SUNSTONE FINANCIAL GROUP, INC.
207 East Buffalo Street, Suite 400
Milwaukee, Wisconsin 53202
(414) 271-5885
December 12, 1996
Securities and Exchange Commission
450 Fifth Street N.W.
Washington, DC 20549
Re: The Haven Fund
(33-76670; 811-8428)
Filing Pursuant to Rule 30b2-1 and Section 24(b)
under the Investment Company Act of 1940
Ladies and Gentlemen:
On behalf of the above-referenced registered investment company, transmitted
herewith for filing pursuant to Rule 30b2-1 and Section 24(b) under the
Investment Company Act of 1940, as amended, is the Fund's Annual Report for the
year ending October 31, 1996. Questions regarding this filing may be directed
to the undersigned at (414) 271-5885.
Sincerely,
/s/ Constance Dye Shannon
Constance Dye Shannon
Legal and Compliance Manager
cc: Toby D'Oench
Encl.
THE HAVEN FUND
November, 1996
LETTER TO INVESTORS
Dear Shareholder,
We are pleased to present our third annual report as a public fund.
For the fiscal year ended October 31, 1996 the total return of The Haven Fund
was +28.3%. This compares with increases in the Standard & Poor's 500 Stock
Index of +24.1% and the Lipper Growth Fund Index of +16.9%. For the calendar
year to the same date the performance of the Fund was +19.7%, as compared with
+16.6% for the S&P 500 and +12.6% for the Lipper Growth Fund Index. A
performance chart and tables, with longer time periods included, are on page 3.
We have done relatively better historically in periods when the U.S. stock
market focused less on certain popular sectors and more on individual stocks,
and this proved to be true again through most of 1996. Technology stocks, 1995's
favorites and an area we thought over-priced, fell out of favor in 1996 to such
a degree that some began to appear to us to be a good value. We have made some
investments in that area. Our underlying investment philosophy continues to be
to seek long-term appreciation through investing in stocks one at a time, always
hoping that we are buying a company with sound growth fundamentals at a
reasonable price. Reasonable is a subjective term, but to us it means not only
good value relative to the stock market as a whole, but good value relative to
historically recognized standards which we think retain their validity. We apply
the same standards of value to foreign stocks, which are of large multi-national
companies, as we do to domestic shares.
Our five best stocks this year were United Meridian, an independent oil and gas
producer which tripled in price in response to important hydrocarbon discoveries
both in the U.S. and West Africa; Borders Group and Sports Authority, fast-
growing retailers which recovered from the disfavor into which retail stocks had
fallen in late 1995; Culligan Water Technologies, which was an initial public
offering in late 1995 and got better recognized for the value we thought it had;
and Schlumberger, which responded to a world-wide increase in oil field
activity. In our semi-annual report we cited Guidant, a fine medical device
company, as one of our best stocks to that date. In fact, in the course of
doubling in price it went, in our opinion, from under-valued to over-valued, and
we subsequently sold it for a long-term gain.
Our worst stock in terms of percentage price decline was United Health Care, an
HMO company whose shares reacted negatively to a drop in profit margins.
However, in this case we sold most of our long-term holding earlier in the year
when the shares were much in demand and then bought them back after a price
decline of nearly 50% so that on balance we made money. Silicon Graphics, a
technology company, was purchased after it had also declined nearly 50%, but it
has since declined another 25%. Subsequent to our purchase the company made a
major acquisition which affected earnings negatively and continues to do so, but
not, we think, beyond the first half of 1997. As the company states in its
annual report, "[Its] stock price, like other technology companies, is subject
to significant volatility." The hoped-for earnings recovery in Readers Digest
has so far failed to materialize, and we sold the stock for a loss. The
remaining two of our five worst performers were Detroit Diesel and Haemonetics,
which remained about unchanged in price. The former has been affected by a
decline in heavy-duty truck sales, and the latter by the unfavorable financial
outlook for hospitals, the primary market for its blood treatment and recovery
equipment. We think both stocks are good values and that their markets will in
time recover.
With thanks for your continued support.
Sincerely,
Colin C. Ferenbach
President
The chart on the following page assumes an initial gross investment of $10,000
made on June 27, 1984 and shows how the Fund and its predecessor have performed.
The Fund began operations on June 23, 1994. Results for the period prior to that
date reflect the performance of HCM Partners, L.P., a limited partnership that
was managed by Haven Capital Management, the Fund's investment adviser, from
1984 to 1994. On June 23, 1994 the Fund acquired the assets of the Partnership
in exchange for shares of the Fund. Although the Partnership was managed by the
same individuals who manage the Fund, and the Fund is managed in a manner that
is in all material respects equivalent to the management of the Partnership, the
information below should not be viewed as an indication of the future
performance of the Fund. It includes information regarding the Partnership's
operations for periods before the Fund's registration statement became
effective. The Partnership was not registered under the Investment Company Act
of 1940 and therefore was not subject to certain investment restrictions that
are imposed by that Act. If the Partnership had been registered, its performance
might have been adversely affected. In addition, the expenses borne by the Fund
are higher than those borne by the Partnership.
AVERAGE ANNUAL TOTAL RETURN OF THE
FUND AND PARTNERSHIP
FOR PERIODS ENDED OCTOBER 31, 1996
One Five Ten Since
Year Year Year Inception<F1>
- --------------------------------------------------------------------------------
The Haven Fund 28.3% 15.2% 12.5% 14.8%
S&P 500 Stock Index 24.0% 15.5% 14.6% 16.9%
Lipper Growth
Fund Index 16.9% 13.7% 13.0% 14.9%
<F1> June 27, 1984
Average Annual Total Return
of the Fund
FOR PERIODS ENDED OCTOBER 31, 1996
One Since
Year Inception<F2>
- ------------------------------------------------------------------------------
The Haven Fund 28.3% 20.5%
S&P 500 Stock Index 24.0% 24.9%
Lipper Growth
Fund Index 16.9% 20.3%
<F2> June 23, 1994
<TABLE>
GROWTH OF A $10,000 INVESTMENT FOR THE FUND AND THE PARTNERSHIP
<CAPTION>
6/27/84 10/31/84 10/31/85 10/31/86 10/31/87 10/31/88 10/31/89
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
THE HAVEN FUND 10,000 10,707 13,463 17,403 16,491 19,155 22,183
S&P 500 Stock Index 10,000 11,007 13,119 17,460 18,585 21,348 26,959
Lipper Growth Fund Index 10,000 10,650 12,609 16,302 16,440 18,947 23,733
10/31/90 10/31/91 10/31/92 10/31/93 10/31/94 10/31/95 10/31/96
- ---------------------------------------------------------------------------------------------------------------------------------
THE HAVEN FUND 20,650 27,947 31,122 36,777 38,856 44,160 54,853
S&P 500 Stock Index 24,969 33,289 36,601 42,069 43,698 55,251 68,522
Lipper Growth Fund Index 20,688 29,264 31,546 37,534 38,299 47,484 55,508
<FN>
The S&P 500 Stock Index is an unmanaged index of 500 selected common stocks, most of which are listed on the New York Stock
Exchange. The index is heavily weighted toward stocks with large market capitalizations and represents approximately two-thirds of
the total market value of all domestic common stocks.
The Lipper Growth Fund Index is an unmanaged index comprised of the largest 30 of the 112 funds in the Lipper Growth Fund category.
Funds included in the category are, by definition, those which normally invest in companies whose long-term earnings are expected to
grow significantly faster than the stocks represented in the major unmanaged stock indices.
A direct investment in either the S&P 500 Stock Index or the Lipper Growth Fund Index is not possible.
Total return calculations reflect fee waivers in effect. In the absence of fee waivers, total return performance would be reduced.
Total return is based on net change in NAV assuming reinvestment of distributions. Investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. Past
performance is no guarantee of future results.
</FN>
</TABLE>
STATEMENT OF NET ASSETS
October 31, 1996
NUMBER
OF SHARES VALUE
- -------------------------------------------------------------------------------
COMMON STOCKS 85.82%
AUTO PARTS 3.62%
50,000 Detroit Diesel Corp.<F3> $ 925,000
25,000 Valeo SA - (FR) 1,500,626
------------
2,425,626
------------
BANKS 6.39%
25,000 Firstar Corp. 1,225,000
15,000 First Union Corp. 1,091,250
70,000 Hong Kong Shangai Bank - (GB) 1,469,774
10,000 Morgan (J.P.) & Co., Inc. 863,750
------------
4,649,774
------------
CHEMICALS 5.97%
15,000 DuPont (E.I.) De Nemours & Co. 1,391,250
40,000 Hoechst AG - (GER) 1,505,400
25,000 Praxair, Inc. 1,106,250
------------
4,002,900
------------
CONSUMER NON-DURABLES 6.02%
37,500 Alberto-Culver Co. 1,490,625
12,500 Colgate Palmolive Co. 1,150,000
15,000 Kimberly-Clark Corp. 1,398,750
------------
4,039,375
------------
DRUG & HOSPITAL SUPPLIES 13.49%
30,000 Abbott Laboratories 1,518,750
45,000 Haemonetics Corp.<F3> 804,375
25,000 Johnson & Johnson 1,231,250
40,000 Pharmacia & Upjohn, Inc. 1,440,000
50,000 Stryker Corp. 1,487,500
25,000 United Healthcare Corp. 946,875
20,000 Zeneca Group Plc. 1,630,000
------------
9,058,750
------------
STATEMENT OF NET ASSETS (cont'd.)
October 31, 1996
NUMBER
OF SHARES VALUE
- ----------------------------------------------------------------------------
COMMON STOCKS 85.82% (cont'd.)
Electrical Equipment 1.93%
17,500 Grainger (W.W.), Inc. $1,297,188
------------
ELECTRONICS 7.93%
25,000 Electronic Data Systems Corp. 1,125,000
60,000 EMC Corp./Mass.<F3> 1,575,000
30,000 Hewlett Packard Co. 1,323,750
70,000 Silicon Graphics, Inc.<F3> 1,295,000
------------
5,318,750
------------
ENVIRONMENTAL CONTROL 2.24%
40,000 Culligan Water Technologies, Inc.<F3> 1,500,000
------------
FURNISHINGS & APPLIANCES 3.17%
60,000 Juno Lighting, Inc. 933,750
40,000 Legget & Platt, Inc. 1,195,000
------------
2,128,750
------------
INSURANCE 2.45%
35,000 Mid Ocean Limited - (BER) 1,645,000
------------
LODGING & CATERING 2.41%
35,000 Brinker International, Inc.<F3> 595,000
30,000 Sysco Corp. 1,020,000
------------
1,615,000
------------
MACHINERY 1.75%
75,000 Columbus McKinnon Corp. 1,171,875
------------
MISCELLANEOUS INDUSTRIALS 1.96%
20,000 Avery Dennison Corp. 1,317,500
------------
STATEMENT OF NET ASSETS (cont'd.)
October 31, 1996
NUMBER
OF SHARES VALUE
- -----------------------------------------------------------------------------
COMMON STOCKS 85.82% (cont'd.)
OIL - DOMESTIC 2.05%
50,000 Union Pacific Resources Group, Inc. $ 1,375,000
------------
OIL - INTERNATIONAL 9.33%
250,000 Gulf Canada Resources, Ltd.<F3> - (CAN) 1,718,750
10,000 Mobil Corp. 1,167,500
9,000 Royal Dutch Petroleum Co. - (NETH) 1,488,375
40,000 United Meridian Corp.<F3> 1,885,000
------------
6,259,625
------------
OIL WELL EQUIPMENT & SERVICES 2.22%
15,000 Schlumberger Ltd. - (NETH ANT) 1,486,875
------------
PUBLISHING & BROADCASTING 1.78%
15,000 Eastman Kodak Co. 1,196,250
------------
REAL ESTATE INVESTMENT TRUSTS 1.88%
50,000 General Growth Properties, Inc. 1,262,500
------------
RETAILING 8.69%
40,000 Borders Group, Inc.<F3> 1,260,000
30,000 Circuit City Stores, Inc. 982,500
30,000 Lowe's Cos., Inc. 1,211,250
50,000 Sports Authority (The), Inc.<F3> 1,212,500
40,000 Viking Office Products<F3> 1,165,000
------------
5,831,250
------------
Total Common Stocks
(cost $39,626,144) 57,581,988
------------
STATEMENT OF NET ASSETS (cont'd.)
October 31, 1996
PAR/PRINCIPAL IN LOCAL CURRENCY
(000) VALUE
- -----------------------------------------------------------------------------
CONVERTIBLE BONDS 4.22%
700 J. Sainsbury, 8.50% - (GB), 11/19/05 $ 1,327,354
4,650<F5> Sanofi, 4.0% - (FR), 01/01/00 1,505,517
------------
Total Convertible Bonds
(cost $2,369,635) 2,832,871
------------
GOVERNMENT BOND 2.76%
10,000 Kingdom of Denmark, 8.0% - (DK), 3/15/06
(cost $1,754,755) 1,850,795
------------
COMMERCIAL PAPER 7.17%
214 American Express Credit Corp., 5.25%, 11/8/96 214,281
2,300 Ford Motor Credit Co., 5.35%, 11/05/96 2,298,633
2,300 General Electric Capital Corp., 5.30%, 11/12/96 2,296,275
------------
Total Commercial Paper
(cost $4,809,189) 4,809,189
------------
TOTAL INVESTMENTS 99.97%
(cost $48,559,723<F4>) $67,074,843
------------
Other Assets in Excess of Liabilities .03% 20,858
------------
Net Assets applicable to 4,778,502 Shares of Common
Stock issued and outstanding 100.00% $67,095,701
============
Net Asset Value, offering and redemption price
per share ($67,095,701 /4,778,502) $14.04
=======
The aggregate unrealized appreciation (depreciation) on a tax basis is as
follows:
Gross appreciation $19,272,633
Gross depreciation (757,513)
------------
Net appreciation $18,515,120
============
<F3> Non-income producing securities.
<F4> Also cost for federal income tax purposes.
<F5> Nominal Par
See Notes to Financial Statements.
STATEMENT OF NET ASSETS (cont'd.)
October 31, 1996
COUNTRY ABBREVIATIONS
- --------------------------------------------------------------
(BER) - Bermuda (GER) - Germany
(CAN) - Canada (GB) - Great Britain
(DK) - Denmark (NETH) - Netherlands
(FR) - France (NETH ANT) - Netherland Antilles
PERCENT OF TOTAL EQUITIES
By Country
(Unaudited)
- -------------------------------
United States 74.7%
Great Britian 7.3%
France 5.0%
Canada 2.8%
Bermuda 2.7%
Netherland Antilles 2.5%
Netherlands 2.5%
Germany 2.5%
STATEMENT OF OPERATIONS
For the Year ended October 31, 1996
INVESTMENT INCOME:
Dividends $ 911,991
Interest 406,693
- --------------------------------------------------------------------------
Total Investment Income 1,318,684
- --------------------------------------------------------------------------
OPERATING EXPENSES:
Investment advisory fees 365,916
Distribution fees 108,136
Legal fees 105,494
Administration and accounting fees 99,997
Transfer agent fees 58,216
Amortization of organizational costs 50,830
Audit fees 44,036
Custodian fees 37,479
Trustees' fees and expenses 28,820
Printing fees 22,676
Insurance fees 21,464
Blue Sky fees 10,553
Registration fees 1,843
Miscellaneous expenses 11,338
- --------------------------------------------------------------------------
Total Operating Expenses 966,798
- --------------------------------------------------------------------------
Net Investment Income 351,886
- --------------------------------------------------------------------------
NET REALIZED GAIN (LOSS) FROM:
Investments 6,502,581
Foreign currency transactions (89,461)
NET INCREASE IN UNREALIZED APPRECIATION ON:
Investments 8,273,760
Translation of assets and liabilities in foreign currency 36,583
- --------------------------------------------------------------------------
Net realized and unrealized gain from
investments and foreign currency 14,723,463
- --------------------------------------------------------------------------
Net increase in net assets resulting from operations $15,075,349
==========================================================================
See Notes to Financial Statements.
STATEMENT OF CHANGES IN NET ASSETS
YEAR YEAR
ENDED ENDED
OCTOBER 31, OCTOBER 31,
1996 1995
- -------------------------------------------------------------------------------
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income $ 351,886 $ 560,954
Net realized gain on investments and foreign
currency transactions 6,413,120 3,393,743
Net change in unrealized appreciation on investments
and translation of other assets and liabilities
denominated in foreign currencies 8,310,343 2,592,806
- -----------------------------------------------------------------------------
Net increase in net assets from operations 15,075,349 6,547,503
- -----------------------------------------------------------------------------
DIVIDENDS PAID TO SHAREHOLDERS:
From net investment income (369,791) (685,149)
From net realized gains (3,308,473) (961,624)
- ----------------------------------------------------------------------------
Total dividends paid to shareholders (3,678,264) (1,646,773)
- ----------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold 2,709,097 4,563,571
Value of shares issued in reinvestment
of dividends 2,653,736 1,438,749
Cost of shares redeemed (5,242,835) (656,287)
- ----------------------------------------------------------------------------
Increase in net assets from share transactions 119,998 5,346,033
- -----------------------------------------------------------------------------
Total increase in net assets 11,517,083 10,246,763
- -----------------------------------------------------------------------------
NET ASSETS:
Beginning of period 55,578,618 45,331,855
- -----------------------------------------------------------------------------
End of period $67,095,701 $55,578,618
=============================================================================
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS
YEAR YEAR PERIOD
ENDED ENDED ENDED
(FOR A SHARE OUTSTANDING OCTOBER 31, OCTOBER 31, OCTOBER 31,
THROUGHOUT EACH PERIOD) 1996 1995 1994<F6>
- --------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $11.67 $10.65 $10.00
INCREASE FROM INVESTMENT OPERATIONS:
Net investment income 0.08 0.12 0.04
Net realized and unrealized gains
on investments and foreign
currency transactions 3.07 1.28 0.61
- --------------------------------------------------------------------------------
Total from investment operations 3.15 1.40 0.65
LESS DISTRIBUTIONS:
Dividends paid to shareholders
From net investment income (0.08) (0.15) -
From net realized gains (0.70) (0.23) -
- --------------------------------------------------------------------------------
Total distributions to shareholders (0.78) (0.38) -
NET ASSET VALUE, END OF PERIOD $14.04 $11.67 $10.65
================================================================================
TOTAL RETURN 28.25% 13.65% 6.50%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period (in 000s) $67,096 $55,579 $45,332
Ratios of expenses to average net assets 1.59% 1.53%<F7> 1.20%<F7><F8>
Ratios of net investment income to
average net assets 0.58% 1.14%<F7> 1.10%<F7><F8>
Portfolio turnover rate 67% 77% 27%
Average commission rate paid<F9> $0.0591 - -
================================================================================
<F6> The Haven Fund commenced operations on June 23, 1994.
<F7> Without fee waivers, the ratio of operating expenses to average daily net
assets would have been 1.59% and 1.43% (annualized) for the periods ended
October 31, 1995 and 1994, respectively, and the ratio of net investment
income to average daily net assets would have been 1.08% and 0.87%
(annualized) for the periods ended October 31, 1995 and 1994, respectively.
<F8> Annualized.
<F9> Computed by dividing the total amount of brokerage commissions paid by the
total shares of investment securities purchased and sold during the period
for which commissions were charged, as required by the SEC.
See Notes to Financial Statements.
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION AND BUSINESS
The Haven Capital Management Trust (the "Trust") is an investment company
registered under the Investment Company Act of 1940, as amended. It is organized
as a Delaware business trust and is an open-ended, diversified, management,
series investment company which currently consists of The Haven Fund (the
"Fund").
2. SIGNIFICANT ACCOUNTING POLICIES
a) PORTFOLIO VALUATION: Securities for which market quotations are readily
available are valued at market value, which is determined by using the last
reported sale price, or if no sales are reported, and in the case of certain
securities traded over-the-counter, the mean between the last reported bid and
asked prices. Short-term obligations having remaining maturities of 60 days or
less are valued at either amortized cost or original cost plus accrued interest
receivable, both of which approximate market value. All other securities and
assets, including any restricted and/or illiquid securities, will be valued at
their fair market value as determined pursuant to procedures adopted by the
Trustees.
b) FOREIGN CURRENCY TRANSACTIONS: Transactions denominated in foreign
currencies are recorded in the Fund's records at the current prevailing exchange
rate. Asset and liability accounts that are denominated in a foreign currency
are adjusted to reflect the current exchange rate at the end of the period.
Transaction gains or losses resulting from changes in the exchange rate during
the reporting period or upon settlement of the foreign currency transaction are
reported in operations for the current period. Foreign security and currency
transactions may involve certain considerations and risks not typically
associated with those of U.S. dollar denominated transactions.
The Fund does not isolate that portion of gains and losses in investments in
equity securities which is due to changes in the foreign exchange rates from
that which is due to changes in market prices of equity securities.
Accordingly, realized and unrealized foreign currency gains and losses with
respect to such securities are included in the reported net realized and
unrealized gains and losses on investment transactions balances. However, the
Fund does isolate the effect of fluctuations in foreign exchange rates when
determining the gain or loss upon the sale or maturity of foreign currency
denominated debt obligations pursuant to U.S. federal income tax regulations,
with such amount categorized as foreign exchange gain or loss for both financial
reporting and U.S. federal income tax reporting purposes.
Net currency gains from valuing foreign currency denominated assets and
liabilities at period end exchange rates are reflected as a component of net
unrealized appreciation/depreciation on investments, foreign currency holdings,
and other assets and liabilities denominated in foreign currency.
Net realized foreign exchange transactions represent foreign exchange gains and
losses from transactions in foreign currencies and forward foreign currency
contracts, exchange gains or losses realized between the trade date and
settlement date on security transactions, and the difference between the amounts
of interest and dividends recorded on the Fund's books and the U.S. dollar
equivalent of the amounts actually received.
c) SECURITY TRANSACTIONS AND INVESTMENT INCOME: Security transactions are
recorded on trade-date. Dividend income is recorded on the ex-dividend date.
Interest income is recorded on an accrual basis. Realized gains or losses on
sales of investments are determined on the identified cost basis for financial
reporting and income tax purposes.
d) DISTRIBUTIONS TO SHAREHOLDERS: Dividends from net investment income are
declared and paid semi-annually. Any net realized capital gains will be
distributed annually. Income distributions and capital gain distributions are
determined in accordance with federal tax regulations which may differ from
generally accepted accounting principles. The difference primarily relates to
investments in forward contracts.
e) FEDERAL TAXES: The Fund is a separate entity for federal income tax
purposes. It is the Fund's policy to qualify as a regulated investment company
by complying with the requirements of the Internal Revenue Code applicable to
regulated investment companies, and to pay out all its net investment income and
net capital gains to its shareholders. Therefore, no federal income or excise
tax provision is required.
f) ORGANIZATION COSTS: Costs incurred in connection with the Fund's
organization and registration are amortized on a straight-line basis over the
period of benefit, not to exceed 60 months.
g) 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 at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.
3. FINANCIAL INSTRUMENTS
The Fund may trade financial instruments with off-balance sheet risk in the
normal course of the investing activities and to assist in managing exposure to
market risks such as interest rates and foreign currency exchange rates. The
financial instruments include written options, forward foreign currency exchange
contracts and futures contracts. The notional or contractual amounts of these
instruments represent the investment the Fund has in particular classes of
financial instruments and do not necessarily represent the amounts potentially
subject to risk. The measurement of the risks associated with these instruments
is meaningful only when all related and offsetting transactions are considered.
At October 31, 1996, the Fund did not hold any financial instruments with off-
balance sheet risk.
4. FEES AND RELATED PARTY TRANSACTIONS
a) INVESTMENT ADVISORY FEES: Under an agreement between the Trust and the
Haven Fund, Haven Capital Management, Inc. (the "Adviser"), serves as the Fund's
investment adviser. For investment advisory services, the Adviser receives
monthly fees at the annual rate of 0.60% of the Fund's average daily net assets.
Fees were paid to the Trustees and/or Officers of the Fund for the year ended
October 31, 1996, but no fees were paid to any Trustee and/or Officer of the
Fund who is also an employee of the Adviser.
b) DISTRIBUTION FEES: The Trust, on behalf of the Fund, has adopted a Plan of
Distribution (the "Plan") pursuant to Rule 12b-1 under the Investment Company
Act of 1940, as amended. Under the Plan, the Fund may spend no more each year
than 0.25% of its average daily net assets to finance activity primarily
intended to result in the sale of shares.
Pursuant to the Distribution Agreement, as compensation for its services, the
Fund pays Sunstone Financial Group, Inc. payable monthly in arrears, at the
annual rate of 0.10% per annum of the Fund's average daily net assets; provided
that such compensation shall be subject to a minimum monthly fee of $7,083
(exclusive of out-of-pocket expenses).
c) ADMINISTRATOR AND TRANSFER AGENT FEES: As compensation for its
administrative and accounting services, the Fund pays PFPC a fee at the annual
rate of 0.10% of the Fund's average daily net assets, with a minimum monthly fee
of $8,333 (exclusive of out-of-pocket expenses). As transfer agent of the Fund,
PFPC receives a minimum monthly fee of $3,000 (exclusive of out-of-pocket
expenses).
d) CUSTODIAN FEES: PNC Bank and Chase Manhattan Bank, N.A., serve as custodian
and sub-custodian for the Fund's U.S. and foreign assets, respectively. As
compensation for its custodian services, the Fund pays PNC Bank a minimum
monthly fee of $1,500 (exclusive of out-of-pocket expenses).
5. CAPITAL STOCK
The Fund is authorized to issue unlimited shares of common stock, par value
$.001 per share. Transactions in shares of the Fund for the years ended October
31, 1996 and 1995 were as follows:
1996 1995
- -----------------------------------------------------------------------
Sale of shares 212,898 424,112
Shares issued to shareholders in
reinvestment of dividends 225,609 141,966
Shares repurchased (421,494) (60,964)
- -----------------------------------------------------------------------
Net increase 17,013 505,114
Shares outstanding:
Beginning of period 4,761,489 4,265,375
- -----------------------------------------------------------------------
End of period 4,778,502 4,761,489
=======================================================================
6. COMPONENTS OF NET ASSETS
At October 31, 1996, net assets consisted of the following:
- -------------------------------------------------------------------------
Capital paid-in $42,058,694
Accumulated net realized gain on investments and foreign
currency transactions 6,428,889
Undistributed net investment income 91,148
Net unrealized appreciation of investments 18,515,120
Net unrealized appreciation on foreign
currency transactions 1,850
- --------------------------------------------------------------------------
$67,095,701
==========================================================================
7. Purchases and Sales of Securities
For the year ended October 31, 1996, the cost of securities purchased and
proceeds from securities sold, excluding short-term obligations, were
$38,220,564 and $40,535,253, respectively.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and
Board of Trustees of
The Haven Capital Management Trust:
We have audited the accompanying statement of net assets of The Haven Capital
Management Trust (comprised of The Haven Fund) as of October 31, 1996, and the
related statement of operations for the year then ended and the statements of
changes in net assets and the financial highlights for each of the periods
presented. 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 and financial highlights based on our
audits.
We conducted our audits 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 and financial
highlights 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
October 31, 1996, by correspondence with the custodians and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide 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 The
Haven Capital Management Trust as of October 31, 1996, and the results of its
operations for the year then ended and the changes in its net assets and its
financial highlights for each of the periods presented, in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
December 3, 1996
ANNUAL REPORT
OCTOBER 31, 1996
HAVEN CAPITAL MANAGEMENT, INC.
Investment Adviser
THE HAVEN FUND
P.O. BOX 8903
WILMINGTON, DE 19899-8903
FOR FUND INFORMATION,
PRICES AND LITERATURE, CALL
1-800-844-4836
FOR ACCOUNT BALANCES AND OTHER INFORMATION ABOUT YOUR HAVEN FUND ACCOUNT, CALL
1-800-850-7163
This report is submitted for the
general information of shareholders
of The Haven Fund. It is not authorized for distribution to prospective
investors unless accompanied or
preceded by an effective prospectus
for The Haven Fund. The prospectus includes complete information about
management fees and expenses, investment objectives, risks and operating
policies of The Haven Fund. Please read the prospectus carefully.
