VIEWS OF THE MANAGER
ANNUAL REPORT
FOR THE 12 MONTHS ENDED JUNE 30,2000
Dear Fellow Investor:
The total return for East End Capital Appreciation Fund in the
twelve months fiscal year end on June 30, 2000 was 106.69%, much
greater than that of the Standard & Poor's 600 Index which was
12.70% and the Russell 2000 Index 16.20 %. For the period October
2, 1995 the inception of the Fund to June 30, 2000 the average
annual total return for the Fund was 26.36 % , Standard & Poor's 600
16.92 %, Russell 2000 15.03 %. A $10,000 investment during this
period returned $ 22,521 for the Fund, $18,038 for the Standard
& Poor's 600 and $17,137 for the Russell 2000. Dividends and
distributions are included expenses have not since the Index's have
none. A exceptional performance for the Fund compared to its peers
Sensing the markets rotation out of old into new industry equities
the Manager invested in new industry equities that had been out of
favor in 1999. These industries were in Business to Business,
Client Management Resources, and Client Access Protection for
website. These companies provided software and services to industry
for internet website, enabling the efficient and cost effective
management of customer sales, service and information access for
customers and employees. The Fund held Seibel Systems, Oracle, and
Checkpoint Systems leading providers of such software and services.
The internet needed high speed large bandwidth data access to enable
commerce over the internet that would replace copper wire with
fiber optic telephone equipment and lines of which Nortel Networks,
Comverse Communications, and JDS Uniphase, provided all were
holdings of the Fund.
Management will continue to seek insights into future
developments in the marketplace and continue to provide above
average returns for the Fund's shareholders.
We look foward to a continuing relationship with our current
shareholders and to reward their confidence in management.
Sincerely,
/s/ Aristides Matsis, President
FUND HIGHLIGHTS
The total return for East End Capital Appreciation Fund in the
twelve months fiscal year end on June 30, 2000 was 106.69%, much
greater than that of the Standard & Poor's 600 Index which was
12.70% and the Russell 2000 Index 16.20 %. For the period October
2, 1995 the inception of the Fund to June 30, 2000 the average
annual total return for the Fund was 26.36 % , Standard & Poor's 600
16.92 %, Russell 2000 15.03 %. A $10,000 investement during this
period returned $ 22,521 for the Fund, $18,038 for the Standard
& Poor's 600 and $17,137 for the Russell 2000. Dividends and
distributions are included expenses have not since the Index's have
none. A exceptional performance for the Fund compared to its peers
MARKET HIGHLIGHTS
Sensing the markets rotation out of old into new industry equities
the Manager invested in new industry equities that had been out of
favor in 1999. These industries were in Business to Business,
Client Management Resources, and Client Access Protection for
website. These companies provided software and services to industry
for internet website, enabling the efficient and cost effective
management of customer sales, service and information access for
customers and employees. The Fund held Seibel Systems, Oracle, and
Checkpoint Systems leading providers of such software and services.
This graph and chart is presented in accordance with SEC
regulations, compares a $10,000 investment in the Fund made at
inception, with the performance of the Standard & Poor's 600 Index
and the Russell 2000 Index which are a basket of unmanaged stocks
with similar characteristics as the Fund invests in. Results include
the reinvestment of all capital gains distributions but no expenses
since Index's have none. Performance is historical and does not
represent future results. Investment returns and principal value
vary and you may have a gain or loss when you sell shares.
The bar chart shows variability of the Fund's shares as a percent
change of net asset value on a fiscal year basis. During the
4 3/4 year period shown in the bar chart, the highest return for a
12 month period was 106.69% for the last fiscal year ending June
30, 2000 and the lowest return was -17.87% for the 12 month
period ending June 30,1997. .
RISK RETURN TABLE
Average Annual
Total Returns Past Past 4
For the periods Year 3/4
ending Years
June 30, 2000 10/95 to
6/2000
East End Capital
Appreciation 106.69 % 23.17 %
Standard & Poor's
600 Index 12.70 % 16.92 %
Russell 2000 Index
16.20 % 15.03 %
The Fund's total return over its last fiscal year ending June
30, 2000 relative to the Standard and Poor's 600 and Russell 2000
both are broad based unmanaged market index's with similar
investment objectives as the Fund were as follows: the Fund's
fiscal one year return was 106.69%, the Standard and Poor's 600
Index was 12.70% and the Russell 2000 16.20%.
EAST END MUTUAL FUNDS - CAPITAL APPRECIATION SERIES
SCHEDULE OF INVESTMENTS
JUNE 30, 2000
SHARES VALUE
COMMON STOCKS - 91.8%
Commercial Services Security - 16.6 %
Checkpoint Software Tech.Ltd. * 365 77,289
Computer Software - 22.6%
Oracle Corporation * 580 48,756
Siebel Systems * 340 55,611
Insurance - 2.1%
Conseco, Inc. 200 9,750
Internet Services - 7.9%
TIBCO Software Inc. * 340 36,699
Medical Equipment - 0.8%
VISX Inc. * 130 3,648
Pharmaceuticals - 9.0%
Andrx Corp. * 323 20,652
Inhale Therapeutic Systems * 210 21,315
Semiconductors - 8.0%
Intel Corp. 270 36,096
Telecommunications Equipment - 24.8%
Comverse Technolgy Inc. * 280 26,040
JDS Uniphase Corp. * 210 25,174
Nortel Networks Corp. * 672 46,536
Qualcomm Corp. * 280 16,800
Total Investments - 91.8% 424,366
Cash and Other Assets Less Liabilities - 8.2% 37,224
$ 462,224
* Non income producing security
The accompanying notes are a integral part of these financial statements
SANVILLE & COMPANY
Certified Public Accountants
1514 Old York Road
Abington, PA 19001
215 884-8460
INDEPENDENT AUDITORS REPORT
To the Shareholders and
Board of Directors of the
East End Mutual Funds, Inc.
Capital Appreciation Series
We have audited the accompanying statement of assets and liabilities
of East End Mutual Funds. Inc.- Capital Appreciation Series,
including the schedule of investments owned as of June 30, 2000 and
the related statement of operations for the year then ended, the
statement of changes in net assets and the financial highlights for
each of the periods indicated therein. These financial statements
and financial highlights are the responsibility of the Fund's
management Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of June 30, 2000 by
correspondence with the custodian and brokers,. An audit also
includes assessing the accounting principles used and significant
estimates when made by management as well as evaluating the overall
financial statement presentation. We believe that our audit provides
a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of East End Mutual Funds, Inc. - Capital
Appreciation Series as of June 30, 2000 the results of its
operations for the year then ended, the changes in its net assets
and the financial highlights for each of the periods indicated
therein, in conformity with generally accepted accounting principles.
Abington, Pennsylvania
Sanville & Company
August 2, 2000
Certified Public Accountants
EAST END MUTUAL FUNDS, INC, - CAPITAL APPRECIATION SERIES
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2000
ASSETS
Investments in securities at value
Cost - $173,637)( Notes 1 and 3) $ 424,366
U.S. Government securities money market account 5,338
Cash at custodian bank 1,043
Dividend receivable 28
Receivable for investment securities sold 81,952
Total assets 512,737
LIABILITIES
Due to manager 357
Payable for investment securities purchased 50,146
Total liabilities 50,503
NET ASSETS $ 462,224
Net assets consist of :
Capital paid-in $ 212,995
Accumulated net realized loss on investments ( 1,500)
Net unrealized appreciation of investments 250,729
NET ASSETS $ 462,224
NET ASSET VALUE PER SHARE
(based on 22,014 shares outstanding -
authorized with a $.001 per share par value) $ 21.00
The accompanying notes are an integral part of these financial
statements
EAST END MUTUAL FUNDS, INC. - CAPITAL APPRECIATION SERIES
STATEMENT OF OPERATIONS
YEAR ENDED JUNE 30, 2000
INVESTMENT INCOME
Income
Dividends $ 1,085
Total income
1,085
Expenses
Investment management fees (Note 2) 3,552
Custodian fees 2,667
Total expenses 6,229
Net investment loss ( 5,144)
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments 700
Change in net unrealized gain on investments 243,672
Net realized and unrealized gain on investments 244,372
Net increase in net assets resulting from operations $ 239,228
The accompanying notes are an integral part of these financial
statements
EAST END MUTUAL FUNDS - CAPITAL APPRECIATION SERIES
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
June 30, 2000 June 30, 2000
INCREASE (DECREASE) IN NET ASSETS:
From Operations:
Net Investment loss $ (5,144) $ ( 2,904)
Net realized gain on investments 700 1,835
Change in net unrealized appreciation
on investments 243,672 15,687
Net increase (decrease) in net assets
resulting from operations 239,228 14,618
Distributions to shareholders from:
Net investment income
Net realized gain
Total distributions
Share Transactions
Net proceeds from sales of shares 1,006
Reinvestment of distributions
Cost of shares redeemed ( 2,500)
Net decrease in net assets resulting
from share transactions ( 1,494)
Total increase in net assets 237,734 14,618
Net Assets
Beginning of year 224,490 209,872
End of year 462,224 224,490
Other information
Shares:
Sold 55
Issued in reinvestment of distributions
Redeemed ( 135)
Net (decrease) ( 80)
The accompanying notes are an integral part of these financial statements
EAST END MUTUAL FUNDS, INC. - CAPITAL APPRECIATION SERIES
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
For the Year Ended June 30 Oct 2,1995
to
2000 1999 1998 1997 1996
PER SHARE OPERATING PERFORMANCE
NET ASSET VALUE, BEGINNING OF PERIOD($) 10.160 9.500 10.340 13.730 10.480
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Loss ( 0.018) (0.130) (0.290) (0.370) (0.007)
Net Realized and Unrealized Gain
(Loss) on Investments 10.858 0.790 (0.550) (2.083) 3.335
TOTAL FROM INVESTMENT OPERATIONS 10.840 0.660 (0.840) (2.453) 3.328
LESS DISTRIBUTIONS:
Distributions from Net Realized gain: 0.937 0.078
TOTAL DISTRIBUTIONS 0.937 0.078
NET ASSET VALUE,END OF PERIOD ($) 21.000 10.160 9.500 10.340 13.730
TOTAL RETURN (%) 106.693 6.947 (8.124)(17.870) 31.730
RATIOS / SUPPLEMENTAL DATA:
Ratio of Expenses (After Reimbursement)
to Average Net Assets (%) 1.801 2.668 3.057 4.840 2.770 *
Ratio of Net Investment Loss to Average
Net Assets (%) (1.488) (1.411) (2.658) (3.670) (0.910)*
Portfolio Turnover Rate (%) 42.139 77.364 86.840 26.980 65.810%*
NET ASSETS, END OF PERIOD($) 462,224 224,490 209,872 235,139 $284,414
* annualized
The accompanying notes are an integral part of these financial statements
EAST END MUTUAL FUNDS,INC.- CAPITAL APPRECIATION SERIES
NOTES TO FINANCIAL STATEMENTS
June 30, 2000
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
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 values as determined in good faith by
or under the supervision on 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 accural 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 difference relating relating to shareholder dist-
ributions may result in reclassifications to paid in capital and may affect
the per share allocation between net investment income and realized and un-
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 is 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 made.
2. MANAGEMENT FEE AND TRANSACTIONS WITH AFFILIATES
Unlike the terms of the investment 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, for the performance of
its services at 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
$3,552 was paid for the year ended June 30, 2000.
The Manager has voluntarily agreed to bear expenses of the Fund in excess
of 1% of daily net assets plus custodian fees over and above the management
fee.
The Manager provided transfer agency, portfolio pricing, administration
accounting, financial reporting, tax accounting and compliance services to
the fund at no charge for the year ended June 30, 2000.
The fund has adopted a distribution Plan ("the Plan") pursuant to Rule 12b-1
under the Investment Company Act of 1940. 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 the year ended
June 30, 2000.
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 year ended June 30, 2000 were $140,289 and $169,559
respectively.
At June 30, 2000 net unrealized appreciation for federal income tax purposes
aggregated $250,729 of which $258,759 related to unrealized appreciation of
securities and $8,030 related to unrealized depreciation of securities. The
cost of investments at June 30,2000 for federal income tax purposes was
$173,637.
August 3, 2000 Sanville & Company
Abington, PA Certified Public Accountants
SIGNATURES
Pursuant to the requirements of the Securities act of 1933 and
the Investment Company Act of 1940, the Registrant certifies that
it meets the requirements of Form N-30D and has duly caused this
Post-Effective Amendment to be signed on behalf of the undersigned,
on the 14th. day of September 2000.
East End Mutual Funds, Inc.
By: /s/ Aristides M. Matsis
Aristides M. Matsis, President
