ANNUAL REPORT
OCTOBER 31, 2000
THE HAVEN FUND HAVEN CAPITAL MANAGEMENT, INC.
P.O. BOX 8903 Investment Adviser
WILMINGTON, DE 19899-8903
------
THE
HAVEN
FUND
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(PHOTO)
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LETTER TO INVESTORS
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October 2000
(LOGO)
-------
THE
HAVEN
FUND
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Dear Shareholder:
For the fiscal year ended October 31, 2000 the Fund's total return was
+27.64%<F1>. This compares with +6.08% for the Standard & Poor's 500(R) Stock
Index and +9.85% for the Lipper Multi-Cap Value Funds Index<F2>. The Fund is a
"Mid-Cap Blend" fund in the universe of Morningstar, Inc. and ranked in the
top quartile of that category for the year<F3>. Extended performance data for
the Fund will be found on pages 4 and 5. A recapitulation of all of
Morningstar, Inc.'s fund categories will be found on page 3.
A year ago we wrote that the long run of superior performance by unmanaged
funds which aped the S&P 500(R) Index had to end. It made no sense to us that
successful equity investing would be permanently consigned to a mindless
system. "That was a situation which could not continue," we wrote, "but it
still has yet to unwind. When it does, we believe that investing for value
will again come into its own." In 2000, it did unwind and value investing
is, as we write, continuing its comeback. The New York Times headlined a
front-page story on October 30, 2000, "Now that the thrill is gone,
investors turn back to basics<F4>." Our performance reflected this return to
reality. In 2000, stock selection again became important.
The slow deflation of the indexing craze has, on the whole, had a benign
effect on markets in general. The S&P 500(R) Index had risen by over 25% per
year for five years, and an indefinite continuation of this trend was a
mathematical impossibility. The Financial Times summarized the situation
very well on October 14, 2000: "The real story behind U.S. equities this
year has been one of a slow slide rather than a sudden tumble [and] a crash
still looks unlikely. Nevertheless, investors are waking up to the fact
that the double-digit stock market returns they got used to in the 1990s
have disappeared<F5>."
On the other hand the technology sector, which we considered over-heated,
has suffered more than a slow slide. From its peak on March 10 of this year
it declined 33.19% as of October 31, measured by the Nasdaq Index. And the
Internet sector, which was the scene of a classic financial mania, dropped
57.34% as of October 31<F6>, with many stocks in the minus 90% category.
It is impressive that there has been no general market crash as there was
in 1929. Our outlook is that the trend which prevailed in 2000 is likely to
continue for some time. Those five years of 25% plus performance will have
to revert to an arithmetic mean more in line with economic
THE HAVEN FUND | ANNUAL REPORT |
<PAGE>
reality, and without a crash that takes time. This is not to say that there
will not be sector trends in the stock market, with some sectors suffering
as technology did this year, and others providing superior performance as
energy did this year. A year ago we wrote that the North American price of
natural gas, then some $2.50 per million BTU's, was more likely to go up
than down. We got the direction right but the magnitude wrong. The price of
natural gas has doubled. We expect it to remain firm for quite some time,
and this means good business for natural gas producers.
Our five best stocks in the fiscal year were Amdocs, Ltd., a
telecommunications service company that was sold near the height of the
technology craze; EMC, which is our largest holding and a consistent
repeater. EMC continues to set the standard for computer memory systems and
the need for them continues to grow at an astonishing rate; VaxGen, an
offbeat investment for us because it is a biotech company with neither
sales nor earnings. What it does have, in Phase III human trials, is
possibly the world's first effective HIV vaccine. If the vaccine works, and
there are no negative indications to date, it will be an enormous product
of literally world-changing impact; Andrew Corp., a supplier of wireless
telecommunications infrastructure; and, Elan plc, an Irish pharmaceutical
company that was one of 1999's worst performers. It has interesting new
products in the pipeline and set several all-time highs in 2000. It can pay
to be patient<F7>.
Our five worst performers were Owens Corning and Armstrong Worldwide
Industries, both of which fell into the quicksand of asbestos litigation.
We sold out well before the worst, which in the case of Owens Corning was
bankruptcy, but we do not have a pleasant memory of these two; Circuit City
Stores, the electronics retailer, was one of 1999's best stocks and
suffered this year from the effect of restructuring costs and a poor
environment for retail stocks. Sometimes it does not pay to be patient, but
we did sell most of our holding at much higher prices; Newell Rubbermaid,
which has had difficulty achieving the profits it desires from the old
Rubbermaid Co; and finally, Masco Corp., a producer of plumbing and kitchen
products for the home which suffered from the market's reaction to rising
interest rates<F7>.
The Fund's turnover ratio was higher than usual this year. There were two
reasons for this. First, the stock market was exceptionally volatile which
created many of what the military calls "targets of opportunity," and
second, the Fund followed trading practices to reduce taxable gains. There
will be no short-term gains in the year-end dividend.
As ever, we thank you for your continued support.
Sincerely,
/s/Colin C. Ferenbach
Colin C. Ferenbach
President
Sunstone Distribution Services, LLC, Distributor
| ANNUAL REPORT | THE HAVEN FUND
<PAGE>
<F1> Past performance is no guarantee of future results. Investment return
and principal value 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.
The Lipper Multi-Cap Value Funds Index is comprised of funds that, by
portfolio practice, invest in a variety of market capitalization ranges,
without concentrating 75% of their equity assets in any one market
capitalization range over an extended period of time. Multi-Cap Value
funds seek long-term growth of capital by investing in companies that
are considered to be undervalued relative to a major unmanaged stock
index based on price-to-current earnings, book value, asset value or
other factors.
<F3> Source: Morningstar Principia November 2000 release.
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 to 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 $1.6 billion
in market capitalization. "Mid-cap" refers to companies with market
capitalizations between $1.6 billion and $11.0 billion and "large"
refers to companies with market capitalizations over $11.0 billion.
<F4> The New York Times, October 30, 2000.
<F5> Financial Times, The Lex Column, October 14, 2000.
<F6> Goldman Sachs Technology Industry Internet Index.
<F7> Portfolio composition is subject to change due to ongoing management of
the Fund. References to specific securities should not be construed as
recommendations by the Fund, its Adviser or Distributor. As of October
31, 2000, EMC comprised 10.0% of the Fund; VaxGen comprised 0.9% of the
Fund; Andrew Corp. comprised 1.3% of the Fund; Elan plc comprised 2.3%
of the Fund; Circuit City Stores comprised 0.3% of the Fund; Newell
Rubbermaid comprised 1.6% of the Fund and Masco Corp. comprised 0.6% 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
------------------------------------------------------------------------------
Lipper
S&P 500/R Multi-Cap THE Wilshire
Stock Value Funds HAVEN 4500
Index Index FUND Index
-------------------------------------------------------------------------------
6/27
1984 10,000 10,000 10,000 10,000
-------------------------------------------------------------------------------
10/31
1984 11,007 11,110 10,707 10,808
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10/31
1985 13,119 13,020 13,463 13,019
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10/31
1986 17,460 16,406 16,856 16,505
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10/31
1987 18,585 17,066 15,972 15,301
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10/31
1988 21,348 20,315 18,552 18,478
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10/31
1989 26,959 24,508 21,485 22,696
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10/31
1990 24,969 21,305 20,000 17,935
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10/31
1991 33,289 27,999 27,069 27,058
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10/31
1992 36,601 30,838 30,495 29,520
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10/31
1993 42,069 36,959 35,619 36,871
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10/31
1994 43,698 38,360 37,631 36,934
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10/31
1995 55,251 46,071 42,768 45,340
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10/31
1996 68,522 55,538 54,853 53,333
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10/31
1997 90,525 71,794 68,512 68,789
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10/31
1998 110,432 75,247 68,703 66,471
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10/31
1999 138,812 82,689 77,152 84,086
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10/31
2000 147,252 90,834 98,477 99,062
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| ANNUAL REPORT | THE HAVEN FUND
<PAGE>
---------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN OF THE FUND
FOR THE PERIODS
---------------------------------------------------------------------------
Since
One Year Five Year Inception<F1>
9/30/00 10/31/00 9/30/00 10/31/00 9/30/00 10/31/00
---------------------------------------------------------------------------
The Haven Fund 30.1% 27.6% 18.2% 18.2% 17.9% 17.5%
---------------------------------------------------------------------------
S&P 500(R) Stock Index 13.3% 6.1% 21.7% 21.6% 22.9% 22.5%
---------------------------------------------------------------------------
Lipper Multi-Cap
Value Funds Index 10.6% 9.8% 13.6% 14.5% 15.1% 15.3%
---------------------------------------------------------------------------
Wilshire 4500 Index 34.8% 17.8% 18.3% 16.9% 19.4% 17.5%
---------------------------------------------------------------------------
<F1>June 23, 1994
---------------------------------------------------------------------------
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN OF THE FUND AND PARTNERSHIP
FOR THE PERIODS
-------------------------------------------------------------------------------------------------------------------
One Year Five Year Ten Year Since Inception<F1>
9/30/00 10/31/00 9/30/00 10/31/00 9/30/00 10/31/00 9/30/00 10/31/00
<S> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------------------------
The Haven Fund 30.1% 27.6% 18.2% 18.2% 17.0% 17.3% 15.2% 15.0%
-------------------------------------------------------------------------------------------------------------------
S&P 500(R) Stock Index 13.3% 6.1% 21.7% 21.6% 19.4% 19.4% 18.0% 17.9%
-------------------------------------------------------------------------------------------------------------------
Lipper Multi-Cap Value
Funds Index 10.6% 9.8% 13.6% 14.5% 15.1% 15.6% 14.1% 14.2%
-------------------------------------------------------------------------------------------------------------------
Wilshire 4500 Index 34.8% 17.8% 18.3% 16.9% 19.2% 18.6% 15.9% 15.2%
-------------------------------------------------------------------------------------------------------------------
<F1>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(R) 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 Multi-Cap Value Funds Index includes funds that, by portfolio
practice, have between 25% to 75% of their assets invested in companies
with market capitalizations (on a three-year weighted basis) above 300% of
the dollar-weighted median market capitalization of the S&P MidCap 400
Index.
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(R).
A direct investment in either the S&P 500(R) Stock Index, the Lipper Multi-
Cap Value Funds Index or the Wilshire 4500 Index is not possible.
Sunstone Distribution Services, LLC, Distributor
THE HAVEN FUND | ANNUAL REPORT |
<PAGE>
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STATEMENT OF NET ASSETS
-------------------------------------------------------------------------------
October 31, 2000
Number
of Shares Value
---------------------------------------------------------------------------
COMMON STOCKS 93.04%
AUTO PARTS 0.49%
10,000 Valeo S.A. - ADR (FR) $ 434,842
-----------
BANKS 9.40%
32,381 Commerce Bancorp, Inc./NJ 1,961,073
131,391 HSBC Holdings plc (UK) 1,873,580
50,000 Mercantile Bankshares Corp. 1,881,250
100,000 National Commerce Bancorp 2,125,000
10,000 Wachovia Corp. 540,000
-----------
8,380,903
-----------
BUILDING & HOUSING 2.68%
40,000 Lowe's Companies, Inc. 1,827,500
30,000 Masco Corp. 560,625
-----------
2,388,125
-----------
CHEMICALS 2.69%
20,000 du Pont (E.I.) de Nemours & Co. 907,500
40,000 Praxair, Inc. 1,490,000
-----------
2,397,500
-----------
CONSUMER NON-DURABLES 6.51%
40,000 Colgate-Palmolive Co. 2,350,400
30,000 Kimberly-Clark Corp. 1,980,000
100,000 Rayovac Corp.<F1> 1,475,000
-----------
5,805,400
-----------
DRUG & HOSPITAL SUPPLIES 13.00%
35,000 Bristol-Myers Squibb Co. 2,132,812
40,000 Elan Corp. plc - ADR (IRL)<F1> 2,077,500
25,000 Johnson & Johnson 2,303,125
35,000 Medtronic, Inc. 1,900,938
50,000 Stryker Corp. 2,356,250
30,000 VaxGen, Inc.<F1> 823,125
-----------
11,593,750
-----------
| ANNUAL REPORT | THE HAVEN FUND
<PAGE>
---------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONT'D.)
---------------------------------------------------------------------------
October 31, 2000
Number
of Shares Value
---------------------------------------------------------------------------
COMMON STOCKS 93.04% (cont'd.)
ELECTRICAL EQUIPMENT 3.25%
35,000 Agilent Technologies, Inc.<F1> $ 1,620,937
40,000 Grainger (W.W.), Inc. 1,277,500
-----------
2,898,437
-----------
FURNISHINGS & APPLIANCES 1.56%
85,000 Leggett & Platt, Inc. 1,391,875
-----------
INFORMATION TECHNOLOGY 16.25%
100,000 EMC Corp./Mass.<F1> 8,906,250
20,000 Gateway, Inc.<F1> 1,032,200
40,000 Hewlett-Packard Co. 1,857,500
50,000 Molex, Inc. 2,700,000
-----------
14,495,950
-----------
INSURANCE 5.29%
60,000 The Allstate Corp. 2,415,000
30,000 XL Capital Ltd. Class A - (BER) 2,306,250
-----------
4,721,250
-----------
MACHINERY 2.75%
100,000 CNH Global N.V. - (NETH) 968,750
35,000 Dover Corp. 1,485,313
-----------
2,454,063
-----------
MISCELLANEOUS INDUSTRIALS 5.08%
35,000 Avery Dennison Corp. 1,767,500
60,000 Delta & Pine Land Co. 1,466,250
50,000 Diebold, Inc. 1,300,000
-----------
4,533,750
-----------
THE HAVEN FUND | ANNUAL REPORT |
<PAGE>
-------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONT'D.)
-------------------------------------------------------------------------------
October 31, 2000
Number
of Shares Value
---------------------------------------------------------------------------
COMMON STOCKS 93.04% (cont'd.)
OIL - DOMESTIC/INTERNATIONAL 9.83%
15,000 Anadarko Petroleum Corp. $ 960,750
37,500 Devon Energy Corp. 1,890,000
90,000 Ocean Energy, Inc.<F1> 1,248,750
50,000 Petroleo Brasileiro S.A. -
ADR - (BRZ) 1,453,125
36,000 Royal Dutch Petroleum Co. - (NETH) 2,137,500
15,000 Total Fina Elf S.A. - ADR (FR) 1,074,375
-----------
8,764,500
-----------
OIL WELL EQUIPMENT & SERVICES 1.28%
15,000 Schlumberger, Ltd. 1,141,875
-----------
REAL ESTATE INVESTMENT TRUST 1.98%
60,000 General Growth Properties, Inc. 1,770,000
-----------
RETAILING 2.17%
100,000 Borders Group, Inc.<F1> 1,387,500
20,000 Circuit City Stores -
Circuit City Group 265,000
200,000 Zainy Brainy, Inc.<F1> 287,500
-----------
1,940,000
-----------
RUBBER & PLASTIC 1.61%
75,000 Newell Rubbermaid, Inc. 1,439,063
-----------
TELECOMMUNICATIONS 3.72%
45,000 Andrew Corp.<F1> 1,184,063
50,000 Nokia Oyj Corp. - ADR (FIN) 2,137,500
-----------
3,321,563
-----------
TRANSPORTATION 3.50%
61,924 TNT Post Group N.V. - ADR (NETH) 1,300,404
30,000 United Parcel Service, Inc. 1,822,500
-----------
3,122,904
-----------
Total Common Stocks
(cost $52,492,812) 82,995,750
-----------
| ANNUAL REPORT | THE HAVEN FUND
<PAGE>
---------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONT'D.)
---------------------------------------------------------------------------
October 31, 2000
Par (000)/Shares Value
---------------------------------------------------------------------------
TIME DEPOSIT 2.85%
(EURO) 3,000 Credit Commercial de France (FR)
(cost $2,604,619) $ 2,542,933
------------
SHORT-TERM INVESTMENT 3.03%
2,704,365 Temporary Investment Fund
(cost $2,704,365) 2,704,365
------------
TOTAL INVESTMENTS 98.92%
(cost $57,801,796) $88,243,048
------------
Other Assets in Excess of Liabilities 1.08% 963,297
------------
Net Assets applicable to 5,136,096 shares of Common
Stock issued and outstanding 100.00% $89,206,345
===========
Net Asset Value, offering and redemption price
per share ($89,206,345 / 5,136,096) $17.37
======
The aggregate unrealized appreciation (depreciation) on a tax basis is
as follows:
Gross appreciation..........$31,663,433
Gross depreciation...........(1,242,933)
----------
Net appreciation............$30,420,500
===========
COUNTRY ABBREVIATIONS:
(BRZ) - Brazil (IRL) - Ireland
(BER) - Bermuda (NETH) - Netherlands
(FIN) - Finland (UK) - United Kingdom
(FR) - France
CURRENCY ABBREVIATIONS:
(EURO) - Euro
<F1> Non-income producing securities.
ADR American Depositary Receipt
See Notes to Financial Statements.
THE HAVEN FUND | ANNUAL REPORT |
<PAGE>
---------------------------------------------------------------------------
TOP TEN STOCK HOLDINGS
---------------------------------------------------------------------------
----------------------------------------
33.3% of the Fund
----------------------------------------
EMC Corp./Mass. 10.0%
----------------------------------------
Molex, Inc. 3.0%
----------------------------------------
The Allstate Corp. 2.7%
----------------------------------------
Stryker Corp. 2.6%
----------------------------------------
Colgate-Palmolive Co. 2.6%
----------------------------------------
XL Capital Ltd-Class A 2.6%
----------------------------------------
Johnson & Johnson 2.6%
----------------------------------------
Nokia Oyj Corp. ADR 2.4%
----------------------------------------
Royal Dutch Petroleum Co. 2.4%
----------------------------------------
Bristol-Myers Squibb Co. 2.4%
----------------------------------------
TOTAL 33.3%
----------------------------------------
---------------------------------------------------------------------------
PERCENT OF TOTAL EQUITIES
---------------------------------------------------------------------------
BY COUNTRY
(PIE CHART)
Brazil 1.7%
France 1.8%
United Kingdom 2.2%
Ireland 2.4%
Finland 2.5%
Bermuda 2.8%
Netherlands 5.1%
United States 81.5%
| ANNUAL REPORT | THE HAVEN FUND
<PAGE>
---------------------------------------------------------------------------
STATEMENT OF OPERATIONS
---------------------------------------------------------------------------
For the Year Ended October 31, 2000
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld of $35,653) $ 1,071,705
Interest 304,089
----------------------------------------------------------------------
Total Investment Income 1,375,794
----------------------------------------------------------------------
OPERATING EXPENSES:
Investment advisory fees 487,192
Distribution fees 147,575
Administration and accounting fees 100,000
Transfer agent fees 46,612
Legal fees 35,267
Trustees' fees and expenses 29,500
Custodian fees 26,983
Audit fees 25,750
Insurance fees 18,423
Blue Sky fees 15,583
Printing fees 15,337
SEC fees 654
Miscellaneous expenses 6,776
----------------------------------------------------------------------
Total Expenses 955,652
----------------------------------------------------------------------
Net Investment Income 420,142
----------------------------------------------------------------------
NET REALIZED GAIN (LOSS) FROM:
Investments 11,782,342
Foreign currency transactions (96,017)
NET INCREASE IN UNREALIZED APPRECIATION (DEPRECIATION) ON:
Investments 6,903,868
Translation of assets and liabilities in foreign currency (1,518)
----------------------------------------------------------------------
Net realized and unrealized gain from
investments and foreign currency 18,588,675
----------------------------------------------------------------------
Net increase in net assets resulting from operations $19,008,817
======================================================================
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,
2000 1999
---------------------------------------------------------------------------
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income $ 420,142 $ 151,259
Net realized gain on investments and foreign
currency transactions 11,686,325 4,141,826
Net change in unrealized appreciation
on investments and translation of other
assets and liabilities denominated in
foreign currencies 6,902,350 4,700,578
---------------------------------------------------------------------------
Net increase in net assets from operations 19,008,817 8,993,663
---------------------------------------------------------------------------
DIVIDENDS PAID TO SHAREHOLDERS:
From net investment income (272,472) (259,378)
From net realized gains (4,138,179) (8,050,675)
---------------------------------------------------------------------------
Total dividends paid to shareholders (4,410,651) (8,310,053)
---------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold 14,369,393 914,707
Value of shares issued in reinvestment
of dividends 2,819,365 5,984,763
Cost of shares redeemed (14,648,808) (13,205,150)
---------------------------------------------------------------------------
Increase (decrease) in net assets from
capital share transactions 2,539,950 (6,305,680)
---------------------------------------------------------------------------
Total increase (decrease) in net assets 17,138,116 (5,622,070)
---------------------------------------------------------------------------
NET ASSETS:
Beginning of year 72,068,229 77,690,299
---------------------------------------------------------------------------
End of year $89,206,345 $72,068,229
===========================================================================
See Notes to Financial Statements.
| ANNUAL REPORT | THE HAVEN FUND
<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
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 YEAR) 2000 1999 1998 1997 1996
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF YEAR $14.42 $14.29 $15.83 $14.04 $11.67
-------------------------------------------------------------------------------------------------------------
INCREASE FROM INVESTMENT
OPERATIONS:
Net investment income 0.09 0.03 0.08 0.06 0.08
Net realized and unrealized
gains (losses) on investments
and foreign currency transactions 3.77 1.64 (0.02) 3.13 3.07
-------------------------------------------------------------------------------------------------------------
Total from investment operations 3.86 1.67 0.06 3.19 3.15
LESS DISTRIBUTIONS:
Dividends paid to shareholders:
From net investment income (0.06) (0.05) (0.08) (0.05) (0.08)
From net realized gains (0.85) (1.49) (1.52) (1.35) (0.70)
-------------------------------------------------------------------------------------------------------------
Total distributions
to shareholders (0.91) (1.54) (1.60) (1.40) (0.78)
NET ASSET VALUE, END OF YEAR $17.37 $14.42 $14.29 $15.83 $14.04
=============================================================================================================
TOTAL RETURN 27.64% 12.29% 0.29% 24.90% 28.25%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of year (in 000s) $89,206 $72,068 $77,690 $84,769 $67,096
Ratios of expenses to average
net assets 1.18% 1.34% 1.26% 1.33% 1.59%
Ratios of net investment income
to average net assets 0.52% 0.20% 0.50% 0.78% 0.58%
Portfolio turnover rate 80% 31% 59% 57% 67%
-------------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
THE HAVEN FUND | ANNUAL REPORT |
</TABLE>
<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 value as
determined pursuant to procedures adopted by the Trustees. At October 31,
2000, there were no fair valued securities.
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. These "book/tax" differences
are either considered temporary or permanent in nature. To the extent these
differences are permanent in nature, such amounts are reclassified within
the composition of net assets based on their federal tax-basis treatment;
temporary differences do not require reclassification. Distributions which
exceed net investment income and net realized capital
| ANNUAL REPORT | THE HAVEN FUND
<PAGE>
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NOTES TO FINANCIAL STATEMENTS (CONT'D.)
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gains for financial reporting purposes but not for tax purposes are
reported as distributions in excess of net investment income or net
realized gains. To the extent they exceed net investment income and net
realized capital gains for tax purposes, they are reported as distributions
of capital.
As of October 31, 2000, the following reclassifications have been made to
increase (decrease) such accounts with offsetting adjustments made to paid-
in-capital:
Accumulated Accumulated
Undistributed Net Realized
Net Investment Gain/(Loss) on
Income Investments
-------------- --------------
$(3,500) $3,500
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) 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, 2000, the Fund
did not hold any financial instruments with off-balance sheet risk.
THE HAVEN FUND | ANNUAL REPORT |
<PAGE>
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NOTES TO FINANCIAL STATEMENTS (CONT'D.)
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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, 2000, 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.
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 Mount & Nadler, Inc. a monthly fee of $4,000 (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).
e) CUSTODIAN FEES: PFPC Trust Company 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 fee, at the annual rate of 0.0175% of the Fund's first
$100,000,000 of average gross assets; 0.015% of the next $400,000,000 of
average gross assets; 0.0125% of the next $500,000,000 of average gross
assets; and 0.01% of the average gross assets in excess of $1,000,000,000
(exclusive of out-of-pocket expenses and transaction charges). The minimum
monthly fee is $1,500 (exclusive of out-of-pocket expenses and transaction
charges). The Fund pays Chase Manhattan Bank, N.A. an account fee of $5,000
per year and an asset based fee derived from the ending market value of
foreign held securities (exclusive of transaction charges).
| ANNUAL REPORT | THE HAVEN FUND
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NOTES TO FINANCIAL STATEMENTS (CONT'D.)
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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, 2000 and 1999, respectively, were as follows:
2000 1999
----------------------------------------------------------------------
Sale of shares 837,682 64,454
Shares issued to shareholders in reinvestment
of dividends 184,921 439,204
Shares repurchased (885,049) (942,502)
----------------------------------------------------------------------
Net increase (decrease) 137,554 (438,844)
Shares outstanding:
Beginning of year 4,998,542 5,437,386
----------------------------------------------------------------------
End of year 5,136,096 4,998,542
======================================================================
6. COMPONENTS OF NET ASSETS
At October 31, 2000, Net Assets consisted of the following:
----------------------------------------------------------------------
Capital paid-in $46,932,808
Accumulated net realized gain on investments
and foreign currency transactions 11,785,841
Undistributed net investment income 48,153
Net unrealized appreciation of investments 30,441,252
Net unrealized depreciation on foreign
currency transactions (1,709)
----------------------------------------------------------------------
$89,206,345
======================================================================
7. PURCHASES AND SALES OF SECURITIES
For the year ended October 31, 2000, the cost of securities purchased and
proceeds from securities sold, excluding short-term obligations, were
$62,484,023 and $60,938,607, respectively.
THE HAVEN FUND | ANNUAL REPORT |
<PAGE>
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REPORT OF INDEPENDENT ACCOUNTANTS
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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, 2000, 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 accounting principles generally accepted in the United
States of America. 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 auditing standards generally accepted in the United States of
America, 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 audits, which
included confirmation of securities at October 31, 2000 by
correspondence with the custodians, provide a reasonable basis for our
opinion.
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania 19103
December 1, 2000
| ANNUAL REPORT | THE HAVEN FUND
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IMPORTANT TAX INFORMATION (UNAUDITED)
The Haven Fund distributed a total Capital Gain Dividend of $0.8521 per
share during the fiscal year ending October 31, 2000, 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 2001.
THE HAVEN FUND | ANNUAL REPORT |
<PAGE>
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.
HA4081200
<PAGE>
