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DLB GLOBAL SMALL CAPITALIZATION
FUND
UNAUDITED FINANCIAL STATEMENTS FOR
THE SIX MONTHS ENDED JUNE 30, 1996
<TABLE>
DLB GLOBAL SMALL CAPITALIZATION FUND
TABLE OF CONTENTS
<CAPTION>
<S> <C>
PAGE
UNAUDITED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 1996:
Portfolio of Investments 1-6
Statement of Assets and Liabilities 7
Statement of Operations 8
Statement of Changes in Net Assets 9
Financial Highlights 10
Notes to Financial Statements 11-13
</TABLE>
<TABLE>
<CAPTION>
DLB GLOBAL SMALL CAPITALIZATION FUND
PORTFOLIO OF INVESTMENTS - UNAUDITED
JUNE 30, 1996
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON AND PREFERRED STOCKS - 95.3%
ISSUER SHARES VALUE
DOMESTIC - 39.2%
CHEMICALS SPECIALTY - 1.7%
Calgon Carbon 9,200 $124,200
M.A. Hanna Co. 4,500 93,937
-------
218,137
-------
METALS & MINING - 1.9%
Calmat Co. 6,400 116,000
Martin Marietta Materials 5,100 123,675
-------
239,675
-------
PAPER/FOREST PRODUCTS - 0.9%
Albany International Corp. Cl. A 4,800 108,600
-------
AEROSPACE - 0.9%
EG&G 5,600 119,700
-------
CONSTRUCTION - 1.0%
Southdown 5,300 124,550
-------
MACHINERY/EQUIPMENT - 3.8%
BW/IP Inc. Cl. A 6,100 115,900
Elsag Bailey Process Auto (*) 4,700 125,725
Harsco Corp. 2,000 134,500
Trinity Industries 3,300 112,200
-------
488,325
-------
APPAREL - TEXTILE - 1.7%
National Service Industries 3,700 144,762
Stride Rite 9,300 76,725
-------
221,487
-------
AUTO PARTS MANUFACTURERS - 2.4%
Armor All Products 6,800 101,150
Bandag Inc. Cl. A 2,100 98,437
Standard Products 4,400 102,300
-------
301,887
-------
FURNITURE & APPLIANCES - 2.5%
Herman Miller 4,500 137,812
LA-Z-BOY Chair 3,200 96,400
Stanhome Inc. Vtg. 3,100 82,150
-------
316,362
-------
PRINTING & PUBLISHING - 1.7%
Central Newspapers A 3,300 123,750
Lee Enterprises 4,200 99,225
-------
222,975
-------
RETAIL - GENERAL - 0.9%
Fred Meyer Inc. (*) 3,700 108,687
-------
(Continued)
-1-
<PAGE>
DLB GLOBAL SMALL CAPITALIZATION FUND
PORTFOLIO OF INVESTMENTS - UNAUDITED
JUNE 30, 1996
- -------------------------------------------------------------------------------------------------
COMMON AND PREFERRED STOCKS (CONTINUED)
ISSUER SHARES VALUE
RETAIL - SPECIALTY - 1.8%
Charming Shoppes (*) 15,600 110,175
Fingerhut Companies 7,600 118,750
---------------
228,925
-------
WHOLESALERS - 0.7%
Waban Inc. (*) 3,700 88,337
----------------
FOOD PRODUCERS - 0.7%
Dean Foods Co. 3,600 89,100
----------------
COSMETIC/TOILETRY - 0.8%
Alberto Culver Cl. A 2,600 104,000
---------------
TOBACCO - 1.0%
Dimon, Inc. 6,700 123,950
---------------
COAL GAS & PIPE - 2.0%
Cabot Oil & Gas Corp. 6,600 114,675
Nabors Industries (*) 8,800 143,000
--------------
257,675
-------
OIL - DOMESTIC - 0.9%
Quaker State Corp. 7,800 117,000
---------------
BANKS - 1.7%
First Security Corp. 4,350 104,400
Glendale Federal Bank (*) 6,400 116,000
---------------
220,400
-------
INSURANCE COMPANIES - 3.2%
Gallagher 2,600 83,200
Hartford Steam Boiler Ins. 2,200 108,075
Western National Corp. 6,200 113,925
Willis Corroon Group PLC ADR 8,200 97,375
----------------
402,575
-------
COMPUTER RELATED - 0.8%
Gerber Scientific 6,500 104,812
---------------
ELECTRONIC/INSTRUMENT - 1.7%
Intergraph Corp. (*) 7,200 87,300
Scitex 7,400 127,650
---------------
214,950
-------
OFFICE EQUIPMENT - 1.0%
Wallace Computer 2,200 131,450
(Continued)
-2-
<PAGE>
DLB GLOBAL SMALL CAPITALIZATION FUND
PORTFOLIO OF INVESTMENTS - UNAUDITED
JUNE 30, 1996
- -------------------------------------------------------------------------------------------------
COMMON AND PREFERRED STOCKS (CONTINUED)
ISSUER SHARES VALUE
TELECOMMUNICATIONS - 0.7%
Octel Communications (*) 4,600 90,850
----------------
TRUCKING AND SHIPPING - 2.1%
Alexander & Baldwin 4,100 98,912
Hunt J B Transport 4,700 98,112
Overseas Shipholding 3,700 67,062
----------------
264,086
-------
NATURAL GAS - 0.7%
Equitable Resources 3,100 87,575
----------------
FOREIGN - 56.1%
UNITED KINGDOM - 8.4%
Allied Colloids Group - Chemicals 44,900 91,287
Peter Black Holdings - Household Goods 19,000 74,310
N Brown Group - Retailers - General 20,000 107,709
Court Cavendish Group - Health Care 21,400 69,747
Devro International - Food Producers 26,000 97,652
Dorling Kindersley - Publisher 9,000 83,249
Eurotherm - Electronic Control Systems 8,000 73,627
Fairey Group - Electronic and Electrical Equipment 11,300 114,871
Seton Healthcare Group - Health Care 13,000 99,266
Spirax - Sarco Engineering - Engineering 15,000 177,626
Unichem - Health Care 21,300 85,619
-----------------
1,074,963
---------
BELGIUM - 1.2%
Colruyt - Retailers - Food 450 150,718
--------------
FRANCE - 7.1%
Bioblock Scientific - Distributors 2,000 128,248
Brioche Pasquier - Food Producers 1,000 156,611
Guilbert - Distributors 1,200 174,876
Societe Manutan - Distributors 2,000 169,436
Spir Communication - Media 1,400 137,919
Virbac - Pharmaceuticals 1,000 140,484
--------------
907,574
-------
(Continued)
-3-
<PAGE>
DLB GLOBAL SMALL CAPITALIZATION FUND
PORTFOLIO OF INVESTMENTS - UNAUDITED
JUNE 30, 1996
- -------------------------------------------------------------------------------------------------
COMMON AND PREFERRED STOCKS (CONTINUED)
ISSUER SHARES VALUE
GERMANY - 3.4%
Rhoen Klinikum - Health Care 1,200 156,069
SKW Trostberg - Specialty Chemicals 6,000 155,872
Sto AG - Building Materials and Merchants (**) 250 123,982
--------------
435,923
-------
ITALY - 3.1%
Gewiss - Electronic and Electrical Equipment 13,700 205,464
Natuzzi ADR - Household Goods 3,700 189,625
---------------
395,089
-------
NETHERLANDS - 3.4%
Grolsch - Breweries 3,350 137,311
Nutricia Certificates - Food Producers 1,300 137,399
Wegener - Media 1,550 164,185
---------------
438,895
-------
SWITZERLAND - 2.4%
Fotolabo - Other Services and Businesses 400 165,748
Phoenix Mecano - Engineering 300 148,024
--------------
313,772
-------
NEW ZEALAND - 0.7%
Guinness Peat Group - Other Financial 187,550 87,530
--------------
JAPAN - 15.0%
Aim Services - Other Services and Businesses 5,000 133,163
Amada Metrecs - Machine Tools 9,000 136,264
Canon Aptex - Engineering 5,500 88,791
Chodai - General 4,000 144,108
Daiwa Industries - Engineering 12,000 128,055
Fukuda Denshi - Health Care 5,000 128,147
Harada Industry - Electronic and Electrical Equipment 5,000 84,367
Maruko - Retailers - General (*) 2,000 179,679
Mitsui High-Tech - Electronic and Electrical Equipment 5,500 128,420
Nihon Jumbo - Other Services and Businesses 5,160 207,078
Nissen - Retailers - General 460 6,923
Royal Ltd. - Retailers - General 4,400 137,650
SXL Corp. - Building and Construction 12,000 118,205
Toami - Building Materials 7,000 129,606
Xebio - Retailers - General 4,000 149,945
---------------
1,900,401
---------
(Continued)
-4-
<PAGE>
DLB GLOBAL SMALL CAPITALIZATION FUND
PORTFOLIO OF INVESTMENTS - UNAUDITED
JUNE 30, 1996
- -------------------------------------------------------------------------------------------------
COMMON AND PREFERRED STOCKS (CONTINUED)
ISSUER SHARES VALUE
HONG KONG - 4.1%
CDL Hotels - Leisure and Hotels 195,000 107,060
Chen Hsong Holdings - Engineering 90,000 48,250
Gold Peak - Electronic and Electrical Equipment 150,000 84,776
South China Morning Post - Media 150,000 102,700
Vitasoy International Holdings - Soft Drinks 220,000 80,279
YGM Trading - Clothing Retailer 100,000 106,575
-----------------
529,640
-------
INDONESIA - 0.8%
Multi Bintang D/R - Breweries 5,500 99,836
----------------
MALAYSIA - 1.2%
Perlis Plantations - Diversified Industrial 40,000 153,908
----------------
PHILIPPINES - 0.5%
Alaska Milk Corp. - Dairy Products 600,000 73,143
------------------
SINGAPORE - 2.0%
Tibs Holdings - Transport 40,000 94,051
Tiger Medicals - Pharmaceuticals 50,000 84,986
United Industrial Corp. - Property 71,000 72,408
-----------------
251,445
-------
THAILAND - 2.2%
Matichon (THB) F/R - Media 13,000 100,295
Saha Pathana Interholding L/R - Diversified Industrial 35,000 82,677
Thai Pineapple (TIPCO) L/R - Food Producers (*) 75,000 95,208
-----------------
278,180
-------
ARGENTINA - 0.6%
Quilmes Industries, S.A. 2,400 24,600
Quilmes Industries, S.A. 4,800 49,200
----------------
73,800
-------
Total Common and Preferred Stocks (identified cost, $10,910,335) 12,160,887
-----------------
(Continued)
-5-
<PAGE>
DLB GLOBAL SMALL CAPITALIZATION FUND
PORTFOLIO OF INVESTMENTS - UNAUDITED
JUNE 30, 1996
- -------------------------------------------------------------------------------------------------
ISSUER VALUE
REPURCHASE AGREEMENT - 3.9%
Bank of New York, dated 6/28/96, due
7/1/96 (secured by $365,000 U.S. Treasury
Notes, due 7/1/96, market value, $504,156) 494,113
-------------------
Total Investments (identified cost, $11,404,448) 12,655,000
Other Assets, Less Liabilities - 0.8% 96,857
-------------------
NET ASSETS - 100% $ 12,751,857
================
(*) Nonincome-producing securities
(**) Preferred Stock
See notes to financial statements.
</TABLE>
-6-
<PAGE>
<TABLE>
DLB GLOBAL SMALL CAPITALIZATION FUND
STATEMENT OF ASSETS AND LIABILITIES - UNAUDITED
JUNE 30, 1996
- -------------------------------------------------------------------------------------------------------- ----------------
<CAPTION>
<S> <C>
ASSETS:
Investments, at value (identified cost, $11,404,448) $ 12,655,000
Dividends and interest receivable 146,564
-------------------
Total assets 12,801,564
LIABILITIES - Accrued expenses and other liabilities 49,707
-------------------
NET ASSETS $ 12,751,857
================
NET ASSETS CONSIST OF:
Paid-in capital $ 11,290,793
Unrealized appreciation on investments and translation of assets and liabilities in foreign currency 1,250,552
Accumulated net realized gain on investments and foreign currency transactions 111,076
Accumulated undistributed net investment income 99,436
-------------------
TOTAL $ 12,751,857
================
SHARES OF BENEFICIAL INTEREST OUTSTANDING 1,115,913
==========
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER
SHARE (Net assets / shares of beneficial interest outstanding) $ 11.43
====================
See notes to financial statements.
</TABLE>
-7-
<PAGE>
<TABLE>
DLB GLOBAL SMALL CAPITALIZATION FUND
STATEMENT OF OPERATIONS - UNAUDITED
SIX MONTHS ENDED JUNE 30, 1996
- --------------------------------------------------------------------------------------------------------- ---------------
<CAPTION>
<S> <C>
NET INVESTMENT INCOME:
Dividends (net of foreign taxes withheld of $20,839) $ 173,696
Interest 12,271
------------------
Total investment income 185,967
-------
EXPENSES:
Management fee 59,031
Custodian fee 34,858
Legal fees 18,569
Accounting and audit fees 12,250
Trustees' fees 3,563
Other 8,060
-------------------
Total expenses 136,331
Reduction of expenses by investment manager (49,407)
------------------
Net expenses 86,924
-------
NET INVESTMENT INCOME 99,043
-------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) (identified cost basis):
Investment transactions 147,193
Foreign currency transactions (847)
-------
Net realized gain (loss) on investments 146,346
Change in unrealized appreciation on investments 878,621
-----------------
Net realized and unrealized gain on investments 1,024,967
----------------
INCREASE IN NET ASSETS FROM OPERATIONS $ 1,124,010
===============
See notes to financial statements.
</TABLE>
-8-
<PAGE>
<TABLE>
DLB GLOBAL SMALL CAPITALIZATION FUND
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED JUNE 30, 1996 AND THE PERIOD FROM
JULY 19, 1995 (COMMENCEMENT OF OPERATIONS) TO
DECEMBER 31, 1995
- ----------------------------------------------------------------------------------- ----------------- -----------------
<CAPTION>
<S> <C> <C>
1996 1995
(UNAUDITED)
INCREASE (DECREASE) IN NET ASSETS:
From operations:
Net investment income $ 99,043 $ 66,244
Net realized gain (loss) on investments and foreign currency transactions 146,346 (28,897)
Net unrealized gain on investments and foreign currency translation 878,621 371,931
---------- ---------
Increase in net assets from operations 1,124,010 409,278
---------- ---------
Distributions declared to shareholders from net investment income = (72,224)
---------
Fund share (principal) transactions:
Net proceeds from sale of shares 1,118,569 10,000,000
Net asset value of shares issued
to shareholders in reinvestment of distributions = 72,224
-----------
Increase in net assets from Fund share transactions 1,118,569 10,072,224
---------- ------------
Total increase in net assets 2,242,579 10,409,278
NET ASSETS:
Beginning of period 10,509,278 100,000
---------- -----------
End of period (including accumulated undistributed net investment
income of $99,436 and $393, respectively) $ 12,751,857 $ 10,509,278
============ =============
See notes to financial statements.
</TABLE>
-9-
<PAGE>
<TABLE>
DLB GLOBAL SMALL CAPITALIZATION FUND
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED JUNE 30, 1996 AND THE PERIOD FROM
JULY 19, 1995 (COMMENCEMENT OF OPERATIONS) TO
DECEMBER 31, 1995
- ----------------------------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C>
1996 1995
(UNAUDITED)
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $ 10.33 $ 10.00
------ -----
Income from investment operations:
Net investment income 0.09 0.07
Net realized and unrealized gain on investments 1.01 0.33
---- ----
Total income from investment operations 1.10 0.40
---- ----
Less distributions declared to shareholders from net investment income = (0.07)
------
Net asset value - end of period $ 11.43 $ 10.33
= ===== = =====
Total return 21.41 %* 8.96 %
Ratios and supplemental data:
Ratio of expenses to average net assets 1.47 %* 1.46 %
Ratio of net investment income to average net assets 1.68 %* 1.46 %
Portfolio turnover 16 % 5 %
Net assets at end of period (000 omitted) $ 12,752 $ 10,509
The manager has agreed with the Fund to reduce its management fee and bear
certain expenses, such that expenses do not exceed 1.50% of average daily net
assets on an annualized basis. If the fee and expenses had been incurred by the
Fund and had expenses been limited to that required by state securities law in
1995, the net investment income per share and ratios would have been:
Net investment income $ 0.05 $ 0.02
Ratios (to average net assets):
Expenses 2.31 % * 2.50 %
Net investment income 0.84 % * 0.42 %
* Annualized.
See notes to financial statements.
</TABLE>
-10-
<PAGE>
DLB GLOBAL SMALL CAPITALIZATION FUND
NOTES TO FINANCIAL STATEMENTS - UNAUDITED
1. BUSINESS AND ORGANIZATION
DLB Global Small Capitalization Fund (the "Fund") is a non-diversified
series of The DLB Fund Group (the "Trust").
The Trust is organized as a Massachusetts business trust and is registered
under the Investment Company Act of 1940, as amended, as an open-end
management investment company.
2. SIGNIFICANT ACCOUNTING POLICIES
INVESTMENT VALUATIONS - Equity securities listed on securities exchanges
or reported through the NASDAQ system are valued at last sale prices.
Unlisted equity securities or listed equity securities for which last sale
prices are not available are valued at last quoted bid prices. Short-term
obligations, which mature in 60 days or less, are valued at amortized
cost, which approximates market value. Securities for which there are no
such quotations or valuations are valued at fair value as determined in
good faith by or at the direction of the Trustees.
FOREIGN CURRENCY TRANSLATION - Investment valuations, other assets and
liabilities initially expressed in foreign currencies are converted each
business day into U.S. dollars based upon current exchange rates.
Purchases and sales of foreign investments and income and expenses are
converted into U.S. dollars based upon currency exchange rates prevailing
on the respective dates of such transactions. Gains and losses
attributable to foreign currency exchange rates on sales of securities are
recorded for financial statement purposes as net realized gains and losses
on investments. Gains and losses attributable to foreign exchange rate
movements on income and expenses are recorded for financial statement
purposes as foreign currency transaction gains and losses. That portion of
both realized and unrealized gains and losses on investments that results
from fluctuations in foreign currency exchange rates is not separately
disclosed.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS - The Fund may enter into
forward foreign currency exchange contracts for the purchase or sale of a
specific foreign currency at a fixed price on a future date. Risks may
arise upon entering these contracts from the potential inability of
counterparties to meet the terms of their contracts and from unanticipated
movements in the value of a foreign currency relative to the U.S. dollar.
The Fund will enter into forward contracts for hedging purposes only. The
Fund may enter into contracts to deliver or receive foreign currency it
will receive from or require for its normal investment activities. It may
also use contracts in a manner intended to protect foreign
currency-denominated securities from declines in value due to unfavorable
exchange rate movements. The forward foreign currency exchange contracts
are adjusted by the daily exchange rate of the underlying currency, and
any gains or losses are recorded for financial statement purposes as
unrealized until the contract settlement date.
-11-
<PAGE>
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INVESTMENT TRANSACTIONS AND INCOME - Investment transactions are recorded
on the trade date. Dividend income is recorded on the ex-dividend date for
dividends received in cash. Dividend payments received in additional
securities are recorded on the ex-dividend date in an amount equal to the
value of the security on such date. Interest income is recorded on the
accrual basis.
TAX MATTERS AND DISTRIBUTIONS - The Fund's policy is to comply with the
provisions of the Internal Revenue Code ( the "Code") applicable to
regulated investment companies and to distribute to shareholders all of
its taxable income, including any net realized gain on investments.
Accordingly, no provision for federal income or excise tax is provided.
The Fund files a tax return annually using tax accounting methods required
under provisions of the Code which may differ from generally accepted
accounting principles, the basis on which these financial statements are
prepared. Accordingly, the amount of net investment income and net
realized gain reported on these financial statements may differ from that
reported on the Fund's tax return, and consequently, the character of
distributions to shareholders reported in the financial highlights may
differ from that reported to shareholders on Form 1099-DIV. Foreign taxes
have been provided for on interest and dividend income earned on foreign
investments in accordance with the applicable country's tax rates and to
the extent unrecoverable are recorded as a reduction of investment income.
Distributions to shareholders are recorded on the ex-dividend date.
The Fund distinguishes between distributions on a tax basis and a
financial reporting basis and requires that only distributions in excess
of tax basis earnings and profits are reported in the financial statements
as a return of capital. Differences in the recognition or classification
of income between the financial statements and tax earnings and profits
which result in temporary over-distributions for financial statement
purposes, are classified as distributions in excess of net investment
income or accumulated net realized gains.
During the period ended December 31, 1995, $6,373 was reclassified from
accumulated undistributed net realized gain on investments to accumulated
undistributed net investment income, due to differences between book and
tax accounting for foreign currency transactions. This change had no
effect on net assets or net asset value per share.
At December 31, 1995, the Fund, for federal income tax purposes, had a
capital loss carryforward of $35,270 which may be applied against any net
taxable realized gains of each succeeding year until the earlier of its
utilization or expiration on December 31, 2003.
3. TRANSACTIONS WITH AFFILIATES
INVESTMENT MANAGER - The Fund has a management contract with David L.
Babson & Co., Inc. ("DLB") to provide overall investment advisory and
administrative services, and general office facilities. The management fee
is computed daily and paid monthly at an effective annual rate of 0.80% of
average daily net assets, after a reduction due to a voluntary fee waiver
of 0.20%.
DLB has entered into a sub-advisory agreement with Babson-Stewart Ivory
International ("BSII") with respect to the management of the international
component of the Fund's portfolio. Under the subadvisory agreement, DLB
pays BSII a fee equal to one half of the management fee received by DLB
from the Fund.
-12-
<PAGE>
3. TRANSACTIONS WITH AFFILIATES (CONTINUED)
For the six months ended June 30, 1996, DLB reduced its management fee and
assumed other expenses in the aggregate amount of $49,407.
The Fund pays no compensation directly to its Trustees who are officers of
the investment manager, or to officers of the Fund, all of whom receive
remuneration for their services to the Fund from DLB.
4. PORTFOLIO SECURITIES
Purchases and sales of investments, other than short-term obligations, for
the six months ended June 30, 1996 aggregated $2,301,126 and $1,502,240.
The cost and unrealized appreciation or depreciation in value of the
investments owned by the Fund, as computed on a federal income tax basis,
are as follows:
<TABLE>
<CAPTION>
<S> <C>
Aggregate cost $ 11,404,448
=============
Gross unrealized appreciation $ 1,609,575
Gross unrealized depreciation (359,023)
------------------
Net unrealized appreciation $ 1,250,552
================
</TABLE>
5. SHARES OF BENEFICIAL INTEREST
The Fund's Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest (without par
value). Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS
ENDED PERIOD ENDED
JUNE 30, DECEMBER 31,
1996 1995
Shares sold 98,901 1,000,000
Shares issued to shareholders in reinvestment of distributions - 7,012
------------ ---------
Net increase 98,901 1,007,012
====== ========
* * * * * *
</TABLE>
-13-
<PAGE>
DLB FIXED INCOME FUND
UNAUDITED FINANCIAL STATEMENTS FOR THE
SIX MONTHS ENDED JUNE 30, 1996
<TABLE>
DLB FIXED INCOME FUND
TABLE OF CONTENTS
<CAPTION>
<S> <C>
PAGE
UNAUDITED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED
JUNE 30, 1996:
Portfolio of Investments 1-2
Statement of Assets and Liabilities 3
Statement of Operations 4
Statement of Changes in Net Assets 5
Financial Highlights 6
Notes to Financial Statements 7-8
</TABLE>
<PAGE>
<TABLE>
DLB FIXED INCOME FUND
PORTFOLIO OF INVESTMENTS - UNAUDITED
JUNE 30, 1996
- ------------------ --------------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C> <C>
S&P/MOODY'S PRINCIPAL
BOND RATING ISSUER AMOUNT VALUE
BONDS - 98.1%
U.S. GOVERNMENT BONDS - 42.3%
AAA U.S. Treasury, 7.25s, 1996 $ 150,000 $ 151,031
AAA U.S. Treasury, 8.50s, 1997 150,000 153,446
AAA U.S. Treasury, 8.875s, 1997 450,000 466,803
AAA U.S. Treasury, 7.875s, 1998 450,000 462,091
AAA U.S. Treasury, 6.375s, 1999 100,000 100,328
AAA U.S. Treasury, 7.50s, 1999 525,000 542,147
AAA U.S. Treasury, 6.25s, 2000 100,000 99,297
AAA U.S. Treasury, 7.50s, 2002 500,000 523,435
AAA U.S. Treasury, 6.375s, 2002 450,000 446,413
AAA U.S. Treasury, 11.625s, 2002 500,000 630,310
AAA U.S. Treasury, 6.25s, 2003 450,000 442,053
AAA U.S. Treasury, 5.75s, 2003 500,000 476,170
AAA U.S. Treasury, 5.875s, 2004 500,000 477,890
AAA U.S. Treasury, 10.375s, 2012 250,000 317,383
AAA U.S. Treasury, 8.125s, 2021 50,000 56,328
------
5,345,125
---------
U.S. FEDERAL AGENCY BONDS - 2.8%
GOV FHLMC, 6.30s, 1999 250,000 248,397
GOV Federal Home Loan Banks, 7.26s, 1999 100,000 101,078
-------
349,475
-------
MORTGAGES - 17.2%
BAA3 Green Tree Financial, 6.90s, 2004 29,741 29,456
BAA3 Green Tree Financial, 7.25s, 2005 78,793 78,637
AAA GNMA, 7.5s, 2011 757,500 762,944
AAA FHLMC Gold G00143, 7.50s, 2023 69,650 69,046
AAA GNMA, 7.50s, 2023 451,527 447,418
AAA Green Tree, 7.05s, 2025 100,000 100,750
AAA GNMA, 7.50s, 2025 500,953 493,591
AAA Green Tree, 6.90s, 2027 200,000 194,563
-------
2,176,405
---------
INTERNATIONAL BONDS - 10.0%
BAA2 Canadian National Railroad, 7.00s, 2004 500,000 482,110
AA3 Province of Ontario, 7.00s, 2005 125,000 123,214
AA2 British Columbia Hydro & Pwr., 15.5s, 2011 200,000 219,996
AA3 Province of Ontario, 15.75s, 2012 100,000 111,746
AAA Hydro Quebec, 8.40s, 2022 100,000 105,338
BAA1 Province of Newfoundland, 8.625s, 2022 200,000 217,040
-------
1,259,444
---------
BANK - 1.8%
A2 Suntrust Banks, 6.00s, 2026 250,000 229,610
-------
-1-
<PAGE>
DLB FIXED INCOME FUND
PORTFOLIO OF INVESTMENTS - UNAUDITED
JUNE 30, 1996
- ------------------ ------------------------------------------------------------------ ----------------------------------
S&P/MOODY'S PRINCIPAL
BOND RATING ISSUER AMOUNT VALUE
FINANCIAL - 6.4%
A3 GMAC, 8.40s, 1999 200,000 209,922
BAA2 Comdisco, 6.50s, 2000 200,000 197,264
A1 Ford Capital BV, 10.125s, 2000 100,000 111,889
A3 GMAC, 6.625s, 2005 300,000 284,388
-------
803,463
-------
INDUSTRIAL - 14.3%
A3 Chrysler Corp., 10.40s, 1999 100,000 104,291
A3 Ryder System Inc., 8.45s, 1999 100,000 104,900
A2 Sears Roebuck, 6.50s, 2000 100,000 98,861
A1 Aluminum Co. of America, 5.75s, 2001 400,000 382,340
A3 Lockheed Martin, 6.85s, 2001 100,000 99,753
A2 Philip Morris, 8.25s, 2003 75,000 79,152
A3 Cardinal Health Inc., 6.50s, 2004 400,000 382,232
BA1 TCI Communications Inc., 8.65s, 2004 70,000 71,348
BA1 Tele-Communications Inc., 9.80s, 2012 30,000 32,414
BAA2 McDonnell Douglas, 9.75s, 2012 250,000 297,788
BAA3 Time Warner Entertainment, 8.375s, 2023 50,000 48,681
BAA3 American Stores, 8.00s, 2026 100,000 100,495
-------
1,802,255
---------
TRANSPORTATION - 3.3%
A3 CSX Corp., 9.50s, 2000 100,000 108,733
A3 CSX Corp., 9.00s, 2006 100,000 111,072
A3 American Airlines, 9.71s, 2007 67,216 74,213
BAA1 United Airlines, 7.27s, 2013 125,000 118,348
-------
412,366
---------
Total Bonds (identified cost, $12,623,519) 12,378,143
REPURCHASE AGREEMENT - 0.2%
Bank of New York, dated 6/28/96, due 7/1/96
(secured by $17,000 U.S. Treasury Notes, due 8/15/15,
market value, $23,481) 21,839
------
TOTAL INVESTMENTS (IDENTIFIED COST, $12,645,358) 12,399,982
Other Assets, Less Liabilities - 1.7% 213,016
-------
NET ASSETS - 100% $ 12,612,998
= ==========
See notes to financial statements.
</TABLE>
-2-
<PAGE>
<TABLE>
DLB FIXED INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES - UNAUDITED
JUNE 30, 1996
- ------------------------------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C>
ASSETS:
Investments, at value (identified cost, $12,645,358) $ 12,399,982
Interest receivable 206,922
Other assets 6,094
-----
Total assets 12,612,998
LIABILITIES - Accrued expenses and other liabilities =
NET ASSETS $ 12,612,998
= ==========
NET ASSETS CONSIST OF:
Paid-in capital $ 12,573,288
Unrealized depreciation on investments (245,376)
Accumulated net realized loss on investments (24,577)
Accumulated undistributed net investment income 309,663
-------
Total $ 12,612,998
= ==========
SHARES OF BENEFICIAL INTEREST OUTSTANDING 1,236,272
=========
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION
PRICE PER SHARE (Net assets / shares of beneficial interest
outstanding) $ 10.20
= =====
See notes to financial statements.
</TABLE>
-3-
<PAGE>
<TABLE>
DLB FIXED INCOME FUND
STATEMENT OF OPERATIONS - UNAUDITED
SIX MONTHS ENDED JUNE 30, 1996
- ------------------------------------------------------------------------------------------------------ ----------------
<CAPTION>
<S> <C>
INTEREST INCOME $ 336,027
- -------
EXPENSES:
Management fee 19,636
Custodian fee 26,649
Legal fees 18,569
Accounting and audit fees 12,250
Trustees' fees 3,563
Other 8,060
-----
Total expenses 88,727
Reduction of expenses by investment manager (62,363)
--------
Net expenses 26,364
--------
NET INVESTMENT INCOME 309,663
--------
REALIZED AND UNREALIZED LOSS ON INVESTMENTS:
Realized loss on investment transactions (identified cost basis) (24,577)
Change in unrealized depreciation (378,368)
---------
Net realized and unrealized gain (loss) on investments (402,945)
---------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS $ (93,282)
= ========
See notes to financial statements.
</TABLE>
-4-
<PAGE>
<TABLE>
DLB FIXED INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED JUNE 30, 1996 AND THE PERIOD
FROM JULY 25, 1995 (COMMENCEMENT OF OPERATIONS)
TO DECEMBER 31, 1995
- ------------------------------------------------------------------------------------ ----------------- -----------------
<CAPTION>
<S> <C> <C>
1996 1995
(UNAUDITED)
INCREASE (DECREASE) IN NET ASSETS:
From operations:
Net investment income $ 309,663 $ 138,911
Net realized gain (loss) on investments (24,577) 53,226
Net unrealized gain (loss) on investments (378,368) 132,992
--------- -------
Increase (decrease) in net assets from operations (93,282) 325,129
-------- -------
Distributions declared to shareholders:
From net investment income - (139,227)
From net realized gain on investments = (53,159)
--------
Total distributions declared to shareholders = (192,386)
---------
Fund share (principal) transactions:
Net proceeds from sale of shares 7,381,141 5,000,000
Net asset value of shares issued to shareholders in
reinvestment of distributions = 192,386
-------
Increase in net assets from Fund share transactions 7,381,141 5,192,386
--------- ---------
Total increase in net assets 7,287,859 5,325,129
NET ASSETS:
Beginning of period 5,325,139 10
--------- --
End of period (including accumulated undistributed net investment
income of $309,663 and $0, respectively) $ 12,612,998 $ 5,325,139
= ========== = ==========
See notes to financial statements.
</TABLE>
-5-
<PAGE>
<TABLE>
DLB FIXED INCOME FUND
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED JUNE 30, 1996 AND THE PERIOD
FROM JULY 25, 1995 (COMMENCEMENT OF OPERATIONS)
TO DECEMBER 31, 1995
- -------------------------------------------------------------------------- -------------- ----- --------------------
<CAPTION>
<S> <C> <C>
1996 1995
(UNAUDITED)
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $ 10.26 $ 10.00
- ----- - -----
Income from investment operations:
Net investment income 0.25 0.28
Net realized and unrealized gain (loss) on investments (0.31) 0.37
------ -------
Total increase (decrease) from investment operations (0.06) 0.65
------ -------
Less distributions declared to shareholders:
From net investment income - (0.28)
From net realized gain on investments = (0.11)
Total distributions declared to shareholders = (0.39)
-------
Net asset value - end of period $ 10.20 $ 10.26
= ===== = =====
Total return (1.18)% 14.75 %
Ratios and supplemental data:
Ratio of expenses to average net assets 0.54 % 0.55 %
Ratio of net investment income to average net assets 6.31 % 6.24 %
Portfolio turnover 18 % 42 %
Net assets at end of period (000 omitted) $ 12,613 $ 5,325
The manager has agreed with the Fund to reduce its management fee and bear
certain expenses, such that expenses do not exceed 0.55% of average daily net
assets on an annualized basis. If the fee and expenses had been incurred by the
Fund, and had expenses been limited to that permitted by state securities law in
1995, the net investment income per share and ratios would have been:
Net investment income $ 0.20 $ 0.19
Ratios (to average net assets):
Expenses 1.81 % 2.50 %
Net investment income 5.04 % 4.33 %
* Annualized.
See notes to financial statements.
</TABLE>
-6-
<PAGE>
DLB FIXED INCOME FUND
NOTES TO FINANCIAL STATEMENTS - UNAUDITED
1. BUSINESS AND ORGANIZATION
DLB Fixed Income Fund (the "Fund") is a non-diversified series of The DLB
Fund Group (the "Trust").
The Trust is organized as a Massachusetts business trust and is registered
under the Investment Company Act of 1940, as amended, as an open-end
management investment company.
2. SIGNIFICANT ACCOUNTING POLICIES
INVESTMENT VALUATIONS - Debt securities (other than short-term obligations
which mature in 60 days or less), including listed issues, are valued on
the basis of valuations furnished by dealers or by a pricing service with
consideration to factors such as institutional-size trading in similar
groups of securities, yield, quality, coupon rate, maturity, type of
issue, trading characteristics and other market data, without exclusive
reliance upon exchange or over-the-counter prices. Short-term obligations,
which mature in 60 days or less, are valued at amortized cost, which
approximates market value. Securities for which there are no such
valuations are valued at fair value as determined in good faith by or at
the direction of the Trustees.
INVESTMENT TRANSACTIONS AND INCOME - Investment transactions are recorded
on the trade date. Interest income is recorded on the accrual basis. All
premium and original issue discount are amortized or accreted for
financial statement and tax reporting purposes as required by federal
income tax regulations.
TAX MATTERS AND DISTRIBUTIONS - The Fund's policy is to comply with the
provisions of the Internal Revenue Code (the "Code") applicable to
regulated investment companies and to distribute to shareholders all of
its taxable income, including any net realized gain on investments.
Accordingly, no provision for federal income or excise tax is provided.
The Fund files a tax return annually using tax accounting methods required
under provisions of the Code which may differ from generally accepted
accounting principles, the basis on which these financial statements are
prepared. Accordingly, the amount of net investment income and net
realized gain reported on these financial statements may differ from that
reported on the Fund's tax return, and consequently, the character of
distributions to shareholders reported in the financial highlights may
differ from that reported to shareholders on Form 1099-DIV. Distributions
to shareholders are recorded on the ex-dividend date.
The Fund distinguishes between distributions on a tax basis and a
financial reporting basis and requires that only distributions in excess
of tax-basis earnings and profits are reported in the financial statements
as a return of capital. Differences in the recognition or classification
of income between the financial statements and tax earnings and profits
which result in temporary over-distributions for financial statement
purposes, are classified as distributions in excess of net investment
income or accumulated undistributed net realized gains. During the period
ended December 31, 1995, $67 and $249 were reclassified from accumulated
undistributed net realized gain on investments` and paid-in capital,
respectively, to accumulated undistributed net investment income, due to
differences between book and tax accounting for mortgage-backed securities
and foreign currency transactions. This change had no effect on the net
assets or net asset value per share.
-7-
<PAGE>
3. TRANSACTIONS WITH AFFILIATES
INVESTMENT MANAGER - The Fund has a management contract with David L.
Babson & Co. Inc. ("DLB") to provide overall investment advisory and
administrative services, and general office facilities. The management
fee is computed daily and paid monthly at an effective annual rate of
0.20% of average daily net assets, after a reduction due to a voluntary
fee waived of 0.20%.
For the six months ended June 30, 1996, DLB reduced its management fee and
assumed other expenses in the amount of $62,363.
The Fund pays no compensation directly to its Trustees who are officers of
the investment manager, or to officers of the Fund, all of whom receive
remuneration for their services to the Fund from DLB.
4. PORTFOLIO SECURITIES
Purchases and sales of investments, other than short-term obligations, for
the six months ended June 30, 1996 were as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
PURCHASES SALES
U.S. Government securities $ 4,523,665 $ 478,996
================ ================
Investments (non-U.S. government securities) $ 4,872,571 $ 1,036,959
================ ================
The cost and unrealized appreciation or depreciation in value
of the investments owned by the Fund, as computed on a federal income
tax basis, are as follows:
Aggregate cost $ 12,645,358
=============
Gross unrealized appreciation $ 10,231
Gross unrealized depreciation (255,607)
--------------
Net unrealized depreciation $ (245,376)
===============
</TABLE>
5. SHARES OF BENEFICIAL INTEREST
The Trust's Declaration of Trust permits the Trustees to issue an
unlimited number of full and fractional shares of beneficial interest
(without par value). Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS PERIOD
ENDED ENDED
JUNE 30, DECEMBER 31,
1996 1995
Shares sold 717,483 500,000
Shares issued to shareholders in reinvestment of distributions = 18,788
-------
Net increase 717,483 518,788
======= =======
* * * * * *
</TABLE>
-8-
<PAGE>
DLB VALUE FUND
UNAUDITED FINANCIAL STATEMENTS FOR THE
SIX MONTHS ENDED JUNE 30, 1996
<PAGE>
<TABLE>
DLB VALUE FUND
TABLE OF CONTENTS
<CAPTION>
<S> <C>
PAGE
UNAUDITED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 1996:
Portfolio of Investments 1-3
Statement of Assets and Liabilities 4
Statement of Operations 5
Statement of Changes in Net Assets 6
Financial Highlights 7
Notes to Financial Statements 8-9
</TABLE>
<PAGE>
<TABLE>
DLB VALUE FUND
PORTFOLIO OF INVESTMENTS - UNAUDITED
JUNE 30, 1996
- ------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C>
COMMON STOCKS - 116.2%
ISSUER SHARES VALUE
CHEMICALS - 2.9%
Dupont 5,200 $411,450
- -------
PAPER/FOREST PRODUCTS - 8.5%
Potlatch Corp. 10,600 414,725
Weyerhaeuser 9,100 386,750
Willamette Ind. 6,800 404,600
-------
1,206,075
AEROSPACE - 5.9%
Boeing 4,700 409,487
Lockheed Martin Corp. 5,100 428,400
-------
837,887
-------
ENVIRONMENTAL - 3.2%
Safety-Kleen 25,800 451,500
-------
APPAREL - TEXTILE - 2.9%
Reebok International 12,100 406,863
-------
RECREATION 1.7%
Huffy Corp. 19,000 244,625
-------
PRINTING & PUBLISHING - 2.9%
Harcourt General 8,300 415,000
-------
RETAIL DISCOUNT - 2.8%
KMart 32,600 403,425
-------
RETAIL - GENERAL - 5.9%
Penny JC 8,000 420,000
Sears Roebuck & Co. 8,500 413,313
-------
833,313
FOOD PRODUCERS - 3.1%
Grand Metropolitan PLC ADR 16,299 435,998
-------
HEALTHCARE - 2.9%
Tenet Healthcare Corp. 19,500 416,813
-------
OIL - DOMESTIC - 2.9%
Atlantic Richfield 3,500 414,750
-------
(Continued)
-1-
<PAGE>
DLB VALUE FUND
PORTFOLIO OF INVESTMENTS - UNAUDITED
JUNE 30, 1996
- ---------------------------------------------------------------------------------------------------- ------------------
Common Stocks (Continued)
Issuer SHARES VALUE
Oil - International - 3.0%
Royal Dutch Pete NY Reg N Gldr. 2,800 430,500
-------
BANKS - 11.8%
Chase Manhattan Corp. New 6,000 423,750
First Bank System 7,300 423,400
National City Corp. 12,200 428,525
Wells Fargo Bank 1,700 406,088
-------
1,681,763
---------
FINANCIAL SERVICES - 14.6%
American Express 9,400 419,475
Salomon Inc. 8,700 382,800
Student Loan Corp. 11,900 428,400
Student Loan Marketing 5,700 421,800
Transamerica 5,200 421,200
-------
2,073,675
---------
INSURANCE COMPANIES - 8.9%
Aetna Life & Casualty 5,800 414,700
Allstate Corp. 9,500 433,437
General RE Corp. 2,700 411,075
-------
1,259,212
---------
DIVERSIFIED - 3.0%
Hanson PLC Sponsored ADR 29,700 423,225
-------
PROFESSIONAL SERVICES - 5.8%
ABM Industries Inc. 10,000 391,250
PHH Corp. 7,600 433,200
-------
824,450
-------
COMPUTER RELATED - 5.7%
Apple Computer 18,900 396,900
International Business Machines 4,200 415,800
-------
812,700
-------
COMPUTER SOFTWARE - 2.9%
Shared Med. Sys. Corp. 6,400 411,200
-------
(Continued)
-2-
<PAGE>
DLB VALUE FUND
PORTFOLIO OF INVESTMENTS - UNAUDITED
JUNE 30, 1996
- ---------------------------------------------------------------------------------------------------- -----------------
Common Stocks (Continued)
ISSUER SHARES VALUE
Office Equipment - 5.9%
Wallace Computer 7,000 418,250
Xerox 7,800 417,300
-------
835,550
-------
AIRLINES - 2.9%
KLM Royal Dutch Air 13,200 419,100
-------
Trucking & Shipping - 3.0%
Overseas Shipholding 23,300 422,312
-------
Electrical Power - 3.1%
Texas Utilities 10,300 440,325
-------
Total common stocks (identified cost, $14,965,164) 16,511,711
Other assets, less liabilities - (16.2%) (2,299,226)
-----------
NET ASSETS - 100% $ 14,212,485
= ==========
See notes to financial statements.
</TABLE>
-3-
<PAGE>
<TABLE>
DLB VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES - UNAUDITED
JUNE 30, 1996
- ------------------------------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C>
ASSETS:
Investments, at value (identified cost, $14,965,164) $ 16,511,711
Cash 855,824
Dividends receivable 20,233
------
Total assets 17,387,768
----------
LIABILITIES:
Payable for investments purchased 3,150,987
Accrued expenses and other liabilities 24,296
-------
Total liabilities 3,175,283
---------
NET ASSETS $ 14,212,485
= ==========
NET ASSETS CONSIST OF:
Paid-in capital $ 12,335,872
Unrealized appreciation on investments 1,546,547
Accumulated undistributed net investment income 98,045
Accumulated undistributed net realized gain on investments 232,021
-------
Total $ 14,212,485
= ==========
SHARES OF BENEFICIAL INTEREST OUTSTANDING 1,204,649
=========
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION
PRICE PER SHARE (Net assets / shares of beneficial
interest outstanding) $ 11.80
= =====
See notes to financial statements.
</TABLE>
-4-
<PAGE>
<TABLE>
DLB VALUE FUND
STATEMENT OF OPERATIONS - UNAUDITED
SIX MONTHS ENDED JUNE 30, 1996
- ----------------------------------------------------------------------------------------------------- ------------------
<CAPTION>
<S> <C>
NET INVESTMENT INCOME:
Dividends (net of foreign tax withheld of $952) $ 136,438
Interest 10,722
------
Total investment income 147,160
-------
EXPENSES:
Management fee 34,650
Custodian fee 25,977
Accounting and audit fees 11,525
Trustees' fees 3,563
Legal fees 18,569
Other 8,060
-----
Total expenses 102,344
Reduction of expenses by investment manager (52,987)
--------
Net expenses 49,357
NET INVESTMENT INCOME 97,803
------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Realized gain on investments (identified cost basis) 232,021
Change in unrealized appreciation 967,774
-------
Net realized and unrealized gain on investments 1,199,795
---------
INCREASE IN NET ASSETS FROM OPERATIONS $ 1,297,598
= =========
See notes to financial statements.
</TABLE>
-5-
<PAGE>
<TABLE>
DLB VALUE FUND
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED JUNE 30, 1996 AND THE PERIOD FROM
JULY 25, 1995 (COMMENCEMENT OF OPERATIONS)
TO DECEMBER 31, 1995
- ---------------------------------------------------------------------------------------------------- -------------------
<CAPTION>
<S> <C> <C>
1996 1995
(UNAUDITED)
INCREASE (DECREASE) IN NET ASSETS:
From operations:
Net investment income $ 97,803 $ 91,102
Net realized gain on investments 232,021 147,693
Net unrealized gain on investments 967,774 578,773
------- -------
Increase in net assets from operations 1,297,598 817,568
--------- -------
Distributions declared to shareholders:
From net investment income - (90,860)
From net realized gain on investments = (147,693)
---------
Total distributions declared to shareholders = (238,553)
---------
Fund share (principal) transactions:
Net proceeds from sale of shares 2,097,309 10,000,000
Net asset value of shares issued to shareholders
in reinvestment of distributions = 238,553
-------
Increase in net assets from Fund share transactions 2,097,309 10,238,553
--------- ----------
Total increase in net assets 3,394,907 10,817,568
NET ASSETS:
Beginning of period 10,817,578 10
---------- --
End of period (including accumulated undistributed net
investment income of $98,045 and $242, respectively) $ 14,212,485 $ 10,817,578
= =========== = ===========
See notes to financial statements.
</TABLE>
-6-
<PAGE>
<TABLE>
DLB VALUE FUND
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED JUNE 30, 1996 AND THE PERIOD FROM
JULY 25, 1995 (COMMENCEMENT OF OPERATIONS)
TO DECEMBER 31, 1995
- ------------------------------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C>
1996 1995
(UNAUDITED)
Per share data (for a share throughout each period):
Net asset value - beginning of period $ 10.58 $ 10.00
- ----- - -----
Income from investment operations:
Net investment income 0.08 0.09
Net realized and unrealized gain on investments 1.14 0.73
---- ----
Total income from investment operations 1.22 0.82
---- ----
Less distributions declared to shareholders:
From net investment income - (0.09)
From net realized gain on investments = (0.15)
------
Total distributions declared to shareholders = (0.24)
------
Net asset value - end of period $ 11.80 $ 10.58
= ===== = =====
Total return 23.20 % * 18.64 % *
Ratios and supplemental data:
Ratio of expenses to average net assets 0.78 % * 0.80 % *
Ratio of net investment income to average net assets 1.55 % * 2.02 % *
Portfolio turnover 11 % 7 %
Net assets at end of period (000 omitted) $ 14,212 $ 10,818
The manager has agreed with the Fund to reduce its management fee and bear
certain expenses, such that expenses do not exceed 0.80% of average daily net
assets on an annualized basis. If the fee and expenses had been incurred by the
Fund, the net investment income per share and ratios would have been:
Net investment income $ 0.04 $ 0.02
Ratios (to average net assets):
Expenses 1.62 % * 2.43 % *
Net investment income 0.71 % * 0.40 % *
* Annualized.
See notes to financial statements.
</TABLE>
-7-
<PAGE>
DLB VALUE FUND
NOTES TO FINANCIAL STATEMENTS - UNAUDITED
1. BUSINESS AND ORGANIZATION
DLB Value Fund (the "Fund") is a non-diversified series of The DLB Fund
Group (the "Trust").
The Trust is organized as a Massachusetts business trust, and is
registered under the Investment Company Act of 1940, as amended as an
open-end management investment company.
2. SIGNIFICANT ACCOUNTING POLICIES
INVESTMENT VALUATIONS - Equity securities listed on securities exchanges
or reported through the NASDAQ system are valued at last sale prices.
Unlisted equity securities or listed equity securities for which last sale
prices are not available are valued at last quoted bid prices. Short-term
obligations, which mature in 60 days or less, are valued at amortized
cost, which approximates market value. Securities for which there are no
such quotations or valuations are valued at fair value as determined in
good faith by or at the direction of the Trustees.
INVESTMENT TRANSACTIONS AND INCOME - Investment transactions are recorded
on the trade date. Dividend income is recorded on the ex-dividend date for
dividends received in cash. Dividend payments received in additional
securities are recorded on the ex-dividend date in an amount equal to the
value of the security on such date. Interest income is recorded on the
accrual basis.
TAX MATTERS AND DISTRIBUTIONS - The Fund's policy is to comply with the
provisions of the Internal Revenue Code ("Code") applicable to regulated
investment companies and to distribute to shareholders all of its taxable
income, including any net realized gain on investments. Accordingly, no
provision for federal income or excise tax is provided. The Fund files a
tax return annually using tax accounting methods required under provisions
of the Code which may differ from generally accepted accounting
principles, the basis on which these financial statements are prepared.
Accordingly, the amount of net investment income and net realized gain
reported on these financial statements may differ from that reported on
the Fund's tax return, and consequently, the character of distributions to
shareholders reported in the financial highlights may differ from that
reported to shareholders on Form 1099-DIV.
Distributions to shareholders are recorded on the ex-dividend date.
The Fund distinguishes between distributions on a tax basis and a
financial reporting basis and requires that only distributions in excess
of tax basis earnings and profits are reported in the financial statements
as a return of capital. Differences in the recognition or classification
of income between the financial statements and tax earnings and profits
which result in temporary over-distributions for financial statement
purposes, are classified as distributions in excess of net investment
income or accumulated net realized gains.
-8-
<PAGE>
3. TRANSACTIONS WITH AFFILIATES
INVESTMENT MANAGER - The Fund has a management agreement with David L.
Babson & Co., Inc. ("DLB") to provide overall investment advisory and
administrative services, and general office facilities. The management fee
is computed daily and paid monthly at an annual rate of 0.35% of average
daily net assets, after a reduction due to a voluntary fee waiver of
0.20%.
For the six months ended June 30, 1996, DLB reduced its management fee and
assumed other expenses in the aggregate amount of $52,987.
The Fund pays no compensation directly to its Trustees who are officers of
the investment manager, or to officers of the Fund, all of whom receive
remuneration for their services to the Fund from DLB.
4. PORTFOLIO SECURITIES
Purchases and sales of investments, other than short-term obligations
aggregated $5,890,520 and $1,124,136 for the six months ended June 30,
1996.
The cost and unrealized appreciation or depreciation in value of the
investments owned by the Fund, as computed on a federal income tax basis,
are as follows:
<TABLE>
<CAPTION>
<S> <C>
Aggregate cost $ 14,965,164
=============
Gross unrealized appreciation $ 1,973,349
Gross unrealized depreciation (426,802)
------------------
Net unrealized appreciation $ 1,546,547
= ===============
</TABLE>
5. SHARES OF BENEFICIAL INTEREST
The Trust's Declaration of Trust permits the Trustees to issue an
unlimited number of full and fractional shares of beneficial interest
(without par value). Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS PERIOD
ENDED ENDED
JUNE 30, DECEMBER 31,
1996 1995
Shares sold 182,058 1,000,000
Shares issued to shareholders in reinvestment of distributions = 22,590
---------
Net increase 182,058 1,022,590
======= =========
* * * * * *
</TABLE>
-9-
<PAGE>
DLB MID CAPITALIZATION FUND
UNAUDITED FINANCIAL STATEMENTS FOR
THE SIX MONTHS ENDED JUNE 30, 1996
<TABLE>
DLB MID CAPITALIZATION FUND
TABLE OF CONTENTS
<CAPTION>
<S> <C>
PAGE
UNAUDITED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 1996:
Portfolio of Investments 1-3
Statement of Assets and Liabilities 4
Statement of Operations 5
Statement of Changes in Net Assets 6
Financial Highlights 7
Notes to Financial Statements 8-9
</TABLE>
<TABLE>
DLB MID CAPITALIZATION FUND
PORTFOLIO OF INVESTMENTS - UNAUDITED
JUNE 30, 1996
- ------------------------------------------------------------------------------- ----------------------------
<CAPTION>
<S> <C> <C>
COMMON STOCKS - 94.9%
ISSUER SHARES VALUE
Chemicals Specialty - 4.1%
Calgon Carbon 22,900 $ 309,150
M.A. Hanna Co. 11,100 231,712
-------
540,862
-------
METALS & MINING - 4.6%
Calmat Co. 16,600 300,875
Martin Marietta Materials 12,700 307,975
-------
608,850
-------
PAPER/FOREST PRODUCTS - 2.1%
Albany International Corp. Cl. A 12,100 273,762
-------
AEROSPACE - 2.3%
EG&G 14,000 299,250
-------
CONSTRUCTION - 2.4%
Southdown 13,200 310,200
-------
MACHINERY/EQUIPMENT - 9.3%
BW/IP Inc. Cl. A 15,200 288,800
Elsag Bailey Process Auto (*) 11,700 312,975
Harsco Corp. 5,100 342,975
Trinity Industries 8,300 282,200
-------
1,226,950
---------
APPAREL - TEXTILE - 4.2%
National Service Industries 9,300 363,862
Stride Rite 23,400 193,050
-------
556,912
-------
AUTO PARTS MANUFACTURERS - 5.8%
Armor All Products 17,000 252,875
Bandag Inc. Cl. A 5,400 253,125
Standard Products 11,000 255,750
-------
761,750
-------
FURNITURE & APPLIANCES - 6.1%
Herman Miller 11,300 346,062
La-Z-Boy Chair 8,000 241,000
Stanhome Inc. Vtg. 7,900 209,350
-------
796,412
PRINTING & PUBLISHING - 4.2% -------
Central Newspapers A 8,200 307,500
Lee Enterprises 10,200 240,975
-------
548,475
-------
(Continued)
-1-
<PAGE>
DLB MID CAPITALIZATION FUND
PORTFOLIO OF INVESTMENTS - UNAUDITED
JUNE 30, 1996
- ------------------------------------------------------------------- ----------------------------------------------------
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE
RETAIL - GENERAL - 2.1%
Fred Meyer Inc. (*) 9,200 270,250
-------
RETAIL - SPECIALTY - 4.3%
Charming Shoppes (*) 38,700 273,319
Fingerhut Companies 19,000 296,875
-------
570,194
-------
WHOLESALERS - 1.7%
Waban Inc. (*) 9,300 222,038
-------
FOOD PRODUCERS - 1.7%
Dean Foods Co. 9,000 222,750
-------
COSMETIC/TOILETRY - 2.0%
Alberto Culver Cl. A 6,500 260,000
-------
TOBACCO - 2.3%
Dimon Inc. 16,700 308,950
-------
COAL, GAS & PIPE - 4.9%
Cabot Oil & Gas Corp. 16,500 286,687
Nabors Industries (*) 21,900 355,875
-------
642,562
OIL - DOMESTIC - 2.2%
Quaker State Corp. 19,600 294,000
-------
BANKS - 4.1%
First Security Corp. 10,500 252,000
Glendale Federal Bank (*) 16,000 290,000
-------
542,000
INSURANCE COMPANIES - 7.6% -------
Gallagher 6,500 208,000
Hartford Steam Boiler Ins. 5,400 265,275
Western National Corp. 15,300 281,138
Willis Corroon Group PLC ADR 20,300 241,063
-------
995,476
COMPUTER RELATED - 2.0% -------
Gerber Scientific Inc. 16,300 262,837
-------
ELECTRONIC/INSTRUMENT - 4.0%
Intergraph Corp. (*) 17,900 217,038
Scitex 18,200 313,950
-------
530,988
-------
(Continued)
-2-
<PAGE>
DLB MID CAPITALIZATION FUND
PORTFOLIO OF INVESTMENTS - UNAUDITED
JUNE 30, 1996
- ----------------------------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE
Office Equipment - 2.5%
Wallace Computer 5,600 334,600
-------
TELECOMMUNICATIONS - 1.7%
Octel Communications (*) 11,400 225,150
-------
TRUCKING & SHIPPING - 5.0%
Alexander & Baldwin 10,200 246,075
Hunt JB Transport 11,500 240,063
Overseas Shipholding 9,300 168,563
-------
654,701
-------
NATURAL GAS - 1.7%
Equitable Resources 8,000 226,000
-------
Total common stocks (identified cost, $11,412,606) 12,485,919
REPURCHASE AGREEMENT - 5.1%
Bank of New York, dated 6/28/96, due
7/1/96 (secured by $500,000 U.S. Treasury
Notes, due 8/15/15, market value, $690,625) 676,834
-------
TOTAL INVESTMENTS (IDENTIFIED COST, $12,089,440) 13,162,753
Other assets, less liabilities (8,600)
------
NET ASSETS - 100% $ 13,154,153
= ==========
(*) Non-income-producing security.
See notes to financial statements. (Concluded)
</TABLE>
-3-
<PAGE>
<TABLE>
DLB MID CAPITALIZATION FUND
STATEMENT OF ASSETS AND LIABILITIES - UNAUDITED
JUNE 30, 1996
- ------------------------------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C>
ASSETS:
Investments, at value (identified cost, $12,089,440) $ 13,162,753
Dividends and interest receivable 25,995
------
Total assets 13,188,748
LIABILITIES - Accrued expenses and other liabilities 34,595
------
NET ASSETS $ 13,154,153
= ==========
NET ASSETS CONSIST OF:
Paid-in capital $ 11,347,311
Unrealized appreciation on investments 1,073,313
Accumulated undistributed net investment income 83,456
Accumulated undistributed net realized gain on investments 650,073
-------
Total $ 13,154,153
= ==========
SHARES OF BENEFICIAL INTEREST OUTSTANDING 1,116,916
==========
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER
SHARE (Net assets / shares of beneficial interest outstanding) $ 11.78
= =====
See notes to financial statements.
</TABLE>
-4-
<PAGE>
<TABLE>
DLB MID CAPITALIZATION FUND
STATEMENT OF OPERATIONS - UNAUDITED
SIX MONTHS ENDED JUNE 30, 1996
- -----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C>
NET INVESTMENT INCOME:
Dividends $ 121,770
Interest 15,389
------
Total investment income 137,159
-------
EXPENSES:
Management fee 36,624
Custodian fee 28,354
Accounting and audit fees 11,525
Legal fees 18,568
Trustees' fees 3,563
Other 8,060
-----
Total expenses 106,694
Reduction of expenses by investment manager (52,759)
--------
Net expenses 53,935
------
NET INVESTMENT INCOME 83,224
------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Realized gain (identified cost basis) 650,073
Change in unrealized appreciation 321,638
-------
Net realized and unrealized gain on investments 971,711
-------
INCREASE IN NET ASSETS FROM OPERATIONS $ 1,054,935
= =========
See notes to financial statements.
</TABLE>
-5-
<PAGE>
<TABLE>
DLB MID CAPITALIZATION FUND
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED JUNE 30, 1996 AND THE PERIOD FROM JULY 25, 1995
(COMMENCEMENT OF OPERATIONS) TO DECEMBER 31, 1995
- -------------------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C>
1996 1995
(UNAUDITED)
INCREASE (DECREASE) IN NET ASSETS:
From operations:
Net investment income $ 83,224 $ 83,881
Net realized gain on investments 650,073 93,308
Net unrealized gain on investments 321,638 751,675
------------ ---------
Increase in net assets from operations 1,054,935 928,864
------------ ----------
Distributions declared to shareholders:
From net investment income - (83,531)
From net realized gain on investments - (93,308)
------------- -------------
Total distributions declared to shareholders - (176,839)
-------------- ------------
Fund share (principal) transactions:
Net proceeds from sale of shares 1,170,344 10,000,000
Net asset value of shares issued to shareholders in reinvestment
of distributions - 176,839
-------------- ------------
Increase in net assets from Fund share transactions 1,170,344 10,176,839
----------- ------------
Total increase in net assets 2,225,279 10,928,864
NET ASSETS:
Beginning of period 10,928,874 10
------------- -----------
End of period (including accumulated undistributed net investment $ 13,154,153 $ 10,928,874
================== ==================
income of $83,456 and $232, respectively)
See notes to financial statements.
</TABLE>
-6-
<PAGE>
<TABLE>
DLB MID CAPITALIZATION FUND
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED JUNE 30, 1996 AND THE PERIOD FROM JULY 25, 1995
(COMMENCEMENT OF OPERATIONS) TO DECEMBER 31, 1995
- --------------------------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C>
1996 1995
(UNAUDITED)
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $ 10.75 $ 10.00
-------------- ------------
Income from investment operations:
Net investment income 0.07 0.08
Net realized and unrealized gain on investments 0.96 0.84
------ -------------
Total income from investment operations 1.03 0.92
------ -------------
Less distributions declared to shareholders:
From net investment income - (0.08)
From net realized gain on investments - (0.09)
----------------- --------------
Total distributions declared to shareholders - (0.17)
----------------- --------------
Net asset value - end of period $ 11.78 $ 10.75
============== ============
Total return 19.27 % 21.17 %
Ratios and supplemental data:
Ratio of expenses to average net assets 0.88 % 0.90 %
Ratio of net investment income to average net assets 1.36 % 1.90 %
Portfolio turnover 28 % 6 %
Net assets at end of period (000 omitted) $ 13,154 $ 10,929
The manager has agreed with the Fund to reduce its management fee and bear
certain expenses, such that expenses do not exceed 0.90% of average daily net
assets on an annualized basis. If the fee and expenses had been incurred by the
Fund and had expenses been limited to that permitted by state securities law in
1995, the net investment income per share and ratios would have been:
Net investment income $ 0.03 $ 0.01
Ratios (to average net assets):
Expenses 1.75 % 2.50 %
Net investment income 0.50 % 0.32 %
*Annualized.
See notes to financial statements.
</TABLE>
-7-
<PAGE>
DLB MID CAPITALIZATION FUND
NOTES TO FINANCIAL STATEMENTS - UNAUDITED
1. BUSINESS AND ORGANIZATION
DLB Mid Capitalization Fund (the "Fund") is a non-diversified series of
The DLB Fund Group (the "Trust").
The Trust is organized as a Massachusetts business trust and is registered
under the Investment Company Act of 1940, as amended, as an open-end
management investment company.
2. SIGNIFICANT ACCOUNTING POLICIES
INVESTMENT VALUATIONS - Equity securities listed on securities exchanges
or reported through the NASDAQ system are valued at last sale prices.
Unlisted equity securities or listed equity securities for which last sale
prices are not available are valued at last quoted bid prices. Short-term
obligations, which mature in 60 days or less, are valued at amortized
cost, which approximates market value. Securities for which there are no
such quotations or valuations are valued at fair value as determined in
good faith by or at the direction of the Trustees.
INVESTMENT TRANSACTIONS AND INCOME - Investment transactions are recorded
on the trade date. Dividend income is recorded on the ex-dividend date for
dividends received in cash. Dividend payments received in additional
securities are recorded on the ex-dividend date in an amount equal to the
value of the security on such date. Interest income is recorded on the
accrual basis.
TAX MATTERS AND DISTRIBUTIONS - The Fund's policy is to comply with the
provisions of the Internal Revenue Code (the "Code") applicable to
regulated investment companies and to distribute to shareholders all of
its taxable income, including any net realized gain on investments.
Accordingly, no provision for federal income or excise tax is provided.
The Fund files a tax return annually using tax accounting methods required
under provisions of the Code which may differ from generally accepted
accounting principles, the basis on which these financial statements are
prepared. Accordingly, the amount of undistributed net investment income
and net realized gain reported on these financial statements may differ
from that reported on the Fund's tax return, and consequently, the
character of distributions to shareholders reported in the financial
highlights may differ from that reported to shareholders on Form 1099-DIV.
Distributions to shareholders are recorded on the ex-dividend date.
The Fund distinguishes between distributions on a tax basis and a
financial reporting basis and requires that only distributions in excess
of tax basis earnings and profits are reported in the financial statements
as a return of capital. Differences in the recognition or classification
of income between the financial statements and tax earnings and profits
which result in temporary over-distributions for financial statement
purposes, are classified as distributions in excess of net investment
income or accumulated net realized gains. During the period ended December
31, 1995, $118 was reclassified from accumulated undistributed net
investment income to paid-in capital, due to differences between book and
tax accounting for foreign currency transactions. This change had no
effect on the net assets or net asset value per share.
-8-
<PAGE>
3. TRANSACTIONS WITH AFFILIATES
INVESTMENT MANAGER - The Fund has a management contract with David L.
Babson & Co., Inc. ("DLB") to provide overall investment advisory and
administrative services, and general office facilities. The management fee
is computed daily and paid monthly at an effective annual rate of 0.30% of
average daily net assets, after a reduction due to a voluntary fee waiver
of 0.30%.
For the six months ended June 30, 1996, DLB reduced its management fee and
assumed other expenses in the aggregate amount of $52,759.
The Fund pays no compensation directly to its Trustees who are officers of
the investment manager, or to officers of the Fund, all of whom receive
remuneration for their services to the Fund from DLB.
4. PORTFOLIO SECURITIES
Purchases and sales of investments, other than short-term obligations, for
the six months ended June 30, 1996 aggregated $3,342,898 and $2,540253.
The cost and unrealized appreciation or depreciation in value of the
investments owned by the Fund, as computed on a federal income tax basis,
are as follows:
<TABLE>
<CAPTION>
<S> <C>
Aggregate cost $ 12,089,440
=============
Gross unrealized appreciation $ 1,423,026
Gross unrealized depreciation (349,713)
-------------
Net unrealized appreciation $ 1,073,313
=============
</TABLE>
5. SHARES OF BENEFICIAL INTEREST
The Trust's Declaration of Trust permits the Trustees to issue an
unlimited number of full and fractional shares of beneficial interest
(without par value). Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
PERIOD
SIX MONTHS ENDED
ENDED DECEMBER 31,
JUNE 30, 1996 1995
Shares sold 100,372 1,000,000
Shares issued to shareholders in reinvestment of - 16,543
-------------- ---------------
distributions
Net increase 100,372 1,016,543
============== =============
* * * * * *
</TABLE>
-9-
<PAGE>
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