EAST END MUTUAL FUNDS, INC.-CAPITAL APPRECIATION SERIES
Schedule of Investments
July 31, thru December 31, 1999
Unaudited
Shares Value
Common Stocks-99.5%
Software 35.6 %
Seibel Systems * 340 $ 28,560
Citrix Systems * 190 23,370
Checkpoint Softwa 200 39,750
Oracle Corp. * 290 32,498
BMC Software Inc. 200 15,987
Telecommunications Equipment 35.0%
Tellabs * 150 9,628
Qualcomm Inc. * 280 49,350
Comverse Technology * 140 20,265
Nortel Networks Inc. 336 33,936
Lucent Technologies Inc. 328 24,538
Healthcare 8.8%
Biomatrix Inc. * 500 9,625
Visx Inc. * 130 6,727
Theragenics Corp. * 660 5,981
Allergan Inc. 200 9,950
Mckesson HBO Inc. 111 2,497
Semiconductor Manufacturing 7.2 %
MMC Networks Inc. * 180 6,187
Intel Corp. 270 22,224
Internet Service Provider 5.0 %
America OnLine Inc. * 260 19,565
Cable Equipment 5.6%
General Instrument Corp. * 260 22,100
Finance 2.3 %
Knight Trimark Group Inc. * 200 9,200
Total Investments 99.5% $ 391,941
Cash and Other Assets less Liabilities 0.5 % 2,309
Total $ 394,257
* Non income producing during the year.
EAST END MUTUAL FUNDS, INC. - CAPITAL APPRECIATION SERIES
Statement of Assets and Liabilities
July 1, thru December 31,1999
Unaudited
ASSETS
Investments in securities at value
(cost - $212,829)(Notes 1 and 3) $ 391,941
U.S. Government securities money market account 2,556
Cash at custodian bank 145
Total assets 394,642
LIABILITIES
Due to manager 516
Total liabilities 516
NET ASSETS $ 394,126
Net assets consist of:
Capital paid in $ 218,097
Accumulated net realized loss on investments ( 664)
Net investment loss ( 2,419)
Net unrealized appreciation of investments 179,112
NET ASSETS $ 394,126
NET ASSET VALUE PER SHARE
(based on 22,094 shares outstanding -
shares authorized with $.001 per share par value) $ 17.84
EAST END MUTUAL FUNDS, INC. - CAPITAL APPRECIATION SERIES
Statement of Changes in Net Assets
Semi-Annual Year
Period Ended Ended
Dec. 31,1999 June 30,1999
INCREASE (DECREASE) IN NET ASSETS:
From Operations:
Net investment loss $ ( 2,419) $ ( 2,904)
Net realized gain (loss) on
investments 1,835
Change in net unrealized
appreciation
(Depreciation) on investments 172,055 15,687
Net increase (decrease) in
net assets resulting from
operations 169,636 14,618
Distributions to shareholders from:
Net investment income
Net realized gain
Total distributions
Share Transactions
Net proceeds from sales of shares
Reinvestment of distributions
Cost of shares redeemed
Net decrease in net assets resulting
from share transactions
Total increase (decrease) in net assets 169,636 14,618
Net Assets
Beginning of year 224,290 209,872
End of year 394,126 224,490
Other information
Shares:
Sold
Issued in reinvestment
of distributions
Redeemed
Net (decrease) increase
EAST END MUTUAL FUNDS, INC. - CAPITAL APPRECIATION SERIES
Financial Highlights
Selected Data For A Share of Capital Stock Outstanding Throughout Each Period
Semi Annual Period Ended December 31st.
1999 1998 1997 1996
Per Share Operating Performance
Net Asset Value, Beginning of
Period on July 31st. ($) 10.160 9.46 10.320 13.73
Income from Investment Operations:
Net investment (Loss) Gain 0.196
Net Realized and Unrealized Gain (Loss)
on Investments 0.120
Total from Investment Operations 0.316
Less Distributions:
Distributions from Net Realized Gain
Total Distributions
Net asset Value, End of Period ($) 17.840 10.010 9.770 10.325
Total Return (%) 75.590 5.770 (15.950) (24.800)
Ratios/Supplemental Data:
Ratio of Expenses (After
Reimbursement)
to Average Net Assets (%) 1.280
Ratio of Net Investment
Loss to Average Net Assets (%) (0.899)
Portfolio Turnover Rate (%) 0
Net assets, End of Period ($) 394,257
EAST END MUTUAL FUNDS, INC.- CAPITAL APPRECIATION SERIES
Statement of Operations
Six Months Ended December 31,1999
INVESTMENT INCOME
Income
Dividends $ 310
Total Income 310
Expenses
Investment management fees (Note 2) 1,400
Custodian fees 1,329
Total expenses 2,729
Net investment loss ( 2,419)
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments
Change in net unrealized appreciation 172,055
Net realized and unrealized gain on investments 172,055
Net increase in net assets resulting from operations 169,636
EAST END MUTUAL FUNDS, INC. - CAPITAL APPRECIATION SERIES
Notes to financial Statements
Six Months Ended December 31,1999
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Organization: East End Mutual Funds, Inc. - Capital Appreciation Series (the
"Fund") is a series of East End Mutual Funds, Inc. (the "Company"}, a
Maryland Corporation. The Fund is a diversified open end management
investment company registered under the Investment Company Act of 1940, as
amended.
The following is a summary of significant accounting policies followed by the
Fund
Security Valuation: Securities are valued at the last reported sales price or in
the case of securities where there is no reported last sale, the closing bid
price. Securities for which market quotations are not readily available are
valued at their fair market values as determined in good faith by or under
the supervision of the Company's Board of Directors in accordance with
methods which have been authorized by the Board. Short term debt obligations
with maturities of 60 days or less are valued at amortized cost which
approximates market value.
Securities Transactions and Investment Income: Security transactions are
recorded on the dates the transactions are entered into (the trade dates).
Realized gains and losses on security transactions are determined on the
identified cost basis. Dividend income is recorded on the ex-dividend date.
Interest income is determined on the accrual basis. Discount on fixed income
securities is amortized.
Dividends and distributions to shareholders: The Fund records all dividends
and distributions payable to shareholders on the ex-dividend date. Permanent
book and tax differences relating to shareholder distributions may result in
reclassifications to paid in capital and may affect the per-share allocation
between net investment income and realized and realized gain/loss.
Undistributed net investment income and accumulated undistributed net
realized gain/loss on investment transactions may include temporary book and
tax differences which reverse in subsequent periods. Any taxable income or
gain remaining at fiscal year end ids distributed in the following year.
Federal Income Taxes: It is the Fund's intention to qualify as a regulated
investment company and distribute all of its taxable income. Accordingly, no
provision for Federal income taxes will be required in the financial
statements.
EAST END CAPITAL APPRECIATION - CAPITAL APPRECIATION SERIES
Notes to Financial Statements (Continued)
Six Months Ended December 31,1999
2. MANAGEMENT FEE AND TRANSACTIONS WITH AFFILIATES
Under the terms of the investment company management agreement, East End
Investment Management Company (the "Manager") has agreed to provide the Fund
investment management services and be responsible for the day to day
operations of the Fund. The Manager will receive a fee, payable monthly at
1/12th of 1%, for the performance of its services which is an annual rate
of 1% on the first $500 million of average daily net assets and .75% in excess
of $500 million of average daily net assets. The fee will be accrued daily and
paid monthly. A management fee of $ 1,400 was paid in this period.
The manager has agreed to reimburse the Fund for expenses in excess of 2% of
daily net assets plus custodian fees. There was no reimbursement by the
manager to the Fund for this period.
The Fund has adopted a distribution Plan (the "Plan") pursuant to Rule 12b-1
under the Investment Company Act of 1940 as amended. The Plan provides that
the Fund may finance activities which are primarily intended to result in the
sale of the Fund's shares. The Fund may incur distribution expenses of up to
.50% of average daily net assets. No distribution fee was accrued for this
period.
Certain officers and directors of the Fund are also officers and directors of
the Manager.
3. INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short term securities)
for the period were $10,623 and none respectively.
At December 31.1999 net unrealized appreciation for federal income tax purposes
aggregated to $176,029 of which $664 related to accumulated net realized
loss on investments and $2,419 related to a net investment loss. The cost of
investments for the period for federal income tax purposes was $212,829.
VIEWS FROM THE MANGER
SEMI-ANNUAL REPORT
SIX MONTHS ENDED DECEMBER 31,1999
Dear Fellow Investor:
The East End Capital Appreciation Fund returned 68.72 % compared to 39.68%
for the Standard & Poor's 600 Stock Index for the six months ended December
31,1999, an exceptional performance for the Fund and its peers. The market
was volatile and unsettled, rotation was erratic and trends were difficult
to ascertain. The Russian- Asian economic crisis had not abated and its
effects put a damper on the stock market.
The manager exploited the unsettled market conditions, making purchases of
under valued telecommunications internet equipment manufacturers such as
Nortel Networks, Lucent, Qualcomm Communications and business to business
software companies such as Seibel Systems, Oracle Corp. whose products would
be needed to bring the world into the internet and wireless communications
age.
The Fund is well positioned to benefit from these changes in the marketplace
in the future and encourage you to adopt a long term horizon in your invest-
ments with us and reach your investment goals.
Thank you for your investment in the East End Capital Appreciation Fund. We
appreciate the confidence you have shown us and look forward to working with
you in the years ahead.
March 15, 2000
Aristides Matsis
Portfolio Manager
FUND HIGHLIGHTS
The East End Capital Appreciation Fund returned 68.72% for the six months
ended December 31,1999. The Fund's one year average annual total return was
71.01%. Since inception (10-2-95) the Fund has an average annual total return
of 20.91%. Software, Telecommunication equipment, semiconductor, electronics,
internet services, cable equipment and healthcare providers, with strong
revenue and profit growth were the Fund's best performers during the last
half of 1999. Business to business software and internet providers grew the
Fund.
AVERAGE ANNUAL TOTAL RETURNS
For the period January 1,1999 thru 12-31-99 - One Year Return of the Fund
was 71.01%. Since inception for the period October 2,1995 thru December 31,
1999 the average total return was 20.91%. The Standard & Poor's 600 Stock
Index returned 39.68 % and the Fund 68.72% for the six months ended December
31,1999. The Standard & Poor's 600 Index * and the Russell 2000 ** are
baskets of stocks generally representing of the United States market and
cross section of stocks the Fund is or would invest in. They are not managed
therefore they do not incur any management fees or trading expenses such as
brokerage, bank, custodian, printing, office, advertising, legal and account-
ing that the Fund which is managed does. The source of the S&P 600 is Micro-
pal and Russell 2000, Frank Russell Co.
The market favored technology companies in the telecommunications field such as
Qualcomm, Nortel Networks and business to business software companies Seibel
Systems, Oracle and Checkpoint Software which are core holdings of the Fund.
Investors reallocated investments in retail and industrials to high tech comp-
anies during the six month period. The internet and wireless revolutions
created huge demand for infrastructure equipment upgrades which favored the
Funds holdings. High productivity continued to hold corporate costs down and
keep inflation in check.
FIVE LARGEST HOLDINGS
As of 12-31-99
Security % of Net Assets
Qualcomm 12.4
Checkpoint Software 10.2
Oracle 8.1
Nortel Networks 8.6
Seibel Systems 7.1
This graph is prepared in accordance with SEC regulations, compares a $10,000
investment in the Fund, made at inception, with the performance of the Stand-
ard & Poor's 600 Stock Index ("S&P 600") and the Russell 2000 Stock Index.
Results include the reinvestment of all dividends and capital gains distribu-
tions. Performance is historical and does not represent future results.Invest-
ment returns and principal value vary and you may have a gain or loss when
you sell shares. At the end of the period $10,000 invested in the S & P 600
would have grown to $16,579, in the Russell 2000 to $17,038 and to $18,710 in
the East End Capital Appreciation Fund.
