(JEFFERSON FUNDS LOGO)
SEMI-ANNUAL REPORT
APRIL 30, 2000
June 23, 2000
Dear Fellow Investors,
Enclosed is the semiannual report for the period ended April 30, 2000. Since our
last letter to shareholders, on October 31, 1999 the market has provided little
in the way of return and has continued to be narrow. Market leadership remains
confined to a short list of select large capitalization technology stocks. The
broader list of small and medium sized companies has not participated in the
market appreciation enjoyed by their larger company counterparts. This disparity
has created a condition where many companies are selling at a substantial
valuation discount to the market leaders suggesting that they are good values.
In the past, portfolio managers may have seen these discounts as an opportunity
to reallocate resources into good companies with compelling valuation
characteristics; lately that has not been the case. The market psychology has
changed to one that is driven by price momentum. Stocks that are not moving up,
or worse yet, those that are moving down in price are increasingly viewed as an
opportunity cost which hurts portfolio performance. In the end, these stocks
are sold to become the source of funds, which flow to that narrow group of
stocks that are going higher in price.
To the extent that this market psychology seems persistent, we have adjusted the
portfolio of the Growth and Income Fund. We continue to focus on the stocks of
small and medium sized companies which show compelling valuation
characteristics, but we are now attempting to focus on those value stocks that
have also been displaying improving price momentum patterns. We are also working
to stay fully invested in order to maximize shareholder returns.
In the financial sector, Real Estate Investment Trusts (REIT's), in particular
had declined as a result of momentum focused investing. REIT's are an emerging
asset class that continues to gain popularity with institutional investors as a
liquid alternative to direct real estate ownership. Historically, equity REIT's
have provided very competitive long-term rates of return with attractive
dividend yields and a low correlation to both stocks and bonds. REIT's have
enjoyed recent media attention as a result of the legendary value investor
Warren Buffet announcing for the second time this year that he has personally
made a number of investments in the sector and more recently Abbey Joseph Cohen,
the well known portfolio strategist from Goldman Sachs, added REIT's to her
asset allocation.
The Jefferson REIT Fund, introduced last February, is designed to provide
shareholders with the option of investing in a diversified portfolio of real
estate holdings through the funds ownership of publicly traded equity REIT's.
The Jefferson REIT fund allows investors to participate in a high quality
portfolio of real estate that is diversified by geographic region and property
type.
The REIT asset class has started to outperform the broader market and has never
been cheaper on an absolute or relative valuation basis. The fundamental supply
outlook for real estate in most markets and property types is very positive. Low
levels of new construction and high occupancy rates have helped to reinforce the
limited supply outlook in most locations. And, robust domestic economic
conditions have led to increased demand for space and higher rents in most
markets. These positive supply and demand factors generally lead to higher real
estate valuations and higher REIT prices and we expect these conditions to
continue.
In prior shareholder letters we concluded that a defensive portfolio posture was
more appropriate given the market environment. That posture proved timely as a
broad based decline in the value of small and medium sized companies occurred
during most of 1998 and 1999. We took advantage of this weakness in the market
to expand the fund's holdings in common stocks and convertible bonds on a highly
selective basis and have since used the general market volatility to reposition
the portfolio into stronger sectors which display current price momentum.
In the last six months, The Jefferson Growth and Income Fund paid two regular
quarterly dividends of $.14. The Jefferson REIT fund paid two regular quarterly
dividends of $.34 and $.10 during the period.
We appreciate the support of our loyal investors and friends and look forward to
continued success in 2000.
Sincerely,
/s/ Richard P. Imperiale
Richard P. Imperiale
Chairman
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 2000 (UNAUDITED)
GROWTH &
INCOME FUND REIT FUND
----------- ---------
ASSETS:
Investments, at current value
(cost $5,405,807, $1,477,619) $4,961,316 $1,442,857
Cash 113,715 --
Dividends receivable 2,320 1,933
Interest receivable 845 531
Receivable from Investment Adviser 84,632 26,351
Organization costs, net of accumulated amortization 11,929 --
Other assets 4,377 1,445
---------- ----------
Total Assets 5,179,134 1,473,117
---------- ----------
LIABILITIES:
Payable for fund shares redeemed 40,885 41,581
Accrued expenses 62,318 --
Other payable -- 3,620
---------- ----------
Total Liabilities 103,203 45,201
---------- ----------
NET ASSETS $5,075,931 $1,427,916
---------- ----------
---------- ----------
NET ASSETS CONSIST OF:
Capital Stock $5,593,250 $1,470,570
Undistributed net investment income (loss) (25,762) 7,429
Undistributed accumulated net realized
loss on investments (47,066) (15,321)
Unrealized net (depreciation) of:
Investments (444,491) (34,762)
---------- ----------
Total Net Assets $5,075,931 $1,427,916
---------- ----------
---------- ----------
Shares outstanding (unlimited number authorized) 506,363 146,784
Net asset value and offering price per share $ 10.02 $ 9.73
---------- ----------
---------- ----------
Maximum offering price per share $ 10.60 $ 10.30
---------- ----------
---------- ----------
See notes to the financial statements.
STATEMENT OF OPERATIONS
(UNAUDITED)
GROWTH & INCOME FUND REIT FUND
SIX MONTHS ENDED SIX MONTHS ENDED
APRIL 30, 2000 APRIL 30, 2000
-------------- --------------
INVESTMENT INCOME:
Dividend income $ 39,657 $ 41,563
Interest income 39,277 4,857
Other income 1,298 --
--------- --------
Total investment income 80,232 46,420
--------- --------
EXPENSES:
Investment advisory fees 19,963 3,798
Administration fees 9,954 9,941
Shareholder servicing and
accounting fees and expense 23,968 14,745
Distribution fees 10,863 2,356
Custody fees 2,602 2,714
Federal and state registration fees 2,360 3,087
Professional fees 16,871 5,107
Reports to shareholders 1,375 4,967
Amortization of organization costs 11,826 --
Trustees' fees and expenses 804 851
Miscellaneous 5,743 452
--------- --------
Total expense before waiver
and reimbursement 106,329 48,018
Less: Waiver of expenses and
reimbursement from Adviser (44,564) (36,916)
--------- --------
Net expenses 61,765 11,102
--------- --------
NET INVESTMENT INCOME 18,467 35,318
--------- --------
REALIZED AND UNREALIZED GAIN:
Net realized gain (loss) on investments 305,053 (15,110)
Net change in unrealized appreciation
(depreciation) of investment (717,144) 91,096
--------- --------
Net gain (loss) on investments (412,091) 75,986
--------- --------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $(393,624) $111,304
--------- --------
--------- --------
See notes to the financial statements.
GROWTH & INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED
APRIL 30, 2000 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1999
---------------- ----------------
OPERATIONS:
Net investment income (loss) $ 18,467 $ 191,965
Net realized gain (loss) on investments 305,053 (366,086)
Change in unrealized appreciation
(depreciation) on investments (717,144) 1,036,486
---------- ----------
Net increase (decrease) in net
assets resulting from operations (393,624) 862,365
---------- ----------
CAPITAL SHARE TRANSACTIONS:
Shares sold 1,318,136 648,639
Shares issued to holders in
reinvestment of dividends 50,242 529,665
Shares redeemed (3,390,317) (2,284,817)
---------- ----------
Net increase (decrease) in net
assets resulting from capital
share transactions (2,021,939) (1,106,513)
---------- ----------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income (50,752) (174,218)
From net realized gains -- (284,551)
---------- ----------
Total distributions to
Class A shareholders (50,752) (458,769)
---------- ----------
DISTRIBUTIONS TO CLASS B SHAREHOLDERS:
From net investment income -- (22,394)
From net realized gains -- (56,711)
---------- ----------
Total distributions to
Class B shareholders -- (79,105)
---------- ----------
TOTAL INCREASE IN NET ASSETS (2,466,315) (782,022)
NET ASSETS:
Beginning of year 7,542,246 8,324,268
---------- ----------
End of year (including undistributed net
investment income (loss) of $1,069,
$5,716, and $6,053 respectively) $5,075,931 $7,542,246
---------- ----------
---------- ----------
See notes to the financial statements.
REIT FUND
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED MARCH 1, 19991<F1>
APRIL 30, 2000 THROUGH
(UNAUDITED) OCTOBER 31, 1999
---------------- ------------------
OPERATIONS:
Net investment income (loss) $ 35,318 $ 22,521
Net realized gain (loss) on investments (15,110) (227)
Change in unrealized appreciation
(depreciation) on investments 91,096 (125,858)
---------- ----------
Net increase (decrease) in net
assets resulting from operations 111,304 (103,564)
---------- ----------
CAPITAL SHARE TRANSACTIONS:
Shares sold 723,926 1,259,195
Shares issued to holders in
reinvestment of dividends 28,203 11,350
Shares redeemed (550,479) (68)
---------- ----------
Net increase (decrease) in net
assets resulting from capital
share transactions 201,650 1,270,477
---------- ----------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income (35,484) (12,177)
From net realized gains -- --
---------- ----------
Total distributions to
Class A shareholders (35,484) (12,177)
---------- ----------
DISTRIBUTIONS TO CLASS B SHAREHOLDERS:
From net investment income -- (4,290)
From net realized gains -- --
---------- ----------
Total distributions to
Class B shareholders -- (4,290)
---------- ----------
TOTAL INCREASE IN NET ASSETS 277,470 1,150,446
NET ASSETS:
Beginning of year 1,150,446 --
---------- ----------
End of year (including undistributed
net investment income (loss) of $1,069,
$5,716, and $6,053 respectively) $1,427,916 $1,150,446
---------- ----------
---------- ----------
1<F1> Commencement of operations.
See notes to the financial statements.
GROWTH & INCOME FUND
FINANCIAL HIGHLIGHTS
<TABLE>
SIX MONTHS
ENDED
APRIL 30, 2000 YEAR ENDED YEAR ENDED YEAR ENDED
(UNAUDITED) OCTOBER 31, 1999 OCTOBER 31, 1998 OCTOBER 31, 1997
-------------- ------------------- ------------------- -------------------
CLASS A CLASS A CLASS B CLASS A CLASS B CLASS A CLASS B
------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value,
beginning of period $10.80 $10.40 $10.34 $12.26 $12.20 $10.91 $10.87
Income from investment operations:
Net investment income 0.08 0.25 0.19 0.32 0.23 0.29 0.20
Net realized and unrealized
gains on securities (0.72) 0.86 0.83 (1.09) (1.07) 1.40 1.39
------ ------ ------ ------ ------ ------ ------
Total from
investment operations (0.64) 1.11 1.02 (0.77) (0.84) 1.69 1.59
Less distributions:
Dividends from net
investment income (0.14) (0.27) (0.18) (0.32) (0.25) (0.29) (0.21)
Distributions from
net realized gains -- (0.44) (0.44) (0.77) (0.77) (0.05) (0.05)
------ ------ ------ ------ ------ ------ ------
Total distributions (0.14) (0.71) (0.62) (1.09) (1.02) (0.34) (0.26)
------ ------ ------ ------ ------ ------ ------
Net asset value, end of period $10.02 $10.80 $10.74 $10.40 $10.34 $12.26 $12.20
------ ------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------ ------
TOTAL RETURN2<F3>,3<F4> (7.46%) 10.88% 10.09% (7.01%) (7.64%) 15.56% 14.68%
SUPPLEMENTAL DATA
AND RATIOS:
Net assets, in thousands,
end of period $5,076 $6,336 $1,206 $6,838 $1,486 $6,815 $1,330
Ratio of net expense
to average net assets:
Before expense reimbursement 3.18%4<F5> 2.65% 3.40% 2.75% 3.37% 2.96% 3.71%
After expense reimbursement 1.85%4<F5> 1.15% 1.90% 1.15% 1.78% 1.15% 1.90%
Ratio of net investment income
to average net assets:
Before expense reimbursement 0.78%4<F5> 0.91% 0.18% 1.11% 0.50% 1.01% 0.26%
After expense reimbursement 0.55%4<F5> 2.41% 1.68% 2.71% 2.09% 2.82% 2.07%
Portfolio turnover rate5<F6> 98.76% 94.73% 94.73% 136.94% 136.94% 98.37% 98.37%
</TABLE>
GROWTH & INCOME FUND
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
SEPTEMBER 1, 19951<F2>
THROUGH
OCTOBER 31, 1996 OCTOBER 31, 1995
------------------- --------------------
CLASS A CLASS B CLASS A CLASS B
------- ------- ------- -------
<S> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value,
beginning of period $10.04 $10.03 $10.00 $10.00
Income from investment operations:
Net investment income 0.27 0.21 0.04 0.03
Net realized and unrealized
gains on securities 0.87 0.83 -- --
------ ------ ------ ------
Total from
investment operations 1.14 1.04 0.04 0.03
Less distributions:
Dividends from net
investment income (0.27) (0.20) -- --
Distributions from net realized gains -- -- -- --
------ ------ ------ ------
Total distributions (0.27) (0.20) -- --
------ ------ ------ ------
Net asset value, end of period $10.91 $10.87 $10.04 $10.03
------ ------ ------ ------
------ ------ ------ ------
TOTAL RETURN2<F3>,3<F4> 11.50% 10.49% 0.40%3<F4> 0.30%3<F4>
SUPPLEMENTAL DATA
AND RATIOS:
Net assets, in thousands,
end of period $4,688 $412 $1,279 $133
Ratio of net expense
to average net assets:
Before expense reimbursement 5.95% 6.70% 17.35%4<F5> 18.10%4<F5>
After expense reimbursement 1.15% 1.90% 1.15%4<F5> 1.90%4<F5>
Ratio of net investment income
to average net assets:
Before expense reimbursement (1.77%) (2.52%) (14.95%)4<F5>(15.70%)4<F5>
After expense reimbursement 3.03% 2.28% 1.25%4<F5> 0.50%4<F5>
Portfolio turnover rate5<F6> 131.98% 131.98% -- --
</TABLE>
1<F2> Commencement of operations.
2<F3> The total return calculation does not reflect the 5.5% front end sales
charge for Class A.
3<F4> Not annualized.
4<F5> Annualized.
5<F6> During the period ended October 31, 1995, there were no sales of
securities. Portfolio turnover rate is calculated on the basis of the
Fund as a whole without distinguishing between classes of shares issued.
See notes to the financial statements.
REIT FUND
FINANCIAL HIGHLIGHTS
<TABLE>
SIX MONTHS ENDED MARCH 1, 19991<F7>
APRIL 30, 2000 THROUGH
(UNAUDITED) OCTOBER 31, 1999
----------------- ------------------------------
CLASS A CLASS A CLASS B5<F11>
------- ------- -------------
<S> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period $ 9.22 $10.00 $10.32
Income from investment operations:
Net investment income 0.49 0.30 0.19
Net realized and unrealized gains on securities 0.46 (0.82) (1.13)
------ ------ ------
Total from investment operations 0.95 (0.52) (0.94)
Less distributions:
Dividends from net investment income (0.44) (0.26) (0.13)
Distributions from net realized gains -- -- --
------ ------ ------
Total distributions (0.44) (0.26) (0.13)
------ ------ ------
Net asset value, end of period $9.73 $9.22 $9.25
------ ------ ------
------ ------ ------
TOTAL RETURN2<F8>,3<F9> (1.24%) (5.32%) (9.14%)
SUPPLEMENTAL DATA AND RATIOS:
Net assets, in thousands, end of period $1,428 $ 817 $ 334
Ratio of net expense to average net assets:
Before expense reimbursement 7.54%4<F10> 12.71%4<F10> 20.90%4<F10>
After expense reimbursement 1.74%4<F10> 1.15%4<F10> 1.90%4<F10>
Ratio of net investment income to average net assets:
Before expense reimbursement (0.25%)4<F10> (6.20%)4<F10> (14.09%)4<F10>
After expense reimbursement 5.55%4<F10> 5.36%4<F10> 4.90%4<F10>
Portfolio turnover rate 6.60% 1.36% 1.36%
</TABLE>
1<F7> Commencement of operations.
2<F8> The total return calculation does not reflect the 5.5% front end sales
charge for Class A.
3<F9> Not annualized.
4<F10> Annualized.
5<F11> Class B shares did not have shareholders until April 1, 1999.
See notes to the financial statements.
GROWTH & INCOME FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 2000 (UNAUDITED)
NUMBER
OF SHARES VALUE
--------- -----
COMMON STOCKS -- 96.66%
Application Software -- 6.26%
6,000 Bsquare Corp. $ 105,000
2,500 Rational Software Corp. 212,812
----------
317,812
----------
Chemicals -- 13.89%
13,000 IMC Global, Inc. 200,687
10,500 Cabot Corp. 283,500
6,200 Rohm & Haas Co. 220,875
----------
705,062
----------
Computer Software -- 3.40%
4,500 Autodesk, Inc. 172,687
----------
Computer Integrated -- 1.29%
5,000 Mentor Graphics 65,625
----------
Construction -- 3.07%
2,000 Dycom Industries 156,000
----------
Entertainment & Leisure -- 9.90%
14,000 Pinnacle Entertainment, Inc. 280,875
5,500 Anchor Gaming 221,375
----------
502,250
----------
Financial Services -- 13.47%
8,000 Associated Banc Corp. 204,500
6,200 MGIC Investment *<F12> 296,438
17,500 Insignia Financial Group 182,656
----------
683,594
----------
Manufacturing -- 11.78%
22,000 Noble International LTD *<F12> 242,000
7,000 Dover Co. 355,688
----------
597,688
----------
Medical - Drugs -- 4.53%
4,400 Vertex Pharmaceuticals, Inc. 229,900
----------
Multimedia -- 3.78%
3,000 Gannett Co., Inc. 191,625
----------
Network Products -- 6.17%
10,000 Data Critical Corp. 116,250
5,000 Xircom, Inc. 197,188
----------
313,438
----------
Oil Company -- 10.09%
10,000 Berry Petroleum 158,125
6,000 Murphy Oil Corp. 354,000
----------
512,125
----------
Semiconductor -- 4.33%
3,000 Xilinx, Inc. 219,750
----------
Real Estate Investment Trusts -- 4.70%
28,500 Mission West Properties 238,688
----------
TOTAL COMMON STOCKS
(COST $5,349,294) 4,906,244
----------
PRINCIPAL
AMOUNT
---------
FIXED INCOME -- 1.08%
U.S. Government
$ 6,734 Federal National Mortgage
Association (FNMA)
Pass-Thru Certificates Pool
#050737, 6.00%, 05/01/00 6,680
50,000 Financial Salomon Inc.
7.50%, 09/29/2015 48,392
----------
TOTAL FIXED INCOME
(COST $56,513) 55,072
----------
TOTAL INVESTMENTS
(COST $5,405,807) 4,961,316
----------
OTHER ASSETS IN EXCESS
OF LIABILITIES -- 2.26% 114,615
----------
TOTAL NET
ASSETS -- 100.0% $5,075,931
----------
----------
*<F12> Non-income producing security.
See notes to the financial statements.
REIT FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 2000 (UNAUDITED)
NUMBER
OF SHARES VALUE
--------- -----
COMMON STOCKS -- 93.07%
Healthcare -- 3.39%
2,526 Healthcare Realty Trust $ 45,468
1,500 Meditrust Corporation 3,000
----------
48,468
----------
Industrial -- 22.62%
2,000 AMB Property Corp. 44,125
1,100 Alexandria Real Estate
Equities, Inc. 35,200
1,100 Centerpoint Properties Trust 39,463
2,100 Duke-Weeks Realty Corporation 45,544
1,500 First Industrial Realty Trust 45,094
2,110 PBS Business Park, Inc. 46,948
1,300 Prentiss Properties Trust 30,875
1,016 Public Storage, Inc. 22,733
500 Shurgard Storage Centers 13,094
----------
323,076
----------
Office -- 17.13%
1,000 Boston Properties, Inc. 34,875
1,800 Brandywine Realty Trust 31,275
1,500 Carramerica Realty Corporation 35,625
1,600 Equity Office Properties 43,500
2,100 Great Lakes REIT, Inc. 31,763
5,000 Mission West Properties 41,875
1,000 SL Green Realty Corp. 25,687
----------
244,600
----------
Residential -- 20.28%
2,000 Archstone Communities Trust 43,250
800 Apartment Investment
& Management 31,800
1,400 Avalonbay Communities, Inc. 54,775
800 Chateau Properties, Inc. 20,800
1,400 Equity Residential
Properties Trust 63,700
1,200 Home Properties of NY, Inc. 33,600
1,400 New Plan Excel Realty Trust 20,125
1,000 Pacific Gulf Properties 21,500
----------
289,550
----------
REIT Diversified -- 5.77%
1,000 Liberty Property Trust 24,750
1,300 Spieker Properties, Inc. 57,606
----------
82,356
----------
Retail -- 17.86%
1,000 Chelsea GCA Realty, Inc. 32,625
1,000 General Growth Inds. 32,875
2,000 JDN Realty Corporation 19,375
800 Kimco Realty 31,850
2,000 Simon Property Group, Inc. 50,750
1,600 Vornado Realty Trust 55,200
800 Weingarten Realty Inv 32,400
----------
255,075
----------
Specialty -- 6.02%
2,000 Hospitality Properties Trust 44,500
1,700 Plum Creek Timber Co. 41,437
----------
85,937
----------
TOTAL COMMON STOCKS
(COST $1,363,824) 1,329,062
----------
PRINCIPAL
AMOUNT
-------
SHORT-TERM INVESTMENTS -- 7.97%
Variable Rate Demand Notes -- 7.97%
$56,150 Wisconsin Corp. Cent. Credit
Union, 5.83%, 12-31-2031 56,150
32,477 Sara Lee Corporation
5.764%, 12-31-2031 32,477
21,724 Warner Lambert
5.76%, 12-31-2031 21,724
3,444 General Mills, Inc.
5.769%, 12-31-2031 3,444
----------
TOTAL SHORT-TERM INVESTMENTS
(COST $113,795) 113,795
----------
TOTAL INVESTMENTS
(COST $1,477,619) 1,442,857
----------
LIABILITIES IN EXCESS OF
OTHER ASSETS -- (1.04)% (14,941)
----------
TOTAL NET
ASSET -- 100.00% $1,427,916
----------
----------
See notes to the financial statements.
NOTES TO THE FINANCIAL STATEMENTS
APRIL 30, 2000 (UNAUDITED)
1). ORGANIZATION
The Jefferson Fund Group Trust (the "Trust") was organized as a business trust
under the laws of Delaware on January 20, 1995 and registered under the
Investment Company Act of 1940, as amended (the "1940 Act") as an open-end
management investment company issuing its shares in series, each series
representing a distinct portfolio with its own investment objective and
policies. The series presently authorized are the Jefferson Growth and Income
Fund (the "Growth Fund"), the Jefferson Regional Bank Fund (the "Regional Bank
Fund"), and the Jefferson REIT Fund (the "REIT Fund"), collectively known as
(the "Funds").
Costs incurred by the Trust in connection with the organization, registration
and initial public offering of shares aggregated $65,659, and are being
amortized over the period of benefit, but not to exceed sixty months from the
date the Trust commenced operations. The only series authorized at the
commencement of operations was the Growth Fund. The Regional Bank Fund and the
REIT Fund commenced operations on March 1, 1999, all organizational costs
incurred by the Trust in connection with the organization, registration and
initial public offering of these series were expensed as incurred.
The Trust is authorized to issue an unlimited number of shares without par
value, of each series. The Trust has issued one class of shares of the Funds:
Class A. The Class A shares are subject to a service organization fee of 0.25%
pursuant to Rule 12b-1 and a front-end sales charge imposed at the time of
purchase in accordance with the Fund's prospectus. The maximum front-end sales
charge is 5.50% of the offering price of 5.82% of the net asset value.
2). SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Funds in the preparation of its financial statements. These policies are in
conformity with generally accepted accounting principles.
a). Investment Valuations -- Securities which are traded on a national or
recognized stock exchange are valued at the last sale price on the securities
exchange on which such securities are primarily traded. Exchange-traded
securities for which there were no transactions that day are valued at the most
recent bid prices. Securities traded on only over-the-counter markets are
valued on the basis of closing over-the-counter bid prices. Instruments with a
remaining maturity of 60 days or less are valued on an amortized cost basis.
Securities for which market quotations are not readily available, and securities
which are restricted as to resale are valued at fair value as determined by the
investment adviser under the supervision of the Board of Trustees. Portfolio
securities which are primarily traded on foreign securities exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, except when an occurrence subsequent to the time a value
was so established is likely to have changed such value.
Because the REIT Fund may invest a substantial portion of its assets in Real
Estate Investment Trusts ("REITs"), the Fund may be subject to certain risks
associated with direct investment in REITs. REITs may be affected by changes in
the value of their underlying properties and by defaults by borrowers and
tenants. REITs depend generally on their ability to generate cash flow to make
distributions to shareholders, and certain REITs have self-liquidation
provisions by which mortgages held my be paid in full and distributions of
capital returns may be made at any time.
On January 6, 2000 the Board of Trustees voted to eliminate the Class B shares
of the Jefferson Growth and Income Fund and the Jefferson REIT Fund. Thus
effective the close of business on February 14, 2000, Class B shares were
converted to Class A shares of each respective Fund. The shareholders did not
pay the contingent deferred sales charge. Class B shareholders received shares
of Class A based on their Class B balance.
b). Federal Income Taxes -- Provision for federal income taxes or excise taxes
has not been made since the Funds have elected to be taxed as "regulated
investment companies" and intends to distribute substantially all taxable income
to their shareholders and otherwise comply with the provisions of the Internal
Revenue Code applicable to regulated investment companies.
Generally accepted accounting principles require that permanent differences
between financial reporting and tax reporting be reclassified between various
components of net assets.
c). Income and Expenses -- The Funds are charged for those expenses that are
directly attributable to the portfolio, such as advisory, administration and
certain shareholder service fees. Net investment income other than class
specific expenses, and realized and unrealized gains and losses are allocated
daily to each class of shares based upon the relative net asset value of
outstanding shares at the beginning of the day (after adjusting for the current
capital share activity of the respective class).
d). Distributions to Shareholders -- Dividends from net investment income are
declared and paid on a calendar quarter basis. Distributions of net realized
capital gains, if any, will be declared at least annually.
A portion of the dividend income recorded by the REIT Fund is from distributions
by publicly traded REITs and such distributions for tax purposes may consist of
capital gains and return of capital. The actual return of capital and capital
gains portions of such distributions will be determined by formal notifications
from the REITs subsequent to the calendar year-end. Distributions received from
the REITs that are determined to be a return of capital are recorded by the REIT
Fund as a reduction of the cost basis of the securities held. The character of
such distributions, for tax purposes, is determined by the REIT Fund based on
estimates and information received by the REIT Fund from the REITs.
e). Written Option Accounting -- When a Fund sells an option, an amount equal
to the premium received by the Fund is included in the Statement of Assets and
Liabilities as an asset and an equivalent liability. The amount of the
liability is subsequently marked-to-market to reflect the current value of the
option written. By writing an option, the Fund may become obligated during the
term of the option to deliver or purchase the securities underlying the option
at the exercised price if the option is exercised.
Option contracts are valued at the average of the current bid and asked price
reported on the day of valuation. When an option expires on its stipulated
expiration date or the Fund enters into a closing purchase transaction, the Fund
realizes a gain or loss if the cost of the closing purchase transaction differs
from the premium received when the option was sold without regard to any
unrealized gain or loss on the underlying security, and the liability related to
such option is eliminated. When an option is exercised, the Fund realizes a
gain or loss from the sale of the underlying security, and the proceeds from
such sale are increased by the premium originally received.
f). Use of Estimates -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
g). Other -- Investment and shareholder transactions are recorded on trade
date. The Funds determine the gain or loss realized from the investment
transactions by comparing the original cost of the security lot sold with the
net sale proceeds. Dividend income is recognized on the ex-dividend date and
interest income is recognized on an accrual basis.
3). CAPITAL SHARE TRANSACTIONS
Transactions in shares of the Funds were as follows:
GROWTH FUND
CLASS A
---------------------------------------------
YEAR ENDED YEAR ENDED
APRIL 30, 2000 OCTOBER 31, 1999
------------------ --------------------
AMOUNT SHARES AMOUNT SHARES
------ ------ ------ ------
Shares sold $ 1,318,136 122,912 $ 575,170 54,954
Shares issued to
holders in reinvest-
ment of dividends 44,402 4,040 455,884 43,349
Shares redeemed (2,188,634) (207,022) (1,800,417) (168,773)
----------- -------- ----------- --------
Net increase
(decrease) $ (826,096) (80,070) $ (769,363) (70,470)
----------- -------- ----------- --------
----------- -------- ----------- --------
CLASS B
---------------------------------------------
YEAR ENDED YEAR ENDED
APRIL 30, 2000 OCTOBER 31, 1999
------------------ --------------------
AMOUNT SHARES AMOUNT SHARES
------ ------ ------ ------
Shares sold $ -- -- $ 73,469 6,783
Shares issued to
holders in reinvest-
ment of dividends 5,839 534 73,782 7,053
Shares redeemed (1,201,683) (112,800) (475,964) (45,323)
----------- -------- ----------- --------
Net increase
(decrease) $(1,195,844) (112,266) $ (328,713) (31,487)
----------- -------- ----------- --------
----------- -------- ----------- --------
REIT FUND
CLASS A
---------------------------------------------
PERIOD ENDED PERIOD ENDED
APRIL 30, 2000 OCTOBER 31, 1999
------------------ --------------------
AMOUNT SHARES AMOUNT SHARES
------ ------ ------ ------
Shares sold $ 679,416 75,007 $ 880,044 86,723
Shares issued to
holders in reinvest-
ment of dividends 23,013 2,502 7,465 776
Shares redeemed (175,121) (19,292) (68) (8)
----------- -------- ----------- --------
Net increase $ 527,308 58,217 $ 887,441 87,491
----------- -------- ----------- --------
----------- -------- ----------- --------
CLASS B
---------------------------------------------
PERIOD ENDED PERIOD ENDED
APRIL 30, 2000 OCTOBER 31, 1999
------------------ --------------------
AMOUNT SHARES AMOUNT SHARES
------ ------ ------ ------
Shares sold $ 44,511 4,787 $ 369,236 35,666
Shares issued to
holders in reinvest-
ment of dividends 5,190 563 3,886 403
Shares redeemed (375,359) (41,419) -- --
----------- -------- ----------- --------
Net increase $ (325,658) (36,069) $ 373,122 36,069
----------- -------- ----------- --------
----------- -------- ----------- --------
4). INVESTMENT TRANSACTIONS
The aggregate purchases and sales of securities, excluding short-term
investments, by the Funds for the period ended April 30, 2000, were as follows:
PURCHASES SALES
--------- ------
GROWTH FUND
U.S. Government $ -- $ 8,886
Other 4,660,361 6,049,573
REIT FUND
U.S. Government $ -- $ --
Other 364,699 70,712
At April 30, 2000, gross unrealized appreciation and depreciation of investments
for federal income tax purposes was as follows:
GROWTH FUND
Appreciation $ 373,733
(Depreciation) (818,224)
---------
Net unrealized appreciation
on investments $(444,491)
---------
---------
REIT FUND
Appreciation $ 52,926
(Depreciation) (87,688)
---------
Net unrealized appreciation
on investments $ (34,762)
---------
---------
At April 30, 2000, the cost of investments for federal income tax purposes for
the Growth Fund, and the REIT Fund were $5,405,807, and $1,477,619 respectively.
Transactions in call options written during the period ended April 30, 2000 for
the Growth Fund were as follows:
NUMBER PREMIUMS
------ --------
Options outstanding at beginning of year 2,500 $ 4,100
Options expired (2,500) (4,100)
------ -------
Options outstanding at end of year 0 $ 0
------ -------
------ -------
5). INVESTMENT ADVISORY AND OTHER
AGREEMENTS
Uniplan, Inc. is the Investment Adviser for the Growth Fund and the REIT Fund.
Marshall Capital Management, Inc. is the Investment Adviser for the Regional
Bank Fund.
Pursuant to their Advisory Agreements with the Funds, the Advisers are entitled
to receive a fee, calculated daily and payable monthly, at the annual rate of
0.60% as applied to the Funds' daily net assets.
The Trust entered into a distribution and servicing agreement with Adviser
Dealer Services, Inc. (the "Distributor"). The Trust has adopted a Class A
Servicing Fee Plan whereby the Funds pay the Distributor servicing fees of up to
0.25% annually, calculated as a percentage of each Fund's average daily net
assets attributable to Class A shares.
If the aggregate annual operating expenses (excluding interest, taxes, brokerage
commissions and other costs incurred in connection with the purchase or sale of
portfolio securities, and extraordinary items) exceed 1.50% of average net
assets for Class A , the Advisers may waive or may reimburse the Funds for the
amount of such excess. Accordingly, for the period ended April 30, 2000, the
Advisers have waived and reimbursed the Growth Fund and REIT Fund $44,564 and
$36,916, respectively.
The Distributor has not received any front-end sales charges on Class A shares
for the period ended April 30, 2000. Firstar Mutual Fund Services, LLC serves
as Transfer Agent, Administrator and Accounting services agent for the Fund.
Firstar Bank Milwaukee, N.A. serves as Custodian for the Fund.
INVESTMENT ADVISER
Uniplan, Inc.
839 North Jefferson Street
Suite 201
Milwaukee, WI 53202
(800) 216-9785
ADMINISTRATOR, TRANSFER
AGENT & DIVIDEND PAYING AGENT
Firstar Mutual Fund Services, LLC
615 East Michigan Street
Milwaukee, WI 53202
CUSTODIAN
Firstar Bank N.A.
615 East Michigan Street
Milwaukee, WI 53202
DISTRIBUTOR
Adviser Dealer Services, Inc.
6000 Memorial Drive
Dublin, OH 43017
LEGAL COUNSEL
Foley & Lardner
777 East Wisconsin Avenue
Milwaukee, WI 53202
INDEPENDENT ACCOUNTANTS
KPMG LLP
303 East Wacker Drive
Chicago, IL 60601
