<PAGE>
The
Bear Stearns
Funds
575 Lexington Avenue
New York, NY 10022
1.800.766.4111
Michael Minikes Chairman of the Board
Doni L. Fordyce President
Barry Sommers Executive Vice President
Peter M. Bren Trustee
Alan J. Dixon Trustee
John R. McKernan, Jr. Trustee
M.B. Oglesby, Jr. Trustee
Stephen A. Bornstein Vice President and Secretary
Frank J. Maresca Vice President and Treasurer
Vincent L. Pereira Assistant Treasurer
INVESTMENT ADVISER COUNSEL
Bear Stearns Asset Kramer Levin
Management Inc. Naftalis & Frankel LLP
575 Lexington Avenue 919 Third Avenue
New York, NY 10022 New York, NY 10022
SUB-ADVISER DISTRIBUTOR
INTERNATIONAL EQUITY Bear, Stearns & Co. Inc.
PORTFOLIO 245 Park Avenue
Marvin & Palmer New York, NY 10167
Associates, Inc.
1201 N. Market Street TRANSFER AND DIVIDEND
Suite 2300 DISBURSEMENT AGENT
Wilmington, DE 19801 PFPC Inc.
Bellevue Corporate Center
ADMINISTRATOR Wilmington, DE 19809
Bear Stearns Funds
Management Inc. INDEPENDENT AUDITORS
575 Lexington Avenue Deloitte & Touche LLP
New York, NY 10022 Two World Financial Center
New York, NY 10281
CUSTODIAN
Custodial Trust Company
101 Carnegie Center
Princeton, NJ 08540
The financial information included herein is taken from the records of each
Portfolio without examination by independent auditors who do not express an
opinion thereof.
This report is submitted for the general information of the shareholders of
each Portfolio. It is not authorized for distribution to prospective
investors in each Portfolio unless it is preceded or accompanied by a current
prospectus which includes details regarding each Portfolio's objectives,
policies, sales commissions and other information. Total investment return is
based on historical results and is not intended to indicate future
performance. The investment return and principal value of an investment in
each Portfolio will fluctuate, so that an investor's shares, when redeemed,
may be worth more or less than original cost.
"Standard & Poor's", "S&P", and "STARS"-Registered Trademark- are
trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use
by Bear, Stearns & Co. Inc. S&P STARS Portfolio is not sponsored, managed,
advised, sold or promoted by Standard & Poor's.
BSF-R-015-05
THE
BEAR STEARNS
FUNDS
EQUITY FUNDS
S&P STARS PORTFOLIO
THE INSIDERS SELECT FUND
LARGE CAP VALUE PORTFOLIO
SMALL CAP VALUE PORTFOLIO
FOCUS LIST PORTFOLIO
BALANCED PORTFOLIO
INTERNATIONAL EQUITY PORTFOLIO
SEMI-ANNUAL REPORT
SEPTEMBER 30, 1999
BEAR
STEARNS
<PAGE>
THE BEAR STEARNS FUNDS
S&P STARS Portfolio
The Insiders Select Fund
Large Cap Value Portfolio
Small Cap Value Portfolio
Focus List Portfolio
Balanced Portfolio
International Equity Portfolio
LETTER TO SHAREHOLDERS
October 27, 1999
Dear Shareholders:
We are pleased to present the semi-annual report to shareholders for the
S&P STARS Portfolio ("S&P STARS"), The Insiders Select Fund ("Insiders Select"),
Large Cap Value Portfolio ("Large Cap"), Small Cap Value Portfolio ("Small
Cap"), Focus List Portfolio ("Focus List"), Balanced Portfolio ("Balanced") and
International Equity Portfolio ("International Equity") for the six months ended
September 30, 1999. Detailed performance data for each class of shares of each
Portfolio can be found in the "Financial Highlights" of this report.
S&P STARS PORTFOLIO
For the six months ended September 30, 1999, the Portfolio's Class A shares had
a total return of 3.53% (without giving effect to the sales charge), and
Class B and C shares had a total return of 3.28% and 3.32%(1), respectively,
(without giving effect to the contingent deferred sales charge, or "CDSC"). The
Portfolio's benchmark, the S&P 500 Index, returned 0.36% for the same period.
The six months ended September 30, 1999, were highly volatile for the stock
market as investors grew increasingly nervous that inflation and interest rates
would rise. This added ammunition to concerns that many technology stocks were
overvalued. In addition, lingering Y2K concerns continued to cast a shadow.
While there has been no firm evidence that inflation is in fact increasing, the
Federal Reserve Board raised short-term interest rates in late June and August.
Given the environment, some of our larger technology holdings gave back some
ground as the period drew to a close. Year to date, however, they remain strong
performers. With developments in technology driving global growth, we believe
long-term prospects for the sector are extremely positive and expect to maintain
a significant position in the sector for the foreseeable future.
OPPORTUNITIES IN SMALL- AND MID-CAP STOCKS
Strong economic growth and rising oil prices have made energy stocks attractive
this year, and we added Global Marine (3.71% of net assets), an offshore
drilling company, to the Portfolio. Given the wide disparity in valuations
between larger and smaller companies, we also saw opportunity in small- and
mid-cap issues and bought Eaton Vance Corp. (1.71%), Duff & Phelps Credit Rating
Co. (3.21%), Zebra Technologies Corp. (1.37%) and Sterling Software, Inc.
(2.84%). We believe that with above-average earnings growth, these stocks offer
investors the potential for outperformance when sentiment towards them grows
more positive.
One of our largest holdings, Sprint PCS (4.48%), was the target of numerous
takeover attempts. Whether or not this company is ultimately acquired by MCI
Worldcom, we believe it is well positioned to become one of the leading wireless
providers in the U.S. We sold America Online as it was our opinion that
competition made the prospects for the company less attractive since many of the
services that initially drew subscribers were increasingly offered without
charge by other Internet providers. With traditional financial services stocks
taking the brunt of the rising interest rate environment and faced with the
possibility that rates may go higher over the short-term, we sold Bank of
America and have underweighted the sector relative to the benchmark index.
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In a skittish market in which stock prices are more responsive to changes in
interest rates than to changes in earnings, we believe that higher interest
rates could more than offset solid earnings growth over the next few months.
After a sluggish year-end, we expect the market to revive, with growth stocks,
particularly those of technology companies, leading the advance.
THE INSIDERS SELECT FUND
For the six months ended September 30, 1999, the Portfolio's Class A shares had
a total return of (2.65%) (without giving effect to the sales charge), and
Class B and C shares had a total return of (2.87%)(2) (without giving effect to
the CDSC). The Portfolio's benchmark, the S&P MidCap 400 Index, returned 4.57%
for the same period.
In a highly volatile market, the performance of our holdings included some
strong performers and some disappointments. Our largest position, WPP Group plc
(6.96% of net assets), continued to perform well as strong economic growth
supported strong spending for advertising. In addition, Y2K brings the U.S.
elections and the Olympics, which typically boost advertising revenues. Two
portfolio holdings, Winsloew Furniture and Raychem, were acquired by the other
companies, which also helped performance.
However, Dun & Bradstreet (4.85%) lost value after the company pre-announced
disappointing third-quarter earnings resulting from declining revenues. A number
of large institutional shareholders have called on the Board of Directors to
explore strategic initiatives, including the sale of parts of the firm, to
enhance shareholder value. D&B's Moody's subsidiary has continued to generate
healthy double-digit sales growth.
FINANCIAL STOCKS TO BENEFIT FROM DEREGULATION
Rising interest rates depressed the financial services sector as a whole,
including such Portfolio holdings as American Express (5.71%), Citigroup (4.45%)
and American International Group (4.07%). All three companies have strong
franchises and we expect them to benefit from federal legislation to deregulate
the financial services industry.
We continued to add new positions with attractive valuations and a high degree
of insider ownership. We bought Diageo Plc (1.96%), one of the world's largest
producers of consumer goods, whose subsidiaries include Pillsbury and Burger
King. The company is generating a high level of free cash flow, has initiated a
share repurchase program and instituted a new executive compensation plan that
is tied to earnings. In addition, the stock is selling at a significant discount
to its peer group on both a price-to-earnings and price-to-cash flow basis. We
also bought Cabletron Systems Inc. (1.98%), a major provider of networking
products and services, whose chairman owns more than 10% of the company's stock
and which we expect to have strong revenue growth.
We continue to maintain our discipline of purchasing mid-cap value stocks with
positive fundamentals and compelling insider buying and/or share repurchases.
These stocks generally have much lower valuations than their respective index
and tend to provide a defensive position in volatile markets.
LARGE CAP VALUE PORTFOLIO
For the six months ended September 30, 1999, the Portfolio's Class A shares had
a total return of (2.63%) (without giving effect to the sales charge) and
Class B and Class C shares had a total return of (2.87%) and (2.91%)(3),
respectively, (without giving effect to the CDSC). The Portfolio's benchmark,
the S&P 500 Index, returned 0.36% for the same period.
With inflation and Y2K concerns clouding the market this year, the advance of
the S&P 500 has been limited primarily to a handful of large-cap growth stocks.
Although value stocks enjoyed a rally in the spring, this small group of
large-cap, high-growth stocks continued to lead the market. After hitting new
highs during the summer, the S&P 500 Index and Dow Jones Industrial Average
corrected by about 10% by the end of September. During the third quarter,
technology was the only sector of the S&P 500 to produce positive returns, with
an increase of approximately 4%. By the end of September, more than half the
stocks in the S&P 500 were down for the year.
The Portfolio does not invest in the mega-cap, high-growth technology companies
that have been market leaders, but which also sell at very high earnings
multiples with a high risk-reward profile. Rather, holdings are conservative,
seasoned companies that typically are less volatile. While the Portfolio lagged
the broader index due to its low technology weighting, its performance has been
roughly in line with the S&P BARRA Value component of the index. It should be
noted that stocks of those companies that did not exactly meet or exceed their
earnings projections were punished severely by investors, and any diversified
portfolio of 35-40 stocks unavoidably owned one or two of these.
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A FOCUS ON VALUE AND STRONG FUNDAMENTALS
Our investment process continues to point us to companies with high free cash
flow, below-market price-to-earnings ratios and above-market dividend yields.
For example, the Portfolio's bank holdings continue to be companies with strong
fundamentals, but they, along with the entire financial services sector, have
been hurt by rising interest rates. We expect these, along with our insurance
holdings, to benefit from proposed legislation to deregulate the financial
services industry.
We have participated in the upturn in cyclicals by investing in consumer
cyclicals, where we are overweighted in the auto and auto parts industries,
which are beginning to turn around. We have taken advantage of the market's
correction to upgrade the quality of the Portfolio by redeploying assets into
stocks that meet our criteria for a low relative price-to-earnings ratio, strong
cash flow, a share price selling at a discount to asset value and insider
buying.
The current market is also creating opportunities to add new positions in strong
global brand franchises and possibly in technology when valuations fall within
our parameters. In the current strong economy investors have been willing to
overlook weak fundamentals -- a trend that we believe is unlikely to last for a
sustainable period of time.
Overall, we believe the market correction that has occurred is not
unprecedented. Concerns about rising interest rates, inflation and economic
growth were also dominant factors during the market's correction in 1994. We
expect the market to recover as it did in 1995 by experiencing a dynamic period
of equity strength for value-oriented companies with strong earnings, which are
the kinds of companies in which we invest.
SMALL CAP VALUE PORTFOLIO*
For the six months ended September 30, 1999, the Portfolio's Class A shares had
a total return of 13.78% (without giving effect to the sales charge), and
Class B and C shares had a total return of 13.50%(4), (without giving effect to
the CDSC). The Portfolio's benchmark, the Russell 2000 Index, returned 8.25% for
the same period.
During the second calendar quarter of the year, small-cap stocks and value
stocks finally joined the general market rally that had been led by large,
high-growth stocks over the past few years. With growing confidence that smaller
companies would benefit from continuing strong economic growth in the U.S.,
investors propelled the small-cap heavy Russell 2000 Index to a return of nearly
16%, more than twice the 7% gain in the S&P 500 Index. This surge was enough to
compensate for the downturn that occurred in the summer, as investor sentiment
shifted once again to a relatively small group of high-growth, large-cap stocks.
After hitting a new high in July, the Russell 2000 steadily retreated, declining
nearly 8% from the end of June through the end of September, although it ended
the six-month period with a return of 8%.
SMALL-CAP STOCKS BECOME TAKEOVER TARGETS
In addition to institutional and individual investors, corporate buyers have
shown increasing interest in small caps, which has led to a dramatic increase in
mergers and acquisitions among smaller stocks. Several Portfolio holdings,
including Varlen Corp. and Fore Systems, Inc., were acquired by larger companies
during the period, and others announced plans to evaluate "strategic
alternatives" to enhance shareholder value.
During the summer, the performance of our top holdings was decidedly mixed, with
some posting double-digit gains and some recording double-digit declines. One of
our top ten holdings, Butler International, Inc. (3.50% of net assets), was down
dramatically as customer concerns regarding Y2K issues depressed the information
technology services sector as a whole. We believe that investors have
overreacted in pushing the stock to a multiple of only 6.3 times next year's
estimated earnings per share and that the stock will post gains once the Y2K
issue is behind us and customers begin to spend at normal levels.
The market's volatility created opportunities to buy new stocks or add to
existing positions at favorable prices, and we selectively increased our
technology exposure. The former category included our purchase of Zi Corp.
(1.94%), which is targeting Chinese-character-language-enabling technologies for
electronic products and services. Zi Corp. has signed agreements with two
ministries of the Chinese government and with Ericsson, a leading manufacturer
of cellular telephones.
We continue to believe that small-cap stocks will remain attractive acquisition
targets due to their low relative valuations. However, we expect market
volatility to remain high over the remainder of the year, as concerns about
inflation, interest rates and the Y2K transition persist. It is possible,
however, that small cap companies may not be affected as much as their larger
brethren since they and their suppliers have little if any overseas exposure,
where problems are more likely to occur.
3
<PAGE>
FOCUS LIST PORTFOLIO
For the six months ended September 30, 1999, the Portfolio's Class A shares had
a total return of (1.73%) (without giving effect to the sales charge), and
Class B and C shares had a total return of (2.04%)(5) (without giving effect to
the CDSC). The Portfolio's benchmark, the S&P 500 Index returned 0.36% for the
same period.
Concerns about inflation and interest rates created a volatile environment for
stocks during the period. With only a minor sputter in the spring, interest in
growth stocks in general, and technology stocks in particular, continued to
drive the market. However, rising interest rates and the market's
super-sensitivity to corporate earnings reports caused the prices of some
technology and technology-related issues, such as The BISYS Group (4.61% of net
assets) and Affiliated Computer Services (4.80%), to fall significantly during
the period.
This setback seemed to be based on the growing belief that the best days of
these stocks were behind them. In other words, valuations in the sector were
still high, so it was their turn to correct. This, coupled with the Federal
Reserve Board's two interest rate hikes this year, created a volatile market, a
situation that was amplified by a lack of consensus about what sectors might
emerge as the next leaders.
A CONVICTION THAT TECHNOLOGY WILL CONTINUE TO LEAD THE MARKET
In revisiting our bottom-up analysis of our technology and technology-related
positions, we did not spot any real weakness, or, more importantly, see any of
our holdings losing steam. Several of our large-cap technology holdings,
including Solectron (5.05%) and EMC Corp. (6.16%), performed solidly during the
period, as did a smaller-cap issue, Project Software & Development (6.02%).
Surveying the marketplace, we did not find any other sector or industry whose
participants currently offered investors this type of growth potential.
Consequently, we maintained a significant position in technology.
During the period, we bought Charles Schwab (4.26%) due to its ability to
attract assets and its expanding presence on the Internet. While its stock has
retreated since our purchase, we believe the company's fundamental strength and
long-term prospects remain outstanding. We sold Telecom Italia after it
announced a plan to spin off its most valuable assets, since this move did not
appear to offer shareholders any benefit. Funds were reinvested in Terex Corp.
(5.16%), a leading manufacturer of construction and mining equipment, which we
expect will benefit from the pickup in the global economy and new projects in
the U.S. resulting from the new highway bill.
Although we are optimistic about the market's prospects, we are somewhat
cautious. Clearly, the market is nervous about the direction of interest rates
and the economy. Y2K concerns, too, are still casting a shadow. As a result, the
market could be relatively more volatile in the coming months. Nonetheless, we
remain convinced that few areas of the market offer investors opportunities as
compelling as those found in technology and technology-related industries, and
we expect to remain heavily weighted in these issues for some time to come.
BALANCED PORTFOLIO
For the six months ended September 30, 1999, the Portfolio's Class A shares had
a total return of (1.88%) (without giving effect to the sales charge), and
Class B and C shares had a total return of (2.11%)(6) (without giving effect to
the CDSC). The Portfolio's broad-based securities market index, the S&P 500
Index returned 0.36% while the Lipper Balanced Fund Index, returned 0.17% for
the same period.
Investors have not been kind to large-cap value stocks this year, focusing on
large-cap growth stocks instead. Although value stocks enjoyed a rally in the
spring, a small number of large-cap, high-growth stocks continued to lead the
market. After hitting new highs during the summer, the S&P 500 Index and Dow
Jones Industrial Average corrected by about 10% by the end of September. Stocks
of companies that failed to meet or exceed their earnings projections were
punished severely by investors, and any diversified portfolio of 35-40 stocks
unavoidably owned one or two of these.
A FOCUS ON SEASONED COMPANIES WITH LESS VOLATILITY
Technology was the only S&P sector to produce positive returns in the third
quarter of the year. The Portfolio does not invest in the mega-cap, high-growth
technology companies that have been market leaders, which sell at very high
earnings multiples and have a high risk-reward profile. Our holdings are
conservative, seasoned companies that typically are less volatile.
4
<PAGE>
Our investment process continues to point us to companies with high free cash
flow, below-market price-earnings ratios and above-market dividend yields. For
example, our bank holdings have strong fundamentals, but they, along with the
entire financial services sector, have been hurt by rising interest rates. We
expect these along with our insurance holdings to benefit from new legislation
that will deregulate the financial services industry.
Although the Portfolio's equity allocation declined during the period due to
lower stock prices, we are looking for opportunities to bring the equity
position up to a more typical allocation as the stock market corrects. We expect
to add new positions in strong global brand franchises and possibly technology
when valuations fall within our parameters.
During the quarter, bond prices fell due to rising interest rates and an
unusually large supply of new issues, which caused spreads to widen in July and
August to the levels of last year's liquidity crunch. As rates rose, bond prices
in most sectors fell more significantly than they did in the Treasury market,
where investors found greater comfort. In this environment, we increased
exposure slightly to agency and high-quality corporate bonds for their yield
advantage.
In the corporate sector, we are targeting industries that are benefiting from
the increase in commodity and energy prices, as well as multinationals, which
stand to benefit from increased economic growth abroad. The emphasis on
corporate issues reflects our view that the U.S. economy is still in a growth
mode, which bodes well for corporate profits. In addition, the supply problems
of the summer are largely behind us.
INTERNATIONAL EQUITY PORTFOLIO**
For the six months ended September 30, 1999, the Portfolio's Class A shares had
a total return of 13.28% (without giving effect to the sales charge), and
Class B and C shares had a total return of 12.96%(7) (without giving effect to
the CDSC).The Portfolio's benchmark, the Morgan Stanley Capital International
Europe, Australasia, Far East (EAFE) Index returned 7.18% for the same period.
Anticipating that Japan's growth prospects would improve, we nearly doubled our
exposure to more than 40% of the Portfolio's net assets since our last report.
At the same time, we reduced our European holdings, which had accounted for
roughly two-thirds of the Portfolio, to 37% reflecting a less positive outlook
than we had at the beginning of the year.
TECHNOLOGY AND TELECOMMUNICATIONS LEAD THE MARKET IN JAPAN
The strength in the Japanese market reflected slow, but visible improvement in
the economy, an increase in the pace of corporate restructuring and a strong
currency. The government and its supervisory agencies have begun addressing the
country's problems, injecting capital into the banking system and instituting
necessary reforms to create a healthier economy. High-growth sectors such as
telecommunications and technology have led the market higher just as they have
in the U.S. over the past several years. We are focusing on globally competitive
companies, particularly in technology, such as SOFTBANK (4.94% of net assets),
Fujitsu (4.59%) and Tokyo Electron (2.63%).
Although continuing their recovery from last year's problems, other Asian
markets were less robust than Japan's as fears of rising interest rates in the
U.S. dampened investor enthusiasm for the region. In Europe, restructuring
continued, but much more slowly and narrowly than investors had anticipated in
the wake of the euro's launch at the start of the year. As a result, these
markets were much more subdued. Long term, however, the prospects for change --
and for growth -- remain positive, particularly in the technology and
telecommunications sectors, where the Portfolio is well represented. We expect
these industries to be among the prime beneficiaries of the consolidation that
is taking place as Europeans adjust to and take advantage of a more unified
marketplace.
The Japanese market should continue to offer investors the most bang for the
investment buck in the near term. Longer term, the outlook depends on whether
and to what extent current constraints on the money supply are eased and on the
pace of deregulation and restructuring. Given the rapidly increasing demand for
technology and telecommunications products and services around the world, we
believe that these sectors offer investors the greatest potential for growth.
Consequently, we continue to build our positions on a market-by-market basis.
YEAR 2000
As shareholders, you should be aware that The Bear Stearns Funds (the "Fund"),
like most computer-reliant businesses, could be negatively impacted if the
computer systems it uses do not properly process date-related information after
January 1, 2000. Consequently, we implemented a comprehensive Y2K program,
including system remediation and testing as well as other prudent measures, to
avoid such problems. As part of this program, we have contacted other system
providers and vendors that service the Fund to determine the Y2K status of their
systems. While there can be no guarantee that every system will work
5
<PAGE>
properly on or after January 1, 2000, we believe that the Fund has taken the
proper steps to reduce the risk of a system interruption. The Fund is also aware
that Y2K problems may hurt the issuers whose securities the Funds hold, as well
as the securities markets in general.
In conclusion, we value the confidence you have placed in us and would be
pleased to address any questions or concerns you may have. Please feel free to
call us at 1-800-766-4111.
Sincerely,
/s/ Doni L. Fordyce
Doni L. Fordyce
President
The Bear Stearns Funds
- -------
* Small-cap funds typically carry additional risks, since smaller companies
generally have a higher risk of failure than well-established larger
companies. Historically, stocks of smaller companies have experienced a
greater degree of market volatility than stocks on average.
** International investing involves risks such as currency exchange-rate
volatility, possible political, social, or economic instability and
differences in taxation and other financial standards.
(1) For the six months ended September 30, 1999, the Portfolio's Class A shares
had a total return of (2.17%), including the initial 5.50% maximum sales
charge, Class B shares returned (1.72%), including the 5.00% CDSC and
Class C shares returned 2.32%, including the 1.00% CDSC.
(2) For the six months ended September 30, 1999, the Portfolio's Class A shares
had a total return of (8.00%), including the initial 5.50% maximum sales
charge, Class B shares returned (7.70%), including the 5.00% CDSC and
Class C shares returned (3.82%), including the 1.00% CDSC.
(3) For the six months ended September 30, 1999, the Portfolio's Class A shares
had a total return of (7.99%), including the initial 5.50% maximum sales
charge, Class B shares returned (7.74%), including the 5.00% CDSC and
Class C shares returned (3.88%), including the 1.00% CDSC.
(4) For the six months ended September 30, 1999, the Portfolio's Class A shares
had a total return of 7.54%, including the initial 5.50% maximum sales
charge, Class B shares returned 8.49%, including the 5.00% CDSC and Class C
shares returned 12.50%, including the 1.00% CDSC.
(5) For the six months ended September 30, 1999, the Portfolio's Class A shares
had a total return of (7.15%), including the initial 5.50% maximum sales
charge, Class B shares returned (6.94%), including the 5.00% CDSC and
Class C shares returned (3.02%), including the 1.00% CDSC.
(6) For the six months ended September 30, 1999, the Portfolio's Class A shares
had a total return of (7.26%), including the initial 5.50% maximum sales
charge, Class B shares returned (6.95%), including the 5.00% CDSC and
Class C shares returned (3.08%), including the 1.00% CDSC.
(7) For the six months ended September 30, 1999, the Portfolio's Class A shares
had a total return of 7.05%, including the initial 5.50% maximum sales
charge, Class B shares returned 7.96%, including the 5.00% CDSC and Class C
shares returned 11.96%, including the 1.00% CDSC.
Bear Stearns Asset Management Inc. waived all or a portion of its advisory fee
and agreed voluntarily to reimburse a portion of each applicable Portfolio's
operating expenses, as necessary, to maintain the expense limitation as set
forth in the notes to the financial statements. Total returns shown include fee
waivers and expense reimbursements, if any; total returns would have been lower
had there been no assumption of fees and expenses in excess of expense
limitations.
6
<PAGE>
THE BEAR STEARNS FUNDS
S&P STARS Portfolio
SEPTEMBER 30, 1999
(UNAUDITED)
- --------------------------------------------------------------------------------
TOP TEN INDUSTRY WEIGHTINGS*
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENT OF
RANK INDUSTRY NET ASSETS
- --------------------- ------------------------------------------------------------ ----------
<C> <S> <C>
1. Telecommunications.......................................... 13.98
2. Cable TV.................................................... 7.37
3. Diversified Operations...................................... 6.42
4. Networking Products......................................... 5.95
5. Commercial Services......................................... 4.16
6. Drugs & Hospital Supplies................................... 4.08
7. Electronic Components....................................... 3.75
8. Data Processing/Management.................................. 3.72
9. Oil & Gas Drilling.......................................... 3.71
10. Retail - Restaurants........................................ 3.55
</TABLE>
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS*
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENT OF
RANK HOLDINGS INDUSTRY NET ASSETS
- --------------------- ---------------------------------------------------- ------------------------ ----------
<C> <S> <C> <C>
1. Cisco Systems, Inc.................................. Networking Products 5.95
2. Comcast Corp........................................ Cable TV 5.06
3. Sprint Corp. (PCS Group)............................ Telecommunications 4.48
4. Global Marine Inc................................... Oil & Gas Drilling 3.71
5. Tyco International Ltd.............................. Diversified Operations 3.36
6. Duff & Phelps Credit Rating Co...................... Commercial Services 3.21
7. Nortel Networks Corp................................ Telecommunications 2.98
8. QUALCOMM, Inc....................................... Telecommunications 2.84
9. Sterling Software, Inc.............................. Data 2.84
Processing/Management
10. American Express Co................................. Credit & Finance 2.70
</TABLE>
- -------
* The Portfolio's composition will change over time.
7
<PAGE>
THE BEAR STEARNS FUNDS
The Insiders Select Fund
SEPTEMBER 30, 1999
(UNAUDITED)
- --------------------------------------------------------------------------------
TOP TEN INDUSTRY WEIGHTINGS*
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENT OF
RANK INDUSTRY NET ASSETS
- --------------------- ------------------------------------------------------------ ----------
<C> <S> <C>
1. Credit & Finance............................................ 11.26
2. Telecommunications.......................................... 7.84
3. Advertising Agencies........................................ 6.96
4. Retail - Restaurants........................................ 5.59
5. Computers - Memory Devices.................................. 5.50
6. Commercial Services......................................... 4.85
7. Banks....................................................... 4.64
8. Drugs & Hospital Supplies................................... 4.59
9. Financial Services.......................................... 4.45
10. Multi-Line Insurance........................................ 4.07
</TABLE>
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS*
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENT OF
RANK HOLDINGS INDUSTRY NET ASSETS
- --------------------- ---------------------------------------------------- ------------------------ ----------
<C> <S> <C> <C>
1. WPP Group plc....................................... Advertising Agencies 6.96
2. American Express Co................................. Credit & Finance 5.71
3. Dun & Bradstreet Corp. (The)........................ Commercial Services 4.85
4. Johnson & Johnson................................... Drugs & Hospital 4.59
Supplies
5. Citigroup Inc....................................... Financial Services 4.45
6. American International Group, Inc................... Multi-Line Insurance 4.07
7. SLM Holding Corp.................................... Credit & Finance 3.67
8. Wendy's International, Inc.......................... Retail - Restaurants 3.62
9. Viad Corp........................................... Diversified Operations 3.29
10. SBC Communications, Inc............................. Telecommunications 3.19
</TABLE>
- -------
* The Portfolio's composition will change over time.
8
<PAGE>
THE BEAR STEARNS FUNDS
Large Cap Value Portfolio
SEPTEMBER 30, 1999
(UNAUDITED)
- --------------------------------------------------------------------------------
TOP TEN INDUSTRY WEIGHTINGS*
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENT OF
RANK INDUSTRY NET ASSETS
- --------------------- ------------------------------------------------------------ ----------
<C> <S> <C>
1. Oil Companies - Integrated.................................. 8.51
2. Credit & Finance............................................ 6.72
3. Retail - Restaurants........................................ 6.66
4. Drugs & Hospital Supplies................................... 6.42
5. Life/Health Insurance....................................... 6.14
6. Banks....................................................... 5.97
7. Financial Services.......................................... 5.84
8. Toys........................................................ 5.75
9. Advertising Agencies........................................ 5.14
10. Cosmetics & Toiletries...................................... 5.01
</TABLE>
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS*
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENT OF
RANK HOLDINGS INDUSTRY NET ASSETS
- --------------------- ---------------------------------------------------- ------------------------ ----------
<C> <S> <C> <C>
1. WPP Group plc....................................... Advertising Agencies 5.14
2. Atlantic Richfield Co............................... Oil Companies - 3.83
Integrated
3. Dun & Bradstreet Corp. (The)........................ Commercial Services 3.60
4. SLM Holding Corp.................................... Credit & Finance 3.54
5. Mattel, Inc......................................... Toys 3.45
6. McDonald's Corp..................................... Retail - Restaurants 3.41
7. Bell Atlantic Corp.................................. Telephone - Local 3.38
8. Citigroup Inc....................................... Financial Services 3.32
9. Wendy's International, Inc.......................... Retail - Restaurants 3.25
10. Fannie Mae.......................................... Credit & Finance 3.18
</TABLE>
- -------
* The Portfolio's composition will change over time.
9
<PAGE>
THE BEAR STEARNS FUNDS
Small Cap Value Portfolio
SEPTEMBER 30, 1999
(UNAUDITED)
- --------------------------------------------------------------------------------
TOP TEN INDUSTRY WEIGHTINGS*
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENT OF
RANK INDUSTRY NET ASSETS
- --------------------- ------------------------------------------------------------ ----------
<C> <S> <C>
1. Commercial Services......................................... 11.26
2. Drugs & Hospital Supplies................................... 7.59
3. Hotels & Motels............................................. 6.80
4. Building & Housing.......................................... 6.67
5. Communications.............................................. 5.11
6. Miscellaneous Industrials................................... 4.93
7. Radio....................................................... 4.30
8. Recreational Centers........................................ 3.99
9. Computer Services........................................... 3.69
10. Human Resources............................................. 3.50
</TABLE>
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS*
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENT OF
RANK HOLDINGS INDUSTRY NET ASSETS
- --------------------- ---------------------------------------------------- ------------------------ ----------
<C> <S> <C> <C>
1. Global Pharmaceutical Corp.......................... Drugs & Hospital 7.59
Supplies
2. U.S. Franchise System, Inc.......................... Hotels & Motels 6.80
3. Data Transmission Network Corp...................... Communications 5.11
4. Kemet Corp.......................................... Miscellaneous 4.93
Industrials
5. Duff & Phelps Credit Rating Co...................... Commercial Services 4.49
6. Cox Radio, Inc., Class A............................ Radio 4.30
7. Steiner Leisure Ltd................................. Commercial Services 4.25
8. Bally Total Fitness Holding Corp.................... Recreational Centers 3.99
9. Butler International, Inc........................... Human Resources 3.50
10. Elcor Corp.......................................... Building & Housing 3.50
</TABLE>
- -------
* The Portfolio's composition will change over time.
10
<PAGE>
THE BEAR STEARNS FUNDS
Focus List Portfolio
SEPTEMBER 30, 1999
(UNAUDITED)
- --------------------------------------------------------------------------------
TOP TEN INDUSTRY WEIGHTINGS*
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENT OF
RANK INDUSTRY NET ASSETS
- --------------------- ------------------------------------------------------------ ----------
<C> <S> <C>
1. Technology: Internet - News Media........................... 8.57
2. Technology: Computers & Office Equipment.................... 6.16
3. Technology: Enterprise Software............................. 6.02
4. Media-Communications: European Telecommunication Services... 5.46
5. Technology: Semiconductors.................................. 5.22
6. Basic Industry: Machinery - Diversified Industrials......... 5.16
7. Technology: Electronic Components........................... 5.05
8. Consumer: Restaurants....................................... 5.04
9. Technology: Computer Sciences............................... 4.80
10. Media-Communications: Broadcasting - TV & Radio............. 4.72
</TABLE>
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS*
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENT OF
RANK HOLDINGS INDUSTRY NET ASSETS
- --------------------- ----------------------------------------------- ------------------------------ ----------
<C> <S> <C> <C>
1. America Online, Inc. .......................... Technology: Internet - News 8.57
Media
2. EMC Corp....................................... Technology: Computers & Office 6.16
Equipment
3. Project Software & Development, Inc............ Technology: Enterprise 6.02
Software
4. Vodafone AirTouch plc.......................... Media-Communications: European 5.46
Telecommunication Services
5. Intel Corp..................................... Technology: Semiconductors 5.22
6. Terex Corp. ................................... Basic Industry: Machinery - 5.16
Diversified Industrials
7. Solectron Corp................................. Technology: Electronic 5.05
Components
8. Darden Restaurants, Inc........................ Consumer: Restaurants 5.04
9. Affiliated Computer Services, Inc. ............ Technology: Computer Sciences 4.80
10. USA Networks, Inc.............................. Media-Communications: 4.72
Broadcasting - TV & Radio
</TABLE>
- -------
* The Portfolio's composition will change over time.
11
<PAGE>
THE BEAR STEARNS FUNDS
Balanced Portfolio
SEPTEMBER 30, 1999
(UNAUDITED)
- --------------------------------------------------------------------------------
TOP INDUSTRY/SECTOR WEIGHTINGS*
EQUITY
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENT OF
RANK INDUSTRY NET ASSETS
- --------------------- ------------------------------------------------------------ ----------
<C> <S> <C>
1. Oil Companies-Integrated.................................... 3.86
2. Credit & Finance............................................ 3.54
3. Retail - Restaurants........................................ 3.14
4. Diversified Operations...................................... 2.90
5. Multi-Line Insurance........................................ 2.40
LONG-TERM DEBT
<CAPTION>
SECTOR
- ------------------------------------------------------------------------------------------------
<C> <S> <C>
1. U.S. Government Agency Obligations.......................... 24.64
2. Corporate Obligations....................................... 17.36
3. U.S. Government Obligations................................. 4.26
</TABLE>
- --------------------------------------------------------------------------------
TOP HOLDINGS*
EQUITY
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENT OF
RANK HOLDINGS INDUSTRY NET ASSETS
- --------------------- --------------------------------------------------- ------------------------------ ----------
<C> <S> <C> <C>
1. WPP Group plc...................................... Advertising Agencies 1.95
2. Dun & Bradstreet Corp. (The)....................... Commercial Services 1.86
3. SLM Holding Corp................................... Credit & Finance 1.84
4. Fannie Mae......................................... Credit & Finance 1.70
5. Citigroup Inc...................................... Financial Services 1.58
LONG-TERM DEBT SECTOR
- -----------------------------------------------------------------------------------------------------------------------
1. Fannie Mae......................................... U.S. Government Agency
Obligations 12.94
2. Government National Mortgage Association........... U.S. Government Agency
Obligations 5.64
3. Freddie Mac........................................ U.S. Government Agency
Obligations 5.05
4. U.S. Treasury Notes................................ U.S. Government Obligations 3.41
5. Wheeling Pittsburgh Corp. Notes.................... Corporate Obligations 1.36
</TABLE>
- -------
* The Portfolio's composition will change over time.
12
<PAGE>
THE BEAR STEARNS FUNDS
International Equity Portfolio
SEPTEMBER 30, 1999
(UNAUDITED)
- --------------------------------------------------------------------------------
TOP TEN INDUSTRY WEIGHTINGS*
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENT OF
RANK INDUSTRY NET ASSETS
- --------------------- ------------------------------------------------------------ ----------
<C> <S> <C>
1. Money Center Banks.......................................... 8.85
2. Telecommunication Equipment................................. 8.55
3. Computers - Integrated Systems.............................. 8.39
4. Electronic Components - Semiconductors...................... 8.04
5. Cellular Telecommunications................................. 6.41
6. Electronic Components - Miscellaneous....................... 5.63
7. Internet Content............................................ 4.94
8. Computer Services........................................... 3.87
9. Medical - Drugs............................................. 3.83
10. Telecommunication Services.................................. 3.67
</TABLE>
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS*
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENT OF
RANK HOLDINGS INDUSTRY NET ASSETS
- --------------------- ------------------------------------------- --------------------------------- ----------
<C> <S> <C> <C>
1. SOFTBANK Corp.............................. Internet Content 4.94
2. Fujitsu Ltd................................ Computers-Integrated Systems 4.59
3. NTT Mobile Communications Network, Inc..... Cellular Telecommunications 3.84
4. Nokia Oyj.................................. Telecommunication Equipment 3.84
5. Murata Manufacturing Co., Ltd.............. Electronic 3.48
Components-Miscellaneous
6. STMicroelectronics NV...................... Electronic 3.31
Components-Semiconductors
7. The Nikko Securities Co., Ltd.............. Finance-Investment 3.26
Banking/Brokerage
8. Matsushita Electric Industrial Co., Ltd.... Telecommunication Equipment 2.89
9. HSBC Holdings plc.......................... Money Center Banks 2.78
10. Tokyo Electron Ltd......................... Electronic 2.63
Components-Semiconductors
</TABLE>
- -------
* The Portfolio's composition will change over time.
13
<PAGE>
THE BEAR STEARNS FUNDS
S&P STARS Portfolio
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------
SHARES VALUE
- --------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 99.38%
BANKS - 1.76%
200,000 PNC Bank Corp. .............. $ 10,537,500
------------
CABLE TV - 7.37%
190,000 Cablevision Systems
Corp.* .................... 13,822,500
760,000 Comcast Corp., Special
Class A ................... 30,305,000
------------
44,127,500
------------
COMMERCIAL SERVICES - 4.16%
290,000 Convergys Corp.*+ ........... 5,745,625
240,100 Duff & Phelps Credit Rating
Co.+++ .................... 19,192,994
------------
24,938,619
------------
COMPUTER SERVICES - 1.62%
390,000 Ceridian Corp.* ............. 9,701,250
------------
COMPUTER SOFTWARE - 0.91%
60,000 Microsoft Corp.*+ ........... 5,433,750
------------
COMPUTERS - MEMORY DEVICES - 2.57%
215,000 EMC Corp.* .................. 15,359,063
------------
COMPUTERS - MICRO - 1.24%
80,000 Sun Microsystems, Inc.* ..... 7,440,000
------------
CONSULTING SERVICES - 1.01%
380,000 Gartner Group, Inc.,
Class A+++ ................ 6,056,250
------------
COSMETICS & TOILETRIES - 1.58%
180,000 Kimberly-Clark Corp. ........ 9,450,000
------------
CREDIT & FINANCE - 3.07%
120,000 American Express Co. ........ 16,155,000
75,000 Dun & Bradstreet Corp.
(The) ..................... 2,240,625
------------
18,395,625
------------
DATA PROCESSING/MANAGEMENT - 3.72%
260,000 Reynolds & Reynolds Co.
(The)++ ................... 5,297,500
850,000 Sterling Software, Inc.* .... 17,000,000
------------
22,297,500
------------
<CAPTION>
- --------------------------------------------------------------------
SHARES VALUE
- --------------------------------------------------------------------
<C> <S> <C>
DIVERSIFIED OPERATIONS - 6.42%
100,000 General Electric Co.++ ...... $ 11,856,250
168,400 Roper Industries, Inc. ...... 6,441,300
195,000 Tyco International Ltd. ..... 20,133,750
------------
38,431,300
------------
DRUGS & HOSPITAL SUPPLIES - 4.08%
170,000 Bristol-Myers Squibb Co. .... 11,475,000
360,000 Pfizer Inc.+ ................ 12,937,500
------------
24,412,500
------------
ELECTRONIC COMPONENTS - 3.75%
180,000 Amkor
Technology, Inc.*+++(a) .... 2,902,500
105,000 Applied Materials, Inc.* .... 8,176,875
478,750 Vishay
Intertechnology, Inc.+ .... 11,370,313
------------
22,449,688
------------
ELECTRONICS - 2.48%
200,000 Intel Corp. ................. 14,862,500
------------
INVESTMENT MANAGEMENT/ADVISOR SERVICE -
1.71%
319,600 Eaton Vance Corp.+ .......... 10,227,200
------------
MACHINERY - PRINT TRADE - 1.37%
180,000 Zebra Technologies Corp.,
Class A* .................. 8,184,375
------------
MEDICAL - WHOLESALE DRUG DISTRIBUTION -
2.00%
220,000 Cardinal Health, Inc. ....... 11,990,000
------------
MULTIMEDIA - 1.72%
170,000 Time Warner Inc.+ ........... 10,327,500
------------
NETWORKING PRODUCTS - 5.95%
520,000 Cisco Systems, Inc.* ........ 35,652,500
------------
OIL & GAS DRILLING - 3.71%
1,350,000 Global Marine Inc.* ......... 22,190,625
------------
OIL & OFFSHORE DRILLING - 1.98%
550,000 Santa Fe International
Corp. ..................... 11,859,375
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
THE BEAR STEARNS FUNDS
S&P STARS Portfolio
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------
SHARES VALUE
- --------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
PHARMACEUTICALS - 0.54%
50,000 Millennium
Pharmaceuticals, Inc.*++ .... $ 3,250,000
------------
PHYSICAL THERAPY/REHABILITATION CENTERS -
1.51%
510,000 RehabCare Group, Inc.*+ ..... 9,052,500
------------
PUBLISHING - BOOKS - 2.34%
280,000 Scholastic Corp.* ........... 14,000,000
------------
RETAIL - DRUG STORES - 2.39%
350,000 CVS Corp.+ .................. 14,284,375
------------
RETAIL - GROCERY STORES - 2.14%
580,000 Kroger Co. (The)*+ .......... 12,796,250
------------
RETAIL - OFFICE SUPPLIES - 3.00%
800,000 OfficeMax, Inc.*++ .......... 4,650,000
610,000 Staples, Inc.*+ ............. 13,305,625
------------
17,955,625
------------
RETAIL - RADIO, TV & ELECTRONICS - 2.18%
310,000 Circuit City Stores, Inc. -
Circuit City Group++ ...... 13,078,125
------------
RETAIL - RESTAURANTS - 3.55%
536,200 Consolidated
Products, Inc.*++ ......... 5,227,950
630,000 Outback
Steakhouse, Inc.* ......... 16,045,313
------------
21,273,263
------------
TELECOMMUNICATIONS - 13.98%
190,000 MCI Worldcom, Inc.* ......... 13,656,250
350,000 Nortel Networks Corp. ....... 17,850,000
90,000 QUALCOMM, Inc.* ............. 17,026,875
360,000 Sprint Corp. (PCS Group)* ... 26,842,500
35,000 Vodafone AirTouch plc -
ADR ....................... 8,321,250
------------
83,696,875
------------
TELEPHONE - LONG DISTANCE - 1.02%
140,000 AT&T Corp. .................. 6,090,000
------------
<CAPTION>
- --------------------------------------------------------------------
SHARES VALUE
- --------------------------------------------------------------------
<C> <S> <C>
TELEVISION - 1.36%
100,000 Univision Communications Inc.
- Class A* ................ $ 8,137,500
------------
TRANSPORT - TRUCK - 1.19%
150,000 USFreightways Corp.+ ........ 7,106,250
------------
Total Common Stocks
(cost - $479,870,025) ..... 595,045,383
------------
SHORT-TERM INVESTMENTS -- 0.00%
INVESTMENT COMPANIES - 0.00%
45 Federated Investors, Trust
for Short-Term U.S.
Government Securities**+++
(cost - $45) .............. 45
------------
Total Investments -- 99.38%
(cost - $479,870,070) ..... 595,045,428
Other assets in excess of
liabilities -- 0.62% ...... 3,741,582
------------
Net Assets -- 100.00% ....... $598,787,010
============
</TABLE>
- ---------
Unless otherwise indicated, all common stocks are ranked as five stars.
+ Currently ranked as four stars.
++ Currently ranked as three stars.
+++ Not ranked by stars.
* Non-income producing security.
** Money market fund.
(a) Security or a portion thereof is out on loan.
ADR American Depositary Receipts.
S&P STARS RANKING:
Five stars - Buy - Expect to be among best performers over next 12 months and to
rise in price.
Four stars - Accumulate - Expect to be an above average performer.
Three stars - Hold - Expect to be an average performer.
Two stars - Avoid - Expect to be a below average performer.
One star - Sell - Expect to be well below average performer and to fall in
price.
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
THE BEAR STEARNS FUNDS
The Insiders Select Fund
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
SHARES VALUE
- -------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 96.56%
ADVERTISING AGENCIES - 6.96%
30,000 WPP Group plc - ADR ......... $ 2,790,000
-----------
AEROSPACE & DEFENSE - 2.66%
18,000 United Technologies Corp. ... 1,067,625
-----------
AUTOMOTIVE PARTS & EQUIPMENT - 2.78%
30,000 Dana Corp. .................. 1,113,765
-----------
BANKS - 4.64%
14,000 Bank of America Corp. ....... 779,625
20,500 PNC Bank Corp. .............. 1,080,094
-----------
1,859,719
-----------
CHEMICALS - DIVERSIFIED - 2.01%
45,000 Solutia Inc. ................ 804,375
-----------
COMMERCIAL SERVICES - 4.85%
65,000 Dun & Bradstreet Corp.
(The) ..................... 1,941,875
-----------
COMPUTERS - MEMORY DEVICES - 5.50%
58,300 Cadence Design
Systems, Inc.* ............ 772,475
58,800 Quantum Corp-DLT & Storage
Systems* .................. 826,875
31,500 Storage Technology
Corporation* .............. 606,375
-----------
2,205,725
-----------
COMPUTERS & OFFICE EQUIPMENT - 2.28%
15,000 Pitney Bowes, Inc. .......... 914,062
-----------
CONSULTING SERVICES - 1.99%
50,000 Gartner Group, Inc.* ........ 796,875
-----------
CREDIT & FINANCE - 11.26%
17,000 American Express Co. ........ 2,288,625
12,000 Fannie Mae .................. 752,250
34,200 SLM Holding Corp. ........... 1,470,600
-----------
4,511,475
-----------
<CAPTION>
- -------------------------------------------------------------------
SHARES VALUE
- -------------------------------------------------------------------
<C> <S> <C>
DIVERSIFIED OPERATIONS - 3.29%
44,700 Viad Corp. .................. $ 1,318,650
-----------
DRUGS & HOSPITAL SUPPLIES - 4.59%
20,000 Johnson & Johnson ........... 1,837,500
-----------
FINANCIAL SERVICES - 4.45%
40,500 Citigroup Inc. .............. 1,782,000
-----------
HEALTH CARE - 2.35%
32,500 Mckesson HBOC, Inc. ......... 942,500
-----------
LIFE/HEALTH INSURANCE - 2.26%
35,000 Torchmark Corp. ............. 905,625
-----------
MEDICAL SERVICES - 2.64%
50,000 Columbia/HCA Healthcare
Corp. ..................... 1,059,375
-----------
MULTI-LINE INSURANCE - 4.07%
18,750 American International
Group, Inc. ............... 1,630,078
-----------
OIL COMPANIES - INTEGRATED - 2.84%
18,000 Texaco Inc. ................. 1,136,250
-----------
PAPER & PAPER RELATED PRODUCTS - 2.75%
21,000 Kimberly-Clark Corp. ........ 1,102,500
-----------
PROPERTY/CASUALTY INSURANCE - 1.90%
27,600 Mercury General Corp. ....... 760,725
-----------
RETAIL - RESTAURANTS - 5.59%
19,000 Diageo plc* ................. 787,313
55,000 Wendy's
International, Inc. ....... 1,450,625
-----------
2,237,938
-----------
RETAIL - TOY STORES - 2.20%
58,900 Toys 'R' Us, Inc.* .......... 883,500
-----------
SAVINGS & LOAN - 1.78%
24,400 Washington Mutual, Inc. ..... 713,700
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
THE BEAR STEARNS FUNDS
The Insiders Select Fund
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
SHARES VALUE
- -------------------------------------------------------------------
<C> <S> <C>
</TABLE>
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
SHARES VALUE
- -------------------------------------------------------------------
<C> <S> <C>
TELECOMMUNICATIONS - 7.84%
50,700 Cabletron Systems, Inc.* .... $ 795,356
55,000 Cincinnati Bell, Inc.* ...... 1,069,062
25,000 SBC Communications, Inc. .... 1,276,563
-----------
3,140,981
-----------
TOYS - 3.08%
64,900 Mattel, Inc. ................ 1,233,100
-----------
Total Common Stocks
(cost - $35,382,869)....... 38,689,918
-----------
SHORT-TERM INVESTMENTS -- 3.91%
INVESTMENT COMPANIES - 3.91%
1,567,044 Federated Investors, Trust
for Short-Term U.S.
Government Securities**
(cost - $1,567,044)........ 1,567,044
-----------
Total Investments 100.47%
(cost - $36,949,913)....... 40,256,962
Liabilities in excess of
other
assets -- (0.47)%.......... (186,611)
-----------
Net Assets -- 100.00% $40,070,351
===========
</TABLE>
<TABLE>
<S> <C>
- -----------------------------------------------------------------------------
ADR American Depositary Receipts.
* Non-income producing security.
** Money market fund.
</TABLE>
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
THE BEAR STEARNS FUNDS
Large Cap Value Portfolio
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------
SHARES VALUE
- ---------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 98.31%
ADVERTISING AGENCIES - 5.14%
11,000 WPP Group plc - ADR ........... $ 1,023,000
-----------
AEROSPACE & DEFENSE - 2.38%
8,000 United Technologies Corp. ..... 474,500
-----------
AUTOMOBILES - 3.25%
7,000 Ford Motor Co. ................ 351,312
4,700 General Motors Corp. .......... 295,806
-----------
647,118
-----------
AUTOMOTIVE PARTS & EQUIPMENT - 2.43%
18,200 Genuine Parts Co. ............. 483,437
-----------
BANKS - 5.97%
8,600 Bank of New York Co., Inc.
(The) ....................... 287,562
6,900 Bank of America Corp. ......... 384,244
9,800 PNC Bank Corp. ................ 516,337
-----------
1,188,143
-----------
CHEMICALS - DIVERSIFIED - 1.89%
21,000 Solutia Inc. .................. 375,375
-----------
COMMERCIAL SERVICES - 3.60%
24,000 Dun & Bradstreet Corp.
(The) ....................... 717,000
-----------
COMPUTERS - 2.74%
4,500 International Business Machines
Corp. ....................... 546,188
-----------
COSMETICS & TOILETRIES - 5.01%
11,000 Gillette Co. .................. 373,313
11,900 Kimberly-Clark Corp. .......... 624,750
-----------
998,063
-----------
CREDIT & FINANCE - 6.72%
10,100 Fannie Mae .................... 633,144
16,400 SLM Holding Corp. ............. 705,200
-----------
1,338,344
-----------
<CAPTION>
- ---------------------------------------------------------------------
SHARES VALUE
- ---------------------------------------------------------------------
<C> <S> <C>
DIVERSIFIED OPERATIONS - 4.16%
2,000 General Electric Co. .......... $ 237,125
20,000 Viad Corp. .................... 590,000
-----------
827,125
-----------
DRUGS & HOSPITAL SUPPLIES - 6.42%
9,100 Baxter International Inc. ..... 548,275
3,700 Bristol-Myers Squibb Co. ...... 249,750
7,400 Merck & Co., Inc. ............. 479,613
-----------
1,277,638
-----------
ELECTRIC - INTEGRATED - 1.70%
6,700 FPL Group, Inc. ............... 337,513
-----------
FINANCIAL SERVICES - 5.84%
9,000 AXA Financial, Inc. ........... 502,313
15,000 Citigroup Inc. ................ 660,000
-----------
1,162,313
-----------
FOOD - DIVERSIFIED - 2.01%
9,300 Heinz (H.J.) Co. .............. 399,900
-----------
HEALTH CARE - 1.75%
12,000 McKesson HBOC, Inc. ........... 348,000
-----------
LIFE/HEALTH INSURANCE - 6.14%
18,300 Allstate Corp. ................ 456,356
9,275 Aon Corp. ..................... 274,192
19,000 Torchmark Corp. ............... 491,625
-----------
1,222,173
-----------
OIL COMPANIES - INTEGRATED - 8.51%
8,600 Atlantic Richfield Co. ........ 762,175
4,300 Exxon Corp. ................... 326,531
9,600 Texaco Inc. ................... 606,000
-----------
1,694,706
-----------
RETAIL - RESTAURANTS - 6.66%
15,800 McDonald's Corp. .............. 679,400
24,500 Wendy's
International, Inc. ......... 646,188
-----------
1,325,588
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
18
<PAGE>
THE BEAR STEARNS FUNDS
Large Cap Value Portfolio
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------
SHARES VALUE
- ---------------------------------------------------------------------
<C> <S> <C>
</TABLE>
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------
SHARES VALUE
- ---------------------------------------------------------------------
<C> <S> <C>
SAVINGS & LOAN - 2.01%
13,685 Washington Mutual, Inc. ....... $ 400,286
-----------
TELECOMMUNICATIONS - 2.57%
10,000 SBC Communications, Inc. ...... 510,625
-----------
TELEPHONE - LOCAL - 3.38%
10,000 Bell Atlantic Corp. ........... 673,125
-----------
TOBACCO - 2.28%
13,250 Philip Morris Cos. Inc. ....... 452,984
-----------
TOYS - 5.75%
36,100 Mattel, Inc. .................. 685,900
30,600 Toys 'R' Us, Inc.* ............ 459,000
-----------
1,144,900
-----------
Total Common Stocks
(cost - $16,404,143) ........ 19,568,044
-----------
<CAPTION>
- ---------------------------------------------------------------------
SHARES VALUE
- ---------------------------------------------------------------------
<C> <S> <C>
SHORT-TERM INVESTMENTS -- 2.53%
INVESTMENT COMPANIES - 2.53%
503,852 Federated Investors, Trust for
Short-Term U.S. Government
Securities **
(cost - $503,852) ........... $ 503,852
-----------
Total Investments -- 100.84%
(cost - $16,907,995) ........ 20,071,896
Liabilities in excess of other
assets -- (0.84)% ........... (167,192)
-----------
Net Assets -- 100.00% ......... $19,904,704
===========
</TABLE>
- ---------
ADR American Depositary Receipts.
* Non-income producing security.
** Money market fund.
The accompanying notes are an integral part of the financial statements.
19
<PAGE>
THE BEAR STEARNS FUNDS
Small Cap Value Portfolio
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
EQUITY SECURITIES -- 98.90%
COMMON STOCKS -- 93.30%
BOTTLING+ - 0.02%
2,404 Pepsi-Cola Puerto Rico
Bottling Company* ........ $ 14,424
-----------
BROADCASTING - 1.54%
181,200 Four Media Co.* ............ 951,300
-----------
BUILDING & HOUSING - 6.67%
86,350 Elcor Corp. ................ 2,158,750
85,500 Giant Cement
Holding, Inc.* ........... 1,961,156
-----------
4,119,906
-----------
COMMERCIAL SERVICES - 11.26%
78,750 COMARCO, Inc.* ............. 1,555,312
34,700 Duff & Phelps Credit Rating
Co. ...................... 2,773,831
105,000 Steiner Leisure Ltd.* ...... 2,625,000
-----------
6,954,143
-----------
COMMUNICATIONS - 5.11%
126,500 Data Transmission Network
Corp.*++ ................. 3,154,594
-----------
COMPUTER SERVICES - 3.69%
62,900 Caci
International, Inc.* ..... 1,340,556
47,000 Sterling
Software, Inc.* .......... 940,000
-----------
2,280,556
-----------
COMPUTER SOFTWARE - 1.94%
149,000 Zi Corp.* .................. 1,196,656
-----------
DIVERSIFIED OPERATIONS - 2.62%
143,800 Alyn Corp.* ................ 395,450
29,000 Crane Co. .................. 650,687
15,100 SPS Technologies, Inc.* .... 572,856
-----------
1,618,993
-----------
DRUGS & HOSPITAL SUPPLIES - 3.58%
441,753 Global Pharmaceutical
Corp.* ................... 2,208,765
-----------
<CAPTION>
- ------------------------------------------------------------------
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
ELECTRONICS - 3.03%
26,100 Cubic Corp. ................ $ 611,719
71,400 Elantec
Semiconductor, Inc.* ..... 1,262,887
-----------
1,874,606
-----------
FINANCIAL SERVICES - 1.88%
35,900 Bank United Corp.,
Class A .................. 1,162,262
-----------
FOOD - MEAT PRODUCTS - 0.86%
105,000 Hibernia Foods plc - ADR
* ........................ 531,563
-----------
HOME FURNISHINGS - 1.76%
55,200 Furniture Brands
International, Inc.* ..... 1,086,750
-----------
HOTELS & MOTELS - 6.80%
242,600 U.S. Franchise
System, Inc.* ............ 4,200,013
-----------
HUMAN RESOURCES - 3.50%
247,125 Butler
International, Inc.* ..... 2,162,344
-----------
LIFE INSURANCE - 3.14%
93,000 Penn Treaty American
Corp.* ................... 1,941,375
-----------
MACHINERY - CONSTRUCTION & MINING - 2.09%
40,900 Terex Corp. ................ 1,288,350
-----------
MEDICAL - DRUGS - 2.58%
61,800 ChiRex, Inc.* .............. 1,595,213
-----------
MISCELLANEOUS INDUSTRIALS - 4.93%
95,200 Kemet Corp. ................ 3,043,425
-----------
NON-FERROUS METALS - 1.35%
28,100 Mueller
Industries, Inc.* ........ 834,219
-----------
OIL & GAS DRILLING - 1.40%
52,600 Global Marine Inc.* ........ 864,613
-----------
RADIO - 4.30%
44,600 Cox Radio, Inc.,
Class A* ................. 2,653,700
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
20
<PAGE>
THE BEAR STEARNS FUNDS
Small Cap Value Portfolio
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
</TABLE>
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
REAL ESTATE INVESTMENT TRUST - 3.40%
32,300 Glenborough Reality
Trust, Inc. .............. $ 532,950
82,500 U.S. Restaurants
Properties, Inc. ......... 1,567,500
-----------
2,100,450
-----------
RECREATIONAL CENTERS - 3.99%
80,700 Bally Total Fitness Holding
Corp.* ................... 2,466,394
-----------
RENTAL/AUTO EQUIPMENT - 3.02%
85,900 United Rentals, Inc.* ...... 1,868,325
-----------
RETAIL - APPAREL/SHOE - 0.54%
20,000 Claire's Stores, Inc. ...... 331,250
-----------
RETAIL - RESTAURANTS - 2.71%
67,000 Foodmaker, Inc.* ........... 1,670,813
-----------
STEEL - 1.92%
237,000 Universal Stainless & Alloy
Products, Inc.* .......... 1,185,000
-----------
TRANSPORT - 0.44%
36,000 Celadon Group, Inc.* ....... 274,500
-----------
WIRELESS EQUIPTMENT - 3.23%
104,900 DSP
Communications, Inc.* .... 1,993,100
-----------
Total Common Stocks
(cost - $50,954,610) ..... 57,627,602
-----------
PREFERRED STOCKS - 5.23%
DRUGS & HOSPITAL SUPPLIES - 3.64%
9,000 Global Pharmaceutical Corp.
Convertible Series C * ... 2,250,000
-----------
<CAPTION>
- ------------------------------------------------------------------
SHARES VALUE
- ------------------------------------------------------------------
<C> <S> <C>
FOOD - MEAT PRODUCTS - 1.59%
7,000 Hibernia Foods plc - ADR
Convertible Series A
(a) ...................... $ 984,375
-----------
Total Preferred Stocks
(cost - $1,600,000) ...... 3,234,375
-----------
WARRANTS - 0.37%
DRUGS & HOSPITAL SUPPLIES - 0.37%
225,000 Global Pharmaceutical Corp.
Convertible Series C* .... 225,000
-----------
Total Equity Securities
(cost - $52,554,610) ..... 61,086,977
-----------
SHORT-TERM INVESTMENT - 2.25%
1,391,893 Federated Investors, Trust
for Short-Term U.S.
Government Securities**
(cost - $1,391,893) ...... 1,391,893
-----------
Total Investments -- 101.15%
(cost - $53,946,503) ..... 62,478,870
Liabilities in excess of
other assets --
(1.15)% .................. (714,876)
-----------
Net Assets -- 100.00% ...... $61,763,994
===========
</TABLE>
<TABLE>
<S> <C>
- -----------------------------------------------------------------------------
ADR American Depositary Receipts.
+ Including 646 shares of Buenos Aires Embottellabor SA,
with no market value.
++ Security or a portion thereof is out on loan.
* Non-income producing security.
** Money market fund.
(a) Includes 70,000 shares of Class E and Class F
warrants, with no market value.
</TABLE>
The accompanying notes are an integral part of the financial statements.
21
<PAGE>
THE BEAR STEARNS FUNDS
Focus List Portfolio
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------
SHARES VALUE
- --------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 94.27%
BASIC INDUSTRY: MACHINERY-DIVERSIFIED
INDUSTRIALS - 5.16%
35,000 Terex Corp.* ................. $ 1,102,500
-----------
COMPUTERS - MICRO - 4.55%
8,000 International Business
Machines Corp.+ ............ 971,000
-----------
CONSUMER: BEVERAGES - 4.40%
55,000 Pepsi Bottling
Group, Inc. ................ 938,437
-----------
CONSUMER: RESTAURANTS - 5.04%
55,000 Darden Restaurants, Inc. ..... 1,075,938
-----------
CONSUMER: WHOLESALE DISTRIBUTION - 2.45%
18,032 McKesson HBOC, Inc. .......... 522,928
-----------
ENERGY: OIL & GAS E & P - 4.54%
250,000 Chesapeake Energy Corp.* ..... 968,750
-----------
FINANCIAL SERVICES: BROKERS AND ASSET
MANAGERS - 4.26%
27,000 Charles Schwab Corp. (The) ... 909,562
-----------
FINANCIAL SERVICES: GOVERNMENT-SPONSORED
ENTERPRISES - 4.70%
16,000 Fannie Mae ................... 1,003,000
-----------
FOOD-MISCELLANEOUS/DIVERSIFIED - 0.02%
600 Vlasic Foods International
Inc.*+ ..................... 4,162
-----------
MEDIA-COMMUNICATIONS: BROADCASTING - 4.21%
14,800 Time Warner Inc. ............. 899,100
-----------
MEDIA-COMMUNICATIONS: BROADCASTING-
TELEVISION - 4.33%
20,000 CBS Corp.* ................... 925,000
-----------
MEDIA-COMMUNICATIONS: BROADCASTING-
TV & RADIO - 4.72%
26,000 USA Networks, Inc.* .......... 1,007,500
-----------
<CAPTION>
- --------------------------------------------------------------------
SHARES VALUE
- --------------------------------------------------------------------
<C> <S> <C>
MEDIA-COMMUNICATIONS: EUROPEAN
TELECOMMUNICATION SERVICES - 5.46%
4,900 Vodafone AirTouch plc -
ADR ........................ $ 1,164,975
-----------
TECHNOLOGY: COMPUTER SCIENCES - 4.80%
25,200 Affiliated Computer
Services, Inc. Class A* .... 1,023,750
-----------
TECHNOLOGY: COMPUTER SERVICES - 4.61%
21,000 BISYS Group Inc. (The) * ..... 985,031
-----------
TECHNOLOGY: COMPUTERS & OFFICE
EQUIPMENT - 6.16%
18,400 EMC Corp.* ................... 1,314,450
-----------
TECHNOLOGY: ELECTRONIC COMPONENTS - 5.05%
15,000 Solectron Corp.* ............. 1,077,188
-----------
TECHNOLOGY: ENTERPRISE SOFTWARE - 6.02%
24,000 Project Software &
Development, Inc.* ......... 1,284,000
-----------
TECHNOLOGY: INTERNET-NEWS MEDIA - 8.57%
17,600 America Online, Inc.* ........ 1,830,400
-----------
TECHNOLOGY: SEMICONDUCTORS - 5.22%
15,000 Intel Corp. .................. 1,114,688
-----------
Total Common Stocks
(cost - $16,523,388) ....... 20,122,359
-----------
SHORT-TERM INVESTMENTS -- 6.49%
INVESTMENT COMPANIES - 0.17%
396 Automated Government Money
Trust**+ ................... 396
35,483 Federated Investors, Trust for
Short-term U.S. Government
Securities**+ .............. 35,483
-----------
35,879
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
22
<PAGE>
THE BEAR STEARNS FUNDS
Focus List Portfolio
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------
PRINCIPAL
AMOUNT
(000'S) VALUE
- --------------------------------------------------------------------
<C> <S> <C>
</TABLE>
SHORT-TERM INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------
PRINCIPAL
AMOUNT
(000'S) VALUE
- --------------------------------------------------------------------
<C> <S> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS - 6.32%
$ 1,350 Federal Home Loan Bank
Discount Notes, 5.18%,
10/01/99+++................. $ 1,350,000
-----------
Total Short-Term Investments
(cost - 1,385,879).......... 1,385,879
-----------
Total Investments -- 100.76%
(cost - $17,909,267)........ 21,508,238
Liabilities in excess of other
assets -- (0.76)%........... (162,365)
-----------
Net Assets -- 100.00% ........ $21,345,873
===========
</TABLE>
<TABLE>
<S> <C>
- -----------------------------------------------------------------------------
ADR American Depositary Receipts.
* Non-income producing security.
** Money market fund.
+ Not a Focus List Selection at September 30, 1999.
++ Effective yield on the date of purchase.
</TABLE>
The accompanying notes are an integral part of the financial statements.
23
<PAGE>
THE BEAR STEARNS FUNDS
Balanced Portfolio
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------
SHARES VALUE
- ---------------------------------------------------------------------------------
<C> <S> <C>
EQUITY SECURITIES -- 52.25%
ADVERTISING AGENCIES - 1.95%
4,100 WPP Group plc - ADR .............................. $ 381,300
-----------
AEROSPACE & DEFENSE - 1.09%
3,600 United Tecnologies Corp. ......................... 213,525
-----------
AUTOMOBILES - 1.88%
4,700 Ford Motor Co. ................................... 235,881
2,100 General Motors Corp. ............................. 132,169
-----------
368,050
-----------
AUTOMOTIVE PARTS & EQUIPMENT - 1.03%
7,600 Genuine Parts Co. ................................ 201,875
-----------
BANKS - 2.15%
7,300 Bank of New York Co., Inc. (The) ................. 244,094
3,200 Bank of America Corp. ............................ 178,200
-----------
422,294
-----------
BROADCASTING - 0.40%
15,000 Four Media Co.* .................................. 78,750
-----------
BUILDING & HOUSING - 0.12%
1,000 Giant Cement Holding, Inc.* ...................... 22,937
-----------
CHEMICALS - DIVERSIFIED - 1.21%
13,300 Solutia Inc. ..................................... 237,737
-----------
COMMERCIAL SERVICES - 2.33%
12,200 Dun & Bradstreet Corp. (The) ..................... 364,475
3,700 Steiner Leisure Ltd.* ............................ 92,500
-----------
456,975
-----------
COMMUNICATIONS - 0.55%
4,300 Data Transmission Network Corp.*+ ................ 107,231
-----------
COMPUTERS - 1.49%
2,400 International Business Machines Corp. ............ 291,300
-----------
<CAPTION>
- ---------------------------------------------------------------------------------
SHARES VALUE
- ---------------------------------------------------------------------------------
<C> <S> <C>
CONSULTING SERVICES - 0.35%
4,300 Gartner Group, Inc.+ ............................. $ 68,531
-----------
COSMETICS & TOILETRIES - 1.02%
5,900 Gillette Co. ..................................... 200,585
-----------
CREDIT & FINANCE - 3.54%
5,300 Fannie Mae ....................................... 332,244
8,400 SLM Holding Corp. ................................ 361,200
-----------
693,444
-----------
DIVERSIFIED OPERATIONS - 2.90%
2,300 General Electric Co. ............................. 272,694
10,000 Viad Corp. ....................................... 295,000
-----------
567,694
-----------
DRUGS & HOSPITAL SUPPLIES - 1.78%
4,000 Baxter International, Inc. ....................... 241,000
1,600 Bristol-Myers Squibb Co. ......................... 108,000
-----------
349,000
-----------
ELECTRICITY - 0.57%
2,200 FPL Group, Inc. .................................. 110,825
-----------
FINANCIAL SERVICES - 1.58%
7,050 Citigroup Inc. ................................... 310,200
-----------
FOOD & BEVERAGES - 1.07%
4,900 Heinz (H.J.) Co. ................................. 210,700
-----------
HEALTH CARE - 1.01%
6,800 McKesson HBOC, Inc. .............................. 197,200
-----------
HOTELS & MOTELS - 0.87%
9,800 U.S. Franchise System, Inc.* ..................... 169,662
-----------
HUMAN RESOURCES - 0.29%
6,600 Butler International, Inc.* ...................... 57,750
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
24
<PAGE>
THE BEAR STEARNS FUNDS
Balanced Portfolio
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------
SHARES VALUE
- ---------------------------------------------------------------------------------
<C> <S> <C>
</TABLE>
EQUITY SECURITIES (CONTINUED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------
SHARES VALUE
- ---------------------------------------------------------------------------------
<C> <S> <C>
LIFE/HEALTH INSURANCE - 2.16%
6,550 Aon Corp. ........................................ $ 193,634
8,900 Torchmark Corp. .................................. 230,288
-----------
423,922
-----------
MEDICAL - DRUGS - 1.09%
3,300 Merck & Co., Inc. ................................ 213,881
-----------
MULTI-LINE INSURANCE - 2.40%
9,700 AllState Corp. ................................... 241,894
4,100 AXA Financial Inc. ............................... 228,831
-----------
470,725
-----------
NON-FERROUS METALS - 0.51%
3,400 Mueller Industries, Inc.* ........................ 100,938
-----------
OIL COMPANIES-INTEGRATED - 3.86%
3,000 Atlantic Richfield Co. ........................... 265,875
2,800 Exxon Corp. ...................................... 212,625
4,400 Texaco, Inc. ..................................... 277,750
-----------
756,250
-----------
PAPER & PAPER RELATED PRODUCTS - 1.50%
5,600 Kimberly-Clark Corp. ............................. 294,000
-----------
RADIO - 0.30%
1,000 Cox Radio, Inc., Class A* ........................ 59,500
-----------
<CAPTION>
- ---------------------------------------------------------------------------------
SHARES VALUE
- ---------------------------------------------------------------------------------
<C> <S> <C>
RENTAL/AUTO EQUIPMENT - 0.39%
3,500 United Rentals, Inc.* ............................ $ 76,125
-----------
RETAIL - RESTAURANTS - 3.14%
7,200 McDonald's Corp. ................................. 309,600
11,600 Wendy's International, Inc. ...................... 305,950
-----------
615,550
-----------
RETAIL - TOY STORES - 1.00%
13,100 Toys 'R' Us, Inc. ................................ 196,500
-----------
SAVINGS & LOAN - 1.26%
8,450 Washington Mutual, Inc. .......................... 247,163
-----------
TELECOMMUNICATIONS - 1.54%
5,900 SBC Communications, Inc. ......................... 301,269
-----------
TELEPHONE - LONG DISTANCE - 1.00%
4,500 AT&T Corp. ....................................... 195,750
-----------
TOBACCO - 1.36%
7,800 Philip Morris Cos. Inc. .......................... 266,663
-----------
TOYS - 1.56%
16,100 Mattel, Inc. ..................................... 305,900
-----------
Total Equity Securities
(cost - $9,764,417) ............................ 10,241,701
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
25
<PAGE>
THE BEAR STEARNS FUNDS
Balanced Portfolio
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT INTEREST MATURITY
(000'S) RATE(S) DATE(S) VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
LONG-TERM DEBT INVESTMENTS -- 46.26%
CORPORATE OBLIGATIONS - 17.36%
BANKS - 1.80%
$ 100 Firstar Bank Milwaukee, Senior Notes ........ 6.250% 12/01/02 $ 99,500
250 NationsBank Corp., Senior Notes ............. 7.000 05/15/03 253,125
-----------
352,625
-----------
FINANCIAL - 1.27%
100 Associates Corp. N.A., Senior Notes ......... 6.625 06/15/05 98,500
75 International Lease Finance Corp., Notes .... 6.125 11/01/99 75,029
75 Morgan Stanley Dean Witter Discover & Co.,
Notes ....................................... 6.750 03/04/03 74,906
-----------
248,435
-----------
FOOD & BEVERAGES - 3.83%
75 Anheuser Busch Cos. Inc., Notes ............. 6.750 06/01/05 74,625
200 Heinz (H.J.) Co., Notes ..................... 6.000 03/15/08 189,750
150 Hershey Foods Co., Notes .................... 6.700 10/01/05 151,125
150 Safeway Inc., Notes ......................... 6.050 11/15/03 144,221
200 Sara Lee Corp., Notes ....................... 6.150 06/19/08 191,250
-----------
750,971
-----------
INDUSTRIAL - 8.93%
200 American Home Products, Notes ............... 7.900 02/15/05 206,750
250 Dow Chemical Co., Debentures ................ 8.625 04/01/06 263,438
250 Du Pont (E.I.) de Nemours Co., Notes ........ 6.750 09/01/07 251,250
200 Enron Oil & Gas, Notes ...................... 6.700 11/15/06 195,000
100 Gap, Inc., Notes ............................ 6.900 09/15/07 100,250
75 HNA Holdings, Inc., Notes ................... 6.125 02/01/04 73,219
75 Pepsico Inc., Notes ......................... 5.750 01/02/03 73,500
200 Tribune Co., Notes .......................... 5.500 10/06/08 175,250
150 Union Camp Corp., Notes ..................... 6.500 11/15/07 144,750
250 Wheeling Pittsburgh Corp., Notes ............ 9.375 11/15/03 266,875
-----------
1,750,282
-----------
MORTGAGE BACKED SECURITIES - 0.77%
150 Residential Asset Securities Corp.,
Series 1999-Rs2 Class A13 ................... 7.525 01/25/01 150,375
-----------
UTILITY-ELECTRIC - 0.76%
75 Central Power & Light Co., Mortgage Backed
Series 93-G ................................. 6.875 02/01/03 75,000
75 Pacific Gas & Electric Co., Mortgage Backed
Series FF ................................... 6.250 03/01/04 73,688
-----------
148,688
-----------
Total Corporate Obligations (cost -
$3,554,509) ................................. 3,401,376
-----------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 24.64%
FANNIE MAE - 12.94%
2,601 Pass-thru-Pools ............................. 6.000-8.000 08/01/06-08/01/29 2,536,635
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
26
<PAGE>
THE BEAR STEARNS FUNDS
Balanced Portfolio
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT INTEREST MATURITY
(000'S) RATE(S) DATE(S) VALUE
- ----------------------------------------------------------------------------------------------------------------
LONG-TERM DEBT INVESTMENTS (CONTINUED)
<C> <S> <C> <C> <C>
FEDERAL HOME LOAN BANK - 1.01%
$ 200 Bond ........................................ 6.500% 07/15/04 $ 198,922
-----------
FREDDIE MAC - 5.05%
1,049 Pass-thru-Pools ............................. 5.125-7.000 04/15/08-07/01/29 990,352
-----------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 5.64%
1,108 Pass-thru-Pools ............................. 6.000-8.500 07/15/17-06/15/28 1,106,693
-----------
Total U.S. Government Agency Obligations
(cost - $4,997,539) ......................... 4,832,602
-----------
U.S. GOVERNMENT OBLIGATIONS - 4.26%
150 U.S. Treasury Bonds ......................... 7.500 11/15/16 166,167
650 U.S. Treasury Notes ......................... 6.125-7.000 07/15/06-08/15/07 668,333
-----------
Total U.S. Government Obligations (cost -
$847,364) ................................... 834,500
-----------
Total Long-Term Debt Investments (cost -
$9,399,412) ................................. 9,068,478
-----------
SHORT-TERM INVESTMENTS -- 1.19%
U.S. GOVERNMENT AGENCY OBLIGATIONS - 1.02%
200 Federal Home Loan Bank Discount Notes
(cost - $199,914) ........................... 5.130++ 10/04/99 199,914
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES
------
<C> <S> <C>
INVESTMENT COMPANIES - 0.17%
32,827 Federated Investors, Trust for Short-Term
U.S. Government Securities** (cost -
$32,827) .................................. 32,827
-----------
Total Short-Term Investments (cost -
$232,741) ................................. 232,741
-----------
Total Investments -- 99.70% (cost -
$19,396,570) .............................. 19,542,920
Other assets in excess of liabilities --
0.30% ..................................... 58,738
-----------
Net Assets -- 100.00% ....................... $19,601,658
===========
</TABLE>
- -------------------------------------------------------------------------------
ADR American Depositary Receipts.
+ Security or a portion thereof is out on loan.
++ Effective yield on the date of purchase.
* Non-income producing security.
** Money market fund.
The accompanying notes are an integral part of the financial statements.
27
<PAGE>
THE BEAR STEARNS FUNDS
International Equity Portfolio
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------
SHARES VALUE
- ---------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 95.72%
AUSTRALIA - 0.63%
DIVERSIFIED MINERALS - 0.63%
12,700 Broken Hill Proprietary Co.
Ltd.
(cost - $145,026) ........... $ 146,290
-----------
CANADA - 1.24%
COMMUNICATIONS SOFTWARE - 0.17%
1,300 Research In Motion Ltd.* ...... 40,219
-----------
FINANCE-INVESTMENT BANKING/BROKERAGE - 0.19%
3,300 TD Waterhouse Group, Inc.* .... 43,117
-----------
MEDICAL-DRUGS - 0.24%
2,300 BioChem Pharma Inc.* .......... 55,056
-----------
NETWORK SOFTWARE - 0.24%
2,100 Newbridge Networks Corp.* ..... 54,731
-----------
TELECOMMUNICATION EQUIPMENT - 0.40%
1,800 Nortel Networks Corp. ......... 91,800
-----------
Total Canada (cost -
$314,506) ................... 284,923
-----------
FINLAND - 4.31%
PAPER & RELATED PRODUCTS - 0.47%
3,200 UPM-Kymmene Oyj ............... 109,054
-----------
TELECOMMUNICATION EQUIPMENT - 3.84%
9,900 Nokia Oyj, Class A ............ 886,696
-----------
Total Finland (cost -
$652,873) ................... 995,750
-----------
FRANCE - 8.05%
COMPUTER SERVICES - 1.64%
2,400 Cap Gemini SA ................. 378,283
-----------
COMPUTERS-INTEGRATED SYSTEMS - 1.51%
4,300 Equant NV* .................... 349,869
-----------
ELECTRONIC COMPONENTS-SEMICONDUCTORS - 3.31%
9,800 STMicroelectronics NV* ........ 763,978
-----------
FOOD-RETAIL - 0.83%
1,200 Carrefour SA .................. 192,081
-----------
OIL COMPANIES-INTEGRATED - 0.76%
1,000 Elf Aquitaine SA .............. 174,658
-----------
Total France (cost -
$1,703,814) ................. 1,858,869
-----------
<CAPTION>
- ---------------------------------------------------------------------
SHARES VALUE
- ---------------------------------------------------------------------
<C> <S> <C>
GERMANY - 4.74%
DIVERSIFIED MANUFACTURING OPERATIONS - 1.30%
3,700 Siemens AG .................... $ 301,444
-----------
DIVERSIFIED OPERATIONS - 0.48%
2,200 Preussag AG ................... 110,588
-----------
MACHINERY-GENERAL INDUSTRY - 2.44%
3,600 Mannesmann AG ................. 564,357
-----------
MONEY CENTER BANKS - 0.52%
1,800 Deutsche Bank AG .............. 119,466
-----------
Total Germany (cost -
$956,506) ................... 1,095,855
-----------
HONG KONG - 5.68%
DIVERSIFIED OPERATIONS - 1.65%
98,000 First Pacific Co., Ltd. ....... 59,929
19,000 Hutchinson Whampoa Ltd. ....... 176,729
50,000 Wharf (Holdings) Ltd. ......... 144,511
-----------
381,169
-----------
MONEY CENTER BANKS - 2.78%
56,000 HSBC Holdings plc ............. 641,643
-----------
REAL ESTATE DEVELOPMENT - 0.94%
26,000 Cheung Kong (Holdings) Ltd. ... 216,735
-----------
TELEVISION - 0.31%
17,000 Television Broadcasts Ltd. .... 72,661
-----------
Total Hong Kong (cost -
$1,266,305) ................. 1,312,208
-----------
IRELAND - 0.21%
BUILDING & CONSTRUCTION
PRODUCTS-MISCELLANEOUS - 0.21%
2,600 CRH plc (cost - $53,168) ...... 49,592
-----------
ISRAEL - 0.37%
COMPUTER DATA SECURITY - 0.37%
1,000 Check Point Software* (cost -
$91,597) .................... 84,437
-----------
JAPAN - 43.65%
AUDIO/VIDEO PRODUCTS - 2.33%
3,600 Sony Corp. .................... 537,971
-----------
CELLULAR TELECOMMUNICATIONS - 3.84%
4,500 NTT Mobile Communications
Network, Inc. ............... 887,601
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
28
<PAGE>
THE BEAR STEARNS FUNDS
International Equity Portfolio
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------
SHARES VALUE
- ---------------------------------------------------------------------
<C> <S> <C>
</TABLE>
COMMON STOCKS (CONTINUED)
JAPAN (CONTINUED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------
SHARES VALUE
- ---------------------------------------------------------------------
<C> <S> <C>
COMPUTER SOFTWARE - 0.22%
400 Trans Cosmos Inc. ............. $ 49,969
-----------
COMPUTERS-INTEGRATED SYSTEMS - 4.59%
34,000 Fujitsu Ltd. .................. 1,060,237
-----------
COSMETICS & TOILETRIES - 2.20%
18,000 Kao Corp. ..................... 508,891
-----------
ELECTRONIC COMPONENTS-MISCELLANEOUS - 4.48%
4,000 Alps Electric Co., Ltd. ....... 83,594
500 Mabuchi Motor Co., Ltd. ....... 65,091
8,000 Murata Manufacturing Co.,
Ltd. ........................ 804,007
11,000 Toshiba Corp. ................. 81,932
-----------
1,034,624
-----------
ELECTRONIC COMPONENTS-SEMICONDUCTORS - 4.53%
2,100 Rohm Co. Ltd. ................. 438,869
7,000 Tokyo Electron Ltd. ........... 608,171
-----------
1,047,040
-----------
ELECTRONIC MEASUREMENT INSTRUMENTS - 0.35%
300 Keyence Corp. ................. 80,307
-----------
FINANCE-CONSUMER LOANS - 0.94%
292 Shokoh Fund & Co., Ltd. ....... 218,040
-----------
FINANCE-INVESTMENT BANKING/BROKERAGE - 3.26%
89,000 The Nikko Securities Co.,
Ltd. ........................ 752,347
-----------
INTERNET CONTENT - 4.94%
3,000 SOFTBANK Corp. ................ 1,141,201
-----------
MEDICAL-DRUGS - 3.59%
11,000 Takeda Chemical Industries,
Ltd. ........................ 594,082
5,000 Yamanouchi Pharmaceutical Co.,
Ltd. ........................ 234,345
-----------
828,427
-----------
MONEY CENTER BANKS - 2.49%
27,000 Bank of Tokyo-Mitsubishi,
Ltd. ........................ 414,636
5,000 The Mitsubishi Trust & Banking
Corp. ....................... 61,052
4,000 The Sanwa Bank, Ltd. .......... 53,538
3,000 The Sumitomo Bank, Ltd. ....... 45,084
-----------
574,310
-----------
<CAPTION>
- ---------------------------------------------------------------------
SHARES VALUE
- ---------------------------------------------------------------------
<C> <S> <C>
</TABLE>
JAPAN (CONTINUED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------
SHARES VALUE
- ---------------------------------------------------------------------
<C> <S> <C>
PHOTOGRAPHIC EQUIPMENT & SUPPLIES - 0.42%
5,000 Nikon Corp. ................... $ 96,274
-----------
RETAIL-APPAREL/SHOE - 0.34%
400 Fast Retailing Co. Ltd. ....... 79,274
-----------
RETAIL-CONVENIENCE STORES - 0.38%
1,000 Seven-Eleven Japan Co.,
Ltd. ........................ 87,821
-----------
RETAIL-MISCELLANEOUS/DIVERSIFIED - 0.72%
2,000 Ito Yokado Co., Ltd. .......... 165,310
-----------
TELECOMMUNICATION EQUIPMENT - 2.89%
6,000 Matsushita Electric Industrial
Co., Ltd. ................... 667,814
-----------
TELECOMMUNICATION SERVICES - 0.44%
900 NTT Data Corp. ................ 101,440
-----------
TELEPHONE-INTEGRATED - 0.48%
900 Nippon Telegraph & Telephone
Corp. ....................... 110,739
-----------
TRANSPORT-SERVICES - 0.22%
2,000 Yamato Transport Co., Ltd. .... 50,814
-----------
Total Japan (cost -
$6,666,419) ................. 10,080,451
-----------
NETHERLANDS - 4.79%
COMPUTER SERVICES - 1.12%
4,800 Getronics NV .................. 258,919
-----------
COMPUTERS-INTEGRATED SYSTEMS - 2.29%
7,800 ASM Lithography Holding NV* ... 528,318
-----------
ELECTRONIC COMPONENTS-MISCELLANEOUS - 1.15%
2,636 Koninklijke (Royal) Philips
Electronics NV .............. 265,290
-----------
OIL COMPANIES-INTEGRATED - 0.23%
900 Royal Dutch Petroleum Co. ..... 52,238
-----------
Total Netherlands (cost -
$989,452) ................... 1,104,765
-----------
NORWAY - 0.24%
OIL-FIELD SERVICES - 0.24%
3,000 Petroleum Geo-Services ASA*
(cost - $69,208) ............ 56,306
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
29
<PAGE>
THE BEAR STEARNS FUNDS
International Equity Portfolio
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------
SHARES VALUE
- ---------------------------------------------------------------------
<C> <S> <C>
</TABLE>
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------
SHARES VALUE
- ---------------------------------------------------------------------
<C> <S> <C>
SINGAPORE - 4.32%
MONEY CENTER BANKS - 3.06%
52,335 DBS Group Holdings Ltd. ....... $ 584,759
9,000 Overseas-Chinese Banking Corp.
Ltd. ........................ 69,863
7,000 United Overseas Bank Ltd. ..... 53,103
-----------
707,725
-----------
PUBLISHING-NEWSPAPERS - 0.95%
14,000 Singapore Press Holdings
Ltd. ........................ 220,645
-----------
REAL ESTATE DEVELOPMENT - 0.31%
14,000 City Developments Ltd. ........ 71,216
-----------
Total Singapore (cost -
$864,768) ................... 999,586
-----------
SOUTH KOREA - 2.54%
ELECTRIC PRODUCTS-MISCELLANEOUS - 0.95%
2,700 Samsung Electronics, GDR+ ..... 218,625
-----------
STEEL-PRODUCERS - 0.65%
4,800 Pohang Iron & Steel Ltd.,
ADR ......................... 150,300
-----------
TELECOMMUNICATION SERVICES - 0.94%
3,300 Korea Telecom Corp., ADR* ..... 122,100
9,200 SK Telecom Co. Ltd., ADR ...... 94,875
-----------
216,975
-----------
Total South Korea (cost -
$662,310) ................... 585,900
-----------
SWEDEN - 4.44%
ENGINEERING/R & D SERVICES - 1.78%
4,000 ABB Ltd.* ..................... 410,355
-----------
MACHINERY-CONSTRUCTION & MINING - 0.23%
1,700 Atlas Copco AB- Class A
Shares ...................... 47,696
242 Atlas Copco AB- Class A Shares
(New) ....................... 6,657
-----------
54,353
-----------
PAPER & RELATED PRODUCTS - 0.21%
1,700 Svenska Cellulosa AB - Class B
Shares ...................... 45,311
1,700 Svenska Cellulosa AB - Class B
Shares,
Rights Issue (10/22/99)* .... 2,713
-----------
48,024
-----------
RETAIL-APPAREL/SHOE - 0.44%
4,000 Hennes & Mauritz AB ........... 100,759
-----------
<CAPTION>
- ---------------------------------------------------------------------
SHARES VALUE
- ---------------------------------------------------------------------
<C> <S> <C>
</TABLE>
SWEDEN (CONTINUED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------
SHARES VALUE
- ---------------------------------------------------------------------
<C> <S> <C>
SECURITY SERVICES - 0.36%
5,600 Securitas AB - Class B
Shares ...................... $ 84,023
-----------
TELECOMMUNICATION EQUIPMENT - 1.42%
10,500 Telefonaktiebolaget LM
Ericsson, ADR ............... 328,125
-----------
Total Sweden (cost -
$1,032,985) ................. 1,025,639
-----------
THAILAND - 0.08%
COMMERCIAL BANKS-PACIFIC RIM - 0.08%
9,600 Thai Farmers Bank Public Co.,
Ltd. ........................ 11,319
9,600 Thai Farmers Bank Public Co.,
Ltd., Rights Issue
(10/21/99)* ................. 6,627
-----------
Total Thailand (cost -
$31,831) .................... 17,946
-----------
UNITED KINGDOM - 9.80%
CELLULAR TELECOMMUNICATIONS - 2.57%
25,100 Vodafone AirTouch plc Ord
0.10p ....................... 594,429
-----------
COMPUTER SERVICES - 1.11%
19,500 Logica plc Ord 10p ............ 255,311
-----------
DIVERSIFIED MANUFACTURING OPERATIONS - 2.08%
19,700 General Electric Company plc
5p .......................... 189,148
60,000 Invensys plc 25p .............. 292,489
-----------
481,637
-----------
INTERNET SOFTWARE - 0.11%
11,000 Freeserve plc 25p* ............ 26,495
-----------
OIL COMPANIES-INTEGRATED - 1.42%
17,900 BP Amoco plc 50p .............. 326,928
-----------
RETAIL-CONSUMER ELECTRONICS - 0.65%
8,400 Dixons Group plc Ord 10p ...... 149,683
-----------
TELECOMMUNICATION SERVICES - 1.86%
18,100 COLT Telecom Group plc Ord
25p* ........................ 430,440
-----------
Total United Kingdom (cost -
$1,983,026) ................. 2,264,923
-----------
UNITED STATES - 0.63%
ELECTRONIC COMPONENTS-SEMICONDUCTORS - 0.20%
500 PMC-Sierra, Inc.* ............. 46,250
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
30
<PAGE>
THE BEAR STEARNS FUNDS
International Equity Portfolio
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------
SHARES VALUE
- ---------------------------------------------------------------------
<C> <S> <C>
</TABLE>
COMMON STOCKS (CONTINUED)
UNITED STATES (CONTINUED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------
SHARES VALUE
- ---------------------------------------------------------------------
<C> <S> <C>
TELECOMMUNICATION SERVICES - 0.43%
5,000 Global TeleSystems
Group, Inc.* ................ $ 98,594
-----------
Total United States (cost -
$230,144) ................... 144,844
-----------
Total Common Stocks (cost -
$17,713,938) ................ 22,108,284
-----------
SHORT-TERM INVESTMENTS -- 5.01%
UNITED STATES - 5.01%
INVESTMENT COMPANIES - 5.01%
449,246 Automated Government Money
Trust ....................... 449,246
707,414 Federated Investors, Trust for
Short-term
U.S. Government
Securities .................. 707,414
-----------
1,156,660
-----------
Total Short-Term Investments
(cost - $1,156,660) ......... 1,156,660
-----------
Total Investments -- 100.73%
(cost - $18,870,598) ........ 23,264,944
Liabilities in excess of other
assets -- (0.73)% ........... (169,559)
-----------
Net Assets -- 100.00% ......... $23,095,385
===========
</TABLE>
<TABLE>
<S> <C>
- ----------------------------------------------------------------------------
ADR American Depositary Receipts.
GDR Global Depositary Receipts.
* Non-income producing security.
+ SEC Rule 144A security, such securities are traded
only among "qualified institutional buyers."
</TABLE>
The accompanying notes are an integral part of the financial statements.
31
<PAGE>
THE BEAR STEARNS FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
LARGE CAP SMALL CAP INTERNATIONAL
S&P STARS THE INSIDERS VALUE VALUE FOCUS LIST BALANCED EQUITY
PORTFOLIO SELECT FUND PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ----------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at value
(cost - $479,870,070,
$36,949,913,
$16,907,995,
$53,946,503,
$17,909,267, $19,396,570
and $18,870,598,
respectively)........... $595,045,428 $40,256,962 $20,071,896 $62,478,870 $21,508,238 $19,542,920 $23,264,944
Receivable for Portfolio
shares sold............. 10,750,775 42,713 36,007 34,600 117,406 7,000 72,544
Collateral received for
securities loaned....... 3,040,000 -- -- 2,841,800 -- 111,800 --
Receivable for investments
sold.................... 589,730 -- 244,404 -- 861,875 208,186 118,913
Dividends, interest and
reclaims receivable, if
any..................... 213,575 24,731 40,104 24,758 1,259 181,342 60,491
Receivable from investment
adviser................. -- 9,366 21,760 -- 10,951 32,014 25,193
Deferred organization
expenses and other
asset................... 70,390 64,800 30,712 35,593 54,046 69,351 80,538
------------ ----------- ----------- ----------- ----------- ----------- -----------
Total assets........ 609,709,898 40,398,572 20,444,883 65,415,621 22,553,775 20,152,613 23,622,623
------------ ----------- ----------- ----------- ----------- ----------- -----------
LIABILITIES
Payable for investments
purchased............... 4,354,480 -- 371,050 569,712 1,075,938 345,739 334,713
Payable upon return for
securities loaned....... 3,040,000 -- -- 2,841,800 -- 111,800 --
Payable for open forward
foreign currency
exchange contracts...... -- -- -- -- -- -- 66,217
Payable for Portfolio
shares repurchased...... 1,516,540 142,831 60,407 34,332 21,618 601 19,909
Distribution and service
fees payable (Class A, B
and C shares)........... 884,103 79,002 30,455 65,787 38,488 15,820 36,895
Loan payable.............. 565,200 -- -- -- -- -- --
Advisory fee payable...... 282,468 -- -- 15,426 -- -- --
Administration fee
payable................. 71,956 5,101 2,080 7,745 2,063 1,978 2,825
Custodian fee payable..... -- 3,223 1,820 4,700 2,440 5,113 5,207
Accrued expenses.......... 208,141 98,064 74,367 112,125 67,355 69,904 61,472
------------ ----------- ----------- ----------- ----------- ----------- -----------
Total liabilities... 10,922,888 328,221 540,179 3,651,627 1,207,902 550,955 527,238
------------ ----------- ----------- ----------- ----------- ----------- -----------
NET ASSETS
Capital stock, $0.001 par
value (unlimited shares
of beneficial interest
authorized)............. 23,808 2,437 1,039 3,029 1,261 1,541 1,351
Paid-in capital........... 478,527,388 33,780,539 14,391,616 49,477,637 18,354,534 19,467,197 18,636,758
Undistributed net
investment
income/(loss)........... (2,905,369) 27,390 62,088 (187,144) (70,836) 66,844 (84,656)
Accumulated net realized
gain/(loss) from
investments and foreign
currency related
transactions, if any.... 7,965,825 2,952,936 2,286,060 3,938,105 (538,057) (80,274) 214,755
Net unrealized
appreciation on
investments and foreign
currency related
transactions, if any.... 115,175,358 3,307,049 3,163,901 8,532,367 3,598,971 146,350 4,327,177
------------ ----------- ----------- ----------- ----------- ----------- -----------
Net assets.......... $598,787,010 $40,070,351 $19,904,704 $61,763,994 $21,345,873 $19,601,658 $23,095,385
============ =========== =========== =========== =========== =========== ===========
CLASS A
Net assets................ $287,177,826 $21,437,262 $ 8,839,810 $19,463,356 $10,711,084 $ 4,623,435 $15,000,278
------------ ----------- ----------- ----------- ----------- ----------- -----------
Shares of beneficial
interest outstanding.... 11,373,313 1,293,732 460,057 953,856 629,502 364,297 874,692
------------ ----------- ----------- ----------- ----------- ----------- -----------
Net asset value per
share................... $25.25 $16.57 $19.22 $20.40 $17.02 $12.69 $17.15
============ =========== =========== =========== =========== =========== ===========
Maximum offering price per
share (net asset value.
plus sales charge of
5.50%* of the offering
price) $26.72 $17.53 $20.34 $21.59 $18.01 $13.43 $18.15
============ =========== =========== =========== =========== =========== ===========
CLASS B
Net assets................ $105,268,433 $ 7,281,362 $ 1,925,030 $ 3,257,136 $ 5,823,487 $ 2,062,497 $ 4,308,179
------------ ----------- ----------- ----------- ----------- ----------- -----------
Shares of beneficial
interest outstanding.... 4,227,405 447,636 101,601 162,050 345,937 163,294 253,415
------------ ----------- ----------- ----------- ----------- ----------- -----------
Net asset value and
offering price per
share**................. $24.90 $16.27 $18.95 $20.10 $16.83 $12.63 $17.00
============ =========== =========== =========== =========== =========== ===========
CLASS C
Net assets................ $134,233,116 $10,364,564 $ 4,955,894 $11,945,106 $ 4,811,302 $ 1,665,377 $ 3,786,928
------------ ----------- ----------- ----------- ----------- ----------- -----------
Shares of beneficial
interest outstanding.... 5,391,785 637,436 260,797 594,578 285,656 131,893 222,713
------------ ----------- ----------- ----------- ----------- ----------- -----------
Net asset value and
offering price per
share**................. $24.90 $16.26 $19.00 $20.09 $16.84 $12.63 $17.00
============ =========== =========== =========== =========== =========== ===========
CLASS Y
Net assets................ $ 72,107,635 $ 987,163 $ 4,183,970 $27,098,396 -- $11,250,349 --
------------ ----------- ----------- ----------- ----------- ----------- -----------
Shares of beneficial
interest outstanding.... 2,815,068 58,345 216,833 1,317,900 -- 881,785 --
------------ ----------- ----------- ----------- ----------- ----------- -----------
Net asset value, offering
and redemption price per
share................... $25.61 $16.92 $19.30 $20.56 -- $12.76 --
============ =========== =========== =========== =========== =========== ===========
</TABLE>
- ----------
*On investments of $50,000 or more, the offering price is reduced.
**Redemption price per share is equal to the net asset value per share less any
applicable contingent deferred sales charge.
The accompanying notes are an integral part of the financial statements.
32
<PAGE>
THE BEAR STEARNS FUNDS
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
LARGE CAP SMALL CAP FOCUS INTERNATIONAL
S&P STARS THE INSIDERS VALUE VALUE LIST BALANCED EQUITY
PORTFOLIO SELECT FUND PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ------------ ----------- ---------- --------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends..................... $ 1,172,194 $ 352,213 $ 203,224 $ 179,529 $ 47,995 $ 92,541 $ 69,917
Interest...................... 46,191 86,089 11,445 81,619 35,935 323,063 30,266
Less: Foreign taxes
withheld................ (7,057) (892) (327) -- (4,314) (122) (2,563)
----------- ----------- ----------- ---------- --------- --------- ----------
1,211,328 437,410 214,342 261,148 79,616 415,482 97,620
----------- ----------- ----------- ---------- --------- --------- ----------
EXPENSES
Advisory fees................. 1,894,752 148,946 81,030 237,939 59,050 66,121 94,008
Distribution fees -
Class A..................... 615,059 60,015 24,026 52,391 22,237 12,054 29,449
Distribution fees -
Class B..................... 373,120 42,148 9,792 16,054 25,822 10,608 18,539
Distribution fees -
Class C..................... 589,955 58,338 26,989 61,243 20,538 7,805 16,571
Transfer agent fees and
expenses.................... 214,114 87,131 74,279 73,200 49,140 77,747 62,610
Accounting fees............... 210,706 63,924 46,650 72,598 39,847 53,680 49,622
Administration fees........... 378,950 33,827 16,206 47,475 13,625 15,259 14,101
Federal and state registration
fees........................ 87,321 28,969 22,771 23,587 26,695 22,696 23,206
Legal and auditing fees....... 38,500 25,071 18,881 45,510 19,576 20,219 20,499
Custodian fees and expenses... 22,542 8,531 4,216 10,372 6,405 8,418 16,499
Amortization of organization
expenses.................... 20,415 18,110 7,869 10,832 3,964 5,388 6,118
Reports and notices to
shareholders................ 35,138 5,028 1,131 18,409 2,039 1,449 2,999
Insurance expenses............ 3,532 3,134 2,966 3,135 2,964 2,937 2,910
Trustees' fees and expenses... 2,000 2,196 1,610 3,510 2,040 2,045 2,000
Other......................... 17,726 1,577 1,501 4,353 640 1,607 1,828
----------- ----------- ----------- ---------- --------- --------- ----------
Total expenses before
waivers and related
reimbursements.......... 4,503,830 586,945 339,917 680,608 294,582 308,033 360,959
Less: waivers and related
reimbursements.......... (387,133) (167,000) (170,448) (232,316) (144,130) (206,456) (178,683)
----------- ----------- ----------- ---------- --------- --------- ----------
Total expenses after
waivers and related
reimbursements.......... 4,116,697 419,945 169,469 448,292 150,452 101,577 182,276
----------- ----------- ----------- ---------- --------- --------- ----------
Net investment
income/(loss)............... (2,905,369) 17,465 44,873 (187,144) (70,836) 313,905 (84,656)
----------- ----------- ----------- ---------- --------- --------- ----------
NET REALIZED AND UNREALIZED
GAIN/(LOSS) ON INVESTMENTS
Net realized gain/(loss) from:
Investments................. 8,862,001 2,518,245 1,659,103 3,675,690 115,363 88,942 511,274
Foreign currency related
transactions.............. -- -- -- -- -- -- (319,702)
Net change in unrealized
appreciation on:
Investments................. 6,158,491 (3,500,945) (2,182,049) 4,285,501 (562,846) (886,412) 2,520,207
Foreign currency related
transactions.............. -- -- -- -- -- -- (126)
----------- ----------- ----------- ---------- --------- --------- ----------
Net realized and unrealized
gain/(loss) on
investments................. 15,020,492 (982,700) (522,946) 7,961,191 (447,483) (797,470) 2,711,653
----------- ----------- ----------- ---------- --------- --------- ----------
NET INCREASE/(DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS..................... $12,115,123 $ (965,235) $ (478,073) $7,774,047 $(518,319) $(483,565) $2,626,997
=========== =========== =========== ========== ========= ========= ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
33
<PAGE>
THE BEAR STEARNS FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
S&P STARS PORTFOLIO THE INSIDERS SELECT FUND LARGE CAP VALUE PORTFOLIO
---------------------------------- ---------------------------------- ----------------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE
SIX MONTHS ENDED FISCAL YEAR SIX MONTHS ENDED FISCAL YEAR SIX MONTHS ENDED FISCAL YEAR
SEPTEMBER 30, 1999 ENDED SEPTEMBER 30, 1999 ENDED SEPTEMBER 30, 1999 ENDED
(UNAUDITED) MARCH 31, 1999 (UNAUDITED) MARCH 31, 1999 (UNAUDITED) MARCH 31, 1999
------------------ -------------- ------------------ -------------- ------------------ --------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE IN NET ASSETS
FROM OPERATIONS
Net investment
income/(loss)...... $ (2,905,369) $ (2,293,626) $ 17,465 $ 9,925 $ 44,873 $ 119,515
Net realized
gain/(loss) from
investments........ 8,862,001 5,095,349 2,518,245 434,689 1,659,103 1,012,884
Net change in
unrealized
appreciation on
investments........ 6,158,491 69,260,476 (3,500,945) (424,713) (2,182,049) (291,673)
------------ ------------ ----------- ----------- ----------- -----------
Net
increase/(decrease)
in net assets
resulting from
operations......... 12,115,123 72,062,199 (965,235) 19,901 (478,073) 840,726
------------ ------------ ----------- ----------- ----------- -----------
DIVIDENDS AND
DISTRIBUTIONS TO
SHAREHOLDERS FROM
Net investment income
Class A shares..... -- -- -- -- -- (52,112)
Class B shares..... -- -- -- -- -- (4,736)
Class C shares..... -- -- -- -- -- (3,697)
Class Y shares..... -- -- -- -- -- (58,015)
------------ ------------ ----------- ----------- ----------- -----------
-- -- -- -- -- (118,560)
------------ ------------ ----------- ----------- ----------- -----------
Net realized capital
gains
Class A shares..... -- (6,112,211) -- (1,358,815) -- (807,345)
Class B shares..... -- (944,991) -- (434,161) -- (114,321)
Class C shares..... -- (3,004,046) -- (675,728) -- (474,805)
Class Y shares..... -- (1,819,866) -- (54,124) -- (487,820)
------------ ------------ ----------- ----------- ----------- -----------
-- (11,881,114) -- (2,522,828) -- (1,884,291)
------------ ------------ ----------- ----------- ----------- -----------
SHARES OF BENEFICIAL
INTEREST
Net proceeds from the
sale of shares..... 234,837,967 370,960,712 3,971,370 26,721,919 2,257,090 9,602,484
Cost of shares
repurchased........ (53,751,829) (250,991,253) (8,572,876) (18,667,292) (3,452,828) (9,537,890)
Shares issued in
reinvestment of
dividends.......... -- 11,062,277 -- 2,358,103 -- 1,621,941
------------ ------------ ----------- ----------- ----------- -----------
Net
increase/(decrease)
in net assets
derived from shares
of beneficial
interest
transactions....... 181,086,138 131,031,736 (4,601,506) 10,412,730 (1,195,738) 1,686,535
------------ ------------ ----------- ----------- ----------- -----------
Total
increase/(decrease)
in net assets...... 193,201,261 191,212,821 (5,566,741) 7,909,803 (1,673,811) 524,410
NET ASSETS
Beginning of
period............. 405,585,749 214,372,928 45,637,092 37,727,289 21,578,515 21,054,105
------------ ------------ ----------- ----------- ----------- -----------
End of period*....... $598,787,010 $405,585,749 $40,070,351 $45,637,092 $19,904,704 $21,578,515
============ ============ =========== =========== =========== ===========
</TABLE>
- --------------------------------------------------------------------------------
* Includes undistributed net investment income as follows:
<TABLE>
<CAPTION>
FOR THE SIX FOR THE
MONTHS ENDED FISCAL
SEPTEMBER 30, 1999 YEAR ENDED
(UNAUDITED) MARCH 31, 1999
----------------------- --------------
<S> <C> <C>
The Insiders Select
Fund.................. $27,390 $ 9,925
Large Cap Value
Portfolio............. 62,088 17,215
Balanced Portfolio..... 66,844 36,656
</TABLE>
The accompanying notes are an integral part of the financial statements.
34
<PAGE>
<TABLE>
<CAPTION>
SMALL CAP VALUE PORTFOLIO FOCUS LIST PORTFOLIO BALANCED PORTFOLIO
---------------------------------- ---------------------------------- ----------------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE
SIX MONTHS ENDED FISCAL YEAR SIX MONTHS ENDED FISCAL YEAR SIX MONTHS ENDED FISCAL YEAR
SEPTEMBER 30, 1999 ENDED SEPTEMBER 30, 1999 ENDED SEPTEMBER 30, 1999 ENDED
(UNAUDITED) MARCH 31, 1999 (UNAUDITED) MARCH 31, 1999 (UNAUDITED) MARCH 31, 1999
------------------ -------------- ------------------ -------------- ------------------ --------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE IN NET ASSETS
FROM OPERATIONS
Net investment
income/(loss)...... $ (187,144) $ (350,567) $ (70,836) $ (82,665) $ 313,905 $ 447,144
Net realized
gain/(loss) from
investments........ 3,675,690 262,412 115,363 (653,420) 88,942 (169,216)
Net change in
unrealized
appreciation on
investments........ 4,285,501 (15,312,529) (562,846) 3,662,162 (886,412) 426,454
----------- ----------- ----------- ----------- ----------- -----------
Net
increase/(decrease)
in net assets
resulting from
operations......... 7,774,047 (15,400,684) (518,319) 2,926,077 (483,565) 704,382
----------- ----------- ----------- ----------- ----------- -----------
DIVIDENDS AND
DISTRIBUTIONS TO
SHAREHOLDERS FROM
Net investment income
Class A shares..... -- -- -- -- (65,090) (121,594)
Class B shares..... -- -- -- -- (27,413) (32,964)
Class C shares..... -- -- -- -- (21,057) (21,505)
Class Y shares..... -- -- -- -- (170,157) (251,191)
----------- ----------- ----------- ----------- ----------- -----------
-- -- -- -- (283,717) (427,254)
----------- ----------- ----------- ----------- ----------- -----------
Net realized capital
gains
Class A shares..... -- (1,150,703) -- (7,560) -- (3,931)
Class B shares..... -- (141,517) -- (5,323) -- (1,206)
Class C shares..... -- (714,120) -- (4,143) -- (703)
Class Y shares..... -- (1,268,782) -- -- -- (6,483)
----------- ----------- ----------- ----------- ----------- -----------
-- (3,275,122) -- (17,026) -- (12,323)
----------- ----------- ----------- ----------- ----------- -----------
SHARES OF BENEFICIAL
INTEREST
Net proceeds from the
sale of shares..... 7,340,728 45,379,051 9,369,544 7,301,185 4,045,201 8,698,719
Cost of shares
repurchased........ (9,785,495) (48,453,172) (1,811,304) (3,208,556) (1,658,212) (2,836,127)
Shares issued in
reinvestment of
dividends.......... -- 2,949,510 -- 16,732 184,281 230,561
----------- ----------- ----------- ----------- ----------- -----------
Net
increase/(decrease)
in net assets
derived from shares
of beneficial
interest
transactions....... (2,444,767) (124,611) 7,558,240 4,109,361 2,571,270 6,093,153
----------- ----------- ----------- ----------- ----------- -----------
Total
increase/(decrease)
in net assets...... 5,329,280 (18,800,417) 7,039,921 7,018,412 1,803,988 6,357,958
NET ASSETS
Beginning of
period............. 56,434,714 75,235,131 14,305,952 7,287,540 17,797,670 11,439,712
----------- ----------- ----------- ----------- ----------- -----------
End of period*....... $61,763,994 $56,434,714 $21,345,873 $14,305,952 $19,601,658 $17,797,670
=========== =========== =========== =========== =========== ===========
<CAPTION>
INTERNATIONAL EQUITY PORTFOLIO
----------------------------------
FOR THE FOR THE
SIX MONTHS ENDED FISCAL YEAR
SEPTEMBER 30, 1999 ENDED
(UNAUDITED) MARCH 31, 1999
------------------ --------------
<S> <C> <C>
INCREASE IN NET ASSETS
FROM OPERATIONS
Net investment
income/(loss)...... $ (84,656) $ (20,982)
Net realized
gain/(loss) from
investments........ 191,572 15,991
Net change in
unrealized
appreciation on
investments........ 2,520,081 848,548
----------- -----------
Net
increase/(decrease)
in net assets
resulting from
operations......... 2,626,997 843,557
----------- -----------
DIVIDENDS AND
DISTRIBUTIONS TO
SHAREHOLDERS FROM
Net investment income
Class A shares..... -- (1,421)
Class B shares..... -- (530)
Class C shares..... -- (510)
Class Y shares..... -- --
----------- -----------
-- (2,461)
----------- -----------
Net realized capital
gains
Class A shares..... -- --
Class B shares..... -- --
Class C shares..... -- --
Class Y shares..... -- --
----------- -----------
-- --
----------- -----------
SHARES OF BENEFICIAL
INTEREST
Net proceeds from the
sale of shares..... 7,724,469 8,180,925
Cost of shares
repurchased........ (1,637,675) (2,716,280)
Shares issued in
reinvestment of
dividends.......... -- 1,297
----------- -----------
Net
increase/(decrease)
in net assets
derived from shares
of beneficial
interest
transactions....... 6,086,794 5,465,942
----------- -----------
Total
increase/(decrease)
in net assets...... 8,713,791 6,307,038
NET ASSETS
Beginning of
period............. 14,381,594 8,074,556
----------- -----------
End of period*....... $23,095,385 $14,381,594
=========== ===========
</TABLE>
35
<PAGE>
THE BEAR STEARNS FUNDS
FINANCIAL HIGHLIGHTS
-------------------------------------------------------------------------
Contained below is per share operating performance data for each class of shares
outstanding, total invesment returns, ratios to average net assets and other
supplemental data for each period indicated. This information has been derived
from information provided in the financial statements.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET NET
ASSET NET REALIZED AND DIVIDENDS
VALUE, INVESTMENT UNREALIZED FROM NET
BEGINNING INCOME/ GAIN/(LOSS) ON INVESTMENT
OF PERIOD (LOSS)**(1) INVESTMENTS**(2) INCOME
---------- ----------- ----------------- -----------
<S> <C> <C> <C> <C>
S&P STARS PORTFOLIO
CLASS A
For the six months
ended September 30,
1999 (unaudited)..... $24.39 $(0.11) $ 0.97 --
For the fiscal year
ended March 31,
1999................. 19.97 (0.12) 5.46 --
For the fiscal year
ended March 31,
1998................. 16.13 (0.13) 6.69 --
For the fiscal year
ended March 31,
1997................. 14.92 (0.09) 2.63 --
For the period
April 3, 1995*
through March 31,
1996................. 12.00 -- 3.31 --
CLASS B
For the six months
ended September 30,
1999 (unaudited)..... 24.11 (0.16) 0.95 --
For the fiscal year
ended March 31,
1999................. 19.86 (0.12) 5.29 --
For the period
January 5, 1998*
through March 31,
1998................. 17.37 (0.04) 2.53 --
CLASS C
For the six months
ended September 30,
1999 (unaudited)..... 24.10 (0.17) 0.97 --
For the fiscal year
ended March 31,
1999................. 19.85 (0.22) 5.39 --
For the fiscal year
ended March 31,
1998................. 16.06 (0.22) 6.65 --
For the fiscal year
ended March 31,
1997................. 14.86 (0.17) 2.62 --
For the period
April 3, 1995*
through March 31,
1996................. 12.00 (0.06) 3.28 --
CLASS Y
For the six months
ended September 30,
1999 (unaudited)..... 24.68 (0.06) 0.99 --
For the fiscal year
ended March 31,
1999................. 20.11 (0.05) 5.54 --
For the fiscal year
ended March 31,
1998................. 16.23 (0.05) 6.74 --
For the fiscal year
ended March 31,
1997................. 14.97 (0.02) 2.66 --
For the period
August 7, 1995*
through March 31,
1996................. 14.13 0.07 1.20 $(0.03)
THE INSIDERS SELECT FUND
CLASS A
For the six months
ended September 30,
1999 (unaudited)..... 17.02 0.02 (0.47) --
For the fiscal year
ended March 31,
1999................. 17.88 -- (0.01) --
For the fiscal year
ended March 31,
1998................. 14.58 -- 6.30 --
For the fiscal year
ended March 31,
1997................. 14.00 0.02 2.48 (0.01)
For the period
June 16, 1995*
through March 31,
1996................. 12.00 0.03 1.98 (0.01)
CLASS B
For the six months
ended September 30,
1999 (unaudited)..... 16.75 (0.02) (0.46) --
For the fiscal year
ended March 31,
1999................. 17.69 -- (0.09) --
For the period
January 6, 1998*
through March 31,
1998................. 15.72 0.01 1.96 --
CLASS C
For the six months
ended September 30,
1999 (unaudited)..... 16.74 (0.01) (0.47) --
For the fiscal year
ended March 31,
1999................. 17.68 -- (0.09) --
For the fiscal year
ended March 31,
1998................. 14.48 (0.07) 6.21 --
For the fiscal year
ended March 31,
1997................. 13.96 (0.06) 2.47 --
For the period
June 16, 1995*
through March 31,
1996................. 12.00 (0.01) 1.97 --
CLASS Y
For the six months
ended September 30,
1999 (unaudited)..... 17.33 0.08 (0.49) --
For the fiscal year
ended March 31,
1999................. 18.09 -- 0.09 --
For the fiscal year
ended March 31,
1998................. 14.66 0.07 6.36 --
For the fiscal year
ended March 31,
1997................. 14.02 0.08 2.49 (0.02)
For the period
June 20, 1995*
through March 31,
1996................. 12.12 0.07 1.87 (0.04)
</TABLE>
- ----------
* Commencement of operations.
** Calculated based on the shares outstanding on the first and last day of the
respective periods, except for dividends and distributions, if any, which
are based on the actual shares outstanding on the dates of distributions.
(1) Reflects waivers and reimbursements.
(2) The amounts shown for a share outstanding throughout the respective periods
are not in accord with the changes in the aggregate gains and losses on
investments during the respective periods because of the timing of sales
and repurchases of Portfolio shares in relation to fluctuating net asset
value during the respective periods.
The accompanying notes are an integral part of the financial statements.
36
<PAGE>
<TABLE>
<CAPTION>
RATIO OF
NET
INVESTMENT
DISTRIBUTIONS NET NET INCOME/
FROM NET ASSET ASSETS, RATIO OF (LOSS)
REALIZED VALUE, TOTAL END OF EXPENSES TO TO AVERAGE
CAPITAL END OF INVESTMENT PERIOD AVERAGE NET NET
GAINS PERIOD RETURN(3) (000'S OMITTED) ASSETS(1) ASSETS(1)
------------- --------- ----------- ---------------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
S&P STARS PORTFOLIO
CLASS A
For the six months
ended September 30,
1999 (unaudited)..... -- $25.25 3.53% $287,178 1.50%(5) (1.02)%(5)
For the fiscal year
ended March 31,
1999................. $(0.92) 24.39 27.46 206,130 1.50 (0.73)
For the fiscal year
ended March 31,
1998................. (2.72) 19.97 43.53 109,591 1.50(6) (0.83)(6)
For the fiscal year
ended March 31,
1997................. (1.33) 16.13 16.87 67,491 1.50(6) (0.59)(6)
For the period
April 3, 1995*
through March 31,
1996................. (0.39) 14.92 27.68 45,049 1.50(5)(6) (0.01)(5)(6)
CLASS B
For the six months
ended September 30,
1999 (unaudited)..... -- 24.90 3.28 105,268 2.00(5) (1.60)(5)
For the fiscal year
ended March 31,
1999................. (0.92) 24.11 26.75 49,319 2.00 (1.23)
For the period
January 5, 1998*
through March 31,
1998................. -- 19.86 14.34(4) 5,800 2.00(5) (1.47)(4)(5)
CLASS C
For the six months
ended September 30,
1999 (unaudited)..... -- 24.90 3.32 134,233 2.00(5) (1.60)(5)
For the fiscal year
ended March 31,
1999................. (0.92) 24.10 26.75 97,654 2.00 (1.23)
For the fiscal year
ended March 31,
1998................. (2.64) 19.85 42.80 63,330 2.00(6) (1.32)(6)
For the fiscal year
ended March 31,
1997................. (1.25) 16.06 16.33 37,622 2.00(6) (1.09)(6)
For the period
April 3, 1995*
through March 31,
1996................. (0.36) 14.86 26.91 28,081 2.00(5)(6) (0.45)(5)(6)
CLASS Y
For the six months
ended September 30,
1999 (unaudited)..... -- 25.61 3.77 72,108 1.00(5) (0.47)(5)
For the fiscal year
ended March 31,
1999................. (0.92) 24.68 28.02 52,483 1.00 (0.23)
For the fiscal year
ended March 31,
1998................. (2.81) 20.11 44.22 35,652 1.00(6) (0.32)(6)
For the fiscal year
ended March 31,
1997................. (1.38) 16.23 17.48 14,763 1.00(6) (0.10)(6)
For the period
August 7, 1995*
through March 31,
1996................. (0.40) 14.97 9.09(4) 8,779 1.00(5)(6) 0.82(4)(5)(6)
THE INSIDERS SELECT FUND
CLASS A
For the six months
ended September 30,
1999 (unaudited)..... -- 16.57 (2.65) 21,437 1.65(5) 0.33(5)
For the fiscal year
ended March 31,
1999................. (0.85) 17.02 0.29 24,395 1.65 0.02
For the fiscal year
ended March 31,
1998................. (3.00) 17.88 46.02 21,912 1.65 0.03
For the fiscal year
ended March 31,
1997................. (1.91) 14.58 18.31 13,860 1.65 0.11
For the period
June 16, 1995*
through March 31,
1996................. -- 14.00 16.75 12,132 1.65(5) 0.38(5)
CLASS B
For the six months
ended September 30,
1999 (unaudited)..... -- 16.27 (2.87) 7,281 2.15(5) (0.18)(5)
For the fiscal year
ended March 31,
1999................. (0.85) 16.75 (0.16) 8,426 2.15 0.03
For the period
January 6, 1998*
through March 31,
1998................. -- 17.69 12.53(4) 2,253 2.15(5) (0.95)(4)(5)
CLASS C
For the six months
ended September 30,
1999 (unaudited)..... -- 16.26 (2.87) 10,365 2.15(5) (0.18)(5)
For the fiscal year
ended March 31,
1999................. (0.85) 16.74 (0.16) 11,902 2.15 0.02
For the fiscal year
ended March 31,
1998................. (2.94) 17.68 45.17 12,297 2.15 (0.46)
For the fiscal year
ended March 31,
1997................. (1.89) 14.48 17.69 9,519 2.15 (0.38)
For the period
June 16, 1995*
through March 31,
1996................. -- 13.96 16.33 9,928 2.15(5) (0.12)(5)
CLASS Y
For the six months
ended September 30,
1999 (unaudited)..... -- 16.92 (2.37) 987 1.15(5) 0.90(5)
For the fiscal year
ended March 31,
1999................. (0.85) 17.33 0.85 914 1.15 0.02
For the fiscal year
ended March 31,
1998................. (3.00) 18.09 46.68 1,265 1.15 0.55
For the fiscal year
ended March 31,
1997................. (1.91) 14.66 18.81 1,557 1.15 0.60
For the period
June 20, 1995*
through March 31,
1996................. -- 14.02 15.98(4) 1,293 1.15(5) 0.97(4)(5)
<CAPTION>
INCREASE/(DECREASE)
REFLECTED IN
EXPENSE RATIOS AND NET
INVESTMENT INCOME/
(LOSS) PORTFOLIO
DUE TO WAIVERS AND TURNOVER
REIMBURSEMENTS RATE
------------------------ ---------
<S> <C> <C>
S&P STARS PORTFOLIO
CLASS A
For the six months
ended September 30,
1999 (unaudited)..... 0.15%(5) 32.82%
For the fiscal year
ended March 31,
1999................. 0.27 76.17
For the fiscal year
ended March 31,
1998................. 0.38 172.78(7)
For the fiscal year
ended March 31,
1997................. 0.70 220.00(7)
For the period
April 3, 1995*
through March 31,
1996................. 0.89(5) 295.97(7)
CLASS B
For the six months
ended September 30,
1999 (unaudited)..... 0.15(5) 32.82
For the fiscal year
ended March 31,
1999................. 0.27 76.17
For the period
January 5, 1998*
through March 31,
1998................. 0.53(4)(5) 172.78(7)
CLASS C
For the six months
ended September 30,
1999 (unaudited)..... 0.15(5) 32.82
For the fiscal year
ended March 31,
1999................. 0.27 76.17
For the fiscal year
ended March 31,
1998................. 0.38 172.78(7)
For the fiscal year
ended March 31,
1997................. 0.70 220.00(7)
For the period
April 3, 1995*
through March 31,
1996................. 0.92(5) 295.97(7)
CLASS Y
For the six months
ended September 30,
1999 (unaudited)..... 0.15(5) 32.82
For the fiscal year
ended March 31,
1999................. 0.27 76.17
For the fiscal year
ended March 31,
1998................. 0.38 172.78(7)
For the fiscal year
ended March 31,
1997................. 0.70 220.00(7)
For the period
August 7, 1995*
through March 31,
1996................. 0.99(4)(5) 295.97(7)
THE INSIDERS SELECT FUND
CLASS A
For the six months
ended September 30,
1999 (unaudited)..... 0.74(5) 28.69
For the fiscal year
ended March 31,
1999................. 0.81 99.71
For the fiscal year
ended March 31,
1998................. 1.09 115.64
For the fiscal year
ended March 31,
1997................. 1.82 128.42
For the period
June 16, 1995*
through March 31,
1996................. 1.87(4)(5) 93.45
CLASS B
For the six months
ended September 30,
1999 (unaudited)..... 0.74(5) 28.69
For the fiscal year
ended March 31,
1999................. 0.81 99.71
For the period
January 6, 1998*
through March 31,
1998................. 1.82(5) 115.64
CLASS C
For the six months
ended September 30,
1999 (unaudited)..... 0.74(5) 28.69
For the fiscal year
ended March 31,
1999................. 0.81 99.71
For the fiscal year
ended March 31,
1998................. 1.10 115.64
For the fiscal year
ended March 31,
1997................. 1.81 128.42
For the period
June 16, 1995*
through March 31,
1996................. 1.92(5) 93.45
CLASS Y
For the six months
ended September 30,
1999 (unaudited)..... 0.74(5) 28.69
For the fiscal year
ended March 31,
1999................. 0.81 99.71
For the fiscal year
ended March 31,
1998................. 1.07 115.64
For the fiscal year
ended March 31,
1997................. 1.81 128.42
For the period
June 20, 1995*
through March 31,
1996................. 2.04(4)(5) 93.45
</TABLE>
- ----------
(3) Total investment return does not consider the effects of sales charges or
contingent deferred sales charges. Total investment return is calculated
assuming a purchase of shares on the first day and a sale of shares on the
last day of each period reported and includes reinvestment of dividends and
distributions, if any. Total investment return is not annualized.
(4) The total investment return and ratios for a class of shares are not
necessarily comparable to those of any other outstanding class of shares,
due to timing differences in the commencement of the initial public
offerings.
(5) Annualized.
(6) Includes S&P STARS' share of S&P STARS Master Series' expenses for the
period prior to June 25, 1997.
(7) Portfolio turnover rate is related to S&P STARS Master Series for the
period prior to June 25, 1997.
37
<PAGE>
THE BEAR STEARNS FUNDS
FINANCIAL HIGHLIGHTS
-------------------------------------------------------------------------
Contained below is per share operating performance data for each class of shares
outstanding, total invesment return, ratios to average net assets and other
supplemental data for each period indicated. This information has been derived
from information provided in the financial statements.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET NET DISTRIBUTIONS NET
ASSET NET REALIZED AND DIVIDENDS FROM NET ASSET
VALUE, INVESTMENT UNREALIZED FROM NET REALIZED VALUE,
BEGINNING INCOME/ GAIN/(LOSS) ON INVESTMENT CAPITAL END OF
OF PERIOD (LOSS)**(1) INVESTMENTS**(2) INCOME GAINS PERIOD
---------- ----------- ----------------- ----------- ------------- -------
<S> <C> <C> <C> <C> <C> <C>
LARGE CAP VALUE PORTFOLIO
CLASS A
For the six months
ended September 30,
1999 (unaudited)..... $19.74 $ 0.05 $(0.57) -- -- $19.22
For the fiscal year
ended March 31,
1999................. 20.83 0.11 0.59 $(0.11) $(1.68) 19.74
For the fiscal year
ended March 31,
1998................. 17.17 0.05 7.15 (0.02) (3.52) 20.83
For the fiscal year
ended March 31,
1997................. 15.13 0.04 2.28 (0.10) (0.18) 17.17
For the period
April 3, 1995*
through March 31,
1996................. 12.00 0.06 3.10 (0.02) (0.01) 15.13
CLASS B
For the six months
ended September 30,
1999 (unaudited)..... 19.51 0.02 (0.58) -- -- 18.95
For the fiscal year
ended March 31,
1999................. 20.66 0.08 0.52 (0.07) (1.68) 19.51
For the period
January 28, 1998*
through March 31,
1998................. 18.17 (0.01) 2.50 -- -- 20.66
CLASS C
For the six months
ended September 30,
1999 (unaudited)..... 19.57 0.02 (0.59) -- -- 19.00
For the fiscal year
ended March 31,
1999................. 20.66 0.07 0.53 (0.01) (1.68) 19.57
For the fiscal year
ended March 31,
1998................. 17.11 (0.03) 7.10 -- (3.52) 20.66
For the fiscal year
ended March 31,
1997................. 15.08 (0.02) 2.25 (0.02) (0.18) 17.11
For the period
April 3, 1995*
through March 31,
1996................. 12.00 (0.01) 3.10 -- (0.01) 15.08
CLASS Y
For the six months
ended September 30,
1999 (unaudited)..... 19.78 0.08 (0.56) -- -- 19.30
For the fiscal year
ended March 31,
1999................. 20.84 0.17 0.65 (0.20) (1.68) 19.78
For the fiscal year
ended March 31,
1998................. 17.18 0.26 7.05 (0.13) (3.52) 20.84
For the fiscal year
ended March 31,
1997................. 15.12 0.23 2.17 (0.16) (0.18) 17.18
For the period
September 11, 1995*
through March 31,
1996................. 13.98 0.07 1.16 (0.08) (0.01) 15.12
SMALL CAP VALUE PORTFOLIO
CLASS A
For the six months
ended September 30,
1999 (unaudited)..... 17.93 (0.07) 2.54 -- -- 20.40
For the fiscal year
ended March 31,
1999................. 23.65 (0.13) (4.65) -- (0.94) 17.93
For the fiscal year
ended March 31,
1998................. 17.48 (0.14) 8.06 -- (1.75) 23.65
For the fiscal year
ended March 31,
1997................. 15.87 (0.10) 1.95 -- (0.24) 17.48
For the period
April 3, 1995*
through March 31,
1996................. 12.00 (0.07) 4.17 -- (0.23) 15.87
CLASS B
For the six months
ended September 30,
1999 (unaudited)..... 17.71 (0.12) 2.51 -- -- 20.10
For the fiscal year
ended March 31,
1999................. 23.48 (0.16) (4.67) -- (0.94) 17.71
For the period
January 21, 1998*
through March 31,
1998................. 19.95 -- 3.53 -- -- 23.48
CLASS C
For the six months
ended September 30,
1999 (unaudited)..... 17.70 (0.12) 2.51 -- -- 20.09
For the fiscal year
ended March 31,
1999................. 23.48 (0.26) (4.58) -- (0.94) 17.70
For the fiscal year
ended March 31,
1998................. 17.38 (0.24) 8.00 -- (1.66) 23.48
For the fiscal year
ended March 31,
1997................. 15.79 (0.18) 1.93 -- (0.16) 17.38
For the period
April 3, 1995*
through March 31,
1996................. 12.00 (0.10) 4.11 -- (0.22) 15.79
CLASS Y
For the six months
ended September 30,
1999 (unaudited)..... 18.03 (0.02) 2.55 -- -- 20.56
For the fiscal year
ended March 31,
1999................. 23.65 (0.02) (4.66) -- (0.94) 18.03
For the fiscal year
ended March 31,
1998................. 17.47 (0.04) 8.06 -- (1.84) 23.65
For the fiscal year
ended March 31,
1997................. 15.85 (0.05) 1.97 -- (0.30) 17.47
For the period
June 22, 1995*
through March 31,
1996................. 13.09 -- 3.05 -- (0.29) 15.85
FOCUS LIST PORTFOLIO
CLASS A
For the six months
ended September 30,
1999 (unaudited)..... 17.32 (0.04) (0.26) -- -- 17.02
For the fiscal year
ended March 31,
1999................. 13.40 (0.07) 4.01 -- (0.02) 17.32
For the period
December 29, 1997*
through March 31,
1998................. 12.00 (0.01) 1.41 -- -- 13.40
CLASS B
For the six months
ended September 30,
1999 (unaudited)..... 17.18 (0.08) (0.27) -- -- 16.83
For the fiscal year
ended March 31,
1999................. 13.38 (0.13) 3.95 -- (0.02) 17.18
For the period
December 29, 1997*
through March 31,
1998................. 12.00 (0.01) 1.39 -- -- 13.38
CLASS C
For the six months
ended September 30,
1999 (unaudited)..... 17.19 (0.07) (0.28) -- -- 16.84
For the fiscal year
ended March 31,
1999................. 13.38 (0.13) 3.96 -- (0.02) 17.19
For the period
December 29, 1997*
through March 31,
1998................. 12.00 (0.01) 1.39 -- -- 13.38
</TABLE>
- ----------
* Commencement of operations.
** Calculated based on the shares outstanding on the first and last day of the
respective periods, except for dividends and distributions, if any, which
are based on the actual shares outstanding on the dates of distributions.
(1) Reflects waivers and reimbursements.
(2) The amounts shown for a share outstanding throughout the respective periods
are not in accord with the changes in the aggregate gains and losses on
investments during the respective periods because of the timing of sales
and repurchases of Portfolio shares in relation to fluctuating net asset
values during the respective periods.
The accompanying notes are an integral part of the financial statements.
38
<PAGE>
<TABLE>
<CAPTION>
INCREASE/(DECREASE)
NET RATIO OF NET REFLECTED IN
ASSETS, RATIO OF INVESTMENT EXPENSE RATIOS AND NET
TOTAL END OF EXPENSES TO INCOME/(LOSS) INVESTMENT INCOME/(LOSS) PORTFOLIO
INVESTMENT PERIOD AVERAGE NET TO AVERAGE DUE TO WAIVERS AND TURNOVER
RETURN(3) (000'S OMITTED) ASSETS(1) NET ASSETS(1) REIMBURSEMENTS RATE
----------- ---------------- ----------- -------------- ------------------------ ----------
<S> <C> <C> <C> <C> <C> <C>
LARGE CAP VALUE PORTFOLIO
CLASS A
For the six months
ended September 30,
1999 (unaudited)..... (2.63)% $ 8,840 1.50%(5) 0.45%(5) 0.75%(5) 27.02%
For the fiscal year
ended March 31,
1999................. 3.68 9,677 1.50 0.54 1.46 38.27
For the fiscal year
ended March 31,
1998................. 44.59 8,358 1.50 0.32 1.73 61.75
For the fiscal year
ended March 31,
1997................. 15.44 4,987 1.50 0.43 1.58 136.67
For the period
April 3, 1995*
through March 31,
1996................. 26.35 3,616 1.50(5) 0.46(5) 4.34(5) 45.28
CLASS B
For the six months
ended September 30,
1999 (unaudited)..... (2.87) 1,925 2.00(5) 0.21(5) 0.75(5) 27.02
For the fiscal year
ended March 31,
1999................. 3.21 1,911 2.00 0.08 1.46 38.27
For the period
January 28, 1998*
through March 31,
1998................. 13.70(4) 446 2.00(5) (0.73)(4)(5) 1.05(4)(5) 61.75
CLASS C
For the six months
ended September 30,
1999 (unaudited)..... (2.91) 4,956 2.00(5) 0.20(5) 0.75(5) 27.02
For the fiscal year
ended March 31,
1999................. 3.22 5,250 2.00 0.08 1.46 38.27
For the fiscal year
ended March 31,
1998................. 43.94 4,987 2.00 (0.19) 1.73 61.75
For the fiscal year
ended March 31,
1997................. 14.87 2,986 2.00 (0.08) 1.61 136.67
For the period
April 3, 1995*
through March 31,
1996................. 25.71 3,520 2.00(5) (0.06)(5) 4.39(5) 45.28
CLASS Y
For the six months
ended September 30,
1999 (unaudited)..... (2.43) 4,184 1.00(5) 0.68(5) 0.75(5) 27.02
For the fiscal year
ended March 31,
1999................. 4.29 4,741 1.00 1.08 1.46 38.27
For the fiscal year
ended March 31,
1998................. 45.27 7,263 1.00 0.83 1.76 61.75
For the fiscal year
ended March 31,
1997................. 16.04 6,109 1.00 1.00 1.50 136.67
For the period
September 11, 1995*
through March 31,
1996................. 8.75(4) 3,413 1.00(5) 0.76(4)(5) 4.41(4)(5) 45.28
SMALL CAP VALUE PORTFOLIO
CLASS A
For the six months
ended September 30,
1999 (unaudited)..... 13.78 19,463 1.50(5) (0.67)(5) 0.73(5) 24.91
For the fiscal year
ended March 31,
1999................. (20.26) 18,520 1.50 (0.60) 0.65 84.12
For the fiscal year
ended March 31,
1998................. 46.86 25,111 1.50 (0.71) 0.76 90.39
For the fiscal year
ended March 31,
1997................. 11.71 13,143 1.50 (0.81) 1.00 56.88
For the period
April 3, 1995*
through March 31,
1996................. 34.36 6,474 1.50(5) (0.66)(5) 2.32(5) 40.79
CLASS B
For the six months
ended September 30,
1999 (unaudited)..... 13.50 3,257 2.00(5) (1.19)(5) 0.73(5) 24.91
For the fiscal year
ended March 31,
1999................. (20.63) 2,716 2.00 (1.10) 0.65 84.12
For the period
January 21, 1998*
through March 31,
1998................. 17.69(4) 901 2.00(5) (1.49)(4)(5) 1.31(4)(5) 90.39
CLASS C
For the six months
ended September 30,
1999 (unaudited)..... 13.50 11,945 2.00(5) (1.19)(5) 0.73(5) 24.91
For the fiscal year
ended March 31,
1999................. (20.67) 11,112 2.00 (1.10) 0.65 84.12
For the fiscal year
ended March 31,
1998................. 46.10 18,082 2.00 (1.21) 0.76 90.39
For the fiscal year
ended March 31,
1997................. 11.12 11,071 2.00 (1.31) 0.99 56.88
For the period
April 3, 1995*
through March 31,
1996................. 33.59 6,753 2.00(5) (1.09)(5) 2.39(5) 40.79
CLASS Y
For the six months
ended September 30,
1999 (unaudited)..... 14.03 27,098 1.00(5) (0.19)(5) 0.73(5) 24.91
For the fiscal year
ended March 31,
1999................. (19.84) 24,087 1.00 (0.10) 0.65 84.12
For the fiscal year
ended March 31,
1998................. 47.54 31,141 1.00 (0.21) 0.77 90.39
For the fiscal year
ended March 31,
1997................. 12.19 16,724 1.00 (0.31)(4)(5) 1.00 56.88
For the period
June 22, 1995*
through March 31,
1996................. 23.52(4) 8,989 1.00(5) -- 2.45(4)(5) 40.79
FOCUS LIST PORTFOLIO
CLASS A
For the six months
ended September 30,
1999 (unaudited)..... (1.73) 10,711 1.40(5) (0.53)(5) 1.59(5) 40.46
For the fiscal year
ended March 31,
1999................. 29.47 6,542 1.40 (0.57) 2.89 84.49
For the period
December 29, 1997*
through March 31,
1998................. 11.67 3,201 1.40(5) (0.30)(5) 5.01(5) 28.91
CLASS B
For the six months
ended September 30,
1999 (unaudited)..... (2.04) 5,823 1.90(5) (1.02)(5) 1.59(5) 40.46
For the fiscal year
ended March 31,
1999................. 28.61 4,460 1.90 (1.07) 2.89 84.49
For the period
December 29, 1997*
through March 31,
1998................. 11.50 2,399 1.90(5) (0.78)(5) 5.27(5) 28.91
CLASS C
For the six months
ended September 30,
1999 (unaudited)..... (2.04) 4,811 1.90(5) (1.03)(5) 1.59(5) 40.46
For the fiscal year
ended March 31,
1999................. 28.69 3,304 1.90 (1.07) 2.89 84.49
For the period
December 29, 1997*
through March 31,
1998................. 11.50 1,687 1.90(5) (0.62)(5) 5.52(5) 28.91
</TABLE>
- ----------
(3) Total investment return does not consider the effects of sales charges or
contingent deferred sales charges. Total investment return is calculated
assuming a purchase of shares on the first day and a sale of shares on the
last day of each period reported and includes reinvestment of dividends and
distributions, if any. Total investment return is not annualized.
(4) The total investment return and ratios for a class of shares are not
necessarily comparable to those of any other outstanding class of shares,
due to timing differences in the commencement of the initial public
offerings.
(5) Annualized.
39
<PAGE>
THE BEAR STEARNS FUNDS
FINANCIAL HIGHLIGHTS
-------------------------------------------------------------------------
Contained below is per share operating performance data for each class of shares
outstanding, total invesment returns, ratios to average net assets and other
supplemental data for each period indicated. This information has been derived
from information provided in the financial statements.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET NET DISTRIBUTIONS NET
ASSET NET REALIZED AND DIVIDENDS FROM NET ASSET
VALUE, INVESTMENT UNREALIZED FROM NET REALIZED VALUE,
BEGINNING INCOME/ GAIN/(LOSS) ON INVESTMENT CAPITAL END OF
OF PERIOD (LOSS)**(1) INVESTMENTS**(2) INCOME GAINS PERIOD
---------- ----------- ----------------- ----------- ------------- -------
<S> <C> <C> <C> <C> <C> <C>
BALANCED PORTFOLIO
CLASS A
For the six months
ended September 30,
1999 (unaudited)..... $13.11 $ 0.19 $(0.43) $(0.18) -- $12.69
For the fiscal year
ended March 31,
1999................. 12.93 0.34 0.18 (0.33) $(0.01) 13.11
For the period
December 29, 1997*
through March 31,
1998................. 12.00 0.06 0.91 (0.04) -- 12.93
CLASS B
For the six months
ended September 30,
1999 (unaudited)..... 13.07 0.18 (0.45) (0.17) -- 12.63
For the fiscal year
ended March 31,
1999................. 12.92 0.29 0.16 (0.29) (0.01) 13.07
For the period
December 29, 1997*
through March 31,
1998................. 12.00 0.05 0.90 (0.03) -- 12.92
CLASS C
For the six months
ended September 30,
1999 (unaudited)..... 13.07 0.18 (0.45) (0.17) -- 12.63
For the fiscal year
ended March 31,
1999................. 12.92 0.29 0.16 (0.29) (0.01) 13.07
For the period
December 29, 1997*
through March 31,
1998................. 12.00 0.05 0.90 (0.03) -- 12.92
CLASS Y
For the six months
ended September 30,
1999 (unaudited)..... 13.16 0.20 (0.41) (0.19) -- 12.76
For the fiscal year
ended March 31,
1999................. 12.95 0.37 0.21 (0.36) (0.01) 13.16
For the period
January 6, 1998*
through March 31,
1998................. 12.05 0.06 0.88 (0.04) -- 12.95
INTERNATIONAL EQUITY
PORTFOLIO
CLASS A
For the six months
ended September 30,
1999 (unaudited)..... 15.14 (0.05) 2.06 -- -- 17.15
For the fiscal year
ended March 31,
1999................. 13.77 (0.03) 1.40 --+ -- 15.14
For the period
December 29, 1997*
through March 31,
1998................. 12.00 0.01 1.76 -- -- 13.77
CLASS B
For the six months
ended September 30,
1999 (unaudited)..... 15.05 (0.09) 2.04 -- -- 17.00
For the fiscal year
ended March 31,
1999................. 13.75 (0.02) 1.32 --+ -- 15.05
For the period
December 29, 1997*
through March 31,
1998................. 12.00 -- 1.75 -- -- 13.75
CLASS C
For the six months
ended September 30,
1999 (unaudited)..... 15.05 (0.09) 2.04 -- -- 17.00
For the fiscal year
ended March 31,
1999................. 13.75 (0.02) 1.32 --+ -- 15.05
For the period
December 29, 1997*
through March 31,
1998................. 12.00 -- 1.75 -- -- 13.75
</TABLE>
- ----------
* Commencement of operations.
** Calculated based on the shares outstanding on the first and last day of the
respective periods, except for dividends and distributions, if any, which
are based on the actual shares outstanding on the dates of distributions.
+ Amount is less than $0.01 per share.
(1) Reflects waivers and reimbursements.
(2) The amounts shown for a share outstanding throughout the respective periods
are not in accord with the changes in the aggregate gains and losses on
investments during the respective periods because of the timing of sales
and repurchases of Portfolio shares in relation to fluctuating net asset
values during the respective periods.
The accompanying notes are an integral part of the financial statements.
40
<PAGE>
<TABLE>
<CAPTION>
INCREASE/(DECREASE)
NET RATIO OF NET REFLECTED IN
ASSETS, RATIO OF INVESTMENT EXPENSE RATIOS AND NET
TOTAL END OF EXPENSES TO INCOME/(LOSS) INVESTMENT INCOME/(LOSS) PORTFOLIO
INVESTMENT PERIOD AVERAGE NET TO AVERAGE DUE TO WAIVERS AND TURNOVER
RETURN(3) (000'S OMITTED) ASSETS(1) NET ASSETS(1) REIMBURSEMENTS RATE
----------- ---------------- ------------ -------------- ------------------------ ----------
<S> <C> <C> <C> <C> <C> <C>
BALANCED PORTFOLIO
CLASS A
For the six months
ended September 30,
1999 (unaudited)..... (1.88)% $ 4,623 1.20%(5) 0.63%(5) 2.03%(5) 20.97%
For the fiscal year
ended March 31,
1999................. 4.07 4,495 1.20 2.65 2.08 45.98
For the period
December 29, 1997*
through March 31,
1998................. 8.04 3,852 1.20(5) 2.47(5) 3.25(5) 12.72
CLASS B
For the six months
ended September 30,
1999 (unaudited)..... (2.11) 2,062 1.70(5) 0.59(5) 2.03(5) 20.97
For the fiscal year
ended March 31,
1999................. 3.56 1,811 1.70 2.15 2.08 45.98
For the period
December 29, 1997*
through March 31,
1998................. 7.92 1,044 1.70(5) 1.96(5) 3.30(5) 12.72
CLASS C
For the six months
ended September 30,
1999 (unaudited)..... (2.11) 1,665 1.70(5) 0.59(5) 2.03(5) 20.97
For the fiscal year
ended March 31,
1999................. 3.56 1,089 1.70 2.15 2.08 45.98
For the period
December 29, 1997*
through March 31,
1998................. 7.92 858 1.70(5) 1.95(5) 3.33(5) 12.72
CLASS Y
For the six months
ended September 30,
1999 (unaudited)..... (1.65) 11,250 0.70(5) 0.69 2.03(5) 20.97
For the fiscal year
ended March 31,
1999................. 4.59 10,403 0.70 3.15(5) 2.08 45.98
For the period
January 6, 1998*
through March 31,
1998................. 7.80(4) 5,685 0.70(5) 2.98(4)(5) 3.12(4)(5) 12.72
INTERNATIONAL EQUITY
PORTFOLIO
CLASS A
For the six months
ended September 30,
1999 (unaudited)..... 13.28 15,000 1.75(5) (0.72)(5) 1.91(5) 70.79
For the fiscal year
ended March 31,
1999................. 9.97 8,299 1.75 0.05 2.38 114.68
For the period
December 29, 1997*
through March 31,
1998................. 14.75 3,765 1.75(5) 0.53(5) 4.06(5) 3.26
CLASS B
For the six months
ended September 30,
1999 (unaudited)..... 12.96 4,308 2.25(5) (1.20)(5) 1.92(5) 70.79
For the fiscal year
ended March 31,
1999................. 9.48 3,156 2.25 (0.45) 2.38 114.68
For the period
December 29, 1997*
through March 31,
1998................. 14.58 2,137 2.25(5) (0.06)(5) 4.04(5) 3.26
CLASS C
For the six months
ended September 30,
1999 (unaudited)..... 12.96 3,787 2.25(5) (1.20)(5) 1.92(5) 70.79
For the fiscal year
ended March 31,
1999................. 9.48 2,926 2.25 (0.45) 2.38 114.68
For the period
December 29, 1997*
through March 31,
1998................. 14.58 2,173 2.25(5) (0.06)(5) 4.04(5) 3.26
</TABLE>
- ----------
(3) Total investment return does not consider the effects of sales charges or
contingent deferred sales charges. Total investment return is calculated
assuming a purchase of shares on the first day and a sale of shares on the
last day of each period reported and includes reinvestment of dividends and
distributions, if any. Total investment return is not annualized.
(4) The total investment return and ratios for class Y shares are not
necessarily comparable to those of class A, B and C shares, due to timing
differences in the commencement of the intial public offering of class Y
shares.
(5) Annualized.
41
<PAGE>
THE BEAR STEARNS FUNDS
S&P STARS Portfolio
The Insiders Select Fund
Large Cap Value Portfolio
Small Cap Value Portfolio
Focus List Portfolio
Balanced Portfolio
International Equity Portfolio
NOTES TO FINANCIAL STATEMENTS
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The Bear Stearns Funds (the "Fund") was organized as a Massachusetts business
trust on September 29, 1994 and is registered with the Securities and Exchange
Commission (the "Commission") under the Investment Company Act of 1940, as
amended (the "Investment Company Act"), as an open-end management investment
company. The Fund currently has eleven separate portfolios in operation: seven
diversified portfolios, Large Cap Value Portfolio ("Large Cap"), Small Cap Value
Portfolio ("Small Cap"), Balanced Portfolio ("Balanced"), International Equity
Portfolio ("International Equity"), High Yield Total Return Portfolio, Income
Portfolio and Prime Money Market Portfolio and four non-diversified portfolios,
S&P STARS Portfolio ("S&P STARS"), The Insiders Select Fund ("Insiders Select"),
Focus List Portfolio ("Focus List") and Emerging Markets Debt Portfolio, (each a
"Portfolio" and collectively the "Portfolios"). Each Portfolio is treated as a
separate entity for certain matters under the Investment Company Act, and for
other purposes, and a shareholder of one Portfolio is not deemed to be a
shareholder of any other Portfolio. As of the date hereof, each Portfolio offers
four classes of shares, which have been designated as Class A, B, C and Y shares
(except the Prime Money Market Portfolio, which only offers shares designated as
Class Y). Class Y shares of Focus List, International Equity and Emerging
Markets Debt Portfolio have yet to commence their initial public offerings. On
April 29, 1999, a special shareholder meeting was held that approved a plan of
reorganization and liquidation of the Emerging Markets Debt Portfolio from Bear
Stearns Investment Trust to a newly created separate series of The Bear Stearns
Funds with the same name and investment objectives and policies. Such
reorganization was effected on July 29, 1999.
ORGANIZATIONAL MATTERS -- Prior to commencing investment operations, each
Portfolio as indicated below did not have any transactions other than those
relating to organizational matters and the issuance of shares of beneficial
interest of the Portfolios to Bear, Stearns & Co. Inc. ("Bear Stearns" or the
"Distributor") as follows:
<TABLE>
<CAPTION>
SHARES OF BENEFICIAL INTEREST
COMMENCEMENT OF -----------------------------------------
PORTFOLIO OPERATIONS CLASS A CLASS B CLASS C CLASS Y
- --------- ----------------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
S&P STARS...................................... April 3, 1995 5,209 -- 5,209 --
Insiders Select................................ June 16, 1995 1 -- 1 --
Large Cap...................................... April 3, 1995 1,042 -- 1,042 --
Small Cap...................................... April 3, 1995 1,042 -- 1,042 --
Focus List..................................... December 29, 1997 1 1 1 1
Balanced....................................... December 29, 1997 1 1 1 1
International Equity........................... December 29, 1997 1 1 1 1
</TABLE>
Costs of $203,596, $181,965, $99,875, $107,203, $39,619, $54,795 and $61,015
which were incurred by S&P STARS, Insiders Select, Large Cap, Small Cap, Focus
List, Balanced and International Equity, respectively, in connection with the
42
<PAGE>
organization, registration with the Commission and initial public offering of
its shares, have been deferred and are being amortized using the straight-line
method over the period of benefit not exceeding sixty months, beginning with the
commencement of investment operations of each Portfolio.
In the event that the Distributor or any transferee of the Distributor redeems
any of its original shares in a particular Portfolio prior to the end of the
sixty month period, the proceeds of the redemption payable in respect of such
shares shall be reduced by the pro rata share (based on the proportionate share
of the original shares redeemed to the total number of original shares
outstanding at the time of the redemption) of the unamortized deferred
organization expenses as of the date of such redemption. In the event that a
particular Portfolio is liquidated prior to the end of the sixty month period,
the Distributor or the transferee of the Distributor shall bear the unamortized
deferred organization expenses.
MANAGEMENT ESTIMATES -- The preparation of financial statements in accordance
with generally accepted accounting principles requires management to make
certain estimates and assumptions that may affect the reported amounts and
disclosures in the financial statements. Actual results could differ from those
estimates.
PORTFOLIO VALUATION -- Each Portfolio calculates the net asset value of and
completes orders to purchase or repurchase its shares of beneficial interest on
each business day, with the exception of those days on which the New York Stock
Exchange is closed. Net asset value per share is determined as of the close of
regular trading on the floor of the New York Stock Exchange on each business
day. Portfolio securities, including covered call options written by the
Portfolios, are valued at the last sale price on the securities exchange or
national securities market on which such securities primarily are traded.
Securities not listed on an exchange or national securities market, or
securities in which there were no transactions, are valued at the average of the
most recent bid and asked prices, except in the case of open short positions
where the asked price is used for valuation purposes. Bid price is used when no
asked price is available. Securities which mature in 60 days or less are valued
at amortized cost, which approximates market value, unless this method does not
represent fair value. Any securities or other assets for which recent market
quotations are not readily available are valued at fair value as determined in
good faith by the Fund's Valuation Committee. In making this determination the
Valuation Committee will follow procedures adopted by the Board of Trustees;
such procedures are among other things, publicly available information regarding
the issuer, market conditions and values ascribed to comparable companies.
Expenses and fees, including the investment advisory, administration and
distribution fees, are accrued daily and taken into account for the purpose of
determining the net asset value of a Portfolio's shares. Because of the
differences in operating expenses incurred by each class, the per share net
asset value of each class will differ.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME -- Investment transactions are
recorded on the trade date (the date on which the order to buy or sell is
executed). Realized gains and losses from securities and foreign currency
related transactions, if any, are calculated on the identified cost basis.
Discounts are treated as adjustments to interest income and identified costs of
investments over the lives of the respective investments. Dividend income is
recorded on the ex-dividend date. Interest income is recorded on an accrual
basis. Amortization is recorded on a straight-line basis. Each Portfolio's net
investment income (other than distribution fees) and unrealized and realized
gains or losses are allocated daily to each class of shares based upon the
relative proportion of net assets of each class at the beginning of the day
(after adjusting for current capital share activity of the respective classes).
OPTIONS WRITTEN -- When a Portfolio writes an option, an amount equal to the
premium received by the Portfolio is recorded as a liability and is subsequently
adjusted to the current market value of the option written. Premiums received
from writing options which expire unexercised are recorded by the Portfolio on
the expiration date as realized gains from option transactions. The difference
between the premium and the amount paid on effecting a closing purchase
transaction, including brokerage commissions, is also treated as a realized
gain, or if the premium is less than the amount paid for the closing purchase
transaction, as a realized loss. If a call option is exercised, the premium is
added to the proceeds from the sale of the underlying securities in determining
whether the Portfolio has a realized gain or loss. If a put option is exercised,
the premium reduces the cost basis of the securities purchased by the Portfolio.
The use of written options involves, to varying degrees, elements of market risk
in excess of the amount recognized in the Statements of Assets and Liabilities.
The contractual or notional amounts reflect the extent of the Portfolio's
involvement in these financial instruments. In writing an option, the
43
<PAGE>
Portfolio bears the market risk of an unfavorable change in the price of the
security underlying the written option. Exercise of an option written by the
Portfolio could result in the Portfolio selling or buying a security at a price
different from the current market value. Each Portfolio's activities in written
options are conducted through regulated exchanges which do not result in
counterparty credit risks. The Portfolios had no options during the six months
ended September 30, 1999.
SHORT SELLING -- S&P STARS, Insiders Select, Large Cap and Small Cap may engage
in short selling of securities. Short sales are transactions in which a
Portfolio sells a security it does not own in anticipation of a decline in the
market value of that security. When a Portfolio makes a short sale, an amount
equal to the proceeds received by a Portfolio is recorded as a liability and is
subsequently adjusted to the current market value of the short sale. Short sales
represent obligations of a Portfolio to make future delivery of specific
securities and, correspondingly, create an obligation to purchase the security
at market prices prevailing at the later delivery date (or to deliver the
security if already owned by a Portfolio). Upon termination of a short sale, a
Portfolio will recognize a gain, limited to the price at which the Portfolio
sold the security short, if the market price is less than the proceeds
originally received. The Portfolio will recognize a loss, unlimited in
magnitude, if the market price at termination is greater than the proceeds
originally received. As a result, short sales create the risk that the
Portfolio's ultimate obligation to satisfy the delivery requirements may exceed
the amount of the proceeds initially received or the liability recorded in the
financial statements. Focus List, Balanced and International Equity may only
engage in short sales "against the box", a transaction in which a Portfolio
enters into a short sale of a security which a Portfolio owns. None of the
Portfolios engaged in short sales or short sales "against the box" during the
six months ended September 30, 1999.
SECURITIES LENDING -- Loans of securities are required at all times to be
secured by collateral at least equal to 102% of the market value of the
securities on loan. However, in the event of default or bankruptcy by the other
party to the agreement, realization and/or retention of the collateral may be
subject to legal proceedings. In the event that the borrower fails to return
securities, and cash collateral being maintained by the borrower is insufficient
to cover the value of loaned securities and provided such collateral
insufficiency is not the result of investment losses, the lending agent has
agreed to pay the amount of the shortfall to the Portfolios. The market value of
securities on loan to brokers and the related value of cash collateral received
at September 30, 1999, was as follows:
<TABLE>
<CAPTION>
MARKET VALUE OF MARKET VALUE
FUND SECURITIES ON LOAN OF COLLATERAL
- ---- ------------------ -------------
<S> <C> <C>
S&P STARS Portfolio......................................... $2,580,000 $3,040,000
Small Cap Value Portfolio................................... 2,718,188 2,841,800
Balanced Portfolio.......................................... 107,231 111,800
</TABLE>
During the six months ended September 30, 1999, income from securities lending
of $5,840, $492, $51,642, and $1,920 was earned by S&P STARS, Insiders Select,
Small Cap and Balanced, respectively. Such income from securities lending is
included under the caption INTEREST in the Statements of Operations. No other
Portfolios had security lending transactions during the six months ended
September 30, 1999.
FOREIGN CURRENCY TRANSACTIONS -- Transactions denominated in foreign currencies,
if any, are recorded in a Portfolio's records at the current prevailing exchange
rates. Asset and liability accounts that are denominated in a foreign currency
are adjusted daily to reflect current exchange rates. Transaction gains or
losses resulting from changes in exchange rates during the reporting period or
upon settlement of the foreign currency transaction are reported in the
Statements of Operations for the current period. It is not practical to isolate
that portion of both realized and unrealized gains and losses on investments in
the Statements of Operations that result from fluctuations in foreign currency
exchange rates. Each Portfolio reports certain foreign currency related
transactions, if any, as components of realized gains/(losses) for financial
reporting purposes, whereas such components are treated as ordinary
income/(loss) for U.S. federal income tax purposes.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS -- A Portfolio may enter into
forward foreign currency exchange contracts ("forward currency contracts") to
hedge against adverse changes in the relationship of the U.S. dollar to foreign
currencies. The Portfolios may enter into these contracts to fix the U.S. dollar
value of a security that it has agreed to buy or sell for the period between the
date the trade was entered into and the date the security is delivered and paid
for. The Portfolios may also use these contracts to hedge the U.S. dollar value
of securities it already owns denominated in foreign
44
<PAGE>
currencies. Forward currency contracts are valued at the forward rate, and are
marked-to-market daily. The change in market value is recorded by the Portfolio
as an unrealized gain or loss. When the contract is closed, the Portfolio
records a realized gain or loss equal to the difference between the value of the
current contract at the time it was opened and the value at the time it was
closed. The use of forward currency contracts does not eliminate fluctuations in
the underlying prices of the Portfolio's securities, but it does establish a
rate of exchange that can be achieved in the future. Although forward currency
contracts limit the risk of loss due to a decline in the value of the hedged
currency, they also limit any potential gain that might result should the value
of currency increase. In addition, the Portfolio could be exposed to risks if
the counterparties to the contracts are unable to meet the terms of their
contracts. For the six months ended September 30, 1999, only International
Equity entered into such forward currency contracts. International Equity's open
forward currency contracts, at September 30, 1999 were as follows:
<TABLE>
<CAPTION>
DELIVERY VALUE SETTLEMENT UNREALIZED
CURRENCY (LOCAL CURRENCY) DATE COMMITMENT VALUE (LOSS)
- -------- ---------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
SALE:
European Euro......................... 2,310,000 10/08/99 $2,393,899 $2,460,116 $(66,217)
========
</TABLE>
FOREIGN CURRENCY TRANSLATION -- The books and records of the Portfolios are
maintained in U.S. dollars as follows: (1) the foreign currency market value of
investment securities and other assets and liabilities stated in foreign
currencies are translated at the exchange rates prevailing at the end of the
period; and (2) purchases, sales, income and expenses are translated at the rate
of exchange prevailing on the respective dates of such transactions. The
resulting exchange gains and losses are included in the Statements of
Operations. The Portfolios do not generally isolate the effect of fluctuations
in foreign exchange rates from the effect of fluctuations in the market prices
of investments. However, the Portfolios do isolate the effect of fluctuations in
foreign exchange rates when determining the gain or loss upon the sale or
maturity of foreign currency-denominated debt obligations pursuant to U.S.
federal income tax regulations; such amount is categorized as foreign exchange
gain or loss for both financial reporting and income tax reporting purposes.
U.S. FEDERAL TAX STATUS -- Each Portfolio intends to distribute substantially
all of its taxable income and to comply or continue to comply with the other
requirements of the Internal Revenue Code of 1986, as amended, applicable to
regulated investment companies. Accordingly, no provision for U.S. federal
income taxes is required. In addition, by distributing during each calendar year
substantially all of its ordinary income and capital gains, if any, each
Portfolio intends not to be subject to a U.S. federal excise tax.
DIVIDENDS AND DISTRIBUTIONS -- Each Portfolio, except Balanced, distributes at
least annually to shareholders substantially all of its net investment income.
Balanced declares and pays quarterly, as dividends to shareholders,
substantially all of its net investment income. Distribution of net realized
gains, if any, are declared and paid at least annually. Dividends and
distributions to shareholders are recorded on the ex-dividend date. Income and
capital gain distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
These "book/tax" differences are either considered temporary or permanent in
nature. To the extent these differences are permanent in nature, such amounts
are reclassified within capital accounts based on their U.S. federal tax-basis
treatment. Temporary differences do not require reclassification.
FOREIGN WITHHOLDING TAXES -- Income received from sources outside of the United
States may be subject to withholding and other taxes imposed by countries other
than the United States.
OTHER -- Securities denominated in currencies other than U.S. dollars are
subject to changes in value due to fluctuations in exchange rates. Some
countries in which the Portfolios invest require governmental approval for the
repatriation of investment income, capital or the proceeds of sales of
securities by foreign investors. In addition, if there is a deterioration in a
country's balance of payments or for other reasons, a country may impose
temporary restrictions on foreign capital remittances abroad. The securities
exchanges of certain foreign markets are substantially smaller, less liquid and
more volatile than the major securities markets in the United States.
45
<PAGE>
TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
For the six months ended September 30, 1999, Bear Stearns Asset Management Inc.
("BSAM" or the "Adviser"), a wholly-owned subsidiary of The Bear Stearns
Companies Inc., served as the investment adviser pursuant to an Investment
Advisory Agreement with respect to each Portfolio. Under the terms of the
Investment Advisory Agreement, each Portfolio, except Insiders Select, has
agreed to pay BSAM a monthly fee at the annual rate of 0.75% of average daily
net assets for S&P STARS, Large Cap and Small Cap, 0.65% of average daily net
assets for Focus List and Balanced, and 1.00% of average daily net assets for
International Equity.
For Insiders Select, BSAM is entitled to receive from the Portfolio a monthly
fee equal to an annual rate of 1.00% of the Portfolio's average daily net
assets. In addition, starting in the thirteenth month of operation, BSAM is
entitled to a monthly performance adjustment fee which may increase or decrease
the total advisory fee by up to 0.50% per year of the value of Insider Select's
average daily net assets. The performance adjustment fee reduced the total
advisory fee by $93,868 or 0.21% of the value of Insider's average daily net
assets due to underperformance in comparison to the S&P MidCap 400 Index, the
Portfolio's benchmark index, for the six months ended September 30, 1999.
BSAM has engaged Marvin & Palmer Associates, Inc. ("Marvin & Palmer") as
International Equity's sub-investment adviser to manage International Equity's
day-to-day investment activities. Marvin & Palmer is entitled to receive a
monthly fee from BSAM calculated on an annual basis equal to 0.20% of
International Equity's total average daily net assets to the extent
International Equity's average daily net assets are in excess of $25 million and
below $50 million at the relevant month end, 0.45% of International Equity's
total average daily net assets to the extent International Equity's average
daily net assets are in excess of $50 million and below $65 million at the
relevant month end and 0.60% of International Equity's total average daily net
assets to the extent International Equity's net assets are in excess of
$65 million at the relevant month end. During the six months ended
September 30, 1999, Marvin & Palmer did not earn a fee since International
Equity's net assets were below $25 million.
For the six months ended September 30, 1999, Bear Stearns Funds Management Inc.
("BSFM" or the "Administrator") served as administrator to each Portfolio
pursuant to an Administration Agreement. The Administrator is entitled to
receive from each Portfolio a monthly fee equal to an annual rate of 0.15% of
each Portfolio's average daily net assets.
Under the terms of an Administrative Services Agreement with each Portfolio,
PFPC Inc. provides certain accounting and administrative services to each
Portfolio. For providing these services, PFPC Inc. is entitled to receive from
each Portfolio a monthly fee equal to an annual rate of 0.10% of the Portfolio's
average daily net assets up to $200 million, 0.075% of the next $200 million,
0.05% of the next $200 million and 0.03% of net assets above $600 million,
subject to a minimum annual fee of $138,000 for each Portfolio.
For the six months ended September 30, 1999, BSAM voluntarily undertook to limit
each Portfolio's total operating expenses (exclusive of brokerage commissions,
taxes, interest and extraordinary items) to a maximum annual level as a percent
of each Portfolio's average daily net assets as follows:
<TABLE>
<CAPTION>
PORTFOLIO CLASS A SHARES CLASS B SHARES CLASS C SHARES CLASS Y SHARES
- --------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
S&P STARS.................................... 1.50% 2.00% 2.00% 1.00%
Insiders Select.............................. 1.65 2.15 2.15 1.15
Large Cap.................................... 1.50 2.00 2.00 1.00
Small Cap.................................... 1.50 2.00 2.00 1.00
Focus List................................... 1.40 1.90 1.90 0.90
Balanced..................................... 1.20 1.70 1.70 0.70
International Equity......................... 1.75 2.25 2.25 1.25
</TABLE>
46
<PAGE>
As necessary, this limitation is effected by waivers by the Adviser of its
advisory fees and reimbursements of expenses exceeding the advisory fee. For the
six months ended September 30, 1999, the investment advisory fee waivers and
reimbursements of expenses (in order to maintain the voluntary expense
limitation) were as follows:
<TABLE>
<CAPTION>
PORTFOLIO ADVISORY WAIVERS EXPENSE REIMBURSEMENTS
- --------- ---------------- ----------------------
<S> <C> <C>
S&P STARS.................................................. $387,133 --
Insiders Select............................................ 145,444 $ 21,556
Large Cap.................................................. 88,030 82,418
Small Cap.................................................. 204,602 27,714
Focus List................................................. 59,050 85,080
Balanced................................................... 66,121 140,335
International Equity....................................... 94,008 84,675
</TABLE>
The Portfolios will not pay BSAM at a later time for any amounts BSAM may waive,
nor will the Portfolios reimburse BSAM for any amounts BSAM may assume.
For the six months ended September 30, 1999, Bear Stearns, an affiliate of the
Adviser and the Administrator, earned approximately $317,226, $10,086, $708,
$1,098, $33,610, and $3,773 in brokerage commissions from portfolio transactions
executed on behalf of S&P STARS, Insiders Select, Large Cap, Small Cap, Focus
List and Balanced, respectively.
Custodial Trust Company, a wholly-owned subsidiary of The Bear Stearns Companies
Inc. and an affiliate of the Adviser and the Administrator, serves as custodian
to each of the Portfolios.
DISTRIBUTION PLAN AND SHAREHOLDER SERVICING PLAN
The Portfolios listed below have entered into a Distribution Plan pursuant to
Rule 12b-1 under the Investment Company Act and a Shareholder Servicing Plan
which are as follows:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
-------------------------- -------------------------- --------------------------
DISTRIBUTION SHAREHOLDER DISTRIBUTION SHAREHOLDER DISTRIBUTION SHAREHOLDER
PORTFOLIO PLAN SERVICING PLAN SERVICING PLAN SERVICING
- --------- ------------ ----------- ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
S&P STARS........................... 0.25%(a) 0.25%(a) 0.75% 0.25% 0.75%(a) 0.25%(a)
Insiders Select..................... 0.25 (a) 0.25 (a) 0.75 0.25 0.75 (a) 0.25 (a)
Large Cap........................... 0.25 (a) 0.25 (a) 0.75 0.25 0.75 (a) 0.25 (a)
Small Cap........................... 0.25 (a) 0.25 (a) 0.75 0.25 0.75 (a) 0.25 (a)
Focus List.......................... 0.25 0.25 0.75 0.25 0.75 0.25
Balanced............................ 0.25 0.25 0.75 0.25 0.75 0.25
International Equity................ 0.25 0.25 0.75 0.25 0.75 0.25
</TABLE>
- -------
(a) Prior to February 10, 1999, fees for shareholder servicing were paid through
the Distribution Plan.
Such fees are based on the average daily net assets in each class of the
respective Portfolios and are accrued daily and paid quarterly or at such
intervals as the Board of Trustees may determine. The fees paid to Bear Stearns
under the Distribution Plan are payable without regard to actual expenses
incurred. Bear Stearns uses the distribution fee to pay broker/dealers whose
clients hold each Portfolio's shares and other distribution-related activities.
Bear Stearns uses shareholder servicing fees to pay broker-dealers and other
financial institutions whose clients hold portfolio shares primarily for
shareholder liaison and other account maintenance services.
47
<PAGE>
For the six months ended September 30, 1999, the distribution and shareholder
servicing fees paid to Bear Stearns under each Plan were as follows:
<TABLE>
<CAPTION>
PORTFOLIO DISTRIBUTION FEES SHAREHOLDER SERVICING FEES
- --------- ----------------- --------------------------
<S> <C> <C>
S&P STARS................................................... $1,029,836 $548,298
Insiders Select............................................. 105,372 55,129
Large Cap................................................... 39,599 21,208
Small Cap................................................... 84,169 45,519
Focus List.................................................. 45,888 22,709
Balanced.................................................... 19,837 10,630
International Equity........................................ 41,057 23,502
</TABLE>
In addition, as Distributor of the Portfolios, Bear Stearns collects the sales
charges imposed on sales of each Portfolio's Class A shares, and reallows a
portion of such charges to dealers through which the sales are made. The
Distributor advanced 1.25% in sales commissions to all authorized dealers on net
asset value transfers. In addition, Bear Stearns advanced 4.25% and 1.00% in
sales commissions on the sale of Class B and C shares, respectively, to dealers
at the time of such sales.
For the six months ended September 30, 1999, Bear Stearns has advised each
Portfolio that it received the approximate amounts noted below in front-end
sales charges resulting from sales of Class A shares (from which Bear Stearns
paid such sales charges to dealers who in turn paid commissions to sales
persons) and contingent deferred sales charges ("CDSC") upon certain redemptions
by Class B and C shareholders, respectively. The amounts were as follows:
<TABLE>
<CAPTION>
FRONT-END SALES CHARGES CDSC CDSC
PORTFOLIO CLASS A SHARES CLASS B SHARES CLASS C SHARES
- --------- ----------------------- -------------- --------------
<S> <C> <C> <C>
S&P STARS.......................................... $2,124,600 $144,700 $14,900
Insiders Select.................................... 55,200 53,200 2,000
Large Cap.......................................... 19,600 8,200 300
Small Cap.......................................... 31,000 8,000 1,400
Focus List......................................... 136,700 20,700 200
Balanced........................................... 13,300 1,300 100
International Equity............................... 26,000 5,900 300
</TABLE>
INVESTMENTS IN SECURITIES
For U.S. federal income tax purposes, the cost of securities owned, gross
appreciation, gross depreciation and net unrealized appreciation of investments
at September 30, 1999 for each Portfolio were as follows:
<TABLE>
<CAPTION>
GROSS GROSS
PORTFOLIO COST APPRECIATION DEPRECIATION NET APPRECIATION
- --------- ------------ ------------ ------------ ----------------
<S> <C> <C> <C> <C>
S&P STARS................................ $481,530,155 $143,837,578 $(30,322,305) $113,515,273
Insiders Select.......................... 36,953,093 6,290,317 (2,986,448) 3,303,869
Large Cap................................ 16,907,995 4,196,839 (1,032,938) 3,163,901
Small Cap................................ 54,418,372 13,877,298 (5,816,800) 8,060,498
Focus List............................... 17,909,267 4,860,102 (1,261,131) 3,598,971
Balanced................................. 19,396,570 1,259,884 (1,113,534) 146,350
International Equity..................... 18,879,035 4,976,396 (590,487) 4,385,909
</TABLE>
48
<PAGE>
For the six months ended September 30, 1999, aggregate purchases and sales of
investment securities (excluding short-term securities) for each Portfolio were
as follows:
<TABLE>
<CAPTION>
PORTFOLIO PURCHASES SALES
- --------- ------------ ------------
<S> <C> <C>
S&P STARS................................................... $339,581,335 $164,054,325
Insiders Select............................................. 11,829,664 14,730,234
Large Cap................................................... 5,688,585 7,013,397
Small Cap................................................... 15,583,089 18,999,382
Focus List.................................................. 13,708,305 6,735,419
Balanced.................................................... 6,565,356 4,096,118
International Equity........................................ 16,781,772 12,415,481
</TABLE>
SHARES OF BENEFICIAL INTEREST
Each Portfolio offers Class A, B, C and Y shares. Class A shares are sold with a
front-end sales charge of up to 5.50% for each Portfolio. Class B shares are
sold with a CDSC of up to 5.00% within six years of purchase. Class C shares are
sold with a CDSC of 1.00% during the first year. There is no sales charge or
CDSC on Class Y shares, which are offered primarily to institutional investors.
At September 30, 1999, there was an unlimited amount of $0.001 par value shares
of beneficial interest authorized for each Portfolio, of which Bear Stearns
owned the following shares including reinvestment of dividends and
distributions, if any:
<TABLE>
<CAPTION>
SHARES OF BENEFICIAL INTEREST
-----------------------------------------
PORTFOLIO CLASS A CLASS B CLASS C CLASS Y
- --------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
S&P STARS.................................................. 5,436 -- 5,438 --
Insiders Select............................................ 1 -- -- --
Large Cap.................................................. 1,359 -- 1,353 --
Small Cap.................................................. 1,190 -- 1,186 --
Focus List................................................. 41,736 41,737 41,737 --
Balanced................................................... 55,557 55,557 57,755 1
International Equity....................................... 138,890 138,917 138,890 --
</TABLE>
49
<PAGE>
<TABLE>
<CAPTION>
S&P STARS INSIDERS SELECT
------------------------------------------- -----------------------------------------
SALES REPURCHASES REINVESTMENTS SALES REPURCHASES REINVESTMENTS
------------ ------------ ------------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
CLASS A
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999
Shares.................................. 4,447,876 1,527,354 -- 149,333 289,043 --
Value................................... $113,371,020 $ 38,627,533 -- $ 2,689,369 $5,162,813 --
FOR THE FISCAL YEAR ENDED MARCH 31, 1999
Shares.................................. 13,356,673 10,653,471 260,562 822,035 693,757 79,376
Value................................... $285,940,228 $225,975,249 $5,518,701 $14,004,050 $11,455,485 $1,261,278
CLASS B
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999
Shares.................................. 2,377,752 196,092 -- 37,434 92,811 --
Value................................... $ 59,796,641 $ 4,882,650 -- $ 663,474 $1,620,584 --
FOR THE FISCAL YEAR ENDED MARCH 31, 1999
Shares.................................. 1,816,976 105,953 42,628 489,490 140,589 26,712
Value................................... $ 39,716,007 $ 2,329,507 $ 894,326 $ 8,243,946 $2,267,701 $ 418,312
CLASS C
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999
Shares.................................. 1,640,507 301,078 -- 28,497 102,036 --
Value................................... $ 41,222,069 $ 7,532,086 -- $ 504,544 $1,780,965 --
FOR THE FISCAL YEAR ENDED MARCH 31, 1999
Shares.................................. 1,500,923 775,235 136,180 258,790 283,301 40,088
Value................................... $ 32,744,043 $ 15,847,614 $2,855,694 $ 4,440,849 $4,567,478 $ 627,381
CLASS Y
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999
Shares.................................. 795,017 106,923 -- 6,109 472 --
Value................................... $ 20,448,237 $ 2,709,560 -- $ 113,983 $ 8,514 --
FOR THE FISCAL YEAR ENDED MARCH 31, 1999
Shares.................................. 593,967 324,017 83,772 1,825 22,222 3,166
Value................................... $ 12,560,434 $ 6,838,883 $1,793,556 $ 33,074 $ 376,628 $ 51,132
</TABLE>
50
<PAGE>
<TABLE>
<CAPTION>
LARGE CAP SMALL CAP
---------------------------------------- -----------------------------------------
SALES REPURCHASES REINVESTMENTS SALES REPURCHASES REINVESTMENTS
---------- ----------- ------------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
CLASS A
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999
Shares.................................... 45,619 75,693 -- 228,738 307,693 --
Value..................................... $ 945,836 $1,573,759 -- $ 4,616,734 $6,303,229 --
FOR THE FISCAL YEAR ENDED MARCH 31, 1999
Shares.................................... 236,435 182,475 34,912 1,836,377 1,923,838 58,402
Value..................................... $4,771,728 $3,596,602 $665,076 $33,847,374 $35,242,367 $1,063,921
CLASS B
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999
Shares.................................... 17,986 14,306 -- 23,140 14,435 --
Value..................................... $ 366,551 $ 292,870 -- $ 464,397 $ 286,684 --
FOR THE FISCAL YEAR ENDED MARCH 31, 1999
Shares.................................... 88,188 17,993 6,120 142,362 34,784 7,380
Value..................................... $1,751,063 $ 331,830 $115,353 $ 2,826,045 $ 613,558 $ 133,000
CLASS C
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999
Shares.................................... 22,322 29,756 -- 66,721 99,857 --
Value..................................... $ 462,947 $ 609,461 -- $ 1,337,960 $1,961,464 --
FOR THE FISCAL YEAR ENDED MARCH 31, 1999
Shares.................................... 72,424 69,436 23,811 174,437 351,849 34,901
Value..................................... $1,462,648 $1,367,701 $450,271 $ 3,524,703 $6,472,733 $ 629,311
CLASS Y
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999
Shares.................................... 22,968 45,874 -- 44,105 62,271 --
Value..................................... $ 481,756 $ 976,738 -- $ 921,637 $1,234,118 --
FOR THE FISCAL YEAR ENDED MARCH 31, 1999
Shares.................................... 83,237 212,477 20,538 284,559 326,429 61,415
Value..................................... $1,617,045 $4,241,757 $391,241 $ 5,180,929 $6,124,514 $1,123,278
</TABLE>
51
<PAGE>
<TABLE>
<CAPTION>
FOCUS LIST BALANCED
---------------------------------------- ----------------------------------------
SALES REPURCHASES REINVESTMENTS SALES REPURCHASES REINVESTMENTS
---------- ----------- ------------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
CLASS A
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999
Shares...................................... 327,423 75,700 -- 69,529 50,995 3,025
Value....................................... $5,734,615 $1,316,112 -- $ 937,407 $ 681,605 $ 39,953
FOR THE FISCAL YEAR ENDED MARCH 31, 1999
Shares...................................... 273,095 134,732 508 203,116 162,878 4,677
Value....................................... $3,857,601 $1,822,606 $7,297 $2,584,096 $2,121,980 $ 59,462
CLASS B
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999
Shares...................................... 102,028 15,774 -- 29,782 6,304 1,310
Value....................................... $1,765,418 $ 271,062 -- $ 402,414 $ 82,576 $ 17,247
FOR THE FISCAL YEAR ENDED MARCH 31, 1999
Shares...................................... 166,081 86,025 371 58,838 2,483 1,358
Value....................................... $2,369,877 $1,237,419 $5,300 $ 751,354 $ 31,916 $ 17,255
CLASS C
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999
Shares...................................... 106,223 12,819 -- 50,884 3,879 1,562
Value....................................... $1,869,511 $ 224,130 -- $ 690,702 $ 52,629 $ 20,537
FOR THE FISCAL YEAR ENDED MARCH 31, 1999
Shares...................................... 76,706 10,820 289 15,231 49 1,718
Value....................................... $1,073,707 $ 148,531 $4,135 $ 196,638 $ 640 $ 21,785
CLASS Y
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999
Shares...................................... -- -- -- 148,012 64,760 8,028
Value....................................... -- -- -- $2,014,678 $ 841,402 $106,544
FOR THE FISCAL YEAR ENDED MARCH 31, 1999
Shares...................................... -- -- -- 394,174 53,105 10,358
Value....................................... -- -- -- $5,166,631 $ 681,591 $132,059
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY
----------------------------------------
SALES REPURCHASES REINVESTMENTS
---------- ----------- -------------
<S> <C> <C> <C>
CLASS A
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999
Shares...................................................... 412,979 86,435 --
Value....................................................... $6,288,006 $1,327,283 --
FOR THE FISCAL YEAR ENDED MARCH 31, 1999
Shares...................................................... 436,615 162,043 46
Value....................................................... $6,455,599 $2,355,819 $660
CLASS B
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999
Shares...................................................... 55,392 11,711 --
Value....................................................... $ 882,232 $ 196,435 --
FOR THE FISCAL YEAR ENDED MARCH 31, 1999
Shares...................................................... 69,803 15,483 36
Value....................................................... $1,039,099 $ 212,361 $527
CLASS C
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999
Shares...................................................... 35,456 7,178 --
Value....................................................... $ 554,231 $ 113,957 --
FOR THE FISCAL YEAR ENDED MARCH 31, 1999
Shares...................................................... 46,356 9,943 8
Value....................................................... $ 686,227 $ 148,100 $110
</TABLE>
52
<PAGE>
CREDIT AGREEMENT
The Fund on behalf of the Portfolios had entered into a credit agreement with
BankBoston, N.A. The agreement provided that each party to the credit agreement
was permitted to borrow in an amount equal to the lesser of $25 million or 25%
of the net assets of each Portfolio. At no time did the aggregate outstanding
principal amount of all loans to any of the Portfolios exceed $25 million. Each
Portfolio as a fundamental policy were permitted to borrow in an amount up to
331/3% of the value of such Portfolio's assets. However, each Portfolio intended
to borrow money, if any, only for temporary or emergency (not leveraging)
purposes in an amount up to 15% of its net assets. The line of credit bore
interest at the greater of: (i) the annual rate of interest announced from time
to time from the bank at its head office as its Base Rate, or (ii) the Federal
Funds Effective Rate plus 0.50%, or at the borrower's option, the rate quoted by
BankBoston, N.A. Such agreement terminated on September 30, 1999. Effective
October 1, 1999, the Fund entered into a demand promissory note arrangement with
The Chase Manhattan Bank (the "Bank") to provide an uncommitted credit facility
to the Fund (on behalf of the Portfolios). The credit facility bears interest at
the greater of (i) the rate otherwise in effect for such loan plus 2% and (ii)
that rate of interest from time to time announced by the Bank at its principal
office as its prime commercial lending rate plus 2%, with such interest to be
payable on demand and upon payment in full of such principal.
Each loan is payable on demand or upon termination of this credit agreement or,
for money market loans, on the last day of the interest period and, in any
event, not later than 14 days from the date the loan was advanced.
Amounts outstanding under the line of credit agreement during the six months
ended September 30, 1999, were as follows:
<TABLE>
<CAPTION>
MAXIMUM LOAN AMOUNTS
PORTFOLIO AVERAGE LOAN BALANCE OUTSTANDING AVERAGE INTEREST RATE
- --------- -------------------- -------------------- ---------------------
<S> <C> <C> <C>
S&P STARS................................ $354,996 $2,250,000 6.78%
Insiders Select.......................... 2,434 136,800 6.64
Large Cap................................ 15,944 304,800 7.75
Small Cap................................ 64,548 1,101,859 6.85
Focus List............................... 3,186 583,000 6.50
Balanced................................. 1,845 337,600 6.49
International Equity..................... 8,008 222,700 7.62
</TABLE>
The Portfolios had no amounts outstanding under the line of credit agreement at
September 30, 1999, (except for S&P STARS Portfolio which had $565,200
outstanding under the line of credit agreement).
53
