ANNUAL REPORT
OCTOBER 31, 1999
HAVEN CAPITAL MANAGEMENT, INC.
Investment Adviser
------
THE
HAVEN
FUND
------
(PHOTO)
<PAGE>
- --------------------------------------------------------------------------------
LETTER TO INVESTORS
- --------------------------------------------------------------------------------
December 1999
-----
THE
HAVEN
FUND
-----
Dear Shareholder:
For the fiscal year ended October 31, 1999 the Fund's total return was
+12.3%<F1>. This compares with +25.7% for the Standard & Poor's 500/R Stock
Index<F2> and +29.3% for the Lipper Growth Fund Index<F3>. Extended performance
data can be found on pages 4 and 5. Calendar 1999 has been somewhat of a break
in the pattern of exceptional gains of the past four years. While most indices
were up in the first nine months, more stocks were down for the year than up.
Through the first three calendar quarters the S&P 500/R Index was +5.4% and the
Fund was +5.1%.
Our energy holdings continued to retard our performance in the first, second and
fourth fiscal quarters, while our emphasis on value investing continued out of
favor in all fiscal quarters except the third. We believe that what are
literally "the powers that be," which is to say the controlling members of OPEC,
intend to keep the price of crude oil in the range of $20-25 per barrel for the
foreseeable future. We also believe that the current price of North American
natural gas of about $2.50 per million BTU's is more likely to rise than fall.
These are favorable conditions for energy producers, but the stock market
remains skeptical. More immediately positive, EMC Corp., the world's largest
independent supplier of computer memories and the Fund's largest holding, has
benefited from the explosion of the Internet because ".com" companies require
huge computer memory banks. Unlike most ".coms," EMC is very profitable<F4>.
As we did last year, we are including a table of mutual fund performance by
category. It illustrates clearly how much out of favor value investing has been
despite its long history of delivering good performance. Earlier in the year, at
the height of the Internet mania, Paul Volker, the former chairman of the
Federal Reserve Board, was quoted as saying, "The fate of the world economy is
now totally dependent on the stock market, whose growth is dependent on about 50
stocks, half of which have never reported any earnings." While Mr. Volker was
exaggerating for emphasis, there was more than a little truth in his comment.
That was a situation which could not continue, but it still has yet to unwind.
When it does, we believe that investing for value will again come into its own.
THE HAVEN FUND | ANNUAL REPORT |
<PAGE>
DOMESTIC GENERAL STOCK FUNDS<F5>
WEEKLY PERFORMANCE FOR THE WEEK ENDED FRIDAY, OCTOBER 29, 1999
<TABLE>
<CAPTION>
AVERAGE YEAR-TO-DATE RETURNS 1-YEAR RETURNS 3-MONTH RETURNS
ONE-WEEK TOP BTM. TOP BTM. TOP BTM.
ABV. FUND TYPE NO. RETURN QTR. MEDIAN QTR. QTR. MEDIAN QTR. QTR. MEDIAN QTR.
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
LG Large Growth 393 +5.2% +20.8% +15.1% +10.9% +45.9% +37.4% +31.5% +7.3% +4.8% +3.0%
- ------------------------------------------------------------------------------------------------------------------------------------
MG Mid-Cap Growth 201 +5.1 +32.3 +19.9 +9.9 +62.1 +45.6 +34.5 +13.6 +8.2 +3.3
- ------------------------------------------------------------------------------------------------------------------------------------
SG Small Growth 220 +4.1 +37.2 +18.3 +4.9 +66.9 +44.0 +25.3 +15.5 +6.6 +1.1
- ------------------------------------------------------------------------------------------------------------------------------------
LB Large Blend 596 +4.4 +12.3 +10.5 +7.1 +28.4 +25.6 +20.3 +2.3 +1.6 -0.1
- ------------------------------------------------------------------------------------------------------------------------------------
MB Mid-Cap Blend 120 +3.8 +9.8 +1.8 -4.0 +26.6 +15.0 +9.1 +0.2 -1.6 -5.0
- ------------------------------------------------------------------------------------------------------------------------------------
SB Small Blend 113 +2.5 +9.2 +1.1 -5.3 +23.8 +14.6 +7.0 -1.4 -3.6 -6.8
- ------------------------------------------------------------------------------------------------------------------------------------
LV Large Value 357 +4.2 +8.3 +4.2 +0.5 +19.6 +14.0 +9.2 -1.6 -3.5 -5.4
- ------------------------------------------------------------------------------------------------------------------------------------
MV Mid-Cap Value 124 +3.5 +8.3 +2.9 -1.3 +15.8 +10.3 +5.6 -3.2 -5.8 -8.1
- ------------------------------------------------------------------------------------------------------------------------------------
SV Small Value 113 +1.7 +1.2 -4.4 -7.7 +10.7 +4.1 -0.1 -4.8 -7.9 -9.9
- ------------------------------------------------------------------------------------------------------------------------------------
DH Domestic Hybrid 413 +2.8 +6.3 +4.5 +1.8 +15.8 +12.2 +7.4 +1.7 +0.6 -1.3
====================================================================================================================================
TOTAL 2650 +4.0 +13.6 +8.2 +2.6 +33.5 +21.6 +11.8 +3.7 +0.9 -2.8
====================================================================================================================================
</TABLE>
The figures shown represent the average total returns in each fund category for
the periods shown ended on October 31, 1999. Return figures assume reinvestment
of all dividends.
Morningstar, Inc. classifies The Haven Fund as a "mid-cap blend" fund. While the
Fund slipped into the third quartile for the 12 months ended October 31, 1999,
it was in the first or second quartile from February through October 1999 and in
the third quartile for January 1999. The Fund was in the second quartile for the
ten-month period ended October 1999.
The Fund's five best-performing stocks last year were Circuit City Stores, the
electronic, appliance and automobile retailer, which recovered from a depressed
price last year. EMC Corp., which is a repeat performer for us. Amdocs, Ltd., an
Israeli company that is a leading provider of "CC&B" (customer care and billing)
systems to telecommunications companies. Avery Dennison, who make a multitude of
tags, labels and sundry stationery products. And Stryker Corp., one of the
world's leading producers of orthopedic implants<F6>.
The five worst performers were Borders Group, retailer of books and records,
whose stock continues to suffer from the perception that the retailing of books
will mostly move into e-commerce. The evidence to date does not support this
perception and we do not think it will. Owens Corning and Armstrong World
Industries, domestic producers primarily of building materials, are financially
solid, their earnings progress is satisfactory and we believe the stocks
represent sound value. Owens Corning sells for approximately five times
estimated earnings for the year 2000, which is less than one-quarter of the
price-earnings multiple of the S&P 500/R Index, and
<PAGE>
| ANNUAL REPORT | THE HAVEN FUND
no one seems to care. Ocean Energy, which in the twelve months went from $12 to
$4 to $12 and then to $8, is a vivid example of current stock market volatility.
No other independent exploration and production energy company has as many large
and promising projects in its near-term future, but the whole energy sector is
currently out of favor in the stock market. Elan plc, a medium-sized Irish
pharmaceutical company is developing several promising new drugs<F6>.
We thank you for your continued support.
Sincerely,
/s/ Colin C. Ferenbach
Colin C. Ferenbach
President
<F1> Past performance is no guarantee of future results. The 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 their original cost.
<F2> The S&P 500/R 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.
<F3> The Lipper Growth Fund Index includes the 30 largest funds, which by
prospectus or portfolio practice, normally invests in companies whose long-
term earnings are expected to grow significantly faster than the earnings
of the stocks represented in the major unmanaged stock indices. Effective
September 16, 1999 Lipper reclassified The Haven Fund as Multi-Cap Core.
Lipper defines Multi-Cap Core funds as stock funds investing in companies
of various sizes, with wide latitude in the type of shares they buy. On
average, the price-to-earnings and price-to-book ratios match those of the
average U.S. diversified multi-cap fund. It was formerly classified as
Growth. Lipper defines Growth funds as a fund that normally invests in
companies with long-term earnings expected to grow significantly faster
than the earnings of the stocks represented in the major unmanaged stock
indices.
<F4> As of October 31, 1999, EMC Corp. comprised 9.1% of the Fund.
<F5> Source: Morningstar Principia, November 1999 release. Fund Category
Classification Definitions Funds with a combined relative price/earnings
and price/book figure less than 1.75 are considered to be value funds.
Portfolios with combined ratios equal or greater than 1.75 but less than or
equal to 2.25 are considered to be blend funds (by definition, the S&P
500/R Index scores 2.00) and any funds with a sum greater than 2.25 are
classified as growth funds. "Small" refers to companies with less than $1.5
billion in market capitalization. "Mid-cap" refers to companies with market
capitalizations between $1.5 billion and $9.1 billion and "large" refers to
companies with market capitalizations over $9.1 billion.
<F6> As of October 31, 1999, Circuit City Stores comprised 1.8% of the Fund;
Amdocs, Ltd. comprised 2.7% of the Fund; Avery Dennison comprised 2.2% of
the Fund; Stryker Corp. comprised 3.4% of the Fund; Borders Group comprised
1.8% of the Fund; Owens Corning comprised 1.1% of the Fund; Armstrong World
Industries comprised 1.3% of the Fund; Ocean Energy comprised 1.8% of the
Fund; and Elan plc comprised 2.4% of the Fund.
THE HAVEN FUND | ANNUAL REPORT |
<PAGE>
The chart below 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, Inc., 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.
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT
FOR THE FUND AND THE PARTNERSHIP
S&P 500 Lipper Haven Wilshire
Index Growth Fund 4500
------- ------ ------ ------
6/27/84 10,000 10,000 10,000 10,000
10/31/84 11,007 10,650 10,707 10,808
10/31/85 13,119 12,609 13,463 13,019
10/31/86 17,460 16,302 16,856 16,505
10/31/87 18,585 16,440 15,972 15,301
10/31/88 21,348 18,947 18,552 18,478
10/31/89 26,959 23,733 21,485 22,696
10/31/90 24,969 20,688 20,000 17,935
10/31/91 33,289 29,264 27,069 27,058
10/31/92 36,601 31,546 30,495 29,520
10/31/93 42,069 37,534 35,619 36,871
10/31/94 43,698 38,299 37,631 36,934
10/31/95 55,251 47,484 42,768 45,340
10/31/96 68,522 55,508 54,853 53,333
10/31/97 90,525 71,284 68,512 68,789
10/31/98 110,432 78,041 68,703 66,471
10/31/99 138,812 100,908 77,152 84,086
- --------------------------------------------------------------------------------
| ANNUAL REPORT | THE HAVEN FUND
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN OF THE FUND
FOR THE PERIODS
- --------------------------------------------------------------------------------
One Year Five Year Since Inception<F1>
9/30/99 10/31/99 9/30/99 10/31/99 9/30/99 10/31/99
- --------------------------------------------------------------------------------
The Haven Fund 22.0% 12.3% 15.5% 15.4% 15.9% 15.7%
- --------------------------------------------------------------------------------
S&P 500/R Stock Index 27.8% 25.7% 25.0% 26.0% 24.8% 25.8%
- --------------------------------------------------------------------------------
Lipper Growth Fund Index 30.3% 29.3% 21.4% 22.4% 21.2% 22.2%
- --------------------------------------------------------------------------------
Wilshire 4500 Index 27.2% 26.5% 16.8% 17.9% 16.7% 17.5%
- --------------------------------------------------------------------------------
<F1>June 23, 1994
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN OF THE FUND AND PARTNERSHIP
FOR THE PERIODS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
One Year Five Year Ten Year Since Inception<F2>
9/30/99 10/31/99 9/30/99 10/31/99 9/30/99 10/31/99 9/30/99 10/31/99
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
The Haven Fund 22.0% 12.3% 15.5% 15.4% 13.2% 13.6% 14.2% 14.2%
S&P 500/R Stock Index 27.8% 25.7% 25.0% 26.0% 16.8% 17.8% 18.3% 18.7%
Lipper Growth Fund Index 30.3% 29.3% 21.4% 22.4% 15.0% 16.0% 16.2% 16.6%
Wilshire 4500 Index 27.2% 26.5% 16.8% 17.9% 12.9% 14.0% 14.5% 14.8%
- -----------------------------------------------------------------------------------------------------------------
<F2>June 27, 1984
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
Total return calculations reflect fee waivers in effect for 1995 and 1994. 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.
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 1,197 funds in the Lipper Growth Fund category as of April 30, 1999.
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.
The Wilshire 4500 Index is an unmanaged index of all U.S. equity securities with
readily available price data that are not included in the S&P 500.
A direct investment in either the S&P 500 Stock Index, the Lipper Growth Fund
Index or the Wilshire 4500 Index is not possible.
Sunstone Distribution Services, LLC, Distributor
THE HAVEN FUND | ANNUAL REPORT |
<PAGE>
- --------------------------------------------------------------------------------
TOP TEN STOCK HOLDINGS
- --------------------------------------------------------------------------------
---------------------------------------
37.6% of the Fund
---------------------------------------
EMC Corp. 9.1%
---------------------------------------
Molex, Inc. 3.8%
---------------------------------------
Johnson & Johnson 3.6%
---------------------------------------
Stryker Corp. 3.4%
---------------------------------------
Kimberly-Clark Corp. 3.1%
---------------------------------------
Royal Dutch Petroleum Co. 3.0%
---------------------------------------
Masco Corp. 3.0%
---------------------------------------
Diebold, Inc. 2.9%
---------------------------------------
Burlington Resources, Inc. 2.9%
---------------------------------------
Commerce Bancorp, Inc. 2.8%
---------------------------------------
TOTAL 37.6%
---------------------------------------
- --------------------------------------------------------------------------------
PERCENT OF TOTAL EQUITIES
- --------------------------------------------------------------------------------
BY COUNTRY
(Unaudited)
- ---------------------
United States 81.8%
France 6.1%
Netherlands 5.9%
Ireland 3.1%
Israel 3.1%
- ---------------------
| ANNUAL REPORT | THE HAVEN FUND
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
October 31, 1999
Number
of Shares Value
- --------------------------------------------------------------------------------
COMMON STOCKS 86.94%
AUTO PARTS 2.49%
5,000 Valeo SA - (FR) $ 358,933
20,000 Valeo SA - ADR (FR) 1,435,734
-----------
1,794,667
-----------
BANKS 7.02%
35,000 Bank One Corp. 1,314,688
45,125 Commerce Bancorp, Inc. 2,022,164
20,000 Wachovia Corp. 1,725,000
-----------
5,061,852
-----------
BUILDING & HOUSING 2.44%
25,000 Armstrong World Industries, Inc. 934,375
40,000 Owens Corning 820,000
-----------
1,754,375
-----------
CHEMICALS 3.73%
20,000 du Pont (E.I.) de Nemours & Co. 1,288,750
30,000 Praxair, Inc. 1,402,500
-----------
2,691,250
-----------
CONSUMER NON-DURABLES 3.07%
35,000 Kimberly-Clark Corp. 2,209,375
-----------
DRUG & HOSPITAL SUPPLIES 10.02%
75,000 Elan Corp. plc - ADR (IRL)<F2> 1,931,250
25,000 Johnson & Johnson 2,618,750
40,000 Stryker Corp. 2,470,000
20,000 VaxGen, Inc.<F1> 198,812
-----------
7,218,812
-----------
| ANNUAL REPORT | THE HAVEN FUND
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONT'D.)
- --------------------------------------------------------------------------------
October 31, 1999
Number
of Shares Value
- --------------------------------------------------------------------------------
COMMON STOCKS 86.94% (cont'd.)
ELECTRICAL EQUIPMENT 1.76%
30,000 Grainger (W.W.), Inc. $ 1,271,250
-----------
FURNISHINGS & APPLIANCES 4.81%
60,000 Leggett & Platt, Inc. 1,331,250
70,000 Masco Corp. 2,135,000
-----------
3,466,250
-----------
INFORMATION TECHNOLOGY 17.57%
90,000 EMC Corp.<F2> 6,570,000
25,000 Hewlett-Packard Co. 1,851,562
75,000 Molex, Inc. 2,737,500
75,000 Novell, Inc.<F2> 1,504,688
-----------
12,663,750
-----------
MACHINERY 2.07%
35,000 Dover Corp. 1,489,688
-----------
MISCELLANEOUS INDUSTRIALS 5.08%
25,000 Avery Dennison Corp. 1,562,500
80,000 Diebold, Inc. 2,100,000
-----------
3,662,500
-----------
OIL - DOMESTIC 4.22%
60,000 Burlington Resources, Inc. 2,092,500
35,000 Conoco, Inc. 949,375
-----------
3,041,875
-----------
OIL - INTERNATIONAL 7.56%
140,000 Ocean Energy, Inc.<F2> 1,286,250
36,000 Royal Dutch Petroleum Co. - (NETH) 2,157,750
30,000 Total SA - ADR (FR) 2,000,625
-----------
5,444,625
-----------
THE HAVEN FUND | ANNUAL REPORT |
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONT'D.)
- --------------------------------------------------------------------------------
October 31, 1999
Number
of Shares Value
- --------------------------------------------------------------------------------
COMMON STOCKS 86.94% (cont'd.)
OIL WELL EQUIPMENT & SERVICES 2.10%
25,000 Schlumberger, Ltd. $ 1,514,062
-----------
REAL ESTATE INVESTMENT TRUSTS 2.41%
60,000 General Growth Properties, Inc. 1,736,250
-----------
RETAILING 3.58%
100,000 Borders Group, Inc.<F2> 1,300,000
30,000 Circuit City Stores - Circuit City Group 1,280,625
-----------
2,580,625
-----------
RUBBER & PLASTIC 0.72%
15,000 Newell Rubbermaid, Inc. 519,375
-----------
TELECOMMUNICATIONS 4.13%
70,000 Amdocs Ltd. - (ISR)<F2> 1,946,875
80,000 Andrew Corp.<F2> 1,030,000
-----------
2,976,875
-----------
TRANSPORTATION 2.16%
60,865 TNT Post Group NV - ADR (NETH) 1,559,666
-----------
Total Common Stocks
(cost $39,119,738) 62,657,122
-----------
| ANNUAL REPORT | THE HAVEN FUND
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONT'D.)
- --------------------------------------------------------------------------------
October 31, 1999
Par (000)/Shares Value
- --------------------------------------------------------------------------------
COMMERCIAL PAPER 11.10%
$2,500 American Express Credit Corp., 5.25%, 11/3/99 $ 2,499,271
2,500 Ford Motor Credit Co., 5.22%, 11/4/99 2,498,912
3,000 General Electric Credit Corp., 5.20%, 11/2/99 2,999,567
-----------
(cost $7,997,750) 7,997,750
-----------
SHORT-TERM INVESTMENT 0.93%
668,326 Temporary Investment Fund
(cost $668,326) 668,326
-----------
TOTAL INVESTMENTS 98.97%
(cost $47,785,814<F3>) $71,323,198
-----------
Other Assets in Excess of Liabilities 1.03% 745,031
-----------
Net Assets applicable to 4,998,542 Shares of Common
Stock issued and outstanding 100.00% $72,068,229
===========
Net Asset Value, offering and redemption price
per share ($72,068,229 / 4,998,542) $14.42
======
The aggregate unrealized appreciation (depreciation) on a tax basis is as
follows:
Gross appreciation $25,079,154
Gross depreciation (1,541,770)
---------------
Net appreciation $23,537,384<F3>
===============
<F1> Fair valued by the Board of Trustees.
<F2> Non-income producing securities.
<F3> Also cost for federal income tax purposes.
ADR American Depositary Receipt
COUNTRY ABBREVIATIONS
(FR) - France (ISR) - Israel
(IRL) - Ireland (NETH) - Netherlands
See Notes to Financial Statements.
THE HAVEN FUND | ANNUAL REPORT |
<PAGE>
| ANNUAL REPORT | THE HAVEN FUND
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
For the Year Ended October 31, 1999
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld of $24,938) $ 901,052
Interest 270,627
- ------------------------------------------------------------------------------
Total Investment Income 1,171,679
- ------------------------------------------------------------------------------
OPERATING EXPENSES:
Investment advisory fees 458,464
Distribution fees 150,296
Administration and accounting fees 100,000
Legal fees 60,176
Transfer agent fees 45,102
Amortization of organizational costs 32,914
Audit fees 30,745
Trustees' fees and expenses 28,000
Custodian fees 26,915
Blue Sky fees 25,291
Printing fees 20,678
Insurance fees 19,091
Miscellaneous expenses 22,748
- ------------------------------------------------------------------------------
Total Expenses 1,020,420
- ------------------------------------------------------------------------------
Net Investment Income 151,259
- ------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS) FROM:
Investments 4,150,968
Foreign currency transactions (9,142)
NET INCREASE IN UNREALIZED APPRECIATION (DEPRECIATION) ON:
Investments 4,701,185
Translation of assets and liabilities in foreign currency (607)
- ------------------------------------------------------------------------------
Net realized and unrealized gain from
investments and foreign currency 8,842,404
- ------------------------------------------------------------------------------
Net increase in net assets resulting from operations $8,993,663
==============================================================================
See Notes to Financial Statements.
THE HAVEN FUND | ANNUAL REPORT |
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
YEAR YEAR
ENDED ENDED
OCTOBER 31, OCTOBER 31,
1999 1998
- ------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income $ 151,259 $ 413,175
Net realized gain on investments and foreign
currency transactions 4,141,826 8,045,865
Net change in unrealized appreciation
(depreciation) on investments and translation
of other assets and liabilities denominated
in foreign currencies 4,700,578 (8,092,076)
- ------------------------------------------------------------------------------
Net increase in net assets from operations 8,993,663 366,964
- ------------------------------------------------------------------------------
DIVIDENDS PAID TO SHAREHOLDERS:
From net investment income (259,378) (448,301)
From net realized gains (8,050,675) (7,848,458)
- ------------------------------------------------------------------------------
Total dividends paid to shareholders (8,310,053) (8,296,759)
- ------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold 914,707 2,772,497
Value of shares issued in reinvestment
of dividends 5,984,763 6,023,822
Cost of shares redeemed (13,205,150) (7,944,801)
- ------------------------------------------------------------------------------
Increase (decrease) in net assets from
capital share transactions (6,305,680) 851,518
- ------------------------------------------------------------------------------
Total decrease in net assets (5,622,070) (7,078,277)
- ------------------------------------------------------------------------------
NET ASSETS:
Beginning of year 77,690,299 84,768,576
- ------------------------------------------------------------------------------
End of year $72,068,229 $77,690,299
==============================================================================
See Notes to Financial Statements.
| ANNUAL REPORT | THE HAVEN FUND
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
(For a Share Outstanding OCT. 31, OCT. 31, OCT. 31, OCT. 31, OCT. 31,
Throughout each Period) 1999 1998 1997 1996 1995
- --------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD $14.29 $15.83 $14.04 $11.67 $10.65
- --------------------------------------------------------------------------------
INCREASE FROM INVESTMENT
OPERATIONS:
Net investment income 0.03 0.08 0.06 0.08 0.12
Net realized and unrealized
gains (losses) on investments
and foreign currency
transactions 1.64 (0.02) 3.13 3.07 1.28
- --------------------------------------------------------------------------------
Total from investment
operations 1.67 0.06 3.19 3.15 1.40
LESS DISTRIBUTIONS:
Dividends paid to shareholders:
From net investment income (0.05) (0.08) (0.05) (0.08) (0.15)
From net realized gains (1.49) (1.52) (1.35) (0.70) (0.23)
- --------------------------------------------------------------------------------
Total distributions
to shareholders (1.54) (1.60) (1.40) (0.78) (0.38)
NET ASSET VALUE, END OF PERIOD $14.42 $14.29 $15.83 $14.04 $11.67
================================================================================
TOTAL RETURN 12.29% 0.29% 24.90% 28.25% 13.65%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period
(in 000s) $72,068 $77,690 $84,769 $67,096 $55,579
Ratios of expenses to average
net assets 1.34% 1.26% 1.33% 1.59% 1.53%<F1>
Ratios of net investment income
to average net assets 0.20% 0.50% 0.78% 0.58% 1.14%<F1>
Portfolio turnover rate 31% 59% 57% 67% 77%
- --------------------------------------------------------------------------------
<F1> Without fee waivers, the ratio of expenses to average daily net assets
would have been 1.59% and the ratio of net investment income to average
daily net assets would have been 1.08% for the year ended October 31, 1995.
See Notes to Financial Statements.
THE HAVEN FUND | ANNUAL REPORT |
<PAGE>
- --------------------------------------------------------------------------------
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. At October 31, 1999, one security representing 0.28% of net assets was
fair valued.
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.
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.
| ANNUAL REPORT | THE HAVEN FUND
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONT'D.)
- --------------------------------------------------------------------------------
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 most of 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, 1999, 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 on behalf of
the Fund and Haven Capital Management, Inc. (the "Adviser"), 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.
b) TRUSTEES' FEES: Fees were paid to the Trustees and/or Officers of the Fund
for the year ended October 31, 1999, but no fees were paid to any Trustee and/or
Officer of the Fund who is also an employee of the Adviser.
c) 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.
THE HAVEN FUND | ANNUAL REPORT |
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONT'D.)
- --------------------------------------------------------------------------------
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).
The Fund also pays Hewes Communications, Inc. a monthly fee of $3,500 (exclusive
of out-of-pocket expenses) as compensation for services under the Plan.
d) 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 first $200,000,000 of average net assets; 0.075% of the
next $200,000,000 of average net assets; 0.05% of the next $200,000,000 of
average net assets; and 0.03% of the average net assets in excess of
$600,000,000, 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).
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, 1999, and 1998, respectively, were as follows:
1999 1998
- ----------------------------------------------------------------------
Sale of shares 64,454 188,218
Shares issued to shareholders
in reinvestment of dividends 439,204 415,829
Shares repurchased (942,502) (522,892)
- ----------------------------------------------------------------------
Net increase (decrease) (438,844) 81,155
Shares outstanding:
Beginning of year 5,437,386 5,356,231
- ----------------------------------------------------------------------
End of year 4,998,542 5,437,386
======================================================================
At October 31, 1999, one shareholder held approximately 16% of the outstanding
shares of the Fund.
<PAGE>
| ANNUAL REPORT | THE HAVEN FUND
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONT'D.)
- --------------------------------------------------------------------------------
6. COMPONENTS OF NET ASSETS
At October 31, 1999, Net Assets consisted of the following:
- ------------------------------------------------------------------------------
Capital paid-in $44,392,858
Accumulated net realized gain on investments
and foreign currency transactions 4,138,178
Net unrealized appreciation of investments 23,537,384
Net unrealized depreciation on foreign
currency transactions (191)
- ------------------------------------------------------------------------------
$72,068,229
==============================================================================
7. PURCHASES AND SALES OF SECURITIES
For the year ended October 31, 1999, the cost of securities purchased and
proceeds from securities sold, excluding short-term obligations, were
$21,475,168 and $38,657,427, respectively.
THE HAVEN FUND | ANNUAL REPORT |
<PAGE>
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and
Board of Trustees of
The Haven Capital Management Trust:
In our opinion, the accompanying statement of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
The Haven Capital Management Trust (the "Trust") comprised of The Haven Fund at
October 31, 1999, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended and
the financial highlights for each of the five years in the period then ended, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Trust's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which 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, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audit, which included confirmation of securities at October
31, 1999 by correspondence with the custodians and brokers, provide a reasonable
basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania 19103
November 30, 1999
| ANNUAL REPORT | THE HAVEN FUND
<PAGE>
IMPORTANT TAX INFORMATION (UNAUDITED)
The Haven Fund distributed a total capital gain dividend of $1.4863 per share
during the fiscal year ending October 31, 1999. All of which was a 20 percent
rate gain distribution.
Because the Fund's fiscal year is not the calendar year, capital gain dividend
distribution amounts to be used by calendar year taxpayers on their Federal
income tax returns will be reflected on 1099-DIV forms, which will be mailed in
January 2000.
THE HAVEN FUND | ANNUAL REPORT |
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 MORE COMPLETE INFORMATION ABOUT MANAGEMENT FEES AND
EXPENSES, INVESTMENT OBJECTIVES, RISKS AND OPERATING POLICIES OF THE HAVEN FUND.
PLEASE READ THE PROSPECTUS CAREFULLY.
HA4081299
