<PAGE>
SEMI-ANNUAL REPORT FOR THE PERIOD ENDED JUNE 30, 1999
[PICTURE OF SHIP APPEARS HERE]
<PAGE>
CONTENTS
[LOGO OF SEFTON FUNDS APPEARS HERE]
Statement of Investments ............................. 1
Statement of Assets & Liabilities .................... 16
Statement of Operations .............................. 18
Statement of Changes in Net Assets ................... 20
Financial Highlights ................................. 24
Notes to Financial Statements ........................ 28
<PAGE>
U.S. Government Fund
STATEMENT OF INVESTMENTS
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Face Market
Value Value
----- ------
<C> <S> <C>
CORPORATE BONDS 19.3%
- -------------------------------------------------------------------------------
Finance 7.4%
- -------------------------------------------------------------------------------
$1,000,000 Countrywide Home Loan, 7.45%, 9/16/03 $ 1,021,767
500,000 Lehman Brothers Holdings, Inc., 8.75%,
5/15/02 522,405
1,000,000 Lehman Brothers Holdings, Inc., 7.25%,
10/15/03 1,004,997
500,000 Salomon, Inc., 9.25%, 5/1/01 525,783
-----------
3,074,952
-----------
Industrial 11.9%
- -------------------------------------------------------------------------------
1,000,000 Boise Cascade Co., 7.70%, 1/30/03 998,766
500,000 Boise Cascade Co., 7.90%, 12/15/03 501,530
500,000 Bowater, Inc., 8.25%, 10/15/99 502,620
1,500,000 Coca Cola Bottling Co. Consolidated, 6.85%,
11/1/07 1,465,202
500,000 Royal Caribbean Cruises Ltd., 8.25%, 4/1/05 520,034
1,000,000 Royal Caribbean Cruises Ltd., 7.00%, 10/15/07 959,215
-----------
4,947,367
-----------
TOTAL CORPORATE BONDS
(Cost $8,141,649) 8,022,319
-----------
U.S. GOVERNMENT AGENCY 26.0%
- -------------------------------------------------------------------------------
Federal Home Loan Bank 2.3%
- -------------------------------------------------------------------------------
1,000,000 5.93%, 4/9/08 963,842
-----------
Federal Home Loan Mortgage Corp. 8.2%
- -------------------------------------------------------------------------------
875,000 8.53%, 2/2/05 889,798
348,261 7.50%, 7/1/09, Pool #E00326 354,665
749,107 7.50%, 4/1/14, Pool #C90060 763,925
529,149 7.00%, 4/1/16, Pool #C90133 529,170
856,062 6.10%, 11/15/16, Series 1501, Class F,
Collateralized Mortgage Obligation 856,785
-----------
3,394,343
-----------
Federal National Mortgage Assoc. 13.4%
- -------------------------------------------------------------------------------
1,400,000 6.00%, 8/25/08, Series 1994-34, Class C,
Collateralized Mortgage Obligation 1,376,739
512,967 7.00%, 5/1/14, Pool #190783 510,883
267,864 8.00%, 1/1/15, Pool #250232 274,891
1,503,568 6.50%, 6/1/16, Pool #368930 1,474,732
1,000,000 6.50%, 4/25/23, Series 1993-210 976,472
1,000,000 6.50%, 9/25/23, Series 1994-51 972,945
-----------
5,586,662
-----------
</TABLE>
1
<PAGE>
U.S. Government Fund
STATEMENT OF INVESTMENTS (continued)
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Face Market
Value Value
----- ------
<C> <S> <C>
Government National Mortgage Assoc. 2.1%
- -------------------------------------------------------------------------------
$ 866,862 7.00%, 7/20/13, Pool #2626 $ 867,290
-----------
TOTAL U.S. GOVERNMENT AGENCY
(Cost $10,972,305) 10,812,137
-----------
U.S. TREASURY BOND 5.0%
- -------------------------------------------------------------------------------
1,000,000 7.25%, 5/15/16 1,097,813
1,000,000 6.13%, 11/15/27 990,938
-----------
TOTAL U.S. TREASURY BOND
(Cost $2,031,422) 2,088,751
-----------
U.S. TREASURY NOTES 43.1%
- -------------------------------------------------------------------------------
1,000,000 7.75%, 2/15/01 1,034,688
1,500,000 6.25%, 10/31/01 1,521,563
2,000,000 7.50%, 5/15/02 2,097,500
2,200,000 6.25%, 2/15/03 2,237,813
1,000,000 5.75%, 8/15/03 1,000,313
2,000,000 7.25%, 8/15/04 2,125,000
2,000,000 7.88%, 11/15/04 2,184,375
2,000,000 7.50%, 2/15/05 2,154,376
1,500,000 6.50%, 10/15/06 1,548,282
2,000,000 6.25%, 02/15/07 2,038,126
-----------
TOTAL U.S. TREASURY NOTES
(Cost $17,544,444) 17,942,036
-----------
U.S. TREASURY STRIP 2.6%
- -------------------------------------------------------------------------------
4,000,000 8/15/20 1,063,612
-----------
TOTAL U.S. TREASURY STRIP
(Cost $951,441) 1,063,612
-----------
REPURCHASE AGREEMENT 3.1%
- -------------------------------------------------------------------------------
1,307,000 Union Bank of California Repurchase Agreement, 5.25%,
dated 6/30/99 and maturing 7/1/99 with a maturity
value of $1,307,191, collateralized by $1,358,950,
Freddie Mac, 6.25%, due 12/15/07 with a value of
$1,311,969 1,307,000
-----------
TOTAL REPURCHASE AGREEMENT
(Cost $1,307,000) 1,307,000
-----------
</TABLE>
2
<PAGE>
U.S. Government Fund
STATEMENT OF INVESTMENTS (continued)
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Face Market
Value Value
----- ------
<C> <S> <C> <C>
CASH SWEEP ACCOUNT 0.0%
- ----------------------------------------------------------
$ 432 Union Bank of California $ 432
-----------
TOTAL CASH SWEEP ACCOUNT
(Cost $432) 432
-----------
TOTAL INVESTMENTS
(Cost $40,948,693) (a) 99.1% 41,236,287
OTHER ASSETS IN EXCESS OF LIABILITIES 0.9% 358,708
- ----------------------------------------------------------
TOTAL NET ASSETS 100.0% $41,594,995
- ----------------------------------------------------------
- ----------------------------------------------------------
</TABLE>
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation..... $ 812,525
Unrealized depreciation..... (524,931)
---------
Net unrealized
appreciation............... $ 287,594
=========
</TABLE>
See Notes to Financial Statements.
3
<PAGE>
California Tax-Free Fund
STATEMENT OF INVESTMENTS
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Face Moody's/S&P Market
Value Ratings Value
----- ----------- ------
(Unaudited)
<C> <S> <C> <C>
CERTIFICATE OF PARTICIPATION 4.2%
- ----------------------------------------------------------------------
$1,500,000 West Covina, California
Hospital, Certificate of
Participation, 6.50%, 8/15/14,
Prerefunded 8/15/04 @ 102 A2/NR $1,672,530
----------
TOTAL CERTIFICATE OF PARTICIPATION
(Cost $1,502,606) 1,672,530
----------
EDUCATION 12.8%
- ----------------------------------------------------------------------
1,690,000 California Educational
Facilities Authority, Pomona
College, 6.13%, 2/15/08,
Callable 2/15/02 @ 102 Aaa/AAA 1,794,611
1,500,000 California Educational
Facilities Authority, Santa
Clara University, 6.25%,
2/1/16, Prerefunded 2/1/02 @
102 A1/NR 1,604,625
1,500,000 University of California
Revenue Series B, 6.30%,
9/1/15, Prerefunded 9/1/03 @
102 AAA/A+ 1,644,750
----------
TOTAL EDUCATION
(Cost $4,685,353) 5,043,986
----------
FLOATING RATE NOTES 0.8%
- ----------------------------------------------------------------------
100,000 California Pollution Control
Finance Authority, Series A,
3.35%, 2/28/08 (b) A1/A+ 100,000
100,000 California Pollution Control
Finance Authority, Series B,
3.35%, 2/28/08 (b) A1/A+ 100,000
100,000 California Pollution Control
Finance Authority, Series C,
3.35%, 2/28/08 (b) A1/A+ 100,000
----------
TOTAL FLOATING RATE NOTES
(Cost $300,000) 300,000
----------
GENERAL OBLIGATION BONDS 11.1%
- ----------------------------------------------------------------------
1,325,000 California State, 6.25%, 4/1/08 AA3/A+ 1,468,365
1,895,000 California State Veterans
General Obligation, 5.15%,
12/1/14, Callable 12/1/08 @
101 Aa3/A+ 1,896,421
1,000,000 Oakland California, Series B,
5.88%, 6/15/19, Callable
6/15/05 @ 102, FSA Aaa/AAA 1,041,850
----------
TOTAL GENERAL OBLIGATION BONDS
(Cost $4,272,202) 4,406,636
----------
</TABLE>
4
<PAGE>
California Tax-Free Fund
STATEMENT OF INVESTMENTS (continued)
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Face Moody's/S&P Market
Value Ratings Value
----- ----------- ------
(Unaudited)
<C> <S> <C> <C>
HEALTH 10.3%
- --------------------------------------------------------------------
$1,000,000 California Health Facilities
Authorities Revenue, 5.00%,
11/15/13 Aaa/AAA $ 983,340
1,500,000 California Health Facilities
Finance Authorities, 6.25%,
10/1/13, Callable 10/1/01 @
102, MBIA Aaa/AAA 1,586,640
1,000,000 Stockton, California, Health
Facilities, Dameron Hospital
Assoc., Series A, 5.35%,
12/1/09, Callable 12/1/07 @
102 NR/BBB+ 1,012,310
500,000 Stockton, California, Health
Facilities, Dameron Hospital
Assoc., Series A, 5.45%,
12/1/10, Callable 12/1/07 @
102 NR/BBB+ 503,650
----------
TOTAL HEALTH
(Cost $3,986,700) 4,085,940
----------
HOUSING 6.0%
- --------------------------------------------------------------------
1,460,000 California Housing Finance
Agency, Series F, 5.95%,
8/1/14, Callable 8/1/05 @ 102,
MBIA Aaa/AAA 1,534,402
800,000 California Housing Finance
Agency, Series L, 5.90%,
8/1/17, Callable 2/1/06 @ 102,
MBIA Aaa/AAA 837,784
----------
TOTAL HOUSING
(Cost $2,260,000) 2,372,186
----------
POWER 6.5%
- --------------------------------------------------------------------
1,500,000 M-S-R Public Power Agency,
California San Juan Project,
Series F, 6.00%, 7/1/20,
Callable 7/1/03 @ 102, AMBAC Aaa/AAA 1,574,985
1,000,000 Northern California Power
Agency Revenue, 5.00%, 7/1/15,
Callable 7/1/08 @ 101, MBIA Aaa/AAA 975,800
----------
TOTAL POWER
(Cost $2,498,123) 2,550,785
----------
PRISONS 2.6%
- --------------------------------------------------------------------
1,000,000 California State Public Works
Board University, 5.25%,
12/1/08, AMBAC Aaa/AAA 1,044,920
----------
TOTAL PRISONS
(Cost $970,977) 1,044,920
----------
</TABLE>
5
<PAGE>
California Tax-Free Fund
STATEMENT OF INVESTMENTS (continued)
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Face Moody's/S&P Market
Value Ratings Value
----- ----------- ------
(Unaudited)
<C> <S> <C> <C>
REVENUE 9.2%
- ---------------------------------------------------------------------
$1,000,000 Mountain View California,
Shoreline Regional Park,
Series A, 5.50%, 8/1/21,
Callable 8/1/06 @ 102, MBIA Aaa/AAA $ 1,010,990
1,000,000 Port of Oakland, 5.60%,
11/1/19, Callable 11/1/07 @
102, MBIA Aaa/AAA 1,023,320
1,500,000 San Francisco Port Commission,
5.90%, 7/1/09, Callable 7/1/04
@ 102 A1/A- 1,589,925
-----------
TOTAL REVENUE
(Cost $3,418,607) 3,624,235
-----------
TRANSPORTATION 12.4%
- ---------------------------------------------------------------------
1,500,000 San Diego Regional
Transportation Commission,
California Sales Tax, Series
A, 5.00%, 4/1/07, FGIC Aaa/AAA 1,543,080
1,800,000 San Francisco Airport,
California, City/County,
5.38%, 5/1/17, Callable 5/1/06
@ 102, MBIA Aaa/AAA 1,812,438
1,500,000 San Francisco Bay Area Rapid
Transit, Sales Tax Revenue,
5.50%, 7/1/15, Callable 7/1/05
@ 101, FGIC Aaa/AAA 1,526,565
-----------
TOTAL TRANSPORTATION
(Cost $4,629,044) 4,882,083
-----------
WASTE 11.8%
- ---------------------------------------------------------------------
1,200,000 Los Angeles California Waste
Water Revenue Bond, 5.00%,
6/1/14, Callable 6/1/08 @ 101,
FGIC Aaa/AAA 1,183,212
1,500,000 San Jose-Santa Clara Water
District Financing, 5.38%,
11/15/15, Callable 11/15/05 @
101, FGIC Aaa/AAA 1,516,020
1,000,000 South County California
Regional Wastewater, 4.75%,
8/1/17, Callable 8/1/09 @ 102,
MBIA Aaa/AAA 931,520
1,000,000 Tulare California Sewer
Revenue, 5.70%, 11/15/15,
Callable 11/15/06 @ 102, MBIA Aaa/AAA 1,045,040
-----------
TOTAL WASTE
(Cost $4,604,936) 4,675,792
-----------
</TABLE>
6
<PAGE>
California Tax-Free Fund
STATEMENT OF INVESTMENTS (continued)
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Face Moody's/S&P Market
Value Ratings Value
----- ----------- ------
(Unaudited)
<C> <S> <C> <C>
WATER 11.1%
- ---------------------------------------------------------------------
$1,700,000 Marin California Municipal
Water District, 5.55%, 7/1/13,
Callable 7/1/03 @ 102 A1/AA $ 1,739,916
1,000,000 Rancho California, Water
District Financing Authority,
Series A, 5.88%, 11/1/10,
Callable 11/1/05 @ 102, FGIC Aaa/AAA 1,068,460
1,500,000 San Francisco, California,
City/County, Public Utility
Commission Water, Series A,
6.00%, 11/1/15, Callable
11/1/02 @ 100 A1/AA- 1,562,970
-----------
TOTAL WATER
(Cost $4,243,221) 4,371,346
-----------
TOTAL INVESTMENTS
(Cost $37,371,769) (a) 98.8% 39,030,439
OTHER ASSETS IN EXCESS OF LIABILITIES 1.2% 491,077
- ---------------------------------------------------------------------
TOTAL NET ASSETS 100.0% $39,521,516
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
</TABLE>
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation.... $1,763,161
Unrealized depreciation.... (104,491)
----------
Net unrealized
appreciation.............. $1,658,670
==========
</TABLE>
(b) Floating rate security--rate disclosed as of June 30, 1999.
AMBAC--American Municipal Bond Assurance Corporation.
FGIC--Financial Guaranty Insurance Company.
FSA--Financial Security Assurance Corporation.
MBIA--Municipal Bond Insurance Company.
See Notes to Financial Statements.
7
<PAGE>
Equity Value Fund
STATEMENT OF INVESTMENTS
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Market
Shares Value
------ ------
<C> <S> <C>
COMMON STOCKS 97.9%
- --------------------------------------------------------
Automotive 1.3%
- --------------------------------------------------------
15,000 Borg-Warner Automotive, Inc. $ 825,000
-----------
Banking 7.5%
- --------------------------------------------------------
20,000 Bank of America Corp. 1,466,249
18,000 Bank One Corp. 1,072,125
10,000 Chase Manhattan Corp. 866,250
11,900 KeyCorp 382,288
20,000 PNC Bank Corp. 1,152,500
-----------
4,939,412
-----------
Basic Industry 3.7%
- --------------------------------------------------------
24,000 Fort James Corp. 908,999
23,000 Owens-Illinois, Inc.* 751,813
13,000 PPG Industries, Inc. 767,813
-----------
2,428,625
-----------
Beverages 1.2%
- --------------------------------------------------------
16,000 Adolph Coors Co. 792,000
-----------
Business Services 5.0%
- --------------------------------------------------------
14,000 Computer Sciences Corp.* 968,625
31,000 Reynolds & Reynolds Co. 722,688
21,000 Sterling Software, Inc.* 560,438
17,000 Xerox Corp. 1,004,062
-----------
3,255,813
-----------
Computers 4.4%
- --------------------------------------------------------
11,000 Hewlett-Packard Co. 1,105,500
14,000 IBM Corp. 1,809,500
-----------
2,915,000
-----------
Consumer Cyclicals 4.5%
- --------------------------------------------------------
39,000 BJ's Wholesale Club, Inc. * 1,172,438
25,000 Dillards, Inc. 878,125
34,000 Warnaco Group, Inc. 909,500
-----------
2,960,063
-----------
Diversified Manufacturing 1.0%
- --------------------------------------------------------
10,000 FMC Corp.* 683,125
-----------
</TABLE>
8
<PAGE>
Equity Value Fund
STATEMENT OF INVESTMENTS (continued)
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Market
Shares Value
------ ------
<C> <S> <C>
Electrical & Electronic 5.6%
- ------------------------------------------------------------
50,000 Arrow Electronics, Inc.* $ 950,000
15,000 Emerson Electric Co. 943,125
10,000 Hubbell, Inc. Class A 398,750
10,000 Hubbell, Inc. Class B 453,750
20,000 Thomas & Betts Corp. 945,000
----------
3,690,625
----------
Energy 1.3%
- ------------------------------------------------------------
40,000 MCN Energy Group, Inc. 830,000
----------
Entertainment 3.6%
- ------------------------------------------------------------
61,000 Harrah's Entertainment, Inc.* 1,342,000
23,000 Royal Caribbean Cruises Ltd. 1,006,250
----------
2,348,250
----------
Financial Services 8.1%
- ------------------------------------------------------------
15,000 Astoria Financial Corp. 659,063
18,000 Fannie Mae 1,230,749
15,000 Fleet Financial Group, Inc. 665,625
32,000 Heller Financial, Inc. 890,000
20,000 Household International, Inc. 947,500
25,000 Washington Mutual, Inc. 884,375
----------
5,277,312
----------
Food Products & Services 3.1%
- ------------------------------------------------------------
43,000 Sara Lee Corp. 975,563
24,700 Suiza Foods Corp.* 1,034,312
----------
2,009,875
----------
Life & Health Insurance 4.2%
- ------------------------------------------------------------
30,000 Allstate Corp. 1,076,250
8,000 Cigna Corp. 712,000
22,000 Nationwide Financial Services, Inc. 995,500
----------
2,783,750
----------
Manufacturing 1.7%
- ------------------------------------------------------------
24,000 Dana Corp. 1,105,500
----------
Medical Equipment & Supplies 1.4%
- ------------------------------------------------------------
15,000 Baxter International, Inc. 909,375
----------
</TABLE>
9
<PAGE>
Equity Value Fund
STATEMENT OF INVESTMENTS (continued)
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Market
Shares Value
------ ------
<C> <S> <C>
Oil Companies--Integrated 9.7%
- --------------------------------------------------------
12,100 Amerada Hess Corp. $ 719,950
25,000 Conoco, Inc. 696,875
18,000 Exxon Corp. 1,388,250
32,000 Shell Transport & Trading ADR 1,483,999
20,000 Texaco, Inc. 1,250,000
23,000 USX-Marathon Group, Inc. 748,938
-----------
6,288,012
-----------
Pharmaceuticals 5.3%
- --------------------------------------------------------
30,000 Abbott Laboratories 1,365,000
16,000 Merck & Co., Inc. 1,184,000
16,000 Pharmacia & Upjohn, Inc. 909,000
-----------
3,458,000
-----------
Printing & Publishing 3.0%
- --------------------------------------------------------
16,000 Knight-Ridder, Inc. 879,000
30,000 New York Times Co. 1,104,375
-----------
1,983,375
-----------
Retail Stores 3.8%
- --------------------------------------------------------
15,000 Albertsons, Inc. 773,438
80,000 Food Lion, Inc. 925,000
20,000 May Department Stores Co. 817,500
-----------
2,515,938
-----------
Semiconductors 1.6%
- --------------------------------------------------------
18,000 Intel Corp. 1,071,000
-----------
Tobacco 0.9%
- --------------------------------------------------------
15,000 Philip Morris Cos., Inc. 602,813
-----------
Transportation 2.1%
- --------------------------------------------------------
28,000 Burlington Northern Santa Fe 868,000
20,000 Ryder Systems, Inc. 520,000
-----------
1,388,000
-----------
Utilities--Telephone 6.8%
- --------------------------------------------------------
25,000 AT&T Corp. 1,395,313
26,000 Bell Atlantic Corp. 1,699,749
23,000 US West, Inc. 1,351,250
-----------
4,446,312
-----------
</TABLE>
10
<PAGE>
Equity Value Fund
STATEMENT OF INVESTMENTS (continued)
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Shares or Market
Face Value Value
---------- ------
<C> <S> <C>
Utilities/REITS 5.8%
- -------------------------------------------------------------------------------
35,700 Carramerica Realty Corp. $ 892,500
40,000 FirstEnergy Corp. 1,239,999
24,000 General Public Utility, Inc. 1,012,500
25,000 Highwoods Properties, Inc. 685,938
-----------
3,830,937
-----------
Waste Disposal 1.3%
- -------------------------------------------------------------------------------
16,000 Waste Management, Inc.* 860,000
-----------
TOTAL COMMON STOCKS
(Cost $56,736,982) 64,198,112
-----------
REPURCHASE AGREEMENT 0.4%
- -------------------------------------------------------------------------------
$ 250,000 Union Bank of California Repurchase Agreement, 5.25%,
dated 6/30/99 and maturing on 7/1/99 with a maturity
value of $250,036, collateralized by $259,937,
Freddie Mac, 6.25%, due 12/15/07 with a value of
$250,951 250,000
-----------
TOTAL REPURCHASE AGREEMENT
(Cost $250,000) 250,000
-----------
CASH SWEEP ACCOUNT 0.0%
- -------------------------------------------------------------------------------
976 Union Bank of California 976
-----------
TOTAL CASH SWEEP ACCOUNT
(Cost $976) 976
-----------
TOTAL INVESTMENTS
(Cost $56,987,958) (a) 98.3% 64,449,088
OTHER ASSETS IN EXCESS OF LIABILITIES 1.7% 1,122,505
- -------------------------------------------------------------------------------
TOTAL NET ASSETS 100.0% $65,571,593
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation.... $8,123,515
Unrealized depreciation.... (662,385)
----------
Net unrealized
appreciation.............. $7,461,130
==========
</TABLE>
* Denotes non-income producing security.
ADR- American Depository Receipt
See Notes to Financial Statements.
11
<PAGE>
Small Company Value Fund
STATEMENT OF INVESTMENTS
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Market
Shares Value
------ ------
<C> <S> <C>
COMMON STOCKS 98.2%
- -----------------------------------------------------------------
Aerospace/Defense 1.8%
- -----------------------------------------------------------------
15,000 Primex Technologies, Inc. $ 323,438
----------
Automotive 1.9%
- -----------------------------------------------------------------
12,000 Superior Industries International, Inc. 327,750
----------
Banking 10.6%
- -----------------------------------------------------------------
9,600 Alabama National Bancorporation 240,000
12,700 Bank Of the Ozarks, Inc. 230,188
8,400 F.N.B. Corp. 226,800
27,100 First Essex Bancorp, Inc. 440,375
13,000 Independent Bank Corp. 225,875
9,000 Merchants Bancshares, Inc. 204,750
16,100 Trico Bancshares 297,850
----------
1,865,838
----------
Basic Industry 1.0%
- -----------------------------------------------------------------
6,200 Synthetic Industries, Inc. * 182,900
----------
Building Products 4.7%
- -----------------------------------------------------------------
37,500 Cameron Ashley Building Products, Inc. * 391,406
14,000 Drew Industries, Inc.* 172,375
16,000 Hussmann International, Inc. 265,000
----------
828,781
----------
Business Services 5.0%
- -----------------------------------------------------------------
12,000 Advo. Inc.* 249,000
10,000 Analytical Surveys, Inc.* 248,750
14,000 World Color Press, Inc.* 385,000
----------
882,750
----------
Chemicals 2.0%
- -----------------------------------------------------------------
15,000 A. Schulman, Inc. 257,813
3,500 Ferro Corp. 96,250
----------
354,063
----------
Computers 1.0%
- -----------------------------------------------------------------
10,000 Smart Modular Technologies* 173,750
----------
</TABLE>
12
<PAGE>
Small Company Value Fund
STATEMENT OF INVESTMENTS (continued)
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Market
Shares Value
------ ------
<C> <S> <C>
Consumer Cyclicals 6.9%
- -----------------------------------------------------------------
20,000 Burlington Coat Factory Warehouse Corp.* $ 386,250
10,000 Libbey, Inc. 290,000
25,000 Pier One Imports, Inc. 281,250
8,000 Tropical Sportswear International Corp.* 255,000
----------
1,212,500
----------
Consumer Staples 1.8%
- -----------------------------------------------------------------
9,200 Great Atlantic & Pacific Tea Co. 311,075
----------
Distributors/Wholesale 2.4%
- -----------------------------------------------------------------
25,000 Merkert American Corp.* 237,500
7,500 SCP Pool Corp.* 194,063
----------
431,563
----------
Electrical & Electronics 2.4%
- -----------------------------------------------------------------
35,000 Pioneer Standard Electronics, Inc. 420,000
----------
Energy 6.4%
- -----------------------------------------------------------------
24,000 Avista Corp. 390,000
11,000 Cleco Corp. 334,125
25,000 Midcoast Energy Resources, Inc. 403,125
----------
1,127,250
----------
Finance 1.2%
- -----------------------------------------------------------------
13,000 Litchfield Financial Corp.* 220,188
----------
Health Care 5.1%
- -----------------------------------------------------------------
20,000 AmeriPath, Inc.* 172,500
5,000 Barr Laboratories, Inc.* 199,375
12,500 Maxxim Medical, Inc. * 291,406
14,000 National Dentex Corp.* 241,500
----------
904,781
----------
Insurance 3.6%
- -----------------------------------------------------------------
10,000 Harleysville Group, Inc. 205,000
15,000 Liberty Financial Companies, Inc. 436,875
----------
641,875
----------
Lottery Services 1.6%
- -----------------------------------------------------------------
12,000 Gtech Holdings Corp.* 282,750
----------
</TABLE>
13
<PAGE>
Small Company Value Fund
STATEMENT OF INVESTMENTS (continued)
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Market
Shares Value
------ ------
<C> <S> <C>
Manufacturing 11.7%
- -------------------------------------------------------------
25,800 Citation Corp.* $ 414,412
20,000 Mark IV Industries, Inc. 422,499
17,000 Mascotech, Inc. 287,938
15,000 Meade Instruments Corp.* 258,750
14,900 Standard Products Co. 381,812
29,150 Supreme Industries, Inc.* 282,391
-----------
2,047,802
-----------
Oil & Gas Products & Services 5.9%
- -------------------------------------------------------------
18,000 Energen Corp. 335,250
12,000 Nui Corp. 300,000
27,900 World Fuel Services Corp. 411,525
-----------
1,046,775
-----------
Restaurants 1.8%
- -------------------------------------------------------------
7,700 Benihana, Inc.* 111,650
11,000 Garden Fresh Restaurant Corp.* 206,250
-----------
317,900
-----------
Transport-Equipment & Leasing 3.3%
- -------------------------------------------------------------
31,100 Rollins Truck Leasing Corp. 345,988
14,500 Willis Lease Finance Corp.* 236,531
-----------
582,519
-----------
Transportation 2.0%
- -------------------------------------------------------------
25,000 Railtex, Inc.* 346,875
-----------
Utilities/REITS 14.1%
- -------------------------------------------------------------
20,000 Bedford Property Investors, Inc. 357,500
7,400 Central Hudson Gas & Electric Corp. 310,800
21,000 EastGroup Property Investors, Inc. 421,312
13,000 J.P. Realty, Inc. 267,313
10,000 Pacific Gulf Properties, Inc. 226,250
10,000 Pan Pacific Retail Properties, Inc. 194,375
20,000 RFS Hotel Investors, Inc. 251,250
16,000 TriNet Corporate Realty Trust, Inc. 442,999
-----------
2,471,799
-----------
TOTAL COMMON STOCKS
(Cost $15,768,894) 17,304,922
-----------
</TABLE>
14
<PAGE>
Small Company Value Fund
STATEMENT OF INVESTMENTS (continued)
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Shares or Market
Face Value Value
---------- ------
<C> <S> <C> <C>
REPURCHASE AGREEMENT 0.2%
- ----------------------------------------------------------
$ 28,000 Union Bank of California
Repurchase Agreement, 5.25%,
dated 6/30/99 and maturing on
7/1/99 with a maturity value of
$28,004, collateralized by
$29,113, Freddie Mac, 6.25%,
Due 12/15/07 with a value of
$28,106 $ 28,000
-----------
TOTAL REPURCHASE AGREEMENT
(Cost $28,000) 28,000
-----------
CASH SWEEP ACCOUNT 0.0%
- ----------------------------------------------------------
684 Union Bank of California 684
-----------
TOTAL CASH SWEEP ACCOUNT
(Cost $684) 684
-----------
TOTAL INVESTMENTS
(Cost $15,797,578) (a) 98.4% 17,333,606
OTHER ASSETS IN EXCESS OF LIABILITIES 1.6% 284,733
- ----------------------------------------------------------
TOTAL NET ASSETS 100.0% $17,618,339
- ----------------------------------------------------------
- ----------------------------------------------------------
</TABLE>
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation.... $2,064,047
Unrealized depreciation.... (528,019)
----------
Net unrealized
appreciation.............. $1,536,028
==========
</TABLE>
*Denotes non-income producing security.
PLC- Public Limited Company.
ADR- American Depository Receipt
See Notes to Financial Statements.
15
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
U.S. California
Government Tax-Free
Fund Fund
----------- -----------
<S> <C> <C>
ASSETS:
Investments, at value (cost-$39,641,693 and
$37,371,769, respectively) $39,929,287 $39,030,439
Repurchase Agreements (cost-$1,307,000 and $0,
respectively) 1,307,000 -
Cash - 54,688
Interest receivable 596,625 596,593
Organizational costs, net of accumulated amortization 6,298 6,298
Prepaid expenses 3,650 3,783
- ------------------------------------------------------------------------------
Total Assets 41,842,860 39,691,801
- ------------------------------------------------------------------------------
LIABILITIES:
Payable for capital shares redeemed 30,731 -
Dividend payable 184,317 143,015
Payables:
Investment advisory fees 18,813 14,717
Administration fees 509 486
Other 13,495 12,067
- ------------------------------------------------------------------------------
Total Liabilities 247,865 170,285
- ------------------------------------------------------------------------------
NET ASSETS: $41,594,995 $39,521,516
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS:
Paid-in capital $41,287,655 $37,822,602
Undistributed (distribution in excess of) net
investment income 12,161 3,609
Accumulated net realized gain (loss) on investment
transactions 7,585 36,635
Net unrealized appreciation (depreciation) of
investments 287,594 1,658,670
- ------------------------------------------------------------------------------
NET ASSETS: $41,594,995 $39,521,516
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Shares of beneficial interest outstanding 3,380,718 3,144,113
- ------------------------------------------------------------------------------
Net asset value, offering, and redemption price per
share $12.30 $12.57
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
16
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Equity Small
Value Company Value
Fund Fund
----------- -------------
<S> <C> <C>
ASSETS:
Investments, at value (cost-$56,737,958 and
$15,769,578, respectively) $64,199,088 $17,305,606
Repurchase Agreements (cost-$250,000 and $28,000,
respectively) 250,000 28,000
Cash 224,848 40,499
Interest receivable 72,768 -
Receivable for investments sold 962,758 659,727
Organizational costs, net of accumulated
amortization 6,298 14,756
Prepaid expenses 7,185 3,969
- ------------------------------------------------------------------------------
Total Assets 65,722,945 18,052,557
- ------------------------------------------------------------------------------
LIABILITIES:
Payable for capital shares redeemed 64,654 -
Payables for investments purchased - 408,377
Payables:
Investment advisory fees 53,971 8,823
Administration fees 796 217
Other 31,931 16,801
- ------------------------------------------------------------------------------
Total Liabilities 151,352 434,218
- ------------------------------------------------------------------------------
NET ASSETS: $65,571,593 $17,618,339
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS:
Paid-in capital $59,120,446 $23,733,541
Undistributed (distribution in excess of) net
investment income 46,101 93,858
Accumulated net realized gain (loss) on investment
transactions (1,056,084) (7,745,088)
Net unrealized appreciation (depreciation) of
investments 7,461,130 1,536,028
- ------------------------------------------------------------------------------
NET ASSETS: $65,571,593 $17,618,339
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Shares of beneficial interest outstanding 4,206,304 1,621,443
- ------------------------------------------------------------------------------
Net asset value, offering, and redemption price
per share $15.59 $10.87
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
17
<PAGE>
STATEMENTS OF OPERATIONS
For the Six Months Ended June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
U.S. California
Government Tax-Free
Fund Fund
----------- -----------
<S> <C> <C>
INVESTMENT INCOME:
Interest income $ 1,277,715 $ 1,063,422
- -------------------------------------------------------------------------------
Total Investment Income 1,277,715 1,063,422
- -------------------------------------------------------------------------------
EXPENSES:
Investment advisory fees 120,133 121,285
Administration fees 30,033 30,321
Shareholder servicing fees 10,542 9,026
Fund accounting fees 16,847 17,507
Professional fees 15,189 15,125
Transfer agency fees 4,425 4,235
Custody fees 1,858 1,866
Other 16,900 18,142
- -------------------------------------------------------------------------------
Total expenses 215,927 217,507
- -------------------------------------------------------------------------------
Expenses waived by:
Investment Adviser (14,756) (30,321)
- -------------------------------------------------------------------------------
Net Expenses 201,171 187,186
- -------------------------------------------------------------------------------
NET INVESTMENT INCOME 1,076,544 876,236
- -------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investment transactions 5,409 39,961
Net change in unrealized appreciation (depreciation) (1,709,716) (1,378,810)
- -------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (1,704,307) (1,338,849)
- -------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS $ (627,763) $ (462,613)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements
18
<PAGE>
STATEMENTS OF OPERATIONS
For the Six Months Ended June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Equity Small
Value Company
Fund Value Fund
----------- -----------
<S> <C> <C>
INVESTMENT INCOME:
Interest income $ 55,942 $ 25,504
Dividend income 719,372 218,981
- -------------------------------------------------------------------------------
Total Investment Income 775,314 244,485
- -------------------------------------------------------------------------------
EXPENSES:
Investment advisory fees 328,388 146,852
Administration fees 49,574 17,622
Shareholder servicing fees 14,747 5,509
Fund accounting fees 15,798 15,750
Professional fees 19,182 13,833
Transfer agency fees 11,556 5,871
Custody fees 3,349 1,258
Other 26,846 13,941
- -------------------------------------------------------------------------------
Total expenses 469,440 220,636
- -------------------------------------------------------------------------------
Expenses waived by:
Investment Adviser - (42,963)
- -------------------------------------------------------------------------------
Net Expenses 469,440 177,673
- -------------------------------------------------------------------------------
NET INVESTMENT INCOME 305,874 66,812
- -------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investment transactions (3,476,788) (7,422,560)
Net change in unrealized appreciation (depreciation) 4,316,526 5,842,765
- -------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS 839,738 (1,579,795)
- -------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS $ 1,145,612 $(1,512,983)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
19
<PAGE>
U.S. Government Fund
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Six
Months Ended For the
June 30, Year Ended
1999 December 31,
(Unaudited) 1998
------------ ------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Net investment income $ 1,076,544 $ 2,028,501
Net realized gain (loss) on investment transactions 5,409 104,888
Net change in unrealized appreciation
(depreciation) (1,709,716) 545,227
- -------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting
from operations (627,763) 2,678,616
- -------------------------------------------------------------------------------
Dividends to shareholders from net investment
income (1,076,548) (2,028,496)
Distributions to shareholders from net realized
gains from investment transactions -- (48,432)
- -------------------------------------------------------------------------------
Change in net assets from investment activities (1,704,311) 601,688
- -------------------------------------------------------------------------------
FROM BENEFICIAL INTEREST TRANSACTIONS:
Proceeds from sale of shares 9,565,196 8,013,526
Net asset value of shares issued to shareholders
from reinvestment of dividends and distributions 698,103 1,393,380
Cost of shares redeemed (3,590,049) (8,660,721)
- -------------------------------------------------------------------------------
Change in net assets from beneficial interest
transactions 6,673,250 746,185
- -------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS 4,968,939 1,347,873
NET ASSETS:
Beginning of period 36,626,056 35,278,183
- -------------------------------------------------------------------------------
End of period $41,594,995 $36,626,056
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SHARE TRANSACTIONS:
Issued 754,993 631,624
Reinvested 55,331 109,242
Redeemed (285,302) (679,559)
- -------------------------------------------------------------------------------
Change in shares 525,022 61,307
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
20
<PAGE>
California Tax-Free Fund
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Six
Months Ended For the
June 30, Year Ended
1999 December 31,
(Unaudited) 1998
------------ ------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Net investment income $ 876,236 $ 1,810,065
Net realized gain (loss) on investment transactions 39,961 195,883
Net change in unrealized appreciation
(depreciation) (1,378,810) 521,090
- -------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting
from operations (462,613) 2,527,038
- -------------------------------------------------------------------------------
Dividends to shareholders from net investment
income (876,236) (1,810,065)
Distributions to shareholders from net realized
gains from investment transactions - (199,209)
- -------------------------------------------------------------------------------
Change in net assets from investment activities (1,338,849) 517,764
- -------------------------------------------------------------------------------
FROM BENEFICIAL INTEREST TRANSACTIONS:
Proceeds from sale of shares 2,359,714 5,281,259
Net asset value of shares issued to shareholders
from reinvestment of dividends and distributions 746,439 1,742,462
Cost of shares redeemed (2,809,709) (7,280,193)
- -------------------------------------------------------------------------------
Change in net assets from beneficial interest
transactions 296,444 (256,472)
- -------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS (1,042,405) 261,292
NET ASSETS:
Beginning of period 40,563,921 40,302,629
- -------------------------------------------------------------------------------
End of period $39,521,516 $40,563,921
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SHARE TRANSACTIONS:
Issued 181,368 408,512
Reinvested 57,613 134,555
Redeemed (217,607) (559,510)
- -------------------------------------------------------------------------------
Change in shares 21,374 (16,443)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
21
<PAGE>
Equity Value Fund
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Six
Months Ended For the
June Year Ended
30, 1999 December 31,
(Unaudited) 1998
------------ ------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Net investment income $ 305,874 $ 1,101,118
Net realized gain (loss) on investment
transactions (3,476,788) 2,418,491
Net change in unrealized appreciation
(depreciation) 4,316,526 (10,739,630)
- -------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting
from operations 1,145,612 (7,220,021)
- -------------------------------------------------------------------------------
Dividends to shareholders from net investment
income (309,245) (1,047,780)
Distributions to shareholders from net realized
gains from investment transactions - (1,249,734)
- -------------------------------------------------------------------------------
Change in net assets from investment activities 836,367 (9,517,535)
- -------------------------------------------------------------------------------
FROM BENEFICIAL INTEREST TRANSACTIONS:
Proceeds from sale of shares 11,805,477 12,365,808
Net asset value of shares issued to shareholders
from reinvestment of dividends and distributions 297,464 2,245,513
Cost of shares redeemed (22,520,935) (15,218,869)
- -------------------------------------------------------------------------------
Change in net assets from beneficial interest
transactions (10,417,994) (607,548)
- -------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS (9,581,627) (10,125,083)
NET ASSETS:
Beginning of period 75,153,220 85,278,303
- -------------------------------------------------------------------------------
End of period $ 65,571,593 $ 75,153,220
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SHARE TRANSACTIONS:
Issued 828,166 772,622
Reinvested 20,447 147,315
Redeemed (1,544,849) (904,934)
- -------------------------------------------------------------------------------
Change in shares (696,236) 15,003
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
22
<PAGE>
Small Company Value Fund
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Six
Months Ended For the
June 30, Year Ended
1999 December 31,
(Unaudited) 1998
------------ ------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Net investment income $ 66,812 $ 316,140
Net realized gain (loss) on investment transactions (7,422,560) 60,757
Net change in unrealized appreciation
(depreciation) 5,842,765 (6,191,721)
- -------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting
from operations (1,512,983) (5,814,824)
- -------------------------------------------------------------------------------
Dividends to shareholders from net investment
income (39,139) (251,204)
- -------------------------------------------------------------------------------
Change in net assets from investment activities (1,552,122) (6,066,028)
- -------------------------------------------------------------------------------
FROM BENEFICAL INTEREST TRANSACTIONS:
Proceeds from sale of shares 924,998 15,450,301
Net asset value of shares issued to shareholders
from reinvestment of dividends and distributions 33,152 240,002
Cost of shares redeemed (17,124,182) (3,968,118)
- -------------------------------------------------------------------------------
Change in net assets from beneficial interest
transactions (16,166,032) 11,722,185
- -------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS (17,718,154) 5,656,157
NET ASSETS:
Beginning of period 35,336,493 29,680,336
- -------------------------------------------------------------------------------
End of period $ 17,618,339 $35,336,493
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SHARE TRANSACTIONS:
Issued 91,577 1,331,521
Reinvested 3,119 20,261
Redeemed (1,788,649) (366,695)
- -------------------------------------------------------------------------------
Change in shares (1,693,953) 985,087
- -------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
23
<PAGE>
U.S. Government Fund
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout the
periods indicated:
<TABLE>
<CAPTION>
For the Six
Months Ended For the For the For the For the
June 30, Year Ended Period Ended Year Ended Period Ended
1999 December 31, December 31, March 31, March 31,
(Unaudited) 1998 1997(4) 1997 1996(1)
------------ ------------ ------------ ---------- ------------
<S> <C> <C> <C> <C> <C>
Net asset value--
beginning of period $ 12.83 $ 12.62 $ 12.01 $ 12.35 $ 12.00
- ----------------------------------------------------------------------------------------------
Income from investment
operations:
Net investment income 0.34 0.69 0.52 0.69 0.71
Net realized and
unrealized gain (loss)
on investment
transactions (0.53) 0.23 0.61 (0.29) 0.37
- ----------------------------------------------------------------------------------------------
Total income (loss) from
investment operations (0.19) 0.92 1.13 0.40 1.08
- ----------------------------------------------------------------------------------------------
Dividends and
distributions to
shareholders:
Dividends from net
investment income (0.34) (0.69) (0.52) (0.69) (0.71)
Distributions from net
realized gains from
investment
transactions - (0.02) - (0.05) (0.02)
- ----------------------------------------------------------------------------------------------
Total dividends and
distributions (0.34) (0.71) (0.52) (0.74) (0.73)
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
Net asset value--end of
period $ 12.30 $ 12.83 $ 12.62 $ 12.01 $ 12.35
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
Total return (1.54)%(2) 7.42% 9.59%(2) 3.31% 9.06%(2)
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
Ratios/Supplemental
Data:
Net assets, end of
period (000's) $41,595 $36,626 $35,278 $30,062 $19,096
- ----------------------------------------------------------------------------------------------
Ratio of net expenses to
average net assets 1.00%(3) 0.94% 1.02%(3) 1.09% 1.02%(3)
- ----------------------------------------------------------------------------------------------
Ratio of net investment
income to average net
assets 5.38%(3) 5.40% 5.60%(3) 5.64% 5.68%(3)
- ----------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets
without fee waivers 1.08%(3) 1.04% 1.17%(3) 1.39% 1.39%(3)
- ----------------------------------------------------------------------------------------------
Portfolio turnover
rate(5) 3.00% 12.94% 5.49% 11.94% 45.41%
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
</TABLE>
(1) Fund commenced investment operations April 3, 1995.
(2) Total return is not annualized.
(3) Annualized.
(4) For the period from April 1, 1997 through December 31, 1997. The Fund
changed its fiscal year end from March 31 to December 31.
(5) A portfolio turnover rate is the percentage computed by taking the lesser
of purchases or sales of portfolio securities (excluding securities with
maturity dates of one year or less at the time of acquisition) for the
period and dividing it by the monthly average of the market value of such
securities during the period.
24
<PAGE>
California Tax-Free Fund
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout the
periods indicated:
<TABLE>
<CAPTION>
For the Six
Months Ended For the For the For the For the
June 30, Year Ended Period Ended Year Ended Period Ended
1999 December 31, December 31, March 31, March 31,
(Unaudited) 1998 1997(4) 1997 1996(1)
------------ ------------ ------------ ---------- ------------
<S> <C> <C> <C> <C> <C>
Net asset value--
beginning of period $ 12.99 $ 12.84 $ 12.26 $ 12.19 $ 12.00
- ----------------------------------------------------------------------------------------------
Income from investment
operations:
Net investment income 0.28 0.55 0.43 0.59 0.58
Net realized and
unrealized gain (loss)
on investment
transactions (0.42) 0.21 0.65 0.09 0.20
- ----------------------------------------------------------------------------------------------
Total income (loss) from
investment operations (0.14) 0.76 1.08 0.68 0.78
- ----------------------------------------------------------------------------------------------
Dividends and
distributions to
shareholders:
Dividends from net
investment income (0.28) (0.55) (0.43) (0.59) (0.58)
Distributions from net
realized gains from
investment
transactions - (0.06) (0.07) (0.02) (0.01)
- ----------------------------------------------------------------------------------------------
Total dividends and
distributions (0.28) (0.61) (0.50) (0.61) (0.59)
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
Net asset value--end of
period $ 12.57 $ 12.99 $ 12.84 $ 12.26 $ 12.19
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
Total return (1.13)%(2) 6.11% 8.93%(2) 5.69% 6.60%(2)
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
Ratios/Supplemental
Data:
Net assets, end of
period (000's) $39,522 $40,564 $40,303 $35,504 $42,593
- ----------------------------------------------------------------------------------------------
Ratio of net expenses to
average net assets 0.93 %(3) 0.89% 0.94%(3) 0.88% 0.83%(3)
- ----------------------------------------------------------------------------------------------
Ratio of net investment
income to average net
assets 4.33 %(3) 4.28% 4.54%(3) 4.83% 4.83%(3)
- ----------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets
without fee waivers 1.08 %(3) 1.04% 1.12%(3) 1.17% 1.16%(3)
- ----------------------------------------------------------------------------------------------
Portfolio turnover
rate(5) 1.39 % 36.44% 12.97% 14.52% 93.90%
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
</TABLE>
(1) Fund commenced investment operations April 3, 1995.
(2) Total return is not annualized.
(3) Annualized.
(4) For the period from April 1, 1997 through December 31, 1997. The Fund
changed its fiscal year end from March 31 to December 31.
(5) A portfolio turnover rate is the percentage computed by taking the lesser
of purchases or sales of portfolio securities (excluding securities with
maturity dates of one year or less at the time of acquisition) for the pe-
riod and dividing it by the monthly average of the market value of such se-
curities during the period.
25
<PAGE>
Equity Value Fund
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest
outstanding throughout the periods indicated:
<TABLE>
<CAPTION>
For the Six
Months Ended For the For the For the For the
June 30, Year Ended Period Ended Year Ended Period Ended
1999 December 31, December 31, March 31, March 31,
(Unaudited) 1998 1997(4) 1997 1996(1)
------------ ------------ ------------ ---------- ------------
<S> <C> <C> <C> <C> <C>
Net asset value--
beginning of period $ 15.33 $ 17.45 $ 16.42 $ 14.92 $ 12.00
- ---------------------------------------------------------------------------------------------
Income from investment
operations:
Net investment income 0.07 0.22 0.14 0.17 0.21
Net realized and
unrealized gain (loss)
on investment
transactions 0.26 (1.87) 3.45 3.14 2.92
- ---------------------------------------------------------------------------------------------
Total income (loss) from
investment operations 0.33 (1.65) 3.59 3.31 3.13
- ---------------------------------------------------------------------------------------------
Dividends and
distributions
to shareholders:
Dividends from net
investment income (0.07) (0.21) (0.14) (0.17) (0.21)
Distributions from net
realized gains from
investment
transactions - (0.26) (2.42) (1.64) -
- ---------------------------------------------------------------------------------------------
Total dividends and
distributions (0.07) (0.47) (2.56) (1.81) (0.21)
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
Net asset value--end of
period $ 15.59 $ 15.33 $ 17.45 $ 16.42 $ 14.92
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
Total return 2.20%(2) (9.40)% 22.13%(2) 23.15% 26.31%(2)
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
Ratios/Supplemental
Data:
Net assets, end of
period (000's) $65,572 $75,153 $85,278 $86,316 $36,326
- ---------------------------------------------------------------------------------------------
Ratio of net expenses to
average net assets 1.42%(3) 1.39% 1.41%(3) 1.52% 1.55%(3)
- ---------------------------------------------------------------------------------------------
Ratio of net investment
income to average net
assets 0.93%(3) 1.35% 1.02%(3) 1.13% 1.68%(3)
- ---------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets
without fee waivers 1.42%(3) 1.39% 1.43%(3) 1.56% 1.66%(3)
- ---------------------------------------------------------------------------------------------
Portfolio turnover
rate(5) 89.05% 82.44% 42.10% 77.65% 62.76%
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
</TABLE>
(1) Fund commenced investment operations April 3, 1995.
(2) Total return is not annualized.
(3) Annualized.
(4) For the period from April 1, 1997 through December 31, 1997. The Fund
changed its fiscal year end from March 31 to December 31.
(5) A portfolio turnover rate is the percentage computed by taking the lesser
of purchases or sales of portfolio securities (excluding securities with
maturity dates of one year or less at the time of acquisition) for the pe-
riod and dividing it by the monthly average of the market value of such se-
curities during the period.
26
<PAGE>
Small Company Value Fund
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest
outstanding throughout the periods indicated:
<TABLE>
<CAPTION>
For the Six
Months Ended For the For the
June 30, Year Ended Period Ended
1999 December 31, December 31,
(Unaudited) 1998 1997(1)
------------ ------------ ------------
<S> <C> <C> <C>
Net asset value--beginning of period $ 10.66 $ 12.74 $ 12.00
- -------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.30(2) 0.11 0.07
Net realized and unrealized gain
(loss) on investment transactions (0.07) (2.10) 0.74
- -------------------------------------------------------------------------------
Total income (loss) from investment
operations 0.23 (1.99) 0.81
- -------------------------------------------------------------------------------
Dividends and distributions to
shareholders:
Dividends from net investment income (0.02) (0.09) (0.07)
- -------------------------------------------------------------------------------
Total dividends and distributions (0.02) (0.09) (0.07)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Net asset value--end of period $ 10.87 $ 10.66 $ 12.74
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Total return 2.20%(3) (15.69)% 6.76%(3)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period (000's) $17,618 $35,336 $29,680
- -------------------------------------------------------------------------------
Ratio of net expenses to average net
assets 1.51%(4) 1.55% 1.59%(4)
- -------------------------------------------------------------------------------
Ratio of net investment income to
average net assets 0.57%(4) 0.95% 1.15%(4)
- -------------------------------------------------------------------------------
Ratio of expenses to average net
assets without fee waivers 1.88%(4) 1.75% 1.81%(4)
- -------------------------------------------------------------------------------
Portfolio turnover rate(5) 50.09% 59.24% 14.81%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
(1) For the period from June 30, 1997 (commencement of operations) through De-
cember 31, 1997.
(2) Net investment income per share was calculated using the average shares
method.
(3) Total return is not annualized.
(4) Annualized.
(5) A portfolio turnover rate is the percentage computed by taking the lesser
of purchases or sales of portfolio securities (excluding securities with
maturity dates of one year or less at the time of acquisition) for the pe-
riod and dividing it by the monthly average of the market value of such se-
curities during the period.
27
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
Sefton Funds Trust (the "Trust"), a Delaware business trust was organized on
January 6, 1995. The Trust is registered under the Investment Company Act of
1940, as amended (the "1940 Act") as an open-end management investment compa-
ny. The Trust offers four series of shares--Sefton U.S. Government Fund, Sef-
ton California Tax-Free Fund, Sefton Equity Value Fund, and Sefton Small Com-
pany Value Fund, individually a "Fund", collectively the "Funds". The Funds
commenced investment operations on April 3, 1995 except the Sefton Small Com-
pany Value Fund, which commenced investment operations on June 30, 1997. The
assets for each series are segregated and accounted for separately.
The Funds' investment objectives are as follows:
Sefton U.S. Government Fund - To provide investors with as high a level of
current income as is consistent with preservation of capital. The Fund pursues
its objective by investing, under normal conditions, at least 65% of its total
assets in securities issued or guaranteed by the U.S. Government, its agencies
or instrumentalities.
Sefton California Tax-Free Fund - To provide investors with as high a level
of current income, exempt from both Federal and California personal income
taxes, as is consistent with preservation of capital. The Fund pursues this
objective by investing primarily in California municipal obligations such that
the portfolio's weighted average stated maturity will be 10 or more years.
Sefton Equity Value Fund - To provide investors with long-term capital ap-
preciation. The Fund pursues its investment objective by investing primarily
in common stock of both domestic and foreign companies and it also may invest
in large, well-established companies and smaller companies with market capi-
talizations exceeding $50 million at the time of purchase.
Sefton Small Company Value Fund - To provide investors with long-term capi-
tal appreciation. The Fund pursues its investment objective by investing pri-
marily in a portfolio of equity securities of both foreign and domestic small
capitalization companies, defined as companies having stock market capitaliza-
tion of $1 billion or less at the time of initial purchase.
Note 1 - Significant Accounting Policies
The following is a summary of significant accounting policies consistently
followed by each Fund in preparation of its financial statements. These poli-
cies are in conformity with generally accepted accounting principles. The
preparation of financial statements in accordance with generally accepted ac-
counting principles requires management to make estimates and assumptions that
effect the reported amount of assets and liabilities and disclosure of contin-
gent assets and liabilities at the date of the financial statements and the
reported amounts of income and expense during the reporting period. The actual
results could differ from those estimates.
a. Investment Valuation: Marketable securities are valued at the last sales
price on the principal exchange or market on which they are traded; or, if
there were no sales that day, the closing bid prices are used. Bonds and other
fixed-income securities are valued by using market quotations and may be val-
ued on the basis of prices provided by a pricing service approved by the Board
of Trustees. Securities for which market quotations are not readily available
are valued at their fair market value as determined in good faith by or under
the direction of the Board of Trustees. Short-term securities having a remain-
ing maturity of 60 days or less are valued at amortized cost, which approxi-
mates market value.
b. Repurchase Agreements: Repurchase agreements are fully collateralized by
securities issued by the U.S. Government or its agencies. All collateral is
held by the Trust's custodian and is monitored daily to ensure that the col-
lateral's market value equals at least
28
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
100% of the repurchase price under the agreement. However, in the event of de-
fault or bankruptcy by the counter party to the agreement, realization and/or
retention of the collateral may be subject to legal proceedings. Each Fund's
policy is to limit repurchase agreement transactions to those parties deemed by
the Fund's Investment Adviser to have satisfactory creditworthiness in accor-
dance with guidelines adopted by the Board of Trustees.
c. Federal Income Taxes: The Funds intend to distribute to shareholders all
taxable investment income and realized gains and otherwise comply with the In-
ternal Revenue Code applicable to regulated investment companies.
d. Securities Transactions: Securities transactions are accounted for on the
date the securities are purchased or sold (trade date). Realized gains or
losses from security transactions are recorded on the identified cost basis.
e. Organizational Costs: Each of the Funds, except Sefton Small Company Value
Fund, deferred certain organizational costs of $38,529 at inception. Sefton
Small Company Value Fund deferred certain organizational costs of $21,782. Such
costs are being amortized over a 60 month period from the commencement of in-
vestment operations of each respective fund.
f. Investment Income: Dividend income is recorded on the ex-dividend date.
Interest income, which includes amortization of premium and accretion of dis-
count, is accrued and recorded daily.
g. Dividends, Distributions and Expenses: The Sefton Equity Value Fund and
the Sefton Small Company Value Fund will distribute net investment income quar-
terly. The Sefton U.S. Government Fund and the Sefton California Tax-Free Fund
will declare and pay dividends from net investment income daily and monthly,
respectively. Distributions of net realized gains, if any, are declared at
least once a year. Each Fund bears expenses incurred specifically on its behalf
as well as a portion of general expenses, which are allocated based on average
net assets.
h. Capital Accounts: The Funds follow the provisions of the American Insti-
tute of Certified Public Accountant's Statement of Position 93-2 "Determina-
tion, Disclosure and Financial Statement Presentation of Income, Capital Gain
and Return of Capital Distributions by Investment Companies" ("SOP"). The pur-
pose of this SOP is to report undistributed net investment income and accumu-
lated net realized gain or loss in such a manner as to approximate amounts
available for future distributions to shareholders, if any.
Net investment income distributions and capital gains distributions are de-
termined in accordance with income tax regulations which may differ from gener-
ally accepted accounting principals. These differences are due to differing
treatments for items such as deferral of wash sale losses, net operating losses
and capital loss carry forwards.
i. Concentration of Credit Risk: The Sefton California Tax-Free Fund invests
primarily in securities issued by the State of California (the "State") and its
various political subdivisions. The performance of Sefton California Tax-Free
Fund is closely tied to economic conditions within the State and the financial
condition of the State and its agencies and municipalities.
Note 2 - Investment Advisory Fees, Administration Fees and Other Related Party
Transactions
Each Fund has entered into an Investment Advisory Agreement with Sefton Capi-
tal Management, Inc. (the "Investment Adviser"). Pursuant to its advisory
agreement with the Funds, the Investment Adviser is entitled to an advisory
fee, computed daily and payable
29
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
monthly at an annual rate of 0.60%, 0.60%, 1.00%, and 1.25% of the daily aver-
age net assets for the Sefton U.S. Government Fund, Sefton California Tax-Free
Fund, Sefton Equity Value Fund and Sefton Small Company Value Fund, respec-
tively. The Investment Adviser voluntarily waived $14,756, $30,321, and
$42,963 of its advisory fee for the six months ended June 30, 1999 for the
Sefton U.S. Government Fund, Sefton California Tax-Free Fund, and Sefton Small
Company Value Fund, respectively.
On January 1, 1997, each of the Funds entered into an Administrative Serv-
ices Contract with BISYS Fund Services Limited Partnership d/b/a BISYS Fund
Services ("BISYS"). BISYS is entitled to receive a fee from the Funds for its
services computed daily and payable monthly, at an annual rate of 0.15% of
each Fund's average daily net assets. BISYS assisted in each of the Fund's ad-
ministration and operations, including providing office space and various le-
gal and accounting services in connection with the regulatory requirements ap-
plicable to each Fund.
BISYS Fund Services, Inc., an affiliate of BISYS, serves as fund accountant
and transfer agent to the Funds. For the six months ended June 30, 1999 BISYS
Fund Services, Inc., received $16,847, $17,507, $15,798 and $15,750 for its
services as fund accountant from the Sefton U.S. Government Fund, Sefton Cali-
fornia Tax-Free Fund, Sefton Equity Value Fund and Sefton Small Company Value
Fund, respectively. For its services as transfer agent, BISYS Fund Services,
Inc. received $4,425, $4,235, $11,556 and $5,871 from the Sefton U.S. Govern-
ment Fund, Sefton California Tax-Free Fund, Sefton Equity Value Fund and
Sefton Small Company Value Fund, respectively.
Certain Trustees and officers of the Funds are also members and/or officers
of the Investment Adviser or BISYS. All affiliated and access persons, as de-
fined in the 1940 Act, follow guidelines and policies on personal trading as
outlined in the Trust's Code of Ethics.
Trustees and officers of the Funds who are affiliated persons receive no
compensation from the Funds. Trustees who are not interested persons of the
Trust, as defined in the 1940 Act, collectively received compensation and re-
imbursement of expenses of $1,666, $1,570, $2,779 and $1,192 from the Sefton
U.S. Government Fund, Sefton California Tax Free Fund, Sefton Equity Value
Fund and Sefton Small Company Value Fund, respectively, for the six months
ended June 30, 1999.
Note 3 - Purchases and Sales of Securities
Purchases and sales of securities (excluding short-term securities) for the
six months ended June 30, 1999 are as follows:
<TABLE>
<CAPTION>
Purchases Sales
----------- -----------
<S> <C> <C>
Sefton U.S. Government Fund $ 7,260,848 $ 1,162,991
Sefton California Tax-Free Fund $ 984,350 $ 551,505
Sefton Equity Value Fund $56,763,164 $63,275,952
Sefton Small Company Value Fund $11,239,553 $24,354,166
</TABLE>
30
<PAGE>
Sefton Funds
TRUSTEES AND OFFICERS
Board of Trustees
[LOGO OF SEFTON FUNDS APPEARS HERE]
Harley K. Sefton++ Chairman of the Board:
President and
Chief Executive Officer,
Sefton Capital Management
Grace Evans Cherashore*+ Chief Executive Officer,
Dahla and Catamaran Hotels
Gordon T. Frost. Jr.*+ President/General Manager,
Frost Hardwood Lumber Company
* Member of Audit Committee
+ Member of Nomination Committee
++ Trustee who is and "interested
person" of the Trust as the term is
defined in The Investment Company Act
of 1940
Officers
Harley K. Sefton Chairman of the Board and President
Thomas C. Bowden Vice President
Ted J. Plorkowski Vice President
Lanl Capossere Vice President and Secretary
Irimga Mckay Assistant Secretary
Alaina Metz Assistant Secretary
Manderley Rush Assistant Secretary
Greg Maddox Assistant Treasurer
Frank Deutchki Assistant Treasurer and Principal
Accounting Officer
The views expressed in this report are those of the Funds' portfolio managers as
of the date specified, and may not reflect the views of the portfolio managers
on the date they are first published or at any time thereafter. The views
expressed in this report are intended to assist shareholders of the Sefton Funds
in understanding their investment in the Funds and do not constitute investment
advice: investors should consult their own investment professionals as to
theirindividual investment programs.
Sefton Capital Management, the investment adviser to the Sefton Funds is a
privately owned registered investment adviser.
<PAGE>
Sefton Funds
CORPORATE INFORMATION
[LOGO OF SEFTON FUNDS APPEARS HERE]
Investment Adviser
Sefton Capital Management
2350 Fifth Avenue, Suite 808
San Diego, California 92103
Administrator, Distributor and Transfer Agent
Bisys Fund Services
3435 Stelzer Road
Columbus OH 43219-3035
Custodian
Union Bank of California
475 Sansome Street
San Francisco, California 94111
Legal Counsel
Paul Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Independent Accountants
PricewaterhouseCoopers LLP
203 N. La Salle Street
Chicago Illinois 60601
This report and the financial statements contained herein are provided for the
general information of the shareholders of the Sefton Funds. This material must
be preceded or accompanied by a current prospectus for the Funds. Please read
the prospectus carefully before investing or sending money.
These funds are not insured by
Sefton Capital Management,
the FDIC or any other insurer.
