<PAGE>
- -------------------------------------------------------------------------------
UAM FUNDS
MJI INTERNATIONAL EQUITY
PORTFOLIO
- -------------------------------------------------------------------------------
OFFICERS AND TRUSTEES
Norton H. Reamer William A. Humenuk
Trustee, President Trustee
and Chairman
Peter M. Whitman, Jr.
Mary Rudie Barneby Trustee
Trustee and Executive
Vice President William H. Park
Vice President and
John T. Bennett, Jr. Assistant Treasurer
Trustee
Karl O. Hartmann
J. Edward Day Secretary
Trustee
Robert R. Flaherty
Philip D. English Treasurer
Trustee
Harvey M. Rosen
Assistant Secretary
- -------------------------------------------------------------------------------
INVESTMENT ADVISER
Murray Johnstone International Ltd.
John Hancock Center, Suite 3640
875 North Michigan Avenue, Chicago, IL 60611
- -------------------------------------------------------------------------------
ADMINISTRATOR
The Chase Manhattan Bank, N.A.
73 Tremont Street, Boston, MA 02108-3913
- -------------------------------------------------------------------------------
CUSTODIAN
Morgan Guaranty Trust Company of New York
60 Wall Street, New York, NY 10260
- -------------------------------------------------------------------------------
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young
2600 One Commerce Square Philadelphia, PA 19103
- -------------------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
160 Federal Street
Boston, MA 02110
- -------------------------------------------------------------------------------
DISTRIBUTOR
UAM Fund Distributors, Inc.
One International Place, 44th Floor Boston, MA 02110
- -------------------------------------------------------------------------------
This report has been prepared for shareholders and may be distributed to
others only if preceded or accompanied by a current prospectus.
- -------------------------------------------------------------------------------
UAM FUNDS
MJI
INTERNATIONAL
EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
SEMI-ANNUAL REPORT
OCTOBER 31, 1995
<PAGE>
Dear Shareholder,
For the six-month period ended October 31, 1995, we saw a period when investors
were faced with a series of fortuitous events in the US market: a slowing
economy in the first half of the year reduced the threat of inflation and
allowed the Federal Reserve Board to end the tightening phase which had begun
in early 1994. The bond market rallied strongly and domestic equities followed.
By contrast, international markets enjoyed only measured and variable progress
and faced with the rebound of the US dollar, most ended in negative territory.
Overall, the Portfolio's return for the six-month period was -2.11% while the
return on the Morgan Stanley Capital International ("MSCI") EAFE Index in US
dollars was -1.4%, including dividends reinvested.
ECONOMIC AND MARKET REVIEW
A major cause of the weak performance of the EAFE markets was the decline of
the Japanese market of 11.81% in US dollars, a performance which could be
attributed to several factors. The steadily rising yen, which was pushed even
higher in the aftermath of the Mexican crisis, became a drag on the economy
forcing up the cost of exports and eroding the competitive edge Japan used to
enjoy in world markets. Jobs disappeared at home as companies established
operations abroad where the cost base was lower or simply slimmed down their
domestic facilities. This fed through to higher unemployment and lower spending
in the stores, helping to prolong the recession. Combine this with caution over
the government's ability to kick-start the economy and weakness in the banking
and property sectors and sentiment was about as poor as it could get for a
market. The managers commenced the year with a heavily underweighted exposure
to Japan but as the outlook for corporate profits began to improve, and there
were clear signs that the government had accepted the need to intervene to
support the financial system, the framework for the recovery of the market was
in place, and we steadily increased the Portfolio's exposure. When the trade
dispute with the US was resolved, and there was a concerted move to weaken the
yen, the market quickly rebounded but US dollar investors could not recoup the
fall experienced earlier in the period.
The best performers of the international markets were in Europe, and with the
exception of Switzerland, in non-core countries, particularly in Scandinavia.
The Swiss market rose by 20.58%, benefitting from uncertainty in other markets
and currencies as much as from sound corporate profits. Sweden was up 20.48%
and Finland rose 16.04%, both markets able to take advantage of the boom in
technology stocks emanating from the US. In spite of a weak government, the
Spanish market rose a creditable 7.52%, the UK was up 8.71%, and the
Netherlands rose 5.48%. Returns in France proved to be the most elusive.
Although the government of Jacques Chirac was elected on a mandate for a
change, it stuck doggedly to the "franc-fort" policy, attempting to preserve
the link between the franc and the deutsche mark by way of artificially high
interest rates and seeking to address the government deficit by cutting
spending rather than stimulating growth. This prevented the economy from
enjoying an easier monetary environment which should have accompanied a period
of low growth and falling inflation. Pressure was heaviest on the interest-
sensitive sectors of the economy, the property, insurance and financial areas,
and recovery in these areas is still only embryonic. On a valuation basis,
France continues to be one of the most attractive markets in Europe but during
the period, the moderately overweight exposure focusing on interest-sensitive
stocks did not help performance.
Hong Kong was the best performer of the markets in the Far East, rising 16.68%
as investors returned after the panic selling which followed the Mexican crisis
in early 1995. The Portfolio captured part of this return as investments were
added to the area. In spite of Singapore's sound fundamentals, the market
failed to make headway due to the deterioration of the economy in neighboring
Malaysia. Australia and New Zealand made modest progress, but stock selection
in these markets failed to capture the moves in cyclical companies.
1
<PAGE>
Exposure to the emerging markets was limited to investments in Mexico and
Argentina. Following the crisis in Mexico in late 1994, the currency continued
to be subject to bouts of speculative pressure through 1995, counteracting the
recovery of the market in local terms. The government attempted to stabilize
the peso by raising interest rates but this only increased the pressure on the
economy which was already heading for a deep recession in 1995. Corporate
results in September reflected the severity of business conditions but by and
large were in line with forecasts. Notwithstanding this, uncertainty still
surrounds the future of the economy and the government's ability to steer it
back to a growth path and that uncertainty manifested itself in the volatility
late in the period. After the weakness already experienced, the managers have
made the decision to continue to hold the investments in the Portfolio since
they represent quality companies which should, in time, return to growth.
INVESTMENT STRATEGY
The broad investment strategy for the period was to underweight the Japanese
market but increase exposure during the year, overweight Europe, focusing on
the peripheral markets, and overweight Hong Kong and Singapore. A small
exposure was retained in the emerging markets of Mexico and Argentina in the
belief that they had seen the worst and would begin to recover. The increase in
the Japanese exposure took the Portfolio from 17% of net assets in April to 23%
of net assets in June, so that it was well-placed to benefit from the dramatic
surge in August following the turnaround of the yen/dollar rate. Assets were
switched to Japan by reducing exposure to Europe, especially Switzerland and
the Netherlands. With the exception of the decision to overweight Singapore,
which proved to be a dull market, these decisions were broadly positive for the
Portfolio, including the stance on Japan, since the exposure was still
underweight.
The costly decision for the period was to continue with investments in the
Mexican market following the crisis in late 1994- early 1995. The recovery of
the market, while swift in local terms, has been less successful for U.S.
dollar investors. The third quarter of 1995 was a critical period when the full
impact of the government's austerity program came through to corporate profits
which were sharply down. Stocks held their prices but the peso came under
renewed pressure. This period should represent the nadir for the Mexican
market, and we look for a steady recovery in the months ahead.
OUTLOOK
In a period when the US market and currency were strong it was always going to
be difficult for the international markets to compete. However, with corporate
earnings peaking in the US and the interest rate environment returning to
neutral, the strong run of the US equity market is likely to be coming to an
end. Conversely, there have been signs that the international markets continue
to look attractive. Since the beginning of 1995, the outlook for the Japanese
market has improved and the weakening of the yen will encourage this trend.
With this in mind, we have been increasing the exposure of the Portfolio to
Japan. Recent purchases have been financed through sales in Europe, but in the
future we will look to raising cash in the UK market. Elsewhere, with high
growth continuing in the Far East, the Portfolio will remain overweight in the
region. Although news from the emerging markets has been grim through 1995,
stability is beginning to return and sentiment towards the area and markets
should improve into 1996.
MURRAY JOHNSTONE INTERNATIONAL, INC.
DEFINITION OF THE COMPARITIVE INDEX
- -----------------------------------
The Morgan Stanley Capital International EAFE Index is an unmanaged index
composed of arithmetic, market value weighted averages of the performance of
over 900 securities listed on the stock exchanges of countries in Europe,
Australia and the Far East.
Comparisons of performance assumes reinvestment of dividends.
Please note that one cannot invest in an unmanaged index.
The investment results presented in the Adviser's letter represent past
performance and should not be construed as a guarantee of future results. If
the Adviser didn't have temporary fee waivers and didn't assume expenses on
behalf of the Portfolio, total return for the Portfolio would have been lower.
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. For a complete discussion of the risks associated with
international investing, please refer to the Portfolio's prospectus.
2
<PAGE>
MJI INTERNATIONAL EQUITY PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
October 31, 1995 (Unaudited)
<TABLE>
<CAPTION>
VALUE
SHARES (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (95.3%)
- --------------------------------------------------------------------------------
ARGENTINA (1.9%)
Banco Frances Del Rio de la Plata S.A. ADR...................... 2,000 $ 44
Transportadora de Gas del Sur, S.A. ADR......................... 4,700 48
YPF S.A. ADR.................................................... 3,000 51
------
143
- --------------------------------------------------------------------------------
AUSTRALIA (2.0%)
National Australia Bank Ltd..................................... 17,000 146
- --------------------------------------------------------------------------------
DENMARK (1.7%)
Tele Danmark A.S., Class B...................................... 2,330 122
- --------------------------------------------------------------------------------
FRANCE (6.2%)
Alcatel Alsthom................................................. 940 80
Assurances Generales de France.................................. 3,110 90
*Cap Gemini Sogeti............................................... 401 11
Credit Foncier de France........................................ 2,079 38
*Legris Industries S.A........................................... 1,455 42
Lyonnaise des Eaux-Dumez........................................ 1,015 99
Parisienne de Reescompte........................................ 1,180 91
------
451
- --------------------------------------------------------------------------------
GERMANY (1.9%)
Commerzbank AG.................................................. 212 49
Mannesmann AG................................................... 275 90
------
139
- --------------------------------------------------------------------------------
HONG KONG (5.6%)
Cheung Kong Holdings, Ltd....................................... 20,000 113
Hong Kong Land Holdings, Ltd.................................... 45,000 81
Hutchison Whampoa Ltd........................................... 10,000 55
Swire Pacific Ltd., Class A..................................... 22,000 165
------
414
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
MJI INTERNATIONAL EQUITY PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS--(CONTINUED)
October 31, 1995 (Unaudited)
<TABLE>
<CAPTION>
VALUE
SHARES (000)+
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--(CONTINUED)
- -------------------------------------------------------------------------------
IRELAND (1.5%)
Allied Irish Banks plc......................................... 21,514 $ 109
- -------------------------------------------------------------------------------
ITALY (3.9%)
Istituto Mobiliare Italiano S.p.A.............................. 11,500 63
Italcementi Fabbriche Riunit................................... 2,650 16
Parmalat Finanziaria S.p.A. ................................... 73,000 58
Telecom Italia Mobile S.p.A. (NCS)............................. 74,500 83
Telecom Italia Mobile S.p.A.................................... 39,990 67
------
287
- -------------------------------------------------------------------------------
JAPAN (29.9%)
Canon, Inc..................................................... 5,000 86
Hoya Corp...................................................... 3,000 88
Ito Yokado Co., Ltd............................................ 2,000 109
Itochu Corp.................................................... 20,000 119
Maeda Road Construction........................................ 7,000 125
Mitsubishi Materials Corp...................................... 25,000 113
Mori Seiki..................................................... 6,000 118
NEC Corp....................................................... 10,000 132
Nikko Securities Co., Ltd...................................... 13,000 121
Nippon Steel Co................................................ 37,000 123
Nippon Telegraph & Telephone Corp. ............................ 13 109
Nissan Diesel Motor Co......................................... 17,000 115
*NKK Corp....................................................... 52,000 126
Nomura Securities Co., Ltd..................................... 6,000 110
Omron Corp..................................................... 4,000 93
Sanwa Bank Ltd................................................. 5,000 85
Secom Co....................................................... 2,000 130
Sumitomo Bank.................................................. 5,000 88
Teijin Ltd..................................................... 20,000 92
Yamanouchi Pharmaceutical Co................................... 5,000 111
------
2,193
- -------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
MJI INTERNATIONAL EQUITY PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS--(CONTINUED)
October 31, 1995 (Unaudited)
<TABLE>
<CAPTION>
VALUE
SHARES (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--(CONTINUED)
- --------------------------------------------------------------------------------
MEXICO (2.6%)
CIFRA ADR........................................................ 58,000 $ 62
Cemex S.A. ADR, Class B.......................................... 6,400 41
Grupo Industrial Durango ADR..................................... 5,500 44
Telefonos de Mexico ADR, Class L................................. 1,600 44
------
191
- --------------------------------------------------------------------------------
NETHERLANDS (3.2%)
Elsevier N.V..................................................... 5,690 74
Vendex International N.V. BDR.................................... 2,400 69
VNU.............................................................. 647 91
------
234
- --------------------------------------------------------------------------------
NEW ZEALAND (2.0%)
Telecom Corp. of New Zealand Ltd................................. 36,000 149
- --------------------------------------------------------------------------------
NORWAY (1.9%)
Norsk Hydro...................................................... 1,620 64
Orkla Borregaard A.S............................................. 1,520 79
------
143
- --------------------------------------------------------------------------------
SINGAPORE (5.7%)
Keppel Corp. Ltd. ............................................... 20,000 164
Oversea-Chinese Banking Corp. ................................... 12,000 141
Singapore Land Ltd. ............................................. 20,000 112
------
417
- --------------------------------------------------------------------------------
SPAIN (6.2%)
Centros Comerciales Pryca, SA.................................... 3,500 74
Fuerzas Electricas de Cataluna S.A., Class A..................... 15,000 91
Iberdrola S.A.................................................... 8,230 62
Portland Valderrivas S.A. (New).................................. 1,510 100
Uralita S.A...................................................... 2,730 28
Vallehermoso S.A................................................. 6,220 101
------
456
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
MJI INTERNATIONAL EQUITY PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS--(CONTINUED)
October 31, 1995 (Unaudited)
<TABLE>
<CAPTION>
VALUE
SHARES (000)+
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--(CONTINUED)
- -------------------------------------------------------------------------------
SWITZERLAND (2.9%)
Ciba-Geigy AG (Registered)...................................... 76 $ 66
Sandoz AG (Registered).......................................... 81 67
Winterthur Schweizerische (Registered).......................... 121 79
------
212
- -------------------------------------------------------------------------------
UNITED KINGDOM (16.2%)
Argyll Group plc................................................ 20,000 102
Blue Circle Industries plc...................................... 13,500 62
BOC Group plc................................................... 4,400 60
British Gas plc................................................. 15,000 57
British Petroleum Co., plc...................................... 8,000 59
BTR plc......................................................... 21,000 112
Cable & Wireless plc............................................ 15,500 101
Commercial Union plc............................................ 7,000 68
General Electric Company plc.................................... 20,000 99
Glaxo Wellcome plc.............................................. 7,500 101
Grand Metropolitan plc.......................................... 12,000 83
Kingfisher plc.................................................. 8,000 60
Lloyds Bank plc................................................. 6,500 80
Rank Organization Ltd........................................... 10,000 67
Unilever plc.................................................... 4,000 78
------
1,189
- -------------------------------------------------------------------------------
TOTAL COMMON STOCKS (COST $7,112)................................ 6,995
- -------------------------------------------------------------------------------
FACE
AMOUNT
(000)
- -------------------------------------------------------------------------------
SHORT-TERM INVESTMENT (2.2%)
- -------------------------------------------------------------------------------
REPURCHASE AGREEMENT (2.2%)
J.P. Morgan Securities, Inc., 5.35%, dated 10/31/95, due
11/1/95, to be repurchased at $160, collateralized by $142 U.S.
Treasury Bond 7.5%, due 11/15/16, valued at $164. (COST $160).. $160 160
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS (97.5%) (COST $7,272).......................... $7,155
- -------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
MJI INTERNATIONAL EQUITY PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS--(CONTINUED)
October 31, 1995 (Unaudited)
<TABLE>
<CAPTION>
VALUE
(000)+
- -------------------------------------------------------------------------------
<S> <C>
OTHER ASSETS AND LIABILITIES (2.5%)
- -------------------------------------------------------------------------------
Cash.................................................................. $ 1
Foreign Currency (Cost $206).......................................... 206
Receivable for Investments Sold....................................... 111
Dividends Receivable.................................................. 14
Receivable due from Investment Adviser................................ 13
Receivable for Portfolio Shares Sold.................................. 4
Other................................................................. 8
Payable for Investments Purchased..................................... (135)
Payable for Portfolio Shares Redeemed................................. (6)
Payable for Administrative Fees....................................... (6)
Payable for Custodian Fees............................................ (4)
Payable for Directors' Fees........................................... (1)
Other Liabilities..................................................... (18)
------
187
- -------------------------------------------------------------------------------
NET ASSETS (100%)
Applicable to 789,130 outstanding Institutional Class shares (unlim-
ited authorization, no par value).................................... $7,342
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE............... $ 9.30
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
+ See Note A to Financial Statements
* Non-Income Producing Security
ADR--American Depositary Receipt
BDR--British Depositary Receipt
NCS--Non Convertible Shares
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
MJI INTERNATIONAL EQUITY PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS--(CONTINUED)
October 31, 1995 (Unaudited)
At October 31, 1995, sector diversification of the Portfolio was as follows:
<TABLE>
<CAPTION>
% OF
NET VALUE
SECTOR DIVERSIFICATION ASSETS (000)
- ---------------------- ------ ------
<S> <C> <C>
Automotive...................................................... 1.6% $ 115
Banks........................................................... 5.7 417
Basic Resources................................................. 2.0 143
Beverages, Food & Tobacco....................................... 1.8 135
Broadcasting & Publishing....................................... 2.2 164
Capital Equipment............................................... 4.0 294
Chemicals....................................................... 2.6 192
Construction.................................................... 2.3 166
Consumer Durables............................................... 2.8 209
Electronics..................................................... 6.2 455
Energy.......................................................... 4.3 315
Entertainment & Leisure......................................... 0.9 67
Financial Services.............................................. 11.2 827
Holding Company................................................. 1.5 112
Industrial...................................................... 1.7 123
Insurance ...................................................... 2.2 158
Manufacturing................................................... 4.4 320
Metals.......................................................... 1.5 113
Mining.......................................................... 0.6 42
Paper & Packaging............................................... 0.6 44
Pharmaceuticals................................................. 3.8 278
Real Estate..................................................... 5.5 406
Repurchase Agreement............................................ 2.2 160
Retail.......................................................... 6.5 477
Services........................................................ 1.8 130
Telecommunications.............................................. 9.0 658
Transportation ................................................. 4.4 329
Utilities ...................................................... 4.2 306
----- ------
Total Investments............................................... 97.5% $7,155
Other Assets and Liabilities.................................... 2.5 187
----- ------
Net Assets...................................................... 100.0% $7,342
===== ======
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
MJI INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
OCTOBER 31,
(In Thousands) 1995
- -------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Dividends........................................................ $ 87
Interest......................................................... 23
Less Foreign Taxes Withheld...................................... (11)
- -------------------------------------------------------------------------------
Total Income.................................................... 99
- -------------------------------------------------------------------------------
EXPENSES
Investment Advisory Fees--Note B
Basic Fees................................................. $ 25
Less: Fees Waived.......................................... (25) --
----
Administrative Fees--Note C...................................... 31
Custodian Fees................................................... 18
Printing Fees.................................................... 8
Legal Fees....................................................... 4
Audit Fees....................................................... 6
Filing and Registration Fees..................................... 4
Trustees' Fees--Note F........................................... 1
Other Expenses................................................... 2
Fees Assumed by Adviser--Note B.................................. (27)
- -------------------------------------------------------------------------------
Total Expenses.................................................. 47
Expense Offset--Note A........................................... (1)
- -------------------------------------------------------------------------------
Net Expenses.................................................... 46
- -------------------------------------------------------------------------------
NET INVESTMENT INCOME............................................. 53
- -------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS):
Investments...................................................... 31
Foreign Currency Transactions.................................... (50)
- -------------------------------------------------------------------------------
TOTAL NET REALIZED LOSS ON INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS..................................................... (19)
- -------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION):
Investments...................................................... (195)
Foreign Currency Transactions.................................... 2
- -------------------------------------------------------------------------------
TOTAL NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION)........ (193)
- -------------------------------------------------------------------------------
NET LOSS ON INVESTMENTS AND FOREIGN CURRENCY...................... (212)
- -------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS.............. $(159)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
MJI INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
SEPTEMBER 16, ENDED
1994* TO OCTOBER 31,
APRIL 30, 1995
(In Thousands) 1995 (UNAUDITED)
- -------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income............................... $ 20 $ 53
Net Realized Loss................................... (29) (19)
Net Change in Unrealized Appreciation (Deprecia-
tion).............................................. 75 (193)
- -------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting
from Operations................................... 66 (159)
- -------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS: (1)
Issued--Regular..................................... 5,626 2,219
Redeemed............................................ (182) (253)
- -------------------------------------------------------------------------------
Net Increase from Capital Share Transactions....... 5,444 1,966
- -------------------------------------------------------------------------------
Total Increase....................................... 5,510 1,807
Net Assets:
Beginning of Period................................. 25 5,535
- -------------------------------------------------------------------------------
End of Period (2)................................... $5,535 $7,342
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1)Shares Issued and Redeemed:
Shares Issued...................................... 600 229
Redeemed........................................... (20) (23)
- -------------------------------------------------------------------------------
580 206
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(2)Net Assets Consist of:
Paid in Capital.................................... $5,463 $7,429
Undistributed Net Investment Income................ 13 66
Accumulated Net Realized Loss...................... (16) (35)
Unrealized Appreciation (Depreciation)............. 75 (118)
- -------------------------------------------------------------------------------
$5,535 $7,342
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
* Commencement of Operations
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
MJI INTERNATIONAL EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS
SEPTEMBER 16, ENDED
1994** TO OCTOBER 31,
APRIL 30, 1995
1995 (UNAUDITED)
- -------------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD............... $10.00 $ 9.50
- -------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income+............................ 0.04 0.06
Net Realized and Unrealized Loss on Invest-
ments+++......................................... (0.54) (0.26)
- -------------------------------------------------------------------------------
Total from Investment Operations................. (0.50) (0.20)
- -------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD..................... $ 9.50 $ 9.30
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
TOTAL RETURN....................................... (5.00)%++ (2.11)%++
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands).............. $5,535 $7,342
Ratio of Expenses to Average Net Assets+........... 1.00%* 1.39%*##
Ratio of Net Investment Income to Average Net As-
sets+............................................. 1.49%* 1.56%*
Portfolio Turnover Rate............................ 81% 36%
- -------------------------------------------------------------------------------
</TABLE>
* Annualized
** Commencement of Operations
+ Net of voluntarily waived fees and expenses assumed by the Adviser of $0.17
and $0.07 per share for the periods ended April 30, 1995 and October 31,
1995, respectively.
++ Total return would have been lower had certain fees not been waived and
expenses assumed by the Adviser during the periods indicated.
+++ The amount shown for the period ended April 30, 1995 for a share
outstanding throughout the period does not accord with the aggregate net
gains on investments for that period because of the timing of sales and
repurchases of the Portfolio shares in relation to fluctuating market
value of the investments of the Portfolio.
## The Ratio of Expenses to Average Net Assets excludes the effect of expense
offsets. If expense offsets were included, the Ratio of Expenses to Average
Net Assets would be 1.36%*.
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
MJI INTERNATIONAL EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
UAM Funds Trust, formerly known as The Regis Fund II and UAM Funds, Inc.,
formerly known as The Regis Fund, Inc., (collectively the "UAM Funds") were
organized on May 18, 1994 and October 11, 1988, respectively, and are
registered under the Investment Company Act of 1940, as amended, as open-end
management investment companies. The MJI International Equity Portfolio (the
"Portfolio"), a portfolio of the UAM Funds Trust, began operations on
September 16, 1994. At October 31, 1995, the UAM Funds were comprised of
thirty-four active portfolios. The financial statements of the remaining
portfolios are presented separately.
A. SIGNIFICANT ACCOUNTING POLICIES. The following significant accounting
policies are in conformity with generally accepted accounting principles for
investment companies. Such policies are consistently followed by the Portfolio
in the preparation of its financial statements.
1. SECURITY VALUATION: Securities listed on a securities exchange for which
market quotations are readily available are valued at the last quoted sales
price as of the close of the exchange on the day the valuation is made or,
if no sale occurred on such day, at the mean of the bid and asked prices on
such day. Price information on listed securities is taken from the exchange
where the security is primarily traded. Over-the-counter and unlisted
securities are valued at the mean of the current bid and asked prices.
Short-term investments that have remaining maturities of sixty days or less
at time of purchase are valued at amortized cost, if it approximates market
value.
The value of other assets and securities for which no quotations are
readily available is determined in good faith at fair value using methods
determined by the Board of Trustees.
2. FEDERAL INCOME TAXES: It is the Portfolio's intention to continue to
qualify as a regulated investment company under Subchapter M of the
Internal Revenue Code and to distribute all of its taxable income.
Accordingly, no provision for Federal income taxes is required in the
financial statements. In addition, withholding taxes on foreign securities
have been provided for in accordance with the International Equity
Portfolio's understanding of the applicable country's tax rules and rates.
Paid in capital, undistributed net investment income and accumulated net
realized loss have been adjusted for permanent book-tax differences.
At October 31, 1995, the Portfolio's cost for Federal income tax purposes
was $7,272,000. Net unrealized depreciation for Federal income tax purposes
aggregated $117,000 of which $335,000 related to appreciated securities and
$452,000 related to depreciated securities. For the period ended April 30,
1995, the Portfolio expects to defer to May 1, 1995 for U.S. Federal income
tax purposes, post-October capital losses of $16,000 and post-October
currency losses of $11,000.
3. REPURCHASE AGREEMENTS: In connection with transactions in repurchase
agreements, the Portfolio's custodian bank takes possession of the
underlying securities, the value of which exceeds the principal amount of
the repurchase transaction, including accrued interest. To the extent that
any repurchase transaction exceeds one business day, the value of the
collateral is marked-to-market on a daily basis to determine the adequacy
of the collateral. In the event of default on the obligation to repurchase,
the Portfolio has the right to liquidate the collateral and apply the
proceeds in satisfaction of the obligation. In the event of default or
bankruptcy by the other party to the agreement, realization and/or
retention of the collateral or proceeds may be subject to legal
proceedings.
12
<PAGE>
MJI INTERNATIONAL EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
4. FOREIGN CURRENCY TRANSLATION: The books and records of the Portfolio are
maintained in U.S. dollars. Investment Securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the bid prices of such currencies against U.S. dollars last
quoted by a major bank. The Portfolio does not isolate that portion of
realized or unrealized gain and loss resulting from changes in the foreign
exchange rate from fluctuations arising from changes in the market prices
of the securities. Net realized gains and losses on foreign currency
transactions represent net foreign exchange gains or losses from forward
foreign currency exchange contracts, disposition of foreign forward
currency exchanges contracts, disposition of foreign currencies, currency
gain or loss realized between trade and settlement dates on securities
transactions and the difference between the amount of the investment income
and foreign withholding taxes recorded on the Portfolio's books and the
U.S. dollar equivalent amounts received or paid.
5. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS: The Portfolio may enter
into forward foreign currency exchange contracts to protect securities and
related receivables and payables against changes in future foreign exchange
rates. A forward currency contract is an agreement between two parties to
buy or sell currency at a set price on a future date. The market value of
the contract will fluctuate with changes in currency exchange rates. The
contract is marked-to-market daily using the forward rate and the change in
market value is recorded by the Portfolio as unrealized gain or loss. The
Portfolio recognizes realized gain or loss when the contract is closed,
equal to the difference between the value of the contract at the time it
was opened and the value at the time it was closed. Risks may arise upon
entering into these contracts from the potential inability of
counterparties to meet the terms of their contracts and are generally
limited to the amount of unrealized gain on the contracts, if any, at the
date of default. Risks may also arise from unanticipated movements in the
value of a foreign currency relative to the U.S. dollar.
6. DISTRIBUTIONS TO SHAREHOLDERS: Any distributions from net investment
income are normally declared and paid annually. Any realized net capital
gains will normally be distributed annually. All distributions are recorded
on ex-dividend date.
The amount and character of income and capital gain distributions to be
paid are determined in accordance with Federal income tax regulations which
may differ from generally accepted accounting principles.
7. OTHER: Security transactions are accounted for on trade date, the date
the trade was executed. Costs used in determining realized gains and losses
on the sale of investment securities are determined based on the specific
identification method. Dividend income is recorded on the ex-dividend date,
except that certain dividends from foreign securities are recorded as soon
as the Portfolio is informed of the ex-dividend date. Interest income is
recognized on the accrual basis. Most expenses of the UAM Funds can be
directly attributed to a particular portfolio. Expenses which cannot be
directly attributed are apportioned among the portfolios of the UAM Funds
based on their relative net assets. Additionally, certain expenses are
apportioned among the portfolios of the UAM Funds and AEW Commercial
Mortgage Securities Fund, Inc. ("AEW"), an affiliated closed-end management
investment company, based on their relative net assets. Custodian fees have
been adjusted to include expense offsets for custodian balance credits.
Cost incurred by the Portfolio in connection with its organization have
been deferred and are being amortized on a straight line basis over a five
year period.
Current year permanent book-tax differences, if any, are not included in
ending undistributed net investment income for the purpose of calculating
net investment income per share in the Financial Highlights.
13
<PAGE>
MJI INTERNATIONAL EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
B. ADVISORY SERVICES. Under the terms of an Investment Advisory Agreement,
Murray Johnstone International Ltd. ("MJI"), an indirect wholly-owned
subsidiary of United Asset Management Corporation ("UAM"), provides investment
advisory services to the Portfolio at a fee calculated at an annual rate of
0.75% of the Portfolio's average daily net assets. Effective July 1, 1995, MJI
has voluntarily agreed to waive a portion of its advisory fees and to assume
expenses on behalf of the Portfolio, if necessary, if the annual operating
expenses of the Portfolio exceed, after the effect of expense offsets
arrangements, 1.50% of average daily net assets. Prior to July 1, 1995, MJI
voluntarily agreed to waive a portion of its advisory fees and to assume
expenses on behalf of the Portfolio, if necessary, if the annual operating
expenses of the Portfolio exceeded 1.00% of average daily net assets.
C. ADMINISTRATIVE SERVICES. Effective September 1, 1995, The Chase Manhattan
Bank, N.A., through its affiliate Chase Global Funds Services Company
("CGFSC") (the "Administrator"), formerly Mutual Funds Service Company
("MFSC"), provides administrative, fund accounting, dividend disbursing and
transfer agent services to the UAM Funds under an Administration Agreement
(the "Agreement"). Pursuant to the Agreement, the Administrator is entitled to
receive annual fees, computed daily and payable monthly, based on the combined
aggregate average daily net assets of the UAM Funds and AEW, as follows: 0.20%
of the first $200 million of the combined aggregate net assets; plus 0.12% of
the next $800 million of the combined aggregate net assets; plus 0.08% of the
combined aggregate net assets in excess of $1 billion but less than $3
billion; plus 0.06% of the combined aggregate net assets in excess of $3
billion. The fees are allocated among the portfolios of the UAM Funds and AEW
on the basis of their relative net assets and are subject to a graduated
minimum fee schedule per portfolio which rises from $2,000 per month upon
inception of a portfolio to $70,000 annually after two years. In addition, the
Portfolio is charged certain out of pocket expenses by the Administrator.
Prior to September 1, 1995, MFSC, an affiliate of the United States Trust
Company of New York, provided administrative services to the UAM Funds under
the same terms, conditions and fees as stated above.
D. DISTRIBUTION SERVICES. UAM Fund Distributors, Inc. (the "Distributor")
formerly known as RFI Distributors, (a division of Regis Retirement Plan
Services, Inc.) a wholly-owned subsidiary of UAM, distributes the shares of
the Portfolio. The Distributor does not receive any fee or other compensation
with respect to the Portfolio.
E. PURCHASES AND SALES. During the period ended October 31, 1995, the
Portfolio made purchases of $5,397,000 and sales of $2,022,000 of investment
securities other than long-term U.S. Government and short-term securities.
There were no purchases and sales of long-term U.S. Government securities.
F. TRUSTEES' FEES. Each Trustee, who is not an officer or affiliated person,
receives $2,000 per meeting attended, which is allocated proportionally among
the active portfolios of UAM Funds and AEW, plus a quarterly retainer of $150
for each active portfolio of the UAM Funds and AEW and reimbursement for
expenses incurred in attending Trustee meetings.
G. LINE OF CREDIT. The Portfolio, along with certain other portfolios of UAM
Funds collectively entered into an agreement which enables them to participate
in a $100 million unsecured line of credit with several banks. Borrowings will
be made solely to temporarily finance the repurchase of portfolio shares.
Interest is charged to
14
<PAGE>
MJI INTERNATIONAL EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
each participating portfolio based on its borrowings at a rate per annum equal
to the Federal Funds rate plus 0.75%. In addition, a commitment fee of 1/10th
of 1% per annum, payable at the end of each calendar quarter, is accrued by
each participating portfolio based on its average daily unused portion of the
line of credit. During the period ended October 31, 1995, the Portfolio had no
borrowings under the agreement.
H. OTHER. At October 31, 1995, 43.3% of total shares outstanding were held by
one record shareholder owning 10% or greater of the aggregate total shares
outstanding.
At October 31, 1995, the net assets of the Portfolio was substantially
comprised of foreign denominated securities and currency. Changes in currency
exchange rates will affect the value of and investment income from such
securities and currency.
Foreign security and currency transactions may involve certain considerations
and risks not typically associated with those of U.S. dollar denominated
transactions as a result of, among other factors, the possibly lower level of
governmental supervision and regulation of foreign securities markets and the
possibility of political or economic instability.
15
<PAGE>
- -------------------------------------------------------------------------------
UAM FUNDS
CHICAGO ASSET MANAGEMENT
COMPANY PORTFOLIOS
- -------------------------------------------------------------------------------
OFFICERS AND TRUSTEES
Norton H. Reamer William A. Humenuk
Trustee, President Trustee
and Chairman
Peter M. Whitman, Jr.
Mary Rudie Barneby Trustee
Trustee and Executive
Vice President William H. Park
Vice President and
John T. Bennett, Jr. Assistant Treasurer
Trustee
Karl O. Hartmann
J. Edward Day Secretary
Trustee
Robert R. Flaherty
Philip D. English Treasurer
Trustee
Harvey M. Rosen
Assistant Secretary
- -------------------------------------------------------------------------------
INVESTMENT ADVISER
Chicago Asset Management Company
70 West Madison Street, 56th Floor
Chicago, IL 60602
- -------------------------------------------------------------------------------
ADMINISTRATOR
The Chase Manhattan Bank, N.A.
73 Tremont Street, Boston, MA 02108-3913
- -------------------------------------------------------------------------------
CUSTODIAN
Morgan Guaranty Trust Company of New York
60 Wall Street, New York, NY 10260
- -------------------------------------------------------------------------------
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young
2600 One Commerce Square Philadelphia, PA 19103
- -------------------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
160 Federal Street
Boston, MA 02110
- -------------------------------------------------------------------------------
DISTRIBUTOR
UAM Fund Distributors, Inc.
One International Place, 44th Floor Boston, MA 02110
- -------------------------------------------------------------------------------
This report has been prepared for shareholders and may be distributed to
others only if preceded or accompanied by a current prospectus.
- -------------------------------------------------------------------------------
UAM FUNDS
CHICAGO ASSET
MANAGEMENT
COMPANY
PORTFOLIOS
- -------------------------------------------------------------------------------
SEMI-ANNUAL REPORT
OCTOBER 31, 1995
<PAGE>
UAM FUNDS CHICAGO ASSET MANAGEMENT COMPANY PORTFOLIOS
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Shareholder's Letter........................................................ 1
Statement of Net Assets
Value/Contrarian Portfolio................................................ 3
Intermediate Bond Portfolio............................................... 6
Statements of Operations.................................................... 8
Statement of Changes
Value/Contrarian Portfolio................................................ 9
Intermediate Bond Portfolio............................................... 10
Financial Highlights
Value/Contrarian Portfolio................................................ 11
Intermediate Bond Portfolio............................................... 12
Notes to Financial Statements............................................... 13
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
Dear Shareholders:
The semi-annual reporting period for the Chicago Asset Management
Value/Contrarian Portfolio and the Intermediate Bond Portfolio is October 31,
1995. This letter will highlight the Portfolios' investment returns and
strategies. We thank you for your confidence in our investment expertise and
look forward to maintaining a long-term relationship.
CHICAGO ASSET MANAGEMENT VALUE/CONTRARIAN PORTFOLIO
For the most recent six-month period ended October 31, 1995, the equity market
in general continued its very strong advance which has been going on most of
this year and is a continuation of the now lengthy bull market dating back to
1982.
We have continued to maintain our identical strategies and discipline as large
cap, bottom-up, value-oriented contrarian portfolio managers. We concentrate
most of our efforts on selecting individual securities which are out-of-favor
with the general investing public due to short-term market misperceptions. We
continue to maintain a close to fully invested posture at all times with the
view that equity markets over the longer term will rise more than fall.
Thereby, we avoid the risk of being out of the market during periods of rising
securities' prices.
During this current six-month period, the rate of return for the Portfolio was
9.80%. This number appears quite large on an absolute basis for a six-month
period but, on a relative basis, is a modest number given the very strong
equity market and the returns from portfolios that were more aggressively
invested in narrowly focused areas. Over time, we believe our relative
performance will be more directly influenced by the number of individual
issues which happen to be experiencing their recovery. The stock market's
performance during the past six-months was focused in high growth issues--
particularly notable was technology. These hot areas are not compatible with
our style of equity investing.
During the last six months, we found opportunities to add positions in Gap,
Inc. and Nordstrom, Inc. We view these as two of the best managed and best
positioned companies within the severely depressed retail clothing sector.
These holdings are consistent with our approach of looking for companies we
believe are excellent investments over the longer term but which have been
underperforming recently for reasons that appear not only transitory but soon
to be resolved.
We also believe our approach maintains a portfolio of companies which are
mostly undervalued at current prices and may be less likely to underperform
during market declines. Although this is in no way assured, it does seem to
offer the potential for maintaining value during market declines and
outperforming when, and if, the temporary problems besetting the individual
issues are resolved. This approach to portfolio management has been consistent
since the inception of the Portfolio and we foresee no changes in the future.
CHICAGO ASSET MANAGEMENT INTERMEDIATE BOND PORTFOLIO
The six-month period ended October 31, 1995, was very favorable for fixed
income investors. Any concerns market participants had regarding inflation
were ameliorated by the excellent monthly Consumer Price Index and Producer
Price Index reports. The economy's rate of expansion moderated. The Federal
Reserve cut the Federal Funds rate by a quarter of one percent, from 6% to
5.75%. The yield on two-year U.S. Treasury Notes declined meaningfully from
6.58% to 5.61%. Longer maturity intermediate-term interest rates as
represented by ten-year
1
<PAGE>
U.S. Treasury Notes had a similar movement of approximately one hundred basis
points. The yield fell on ten-year U.S. Treasury Notes from 7.05% to 6.02%.
The Portfolio maintained its concentration in U.S. Treasury Notes and
obligations of large U.S. corporations. Corporate debt is utilized to enhance
the current income and long-term total return of the Portfolio. Emphasis is
placed on intermediate maturity securities. This is done so that the Portfolio
can seek to produce a high level of income while reducing the possibility of
exposing the investor to significant principal fluctuation.
The Portfolio had the following characteristics relative to the Lehman
Brothers Intermediate Government/Corporate Index as of October 31, 1995:
<TABLE>
<CAPTION>
PORTFOLIO INDEX
---------- ----------
<S> <C> <C>
Average Maturity................................... 4.12 Years 4.21 Years
Average Duration................................... 3.28 Years 3.24 Years
Average Coupon..................................... 7.02% 7.01%
Yield to Maturity.................................. 5.99% 5.94%
</TABLE>
For the six-months ended October 31, 1995, the Portfolio produced a total rate
of return, net of expenses, of 6.63% versus the Lehman Brothers Intermediate
Government/Corporate Index return of 6.61%.
CHICAGO ASSET MANAGEMENT COMPANY
DEFINITION OF THE COMPARATIVE INDEX
The Lehman Brothers Intermediate Government/Corporate Index is an unmanaged
index composed of a combination of the Government and Corporate Bond Indices.
All issues are investment grade (BBB) or higher, with maturities of one to ten
years and an outstanding par value of at least $100 million for U.S.
Government issues and $25 million for others. The Government Index includes
public obligations of the U.S. Treasury, issues of Government agencies, and
corporate debt backed by the U.S. Government. The Corporate Bond Index
includes fixed-rate nonconvertible corporate debt. Also included are Yankee
Bonds and nonconvertible debt issued by or guaranteed by foreign or
international governments and agencies. Any security down-graded during the
month is held in the index until month-end and then removed. All returns are
market value weighted inclusive of accrued income.
Comparisons of performance assumes reinvestment of dividends.
Please note that one cannot invest in an unmanaged index.
The investment results presented in the Adviser's letter represent past
performance and should not be construed as a guarantee of future results. If
the Adviser didn't have temporary fee waivers and didn't assume expenses on
behalf of the Portfolios, total returns for the Portfolios would have been
lower. 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.
2
<PAGE>
CHICAGO ASSET MANAGEMENT VALUE/CONTRARIAN PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
October 31, 1995 (Unaudited)
<TABLE>
<CAPTION>
VALUE
SHARES (000)+
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (96.0%)
- -------------------------------------------------------------------------------
AEROSPACE & DEFENSE (6.8%)
Raytheon Co.................................................... 600 $ 26
United Technologies Corp....................................... 300 27
------
53
- -------------------------------------------------------------------------------
AUTOMOTIVE (5.2%)
Ford Motor Corp................................................ 750 21
General Motors Corp............................................ 450 20
------
41
- -------------------------------------------------------------------------------
BANKS (5.8%)
Banc One Corp.................................................. 650 22
BankAmerica Corp............................................... 400 23
------
45
- -------------------------------------------------------------------------------
BEVERAGES, FOOD & TOBACCO (6.6%)
General Mills Inc.............................................. 450 26
Sysco Corp. ................................................... 850 26
------
52
- -------------------------------------------------------------------------------
BROADCASTING & PUBLISHING (2.9%)
Deluxe Corp. .................................................. 850 23
- -------------------------------------------------------------------------------
CHEMICALS (5.5%)
Dow Chemical Co. .............................................. 300 21
Ethyl Corp..................................................... 2,000 22
------
43
- -------------------------------------------------------------------------------
CONSUMER DURABLES (2.2%)
Goodyear Tire & Rubber Co...................................... 450 17
- -------------------------------------------------------------------------------
CONSUMER STAPLES (3.1%)
Procter & Gamble Co............................................ 300 24
- -------------------------------------------------------------------------------
ELECTRONICS (3.2%)
General Electric Co. .......................................... 400 25
- -------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
CHICAGO ASSET MANAGEMENT VALUE/CONTRARIAN PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS--(CONTINUED)
October 31, 1995 (Unaudited)
<TABLE>
<CAPTION>
VALUE
SHARES (000)+
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--(CONTINUED)
- -------------------------------------------------------------------------------
ENERGY (8.2%)
Exxon Corp..................................................... 300 $ 23
Mobil Corp. ................................................... 150 15
Tenneco, Inc................................................... 600 26
------
64
- -------------------------------------------------------------------------------
HEALTH CARE (3.1%)
Caremark International, Inc.................................... 1,150 24
- -------------------------------------------------------------------------------
INSURANCE (2.9%)
Chubb Corp..................................................... 250 23
- -------------------------------------------------------------------------------
LODGING & RESTAURANTS (2.7%)
Darden Restaurants, Inc........................................ 1,850 21
- -------------------------------------------------------------------------------
MANUFACTURING (6.0%)
Eastman Kodak Co............................................... 400 25
Whitman Corp................................................... 1,050 22
------
47
- -------------------------------------------------------------------------------
PAPER & PACKAGING (4.9%)
International Paper Co......................................... 500 18
Weyerhaeuser Co................................................ 450 20
------
38
- -------------------------------------------------------------------------------
PHARMACEUTICALS (8.9%)
Pfizer, Inc. .................................................. 400 23
Upjohn Co...................................................... 500 26
Warner Lambert Co.............................................. 250 21
------
70
- -------------------------------------------------------------------------------
RETAIL (8.4%)
Gap, Inc....................................................... 500 20
Nordstrom, Inc. ............................................... 650 24
The Limited, Inc............................................... 1,200 22
------
66
- -------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
CHICAGO ASSET MANAGEMENT VALUE/CONTRARIAN PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS--(CONTINUED)
October 31, 1995 (Unaudited)
<TABLE>
<CAPTION>
VALUE
SHARES (000)+
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--(CONTINUED)
- -------------------------------------------------------------------------------
TECHNOLOGY (6.3%)
Apple Computer Inc............................................ 700 $ 25
International Business Machines Corp.......................... 250 24
------
49
- -------------------------------------------------------------------------------
TELECOMMUNICATIONS (3.3%)
AT&T Corp..................................................... 400 26
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS (COST $649).................................. 751
- -------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (4.0%)
- -------------------------------------------------------------------------------
Cash.......................................................... 14
Organization Cost............................................. 19
Receivable due from Investment Adviser........................ 8
Receivable for Investments Sold............................... 1
Dividends Receivable.......................................... 1
Payable for Administrative Fees............................... (4)
Payable for Investments Purchased............................. (2)
Payable for Custodian Fees.................................... (1)
Payable for Trustees' Fees.................................... (1)
Other Liabilities............................................. (3)
------
32
- -------------------------------------------------------------------------------
NET ASSETS (100%)
Applicable to 64,713 outstanding Institutional Class shares
(unlimited authorization, no par value)...................... $ 783
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE....... $12.10
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
+ See Note A to Financial Statements
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
CHICAGO ASSET MANAGEMENT INTERMEDIATE BOND PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
October 31, 1995 (Unaudited)
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
(000) (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
CORPORATE BONDS & NOTES (48.5%)
- --------------------------------------------------------------------------------
BANKS (12.1%)
BankAmerica Corp. 7.625%, 6/15/04............................... $250 $ 264
Northern Trust Co. 6.50%, 5/1/03................................ 250 245
Norwest Corp. 7.70%, 11/15/97................................... 250 258
------
767
- --------------------------------------------------------------------------------
FINANCIAL SERVICES (12.4%)
Associates Corp. 7.75%, 2/15/05................................. 250 272
General Electric Credit Corp. 7.85%, 2/1/97..................... 250 255
General Motors Acceptance Corp. 8.00%, 5/2/97................... 250 257
------
784
- --------------------------------------------------------------------------------
INDUSTRIAL (12.1%)
Hertz Corp. 8.30%, 2/2/98....................................... 250 261
PepsiCo, Inc. 6.25%, 9/1/99..................................... 250 251
Shell Oil Co. 6.625%, 7/1/99.................................... 250 254
------
766
- --------------------------------------------------------------------------------
RETAIL (4.0%)
Motorola, Inc. 6.50%, 9/1/25.................................... 250 253
- --------------------------------------------------------------------------------
SERVICES (3.9%)
WMX Technologies, Inc. 6.25%, 10/15/00.......................... 250 250
- --------------------------------------------------------------------------------
UTILITIES (4.0%)
Virginia Electric Power Co. 6.25%, 8/1/98....................... 250 251
- --------------------------------------------------------------------------------
TOTAL CORPORATE BONDS & NOTES (COST $2,917)...................... 3,071
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
CHICAGO ASSET MANAGEMENT INTERMEDIATE BOND PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS--(CONTINUED)
October 31, 1995 (Unaudited)
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
(000) (000)+
- -------------------------------------------------------------------------------
<S> <C> <C>
U.S. GOVERNMENT SECURITIES (48.7%)
- -------------------------------------------------------------------------------
U.S. TREASURY NOTES
5.875%, 7/31/97............................................... $425 $ 427
6.125%, 5/31/97............................................... 550 554
6.50%, 8/15/05................................................ 250 259
6.75%, 2/28/97................................................ 250 254
7.50%, 1/31/97................................................ 500 511
7.50%, 11/15/01............................................... 250 270
7.50%, 5/15/02................................................ 250 271
7.75%, 1/31/00................................................ 500 536
- -------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT SECURITIES (COST $2,980)................. 3,082
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS (97.2%) (COST $5,897)........................ 6,153
- -------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (2.8%)
- -------------------------------------------------------------------------------
Cash.......................................................... 52
Interest Receivable........................................... 119
Organization Cost............................................. 19
Receivable for Investment Adviser............................. 2
Receivable for Portfolio Shares Sold.......................... 1
Other Assets.................................................. 7
Payable for Audit Fees........................................ (7)
Payable for Legal Fees........................................ (5)
Payable for Administrative Fees............................... (4)
Payable for Custodian Fees.................................... (2)
Payable for Trustees' Fees.................................... (1)
Other Liabilities............................................. (4)
------
177
- -------------------------------------------------------------------------------
NET ASSETS (100%)
Applicable to 592,848 outstanding Institutional Class shares
(unlimited authorization, no par value)...................... $6,330
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE....... $10.68
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
+ See Note A to Financial Statements.
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
CHICAGO ASSET MANAGEMENT PORTFOLIOS
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED OCTOBER 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
CHICAGO ASSET CHICAGO ASSET
MANAGEMENT MANAGEMENT
VALUE/ INTERMEDIATE
CONTRARIAN BOND
(In Thousands) PORTFOLIO PORTFOLIO
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends.............................. $ 10 $--
Interest............................... -- 210
- --------------------------------------------------------------------------------
Total Income.......................... 10 210
- --------------------------------------------------------------------------------
EXPENSES
Investment Advisory Fees--Note B
Basic Fees............................ $ 2 $ 14
Less: Fees Waived..................... (2) -- (14) --
--- ----
Administrative Fees--Note C............ 22 20
Custodian Fees......................... 1 1
Audit Fees............................. 6 6
Trustees' Fees--Note F................. 1 1
Printing Fees.......................... 3 4
Legal Fees............................. 1 4
Filing and Registration Fees........... 7 7
Other Expenses......................... 3 3
Fees Assumed by Adviser--Note B........ (39) (22)
- --------------------------------------------------------------------------------
Total Expenses........................ 5 24
Expense Offset--Note A................. (1) (1)
- --------------------------------------------------------------------------------
Net Expenses.......................... 4 23
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME................... 6 187
- --------------------------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS........ 17 48
NET CHANGE IN UNREALIZED APPRECIATION ON
INVESTMENTS............................ 44 124
- --------------------------------------------------------------------------------
NET GAIN ON INVESTMENTS................. 61 172
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS........................ $ 67 $359
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
CHICAGO ASSET MANAGEMENT VALUE/CONTRARIAN PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
DECEMBER 16, ENDED
1994* TO OCTOBER 31,
APRIL 30, 1995
(In Thousands) 1995 (UNAUDITED)
- -------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income................................ $ 3 $ 6
Net Realized Gain.................................... 2 17
Net Change in Unrealized Appreciation................ 58 44
- -------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Opera-
tions.............................................. 63 67
- -------------------------------------------------------------------------------
DISTRIBUTIONS:
Net Investment Income................................ (2) (8)
- -------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS: (1)
Issued--Regular...................................... 615 30
- --In Lieu of Cash Distributions....................... 2 8
Redeemed............................................. (7) (10)
- -------------------------------------------------------------------------------
Net Increase from Capital Share Transactions........ 610 28
- -------------------------------------------------------------------------------
Total Increase....................................... 671 87
Net Assets:
Beginning of Period.................................. 25 696
- -------------------------------------------------------------------------------
End of Period (2).................................... $696 $783
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1)Shares Issued and Redeemed:
Shares Issued....................................... 61 3
In Lieu of Cash Distributions....................... -- 1
Redeemed............................................ (1) (1)
- -------------------------------------------------------------------------------
60 3
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(2)Net Assets Consist of:
Paid in Capital..................................... $632 $660
Undistributed Net Investment Income................. 4 2
Accumulated Net Realized Gain....................... 2 19
Unrealized Appreciation............................. 58 102
- -------------------------------------------------------------------------------
$696 $783
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
* Commencement of Operations
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
CHICAGO ASSET MANAGEMENT INTERMEDIATE BOND PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
JANUARY 24, ENDED
1995* TO OCTOBER 31,
APRIL 30, 1995
(In Thousands) 1995 (UNAUDITED)
- ---------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net Investment Income.... $ 85 $ 187
Net Realized Gain........ -- 48
Net Change in Unrealized
Appreciation............ 132 124
- ---------------------------------------------------
Net Increase in Net As-
sets Resulting from Op-
erations............... 217 359
- ---------------------------------------------------
DISTRIBUTIONS:
Net Investment Income.... (50) (182)
- ---------------------------------------------------
CAPITAL SHARE TRANSAC-
TIONS: (1)
Issued--Regular.......... 5,025 747
- --In Lieu of Cash Distri-
butions.................. 50 182
Redeemed................. -- (43)
- ---------------------------------------------------
Net Increase from Capi-
tal Share Transactions. 5,075 886
- ---------------------------------------------------
Total Increase........... 5,242 1,063
Net Assets:
Beginning of Period...... 25 5,267
- ---------------------------------------------------
End of Period (2)........ $5,267 $6,330
- ---------------------------------------------------
- ---------------------------------------------------
(1)Shares Issued and Re-
deemed:
Shares Issued........... 502 70
In Lieu of Cash Distri-
butions................ 5 17
Redeemed................ -- (4)
- ---------------------------------------------------
507 83
- ---------------------------------------------------
- ---------------------------------------------------
(2)Net Assets Consist of:
Paid in Capital......... $5,097 $5,983
Undistributed Net In-
vestment Income........ 38 43
Accumulated Net Realized
Gain................... -- 48
Unrealized Appreciation. 132 256
- ---------------------------------------------------
$5,267 $6,330
- ---------------------------------------------------
- ---------------------------------------------------
</TABLE>
* Commencement of Operations
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
CHICAGO ASSET MANAGEMENT VALUE/CONTRARIAN PORTFOLIO FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS
DECEMBER 16, ENDED
1994** TO OCTOBER 31,
APRIL 30, 1995
1995 (UNAUDITED)
- -------------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD................. $10.00 $11.14
- -------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income+.............................. 0.05 0.10
Net Realized and Unrealized Gain.................... 1.13 0.99
- -------------------------------------------------------------------------------
Total from Investment Operations................... 1.18 1.09
- -------------------------------------------------------------------------------
DISTRIBUTIONS
Net Investment Income............................... (0.04) (0.13)
- -------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD....................... $11.14 $12.10
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
TOTAL RETURN......................................... 11.81%++ 9.80%++
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period............................ $ 696 $ 783
Ratio of Expenses to Average Net Assets+............. 0.95%* 1.09%*##
Ratio of Net Investment Income to Average Net As-
sets+............................................... 1.54%* 1.64%*
Portfolio Turnover Rate.............................. 4% 16%
- -------------------------------------------------------------------------------
</TABLE>
* Annualized
** Commencement of Operations
+ Net of voluntarily waived fees and expenses assumed by the Adviser of $0.58
per share and $0.66 per share for the periods ended April 30, 1995 and
October 31, 1995, respectively.
++ Total return would have been lower had certain fees not been waived and
expenses assumed by the Adviser during the periods indicated.
## For the period ended October 31, 1995, the Ratio of Expenses to Average Net
Assets excludes the effect of expense offsets. If expense offsets were
included, the Ratio of Expenses to Average Net Assets would be 0.95%*.
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
CHICAGO ASSET MANAGEMENT INTERMEDIATE BOND PORTFOLIO FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS
JANUARY 24, ENDED
1995** TO OCTOBER 31,
APRIL 30, 1995
1995 (UNAUDITED)
- ---------------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.................. $10.00 $10.33
- ---------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income+............................... 0.17 0.33
Net Realized and Unrealized Gain..................... 0.26 0.35
- ---------------------------------------------------------------------------------
Total from Investment Operations.................... 0.43 0.68
- ---------------------------------------------------------------------------------
DISTRIBUTIONS
Net Investment Income................................ (0.10) (0.33)
- ---------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD........................ $10.33 $10.68
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
TOTAL RETURN.......................................... 4.31%++ 6.63%++
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period............................. $5,267 $6,330
Ratio of Expenses to Average Net Assets+.............. 0.80%* 0.83%*##
Ratio of Net Investment Income to Average Net Assets+. 6.20%* 6.45%*
Portfolio Turnover Rate............................... 0% 19%
- ---------------------------------------------------------------------------------
</TABLE>
* Annualized
** Commencement of Operations
+ Net of voluntarily waived fees and expenses assumed by the Adviser of $0.08
per share and $0.06 per share for the periods ended April 30, 1995 and
October 31, 1995, respectively.
++ Total return would have been lower had certain fees not been waived and
expenses assumed by the Adviser for the periods indicated.
## The Ratio of Expenses to Average Net Assets excludes the effect of expense
offsets. If expense offsets were included, the Ratio of Expenses to Average
Net Assets would be 0.80%*.
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
CHICAGO ASSET MANAGEMENT COMPANY PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
UAM Funds Trust, formerly known as The Regis Fund II, and UAM Funds, Inc.,
formerly known as The Regis Fund, Inc., (collectively the "UAM Funds") were
organized on May 18, 1994 and October 11, 1988, respectively, and are
registered under the Investment Company Act of 1940, as amended, as open-end
management investment companies. Chicago Asset Management Value/Contrarian
Portfolio and Chicago Asset Management Intermediate Bond Portfolio (the
"Portfolios"), portfolios of the UAM Funds Trust, began operations on December
16, 1994 and January 24, 1995, respectively. At October 31, 1995, the UAM
Funds were comprised of thirty-four active portfolios. The financial
statements of the remaining portfolios are presented separately.
A. SIGNIFICANT ACCOUNTING POLICIES. The following significant accounting
policies are in conformity with generally accepted accounting principles for
investment companies. Such policies are consistently followed by the
Portfolios in the preparation of its financial statements.
1. SECURITY VALUATION: Securities listed on a securities exchange for which
market quotations are readily available are valued at the last quoted sales
price as of the close of the exchange on the day the valuation is made or,
if no sale occurred on such day, at the mean of the bid and asked prices on
such day. Price information on listed securities is taken from the exchange
where the security is primarily traded. Over-the-counter and unlisted
securities are valued at the mean of the current bid and asked prices.
Fixed income securities are stated on the basis of valuations provided by a
pricing service which uses information with respect to transactions in
fixed income securities, quotations from dealers, market transactions in
comparable securities and various relationships between securities in
determining value. Short-term investments that have remaining maturities of
sixty days or less at time of purchase are valued at amortized cost, if it
approximates market value.
The value of other assets and securities for which no quotations are
readily available is determined in good faith at fair value using methods
determined by the Board of Trustees.
2. FEDERAL INCOME TAXES: It is each Portfolio's intention to continue to
qualify as a regulated investment company under Subchapter M of the
Internal Revenue Code and to distribute all of its taxable income.
Accordingly, no provision for Federal income taxes is required in the
financial statements.
Paid in capital and undistributed net investment income have been adjusted
for permanent book-tax differences.
At October 31, 1995, cost and unrealized appreciation for Federal income
tax purposes were:
<TABLE>
<CAPTION>
NET
COST APPRECIATION DEPRECIATION APPRECIATION
(000) (000) (000) (000)
------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Chicago Asset Management
Value/Contrarian Portfolio... $ 649 $107 $ (5) $102
Chicago Asset Management
Intermediate Bond Portfolio.. 5,897 256 -- 256
</TABLE>
3. REPURCHASE AGREEMENTS: In connection with transactions in repurchase
agreements, the Portfolios' custodian bank takes possession of the
underlying securities, the value of which exceeds the principal
13
<PAGE>
CHICAGO ASSET MANAGEMENT COMPANY PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
amount of the repurchase transaction, including accrued interest. To the
extent that any repurchase transaction exceeds one business day, the value
of the collateral is marked-to-market on a daily basis to determine the
adequacy of the collateral. In the event of default on the obligation to
repurchase, the Portfolios have the right to liquidate the collateral and
apply the proceeds in satisfaction of the obligation. In the event of
default or bankruptcy by the other party to the agreement, realization
and/or retention of the collateral or proceeds may be subject to legal
proceedings.
4. DISTRIBUTIONS TO SHAREHOLDERS: Any distributions from net investment
income are normally declared and paid quarterly. Any realized net capital
gains will normally be distributed annually. All distributions are recorded
on ex-dividend date.
The amount and character of income and capital gain distributions to be
paid are determined in accordance with Federal income tax regulations which
may differ from generally accepted accounting principles.
5. OTHER: Security transactions are accounted for on trade date, the date
the trade was executed. Costs used in determining realized gains and losses
on the sale of investment securities are determined based on the specific
identification method. Dividend income is recorded on the ex-dividend date.
Interest income is recognized on the accrual basis. Discounts and premiums
on securities purchased are amortized over their respective lives. Most
expenses of the UAM Funds can be directly attributed to a particular
portfolio. Expenses which cannot be directly attributed are apportioned
among the portfolios of the UAM Funds based on their relative net assets.
Additionally, certain expenses are apportioned among the portfolios of the
UAM Funds and AEW Commercial Mortgage Securities Fund, Inc. ("AEW"), an
affiliated closed-end management investment company, based on their
relative net assets. Custodian fees have been adjusted to include expense
offsets for custodian balance credits. Costs incurred by each Portfolio in
connection with its organization have been deferred and are being amortized
on a straight line basis over a five year period.
Current year permanent book-tax differences, if any, are not included in
ending undistributed net investment income for the purpose of calculating
net investment income per share in the Financial Highlights.
B. ADVISORY SERVICES. Under the terms of Investment Advisory Agreements,
Chicago Asset Management Company (the "Adviser"), a wholly-owned subsidiary of
United Asset Management Corporation ("UAM"), provides investment advisory
services to the Portfolios at a fee calculated at an annual rate of 0.625% of
the average daily net assets for Chicago Asset Management Value/Contrarian
Portfolio and 0.48% of average daily net assets for Chicago Asset Management
Intermediate Bond Portfolio. Through April 30, 1996, the Adviser has
voluntarily agreed to waive a portion of its advisory fees and to assume
expenses on behalf of the Portfolio, if necessary, if the annual operating
expenses of the Portfolios exceed after the effect of expense offsets
arrangement, 0.95% and 0.80% of average daily net assets, respectively.
C. ADMINISTRATIVE SERVICES. Effective September 1, 1995, The Chase Manhattan
Bank, N.A. through its affiliate Chase Global Funds Services Company ("CGFSC")
(the "Administrator"), formerly Mutual Funds Service Company ("MFSC"),
provides administrative, fund accounting, dividend disbursing and transfer
agent services to the UAM Funds under an Administration Agreement (the
"Agreement"). Pursuant to the Agreement, the Administrator is entitled to
receive annual fees, computed daily and payable monthly, based on the combined
aggregate average daily net assets of the UAM Funds and AEW, as follows: 0.20%
of the first $200 million of
14
<PAGE>
CHICAGO ASSET MANAGEMENT COMPANY PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
the combined aggregate net assets; plus 0.12% of the next $800 million of the
combined aggregate net assets; plus 0.08% of the combined aggregate net assets
in excess of $1 billion but less than $3 billion; plus 0.06% of the combined
aggregate net assets in excess of $3 billion. The fees are allocated among the
portfolios of the UAM Funds and AEW on the basis of their relative net assets
and are subject to a graduated minimum fee schedule per portfolio which rises
from $2,000 per month upon inception of a portfolio to $70,000 annually after
two years. In addition, each Portfolio is charged certain out of pocket
expenses by the Administrator. Prior to September 1, 1995, MFSC was an
affiliate of the United States Trust Company of New York and provided
administrative services to the UAM Funds under the same terms, conditions and
fees as stated above.
D. DISTRIBUTION SERVICES. UAM Fund Distributors, Inc. (the "Distributor"),
formerly known as RFI Distributors, (a division of Regis Retirement Plan
Services, Inc.) a wholly-owned subsidiary of UAM, distributes the shares of
the Portfolios. The Distributor does not receive any fee or other compensation
with respect to the Portfolios.
E. PURCHASES AND SALES. During the period ended October 31, 1995, purchases
and sales of investment securities other than long-term U.S. Government and
short-term securities were:
<TABLE>
<CAPTION>
PURCHASES SALES
(000) (000)
--------- -----
<S> <C> <C>
Chicago Asset Management Value/Contrarian Portfolio.......... $116 $114
Chicago Asset Management Intermediate Bond Portfolio......... 350 102
</TABLE>
Purchases and sales of long-term U.S. Government securities totaled $1,633,000
and $929,000, respectively, for Chicago Asset Management Intermediate Bond
Portfolio. There were no purchases or sales of long-term U.S. Government
securities for Chicago Asset Management Value/Contrarian Portfolio.
F. TRUSTEES' FEES. Each Trustee, who is not an officer or affiliated person,
receives $2,000 per meeting attended, which is allocated proportionally among
the active portfolios of UAM Funds and AEW, plus a quarterly retainer of $150
for each active portfolio of the UAM Funds and AEW and reimbursement for
expenses incurred in attending Trustee meetings.
G. OTHER. At October 31, 1995, the percentage of total shares outstanding held
by record shareholders owning 10% or greater of the aggregate total shares
outstanding for each Portfolio was as follows:
<TABLE>
<CAPTION>
NO. OF %
SHAREHOLDERS OWNERSHIP
------------ ---------
<S> <C> <C>
Chicago Asset Management
Value/Contrarian Port-
folio.................. 2 89.2%
Chicago Asset Management
Intermediate Bond Port-
folio.................. 1 87.8
</TABLE>
At October 31, 1995, 79.0% and 3.9% of the total shares outstanding of the
Chicago Asset Management Value/Contrarian Portfolio were held by UAM Profit
Sharing & 401k Plan and UAM, respectively.
15
<PAGE>
- -------------------------------------------------------------------------------
UAM FUNDS
NEWBOLD'S EQUITYPORTFOLIO
- -------------------------------------------------------------------------------
OFFICERS AND TRUSTEES
Norton H. Reamer Peter M. Whitman, Jr.
Trustee, President Trustee
and Chairman
William H. Park
Mary Rudie Barneby Vice President and
Trustee and Executive Assistant Treasurer
Vice President
Karl O. Hartmann
John T. Bennett, Jr. Secretary
Trustee
Robert R. Flaherty
J. Edward Day Treasurer
Trustee
Harvey M. Rosen
Philip D. English Assistant Secretary
Trustee
William A. Humenuk
Trustee
- -------------------------------------------------------------------------------
INVESTMENT ADVISER
Newbold's Asset Management, Inc.
950 Haverford Road
Bryn Mayr, PA 19010
- -------------------------------------------------------------------------------
ADMINISTRATOR
The Chase Manhattan Bank, N.A.
73 Tremont Street, Boston, MA 02108-3913
- -------------------------------------------------------------------------------
CUSTODIAN
Morgan Guaranty Trust Company of New York
60 Wall Street, New York, NY 10260
- -------------------------------------------------------------------------------
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young
2600 One Commerce Square Philadelphia, PA 19103
- -------------------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
160 Federal Street
Boston, MA 02110
- -------------------------------------------------------------------------------
DISTRIBUTOR
UAM Fund Distributors, Inc.
One International Place, 44th Floor Boston, MA 02110
- -------------------------------------------------------------------------------
This report has been prepared for shareholders and may be distributed to
others only if preceded or accompanied by a current prospectus.
- -------------------------------------------------------------------------------
UAM FUNDS
NEWBOLD'S
EQUITY
PORTFOLIO
- -------------------------------------------------------------------------------
SEMI-ANNUAL REPORT
OCTOBER 31, 1995
<PAGE>
Dear Shareholder:
We are pleased to provide you with our semi-annual report for the period
ended October 31, 1995 for the Newbold's Equity Portfolio.
Our investment philosophy proceeds from the premise that investment value
and return can be best realized through buying companies with a low price
relative to current earnings. This "bottom-up" approach seeks to identify
companies whose earnings growth suggest an increasing stream of future
dividend income, and whose share price represents a level below realizable
value.
OVERVIEW
Equity markets set new record highs in the first half of the year, led by
the NASDAQ Over-the-Counter Index. This was followed by the Standard and
Poor's 500 Index and the Dow Jones Industrial Average. In October, a modest
pullback occurred, with the averages (NASDAQ, S&P 500 and DJIA) declining
about one-third of a percent.
ECONOMY
The quarter ended October 31, 1995 began on a positive note as the Federal
Reserve reduced the Fed Funds rate from 6% to 5 3/4%. This lent psychological
support to the economy and the markets which continued to grasp for signs of
an economic rebound. Statistics on industrial production reflected the first
increases since January and improved throughout the quarter as did the data on
existing home sales. Growth in business inventories slowed, further buoying
hopes that the economy was off bottom. Second quarter adjusted after-tax
corporate profits rose 24% with 57% of the reports exceeding expectations
(source: Wall Street Journal 8/7/95). In addition, second quarter Gross
Domestic Product was revised upward twice to 1.3% from the earlier meager
0.5%.
On the inflation front, things were very quiet as the Producer Price Index
declined and the Consumer Price Index only increased at a 0.1% monthly rate.
The Labor Department reported that total compensation costs for the year ended
June 30, 1995 were up only 2.9%, lower than the 3% inflation rate, reflecting
little upward wage pressure four years into the recovery. A further sign of
the times was the surprising announcement that the U.S. Steelworkers, the
United Auto Workers and the International Association of Machinists plan to
merge in order to bolster bargaining positions. In September, the Federal
Reserve declined to reduce interest rates again, and it seemed that it had
indeed rescued a stumbling economy and engineered a soft landing.
EQUITY MARKET AND PORTFOLIO COMMENT
The stock market responded strongly to the appearance of a non-inflationary
rebound in the economy. Specifically, the S&P 500 increased 4.23% in September
and declined 0.36% in October. The Newbold's Equity Portfolio declined by
2.27% in October, a period characterized by severe penalties to the value
based investment style we follow and is down 1.20% since its inception on
September 13, 1995 to October 31, 1995.
Several objective measures suggest that the market is fully valued at
current levels. Both the S&P 500 Price/Earnings Ratio based on normalized
earnings and the S&P 500 Price/Dividend ratio are near historical
1
<PAGE>
highs. While we do not know if the market will continue to rise or to correct,
our valuation analysis leads us to groups that have traditionally done well in
flat to down consolidating type markets. For example, technology stocks have
performed well, but they fail to meet our parameters given the group's high
P/E ratios and low dividend yields. Conversely, we believe electric utilities
offer excellent value. This group's dividend yield is at an historic high
relative to the S&P 400 Industrials. It is our belief that either the
electrics will appreciate in price or that the industrials will decline in
price bringing this relative yield down. In either case, we believe the result
will be outperformance from the electric utilities. Additionally, we have
pared many of our cyclical holdings as the fundamentals and earnings prospects
appear to be decelerating. We have offset this reduction by building positions
in healthcare and consumer staple issues which have underperformed as their
steady earnings progress has appeared mundane relative to more cyclical
issues.
Finally, in reviewing the market, it is easy to overlook that it was not all
smooth sailing. The market experienced some sharp volatility during September
and October, and we would not be surprised to see more choppiness going
forward given the level of the market and uncertainty over the future
direction of interest rates and level of corporate profits.
NEWBOLD'S ASSET MANAGEMENT, INC.
DEFINITIONS OF THE COMPARATIVE INDICES
--------------------------------------
The Dow Jones Industrial Average Index is a price-weighted average of 30 blue-
chip stocks that are generally the leaders in their industry and are listed on
the New York Stock Exchange.
The S&P 500 Index is an unmanaged index composed of 400 industrial, 40
financial, 40 utility and 20 transportation stocks.
NASDAQ Composite Index is an unmanaged index of more than 3,000 common stocks.
It is a value weighted index calculated on price change only and does not
include income.
Comparisons of performance assumes reinvestment of dividends.
Please note that one can not invest in an unmanaged index.
The investment results presented in the Adviser's letter represent past
performance and should not be construed as a guarantee of future results. If
the Adviser did not have temporary fee waivers and did not assume expenses on
behalf of the Portfolio, total return for the Portfolio would have been lower.
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.
2
<PAGE>
NEWBOLD'S EQUITY PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
October 31, 1995 (Unaudited)
<TABLE>
<CAPTION>
VALUE
SHARES (000)+
- -------------------------------------------------------------------------------
COMMON STOCKS (93.4%)
- -------------------------------------------------------------------------------
<S> <C> <C>
AEROSPACE & DEFENSE (3.8%)
Boeing Co. .................................................... 2,750 $ 180
Rockwell International Corp. .................................. 150 7
United Technologies Corp. ..................................... 2,824 251
-------
438
- -------------------------------------------------------------------------------
AUTOMOTIVE (1.2%)
Genuine Parts Co. ............................................. 2,100 83
Goodyear Tire & Rubber Co. .................................... 1,400 53
TRW, Inc. ..................................................... 100 7
-------
143
- -------------------------------------------------------------------------------
BANKS (4.5%)
Bankers Trust New York Corp. .................................. 2,850 182
Bank of New York Co., Inc. .................................... 600 25
Fleet Financial Group, Inc. ................................... 4,800 186
NationsBank Corp. ............................................. 1,900 125
-------
518
- -------------------------------------------------------------------------------
BEVERAGES, FOOD & TOBACCO (5.5%)
Anheuser-Busch Cos., Inc. ..................................... 1,950 129
Archer-Daniels-Midland Co. .................................... 8,140 131
ConAgra, Inc. ................................................. 1,700 66
RJR Nabisco Holdings Corp. .................................... 8,100 249
Unilever N.V.--New York Shares ADR............................. 500 65
-------
640
- -------------------------------------------------------------------------------
CHEMICALS (1.1%)
Dow Chemical Co. .............................................. 1,800 124
- -------------------------------------------------------------------------------
CONSTRUCTION (1.7%)
Masco Corp. ................................................... 7,000 197
- -------------------------------------------------------------------------------
CONSUMER NON-DURABLES (0.5%)
Browning-Ferris Industries, Inc. .............................. 2,000 58
- -------------------------------------------------------------------------------
ELECTRONICS (1.1%)
General Electric Co. .......................................... 2,100 133
- -------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
NEWBOLD'S EQUITY PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS--(CONTINUED)
October 31, 1995 (Unaudited)
<TABLE>
<CAPTION>
VALUE
SHARES (000)+
- -------------------------------------------------------------------------------
COMMON STOCKS--(CONTINUED)
- -------------------------------------------------------------------------------
<S> <C> <C>
ENERGY (9.1%)
Atlantic Richfield Co. ........................................ 2,450 $ 262
Chevron Corp. ................................................. 5,450 255
Exxon Corp. ................................................... 2,785 213
Schlumberger Ltd. ............................................. 3,450 215
USX-Marathon Group............................................. 6,500 115
-------
1,060
- -------------------------------------------------------------------------------
FINANCIAL SERVICES (4.3%)
Chubb Corp. ................................................... 2,050 184
Providian Corp. ............................................... 3,450 135
St. Paul Cos., Inc. ........................................... 3,600 183
-------
502
- -------------------------------------------------------------------------------
HEALTH CARE (7.8%)
Baxter International, Inc. .................................... 4,500 174
Bristol-Myers Squibb Co. ...................................... 3,400 259
Rhone-Poulenc SA Sponsored ADR................................. 3,000 66
U.S. Healthcare, Inc. ......................................... 2,200 85
Warner Lambert Co. ............................................ 3,800 323
-------
907
- -------------------------------------------------------------------------------
INDUSTRIAL (1.6%)
Corning, Inc. ................................................. 7,300 191
- -------------------------------------------------------------------------------
INSURANCE (1.2%)
Aetna Life & Casualty Co. ..................................... 1,900 134
- -------------------------------------------------------------------------------
METALS (2.4%)
Aluminum Company of America.................................... 5,500 280
- -------------------------------------------------------------------------------
MULTI-INDUSTRY (2.6%)
Hanson plc ADR................................................. 11,650 181
ITT Corp. ..................................................... 550 67
Tenneco, Inc. ................................................. 1,200 53
-------
301
- -------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
NEWBOLD'S EQUITY PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS--(CONTINUED)
October 31, 1995 (Unaudited)
<TABLE>
<CAPTION>
VALUE
SHARES (000)+
- -------------------------------------------------------------------------------
COMMON STOCKS--(CONTINUED)
- -------------------------------------------------------------------------------
<S> <C> <C>
OFFICE EQUIPMENT (1.1%)
Pitney Bowes, Inc. ............................................ 2,800 $ 122
- -------------------------------------------------------------------------------
PAPER & PACKAGING (2.5%)
International Paper Co. ....................................... 4,600 170
Mead Corp. .................................................... 2,050 118
-------
288
- -------------------------------------------------------------------------------
RETAIL (6.7%)
American Stores Co. ........................................... 6,600 197
Dayton-Hudson Corp. ........................................... 800 55
Kmart Corp. ................................................... 17,170 139
May Department Stores Co. ..................................... 3,000 118
The Limited, Inc. ............................................. 14,300 263
-------
772
- -------------------------------------------------------------------------------
SERVICES (5.9%)
Dial Corp. .................................................... 2,100 51
Dun & Bradstreet Corp. ........................................ 4,350 260
New York Times Co.--Class A.................................... 5,100 141
WMX Technologies, Inc. ........................................ 8,350 235
-------
687
- -------------------------------------------------------------------------------
TECHNOLOGY (1.1%)
Apple Computer, Inc. .......................................... 3,600 130
- -------------------------------------------------------------------------------
TELECOMMUNICATIONS (13.4%)
AT&T Corp. .................................................... 6,350 406
GTE Corp. ..................................................... 7,300 301
MCI Corp. ..................................................... 3,900 97
NYNEX Corp. ................................................... 8,200 385
Sprint Corp. .................................................. 9,450 364
U.S. West, Inc. ............................................... 100 5
-------
1,558
- -------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
NEWBOLD'S EQUITY PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS--(CONTINUED)
October 31, 1995 (Unaudited)
<TABLE>
<CAPTION>
VALUE
SHARES (000)+
- -------------------------------------------------------------------------------
COMMON STOCKS--(CONTINUED)
- -------------------------------------------------------------------------------
<S> <C> <C>
UTILITIES (14.3%)
Baltimore Gas & Electric Co. .................................. 3,800 $ 102
Entergy Corp. ................................................. 9,750 278
FPL Group, Inc. ............................................... 4,600 193
General Public Utilities Corp. ................................ 6,050 189
Houston Industries, Inc. ...................................... 2,000 93
Pacificorp..................................................... 3,300 62
Panhandle Eastern Corp. ....................................... 7,100 179
PECO Energy Co. ............................................... 2,300 67
SCE Corp. ..................................................... 5,600 95
Southern Co. .................................................. 6,000 143
Transcanada Pipelines LTD...................................... 14,100 189
Unicom Corp. .................................................. 2,100 69
-------
1,659
- -------------------------------------------------------------------------------
TOTAL COMMON STOCKS (COST $10,016).............................. 10,842
- -------------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCK (0.2%)
- -------------------------------------------------------------------------------
CONSUMER NON-DURABLES (0.2%)
RJR Nabisco Holdings, Series C, $0.6012 (Cost $23)............. 3,500 22
- -------------------------------------------------------------------------------
<CAPTION>
FACE
AMOUNT
(000)
- -------------------------------------------------------------------------------
<S> <C> <C>
SHORT-TERM INVESTMENT (4.0%)
- -------------------------------------------------------------------------------
REPURCHASE AGREEMENT (4.0%)
J.P. Morgan Securities, Inc. 5.35%, dated 10/31/95, due
11/1/95, to be repurchased at $460, collateralized by $406
U.S. Treasury Bonds 7.50%, due 11/15/16, valued at $469. (Cost
$460)......................................................... $ 460 460
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS (97.6%) (COST $10,499)........................ 11,324
- -------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
NEWBOLD'S EQUITY PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS--(CONTINUED)
October 31, 1995 (Unaudited)
<TABLE>
<CAPTION>
VALUE
(000)+
- -------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (2.4%)
- -------------------------------------------------------------------------------
<S> <C>
Cash.......................................................... $ 77
Receivable for Portfolio Shares Sold.......................... 1,710
Receivable for Investments Sold............................... 80
Dividends Receivable.......................................... 14
Receivable due from Investment Adviser........................ 5
Other Assets.................................................. 15
Payable for Investments Purchased............................. (1,607)
Payable for Administrative Fees............................... (3)
Payable for Custodian Fees.................................... (1)
Other Liabilities............................................. (9)
-------
281
- -------------------------------------------------------------------------------
NET ASSETS (100%)
Applicable to 1,175,074 outstanding Institutional Class shares
(unlimited authorization, no par value)...................... $11,605
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE....... $ 9.88
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
+ See Note A to Financial Statements.
ADR--American Depositary Receipt.
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
NEWBOLD'S EQUITY PORTFOLIO
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
SEPTEMBER 13,
1995* TO
OCTOBER 31,
1995
(In Thousands) (UNAUDITED)
- ------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Dividends...................................................... $ 18
Interest....................................................... 7
- ------------------------------------------------------------------------------
Total Income.................................................. 25
- ------------------------------------------------------------------------------
EXPENSES
Investment Advisory Fees--Note B
Basic Fees.................................................... $ 5
Less: Fees Waived............................................. (5) --
---
Administrative Fees--Note C.................................... 5
Custodian Fees................................................. 1
Audit Fees..................................................... 3
Registration and Filing Fees................................... 3
Printing Fees.................................................. 3
Other Expenses................................................. 1
Fees Assumed by Adviser--Note B................................ (6)
- ------------------------------------------------------------------------------
Net Expenses.................................................. 10
- ------------------------------------------------------------------------------
NET INVESTMENT INCOME........................................... 15
- ------------------------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS................................ 15
- ------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED DEPRECIATION ON INVESTMENTS ........... (209)
- ------------------------------------------------------------------------------
NET LOSS ON INVESTMENTS......................................... (194)
- ------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS............ $(179)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
</TABLE>
* Commencement of Operations
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
NEWBOLD'S EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SEPTEMBER 13,
1995* TO
OCTOBER 31,
1995
(In Thousands) (UNAUDITED)
- --------------------------------------------------------------------------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income............................................ $ 15
Net Realized Gain................................................ 15
Net Change in Unrealized Depreciation............................ (209)
- --------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting from Operations............ (179)
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS: (1)
Issued--Regular.................................................. 11,784
- --------------------------------------------------------------------------------
Total Increase.................................................. 11,605
Net Assets:
Beginning of Period.............................................. --
- --------------------------------------------------------------------------------
End of Period (2)................................................ $11,605
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) Shares Issued................................................. 1,175
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(2) Net Assets Consist of:
Paid in Capital............................................... $10,750
Undistributed Net Investment Income........................... 15
Accumulated Net Realized Gain................................. 15
Unrealized Appreciation....................................... 825
- --------------------------------------------------------------------------------
$11,605
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
* Commencement of Operations
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
NEWBOLD'S EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
<TABLE>
<CAPTION>
SEPTEMBER 13,
1995* TO
OCTOBER 31,
1995
(UNAUDITED)
- --------------------------------------------------------------------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD............................. $ 10.00
- --------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income+.......................................... 0.01
Net Realized and Unrealized Loss................................ (0.13)
- --------------------------------------------------------------------------------
Total From Investment Operations............................... (0.12)
- --------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD................................... $ 9.88
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL RETURN..................................................... (1.20)%++
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands)............................ $11,605
Ratio of Expenses to Average Net Assets+......................... 0.90%**
Ratio of Net Investment Income to Average Net Assets+............ 1.29%**
Portfolio Turnover Rate.......................................... 23%
- --------------------------------------------------------------------------------
</TABLE>
* Commencement of Operations.
** Annualized
+ Net of voluntarily waived fees and expenses assumed by the Adviser of $0.01
per share for the period ended October 31, 1995.
++ Total return would have been lower had certain fees not been waived and
expenses assumed by the Adviser.
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
NEWBOLD'S EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
UAM Funds Trust, formerly known as The Regis Fund II, and UAM Funds, Inc.,
formerly known as The Regis Fund, Inc., (collectively the "UAM Funds") were
organized on May 18, 1994 and October 11, 1988, respectively, and are
registered under the Investment Company Act of 1940, as amended, as open-end
management investment companies. Newbold's Equity Portfolio (the "Portfolio"),
a portfolio of UAM Funds Trust, began operations on September 13, 1995 with in
kind transactions of securities with a value of $7,545,014, including
unrealized appreciation of $1,034,451. At October 31, 1995, the UAM Funds were
comprised of thirty-four active portfolios. The financial statements of the
remaining portfolios are presented separately.
A. SIGNIFICANT ACCOUNTING POLICIES. The following significant accounting
policies are in conformity with generally accepted accounting principles for
investment companies. Such policies are consistently followed by the Portfolio
in the preparation of its financial statements.
1. SECURITY VALUATION: Securities listed on a securities exchange for
which market quotations are readily available are valued at the last quoted
sales price as of the close of the exchange on the day the valuation is
made or, if no sale occurred on such day, at the mean of the bid and asked
prices on such day. Price information on listed securities is taken from
the exchange where the security is primarily traded. Over-the-counter and
unlisted securities are valued at the mean of the current bid and asked
prices. Short-term investments that have remaining maturities of sixty days
or less at time of purchase are valued at amortized cost, if it
approximates market value.
The value of other assets and securities for which no quotations are
readily available is determined in good faith at fair value using methods
determined by the Board of Trustees.
2. FEDERAL INCOME TAXES: It is the Portfolio's intention to qualify as a
regulated investment company under Subchapter M of the Internal Revenue
Code and to distribute all of its taxable income. Accordingly, no provision
for Federal income taxes is required in the financial statements.
At October 31, 1995, the Portfolio's cost for Federal income tax purposes
was $10,499,000. Net unrealized appreciation for Federal income tax
purposes aggregated $825,000, of which $1,030,000 related to appreciated
securities and $205,000 related to depreciated securities.
3. REPURCHASE AGREEMENTS: In connection with transactions in repurchase
agreements, the Portfolio's custodian bank takes possession of the
underlying securities, the value of which exceeds the principal amount of
the repurchase transaction, including accrued interest. To the extent that
any repurchase transaction exceeds one business day, the value of the
collateral is marked-to-market on a daily basis to determine the adequacy
of the collateral. In the event of default on the obligation to repurchase,
the Portfolio has the right to liquidate the collateral and apply the
proceeds in satisfaction of the obligation. In the event of default or
bankruptcy by the other party to the agreement, realization and/or
retention of the collateral or proceeds may be subject to legal
proceedings.
4. DISTRIBUTIONS TO SHAREHOLDERS: Any distributions from net investment
income are normally declared and paid quarterly. Any realized net capital
gains will normally be distributed annually. All distributions are recorded
on ex-dividend date.
The amount and character of income and capital gain distributions are
determined in accordance with Federal income tax regulations which may
differ from generally accepted accounting principles.
11
<PAGE>
NEWBOLD'S EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
5. OTHER: Security transactions are accounted for on trade date, the date
the trade was executed. Costs used in determining realized gains and losses
on the sale of investment securities are based on the specific
identification method. Dividend income is recorded on the ex-dividend date.
Interest income is recognized on the accrual basis. Most expenses of the
UAM Funds can be directly attributed to a particular portfolio. Expenses
which cannot be directly attributed are apportioned among the portfolios of
the UAM Funds based on their relative net assets. Additionally, certain
expenses are apportioned among the portfolios of the UAM Funds and AEW
Commercial Mortgage Securities Fund, Inc. ("AEW"), an affiliated closed-end
management investment company, based on their relative net assets.
B. ADVISORY SERVICES. Under the terms of an Investment Advisory Agreement,
Newbold's Asset Management, Inc. (the "Adviser"), a wholly-owned subsidiary of
United Asset Management Corporation ("UAM"), provides investment advisory
services to the Portfolio at a fee calculated at an annual rate of 0.50% of
the Portfolio's average daily net assets. Through January 29, 1998, the
Adviser has voluntarily agreed to waive a portion of its advisory fees and/or
assume expenses on behalf of the Portfolio, if necessary, if the annual
operating expenses of the Portfolio exceed 0.90% of average daily net assets.
C. ADMINISTRATIVE SERVICES. The Chase Manhattan Bank, N.A., through its
affiliate Chase Global Funds Services Company ("CGFSC") (the "Administrator"),
formerly Mutual Funds Service Company ("MFSC"), provides administrative, fund
accounting, dividend disbursing and transfer agent services to the UAM Funds
under an Administration Agreement (the "Agreement"). Pursuant to the
Agreement, the Administrator is entitled to receive annual fees, computed
daily and payable monthly, based on the combined aggregate average daily net
assets of the UAM Funds and AEW, as follows: 0.20% of the first $200 million
of the combined aggregate net assets; plus 0.12% of the next $800 million of
the combined aggregate net assets; plus 0.08% of the combined aggregate net
assets in excess of $1 billion but less than $3 billion; plus 0.06% of the
combined aggregate net assets in excess of $3 billion. The fees are allocated
among the portfolios of the UAM Funds and AEW on the basis of their relative
net assets and are subject to a graduated minimum fee schedule per portfolio
which rises from $2,000 per month upon inception of a portfolio to $70,000
annually after two years. In addition, the Portfolio is charged certain out of
pocket expenses by the Administrator.
D. DISTRIBUTION SERVICES. UAM Fund Distributors, Inc. (the "Distributor"),
formerly known as RFI Distributors (a division of Regis Retirement Plan
Services, Inc.), a wholly-owned subsidiary of UAM, distributes the shares of
the Portfolio. The Distributor does not receive any fee or other compensation
with respect to the Portfolio.
E. PURCHASES AND SALES. During the period ended October 31, 1995, the
Portfolio made purchases of $10,518,000 and sales of $494,000 of investment
securities other than U.S. Government and short-term securities. There were no
purchases or sales of long-term U.S. Government securities during the period
ended October 31, 1995.
F. TRUSTEES' FEES. Each Trustee, who is not an officer or affiliated person,
receives $2,000 per meeting attended which is allocated proportionally among
the active portfolios of the UAM Funds and AEW, plus a quarterly retainer of
$150 for each active portfolio of the UAM Funds and AEW and reimbursement for
expenses incurred in attending Trustee meetings.
G. OTHER. At October 31, 1995, 71.7% of total shares outstanding were held
by four record shareholders owning 10% or greater of the aggregate total
shares outstanding.
12
<PAGE>
- -------------------------------------------------------------------------------
UAM FUNDS
TJ CORE EQUITY
PORTFOLIO
- -------------------------------------------------------------------------------
OFFICERS AND TRUSTEES
Norton H. Reamer Peter M. Whitman, Jr.
Trustee, President Trustee
and Chairman
William H. Park
Mary Rudie Barneby Vice President and
Trustee and Executive Assistant Treasurer
Vice President
Karl O. Hartmann
John T. Bennett, Jr. Secretary
Trustee
Robert R. Flaherty
J. Edward Day Treasurer
Trustee
Harvey M. Rosen
Philip D. English Assistant Secretary
Trustee
William A. Humenuk
Trustee
- -------------------------------------------------------------------------------
INVESTMENT ADVISER
Tom Johnson Investment Management, Inc.
211 North Robinson, Suite 450
Oklahoma City, OK 73102
- -------------------------------------------------------------------------------
ADMINISTRATOR
The Chase Manhattan Bank, N.A.
73 Tremont Street, Boston, MA 02108-3913
- -------------------------------------------------------------------------------
CUSTODIAN
Morgan Guaranty Trust Company of New York
60 Wall Street, New York, NY 10260
- -------------------------------------------------------------------------------
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young
2600 One Commerce Square Philadelphia, PA 19103
- -------------------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
160 Federal Street
Boston, MA 02110
- -------------------------------------------------------------------------------
DISTRIBUTOR
UAM Fund Distributors, Inc.
One International Place, 44th Floor Boston, MA 02110
- -------------------------------------------------------------------------------
This report has been prepared for shareholders and may be distributed to
others only if preceded or accompanied by a current prospectus.
- -------------------------------------------------------------------------------
UAM FUNDS
TJ CORE
EQUITY
PORTFOLIO
- -------------------------------------------------------------------------------
SEMI-ANNUAL REPORT
OCTOBER 31, 1995
<PAGE>
Dear Shareholders,
The investment markets experienced broad-based gains for the six month
period ended October 31, 1995. The Dow Jones Industrial Average increased
11.44% and the S&P 500 Index posted a larger gain of 14.44%. Third quarter
earnings reported by companies have on average been satisfactory though we
have had a slowdown in the economy which was partially due to the restrictive
monetary policy implemented by the Federal Reserve in late 1994 and in the
first quarter of 1995. As a result of the economic slowdown coupled with low
inflation statistics, the Federal Reserve is expected to ease interest rates
further sometime in the near future.
The period ended October 31, 1995 culminates our first full month of
management for the TJ Core Equity Portfolio. During this time period, the S&P
500 Index posted a one month return of -0.36% and the Dow Jones Industrial
Average had a return of -0.49%. Since inception at September 28, 1995 through
October 31, 1995 the net asset value (NAV) of the Portfolio decreased from
$10.00 to $9.76, representing a loss of 2.40%.
During this initial investment month, the Portfolio's return suffered
relative to these indices primarily because of exposure in the retail and
finance sectors. Dillard Department Stores and K-mart unfortunately had
significant declines during the month of October. On the positive side, the
Portfolio's largest gains came from investments in Compaq Computer Corporation
and United Healthcare Corporation.
Although disappointed with the first full month of the Portfolio's
performance, we believe this is a short-term aberration and remain confident
in our style of investing in the common stock of quality companies with lower
valuations in sectors of the economy exhibiting strong, or improving relative
performance.
Tom Johnson Investment Management, Inc.
DEFINITIONS OF THE COMPARATIVE INDICES
--------------------------------------
The Dow Jones Industrial Average Index is a price-weighted average of 30 blue-
chip stocks that are generally the leaders in their industry and are listed on
the New York Stock Exchange.
The S&P 500 Index is an unmanaged index composed of 400 industrial, 40
financial, 40 utility and 20 transportation stocks.
Comparisons of performance assumes reinvestment of dividends.
Please note that one can not invest in an unmanaged index.
The investment results presented in the Adviser's letter represent past
performance and should not be construed as a guarantee of future results. If
the Adviser did not have temporary fee waivers and did not assume expenses on
behalf of the Portfolio, total return for the Portfolio would have been lower.
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.
1
<PAGE>
TJ CORE EQUITY PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
October 31, 1995 (Unaudited)
<TABLE>
<CAPTION>
VALUE
SHARES (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (92.4%)
- --------------------------------------------------------------------------------
AUTOMOTIVE (2.8%)
Ford Motor Corp.................................................. 700 $ 20
- --------------------------------------------------------------------------------
BANKS (6.4%)
First Union Corp................................................. 400 20
NationsBank Corp................................................. 400 26
-----
46
- --------------------------------------------------------------------------------
BEVERAGES, FOOD & TOBACCO (8.6%)
Heinz (H.J.) Co.................................................. 600 28
Sara Lee Corp.................................................... 700 21
Unilever N.V.--New York Shares ADR............................... 100 13
-----
62
- --------------------------------------------------------------------------------
BROADCASTING & PUBLISHING (6.4%)
Dun & Bradstreet Corp. .......................................... 500 30
Gannett Co. ..................................................... 300 16
-----
46
- --------------------------------------------------------------------------------
CHEMICALS (2.9%)
Mallinckrodt Group, Inc.......................................... 600 21
- --------------------------------------------------------------------------------
ELECTRONICS (7.4%)
Emerson Electric Co.............................................. 300 21
General Electric Co. ............................................ 500 32
-----
53
- --------------------------------------------------------------------------------
ENERGY (9.9%)
Amoco Corp. ..................................................... 400 26
Coastal Corp. ................................................... 600 19
Mobil Corp. ..................................................... 200 20
Repsol S.A. ADR.................................................. 200 6
-----
71
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
TJ CORE EQUITY PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS--(CONTINUED)
October 31, 1995 (Unaudited)
<TABLE>
<CAPTION>
VALUE
SHARES (000)+
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--(CONTINUED)
- --------------------------------------------------------------------------------
FINANCIAL SERVICES (7.5%)
American Express Co.............................................. 600 $ 24
Federal National Mortgage Association............................ 200 21
Lehman Brothers Holdings, Inc. .................................. 400 9
-----
54
- --------------------------------------------------------------------------------
HEALTH CARE (2.2%)
United Healthcare Corp........................................... 300 16
- --------------------------------------------------------------------------------
HOLDING COMPANY (6.4%)
ITT Corp. ....................................................... 200 25
Textron, Inc..................................................... 300 21
-----
46
- --------------------------------------------------------------------------------
MANUFACTURING (3.3%)
Tyco International Ltd........................................... 400 24
- --------------------------------------------------------------------------------
METALS (1.7%)
USX-U.S. Steel Group, Inc........................................ 400 12
- --------------------------------------------------------------------------------
OFFICE EQUIPMENT (2.4%)
Pitney Bowes, Inc................................................ 400 17
- --------------------------------------------------------------------------------
PAPER & PACKAGING (2.1%)
Union Camp Corp. ................................................ 300 15
- --------------------------------------------------------------------------------
PHARMACEUTICALS (4.8%)
Bristol-Myers Squibb Co.......................................... 300 23
Merck & Co., Inc. ............................................... 200 12
-----
35
- --------------------------------------------------------------------------------
RETAIL (0.7%)
Dillard Department Stores, Class A............................... 200 5
- --------------------------------------------------------------------------------
SERVICES (3.5%)
WMX Technologies, Inc. .......................................... 900 25
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
TJ CORE EQUITY PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS--(CONTINUED)
October 31, 1995 (Unaudited)
<TABLE>
<CAPTION>
VALUE
SHARES (000)+
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--(CONTINUED)
- -------------------------------------------------------------------------------
TECHNOLOGY (5.8%)
Avnet, Inc. .................................................... 400 $ 20
*Compaq Computer Corp. ......................................... 400 22
-----
42
- -------------------------------------------------------------------------------
UTILITIES (7.6%)
AT&T Corp. ..................................................... 400 26
GTE Corp. ...................................................... 500 21
Telefonos de Mexico S.A. ADR, Class L........................... 300 8
-----
55
- -------------------------------------------------------------------------------
TOTAL COMMON STOCKS (COST $676).................................. 665
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS (92.4%) (COST $676)............................ 665
- -------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (7.6%)
- -------------------------------------------------------------------------------
Cash............................................................ 54
Receivable for Investments Sold................................. 10
Receivable due from Investment Adviser.......................... 8
Receivable for Portfolio Shares Sold............................ 3
Dividends Receivable............................................ 1
Payable for Investments Purchased............................... (12)
Payable for Administrative Fees................................. (3)
Payable for Custodian Fees...................................... (1)
Other Liabilities............................................... (5)
-----
55
- -------------------------------------------------------------------------------
NET ASSETS (100%)
Applicable to 73,763 outstanding Institutional Service Class
shares
(unlimited authorization, no par value)........................ $ 720
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE......... $9.76
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
+ See Note A to Financial Statements
* Non-Income Producing Security
ADR--American Depositary Receipt
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
TJ CORE EQUITY PORTFOLIO
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
SEPTEMBER 28, 1995*
TO OCTOBER 31, 1995
(In Thousands) (UNAUDITED)
- --------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Dividends............................................... $ 1
Interest................................................ 1
- --------------------------------------------------------------------------------
Total Income........................................... 2
- --------------------------------------------------------------------------------
EXPENSES
Investment Advisory Fees--Note B
Basic Fees............................................. $ 1
Less: Fees Waived...................................... (1) --
---------
Administrative Fees--Note C............................. 3
Custodian Fees.......................................... 1
Audit Fees.............................................. 2
Registration and Filing Fees............................ 1
Printing Fees........................................... 2
Fees Assumed by Adviser--Note B......................... (8)
- --------------------------------------------------------------------------------
Net Expenses........................................... 1
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME.................................... 1
- --------------------------------------------------------------------------------
NET REALIZED LOSS ON INVESTMENTS......................... (8)
- --------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED DEPRECIATION ON INVESTMENTS..... (11)
- --------------------------------------------------------------------------------
NET LOSS ON INVESTMENTS.................................. (19)
- --------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS..... $(18)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
* Commencement of Operations
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
TJ CORE EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SEPTEMBER 28, 1995*
TO OCTOBER 31, 1995
(In Thousands) (UNAUDITED)
- --------------------------------------------------------------------------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income...................................... $ 1
Net Realized Loss.......................................... (8)
Net Change in Unrealized Depreciation...................... (11)
- --------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting from Operations...... (18)
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS: (1)
Issued--Regular............................................ 781
Redeemed................................................... (43)
- --------------------------------------------------------------------------------
Net Increase from Capital Share Transactions.............. 738
- --------------------------------------------------------------------------------
Total Increase............................................. 720
Net Assets:
Beginning of Period........................................ --
- --------------------------------------------------------------------------------
End of Period (2).......................................... $720
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1)Shares Issued and Redeemed:
Shares Issued............................................ 78
Shares Redeemed.......................................... (4)
- --------------------------------------------------------------------------------
74
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(2)Net Assets Consist of:
Paid in Capital.......................................... $738
Undistributed Net Investment Income...................... 1
Accumulated Net Realized Loss............................ (8)
Unrealized Depreciation.................................. (11)
- --------------------------------------------------------------------------------
$720
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
*Commencement of Operations
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
TJ CORE EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
<TABLE>
<CAPTION>
SEPTEMBER 28, 1995*
TO OCTOBER 31, 1995
(UNAUDITED)
- --------------------------------------------------------------------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD........................ $10.00
- --------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income+..................................... 0.01
Net Realized and Unrealized Loss .......................... (0.25)
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Total From Investment Operations.......................... (0.24)
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NET ASSET VALUE, END OF PERIOD.............................. $ 9.76
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL RETURN................................................ (2.40)%++
- --------------------------------------------------------------------------------
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RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands)....................... $ 720
Ratio of Expenses to Average Net Assets+.................... 1.25%**
Ratio of Net Investment Income to Average Net Assets+....... 0.75%**
Portfolio Turnover Rate..................................... 5%
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</TABLE>
* Commencement of Operations.
** Annualized.
+ Net of voluntarily waived fees and expenses assumed by the Adviser of $0.12
per share for the period ended October 31, 1995.
++ Total return would have been lower had certain fees not been waived and
expenses assumed bt the Adviser.
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
TJ CORE EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
UAM Funds Trust, formerly known as The Regis Fund II, and UAM Funds, Inc.,
formerly known as The Regis Fund, Inc., (collectively the "UAM Funds") were
organized on May 18, 1994 and October 11, 1988, respectively, and are
registered under the Investment Company Act of 1940, as amended, as open-end
management investment companies. The TJ Core Equity Portfolio (the
"Portfolio"), a portfolio of UAM Funds Trust, began operations on September
28, 1995. At October 31, 1995, the UAM Funds were comprised of thirty-four
active portfolios. The financial statements of the remaining portfolios are
presented separately.
A. SIGNIFICANT ACCOUNTING POLICIES. The following significant accounting
policies are in conformity with generally accepted accounting principles for
investment companies. Such policies are consistently followed by the Portfolio
in the preparation of its financial statements.
1. SECURITY VALUATION: Securities listed on a securities exchange for
which market quotations are readily available are valued at the last quoted
sales price as of the close of the exchange on the day the valuation is
made or, if no sale occurred on such day, at the mean of the bid and asked
prices on such day. Price information on listed securities is taken from
the exchange where the security is primarily traded. Over-the-counter and
unlisted securities are valued at the mean of the current bid and asked
prices. Short-term investments that have remaining maturities of sixty days
or less at time of purchase are valued at amortized cost, if it
approximates market value.
The value of other assets and securities for which no quotations are
readily available is determined in good faith at fair value using methods
determined by the Board of Trustees.
2. FEDERAL INCOME TAXES: It is the Portfolio's intention to qualify as a
regulated investment company under Subchapter M of the Internal Revenue
Code and to distribute all of its taxable income. Accordingly, no provision
for Federal income taxes is required in the financial statements.
At October 31, 1995, the Portfolio's cost for Federal income tax purposes
was $676,000. Net unrealized depreciation for Federal income tax purposes
aggregated $11,000, of which $8,000 related to appreciated securities and
$19,000 related to depreciated securities.
3. REPURCHASE AGREEMENTS: In connection with transactions in repurchase
agreements, the Portfolio's custodian bank takes possession of the
underlying securities, the value of which exceeds the principal amount of
the repurchase transaction, including accrued interest. To the extent that
any repurchase transaction exceeds one business day, the value of the
collateral is marked-to-market on a daily basis to determine the adequacy
of the collateral. In the event of default on the obligation to repurchase,
the Portfolio has the right to liquidate the collateral and apply the
proceeds in satisfaction of the obligation. In the event of default or
bankruptcy by the other party to the agreement, realization and/or
retention of the collateral or proceeds may be subject to legal
proceedings.
4. DISTRIBUTIONS TO SHAREHOLDERS: Any distributions from net investment
income are normally declared and paid quarterly. Any realized net capital
gains will normally be distributed annually. All distributions are recorded
on ex-dividend date.
The amount and character of income and capital gain distributions are
determined in accordance with Federal income tax regulations which may
differ from generally accepted accounting principles.
5. OTHER: Security transactions are accounted for on trade date, the date
the trade was executed. Costs used in determining realized gains and losses
on the sale of investment securities are determined based on the specific
identification method. Dividend income is recorded on the ex-dividend date.
Interest income
8
<PAGE>
TJ CORE EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
is recognized on the accrual basis. Most expenses of the UAM Funds can be
directly attributed to a particular portfolio. Expenses which cannot be
directly attributed are apportioned among the portfolios of the UAM Funds
based on their relative net assets. Additionally, certain expenses are
apportioned among the portfolios of the UAM Funds and AEW Commercial
Mortgage Securities Fund, Inc. ("AEW"), an affiliated closed-end management
investment company, based on their relative net assets.
B. ADVISORY SERVICES. Under the terms of an Investment Advisory Agreement,
Tom Johnson Investment Management, Inc. (the "Adviser"), a wholly-owned
subsidiary of United Asset Management Corporation ("UAM"), provides investment
advisory services to the Portfolio at a fee calculated at an annual rate of
0.75% of the Portfolio's average daily net assets. Through January 1, 1997 the
Adviser has voluntarily agreed to waive a portion of its advisory fees and/or
assume expenses on behalf of the Portfolio, if necessary, if the annual
operating expenses of the Portfolio exceed 1.25% of average daily net assets.
C. ADMINISTRATIVE SERVICES. The Chase Manhattan Bank, N.A., through its
affiliate Chase Global Funds Services Company ("CGFSC") (the "Administrator"),
formerly Mutual Funds Service Company ("MFSC"), provides administrative, fund
accounting, dividend disbursing and transfer agent services to the UAM Funds
under an Administration Agreement (the "Agreement"). Pursuant to the
Agreement, the Administrator is entitled to receive annual fees, computed
daily and payable monthly, based on the combined aggregate average daily net
assets of the UAM Funds and AEW, as follows: 0.20% of the first $200 million
of the combined aggregate net assets; plus 0.12% of the next $800 million of
the combined aggregate net assets; plus 0.08% of the combined aggregate net
assets in excess of $1 billion but less than $3 billion; plus 0.06% of the
combined aggregate net assets in excess of $3 billion. The fees are allocated
among the portfolios of the UAM Funds and AEW on the basis of their relative
net assets and are subject to a graduated minimum fee schedule per portfolio
which rises from $2,000 per month upon inception of a portfolio to $70,000
annually after two years. In addition, the Portfolio is charged certain out of
pocket expenses by the Administrator.
D. DISTRIBUTION AND SERVICE PLANS. UAM Fund Distributors, Inc. (the
"Distributor"), formerly known as RFI Distributors (a division of Regis
Retirement Plan Services, Inc.), a wholly-owned subsidiary of UAM, distributes
the shares of the Portfolio. The Portfolio has adopted a Distribution and
Service Plan (the "Plans") on behalf of the Institutional Service Class Shares
pursuant to Rule 12b-1 under the 1940 Act. Under the Plans the Portfolio may
not incur distribution and service costs which exceed an annual rate of 0.75%
of the Portfolio's net assets. The Board has currently limited aggregate
payments under the Plans to an annual rate of 0.50% of the Portfolio's net
assets. The Portfolio is not currently making payments under the Distribution
Plan. Under the Service Plan the Portfolio reimburses the Distributor or the
Service Organization for payments made at an annual rate of 0.25% of the
average daily value of Institutional Service Class Shares owned by clients of
such Service Organizations.
E. PURCHASES AND SALES. During the period ended October 31, 1995, the
Portfolio made purchases of $718,000 and sales of $35,000 of investment
securities other than U.S. Government and short-term securities. There were no
purchases or sales of long-term U.S. Government securities during the period
ended October 31, 1995.
F. TRUSTEES' FEES. Each Trustee, who is not an officer or affiliated person,
receives $2,000 per meeting attended, which is allocated proportionally among
the active portfolios of UAM Funds and AEW, plus a quarterly retainer of $150
for each active portfolio of the UAM Funds and AEW and reimbursement for
expenses incurred in attending Trustee meetings.
G. OTHER. At October 31, 1995, 99.7% of total shares outstanding were held
by one record shareholder owning 10% or greater of the aggregate total shares
outstanding.
9
