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UAM Funds
Funds for the Informed Investor(SM)
Clipper Focus Portfolio
Semi-Annual Report October 31, 2000
[LOGO of UAM]
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UAM FUNDS CLIPPER FOCUS PORTFOLIO
OCTOBER 31, 2000
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TABLE OF CONTENTS
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Shareholders' Letter ...................................................... 1
Portfolio of Investments .................................................. 4
Statement of Assets and Liabilities ....................................... 7
Statement of Operations ................................................... 8
Statement of Changes in Net Assets ........................................ 9
Financial Highlights ...................................................... 10
Notes to Financial Statements ............................................. 11
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UAM FUNDS CLIPPER FOCUS PORTFOLIO
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November 3, 2000
Dear Shareholder:
The greatest speculative bubble in American financial history deflated a little
more last quarter. Technology stocks, which have become a financial religion,
showed small signs of heresy in the face of profit disappointments. By contrast,
the stocks of good but less theologically favored companies advanced. Your
portfolio gained 22.58% during the quarter ended October 31, 2000, versus 0.18%
for the S&P 500 the portfolio's benchmark. For the six-month period ended
October 31, 2000, your portfolio gained 31.69% versus -1.03% for the S&P 500.
Do the Right Thing
Doing the right thing is harder than knowing the right thing to do. We fell that
in this era of "irrational exuberance," the obviously right thing to do to
preserve capital is to avoid the exuberantly valued stocks, notably many
technology issues still selling at prices which are remarkable by any standard
except that of the last two years.
Actually doing that is more difficult than it seems. Avoiding those stocks last
year meant missing large speculative gains. The psychological pain of feeling
left behind in such a euphoric market should not be underestimated. Neither
should the impact of client criticism (e.g. "Why don't you spice up your
portfolio with some exciting tech stocks?"). With no small amount of frustration
on our part, we have remained rational and patient value investors. Our ability
to remain rational and patient is aided significantly by the patience and
understanding of our clients. We would like to thank you again for your support
last year when we appeared totally benighted because we would not pay astounding
prices for stocks we (and most other investors) simply could not understand.
eToys is a good example (obviously, not a holding in the portfolio). Last year
it soared from an IPO price of $20 to $86. It has one of the more appealing
business models in the business-to-consumer arena. It also has modest sales,
large losses, and a share price which recently sank to $2. Can they grow the
business into profitability? Is it cheap after such a dramatic decline? No one
really knows. We do know the company is burning cash, a precious asset which
will be gone in about a year at the current rate. We also know the stock still
sells at a significant premium to its rapidly evaporating book value, so there
is no asset protection. We are willing to buy out-of-favor stocks which are both
understandable and clearly cheap. Currently eToys is neither (and thus does not
fit into our model).
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"It Will Fluctuate"
That is the response Bernard Baruch gave when asked what the stock market will
do. That reply, while probably unsatisfying to the listener at the time, is
unusually relevant today. The modest change in the year-to-date stock market
indices masks unusually large fluctuations in individual stocks. In many cases
the volatility comes from momentum investors who rush from one hot stock to
another. Since underlying business values rarely change as rapidly as the prices
investors attach to them, this volatility creates a natural opportunity for a
value investor such as ourselves to be on the other side of the trade with a
momentum investor. Some recent examples include:
. We purchased Allstate and Nike at significant discounts to their intrinsic
values earlier this year, then sold them a few months later as their stocks
appreciated to our estimates of fair value.
. We bought more Freddie Mac earlier this year when investors pushed its
share price down. Recently we reduced our large holdings in Fannie Mae and
Freddie Mac in response to a moderate rise in their political risk combined
with a generous increase in their share prices. We still believe they are
good businesses worth holding, but in smaller amounts to reflect the change
in their risk/reward profiles.
. Philip Morris, the most controversial stock in your portfolio, now is a
smaller position as a consequence of a 50% increase in price off its recent
lows. In this as in other stocks, we adjust the size of the position to
reflect the changing cheapness of the stock.
. We added some new positions to your portfolio. Retailing stocks are out of
favor, which gave us the opportunity to buy Target, Staples, and Office
Depot. Tyson Foods and Fortune Brands are new positions; McDonald's is an
old friend we purchased again on recent price weakness.
This surge in trading does not mean we have become converts to the ethos of day
trading. Our preference is to buy and hold for an extended period, but the locus
of value opportunities is more important than our preference. While our
professional mission is to enrich our clients rather than our brokers, we will
continue to trade more actively than usual so long as large fluctuations in
stock prices pay us well to do so.
Boredom Revisited
In the realm of boredom, as in other aspects of life, it is better to give than
to receive. Real estate investment trusts (REITs) are an exception. If last
year's pinnacle of excitement was a small technology stock without earnings,
then the depth of dull-
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ness was a REIT with an understandable business, great balance sheet, generous
yield, and a price well below the private market value of its properties. Since
we made them the major new position in your portfolio last year, REITs have
demonstrated improving fundamentals and declining yields (for the high-grade
reason that their stock prices are up). They are still boring, but that is the
kind of boredom we can live with very well.
We hope that the extraordinary performance of the past six months has not
created unrealistic expectations. The value added from our process sometimes
produces uneven returns. Today's more rational market presents a challenging
investment landscape.
Ten Largest Equity Holdings
(as a percentage of the Portfolio)
1. Freddie Mac (7.3%) 6. Pitney Bowes (3.8%)
2. Philip Morris (7.0%) 7. Fannie Mae (3.5%)
3. Manpower (4.2%) 8. SaraLee (3.4%)
4. Equity Residential Properties (4.0%) 9. McDonald's (3.4%)
5. Litton Industries (4.0%) 10. Electronic Data Systems (3.3%)
Pacific Financial Research, Inc.
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 the Comparative Index
-----------------------------------
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 index assumes reinvestment of dividends and, unlike a
portfolio's returns, does not reflect any fees or expenses. If such fees were
reflected in the comparative index's returns, the performance would have been
lower.
Please note that one cannot invest directly in an unmanaged index.
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UAM FUNDS CLIPPER FOCUS PORTFOLIO
OCTOBER 31, 2000 (Unaudited)
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PORTFOLIO OF INVESTMENTS
COMMON STOCKS - 88.7%
Shares Value
------------ ------------
AEROSPACE & DEFENSE -- 6.4%
Litton Industries* ............................ 114,200 $ 5,931,262
Lockheed Martin ............................... 87,000 3,118,950
------------
9,050,212
------------
BANKS -- 1.6%
Golden West Financial ......................... 42,100 2,360,231
------------
CHEMICALS -- 2.2%
Airgas* ....................................... 176,800 1,193,400
Great Lakes Chemical .......................... 56,800 1,895,700
------------
3,089,100
------------
COMPUTERS & SERVICES -- 4.0%
Pitney Bowes .................................. 191,800 5,694,062
------------
CONTAINERS & PACKAGING -- 2.8%
Newell Rubbermaid ............................. 212,200 4,071,587
------------
FINANCIAL SERVICES -- 13.9%
Block H&R ..................................... 105,500 3,765,031
Fannie Mae .................................... 67,100 5,166,700
Freddie Mac ................................... 182,000 10,920,000
------------
19,851,731
------------
FOOD, BEVERAGE & TOBACCO -- 15.1%
Philip Morris ................................. 284,700 10,427,138
Sara Lee ...................................... 238,500 5,142,656
Tyson Foods ................................... 266,700 2,983,706
UST ........................................... 118,200 2,984,550
------------
21,538,050
------------
HEALTH CARE -- 1.0%
Tenet Healthcare* ............................. 34,700 1,364,144
------------
HOUSEHOLD PRODUCTS -- 2.9%
Fortune Brands ................................ 141,700 4,171,294
------------
The accompanying notes are an integral part of the financial statements.
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UAM FUNDS CLIPER FOCUS PORTFOLIO
OCTOBER 31, 2000 (unaudited)
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COMMON STOCKS -- continued
Shares Value
---------- ------------
INSURANCE -- 1.8%
Old Republic International ...................... 96,800 $ 2,516,800
------------
METALS & MINING -- 1.6%
De Beers Consolidated Mines ADR ................. 83,200 2,314,000
------------
MISCELLANEOUS BUSINESS SERVICES -- 7.9%
Electronic Data Systems ......................... 105,500 4,951,906
Manpower ........................................ 180,300 6,276,694
------------
11,228,600
------------
PRINTING COMMERCIAL -- 2.3%
R.R. Donnelley & Sons ........................... 153,400 3,298,100
------------
REAL ESTATE INVESTMENT TRUSTS -- 14.3%
Apartment Investment & Management ............... 57,600 2,631,600
Archstone Community ............................. 193,400 4,556,988
Equity Office Properties Trust .................. 73,700 2,220,212
Equity Residential Properties ................... 126,200 5,939,288
General Growth Properties ....................... 7,000 206,500
Mack-Cali Realty ................................ 127,900 3,469,288
Security Capital Group, Cl B* ................... 67,800 1,292,438
------------
20,316,314
------------
RETAIL -- 9.6%
McDonald's ...................................... 165,800 5,139,800
Office Depot* ................................... 342,900 2,850,356
Staples* ........................................ 209,100 2,979,675
Target .......................................... 99,100 2,737,638
------------
13,707,469
------------
TOOLS -- 1.3%
Stanley Works ................................... 68,000 1,810,500
------------
TOTAL COMMON STOCKS
(Cost $111,606,552) ............................. 126,382,194
------------
The accompanying notes are an integral part of the financial statements.
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UAM FUNDS CLIPPER FOCUS PORTFOLIO
OCTOBER 31, 2000 (unaudited)
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SHORT-TERM INVESTMENT -- 16.6%
<TABLE>
<CAPTION>
Face
Amount Value
----------- ------------
<S> <C> <C>
REPURCHASE AGREEMENT -- 16.6%
Chase Securities, Inc. 6.35%, dated 10/31/00,
due 11/01/00, to be repurchased at $23,596,161,
collateralized by $17,670,975 of various U.S. Treasury
Obligations valued at $23,592,462 (Cost $23,592,000) ......... $23,592,000 $ 23,592,000
------------
TOTAL INVESTMENTS -- 105.3%
(Cost $135,198,552) (a) ........................................ 149,974,194
------------
OTHER ASSETS AND LIABILITIES, NET -- (5.3%) ...................... (7,571,164)
------------
TOTAL NET ASSETS -- 100.0% ....................................... $142,403,030
============
</TABLE>
*Non-Income Producing Security
ADR American Depositary Receipt
Cl Class
(a) The cost for Federal Income tax purposes was $135,198,552. At October 31,
2000, net unrealized appreciation for all securities based on tax cost was
$14,775,642. This consisted of aggregate gross unrealized appreciation for
all securities of $16,333,452 and aggregate gross unrealized depreciation
for all securities of $1,557,810.
The accompanying notes are an integral part of the financial statements.
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UAM FUNDS CLIPPER FOCUS PORTFOLIO
OCTOBER 31, 2000 (Unaudited)
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STATEMENT OF ASSETS & LIABILITIES
Assets
Investments, at Cost ........................................ $111,606,552
============
Investments, at Value -- Note A ............................. $126,382,194
Repurchase Agreements, at Value -- Note A
(Cost $23,592,000) ......................................... 23,592,000
Cash ........................................................ 911
Receivable for Portfolio Shares Sold ........................ 13,963,797
Dividends and Interest Receivable ........................... 58,070
Other Assets ................................................ 41,030
------------
Total Assets ............................................. 164,038,002
------------
Liabilities
Payable to Investment Purchased ............................. 21,464,456
Payable for Advisory Fees -- Note B ......................... 93,897
Payable for Portfolio Shares Redeemed ....................... 30,982
Payable for Administrative Fees -- Note C ................... 14,973
Payable for Custodian Fees -- Note D ........................ 7,714
Other Liabilities ........................................... 22,950
------------
Total Liabilities ........................................ 21,634,972
------------
Net Assets .................................................. $142,403,030
============
Net Assets Consist of:
Paid in Capital ............................................. $123,917,217
Undistributed Net Investment Income ......................... 79,168
Accumulated Net Realized Gain ............................... 3,631,003
Unrealized Appreciation ..................................... 14,775,642
------------
Net Assets .................................................. $142,403,030
============
Institutional Class Shares
Shares Issued and Outstanding (Unlimited
authorization, no par value) ............................... 10,043,395
Net Asset Value, Offering and Redemption
Price Per Share ............................................ $14.18
======
The accompanying notes are an integral part of the financial statements.
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UAM FUNDS CLIPPER FOCUS PORTFOLIO
SIX MONTHS ENDED OCTOBER 31, 2000(Unaudited)
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STATEMENT OF OPERATIONS
Investment Income
Dividends .................................................. $ 1,405,248
Interest ................................................... 103,526
-------------
Total Income .............................................. 1,508,774
-------------
Expenses
Investment Advisory Fees -- Note B ......................... 474,019
Administrative Fees -- Note C .............................. 84,008
Shareholder Servicing Fees -- Note G ....................... 52,177
Filing and Registration Fees .............................. 27,031
Printing Fees .............................................. 13,290
Custodian Fees -- Note D ................................... 8,641
Audit Fees ................................................. 7,491
Legal Fees ................................................. 5,329
Trustees' Fees -- Note F ................................... 1,719
Other Expenses ............................................. 7,780
Investment Advisory Fees Waived--Note B .................... (19,110)
-------------
Net Expenses Before Expense Offset ........................ 662,375
Expense Offset -- Note A ................................... (460)
-------------
Net Expenses After Expense Offset ......................... 661,915
-------------
Net Investment Income ...................................... 846,859
-------------
Net Realized Gain on Investments ........................... 3,827,872
Net Change in Unrealized Appreciation
(Depreciation) of Investments ............................. 22,605,914
-------------
Net Gain on Investments .................................... 26,433,786
-------------
Net Increase in Net Assets
Resulting from Operations ................................. $ 27,280,645
=============
The accompanying notes are an integral part of the financial statements.
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STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended Year
October 31, Ended
2000 April 30,
(Unaudited) 2000
-------------- ------------
<S> <C> <C>
Increase (Decrease) in Net Assets
Operations:
Net Investment Income ................................... $ 846,859 $ 1,248,984
Net Realized Gain (Loss) ................................ 3,827,872 (195,668)
Net Change in Unrealized Appreciation (Depreciation) .... 22,605,914 (9,829,569)
-------------- ------------
Net Increase (Decrease) in Net Assets
Resulting from Operations .............................. 27,280,645 (8,776,253)
-------------- ------------
Distributions:
Net Investment Income ................................... (894,198) (1,200,879)
Net Realized Gain ....................................... -- (1,069,221)
-------------- ------------
Total Distributions ..................................... (894,198) (2,270,100)
-------------- -------------
Share Transactions: (1)
Issued .................................................. 70,743,588 82,007,266
In Lieu of Cash Distributions ........................... 880,635 2,247,719
Redeemed ................................................ (39,833,685) (53,117,847)
-------------- ------------
Net Increase from Capital Share Transactions ............ 31,790,538 31,137,138
-------------- ------------
Total Increase ......................................... 58,176,985 20,090,785
Net Assets:
Beginning of Period ..................................... 84,226,045 64,135,260
-------------- ------------
End of Period (Including undistributed net
investment income of $79,168 and
$126,507, respectively) ................................ $142,403,030 $ 84,226,045
============== ============
(1) Shares Issued and Redeemed:
Shares Issued ......................................... 5,548,518 7,141,034
In Lieu of Cash Distributions ......................... 71,204 203,560
Shares Redeemed ....................................... (3,324,032) (4,857,116)
-------------- ------------
Net Increase in Shares Outstanding .................... 2,295,690 2,487,478
============== ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
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FINANCIAL HIGHLIGHTS
Selected Per Share Data & Ratios
For a Share Outstanding Throughout Each Period
<TABLE>
<CAPTION>
Six Months
Ended Year Sept 10,
October 31, Ended 1998* to
2000 April 30, April 30,
(Unaudited) 2000 1999
------------- ------------ -------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period ....................... $ 10.87 $ 12.19 $ 10.00
-------- ------- -------
Income from Investment Operations
Net Investment Income ..................................... 0.11 0.16 0.05
Net Realized and Unrealized Gain (Loss) ................... 3.32 (1.18) 2.18
-------- ------- -------
Total from Investment Operations .......................... 3.43 (1.02) 2.23
-------- ------- -------
Distributions:
Net Investment Income ..................................... (0.12) (0.16) (0.04)
Net Realized Gain ......................................... -- (0.14) --@
-------- ------- -------
Total Distributions ....................................... (0.12) (0.30) (0.04)
-------- ------- -------
Net Asset Value, End of Period ............................. $ 14.18 $ 10.87 $ 12.19
-------- ------- -------
Total Return+ .............................................. 31.69% (8.39)% 22.33%***
======== ======= =======
Ratios and Supplemental Data
Net Assets, End of Period (Thousands) ...................... $142,403 $84,226 $64,135
Ratio of Expenses to Average Net Assets .................... 1.40%** 1.40% 1.40%**
Ratio of Net Investment Income to
Average Net Assets ........................................ 1.79%** 1.47% 1.05%**
Portfolio Turnover Rate .................................... 54% 54% 22%
</TABLE>
* Commencement of operations
** Annualized
*** Not annualized
@ Amount is less than $0.01 per share.
+ Total return would have been lower had certain fees not been waived by the
Adviser.
The accompanying notes are an integral part of the financial statements.
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NOTES TO FINANCIAL STATEMENTS
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
Clipper Focus Portfolio (the "Portfolio"), a portfolio of UAM Funds Trust, is a
non-diversified open-end management investment company. At October 31, 2000, the
UAM Funds were comprised of 49 active portfolios. The information presented in
the financial statements pertains only to the Portfolio. The objective of the
Portfolio is to provide long-term growth of capital by investing in a
concentrated portfolio of the stocks that, in the opinion of the Adviser, are
significantly undervalued.
A. Significant Accounting Policies: The following significant accounting
policies are in conformity with generally accepted accounting principles. Such
policies are consistently followed by the Portfolio in the preparation of its
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 sale 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.
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 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.
3. Repurchase Agreements: In connection with transactions involving repurchase
agreements, the Portfolio's 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
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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
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: The 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.
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. Other: Security transactions are accounted for on trade date, the date
the trade is executed. Costs used in determining realized gains or 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 an accrual basis. 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 Portfolio
are shown gross of expense offsets, if any, for custodian balance credits.
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B. Investment Advisory Services: Under the terms of an investment advisory
agreement, Pacific Financial Research, Inc. (the "Adviser"), a subsidiary of
United Asset Management Corporation ("UAM"), provides investment advisory
services to the Portfolio at a fee calculated at an annual rate of 1.00% of
average daily net assets. The Adviser has voluntarily agreed to waive a portion
of its advisory fees and to assume expenses, if necessary, in order to keep the
Portfolio's total annual operating expenses, after the effect of expense offset
arrangements, from exceeding 1.40% of average daily net assets. Old Mutual, Plc.
gained control of United Asset Management on September 26, 2000.
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 Portfolio under a Fund Administration Agreement (the
"Agreement"). The Administrator has entered into separate Service Agreements
with SEI Investments Mutual Funds Services ("SEI"), a wholly-owned subsidiary of
SEI Investments Company, DST Systems, Inc. ("DST"), and UAM Shareholder Service
Center ("UAMSSC"), an affiliate of UAM, to assist in providing certain services
to the Portfolio.
Pursuant to the Agreement, the Portfolio pays the Administrator 0.073% per
annum of the average daily net assets of the Portfolio, an annual base fee of
$72,500, and a fee based on the number of active shareholder accounts.
For the six months ended October 31, 2000, the Administrator was paid $84,008,
of which $31,864 was paid to SEI for their services, $10,858 to DST for their
services, and $11,073 to UAMSSC for their services.
D. Custodian: The Chase Manhattan Bank is custodian for the Portfolio's 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 Portfolio. The
Distributor does not receive any fee or other compensation with respect to the
Portfolio.
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F. Trustees' Fees: Each Trustee, who is not an officer or affiliated person,
receives $3,000 per meeting attended plus reimbursement of expenses incurred in
attending Trustees meetings, which is allocated proportionally among the active
portfolios of UAM Funds, plus a quarterly retainer of $200 for each active
portfolio of the UAM Funds.
G. Shareholder Servicing Fees: Certain brokers, dealers, banks, trust
companies and other financial representatives receive compensation from the
UAM Funds for providing a variety of services, including record-keeping and
transaction processing. Such fees are based on the assets of the UAM Funds that
are serviced by the financial representative.
H. Purchases and Sales: For the six months ended October 31, 2000, the
Portfolio made purchases of $67,279,432 and sales of $50,893,662 of investment
securities other than long-term U.S. Government and short-term securities. There
were no purchases or sales of long-term U.S. Government securities.
I. 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 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 0.09% 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, 2000, the Portfolio had
no borrowings under the agreement.
J. Other: At October 31, 2000, 61% of total shares outstanding were held by 1
record shareholder.
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NOTES
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NOTES
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UAM FUNDS CLIPPER FOCUS PORTFOLIO
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Officers and Trustees
James F. Orr, III William H. Park
Trustee, President and Chairman Vice President
John T. Bennett, Jr. Gary L. French
Trustee Treasurer
Nancy J. Dunn Robert J. Della Croce
Trustee Assistant Treasurer
Philip D. English Linda T. Gibson, Esq.
Trustee Secretary
William A. Humenuk Martin J. Wolin, Esq.
Trustee Assistant Secretary
James P. Pappas Theresa DelVecchio
Vice President Assistant Secretary
--------------------------------------------------------------------------------
UAM Funds
P.O. Box 219081
Kansas City, MO 64121
(toll free)
1-877-UAM-LINK (826-5465)
www.uam.com
Investment Adviser
Pacific Financial Research, Inc.
9601 Wilshire Boulevard, Suite 800
Beverly Hills, CA 90210
Distributor
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
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This report has been prepared for
shareholders and may be distributed to
others only if preceded or accompanied by
a current prospectus.
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[LOGO OF UAM FUNDS]
Supplement dated October 27, 2000, to the Annual Report of the Financials for
the Clipper Focus Portfolio.
The Annual Report is hereby supplemented to reflect the following:
On November 27, 2000, there was a Special Meeting of Shareholders of the
Fund, at which the shareholders of the Portfolio voted on the listed
proposals. The following were the results of the vote:
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<CAPTION>
For: Against: Abstain:
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<S> <C> <C> <C>
1.To elect the Trustees/Directors.
01) John T. Bennett, Jr.......................... 19,010,168 -- 451,579
02) Nancy J. Dunn................................ 19,032,354 -- 429,393
03) William A. Humenuk........................... 19,032,469 -- 429,278
04) Philip D. English............................ 19,032,469 -- 429,278
05) James F. Orr, III............................ 19,030,371 -- 431,371
2.To approve the proposed change of the investment objective of the Fund from
fundamental to non-fundamental.
N/A -- --
3.To approve the proposed changes to the Fund's fundamental investment
restrictions.
a) Diversification of Investments:............... 3,464,098 13,650 87,176
b) Borrowing:.................................... 3,217,700 260,048 87,176
c) Issuing of Senior Securities:................. 3,217,414 260,334 87,176
d) Underwriting:................................. 3,463,636 14,112 87,176
e) Industry Concentration:....................... 3,464,098 13,650 87,176
f) Investment in Real Estate:.................... 3,463,923 13,825 87,176
g) Commodities:.................................. 3,462,710 15,038 87,176
h) Lending:...................................... 3,458,811 18,937 87,176
i) Illiquid Securities:.......................... 3,459,273 18,475 87,176
j) Control or Management:........................ 3,461,714 16,034 87,176
k) Unseasoned Issuers:........................... 3,463,496 14,252 87,176
l) Borrowing exceeding 5%:....................... 3,458,671 19,077 87,176
m) Pledging:..................................... 3,460,453 17,295 87,176
n) Margin Purchases and Short Sales:............. 3,460,453 16,374 87,176
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