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UAM Funds
Funds for the Informed Investor(sm)
Chicago Asset Management Company Portfolios
Semi-Annual Report October 31, 1999
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[LOGO OF UAM]
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UAM FUNDS CHICAGO ASSET MANAGEMENT
COMPANY PORTFOLIOS
OCTOBER 31, 1999
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TABLE OF CONTENTS
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Shareholders' Letter ....................................................... 1
Portfolios of Investments
Value/Contrarian Portfolio ............................................ 4
Intermediate Bond Portfolio ........................................... 7
Statement of Assets and Liabilities ........................................ 11
Statement of Operations .................................................... 12
Statement of Changes in Net Assets
Value/Contrarian Portfolio ............................................ 13
Intermediate Bond Portfolio ........................................... 14
Financial Highlights
Value/Contrarian Portfolio ............................................ 15
Intermediate Bond Portfolio ........................................... 16
Notes to Financial Statements .............................................. 17
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<PAGE>
UAM FUNDS CHICAGO ASSET MANAGEMENT
COMPANY PORTFOLIOS
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October 31, 1999
Dear Shareholder:
October 31, 1999 is the semi-annual reporting period for Chicago Asset
Management's Value/Contrarian Portfolio for equity investors and the
Intermediate Bond Portfolio for our fixed income clients. This letter will
review the investment environment for the last six months, the strategies and
the returns for the Portfolios. We would like to take this opportunity to thank
you for your continued confidence in Chicago Asset Management.
Chicago Asset Management Value/Contrarian Portfolio
During the first half of the fiscal year ended October 31, 1999, the Portfolio
was managed under the disciplined Value/Contrarian approach. This approach
selects securities of companies which are believed to be sound and in possession
of a favorable longer term outlook. They are also companies whose common stock
has clearly underperformed the market prior to initial purchase in the
portfolio. The belief is that the reasons for the underperformance have been
recognized and are temporary. The goal is to hold companies which are not only
making progress in their basic business, but are benefiting from a recovery.
This produces superior performance potential.
For the six months ended October 31, 1999, the equity market accelerated with a
narrowing focus. A small group of securities dominated the performance of the
popular Standard & Poor's 500 Index. In this situation the majority of
securities produced a negative rate of return. A small group of securities that
produced strong positive rates of return had the largest influence on the index,
resulting in positive returns for that market index. This environment was not
favorable for the Value/Contrarian style applied in the management of this
Portfolio.
For the six months ended October 31, 1999, the Portfolio produced a total return
net of expenses of -10.69% in comparison to the Standard & Poor's 500 Index
return of 2.74%. During the second quarter ended October 31, 1999, the Portfolio
produced a total return net of expenses of -8.55% in comparison to the Standard
& Poor's 500 Index return of 2.90%.
As the results show, most of the underperformance occurred in the second quarter
of the fiscal year. The securities that dominated the index represent popular,
fast-growing companies with speculative potential to grow rapidly in the future.
These issues carry prices relative to earnings substantially higher than the
kinds of issues held within this Portfolio, or the broad market in general. In
summary, this Portfolio held primarily securities which were not popular during
that time period and, therefore, notably underperformed the market index.
Although these time periods are uncomfortable to view in isolation, they do
offer positive opportunities for the true investor over the longer term. A
portion of our discipline leads us to actively rebalance the Portfolios. This
simply means that we sell portions of securities which have outperformed and
become oversized in the Portfolio, and reinvest the proceeds into the issues
which are underperforming but which hold above average potential for
outperformance in the future. By implementing this rebalancing activity, the
Portfolio continually sharpens its focus on the
1
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UAM FUNDS CHICAGO ASSET MANAGEMENT
COMPANY PORTFOLIOS
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most reasonably valued securities that we believe to have the greatest potential
for long term outperformance in the future. It is our belief that this leads to
the benefit of the holder when the eventual market rotation returns to favor
these most reasonably valued securities.
Although market distortions which emphasize a narrow group of securities may at
times seem to last for a lengthy time period, we believe that the length of the
cycle is less important than the potential performance when the cycle naturally
reverses. Therefore, we are comfortable that our style and philosophy are
appropriate even if they are not offering tangible rewards in the near term.
Investing, by nature, should focus on the greatest opportunities for the future
and view underperformance in the equity market as opportunity to acquire
securities at bargain valuations. This view, consistently applied over time, is
what in our opinion will offer a superior investment return for equity
investors.
Chicago Asset Management Intermediate Bond Portfolio
The six month period ended October 31, 1999 was a difficult period for the fixed
income markets.
The last six months have been a period of rising interest rates. During this
time the yield on intermediate maturity Treasury notes, with a two to ten year
maturity, have risen approximately seventy basis points. The rise in rates
pushed down bond prices to such an extent that income generated by the bonds
barely offset the decline in prices.
The last six months reflect a global shift in market participants' concerns from
that of a deflationary environment to one of reflation. The Federal Reserve and
Foreign Central Banks have revised their expectations and policies. The massive
global easing in monetary policy which began in the late summer and fall of 1998
has been replaced by a policy of taking back the rate reductions of last year.
These reductions worked to stabilize the world financial structure. Now it is
time to keep things on an even keel, good growth with low inflation. On June
30th the Federal Open Market Committee (FOMC) increased the Fed Funds rate from
4 3/4% to 5%. On August 24th the FOMC again increased the Fed Funds rate another
1/4% to 5 1/4%. They also raised the discount rate by a like amount from 4 1/2%
to 4 3/4%.
Another important issue during this period has been the underperformance of
non-Treasury securities. Corporate bonds have lagged for three reasons.
Globally, Central Banks are more restrictive. The focus on year-end Y2K concerns
has resulted in a rush to market by major issuers concerned about less liquidity
at year-end. This significant supply has caused new issues to be priced cheaply
in order to sell quickly. Finally, the U.S. Treasury surplus has diminished the
supply of new and outstanding Treasury debt, which is the most liquid in the
world. This reduction in supply then causes them to trade more richly than they
otherwise would. Interest rates are at their most attractive level in a long
time. This is especially true of corporate bonds, which have underperformed
Treasuries.
For the six months ended October 31, 1999, the Portfolio produced a total rate
of return, net of expenses, of 0.02% versus the Lehman Intermediate Government/
Corporate Index return of 0.47%. The Portfolio primarily underperformed the
Index because of our overweighting of non-Treasury securities. The market
currently
2
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UAM FUNDS CHICAGO ASSET MANAGEMENT
COMPANY PORTFOLIOS
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offers many opportunities to invest in agency and high quality corporate debt.
We think that the Portfolio is positioned to perform well in the future as these
sectors catch up with the Treasury market.
The Portfolio remains focussed on the two major objectives, safety and income.
Emphasis is on securities with maturities between two to ten years.
The Portfolio had the following characteristics relative to the Lehman Brothers
Intermediate Government/Corporate Index as of October 31, 1999:
Portfolio Index
--------- -----
Average Maturity ............................. 4.65 Years 4.33 Years
Average Duration ............................. 3.46 Years 3.44 Years
Average Coupon ............................... 6.16% 6.39%
Yield to Maturity ............................ 6.58% 6.41%
Chicago Asset Management Company
The investment results presented in this report represent past performance and
should not be construed as a guarantee of future results. A portfolio's
performance assumes the reinvestment of all dividends and distributions.
There are no assurances that a portfolio will meet its stated objectives. 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.
A portfolio's holdings are subject to change because it is actively managed.
portfolio changes should not be considered recommendations for action by
individual investors.
Definition of Comparative Indices
---------------------------------
Lehman Corporate Bond Index is an unmanaged index of all publicly issued,
fixed-rate, nonconvertible investment grade domestic corporate debt. Also
included are yankee bonds, which are dollar-denominated SEC registered public,
noncovertible, debt issued or guaranteed by foreign sovereign governments,
municipalities, or governmental agencies, or international agencies.
Lehman Government Bond Index is an unmanaged treasury bond index including all
public obligations of the U.S. Treasury, excluding flower bonds and
foreign-targeted issues, and all publicly issued debt of U.S. government
agencies and quasi-federal corporation, and corporate debt guaranteed by the
U.S. government. In addition to the aggregate index, sub-indices cover
intermediate and long term issues.
Lehman Intermediate Government/Corporate Index is an unmanaged fixed income
market value-weighted index that combines the Lehman Government Bond Index
(intermediate-term sub-index) and Lehman Corporate Bond Index. In addition to
the aggregate index, sub-indices cover intermediate and long term issues.
Standard & Poor's 500 Index is an unmanaged index composed of 400 industrial
stocks, 40 financial stocks, 40 utility stocks and 20 transportation stocks.
The comparative indices assume reinvestment of dividends and, unlike a
portfolio's returns, do not reflect any fees or expenses. If such fees were
reflected in the comparative indices' returns, the performance would have been
lower.
Please note that one cannot invest directly in an unmanaged index.
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UAM FUNDS CHICAGO ASSET MANAGEMENT
VALUE/CONTRARIAN PORTFOLIO
OCTOBER 31, 1999 (Unaudited)
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PORTFOLIO OF INVESTMENTS
COMMON STOCKS - 98.7%
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Shares Value
------ -----
AUTOMOTIVE -- 7.5%
Daimler Chrysler AG* .................................. 10,753 $ 836,046
General Motors ......................................... 13,125 922,031
---------
1,758,077
---------
BANKS -- 12.0%
Bank of America ........................................ 15,033 967,749
Bank One ............................................... 23,382 878,286
First Union ............................................ 22,300 951,931
---------
2,797,966
---------
CHEMICALS -- 3.5%
Dow Chemical ........................................... 6,950 821,837
---------
COMMERCIAL SERVICES-FINANCE -- 2.8%
Deluxe ................................................. 23,675 668,819
---------
COMMUNICATIONS -- 2.7%
Motorola ............................................... 6,600 643,088
---------
COMPUTERS & SERVICES -- 6.8%
Electronic Data Systems ................................ 14,300 836,550
International Business Machines ........................ 7,500 737,813
---------
1,574,363
---------
CONSUMER DURABLES -- 2.7%
Goodyear Tire & Rubber ................................. 15,175 626,917
CONTAINERS & PACKAGING -- 2.6%
Crown Cork & Seal ...................................... 25,300 605,619
---------
DEFENSE AND AEROSPACE -- 2.9%
Raytheon, Cl A ......................................... 24,856 681,987
---------
INSURANCE -- 8.2%
Allstate ............................................... 35,200 1,012,000
Chubb .................................................. 16,225 890,347
---------
1,902,347
---------
MACHINERY -- 2.2%
Tenneco ................................................ 31,800 508,800
---------
The accompanying notes are an integral part of the financial statements.
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UAM FUNDS CHICAGO ASSET MANAGEMENT
VALUE/CONTRARIAN PORTFOLIO
OCTOBER 31, 1999 (Unaudited)
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COMMON STOCKS - continued
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Shares Value
------ -----
MEDICAL PRODUCTS & SERVICES -- 10.4%
Aetna .............................................. 13,100 $ 658,275
Columbia/HCA Healthcare ............................ 39,025 941,478
United Healthcare .................................. 16,050 829,584
----------
2,429,337
----------
MINING -- 3.1%
Newmont Mining ..................................... 32,500 712,969
PAPER & PAPER PRODUCTS -- 5.1%
International Paper ................................ 9,825 517,041
Weyerhaeuser ....................................... 11,175 667,008
----------
1,184,049
----------
PETROLEUM & FUEL PRODUCTS -- 2.7%
Schlumberger ....................................... 10,300 623,794
----------
PETROLEUM REFINING -- 6.9%
Conoco ............................................. 32,400 878,850
Sunoco ............................................. 30,200 728,575
----------
1,607,425
----------
PHARMACEUTICALS -- 3.7%
Pharmacia & Upjohn ................................. 15,950 860,303
----------
PHOTOGRAPHIC EQUIPMENT & SUPPLIES -- 3.3%
Eastman Kodak ...................................... 11,100 765,206
----------
RETAIL -- 2.5%
Sears, Roebuck & Company ........................... 20,300 572,206
----------
TELEPHONES & TELECOMMUNICATION -- 7.1%
AT&T ............................................... 18,800 878,900
Bell Atlantic ...................................... 12,050 782,497
----------
1,661,397
----------
TOTAL COMMON STOCKS (Cost $22,993,176) ............. 23,006,506
----------
The accompanying notes are an integral part of the financial statements.
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UAM FUNDS CHICAGO ASSET MANAGEMENT
VALUE/CONTRARIAN PORTFOLIO
OCTOBER 31, 1999 (Unaudited)
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SHORT-TERM INVESTMENT -- 1.3%
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<TABLE>
<CAPTION>
Face
Amount Value
-------- --------
<S> <C> <C>
REPURCHASE AGREEMENT -- 1.3%
Chase Securities, 5.15%, dated 10/29/99, due 11/01/99, to be
repurchased at $295,127, collateralized by $296,004
of various U.S. Treasury Bills and U.S. Treasury Notes,
valued at $295,008 (Cost $295,000) ......................... $295,000 $ 295,000
-----------
TOTAL INVESTMENTS -- 100.0%
(Cost $23,288,176) (a) ..................................... 23,301,506
-----------
OTHER ASSETS AND LIABILITIES, NET -- 0.0% .................... 6,276
-----------
TOTAL NET ASSETS -- 100.0% ................................... $23,307,782
===========
</TABLE>
* Non-income producing security
Cl Class
(a) The cost for federal income tax purposes was $23,288,176. At October 31,
1999, net unrealized appreciation for all securities based on tax cost was
$13,330. This consisted of aggregate gross unrealized appreciation for all
securities of $2,860,222 and aggregate gross unrealized depreciation for all
securities of $2,846,892.
The accompanying notes are an integral part of the financial statements.
6
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UAM FUNDS CHICAGO ASSET MANAGEMENT
INTERMEDIATE BOND PORTFOLIO
OCTOBER 31, 1999 (Unaudited)
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CORPORATE OBLIGATIONS -- 52.8%
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Face
Amount Value
------ -----
AUTOMOTIVE -- 1.7%
General Motors
6.250%, 05/01/05 ..................................... $ 250,000 $ 241,782
---------
BANKS -- 9.6%
BankAmerica
7.625%, 06/15/04 ..................................... 250,000 254,800
Northern Trust
6.500%, 05/01/03 ..................................... 250,000 246,437
7.100%, 08/01/09 ..................................... 250,000 247,850
State Street Boston
7.350%, 06/15/26 ..................................... 250,000 255,328
SunTrust Banks
6.000%, 02/15/26 ..................................... 275,000 258,497
Wachovia
6.625%, 11/15/06 ..................................... 100,000 97,716
---------
1,360,628
---------
CHEMICALS -- 1.8%
Dupont (EI) De Nemours
6.750%, 10/15/04 ..................................... 250,000 250,000
---------
FINANCIAL SERVICES -- 16.4%
Associates Corporation of North America
6.500%, 10/15/02 ..................................... 150,000 149,448
7.750%, 02/15/05 ..................................... 250,000 257,607
Ford Motor Credit
5.125%, 10/15/01 ..................................... 250,000 243,153
6.125%, 04/28/03 ..................................... 250,000 244,555
7.375%, 10/28/09 ..................................... 250,000 252,772
General Electric Capital Services
6.500%, 11/01/06 ..................................... 250,000 243,305
General Motors Acceptance
5.750%, 01/05/00 ..................................... 100,000 99,883
6.125%, 01/22/08 ..................................... 100,000 93,063
General Motors Acceptance Global Bond
6.750%, 02/07/02 ..................................... 100,000 99,958
Heller Financial
6.250%, 03/01/01 ..................................... 250,000 248,743
The accompanying notes are an integral part of the financial statements.
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UAM FUNDS CHICAGO ASSET MANAGEMENT
INTERMEDIATE BOND PORTFOLIO
OCTOBER 31, 1999 (Unaudited)
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CORPORATE OBLIGATIONS - continued
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Face
Amount Value
------ -----
FINANCIAL SERVICES -- continued
Sears Roebuck Acceptance
6.160%, 12/04/00 .................................. $ 250,000 $ 249,775
6.700%, 08/13/01 .................................. 150,000 149,859
---------
2,332,121
---------
INDUSTRIAL -- 6.8%
Cooper Industries
5.880%, 02/20/03 .................................. 250,000 243,850
Ingersoll-Rand
6.230%, 11/19/27 .................................. 250,000 241,875
Procter and Gamble
5.250%, 09/15/03 .................................. 250,000 238,890
WMX Technologies
6.250%, 10/15/00 .................................. 250,000 240,753
---------
965,368
---------
PETROLEUM REFINING -- 0.4%
Exxon Capital
6.625%, 08/15/02 .................................. 59,000 59,172
---------
RETAIL -- 4.1%
JC Penney
6.900%, 08/15/26 .................................. 200,000 195,510
Wal-Mart Stores
6.150%, 08/10/01 .................................. 250,000 249,112
6.375%, 03/01/03 .................................. 140,000 139,352
---------
583,974
---------
TELEPHONES & TELECOMMUNICATION -- 3.4%
Sprint Capital
5.700%, 11/15/03 .................................. 250,000 239,408
Worldcom
6.125%, 08/15/01 .................................. 250,000 248,798
---------
488,206
---------
UTILITIES -- 8.6%
Central Illinois Public Service
6.680%, 03/15/00 .................................. 250,000 250,342
The accompanying notes are an integral part of the financial statements.
8
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UAM FUNDS CHICAGO ASSET MANAGEMENT
INTERMEDIATE BOND PORTFOLIO
OCTOBER 31, 1999 (Unaudited)
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CORPORATE OBLIGATIONS - continued
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<TABLE>
<CAPTION>
Face
Amount Value
------ -----
<S> <C> <C>
UTILITIES -- continued
Florida Power and Light
6.000%, 06/01/08 .................................. $ 250,000 $ 232,267
Potomac Electric Power
6.250%, 10/15/07 .................................. 250,000 242,623
National Rural Utilities
5.140%, 10/22/01 .................................. 250,000 243,418
5.950%, 01/15/03 .................................. 250,000 244,975
---------
1,213,625
---------
TOTAL CORPORATE OBLIGATIONS (Cost $7,582,790) ........ 7,494,876
---------
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U.S.GOVERNMENT SECURITIES -- 24.1%
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U.S.TREASURY NOTES -- 24.1%
7.750%, 01/31/00 .................................. 250,000 251,485
5.500%, 02/29/00 .................................. 400,000 400,312
5.750%, 11/15/00 .................................. 500,000 500,625
7.500%, 11/15/01 .................................. 250,000 257,890
7.500%, 05/15/02 .................................. 150,000 155,601
5.750%, 08/15/03 .................................. 250,000 248,125
5.250%, 05/15/04 .................................. 250,000 242,930
5.625%, 02/15/06 .................................. 250,000 243,945
6.125%, 08/15/07 .................................. 400,000 398,436
5.625%, 05/15/08 .................................. 50,000 723,630
---------
TOTAL U.S. GOVERNMENT SECURITIES (Cost $3,444,339).... 3,422,979
---------
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AGENCY SECURITIES -- 15.4%
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FEDERAL HOME LOAN BANK -- 3.4%
5.610%, 01/23/03 .................................. 250,000 244,301
5.755%, 06/24/03 .................................. 250,000 244,960
---------
489,261
---------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 10.3%
5.420%, 01/23/01 .................................. 50,000 49,539
5.370%, 02/07/01 .................................. 250,000 247,500
7.000%, 12/01/07 .................................. 144,911 144,866
5.250%, 01/15/09 .................................. 250,000 224,960
</TABLE>
The accompanying notes are an integral part of the financial statements.
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UAM FUNDS CHICAGO ASSET MANAGEMENT
INTERMEDIATE BOND PORTFOLIO
OCTOBER 31, 1999 (Unaudited)
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FEDERAL NATIONAL MORTGAGE ASSOCIATION - continued
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<TABLE>
<CAPTION>
Face
Amount Value
------------ -----------
<S> <C> <C>
6.400%, 05/14/09 .............................. $ 500,000 $ 475,860
6.375%, 06/15/09 .............................. 50,000 48,773
5.500%, 05/01/13 .............................. 283,977 267,294
------------
1,458,792
------------
PRIVATE EXPORT FUNDING -- 1.7%
5.870%, 07/31/08 .............................. 250,000 234,218
------------
TOTAL AGENCY SECURITIES (Cost $2,268,497) ........ 2,182,271
------------
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ASSET-BACKED SECURITIES -- 4.2%
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Norwest Automobile Trust
Series 1996-A Class A4, 6.100%, 03/15/01 ...... 102,880 102,880
Premier Auto Trust
Series 1998-1 Class A3, 5.630%, 08/06/01 ...... 250,000 249,452
Series 1999-2 Class A4, 5.590%, 02/09/04 ...... 250,000 244,448
------------
TOTAL ASSET-BACKED SECURITIES (Cost $602,782) .... 596,780
------------
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SHORT-TERM INVESTMENT -- 3.7%
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REPURCHASE AGREEMENT -- 3.7%
Chase Securities, Inc. 5.15%, dated 10/29/99, due 11/01/99, to
be repurchased at $531,228, collateralized by $532,807 of
various U.S. Treasury Bills and U.S. Treasury Notes,
valued at $531,015 (Cost $531,000) ............ 531,000 531,000
------------
TOTAL INVESTMENTS -- 100.2% (Cost $14,429,408) (a) 14,227,906
------------
OTHER ASSETS AND LIABILITIES, NET -- (0.2%) ....... (34,276)
------------
TOTAL NET ASSETS -- 100.0% ........................ $14,193,630
============
</TABLE>
(a) The cost for federal income tax purposes was $14,429,408. At October 31,
1999, net unrealized depreciation for all securities based on tax cost was
$201,502. This consisted of aggregate gross unrealized appreciation for all
securities of $55,157 and aggregate gross unrealized depreciation for all
securities of $256,659.
The accompanying notes are an integral part of the financial statements.
10
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UAM FUNDS CHICAGO ASSET MANAGEMENT
COMPANY PORTFOLIOS
OCTOBER 31, 1999 (Unaudited)
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- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Chicago Asset Chicago Asset
Management Management
Value/ Intermediate
Contrarian Bond
Portfolio Portfolio
------------ ------------
<S> <C> <C>
Assets
Investments, at Cost .................................. $ 23,288,176 $ 14,429,408
============ ============
Investments, at Value -- Note A ....................... 23,301,506 14,227,906
Cash .................................................. 7,804 --
Deferred Organization Costs -- Note A ................. 549 1,102
Interest Receivable ................................... 25,127 234,568
Receivable due from Investment Adviser -- Note B ...... -- 5,201
Other Assets .......................................... 2,604 1,336
------------ ------------
Total Assets .......................................... 23,337,590 14,470,113
------------ ------------
Liabilities
Payable for Administrative Fees -- Note C ............. 11,171 9,999
Payable to Custodian -- Note D ........................ 64 249,051
Payable for Trustees' Fees -- Note F .................. 175 82
Payable for Investment Adviser -- Note B .............. 5,447 --
Other Liabilities ..................................... 12,951 17,351
------------ ------------
Total Liabilities ................................ 29,808 276,483
------------ ------------
Net Assets ............................................ $ 23,307,782 $ 14,193,630
============ ============
Net Assets Consist of:
Paid in Capital ....................................... 19,651,398 14,293,450
Undistributed Net Investment Income ................... 15,833 91,369
Accumulated Net Realized Gain ......................... 3,627,221 10,313
Unrealized Appreciation ............................... 13,330 (201,502)
------------ ------------
Net Assets ............................................ $ 23,307,782 $ 14,193,630
============ ============
Institutional Class Shares
Shares Issued and Outstanding (Unlimited authorization,
no par value) .................................... 1,495,342 1,385,981
Net Asset Value, Offering and Redemption Price
Per Share ........................................ $15.59 $10.24
====== ======
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
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UAM FUNDS CHICAGO ASSET MANAGEMENT COMPANY
PORTFOLIOS FOR THE SIX MONTHS ENDED
OCTOBER 31, 1999 (Unaudited)
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- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Chicago Asset Chicago Asset
Management Management
Value/ Intermediate
Contrarian Bond
Portfolio Portfolio
----------- -----------
<S> <C> <C>
Investment Income
Dividends ........................................... $ 260,877 $ --
Interest ............................................ 15,031 423,957
----------- -----------
Total Income.................................... 275,908 423,957
----------- -----------
Expenses
Investment Advisory Fees -- Note B ................... 82,358 33,014
Administrative Fees -- Note C ........................ 57,612 49,445
Shareholder Servicing Fees .......................... 33,101 157
File and Registration Fees .......................... 9,876 9,188
Printing Fees ....................................... 9,422 12,525
Audit Fees .......................................... 6,987 6,940
Custodian Fees -- Note D ............................ 3,172 1,846
Amortization of Organization Costs -- Note A ........ 2,245 2,245
Legal Fees .......................................... 1,610 959
Trustees' Fees -- Note F ............................ 999 773
Other Expenses ...................................... 4,014 6,678
Investment Advisory Fees Waived -- Note B ........... (47,343) (33,014)
Expenses Assumed by the Adviser -- Note B ........... -- (35,280)
----------- -----------
Net Expenses ................................... 164,053 55,476
----------- -----------
Net Investment Income ............................... 111,855 368,481
----------- -----------
Net Realized Gain (Loss) on Investments ............. 1,923,210 (5,477)
Net Change in Unrealized Appreciation/Depreciation of
Investments .................................... (5,019,503) (361,185)
----------- -----------
Net Loss on Investments ............................. (3,096,293) (366,662)
----------- -----------
Net Increase (Decrease) in Net Assets Resulting from
Operations ..................................... $(2,984,438) $ 1,819
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
12
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UAM FUNDS CHICAGO ASSET MANAGEMENT
VALUE/CONTRARIAN PORTFOLIO
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
October 31, 1999 April 30,
(Unaudited) 1999
----------- -----------
<S> <C> <C>
Increase (Decrease) In Net Assets
Operations:
Net Investment Income .................................... $ 111,855 $ 214,518
Net Realized Gain ........................................ 1,923,210 2,237,414
Net Change in Unrealized Appreciation/Depreciation........ (5,019,503) 2,260,772
----------- -----------
Net Increase (Decrease) in Net Assets
Resulting from Operations ............................. (2,984,438) 4,712,704
----------- -----------
Distributions:
Net Investment Income: ................................... (108,658) (232,285)
Net Realized Gain ........................................ -- (1,899,659)
----------- -----------
Total Distributions ...................................... (108,658) (2,131,944)
----------- -----------
Capital Share Transactions:(1)
Issued ................................................... 2,409,501 3,796,443
In Lieu of Cash Distributions ............................ 108,307 2,131,655
Redeemed ................................................. (2,969,339) (4,208,221)
----------- -----------
Net Increase (Decrease) from Capital Share Transactions... (451,531) 1,719,877
----------- -----------
Total Increase ........................................... (3,544,627) 4,300,637
Net Assets:
Beginning of Period ...................................... 26,852,409 22,551,772
----------- -----------
End of Period (including undistributed net investment
income of $15,833 and $12,636, respectively) .......... $23,307,782 $26,852,409
=========== ===========
(1) Shares Issued and Redeemed:
Shares Issued ............................................ 143,241 250,149
In Lieu of Cash Distributions ............................ 6,469 145,249
Redeemed ................................................. (186,235) (276,693)
----------- -----------
Net Increase (Decrease) in Shares Outstanding ............ (36,525) 118,705
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
UAM FUNDS CHICAGO ASSET MANAGEMENT
INTERMEDIATE BOND PORTFOLIO
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
October 31, 1999 April 30,
(Unaudited) 1999
--------------- -----------
<S> <C> <C>
Increase (Decrease) In Net Assets
Operations:
Net Investment Income .................................. $ 368,481 $ 720,673
Net Realized Gain ...................................... (5,477) 73,457
Net Change in Unrealized Appreciation/Depreciation ..... (361,185) (27,510)
----------- -----------
Net Increase in Net Assets Resulting from Operations ... 1,819 766,620
----------- -----------
Distributions:
Net Investment Income .................................. (357,830) (730,132)
Net Realized Gain ...................................... -- (76,716)
----------- -----------
Total Distributions .................................... (357,830) (806,848)
----------- -----------
Capital Share Transactions:(1)
Issued ................................................. 709,347 1,189,927
In Lieu of Cash Distributions .......................... 357,829 806,730
Redeemed ............................................... (59,575) (1,675,706)
----------- -----------
Net Increase from Capital Share Transactions ........... 1,007,601 320,951
----------- -----------
Total Increase ......................................... 651,590 280,723
Net Assets:
Beginning of Period .................................... 13,542,040 13,261,317
----------- -----------
End of Year (including undistributed net investment
income of $91,369 and $80,718, respectively) ........ $14,193,630 $13,542,040
=========== ===========
(1) Shares Issued and Redeemed:
Shares Issued .......................................... 68,900 111,732
In Lieu of Cash Distributions .......................... 34,942 75,840
Redeemed ............................................... (5,755) (157,860)
----------- -----------
Net Increase in Shares Outstanding ..................... 98,087 29,712
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
UAM FUNDS CHICAGO ASSET MANAGEMENT
VALUE/CONTRARIAN PORTFOLIO
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected Per Share Data & Ratios
For a Share Outstanding Throughout Each Period
<TABLE>
<CAPTION>
Six Months
Ended December 16,
October 31, Years Ended April 30, 1994*** to
1999 --------------------------------------------- April 30,
(Unaudited) 1999 1998 1997 1996 1995
----------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period....... $ 17.53 $ 15.96 $ 13.07 $ 13.67 $ 11.14 $ 10.00
-------- -------- -------- -------- -------- --------
Income From Investment
Operations
Net Investment Income .... 0.07 0.15 0.17 0.18 0.19 0.05
Net Realized and
Unrealized Gain (Loss)... (1.94) 2.98 3.84 0.30 2.86 1.13
-------- -------- -------- -------- -------- --------
Total from Investment
Operations............... (1.87) 3.13 4.01 0.48 3.05 1.18
-------- -------- -------- -------- -------- --------
Distributions
Net Investment Income..... (0.07) (0.16) (0.18) (0.24) (0.23) (0.04)
Net Realized Gain ........ -- (1.40) (0.94) (0.84) (0.29) --
-------- -------- -------- -------- -------- --------
Total Distributions ...... (0.07) (1.56) (1.12) (1.08) (0.52) (0.04)
-------- -------- -------- -------- -------- --------
Net Asset Value, End of
Period................... $ 15.59 $ 17.53 $ 15.96 $ 13.07 $ 13.67 $ 11.14
======== ======== ======== ======== ======== ========
Total Return ............... (10.69)%**+ 21.68%+ 31.71%+ 3.72%+ 28.00%+ 11.81%**+
======== ======== ======== ======== ======== ========
Ratios and Supplemental Data
Net Assets, End of Period
(Thousands).............. $23,308 $ 26,852 $ 22,552 $ 13,804 $ 892 $ 696
Ratio of Expenses to Average
Net Assets............... 1.25%* 0.99% 0.95% 0.95% 1.06% 0.95%*
Ratio of Net Investment
Income to Average
Net Assets .............. 0.85%* 0.97% 1.16% 1.89% 1.51% 1.54%*
Portfolio Turnover Rate .... 27% 39% 55% 21% 33% 4%
</TABLE>
* Annualized
** Not Annualized
*** Commencement of Operations.
+ Total return would have been lower had certain fees not been waived and
expenses assumed by the advisor during the periods indicated.
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
UAM FUNDS CHICAGO ASSET MANAGEMENT
INTERMEDIATE BOND PORTFOLIO
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Selected Per Share Data & Ratios
For a Share Outstanding Throughout Each Period
Six Months
Ended January 24,
October 31, Years Ended April 30, 1995*** to
1999 ------------------------------------- April 30,
(Unaudited) 1999 1998 1997 1996 1995
----------- ------- ------- ------ ------- --------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period ........ $ 10.51 $ 10.54 $ 10.30 $ 10.39 $ 10.33 $ 10.00
--------- ------- ------- ------- ------- -------
Income From Investment
Operations
Net Investment Income .... 0.27 0.56 0.57 0.61 0.64 0.17
Net Realized and
Unrealized Gain (Loss)... (0.27) 0.04 0.24 (0.05) 0.14++ 0.26
--------- ------- ------- ------- ------- -------
Total from Investment
Operations............... -- 0.60 0.81 0.56 0.78 0.43
--------- ------- ------- ------- ------- -------
Distributions
Net Investment Income..... (0.27) (0.57) (0.57) (0.62) (0.64) (0.10)
Net Realized Gain ........ -- (0.06) --@ (0.03) (0.08) --
--------- ------- ------- ------- ------- -------
Total Distributions ...... (0.27) (0.63) (0.57) (0.65) (0.72) (0.10)
--------- ------- ------- ------- ------- -------
Net Asset Value, End of
Period................... $ 10.24 $ 10.51 $ 10.54 $ 10.30 $ 10.39 $ 10.33
========= ======= ======= ======= ======= =======
Total Return+ .............. 0.02%** 5.72% 8.08% 5.53% 7.62% 4.31%**
========= ======= ======= ======= ======= =======
Ratios and Supplemental Data
Net Assets, End of Period
(Thousands).............. $14,194 $13,542 $13,261 $10,044 $ 7,981 $ 5,267
Ratio of Expenses to Average
Net Assets............... 0.80%* 0.80% 0.80% 0.80% 0.84% 0.80%*
Ratio of Net Investment
Income to Average
Net Assets .............. 5.34%* 5.29% 5.64% 5.88% 6.17% 6.20%*
Portfolio Turnover Rate .... 18% 48% 40% 31% 24% 0%
</TABLE>
* Annualized
** Not Annualized
*** Commencement of Operations.
+ 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 a share outstanding throughout the year does not
accord with the aggregate net losses on investments for that year because
of the timing of sales and repurchases of the Portfolio shares in relation
to fluctuating market value of the investments of the Portfolio.
@ Amount is less than $0.01 per share.
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
UAM FUNDS CHICAGO ASSET MANAGEMENT
COMPANY PORTFOLIOS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
- --------------------------------------------------------------------------------
UAM Funds, Inc., UAM Funds, Inc. II and UAM Funds Trust (collectively the
"UAM Funds") are registered under the Investment Company Act of 1940, as
amended. The Chicago Asset Management Value/Contrarian Portfolio and Chicago
Asset Management Intermediate Bond Portfolio (collectively the "Portfolios"),
portfolios of UAM Funds Trust, are diversified, open-end management investment
companies. At October 31, 1999, the UAM Funds were comprised of 48 active
portfolios. The information presented in the financial statements pertains only
to the Portfolios. The objective of the Chicago Asset Management
Value/Contrarian Portfolio is to provide capital appreciation by investing
primarily in the common stock of large companies. The objective of the Chicago
Asset Management Intermediate Bond Portfolio is to provide a high level of
current income consistent with moderate interest rate exposure by investing
primarily in investment grade bonds with an average weighted maturity between 3
and 10 years.
A. Significant Accounting Policies: The following significant accounting
policies are in conformity with generally accepted accounting principles. Such
policies are consistently followed by the Portfolios in the preparation of their
financial statements. Generally accepted accounting principles may require
Management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results may differ from
those estimates.
1. Security Valuation: Investments for which market quotations are
readily available are stated at market value, which is determined using the
last reported sales price from the exchange where the security is primarily
traded. If no sales are reported, as in the case of some securities traded
over-the-counter, the market value is determined by using the last reported
bid price. Fixed income securities are stated on the basis of valuations
provided by brokers and/or 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 with 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 following procedures approved by
the Board of Trustees.
2. Federal Income Taxes: It is each 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.
17
<PAGE>
UAM FUNDS CHICAGO ASSET MANAGEMENT
COMPANY PORTFOLIOS
- --------------------------------------------------------------------------------
3. Repurchase Agreements: In connection with transactions involving
repurchase agreements, the Portfolios' custodian bank takes possession of
the underlying securities ("collateral"), 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 monitored 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 counterparty to the agreement, realization
and/or retention of the collateral or proceeds may be subject to legal
proceedings.
Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the UAM Funds may transfer their daily uninvested cash balances
into a joint trading account which invests in one or more repurchase
agreements. This joint repurchase agreement is covered by the same
collateral requirements as discussed above.
4. Distributions to Shareholders: Each Portfolio will distribute
substantially all of its net investment income quarterly. Any realized net
capital gains will be distributed at least 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. These
differences are primarily due to differing book and tax treatments in the
timing of the recognition of gains or losses on investments and in-kind
transactions.
Permanent book and tax basis differences relating to shareholder
distributions may result in reclassifications to undistributed net
investment income (loss), accumulated net realized gain (loss) and paid in
capital.
Permanent book-tax differences, if any, are not included in ending
undistributed net investment income (loss) for the purpose of calculating
net investment income (loss) per share in the financial highlights.
5. Organization Costs: Costs incurred by the Portfolios in connection
with their organization have been deferred and are being amortized on a
straight-line basis over a five-year period. Any costs incurred in the
organization of new funds are expensed as incurred.
18
<PAGE>
UAM FUNDS CHICAGO ASSET MANAGEMENT
COMPANY PORTFOLIOS
- --------------------------------------------------------------------------------
6. Other: Security transactions are accounted for on trade date, the
date the trade is 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. Discounts and premiums
on securities purchased are amortized using the effective yield basis over
their respective lives. Most expenses of the UAM Funds can be directly
attributed to a particular portfolio. Expenses that cannot be directly
attributed to a portfolio are apportioned among the portfolios of the UAM
Funds based on their relative net assets. Custodian fees for the Portfolios
are shown gross of expense offsets, if any, for custodian balance credits.
B. Investment Advisory Services: Under the terms of an investment
advisory agreement, Chicago Asset Management Company (the "Adviser"), a
subsidiary of United Asset Management Corporation ("UAM"), provides
investment advisory services to the Portfolios at a fee calculated at an
annual rate of average daily net assets for the month, as follows:
Chicago Asset Management Company Portfolios Rate
------------------------------------------- ------
Value/Contrarian .............................................. 0.625%
Intermediate Bond ............................................. 0.48%
Until further notice, the Adviser has voluntarily agreed to waive a
portion of its advisory fees and to assume expenses, if necessary, in order
to keep the Portfolios' total annual operating expenses, after the effect
of expense offset arrangements, from exceeding 1.25% and 0.80% of average
daily net assets, respectively.
C. Administrative Services: UAM Fund Services, Inc. (the
"Administrator"), a wholly-owned subsidiary of UAM, provides and oversees
administrative, fund accounting, dividend disbursing, shareholder servicing
and transfer agent services to the Portfolios under a Fund Administration
Agreement (the "Agreement"). The Administrator has entered into separate
Service Agreements with Chase Global Funds Services Company ("CGFSC"), a
corporate affiliate of The Chase Manhattan Bank, DST Systems, Inc. ("DST"),
and UAM Shareholder Service Center ("UAMSSC"), an affiliate of UAM, to
assist in providing certain services to the Portfolios.
Pursuant to the Agreement, the Value/Contrarian and Intermediate
Portfolios pay the Administrator 0.099% and 0.079% respectively per annum
of the average daily net assets of each of the Portfolios, an annual base
fee of $87,500 per portfolio, and a fee based on the number of active
shareholder accounts.
19
<PAGE>
UAM FUNDS CHICAGO ASSET MANAGEMENT
COMPANY PORTFOLIOS
- --------------------------------------------------------------------------------
For the six months ended October 31, 1999, UAM Funds Services, Inc.
earned the following amounts from each Portfolio as Administrator and paid the
following to CGFSC, DST and UAMSSC for its services:
<TABLE>
<CAPTION>
Chicago Asset Management Administration Portion Paid Portion Paid Portion Paid
Company Portfolios Fees to CGFSC to DST to UAMSSC
- ------------------------ -------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Value/Contrarian ......... $ 57,612 $ 31,413 $ 6,722 $ 4,282
Intermediate Bond ........ 49,445 28,932 6,508 4,038
</TABLE>
Effective November 1, 1999, the UAM Funds' Board of Trustees approved
a change in the Sub-administrator from CGFSC to SEI Investments Mutual Funds
Services.
D. Custodian: The Chase Manhattan Bank is custodian for the
Portfolios' assets held in accordance with the custodian agreement.
E. Distribution Services: UAM Fund Distributors, Inc. (the
"Distributor"), 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.
F. Trustees' Fees: Each Trustee, who is not an officer or affiliated
person, receives $2,000 per meeting attended plus reimbursement of expenses
incurred in attending Trustee meetings, which is allocated proportionally among
the active portfolios of UAM Funds, plus a quarterly retainer of $150 for each
active portfolio of the UAM Funds.
G. Purchases and Sales: For the six months ended October 31, 1999, the
Portfolios' purchases and sales of investment securities other than long-term
U.S. Government and agency securities and short-term securities were:
<TABLE>
<CAPTION>
Chicago Asset Management Company Portfolios Purchases Sales
<S> <C> <C>
Value/Contrarian ........................ $6,791,874 $7,197,590
Intermediate Bond ....................... 3,311,342 2,434,666
</TABLE>
Purchases and sales of long-term U.S. Government securities were
$1,224,754 and $254,902 respectively, for Chicago Asset Management Intermediate
Bond Portfolio. There were no purchases and sales of long-term U.S. Government
securities for Chicago Asset Management Value/Contrarian Portfolio.
20
<PAGE>
UAM FUNDS CHICAGO ASSET MANAGEMENT
COMPANY PORTFOLIOS
- --------------------------------------------------------------------------------
H. Line of Credit: The Portfolios, 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 capital
shares. Interest is charged to each participating Portfolio based on its
borrowings at a rate per annum equal to the Federal Funds rate plus 0.50%. In
addition, a commitment fee of 0.08% 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 six months ended
October 31, 1999, the Chicago Asset Management Value/Contrarian Portfolio and
the Chicago Asset Management Intermediate Bond Portfolio had no borrowings under
the agreement.
I. Other: At October 31, 1999, the percentage of total shares
outstanding held by record shareholders each owning 10% or greater of the
aggregate total shares outstanding for each Portfolio was as follows:
<TABLE>
<CAPTION>
No. of %
Chicago Asset Management Company Portfolios Shareholders Ownership
- ------------------------------------------- ------------ ---------
<S> <C> <C>
Value/Contrarian .......................... 3 85%
Intermediate Bond ......................... 1 88%
</TABLE>
21
<PAGE>
UAM FUNDS CHICAGO ASSET MANAGEMENT
COMPANY PORTFOLIOS
- --------------------------------------------------------------------------------
Officers and Trustees
Norton H. Reamer Peter M. Whitman, Jr.
Trustee, President and Chairman Trustee
John T. Bennett, Jr. William H. Park
Trustee Vice President
Nancy J. Dunn Michael E. DeFao
Trustee Secretary
Philip D. English Gary L. French
Trustee Treasurer
William A. Humenuk Robert R. Flaherty
Trustee Assistant Treasurer
James P. Pappas Robert J. Della Croce
Trustee Assistant Treasurer
- --------------------------------------------------------------------------------
UAM Funds
P.O. Box 219081
Kansas City, MO 64121
(toll free)
1-877-UAM-LINK (826-5465)
www.uam.com
Investment Adviser
Chicago Asset Management Company
70 West Madison Street, 56th Floor
Chicago, IL 60602
Distributor
UAM Fund Distributors, Inc.
211 Congress Street
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.
-------------------------------------
