SEMI-ANNUAL REPORT
APRIL 30, 1997
HAVEN CAPITAL MANAGEMENT, INC.
Investment Adviser
THE
HAVEN
FUND
(LOGO)
LETTER TO INVESTORS
June 1997
THE HAVEN FUND
Dear Shareholder,
For the six months ended April 30, 1997 The Haven Fund provided a total return
of +7.0%. This compares with increases in the Standard & Poor's 500 Stock Index
of 14.7% and the Lipper Growth Fund Index of +8.5%. Additional performance data,
including longer time periods, may be found on page 3.
Our relative performance obviously lagged the major market indexes in the fiscal
half-year. In November, January and April the outstanding feature of the market
was the strength of the large-capitalization stocks which dominate those
indexes. This has seldom been an area of concentration for the Fund. As the New
York Times recently put it, "Technology stocks, small-capitalization stocks and
growth stocks...performed poorly." These are currently areas of concentration
for the Fund and are ones which have achieved superior long-term performance. We
expect these areas will continue to do so. We believe they are the corporate
sectors with the greatest growth potential. While the Dow Jones and Standard &
Poor's major indexes get the headlines, the majority of traded American stocks
are selling below their levels of a year ago. How long this dichotomy will last
no one can say, but we are quite certain it is not eternal.
The Fund now holds a substantial position in technology stocks. We have always
had a favorable view of technology but not of the high price-earnings ratios the
stocks as a group tended to have. The sell-off in the sector over the past ten
months brought the prices of some stocks down to what we thought was fair value.
If our judgments about company fundamentals prove correct, we believe the shares
will be good long-term investments. The Fund has invested in a few Japanese
multinational companies for the first time in several years. Japan went through
its "irrational exuberance," to borrow Fed Chairman Greenspan's phrase, in the
late 1980s and it is still trying to recover from the aftereffects. Both the
Japanese economy and stock market continue in the doldrums, in contrast to ours,
but we believe the significant fall in the value of the yen and the inherent
strengths of these companies merit a long-term investment.
The Fund's five best-performing holdings over the past six months were Texas
Instruments, EMC Corp., Borders Group, General Growth Properties and United
Healthcare. Texas Instruments' stock responded favorably to their decision to
restructure their business by disposing of low-margin sectors and concentrating
on high-margin ones. EMC Corp., the world's largest manufacturer of stand-alone
computer memories, was bought by the Fund when the stock was depressed. Borders
Group, the bookseller, is a top-five repeat from our last report. The
"superstore" companies continue rapidly to gain market share in a fragmented
retail market. General Growth Properties is a good, steady Real Estate
Investment Trust (REIT), and lately these stocks have become more
popular. United Healthcare, in contrast to Borders, was our worst performer in
the previous half-year. It has recovered to a more reasonable value. We believe
there is still substantial growth ahead for the best HMOs, of which this is one.
The Fund's five worst-performing holdings in the half-year were Viking Office
Products, United Meridian, Readers Digest, The Sports Authority and Electronic
Data Systems. Viking Office Products had, after several years of outstanding
earnings gains, attracted many investors whose method is to follow the momentum
in stock prices. The shares were driven to what we considered an excessive
valuation, at which point we sold the majority of our holding. Then the momentum
turned, and the stock dropped 50%. We believe this company continues to have
outstanding prospects and have restored our stock holding. Much the same thing
happened to United Meridian. After tripling in price last year, it too lost
momentum and the stock dropped 50%. The stock is now selling where it was a year
ago, while every facet of the company's fundamental operations has improved. We
know of no other independent oil and gas company with as interesting a portfolio
of exploration projects. We purchased Readers Digest after the shares had
declined sharply. The company's intangible assets are enormous, irreplaceable
and undervalued, but the current management is seriously underachieving. A
change is needed. The Sports Authority is another case where we sold much of our
holdings (in October) when the shares had risen substantially, and have since
replaced them at much lower prices. Electronic Data Systems has twice reported
disappointing quarterly earnings and the stock was driven sharply lower. This is
a huge company with a superior record. We expect their problems to be solved.
We welcome our new shareholders and thank all of you for your continued support.
Sincerely,
/s/Colin C. Ferenbach
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 APRIL 30, 1997
One Five Ten Since
Year Year Year Inception*
- --------------------------------------------------------------------------------
The Haven Fund 15.25% 15.05% 11.98% 14.77%
- --------------------------------------------------------------------------------
S&P 500 Stock Index 25.13% 17.07% 14.10% 17.42%
- --------------------------------------------------------------------------------
Lipper Growth
Fund Index 14.10% 14.37% 12.18% 15.04%
- --------------------------------------------------------------------------------
*June 27, 1984
Average Annual Total Return
of the Fund
FOR PERIODS ENDED APRIL 30, 1997
One Since
Year Inception*
- --------------------------------------------------------------------------------
The Haven Fund 15.25% 19.45%
- --------------------------------------------------------------------------------
S&P 500 Stock Index 25.13% 26.08%
- --------------------------------------------------------------------------------
Lipper Growth
Fund Index 14.10% 19.83%
- --------------------------------------------------------------------------------
*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 10/31/90
<S> <C> <C> <C> <C> <C> <C> <C> <C>
THE HAVEN FUND $10,000
S&P 500 Stock Index $10,000
Lipper Growth Fund Index $10,000
</TABLE>
<TABLE>
GROWTH OF A $10,000 INVESTMENT FOR THE FUND AND THE PARTNERSHIP (CONTINUED)
10/31/91 10/31/92 10/31/93 10/31/94 10/31/95 10/31/96 4/30/97
<S> <C> <C> <C> <C> <C> <C> <C>
THE HAVEN FUND $58,692
S&P 500 Stock Index $78,606
Lipper Growth Fund Index $60,241
</TABLE>
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 844 funds in the Lipper Growth Fund category as of April 30, 1997. 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.
STATEMENT OF NET ASSETS
April 30, 1997 (Unaudited)
Number
of Shares Value
- ---------------------------------------------------------------------------
COMMON STOCKS 84.88%
AUTO PARTS 2.69%
60,000 Detroit Diesel Corp.* $1,027,500
15,000 Valeo SA - (FR) 924,816
-----------
1,952,316
-----------
BANKS 8.70%
40,000 Firstar Corp. 1,175,000
30,000 First Commerce Corp. 1,226,250
12,500 First Union Corp. 1,050,000
70,000 HSBC Holdings plc. - (GB) 1,837,658
10,000 Morgan (J.P.) & Co., Inc. 1,018,750
-----------
6,307,658
-----------
CHEMICALS 2.01%
10,000 DuPont (E.I.) de Nemours & Co. 1,061,250
10,000 Hoechst AG - (GER) 392,690
-----------
1,453,940
-----------
CONSUMER NON-DURABLES 3.12%
50,000 Alberto-Culver Co. 1,237,500
20,000 Kimberly-Clark Corp. 1,025,000
-----------
2,262,500
-----------
DRUG & HOSPITAL SUPPLIES 11.62%
20,000 Abbott Laboratories 1,220,000
70,000 Haemonetics Corp.* 1,163,750
25,000 Johnson & Johnson 1,531,250
45,000 Stryker Corp. 1,479,375
25,000 United Healthcare Corp. 1,215,625
20,000 Zeneca Group plc. - (GB) 1,807,500
-----------
8,417,500
-----------
ELECTRICAL EQUIPMENT 1.56%
15,000 Grainger (W.W.), Inc. 1,130,625
-----------
STATEMENT OF NET ASSETS (CONT'D.)
April 30, 1997 (Unaudited)
Number
of Shares Value
- ----------------------------------------------------------------------------
COMMON STOCKS 84.88% (cont'd.)
ELECTRONICS 17.07%
35,000 Computer Associates International, Inc. $ 1,820,000
20,000 Electronic Data Systems Corp. 667,500
60,000 EMC Corp./Mass.* 2,182,500
30,000 Hewlett-Packard Co. 1,575,000
17,500 Hitachi Ltd. - (JAP) 1,605,625
10,000 Matsushita Electric - (JAP) 1,618,750
75,000 Silicon Graphics, Inc.* 1,115,625
20,000 Texas Instruments, Inc. 1,785,000
-----------
12,370,000
-----------
ENVIRONMENTAL CONTROL 1.41%
25,000 Culligan Water Technologies, Inc.* 1,021,875
-----------
FURNISHINGS & APPLIANCES 3.31%
65,000 Juno Lighting, Inc. 1,007,500
40,000 Legget & Platt, Inc. 1,390,000
-----------
2,397,500
-----------
INSURANCE 2.53%
40,000 Mid Ocean Limited - (BER) 1,835,000
-----------
LODGING & CATERING 1.47%
30,000 Sysco Corp. 1,065,000
-----------
MACHINERY 3.29%
40,000 Columbus McKinnon Corp. 725,000
75,000 New Holland N.V. - (NETH)* 1,659,375
-----------
2,384,375
-----------
MISCELLANEOUS INDUSTRIALS 1.52%
30,000 Avery Dennison Corp. 1,102,500
-----------
OIL - INTERNATIONAL 8.72%
250,000 Gulf Canada Resources, Ltd. - (CAN)* 2,031,250
STATEMENT OF NET ASSETS (CONT'D.)
April 30, 1997 (Unaudited)
Number
of Shares Value
- ----------------------------------------------------------------------------
COMMON STOCKS 84.88% (cont'd.)
OIL - INTERNATIONAL 8.72% (CONT'D.)
9,000 Royal Dutch Petroleum Co. - (NETH) $ 1,622,250
30,000 Total SA - (FR) 1,248,750
50,000 United Meridian Corp.* 1,418,750
-----------
6,321,000
-----------
OIL WELL EQUIPMENT & SERVICES 1.91%
12,500 Schlumberger, Ltd. - (NETH ANT) 1,384,375
-----------
PUBLISHING & BROADCASTING 3.37%
10,000 Eastman Kodak Co. 835,000
70,000 Readers Digest Association, Inc. 1,610,000
-----------
2,445,000
-----------
REAL ESTATE INVESTMENT TRUSTS 2.20%
50,000 General Growth Properties, Inc. 1,593,750
-----------
RETAILING 8.38%
50,000 Borders Group, Inc.* 1,062,500
30,000 Circuit City Stores, Inc. 1,188,750
25,000 Lowe's Companies, Inc. 950,000
85,000 Sports Authority (The), Inc.* 1,508,750
100,000 Viking Office Products, Inc.* 1,362,500
-----------
6,072,500
-----------
Total Common Stocks
(cost $43,782,699) 61,517,414
-----------
Par/Principal in Local Currency
(000)
- ------------------------------------------------------------------------------
CONVERTIBLE BONDS 8.54%
1,500 Equitable Cos., Inc., 6.125%, 12/15/24 1,831,875
700 J. Sainsbury plc., 8.50% - (GB), 11/19/05 1,267,643
3,000 Meditrust, 6.875%, 11/15/98 3,090,000
-----------
Total Convertible Bonds
(cost $6,138,556) 6,189,518
-----------
STATEMENT OF NET ASSETS (CONT'D.)
April 30, 1997 (Unaudited)
Par
(000) Value
- ------------------------------------------------------------------------------
COMMERCIAL PAPER 5.38%
$3,900 Ford Motor Credit Co., 5.48%, 5/1/97
(cost $3,900,000) $ 3,900,000
-----------
TOTAL INVESTMENTS 98.81%
(cost $53,821,255**) $71,606,932
-----------
Other Assets in Excess of Liabilities 1.19% 865,584
-----------
Net Assets applicable to 5,325,548 shares of common
stock issued and outstanding 100.00% $72,472,516
===========
Net Asset Value, offering and redemption price
per share ($72,472,516 / 5,325,548) $13.61
======
The aggregate unrealized appreciation (depreciation) on a tax basis is as
follows:
Gross appreciation ........$19,699,769
Gross depreciation ........ (1,914,092)
-----------
Net appreciation ..........$17,785,677
===========
* Non-income producing securities.
** Also cost for federal income tax purposes.
See Notes to Financial Statements.
COUNTRY ABBREVIATIONS
(BER) - Bermuda (GB) - Great Britain
(CAN) - Canada (JAP) - Japan
(FR) - France (NETH) - Netherlands
(GER) - Germany (NETH ANT) - Netherland Antilles
TOP TEN STOCK HOLDINGS
25% OF THE FUND
EMC Corp./Mass. 3.0%
- --------------------------------------------------
Gulf Canada Resources, Ltd. 2.8%
- --------------------------------------------------
HSBC Holdings plc. 2.5%
- --------------------------------------------------
Mid Ocean Limited 2.5%
- --------------------------------------------------
Computer Associates International, Inc. 2.5%
- --------------------------------------------------
Zeneca Group plc. 2.5%
- --------------------------------------------------
Texas Instruments, Inc. 2.5%
- --------------------------------------------------
New Holland N.V. 2.3%
- --------------------------------------------------
Royal Dutch Petroleum Co. 2.2%
- --------------------------------------------------
Matsushita Electric 2.2%
- --------------------------------------------------
TOTAL 25.0%
PERCENT OF TOTAL EQUITIES
BY COUNTRY
(Unaudited)
United States 73.5%
Germany 0.5%
Netherland Antilles 1.9%
Bermuda 2.5%
Canada 2.8%
France 3.1%
Japan 4.4%
Netherlands 4.5%
Great Britain 6.8%
STATEMENT OF OPERATIONS
For the Six Months Ended April 30, 1997 (Unaudited)
INVESTMENT INCOME:
Dividends $ 517,098
Interest 292,121
-----------
Total Investment Income 809,219
-----------
OPERATING EXPENSES:
Investment advisory fees 211,487
Distribution fees 74,356
Administration and accounting fees 49,999
Transfer agent fees 27,468
Amortization of organizational costs 25,137
Custodian fees 14,728
Trustees' fees and expenses 14,650
Audit fees 14,075
Legal fees 14,019
Insurance fees 9,728
Blue Sky fees 5,601
Printing fees 4,571
Miscellaneous expenses 5,590
-----------
Total Expenses 471,409
-----------
Net Investment Income 337,810
-----------
NET REALIZED GAIN FROM:
Investments 5,022,904
Foreign currency transactions 19,161
NET DECREASE IN UNREALIZED APPRECIATION ON:
Investments (729,443)
Translation of assets and liabilities in foreign currency (4,314)
-----------
Net realized and unrealized gain from
investments and foreign currency 4,308,308
-----------
Net increase in net assets resulting from operations $4,646,118
==========
See Notes to Financial Statements.
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS YEAR
ENDED ENDED
APRIL 30, 1997 OCTOBER 31,
(UNAUDITED) 1996
--------------- -----------
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income $ 337,810 $ 351,886
Net realized gain on investments and
foreign currency transactions 5,042,065 6,413,120
Net change in unrealized appreciation
(depreciation) on investments and
translation of other assets and
liabilities denominated in foreign
currencies (733,757) 8,310,343
----------- -----------
Net increase in net assets
from operations 4,646,118 15,075,349
----------- -----------
DIVIDENDS PAID TO SHAREHOLDERS:
From net investment income (255,709) (369,791)
From net realized gains (6,502,581) (3,308,473)
----------- -----------
Total dividends paid to shareholders (6,758,290) (3,678,264)
----------- -----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold 4,232,881 2,709,097
Value of shares issued in reinvestment
of dividends 4,219,952 2,653,736
Cost of shares redeemed (963,846) (5,242,835)
----------- -----------
Increase in net assets from capital
share transactions 7,488,987 119,998
----------- -----------
Total increase in net assets 5,376,815 11,517,083
----------- -----------
NET ASSETS:
Beginning of period 67,095,701 55,578,618
----------- -----------
End of period $72,472,516 $67,095,701
=========== ===========
See Notes to Financial Statements.
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
SIX MONTHS YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED
(For a Share Outstanding APRIL 30, 1997 OCTOBER 31, OCTOBER 31, OCTOBER 31,
Throughout the Period) (UNAUDITED) 1996 1995 1994<F1>
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $14.04 $11.67 $10.65 $10.00
------- ------- ------- -------
INCREASE FROM INVESTMENT OPERATIONS:
Net investment income 0.07 0.08 0.12 0.04
Net realized and unrealized gains on
investments and foreign currency transactions 0.90 3.07 1.28 0.61
------- ------- ------- -------
Total from investment operations 0.97 3.15 1.40 0.65
LESS DISTRIBUTIONS:
Dividends paid to shareholders
From net investment income (0.05) (0.08) (0.15) --
From net realized gains (1.35) (0.70) (0.23) --
------- ------- ------- -------
Total distributions to shareholders (1.40) (0.78) (0.38) --
NET ASSET VALUE, END OF PERIOD $13.61 $14.04 $11.67 $10.65
======= ======= ======= =======
TOTAL RETURN 7.00% 28.25% 13.65% 6.50%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period (in 000s) $72,473 $67,096 $55,579 $45,332
Ratios of expenses to average net assets 1.34% 1.59% 1.53%<F2> 1.20%<F2><F3>
Ratios of net investment income to
average net assets 0.96% 0.58% 1.14%<F2> 1.10%<F2><F3>
Portfolio turnover rate 67% 67% 77% 27%
Average commission rate paid<F4> $0.0659 $0.0591
------- ------- ------- -------
<FN>
<F1> The Haven Fund commenced operations on June 23, 1994.
<F2> 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.
<F3> Annualized.
<F4> 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.
</TABLE>
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
Board of 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.
NOTES TO FINANCIAL STATEMENTS (CONT'D.)
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 and distributions to shareholders are
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 differences primarily relate 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 April 30, 1997, the Fund did not hold any financial instruments with off-
balance sheet risk.
NOTES TO FINANCIAL STATEMENTS (CONT'D.)
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 six months
ended April 30, 1997, 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 Distribution Services, LLC, 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 the 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).
NOTES TO FINANCIAL STATEMENTS (CONT'D.)
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 period ended April
30, 1997 and the year ended October 31, 1996 were as follows:
1997 1996
---- ----
Sale of shares 305,553 212,898
Shares issued to shareholders in
reinvestment of dividends 311,666 225,609
Shares repurchased (70,173) (421,494)
---------- -----------
Net increase 547,046 17,013
Shares outstanding:
Beginning of period 4,778,502 4,761,489
---------- -----------
End of period 5,325,548 4,778,502
========== ==========
6. COMPONENTS OF NET ASSETS
At April 30, 1997, Net Assets consisted of the following:
Capital paid-in $49,547,681
Accumulated net realized gain on investments
and foreign currency transactions 4,968,373
Undistributed net investment income 173,249
Net unrealized appreciation of investments 17,785,677
Net unrealized depreciation on foreign
currency transactions (2,464)
-----------
$72,472,516
===========
7. PURCHASES AND SALES OF SECURITIES
For the six months ended April 30, 1997, the cost of securities purchased and
proceeds from securities sold, excluding short-term obligations, were
$23,279,446 and $22,136,319, respectively.
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.
