SEMI-ANNUAL REPORT
THOMAS WHITE WORLD FUND
Thomas White World Fund
Officers and Trustees
Thomas S. White Jr.
Chairman of the Board and President
Jill F. Almeida
Trustee
Philip R. Haag
Trustee
Nicholas G. Manos
Trustee
Edward E. Mack III
Trustee
Michael R. Miller
Trustee
John N. Venson, D.P.M.
Trustee
Douglas M. Jackman
Vice-President and Secretary
Brandon S. Joel
Treasurer
Investment Advisor and Administrator
Thomas White International, Ltd.
440 S. LaSalle Street, Suite 3900
Custodian
State Street Bank and Trust Co.
P.O. Box 1631
Boston, Massachusetts 02101
Legal Counsel
Dechert, Price & Rhoads
1500 K Street, N.W.
Washington, DC 20005
Independent Accountants
McGladrey & Pullen LLP
555 Fifth Avenue
New York, New York 10017
Transfer Agent
Firstar Trust Company
615 East Michigan Street
Milwaukee, Wisconsin 53202
<PAGE>
THOMAS WHITE WORLD FUND
Thomas White is the Fund's President and Portfolio Manager. He has been an
active professional investor and security analyst since joining Goldman Sachs
in 1966. His interests have always been global. As a boy he grew up around the
world, living in Naples, Italy, Manila, Philippines and ten other communities
before graduating from Duke University in 1965. Over his thirty-one years as
an investment manager, he has been with Lehman Brothers, Blyth Eastman Dillon
and until 1992, fourteen years with Morgan Stanley. At Morgan Stanley, he was
a Managing Director and the Chief Investment Officer for the firm's valuation-
oriented equity investing.
Together with the organization's team of seasoned domestic and international
analysts, Mr. White directs the management of investment portfolios in Europe,
the United States, Japan and the Far East. The firm's research division, the
Global Capital Institute, produces monthly publications which provide invest-
ment advice on the relative attractiveness of 4,200 common stocks in forty-
seven countries. These are purchased by major institutional asset management
organizations worldwide.
THE FOLLOWING LETTER WAS WRITTEN BY MR. WHITE, THE FUND'S PRESIDENT:
June 30, 1998
Dear Friends,
Many of you have regular contact with us for very understandable reasons.
Investing is a fascinating subject and worldwide investing arouses even a
broader level of excitement. Moreover, having a successful investment plan is
crucial to affording your children's education and a worry-free retirement. We
appreciate the importance of these calls and letters and enjoy our discussions
with the Fund's shareholders. Please continue to call. If you have children
or friends who would like to be involved with our global fund, we also invite
their participation. Our phone number is 800-811-0535.
I have just returned from a speaking engagement at a New York conference
sponsored by the Dow Jones Company. The conference's title was The Future of
Global Investing and it focused on trends in world markets heading into the
new millennium. My speech, The Changing Face of Developed Europe, described
the current transformation of Europe into a single economic, and eventually,
political union.
Although European immigration was largely responsible for the population of
the United States, the business and political structure of the two societies
took separate paths. Americans, as immigrants and pioneers, preferred indepen-
dence from a central government and free markets. The Old World evolved from
monarchies and a feudal economic system. Socialism was the natural next step,
with the king being replaced by a country's central government. The industrial
revolution of the 17th and 18th century produced the catalyst for this poli-
tical and economic transformation in Europe. New modes of power, manufacturing
and transportation changed conditions, which caused a restructuring of the
rights of individuals
<PAGE>
in society and the organization of economic activity.
Private businesses grew, but labor abuses kept European socialism in power.
In socialist countries, the central government, and not private corporations,
was the primary business entity. The fall of the Berlin Wall in 1989 marked
the end of communism, the least effective version of socialism. It is now
broadly accepted that governments, whether Russian, French, American or
Japanese, do not manage capital and commerce as well as the private sector.
<TABLE>
<CAPTION>
THE WORLD HAS CHANGED.
A GLOBAL PORTFOLIO OFFERS THE POTENTIAL FOR BOTH
IMPROVED PERFORMANCE AND SMOOTHER RETURNS.
<S> <C> <C> <C> <C> <C>
Dec Dec Dec Dec Dec
1960 1970 1980 1990 1997
Developed Mkts.
North America 75% 70% 61% 46% 50%
Europe 22% 22% 23% 29% 28%
Pacific 3% 8% 16% 25% 16%
Emerging
Markets .1% .2% .8% 3% 6%
100% 100% 100% 100% 100%
Global Market Value
($trillions) $0.5 $2.0 $4.1 $8.2 $15.9
<FN>
There has been a dramatic growth in the relative size of developed and emerging
markets outside the United States since 1960. This means managers can now
choose to employ wider diversification in the design of their equity portfolios.
History shows that broad global divsersification has in the past lowered the
volatility associated with single country portfolios. The Fund incorporates
this approach to seek smoother returns for its shareholders.
</TABLE>
My personal involvement in valuing European stocks began with my work with
Sir John Templeton in the late seventies. There were very few European stocks
during this period because governments had absorbed many private companies
after a wave of socialist party political victories. This process began to
reverse in the late eighties as Europe gave up on socialism. Today privati-
zations are creating an ever-expanding explosion of new stocks. Understand-
ably, preparing managers and regulators for the newly freed markets has taken
time. America's management consultants and business schools have been
actively educating the Old World. At this time, many European corporations
have adopted shareholder-oriented goals and now practice the most advanced
management techniques.
A second major problem in Europe was its structure. Unlike the original
thirteen American colonies, its fourteen countries had never combined them-
selves into a single political and economic union. In an area no larger than
America's eastern seaboard, there are fourteen different currencies,
languages, border crossings, trade rules, stock exchanges, etc. The situation
was so painfully inefficient that Europe broke with the past and is now deep
into the process of economic unification. Just as in the fall of the Berlin
Wall, political actions that were deemed impossible indeed occurred, because
the economic status quo was so dreadfully unacceptable.
<PAGE>
Europe's conversion to free markets and its choice to unite economically
has created marvelous opportunities for equity investing. Well trained man-
agement teams have opportunities to significantly reduce corporate expenses.
This means company profits should continue to expand in the coming years
faster than the pace of the economy. Along with internally generated im-
provements, there will be additional benefits flowing from a more efficient
European Economic Union. The Fund's 42.6% exposure to European equities on
April 30th reflects our belief that the powerful earnings growth we envision
over the next five years will result in above average equity returns.
I deal conditions should continue to support rich stock market valuations.
Our projections are not dependent upon an expansion of current P/E's since
valuations are already above traditional levels. It is quite possible though,
that we may be underestimating future P/E levels, and therefore market
levels. This is because of the tremendous growth of retirement funds in
Europe and their preference for equities. It is also possible that an interim
business cycle decline could interrupt this scenario, but it would only delay,
not prevent, a positive outcome.
I hope you are encouraged by the many wonderful developments in Europe.
Everyone wins in the current scenario, including investors. Speaking on behalf
of our organization's fifteen professionals, we appreciate your confidence and
support. We should all be thankful for living in an exciting world that is
experiencing an era of peace and prosperity.
Thomas S. White, Jr.
President and Portfolio Manager
<TABLE>
<CAPTION>
THE TWENTY-EIGHT YEAR PERFORMANCE OF THE WORLD EQUITY MARKET AND ITS
MAJOR REGIONAL COMPONENTS
These Index Returns are in U.S. dollars. Five-year
MSCI INDICIES Gross regional performance success is ordered from #1 (best)
to #4 (Worst)
<S> <C> <C> <C> <C> <C>
Period: Jan. 1, 1970 to Pacific
Apr. 30, 1998 World Europe USA Japan Ex-Japan
FIVE-YEAR PERIOD RETURNS
1970-1974 -1.3% -0.9%(#2) -3.4%(#3) 16.0%(#1) -6.2%(#4)
1975-1979 16.0% 18.9%(#2) 13.3%(#4) 18.8%(#3) 27.5%(#1)
1980-1984 12.4% 6.1%(#3) 14.5%(#2) 17.0%(#1) 4.1%(#4)
1985-1989 28.0% 32.3%(#2) 19.8%(#4) 41.4%(#1) 22.4%(#3)
1990-1994 4.2% 7.0%(#3) 9.2%(#2) -3.4%(#4) 15.3%(#1)
1995-1997 (4/30) 20.4% 27.8%(#2) 31.2%(#1) -10.2%(#4) -0.8%(#3)
1970-1997 Returns 12.4% 13.8% 12.9% 13.3% 10.2%
Source: Morgan Stanley Capital International
<FN>
The table above presents the performance of the global stock markets from
Jan. 1, 1970 to Apr. 30, 1998. Returns are shown in a series of five-year
periods, except for the current three-year period. The world's returns are
followed by those of its four component regions.
Regional performance is highlighted using ranks from #1(best) to #4(worst)
to indicate the winners and losers in each five-year period. History shows
regional returns are random in their timing, with no area holding a permanent
monopoly on performance.
Note that the world and its territories all have quite similar long-term
records. But observe the world index has a more stable return pattern than
any of its components. This is because regional bull and bear markets tend to
offset one another.
The Fund's design reflects your manager's belief that shareholders will
benefit from smoother world performance. A more stable portfolio encourages
investors to stay the course in falling market environments. This promotes
success in reaching long-term investment goals.
</TABLE>
<PAGE>
YOUR FUND'S OBJECTIVE
The Thomas White World Fund seeks long-term capital growth through a
flexible policy of investing primarily in stocks of companies of any nation,
including underdeveloped countries.
YOUR FUND'S INVESTMENT PHILOSOPHY
I. Superior returns can come from properly harnessing the high potential
inherent within undervalued companies.
II. A valuation-oriented investment approach can capture this potential while
maintaining a lower risk profile and above average dividend income.
III. We emphasize owning a broadly diversified portfolio of undervalued
companies with solid cash flows, attractive growth potentials and
appropriately conservative balance sheets.
MANAGEMENT DISCUSSION
June 30, 1998
This report discusses portfolio strategy and performance as the Thomas
White World Fund approaches the close of April 1998. The six-month period
reviewed in this annual report concluded on April 30, 1998. As of this
writing, the Fund has $56.9 million of shareholder assets.
On April 30, the Fund's portfolio included 234 common stocks. These
represented 90% of the Fund's total value, with the rest in cash
equivalents or other assets.
The Fund's performance versus the Morgan Stanley World Index is presented
below. Current price and return data now appear daily in most domestic newspa-
pers. This can be found in the mutual fund section listed alphabetically in
the T section as Thomas White. We are pleased with the portfolio's progress
this last year. Returns have been strong, both in an absolute sense and in
comparison to other global mutual funds.
<TABLE>
<S> <C> <C>
PERFORMANCE T. White MSCI
on April 30, 1998 World World
Six Months 16.2% 18.9%
One Year 26.3% 29.0%
Average Annual Return
Since Inception (June 28, 1994) 16.1% 17.6%
Cumulative Total Return
Since Inception (June 28, 1994) 77.5% 86.1%
<FN>
Assumes reinvestment of dividends and capital gain distributions.
</TABLE>
<PAGE>
PORTFOLIO STRATEGY REVIEW
The Fund's performance is the product of our investment philosophy and
portfolio strategy. Our philosophy is that undervalued companies produce
superior returns. Accordingly, our efforts focus on analyzing companies using
our organization's valuation methods. Our portfolio strategy is to buy those
companies that sell at the greatest discount to their valuations, then sell
them when they are overvalued.
<TABLE>
<CAPTION>
The Thomas White World Fund
Geographic distribution on
April 30, 1998
Based on Long-Term Securities
<S> <C>
Continental Europe 30.1%
United Kingdom 10.7%
Africa & Middle East 1.4%
North America 40.1%
Latin America 2.7%
Japan 6.4%
Far East 5.1%
Australia & New 3.4%
Zealand
</TABLE>
We believe that successful stock selection worldwide is one of our organiza-
tion's distinct strengths. Our analysts have established methods of valuing
stocks in the twenty-one developed countries and in twenty-six emerging market
countries throughout the world. We also believe that broad country diversifi-
cation can best capture the potential for smooth portfolio return that is the
unique advantage of a world fund. Furthermore, diversified country exposure
assures that the rewards of good stock selection will not be eclipsed by a
poorly performing country. Accordingly, as of this writing, the Fund's port-
folio has equity investments in thirty-nine major countries.
<TABLE>
<CAPTION>
THE THOMAS WHITE WORLD FUND TOP TEN HOLDINGS ON APRIL 30, 1998
BASED ON TOTAL NET ASSETS
<S> <C> <C> <C>
Company Industry Country % of Total Net Assets
Berkshire CI A Financial Div. United States 1.8%
ING Group Insurance Netherlands 1.8%
Telefonica de Espana Communications Spain 1.0%
Dell Computer Technology United States 1.0%
Telecom Italia Communications Italy 1.0%
Schering-Plough Healthcare United States 1.0%
Bristol Myers Squibb Healthcare United States 0.9%
HSBC Holdings Banking Hong Kong 0.9%
Harris Corp Industrial United States 0.9%
Garan Inc. Retail United States 0.9%
</TABLE>
Over the six month period ending April 30, the Fund has mildly underper-
formed its market benchmark, the Morgan Stanley Capital International World
Index. Benchmark weights, of the world subregions are Europe, the Middle
East and Africa (31.9%), the Americas (53.5%) and the Pacific (14.6%).
Bottom-up stock valuations influenced us to be more balanced in these three
regions (43.7%, 42.8% and 13.5%). The choice to over-weight European
stocks, due to their attractive outlook, helped the Fund's performance.
Returns were restrained by the Fund's exposure to Pacific stocks. Despite
inexpensive valuations, equities in the Far East continue to produce poor
returns. Fortunately, our strong stock selection in all three regions
partially offset our Far East exposure. The final result was a solid 16.2%
return over the six months vs.18.9% for the MSCI World Index. Our current
strategy continues to stress a more balanced regional mix.
<PAGE>
The transactions in the Fund's portfolio are the product of our
organization's monthly investment process. The portfolio's tax-efficient
turnover rate of 24% over the last six months reflects positions which
were sold after our monthly review process because they became overvalued.
This regular process allows us to maintain an undervalued portfolio and
benefit from our analyst's newest investment ideas.
<TABLE>
<CAPTION>
The Thomas White World Fund is designed to take advantage of the positive
changes occurring in the world today.
These forty-seven countries contain over 2,600 companies that meet the
Fund's quality standards. As a shareholder, you are a partial owner of 234
of the most undervalued of these firms. Whether you realize it or not, you
are at the very epicenter of what is driving change in today's world:
An unprecedented explosion of highly beneficial global capitalism.
<S> <C> <C>
DEVELOPED MARKETS
EUROPE PACIFIC LATIN AMERICA
Austria Australia Argentina
Belgium Hong Kong Brazil
Denmark Japan Chile
Finland New Zealand Columbia
France Singapore Mexico
Germany Peru
Ireland EMERGING MARKETS Venezula
Italy GREATER EUROPE
Netherlands Czech Republic INDIAN SUBCONTINENT
Norway Greece India
Spain Hungary Pakistan
Sweden Poland Sri Lanka
Switzerland Portugal
United Kingdom Russia FAR EAST
Turkey China
NORTH AMERICA Indonesia
Canada MIDDLE EAST Korea
United States Israel Malaysia
Philippines
AFRICA Taiwan
South Africa Thailand
<FN>
The Fund takes full advantage of the extensive resources of the Global
Capital Institute. This investment research organization is owned by
Thomas White International, the Fund's manager. The Institute's
professionals perform ongoing valuation-based security on 4,200
global companies in forty-seven countries. Its monthly equity valuation
publications are produced for clients who are asset management organizations
located around the world.
</TABLE>
<PAGE>
PERFORMANCE SUMMARY
The Fund's performance period since inception was three years, ten months
and two days in length. Over this period the Fund's cumulative total return,
with dividend and capital gain distributions reinvested, was 77.5%. In the
same period the MSCI World Index, with net dividends, returned 86.1%. The
graph below shows the monthly value of $10,000 initially invested in the
Fund and the MSCI World Index.
<TABLE>
Pursuant to Rule 304(a) of Regulation S-T, the following table replaces
a graph showing growth of an initial $10,000 investment, assuming all
dividend and capital gain distributions reinvested, and the MSCI World Index
(see footnote 1). The return since inception (June 28, 1994) was 77.5% for the
Fund and 86.1% for the World Index (see footnote 2). The one year return for
the Fund was 26.3%. The Fund's average total return since inception was 16.1%.
<S> <C> <C>
Fund MSCI World
Composite Index
6/30/94 $10,010 $10,028
7/31/94 10,440 10,217
8/31/94 10,690 10,522
9/30/94 10,380 10,243
10/31/94 10,500 10,532
11/30/94 10,130 10,073
12/31/94 10,067 10,168
1/31/95 9,966 10,012
2/28/95 10,259 10,156
3/31/95 10,531 10,643
4/30/95 10,803 11,011
5/31/95 11,035 11,103
6/30/95 11,106 11,097
7/31/95 11,550 11,650
8/31/95 11,389 11,388
9/30/95 11,570 11,717
10/31/95 11,409 11,529
11/30/95 11,621 11,927
12/31/95 11,983 12,272
1/31/96 12,357 12,493
2/29/96 12,432 12,567
3/31/96 12,507 12,773
4/30/96 12,839 13,070
5/31/96 12,914 13,079
6/30/96 12,903 13,143
7/31/96 12,475 12,677
8/31/96 12,710 12,820
9/30/96 13,021 13,319
10/31/96 13,192 13,409
11/30/96 13,898 14,157
12/31/96 13,960 13,928
1/31/97 14,018 14,094
2/28/97 14,145 14,253
3/31/97 13,937 13,968
4/30/97 14,053 14,422
5/31/97 14,907 15,309
6/30/97 15,358 16,070
7/31/97 15,947 16,808
8/31/97 15,115 15,681
9/30/97 16,074 16,530
10/31/97 15,277 15,658
11/30/97 15,427 15,932
12/31/97 15,594 16,124
1/31/98 15,839 16,570
2/28/98 16,853 17,689
3/31/98 17,794 18,433
4/30/98 17,745 18,610
<FN>
The above chart presents performance in terms of an initial $10,000
investment in the Fund, assuming all dividends reinvested, and the
World Index. The return since inception was 77.5% 2 for the Fund and
86.1% for the World Index. The one year return for the Fund was 26.3%.
The Fund's average annual total return since inception was 16.1% (see
footnote 2).
Note: 1. MSCI World Index is with net dividends
2. Past performance should not be construed as a guarantee of
future performance.
</TABLE>
DIVIDEND INFORMATION
The Fund pays dividends annually. On December 11, 1997, the Board of
Trustees authorized an income dividend and capital gains distribution with
an ex-date of December 23, 1997, payable on December 26, 1997, for
shareholders of record December 22, 1997.
In accordance with current Internal Revenue Service requirements, these
distributions comprised substantially all earnings of the Fund from net
investment income through December 31, 1997, and net realized gains through
the fiscal year ending October 31, 1997.
<PAGE>
<TABLE>
<CAPTION>
THOMAS WHITE WORLD FUND
Portfolio of Investments October 31, 1997
Issue Industry Shares Value
<S> <C> <C> <C> <C>
COMMON STOCKS: 90.3%
ARGENTINA: 0.4%
Telecom Argentaria Communications 16,500 $118,800
YPF Sociedad Energy 2,700 94,0685
212,868
AUSTRALIA: 2.6%
Goodman Fielder Ltd. Consumer Staples 171,700 265,671
National Australia Bank Ltd. ADR Banking 4,300 310,675
National Australia Bank Banking 13,600 192,756
Pacific Dunlop Ltd Industrial 93,700 173,008
Rothmans Holdings Ltd. Consumer Staples 56,000 373,184
Santos Ltd. Energy 46,437 166,958
1,482,252
AUSTRIA: 0.4%
EVN Utilities 700 103,279
OMV AG Energy 800 118,603
221,882
BELGIUM: 1.6%
Electrabel Utilities 1,000 265,747
Electrafina Financial Diversified 1,600 209,786
Solvay Chemicals 6,000 451,744
927,277
BRAZIL 1.4%
Electrobras PNB Utilities 3,750,000 168,750
Ipiranga Petroleum PN Energy 7,288,000 94,744
Itausa PN Financial Diversified 125,000 106,150
Petrobras PN Energy 409,000 103,845
Telebras PN Communications 1,728,000 211,162
Vale do Rio Dolce PN Metals 4,600 108,775
793,426
CANADA: 2.3%
BCE Inc. Communications 9,800 417,382
Canadian Pacific Ltd. Transportation 5,200 152,724
Quebecor Incorporated Class B Services 9,300 184,698
<PAGE>
Royal Bank of Canada Banking 6,200 370,264
Shell Canada Energy 9,100 159,432
1,284,500
CHINA: 0.1%
Qingling Motors Consumer Durables 78,000 33,719
33,719
CZECH REPUBLIC 0.2%
SPT Telecom Communications 500 72,688
Tabak Consumer Staples 200 52,605
125,293
DENMARK: 0.6%
Codan Forsikring Insurance 2,000 315,363
315,363
FINLAND: 0.5%
Orion B Healthcare 9,800 303,981
Rauma Industrial 423 7,919
311,900
FRANCE: 2.6%
AXA-UAP Insurance 3,400 399,434
BIC Consumer Staples 1,700 117,058
Bouygues Building 2,458 388,159
Paribas Banking 3,200 340,794
Pernod Ricard Consumer Staples 3,000 207,172
1,452,617
GERMANY: 1.5%
Axel Springer Services 100 88,715
Merck KGAA Healthcare 6,700 258,997
SAP AG Technology 700 349,241
Wela Stamm AG Consumer Staples 150 137,910
834,863
GREECE 0.4%
Alpha Credit Bank Banking 700 73,821
Delta Dairy Consumer Staples 4,200 59,981
<PAGE>
OTE Communications 3,200 91,602
255,404
HONG KONG: 2.3%
Cheung Kong Financial Diversified 16,700 110,992
China Resources Financial Diversified 16,000 27,462
Citic Pacific Services 20,000 61,428
HSBC Holdings Banking 18,000 513,373
Hong Kong China & Gas Utilities 97,900 133,291
Hong Kong Electric Utilities 44,800 137,599
Johnson Electric Industrial 30,000 101,628
New World Development Industrial 37,000 105,287
SHK Properties Financial Diversified 18,000 106,855
1,297,915
HUNGARY: 0.2%
Matav ADR Communications 4,400 129,800
129,800
INDONESIA: 0.2%
Guadang Garam Consumer Staples 24,000 28,296
Indosat Communications 23,000 33,221
Tambang Timah Metals & Mining 53,000 43,672
Telkom Indonesia Communications 100,000 38,880
144,069
ISRAEL: 0.2%
Bezeq Israel Telecom Communications 17,000 47,041
IDB Holding Corp. Financial Diversified 2,000 46,866
93,907
ITALY: 5.1%
Autostrade Utilities 38,800 152,647
Banca Popolare di Bergamo Banking 19,200 464,926
Banca Commerciale Popolare Milano Banking 24,600 225,425
Benetton Group Consumer Retail 7,800 173,929
Edison Utilities 39,400 328,068
Fiat Spa Consumer Durables 71,610 285,287
Mediaset Services 28,700 187,985
Montedison Industrial 392,900 496,429
<PAGE>
Telecom Italia spa Communication 74,111 558,886
2,873,582
JAPAN: 4.7%
Bridgestone Consumer Durables 6,000 136,415
Canon Technology 6,000 141,383
Family Mart Consumer Retail 4,000 146,654
Fuji Photo Film Services 5,000 177,294
Honda Motor Consumer Durables 5,000 180,682
Kyocera Corporation Technology 3,000 156,742
NGK Spark PLug Consumer Durables 23,000 180,079
Nintendo Company Services & Growth 2,400 216,096
Nippon Telephone & Telegraph Communications 20 174,659
Promise Financial Diversified 3,000 151,773
Shiseido & Company Consumer Staples 12,000 157,644
Sony Corporation Technology 2,000 165,776
Taiyo Yuden Technology 18,000 203,674
TDK Corporation Technology 2,000 157,494
Yamanouchi Pharmanceuticals Healthcare 7,000 164,947
Yasuda Fire & Marine Insurance Insurance 36,000 162,611
2,673,923
MALYASIA: 0.5%
Golden Hope Consumer Staples 39,000 48,368
Perlis Plantation Consumer Staples 43,750 61,657
Petronas Gas Utilities 30,000 72,483
Telekom Malaysia Communications 29,000 87,194
269,702
MEXICO: 1.0%
Maseca B Consumer Staples 76,500 55,126
Telefonos de Mexico Series L ADR Communications 7,400 419,025
Vitro A Industrial 18,900 70,102
544,253
NETHERLANDS: 6.71%
ABN-AMRO Holdings Banking 11,900 289,740
Baan Technology 5,000 218,984
DSM NV Chemicals 3,918 392,633
Hoogovens NV Metals 8,334 375,312
ING Groep NV Insurance 15,446 1,003,641
KLM Transportation 9,800 385,074
KNP BT Forest & Paper 10,000 274,657
Royal Dutch Energy 6,900 380,734
<PAGE>
Vendex International Cert. Services 4,354 236,904
VNU Serivces 5,300 171,534
3,771,558
NEW ZEALAND: 0.1%
Lion Nathan Limited Consumer Staples 33,000 87,892
87,892
NORWAY: 1.2%
Den Norske Bank A Banking 87,300 458,290
Orkla B Consumer Staples 1,900 203,051
661,341
PAKISTAN: 0.1%
Pakistan Telephone Communication 650 44,850
44,850
PHILIPPINES: 0.3%
Manila Electric Utilities 18,000 51,107
Philippines Long Distance Communications 3,600 96,389
147,496
POLAND: 0.3%
BPH Banking 1,900 167,795
167,795
PORTUGAL: 0.3%
Banco Espir Santo Banking 1,800 86,026
Telecom Portugal Communications 1,200 64,422
150,448
RUSSIA: 0.2%
Lukoil ADR Energy 800 53,000
Gazprom ADR Energy 3,500 63,950
116,950
<PAGE>
SINGAPORE: 0.7%
City Development Financial Diversified 13,000 56,307
Fraser & Neave Consumer Staples 7,800 35,017
Overseas Union Bank Banking 9,300 35,282
Singapore Airlines-Foriegn Transportation 9,000 58,615
Singapore Telecom Communications 86,000 147,903
United Overseas Bank Banking 5,600 26,557
UOL Ltd. Financial Diversified 66,000 49,243
408,924
SOUTH AFRICA: 0.7%
Anglo American Corp /SA Industrial 1,100 65,035
De Beers Consumer Retail 1,400 36,265
First Bank Banking 9,300 30,016
Liberty Life Association Insurance 2,800 94,676
Nedcor Banking 700 19,932
Rembrandt Group Consumer Staples 7,200 65,490
South African Brewery Consumer Staples 1,800 60,365
Standard Bank Inv. Banking 700 41,385
413,164
SOUTH KOREA: 0.4%
Pohang Iron & Steel Industrial 2,200 118,313
SK Telecom Communications 206 117,172
235,485
SPAIN: 1.5%
Iberdrola Utilities 17,000 273,346
Telefonica de Espana Communications 14,000 584,367
Telefonica de Espana Rights Communications 14,000 11,025
868,738
SWEDEN: 1.6%
SE Banken A Banking 20,600 342,708
Trelleborg B Industrial 16,300 218,619
Volvo B Consumer Durables 11,210 326,724
888,051
SWITZERLAND: 2.4%
Fischer (Georg) AG Capital Goods 1,000 386,280
<PAGE>
Nestle Reg Consumer Staples 200 387,612
Novartis Reg Health Care 200 330,337
SMH AG Services 1,800 269,730
1,373,959
THAILAND: 0.1%
Advanced Information Service Communications 7,300 49,107
Thai Airways International Transportation 35,300 36,758
85,865
TURKEY: 0.4%
Akbank Banking 1,121,000 95,285
Arcelik Consumer Durables 660,000 73,920
Netas* Technology 61,000 22,692
Petkim* Chemicals 43,000 29,670
221,567
UNITED KINGDOM: 10.8%
Abbey National Banking 20,700 392,188
Bank of Scotland Banking 17,000 209,185
Barclays Banking 7,600 219,416
Boots Consumer Retial 8,400 130,308
British Airways Tansportatin 22,400 234,277
British Petroleum Energy 15,800 249,458
British Steel Metals 66,200 176,410
British Telecom Communications 32,400 351,589
Commercial Union Insurance 11,000 205,836
Guardian Royal Insurance 44,613 301,129
Hillsdown Holdings Consumer Staples 61,800 183,787
Imperial Chemicals Industries Plc Chemicals 14,600 265,151
Ladbroke Group Services & Growth 63,996 351,767
MFI Furniture Consumer Retail 29,900 44,958
National Grid Group Utilities 40,885 264,354
National Westminster Bank Banking 18,779 375,557
Next Consumer Retail 12,600 104,415
Pearson Services & Growth 11,300 177,089
P & O DFD Transportation 15,356 227,055
Siebe Industrial 8,100 182,154
Smithkline Beecham Health Care 33,700 401,731
Southwest Water Utilities 14,918 242,262
Tate & Lyle Consumer Staples 23,900 194,663
Unigate Group Consumer Staples 28,000 338,927
WPP Group Services 38,500 244,268
6,067,934
<PAGE>
UNITED STATES: 33.7%
Allmerica Financial Insurance 910 56,989
American National Insurance Co. Insurance 1,800 194,400
American Stores Consumer Staples 12,000 288,000
Amsouth Bancorp Banking 7,050 439,744
Associates First Capital Financial Diversfied 2,122 158,620
Atlantic Richfield Energy 2,600 202,800
Bell Atlantic Communications 4,684 438,427
Bershire Hathaway Class A Financial Diversified 15 1,029,000
Black & Decker Services & Growth 3,400 175,525
BMC Software* Technology 1,600 149,700
Bristol Myers Squibb Health Care 5,000 529,375
Brown Forman B Consumer Staples 7,700 436,013
Champion International Forest & Paper 3,100 166,819
CMS Energy Corporation Utilities 2,100 91,744
Columbia HCA/Health Care Corp Health Care 11,200 368,900
Comerica Banking 4,050 271,097
Dell Computer* Technology 7,200 581,400
Du Pont Company Chemicals 3,200 233,000
Enova Corporation Utilities 10,500 280,875
Entergy Utilities 2,800 69,650
Exel Limited Insurance 1,800 134,438
Federated National Mortgage Assoc. Financial Diversified 7,200 431,100
FMC Software* Technology 2,500 193,906
Ford Motor Company Consumer Durables 8,100 371,081
Garan, Inc. Consumer Retail 18,000 497,250
General Dynamics Corporation Aerospace 7,800 329,550
General Electric Technology 3,400 289,425
GPU Inc. Utilities 2,500 99,063
Harris Corporation Industrial 10,600 512,775
Intel Technology 1,400 113,138
ITT Industries Consumer Durables 9,800 357,088
King World Productions Services & Growth 5,600 149,450
Lucent Technologies Technolgy 3,100 236,569
Marshall & Ilsley Banking 8,400 491,400
Mellon Bank Corporation Banking 5,200 374,400
Merck & Company Health Care 2,600 313,300
Merrill Lynch Financial Diversified 1,600 140,400
Midamerican Energy Utilities 4,800 101,400
Murphy Oil Energy 6,200 318,913
National Service Industries Industrial 6,700 362,638
Norfolk Southern Corporation Transportation 8,100 270,844
Peoplesoft Inc.* Technology 2,800 130,200
Phelps Dodge Corporation Metals 1,000 67,125
Philip Morris Consumer Staples 9,700 361,931
Phillips Petroleum Energy 6,300 312,244
PPG Industries Inc. Chemicals 5,400 381,713
Raytheon A Industrial 2,924 161,368
Raytheon B Industrial 4,100 232,419
Rite Aid Corporation Consumer Staples 12,300 395,137
Royal Dutch Petroleum Energy 4,400 248,874
<PAGE>
Schering-Plough Health Care 6,800 544,850
Southern New England
Telecommunications Corp Communications 5,200 364,000
St. Paul Companies Insurance 1,700 144,074
SuperValu Incorporated Consumer Staples 9,800 428,137
Tele-Communications Inc. A* Services & Growth 5,408 171,703
Tele-Communications TCI A* Services & Growth 6,184 100,876
Tellabs Incorporated* Technology 2,000 141,750
Torchmark Corporation Insurance 2,600 115,862
Travelers Group Incorporated Financial Diversified 6,750 413,015
Unilever NV Consumer Staples 2,400 179,100
United Health Corporation Health Care 5,100 358,274
US West Communication Communications 9,000 474,750
VF Corporation Consumer Retail 5,200 270,400
Washington Post Class B Services & Growth 600 314,550
Xerox Corporation Services & Growth 3,700 419,950
18,982,328
Total Common Stocks (Cost $37,468,355) $50,942,860
TIME DEPOSIT: 9.4
Par
Value
State Street Bank and Trust Co. Eurodollar Time
Deposit 5.25%, due 5/01/98 (Cost $5,272,000) 5,272,000 4,678,000
Total Investments: 99.7% (Cost$42,740,355) 56,214,860
Other Assets, Less
Liabilities: 0.3% 179,289
Total Net Assets: 100% $56,394,149
* Non-income Producing Security
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THOMAS WHITE WORLD FUND
Statement of Assets and Liabilities
April 30, 1998 (Unaudited)
<S> <C>
ASSETS
Investments in securities at value (cost $42,740,355) $56,214,860
Cash 960
Dividends and interest receivable 232,914
Prepaid expenses and deferred organization costs 8,777
Equipment 6,001
Total assets 56,463,512
LIABILITIES
Accrued expenses 69,363
Total liabilities 69,363
NET ASSETS
Source of Net Assets:
Net capital paid in on shares of beneficial interest $41,492,188
Undistributed net investment income 207,313
Accumulated net realized gain 1,220,143
Net unrealized appreciation 13,474,505
Net assets $56,394,149
Shares outstanding 3,883,776
Net asset value per share $14.52
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THOMAS WHITE WORLD FUND
Statement of Operations
Six Months Ended April 30, 1998
INVESTMENT INCOME
<S> <C>
Income:
Dividends (net of foreign taxes withheld of $41,215) $502,144
Interest 134,399
Total investment income 636,543
Expenses:
Investment management fees (note 3) 255,250
Custodian fees 31,444
Transfer Agent Fees 10,559
Audit fees and expenses 11,568
Trustees' fees and expenses 7,904
Printing Expenses 2,493
Legal fees and expenses 11,427
Organization costs 3,005
Registration fees 16,595
Depreciation expense 2,563
Other expenses 10,011
Total expenses 362,819
Net investment income 273,724
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments 1,265,417
Unrealized appreciation on investments 6,232,099
Net gain on investments 7,497,516
Net increase in net assets from operations 7,771,240
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THOMAS WHITE WORLD FUND
Statements of Changes in Net Assets
Year Year
Ended Ended
1997 1996
<S> <C> <C>
Change in net assets from operations:
Net investment income $ 273,724 $ 723,140
Net realized gain 1,265,417 1,981,651
Unrealized appreciation for the period 6,232,099 3,574,857
Net increase in net assets from operations 7,771,240 6,279,648
Distributions to shareholders:
From net investment income (696,401) (591,413)
From net realized gain (1,942,252) (2,434,679)
Fund share transactions 3,265,990 5,584,959
Total increase 8,398,577 8,838,515
Net assets:
Beginning of period 47,995,572 39,157,057
End of year $ 56,394,149 $ 47,995,572
See Notes to Financial Statements.
</TABLE>
<PAGE>
THOMAS WHITE WORLD FUND
Notes to Financial Statement
Note 1. Summary of Accounting Policies
Lord Asset Management Trust (the "Trust") was organized as a Delaware
business trust on February 9, 1994, as an open-end diversified management
investment company. The Trust currently has one series of Shares, the
Thomas White World Fund (the "Fund"). The investment objective of the Fund is
to seek long-term capital growth by investing in stocks and debt obligations of
companies and governments of any nation. The following is a summary of
significant accounting policies followed in the preparation of its financial
statements.
(a) Valuation of securities. Securities listed or traded on a recognized
national or foreign stock exchange or NASDAQ are valued at the last
reported sales prices on the principal exchange on which the
securities are traded. Over-the-counter securities and listed
securities for which no sale is reported are valued at the mean between
the last current bid and asked prices. Securities for which market
quotations are not readily available are valued at fair value as
determined by management and approved in good faith by the Board of
Trustees.
(b) Foreign currency translation. Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S.
dollar amounts at date of valuation. Purchases and sales of portfolio
securities and income items denominated in foreign currencies are
translated into U.S. dollar amounts on the respective dates of such
transactions. When the Fund purchases or sells a foreign security it
will customarily enter into a foreign exchange contract to minimize
foreign exchange risk from the trade date to the settlement date of
such transaction.
The Fund does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from
the fluctuations arising from changes in market prices of securities
held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from
sales of foreign currencies, currency gains or losses realized
between the trade and settlement dates on securities transactions,
the differences between the amounts of dividends, and foreign
withholding taxes recorded on the Fund's books, and the U.S. dollar
equivalent of the amounts actually received or paid. Net unrealized
foreign exchange gains and losses arise from changes in the value of
assets and liabilities other than investments in securities at the end
of the fiscal period, resulting from changes in the exchange rates.
(c) Income taxes. It is the Fund's intention to comply with the provisions
of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to its
shareholders. Therefore, no provision has been made for federal income
taxes. Distributions to shareholders are recorded on the ex-dividend
date. Income distributions and capital gain distributions are
determined in accordance with income tax regulations.
(d) Use of Estimates. The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the reported amounts of increases and decreases
in net assets from operations during the period. Actual results could
differ from these estimates.
(e) Deferred organization costs. Organization costs have been deferred and
are being amortized over the period ending June 28, 1999.
<PAGE>
(f) Other. Investment transactions are accounted for on a trade date basis.
Interest is accrued on a daily basis and dividend income is recorded on
the ex-dividend date, except that certain dividends from foreign
securities are recorded when the information is available to the Fund.
Note 2. Transactions in Shares of Beneficial Interest
As of April 30, 1998, there were an unlimited number of $.01 par value
shares of beneficial interest authorized. Transactions are summarized as
follows:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
April 30, 1998 October 31, 1997
Shares Amount Shares Amount
<S> <C> <C> <C> <C>
Shares sold 135,819 $1,851,054 242,690 $3,097,633
Shares issued on
reinvestment of
distributions 207,791 2,591,156 249,893 2,986,226
Shares redeemed (88,038) (1,176,220) (40,053) (498,900)
Net increase 255,572 3,265,990 452,530 $5,584,959
</TABLE>
Note 3. Investment Management Fees and Other Transactions with Affiliates
The Fund pays monthly an investment management fee to Thomas White
International, Ltd. at the rate of 1% of the Fund's average daily net assets.
Note 4. Investment Transactions
For the year ended April 30, 1998, the cost of purchases and the
proceeds from sales of investment securities, other than short-term
obligations, were $12,721,444 and $11,058,780, respectively. The cost of
securities for federal income tax purposes was $42,740,355. Realized gains
and losses are reported on an identified cost basis.
At April 30, 1998, the aggregate gross unrealized appreciation and
depreciation of portfolio securities, based upon cost for federal income tax
purposes, were as follows:
<TABLE>
<S> <C>
Unrealized appreciation $14,653,695
Unrealized depreciation (1,179,190)
Net unrealized appreciation $13,474,505
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Note 5. Selected Financial Information
Six Months Year
Ended Apr. Ended
30,1998 Oct. 31, 1997
<S> <C> <C>
Per share operating performance
(For a share outstanding throughout the period)
Net asset value, beginning of period $13.23 $12.33
Income from investment operations:
Net investment income 0.07 0.20
Net realized and unrealized gain 1.95 1.65
2.02 1.85
Distributions:
From net investment income (0.19) (0.19)
From net realized gains (0.54) (0.76)
(0.730 (0.95)
Change in net asset value for the period 1.29 (0.90)
Net asset value, end of period $14.52 $13.23
Total Return 16.16% 15.80%
Ratios/supplemental data
Net Assets. End of period (000) $56,394 $47,996
Ratio to average net assets:
Expenses (net of reimbursement) 1.42% 1.47%
Net Investment Income 1.07% 1.60%
Portfolio turnover rate 24.1% 48.19%
Average commission rate (per share):++ $0.0122 $0.0055
Period from
Year Year June 28, 1994
Ended Oct. Ended Oct. (Inception) to
31, 1996 31, 1995 Oct. 31, 1994
<S> <C> <C> <C>
Per share operating performance
(For a share outstanding throughout the period)
Net asset value, beginning of period $11.31 $10.50 $10.00
Income from investment operations:
Net investment income 0.19 0.19 0.06
Net realized and unrealized gain 1.51 0.71 0.44
1.70 0.90 0.50
Distributions:
From net investment income (0.20) (0.09) --
From net realized gains (0.48) -- --
(0.68) (0.09) --
Change in net asset value for the period 1.02 0.81 0.50
Net asset value, end of period $12.33 $11.31 $10.50
Total Return 15.63% 8.65% 5.00%**
Ratios/supplemental data
Net assets, end of period (000) $39,157 $32,979 $13,928
Ratio to average net assets:
Expenses (net of reimbursement) 1.50% 1.49% 1.50%*+
Net investment income 1.63% 2.08% 1.79%*
Portfolio turnover rate 51.22% 64.54% 1.01%
Average commission rate (per share) $0.0337 $0.0303 $0.0618
<FN>
* Annualized
** Not annualized.
+ In the absence of the expense reimbursement, expenses would have been 2.36%
of average net assets.
</TABLE>
