IPS MILLENNIUM FUND SEMI-ANNUAL REPORT
Fellow Shareholders:
We are pleased to present our Semi-Annual Report for the six months
ended May 31, 1999. During the period total assets more than doubled, from $24m
to $51m, and we expanded our corporate offices to the address at the bottom of
this page. All performance statistics are updated monthly and portfolio stocks
daily on our Web site. The Yahoo! Stocks button on the home page gives daily
quotes, insider trading, news and analysis specifically on each company in your
Fund. Your Fund in 1999 has received numerous favorable rankings, most notably
five stars (the highest ranking) from Morningstar, and in the July issue of
Kiplinger's Personal Finance Magazine your fund was ranked #1 for one year
performance and #1 for three year performance among Growth & Income funds for
the period ended 4/19/99, with an annual total return of 56.9% and a 3-year
return of 36.9%. Fund manager Robert Loest was also recently interviewed in the
May 10 issue of Business Week. Over the first half of 1999 we have continued to
work to reduce your Fund's volatility due to its large technology position
relative to the overall market. We have done this by steadily increasing our
holdings in high dividend sectors such as REITs and electric utilities, and by
minimizing our buying of information companies.
[GRAPHIC OMITTED, but is represented below]
$10,000 Investment at Inception 1/3/95
<TABLE>
<CAPTION>
1/31/95 12/31/95 12/31/96 12/31/97 12/31/98
------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
V.L. Arithmetic $10,000 $12,641 $15,667 $20,293 $21,778
Millennium Fund $10,000 $12,480 $15,537 $18,858 $26,458
S&P 500 $10,000 $13,720 $16,758 $22,104 $28,090
</TABLE>
- --------------------------------------------------------------------------------
FIGURE 1. The data presented herein and below represent past performance and are
not a guarantee of future performance. The value of your shares may fluctuate
and be worth more or less at redemption than their original cost.
<TABLE>
<CAPTION>
TOTAL ANNUAL RETURN FOR: IPS MILLENNIUM VALUE LINE S&P 500
FUND ARITHMETIC INDEX COMPOSITE
<S> <C> <C> <C>
6 MONTHS ENDED 5/31/99 45.17% 12.80% 11.96%
12 MONTHS ENDED 5/31/99 59.41% 7.00% 19.19%
3 YEARS ENDED 5/31/99 32.16% 16.89% 23.24%
INCEPTION 1/3/95 - 5/31/99 31.93% 21.52% 28.06%
</TABLE>
Total returns above include changes in the Fund's share price, plus reinvestment
of dividends (income) and capital gains (profits from the
sale of a stock). The VALUE LINE ARITHMETIC INDEX and the S&P 500 COMPOSITE have
been adjusted to reflect total return with dividends reinvested.
- --------------------------------------------------------------------------------
Phone: 423.524.1676 HTTP://WWW.IPSFUNDS.COM 1225 Weisgarber Rd.
800.232.9142 E-mail: [email protected] Suite S-380
Fax: 423.544.0630 Knoxville, TN 37909
<PAGE>
TABLE 1: BREAKDOWN BY MARKET CAP
MAY 31, 1999
SECTOR NUMBER PERCENT
---------------------------------------------------
1. Large Caps (>$10b) 21 42.0%
2. Mid Caps 32 45.4%
3. Small Caps (<$1b) 2 1.5%
------- --------
Total 55 88.9%
MEDIAN MARKET CAPITALIZATION: $ 4.6B
WEIGHTED AVERAGE MARKET CAP: $33.7B
MANAGEMENT'S DISCUSSION & ANALYSIS
CLASSIFICATION BY MARKET CAPITALIZATION.
TABLE 1 presents the Fund's makeup by market capitalization as of
5/31/99. 87.4% OF THE FUND IS COMPOSED OF MID- AND LARGE-CAP COMPANIES. (Market
capitalization is price per share times number of shares outstanding, one good
measure of a company's size.) The balance is held in cash equivalents. Note that
median market cap is a better measure of the type of fund you own than is
average market cap. The reason is that average market cap is strongly biased by
single, large outliers like MICROSOFT (MSFT, OTC). Also note that over half of
the Fund's companies are mid-caps.
[GRAPHIC OMITTED but is represented below
- -----------------------------------------------------------
| |
| Quarter Returns: IPS Millennium Fund |
| vs. Value Line Arithmetic Composite |
| |
| IPS Value Line |
|Quarter ending Millennium Fund Returns |
| |
| 6/95 8.27% 8.53% |
| 12/95 2.36% 2.04% |
| 6/96 9.51% 4.54% |
| 12/96 6.34% 7.08% |
| 6/97 17.81% 14.68% |
| 12/97 -0.53% -0.69% |
| 6/98 3.81% -1.23% |
| 12/98 23.35% 19.80% |
| 6/99 11.38% 17.24% |
- -----------------------------------------------------------
FIGURE 2. Relative volatility of the Fund, on a quarterly basis, vs. the broad
stock market as represented by the VALUE LINE ARITHMETIC COMPOSITE.
The Fund's median market cap has increased slightly since the last
report. THE DISTRIBUTION AMONG THE THREE SIZE SEGMENTS HAS SHIFTED SIGNIFICANTLY
AWAY FROM SMALL CAPS AND TOWARD LARGE-CAPS, with a slight decline in the
percentage of mid-caps over the last six months, and an increase in the
percentage of large caps. This shift has been made as a part of our ongoing
adjustment of the portfolio's volatility (risk) to achieve our minimum targeted
level of return per unit of risk. Our benchmark is the return per unit of
standard deviation for the VALUE LINE ARITHMETIC COMPOSITE (VLAC), an
equally-weighted index of 1700 companies. In addition, the shift has been
intensified by the rapid growth of many of our information-based companies out
of the small- or mid-cap category, and into the mid- or large-cap category.
VOLATILITY OF RETURNS
In order to gain a better perspective on how your Fund's return and
risk characteristics have changed, review FIGURE 2, at right. NOTE THAT THE
FUND'S DOWNSIDE VOLATILITY IN RECENT QUARTERS HAS BEEN CONSIDERABLY LESS THAN
THAT OF THE OVERALL STOCK MARKET, AS REPRESENTED BY THE VLAC. This is
particularly evident for the first quarter of 1999, the next-to-rightmost pair
of bars. For the second calendar quarter of 1999, the Fund slightly
underperformed the VLAC, although it outperformed the S&P 500. The reason is a
strong performance on the part of smaller companies the second quarter this
year, in which both the Fund and the S&P 500 is underweighted, relative to the
VLAC.
We have been successful in mitigating the increasing volatility of the
tech sector relative to broader market returns by shifting recent purchases over
the last six months toward equipment companies like specialty semiconductor chip
stocks, and telecommunications equipment companies. We have also held our buying
in Internet companies to a minimum Thus, we have changed the makeup of our tech
universe, as well as added a larger element of conservative, high dividend
companies, which we discuss in greater detail below. Nevertheless, the Fund is
still subject to the high volatility of the tech sector, so you should continue
to expect greater volatility than the overall market.
COPYRIGHT 1999, IPS ADVISORY, INC. PAGE 2
<PAGE>
TABLE 2
INDUSTRY SECTOR POSITION (%) POSITION (%)
5/31/99 11/30/98
- -----------------------------------------------------------------
CASH 11.0% 15.0%
Banking & Brokerage 4.5% 3.7%
Computer & Internet Equip. 4.8% 5.8%
Electronic Commerce 5.0% 4.6%
Electric & Gas Utilities 22.2% 25.3%
Information Services 4.9% 5.4%
Internet Service Providers 8.5% 11.5%
MEDICAL SERVICES 0.0% 4.4%
Pharmaceutical & Biotech 1.1% 0.5%
REAL ESTATE INVESTMENT TRUSTS 8.3% 0.0%
SEMI-CONDUCTOR TECHNOLOGY 5.8% 2.3%
Software 8.3% 9.2%
Telecommunications 15.7% 12.2%
- -----------------------------------------------------------
<PAGE>
CHANGES IN PORTFOLIO SECTORS
The most obvious change in the Fund's makeup over the last six months
has been a reduction in the total number of companies, from 60 to 55, and the
addition of a significant position in the Real Estate Investment Trust sector,
going from nothing to 8.3% of the portfolio. The reason for this was simply that
a year and a half of abysmal performance by REITs, and a steady increase in
interest rates over the course of the year, has decimated REITs' stock prices to
the extent that they have become a tempting value play.
This fits in with our philosophy of buying high dividend companies when
they are out of favor, as a balance to the high growth sectors. The Fund now
consists of approximately 29.3% in high dividend companies, adjusting for those
electric and gas utilities, like CALPINE and AES, that do not pay a dividend.
This is a moderate increase from the last report.
Note also that we have eliminated our medical technology position with
the sale of HBO just before the merger with MCKESSON. HBO had underperformed our
expectations based on its growth for several quarters, and we could not find out
why. This is usually the reason we sell a company. When the market says one
thing (i.e., something is wrong with HBO), and the company and analysts say
something else, it is generally a pretty good bet that it is the analysts and
company managements that are wrong, and not the market. It turned out much later
that there were "accounting irregularities" at HBO, and the combined company's
stock has dropped precipitously since we sold it.
The other major change has been a more than doubling of our position in
semi-conductor stocks. The reason for this is our strengthening conviction that
there is an imminent and rapid increase in the growth of small, portable
electronic communications devices, cable modems and SANs (Storage Area
Networks). We have thus built up our position in specialty chip companies such
as BROADCOM and QLOGIC that design and manufacture such systems. This has been
one of the best-performing sectors of your Fund over the last six months.
CHANGES IN INVESTMENT POSITIONS: SALES
Due to what we felt was an overvaluation in the Internet stocks the
Fund held, in January we lightened up on our holdings in AMAZON, AMERICA ONLINE
and YAHOO!. We sold off all holdings in a number of companies due to poor
performance. Among them were HBO, mentioned above, QUINTILES TRANSNATIONAL,
KEANE, CALENERGY, 3COM, STERLING COMMERCE, COMPUTER ASSOCIATES, APOLLO GROUP,
FIRST UNION BANK, ROBERT HALF INTERNATIONAL and MOBIUS MANAGEMENT SYSTEMS. We
also sold MINDSPRING, which we had ridden to a gain of 1,233% at the time of
sale. It must be compared with EARTHLINK, and the comparison is not favorable in
terms of the way Mindspring has gone about acquiring new accounts; essentially,
buying up small Internet Service Providers to grow their client base. EARTHLINK,
on the other hand, obtains joint marketing agreements that enable it to increase
its client base by having other companies do much or most of the marketing
work.. We felt that, if we are going to invest your money, we would be better
off concentrating in AMERICA ONLINE and EARTHLINK, and divesting MINDSPRING.
<TABLE>
<CAPTION>
CHANGES IN INVESTMENT POSITIONS: PURCHASES
MAJOR NEW STOCK ADDITIONS RECENT BUY PRICE RANGE PRICE ON 25 JUNE
------------------------- ---------------------- ----------------
<S> <C> <C> <C>
BRE Properties (BRE, NYSE) $23 - $26 $ 25.75
Broadcast.com (BCST, OTC) $33 - $62 $110.00
Camden Prop. Trust (CPT, NYSE) $27 $ 27.13
Ebay (EBAY, OTC) $196 $169.00
Equity Office Props. (EOP, NYSE) $25 - $28 $ 28.25
Equity Residential (EQR, NYSE) $41 - $48 $ 47.94
Exodus Comm. (EXDS, OTC) $67 $ 72.38
Global Crossing (GBLX, OTC) $16 - $19 $ 47.44
Kimco Realty (KIM, NYSE) $36 - $40 $ 39.94
Network Solutions (NSOL, OTC) $74 - $81 $ 59.75
Qlogic (QLGC, OTC) $51 - $64 $108.00
RealNetworks (RNWK, OTC) $19 - $46 $ 70.88
Verio (VRIO, OTC) $22 $ 54.25
</TABLE>
COPYRIGHT 1999, IPS ADVISORY, INC. PAGE 3
<PAGE>
<TABLE>
<S> <C> <C> <C>
Verisign (VRSN, OTC) $106 $111.13
Veritas Software (VRTS, OTC) $73 - $82 $ 88.44
VerticalNet (VERT, OTC) $44 - $99 $ 76.38
MAJOR ADDITIONS TO EXISTING POSITIONS
@Home (ATHM, OTC) $102 - $154 $121.94
AES Corp. (AES, NYSE) $36 - $51 $ 50.00
Amazon.com (AMZN, OTC) $94 - $116 $118.75
Analog Devices (ADI, NYSE) $26 - $28 $ 38.44
Broadcom (BRCM, OTC) $59 $ 98.38
California Water (CWT, NYSE) $24 - $25 $ 25.25
Calpine (CPN, NYSE) $25 - $31 $ 54.19
Duke Power (DUK, NYSE) $53 - $58 $ 60.31
EMC Corp. (EMC, NYSE) $98 $100.44
FPL Group (FPL, NYSE) $51 - $56 $ 58.19
JDS Uniphase (JDSU, OTC) $69 - $102 $134.00
National Commerce Bankcorp (NCBC, OTC) $18 - $24 $ 23.44
NiSource (NI, NYSE) $27 - $28 $ 27.94
Qwest Communications (QWST, OTC) $41 $ 42.63
SCANA Corp. (SCG, NYSE) $22 - $27 $ 26.69
Sprint PCS (PCS, NYSE) $17 - $24 $ 45.00
</TABLE>
NEW MONEY INVESTED WENT OVERWHELMINGLY INTO ELECTRIC AND GAS UTILITIES
(29.9%) AND REITS (26.7%). The software sector ran a distant second (11.7%),
with investment in semiconductors (7.5%) and telecommunications (7.4%) bringing
up third place. There were two reasons for this. First, Internet stocks had
appreciated to the extent that they had reduced the total percentage of high
dividend companies in your Fund significantly, and we had been waiting for an
opportunity to rebalance. Second, the rise in interest rates throughout the year
had depressed the prices of utilities and REITs so much that we felt the timing
was right for rebalancing. It also became clear during late last year that
semiconductors had bottomed out from one of their worst declines in decades, and
were now value stocks.
ANALYSIS OF PERFORMANCE
<TABLE>
<CAPTION>
Investment Sector 6-Month Return Primary Contributors
----------------- -------------- --------------------
<S> <C> <C>
Computer Networking 33.6%
E-Commerce 76.9% AMZN (+106%)
Electric & Water Utilities 6.3% AES (+29%)
Financial 70.8% NTBK (+308%), TBFC (+98%)
Internet Service Providers 89.5% AOL (+259%), CNCX (+117%), VRIO (+128%)
Medical Services 21.5%
Misc. Services 41.1% BCST (+187%), YHOO (+73%)
Natural Gas Utility 72.8% CPN (+132%)
Pharmaceuticals -11.7%
Real Estate Investment Trusts 15.1% EQR (+23%)
Software 27.7% RNWK (+150%)
Semiconductors 121.5% BRCM (+115%), QLGC (+115%)
Telecomm. Services & Equipment 84.3% GBLX (+159%), JDSU (+133%), PCS (+164%), QWST (+112%)
</TABLE>
As you can see from the sector performance breakdown above, our gains,
in spite of a difficult Spring, came overwhelmingly from Internet-related
companies, telecommunications, and communications-related semiconductor
companies. This again emphasizes our investment thesis for the Fund, which is
that we are headed for a highly connected civilization at flank speed. This
means the Fund will remain more volatile than most, but time is proving our
strategy to be the correct one. Thank you again for your confidence in IPS
MILLENNIUM FUND.
ROBERT LOEST, PH.D., CFA GREGORY A. D'AMICO
SENIOR PORTFOLIO MANAGER PRESIDENT
- -------------------------------------------------------------------------------
THIS SEMI-ANNUAL REPORT IS NOT AUTHORIZED FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS UNLESS IT IS PRECEDED OR ACCOMPANIED BY A PROSPECTUS FOR
IPS MILLENNIUM FUND.
- -------------------------------------------------------------------------------
COPYRIGHT 1999, IPS ADVISORY, INC. PAGE 4
<PAGE>
FINANCIAL STATEMENTS
(UNAUDITED)
IPS MILLENNIUM FUND
----------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
For the 6 months ended May 31, 1999
------------------------------------
ASSETS:
Investments in securities, at value -
identified cost $35,314,402 $51,871,335
Cash .31
Accrued income
Sales of fund shares 3,080
Security sales 0
Dividends 42,860
Interest 18,936
Other assets 2,797
-----------
Total assets $51,939,008
LIABILITIES:
Investment securities purchased 116,500
Accrued expenses 52,311
-----------
Total liabilities 168,811
-----------
NET ASSETS ON MAY 31, 1998
Equivalent to $39.93 per share based on
1,296,444.584 shares of capital stock
outstanding $51,770,197
===========
----------------------------------------------------------------
STATEMENT OF OPERATIONS
For the 6 months ended May 31, 1999
------------------------------------
INVESTMENT INCOME:
Income
Dividend income $ 129,774
Interest 111,284
-----------
Total income 241,058
Expenses:
Management fees 257,690
Expense reimbursement ( 1,595)
Organizational cost 1,595
-----------
Total expense 257,690
-----------
Net investment income ( 16,632)
-----------
REALIZED & UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments 1,676,026
Change in unrealized appreciation
of investments for the year 10,519,510
-----------
Net gain (loss) on investments 12,195,536
-----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $12,178,904
===========
<PAGE>
FINANCIAL STATEMENTS
(UNAUDITED)
IPS MILLENNIUM FUND
----------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
For the 6 months ended May 31, 1999
------------------------------------
Six months ended Year ended
INCREASE (DECREASE) IN NET 1999 1998
------------ ------------
ASSETS FROM OPERATIONS:
Investment income-net ( $16,632) $ 29,433
Net realized gain on 1,676,026 137,354
investments
CHANGE IN UNREALIZED 10,519,510 3,223,186
------------ ------------
APPRECIATION
Net increase in net assets 12,178,904 3,389,973
resulting from operations
DISTRIBUTIONS TO SHAREHOLDERS
FROM:
Investment income-net (24,532) 0
Realized gains 0 0
------------ ------------
Net decrease in net assets due (24,532) 0
to distributions to shareholders
CAPITAL SHARE TRANSACTIONS:
Issued-regular 18,973,411 10,621,570
Issued-in lieu of cash 24,319 0
distributions
Redeemed - regular (3,796,854) (1,280,809)
------------ ------------
INCREASE IN NET ASSETS DUE TO 15,200,876 9,340,761
CAPITAL SHARE TRANSACTIONS
INCREASE IN NET ASSETS 27,355,248 12,730,734
NET ASSETS
Beginning of year 24,414,949 11,684,215
End of period $ 51,770,197 $ 24,414,949
============ ============
<PAGE>
IPS MILLENNIUM FUND
NOTES TO FINANCIAL STATEMENTS
SIX MONTHS ENDED MAY 31, 1999
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
The company is registered under the Investment Company Act of 1940 as a
diversified, open-end management investment company. The company began selling
shares and making investments on January 3, 1995. The Fund provides investment
management and advisory services for its shareholders, which include
individuals, qualified plans and trust accounts located states in the United
States.
SECURITY VALUATION - Investments in securities traded on a national securities
exchange (or reported on the NASDAQ national market) are stated at the last
reported sales price on the day of valuation; other securities traded in the
over-the-counter market and listed securities for which no sale was reported on
that date are stated at the last quoted bid price.
Short-term notes are stated at amortized cost, which is equivalent to value.
FEDERAL INCOME TAXES - The Fund's policy is to comply with the requirements of
the Internal Revenue Code that are applicable to regulated investment companies
and to distribute all its taxable income to its shareholders. Therefore, no
federal income tax provision is required.
As of May 31, 1999, net unrealized appreciation on investments for book and
federal income tax purposes aggregated $16,556,933. The cost of portfolio
securities for book and federal income tax purposes was $35,314,402.
DISTRIBUTIONS TO SHAREHOLDERS - Dividends to shareholders are recorded on the
ex-dividend date.
OTHER - The Fund follows industry practice and records security transactions on
the trade date for performance calculations and the trade date plus one for fund
accounting. Dividend income is recognized on the ex-dividend date, and interest
income is recognized on an accrual basis. Discounts and premiums on securities
purchased are amortized over the life of the respective securities.
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS - The preparation of
financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.
NOTE 2 - DISTRIBUTIONS TO SHAREHOLDERS
December 14, 1998 was the record date for income distribution on December 15,
1998 of $0.027 per share aggregating $24,532.07.
NOTE 3 - ORGANIZATIONAL EXPENSES
The Fund has incurred amortized organizational expenses in the amount of
$16,281. Organizational expenses are being amortized monthly over a period of 60
months, beginning on January 3, 1995. The balance outstanding on May 31, 1999
was $2,796
NOTE 4 - CAPITAL SHARE TRANSACTIONS
As of May 31, 1999, there were an unlimited number of shares of no par value
capital stock authorized and capital paid in aggregated $33,659,163.
Transactions in capital stock for the period 11/30/98 through 05/31/99 were as
follows:
<TABLE>
<CAPTION>
Shares Amount
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Shares sold 463,892.629 177,611.589 $18,973,411 $4,773,237
Share issued in reinvestment
of Dividends 861.266 0 24,319 24,531
----------- ----------- ----------- ----------
Total 464,753.895 177,611.589 $18,997,730 $4,797,768
Shares redeemed 113,239.725 1,852.448 3,796,854 197,315
----------- ----------- ----------- ----------
Net increase 351,514.170 175,759.141 $15,200,876 $4,600,453
</TABLE>
NOTE 5 - INVESTMENT TRANSACTIONS
The Fund made purchases and sales of investment securities (excluding short-term
securities) of $20,611,281 and $7,490,090, respectively, during the period
December 1, 1999 through May 31, 1999; there were no investment transactions
involving U.S. Government obligations.
As of May 31, 1999 the unrealized appreciation of securities was $16,556,933;
accumulated undistributed net realized gains on investment transactions totaled
$1,676,026.
NOTE 6 - INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund pays advisory fees for investment management and advisory services
under a management agreement with IPS Advisory, Inc.(the Advisor). Under the
agreement, the Advisor will pay all of the Fund's operating expenses, excluding
brokerage fees and commissions, taxes, interest and extraordinary expenses. The
Fund is obligated to pay the Advisor a fee computed and accrued daily and paid
monthly at an annual rate of 1.40% of its average daily net assets to and
including $100,000,000, 1.15% of such assets from $100,000,001 to and including
$250,000,000, and 0.90% of such assets in excess of $250,000,001.
Certain officers and trustees of the Fund are also officers and directors of the
investment advisor.
<PAGE>
NOTES TO FINANCIAL STATEMENTS(CONTINUED)
SIX MONTHS ENDED MAY 31, 1999
Securities Service Network, Inc .(SSNI), the Fund's underwriter, has received no
income from sales commissions earned on sales of the Fund shares, since it is a
no-load fund. Mr. D'Amico and Mr. Loest are registered representatives of SSNI.
All securities trades for the Fund have been made through SSNI. Mr. D'Amico and
Mr. Loest, as registered representatives of SSNI, received benefits from
securities trading commissions paid by the Fund to SSNI. The Investment Advisor
has no soft dollar arrangements with any company.
NOTE 7 - PORTFOLIO MANAGER INVESTMENT DISCLOSURE
IPS Advisory, Inc. prohibits its portfolio managers from trading in individual
stocks. All of the invested assets of portfolio manager Robert Loest, as well as
his immediate family, are invested in IPS Millennium Fund.
-------------------------------------------------------
IPS MILLENNIUM FUND
FINANCIAL HIGHLIGHTS, SELECTED PER SHARE DATA AND RATIOS
================================================================================
<TABLE>
<CAPTION>
FOR THE PERIOD ENDED FOR THE YEAR ENDED FOR THE YEAR ENDED
MAY 31, 1999 NOV. 30, 1998 NOV. 30, 1997
------------ ------------- -------------
PER SHARE DATA: PER SHARE DATA: PER SHARE DATA:
<S> <C> <C> <C>
NET ASSET VALUE:
Beginning of period $ 27.530 $ 22.310 $ 18.860
INCOME FROM INVESTMENT OPERATIONS
Net Investment income (0.016) (0.006) (0.046)
Net realized and unrealized gain
(loss) on investments 12.439 2.766 3.576
-------- -------- --------
TOTAL INCOME (LOSS) FROM INVESTMENT OPERATIONS 12.423 2.760 3.530
LESS DISTRIBUTIONS:
Dividends from net investment income (0.023) 0.000 0.000
Dividends from net realized gains on investments (0.000) (0.000) (0.080)
-------- -------- --------
Total distributions $ (0.023) $ (0.000) $ (0.080)
NET ASSET VALUE:
End of period $ 39.930 $ 25.070 $ 22.310
======== -------- --------
Total return (ANNUALIZED) 24.826% 24.826% 18.746%
RATIOS:
Net assets, end of period (thousands) $ 51,770.000 $ 16,965.226 $ 11,684.215
Ratio of expenses to average net assets 1.40% 1.40% 1.40%
Ratio of net income to average net assets (0.04) 0.03% 0.23%
Portfolio turnover rate 22.10% 42.77% 33.17%
Average commissions per share $ 0.04884 $ 0.05100 $ 0.04050
</TABLE>
<TABLE>
<CAPTION>
FOR THE YEAR ENDED FOR THE YEAR ENDED
NOV. 30, 1996 NOV. 30, 1995
<S> <C> <C>
NET ASSET VALUE:
Beginning of period $ 14.996 $ 12.000
INCOME FROM INVESTMENT OPERATIONS
Net Investment income 0.021 0.121
Net realized and unrealized gain
(loss) on investments 3.959 2.982
-------- -------
TOTAL INCOME (LOSS) FROM INVESTMENT OPERATIONS 3.980 3.103
LESS DISTRIBUTIONS:
Dividends from net investment income (0.035) (0.107)
Dividends from net realized gains on investments (0.081) 0.000
-------- -------
Total distributions $ (0.116) $(0.107)
NET ASSET VALUE:
End of period $ 18.860 $ 2.996
-------- -------
Total return (ANNUALIZED) 26.754% 28.831%
RATIOS:
Net assets, end of period (thousands) $ 5,613.515 $ 1,625,600
Ratio of expenses to average net assets 1.40% 1.40%
Ratio of net income to average net assets 0.76% 1.00%
Portfolio turnover rate 55.17% 26.70%
Average commissions per share $ 0.05705 $ 0.10056
</TABLE>
- -------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
<TABLE>
<CAPTION>
IPS MILLENNIUM FUND
INVESTMENT PORTFOLIO MAY 31, 1999
=======================================================================================================
SHARES OR MARKET PERCENT OF SECTOR
EQUITY SECURITIES: PRINCIPAL AMOUNT VALUE NET ASSETS WEIGHTING
=======================================================================================================
<S> <C> <C> <C> <C>
Computer & Internet Hardware 4.8%
- ---------------------------- ---
Cisco Systems 9,200 $1,001,650 1.9%
EMC Corp 15,000 $1,494,375 2.9%
Electronic Commerce 5.0%
- ------------------- ----
Amazon.com 10,000 $1,187,500 2.3%
Doubleclick 2,000 $ 194,875 0.4%
EBay Inc. 2,000 $ 354,375 0.7%
Verisign 4,000 $ 474,000 0.9%
Verticalnet Inc. 5,000 $ 400,000 0.8%
Electric & Gas Utilities 15.1%
- ------------------------ -----
AES Corp. 25,000 $1,242,188 2.4%
California Water Service 15,000 $ 390,000 0.8%
Duke Power 35,000 $2,110,938 4.1%
FPL Group 30,000 $1,745,625 3.4%
NISource 45,000 $1,257,188 2.4%
Scana Corp 40,000 $1,067,500 2.1%
Financial 4.5%
- --------- ----
National Commerce Bancorp 30,000 $ 703,125 1.4%
Netbank 24,000 $1,023,000 2.0%
Telebank Financial 3,000 $ 199,500 0.4%
Trustco & Bank of NY 13,800 $ 386,400 0.7%
Information & Services 4.9%
- ---------------------- ----
Broadcast.com 6,000 $ 660,000 1.3%
Equifax Inc. 15,000 $ 540,000 1.0%
Lycos 2,000 $ 201,000 0.4%
Network Solutions 4,000 $ 254,500 0.5%
Yahoo! 6,000 $ 888,000 1.7%
Internet Service Providers 8.5%
- -------------------------- ----
America Online 15,000 $1,785,000 3.4%
@Home 6,000 $ 760,500 1.5%
Concentric Networks 16,000 $ 517,000 1.0%
Earthlink Networks 16,000 $ 856,000 1.7%
Intermedia Communications 2,000 $ 50,625 0.1%
Verio Inc. 8,000 $ 434,000 0.8%
Natural Gas 7.0%
- ----------- ----
Calpine 35,000 $1,896,563 3.7%
Enron Corp. 24,000 $1,713,000 3.3%
Pharmaceuticals & Biotechnology 1.1%
- ------------------------------- ----
Abbott Laboratories, Inc. 5,000 $ 225,938 0.4%
Pfizer 3,000 $ 322,125 0.6%
Real Estate Investment Trust 8.3%
- ---------------------------- ----
BRE Properties 35,000 $ 903,438 1.7%
Camden Property Trust 10,000 $ 274,375 0.5%
Equity Office Properties 25,000 $ 706,250 1.4%
Equity Residential Props 21,000 $1,006,688 1.9%
Kimco Realty Corp. 35,000 $1,397,813 2.7%
Semi-conductor Technology 5.8%
- ------------------------- ----
Analog Devices 20,000 $ 768,750 1.5%
Broadcom 10,000 $ 957,500 1.8%
National Semiconductor 20,000 $ 387,500 0.7%
QLogic 8,000 $ 878,000 1.7%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
=======================================================================================================
SHARES OR MARKET PERCENT OF SECTOR
EQUITY SECURITIES: PRINCIPAL AMOUNT VALUE NET ASSETS WEIGHTING
=======================================================================================================
<S> <C> <C> <C> <C>
Software 8.3%
- -------- ----
BMC Software 10,000 $ 494,375 1.0%
Broadvision 5,000 $ 260,000 0.5%
i2 12,000 $ 379,500 0.7%
Microsoft 18,000 $ 1,452,375 2.8%
RealNetworks 12,000 $ 850,500 1.6%
Veritas 10,000 $ 882,500 1.7%
Telecommunications
(Service & Equipment) 15.7%
- ----------------------- -----
Exodus Communications 4,000 $ 300,000 0.6%
Global Crossing 20,000 $ 948,750 1.8%
Lucent Technologies 12,333 $ 703,004 1.4%
QWEST Communications 40,000 $ 1,697,500 3.3%
Sprint FON Group 8,000 $ 902,000 1.7%
Sprint PCS Group 15,000 $ 675,000 1.3%
Uniphase 15,000 $ 2,010,000 3.9%
MCI/WorldCom, Inc. 10,250 $ 885,344 1.7%
Money Market Funds 11.2%
- ------------------ -----
Federated U.S. Treasury Fund 0 0 0.0%
Provident Insured Money Fund 0 0 0.0%
Riverfront U.S. Govt Securities
Fund 5,813,688 $ 5,813,688 11.2%
Cash, Payables & Receivables -.02%
- ---------------------------- -----
Excess of Cash & Receivables over
Payables 0 ($ 101,138) -0.2%
TOTAL ASSETS: 6,660,271 $ 51,770,197 100.0%
==================================================================================================
</TABLE>
