<PAGE>
TO THE SHAREHOLDERS OF FOCUS TRUST, INC.:
Focus Trust's total return for the first quarter, second quarter and year to
date are shown below, along with the total returns of the Fund's two
comparable benchmark indices: the Standard & Poor's 500 Index and the Lipper
Growth Index:
<TABLE>
<CAPTION>
FOCUS STANDARD & LIPPER
1996 TRUST POOR'S 500 GROWTH
---- ----- ---------- ------
<S> <C> <C> <C>
First Quarter...................................... 10.30 % 4.80% 4.51%
Second Quarter..................................... -3.25% 3.89% 3.03%
Year-To-Date....................................... 6.71 % 8.88% 7.99%
</TABLE>
Now, you must be thinking, "Those guys at Focus Trust were brilliant in the
first quarter, but in the second quarter they must have gone brain-
dead . . . what happened?" It is a reasonable thought and one that deserves
some explanation. Perhaps the easiest way to appreciate this quarterly change
is to take a look at what happened to our largest holdings.
<TABLE>
<CAPTION>
MARCH 31, 1996 JUNE 30, 1996 %
HOLDINGS PRICE PER SHARE PRICE PER SHARE CHANGE
-------- --------------- --------------- ------
<S> <C> <C> <C>
American Express Co. ................. $49.38 $44.63 - 9.61
Berkshire Hathaway, Inc. ............. $33,850.00 $30,700.00 - 9.30
Gannett Co. .......................... $67.25 $70.75 + 5.20
Intl. Speedway Corp. ................. $363.00 $295.00 -18.70
The Walt Disney Co. .................. $63.87 $62.87 - 1.56
Wrigley (WM) Jr. Co. ................. $58.63 $50.50 -13.86
</TABLE>
Since our top six holdings represent 50% of our portfolio, the weighted
average decline of the above list contributed to a 4.38% drop in our
performance during the second quarter. Because Focus Trust declined only 3.25%
in this period, you can assume we did own some stocks that actually
appreciated in value during this period.
The next logical question that an investor should ask is: "Was the decline in
share price a result of any company bad news? Specifically, was there any
economic reason for the drop in share price of American Express, Berkshire
Hathaway, International Speedway, or Wrigley?" The answer is--none that we can
determine.
We do know this--the share prices of Berkshire Hathaway, International
Speedway, and Wrigley were at a relatively high level during the second
quarter. Indeed, Warren Buffett repeatedly stated that Berkshire Hathaway
shares, during this period, were not undervalued, hence he would not recommend
buying Berkshire at such high prices. But just because a company's share price
is too high to purchase does not necessarily mean the company should be sold.
Bill Ruane, Chairman of Sequoia Fund, who has invested 40% of Sequoia's assets
in Berkshire Hathaway, confessed that Berkshire "was too high to purchase, but
too dear to sell."
After years of study, research and observation, we are convinced that the way
to make money long-term, is to purchase, at reasonable prices, shares of a
select few outstanding companies which possess favorable long-term prospects
and are well managed. Once we make these purchases, we are content to become
long-term owners of these companies knowing that the share price of the
company, over time, will correlate with the growth of the company's intrinsic
value. In other words, if we pick the right business, the share price will
take care of itself.
-1-
<PAGE>
We understand how mutual funds are marketed in this country. In the money
management business, accolades are customarily handed out to those funds which
have beaten their indices in the most recent reporting period. When a fund has
had good performance, the financial press heaps praise upon the manager,
investors become excited, and assets flood into the mutual fund. Those funds
which, for whatever reason, were unable to beat their indices, unfortunately
become lost in the shuffle or worse. Hence, to win the gold medal in mutual
fund marketing, the manager is required to beat the index over a short period
of time.
Focus investing, however, is a concentrated buy-and-hold investment strategy,
which has the potential to generate above-average long-term returns, but may
underperform on a short-term basis. Although Focus investing is, in our
opinion, the most logical way to manage money, it sometimes creates
difficulties marketing a mutual fund. But what makes sense from a marketing
perspective makes no sense to us in managing a mutual fund. As an example, to
have remained consistently close to the market over the last 18 months would
have required realigning our portfolio; changes that we were unwilling
to make.
With all this said, which investment results should be used to judge how well
your investment manager has done this year? Is the first quarter performance a
more accurate reflection of our abilities than the second quarter? Or is the
second quarter a more honest estimate? Asking this question seems to us to be
very much like trying to determine a marathoner's ability based solely upon
the time it took to run the first two miles of a 26 mile race.
Our performance history dates back a short fifteen months. From inception
through June 30, 1996, Focus Trust has increased in value 19.8% compared to
the Standard & Poor's 500 Index, which has gained 34.2% and the Lipper Growth
Index, which is up 30.8%.
As we indicated in last year's Annual Report, much of our early
underperformance was attributed to our high cash levels. Going forward, this
will no longer be the case. In the last six months we have purchased shares in
Brown-Forman Corporation, Gaylord Entertainment Company, Harley-Davidson, Inc.
and Sotheby's Holdings, Inc. and our net cash level now stands at 6.5%.
BROWN-FORMAN CORPORATION is a leading producer and importer of wine and
spirits, as well as a producer of fine china, crystal, silver, and luggage.
Name brand products include Jack Daniels, Canadian Mist, Southern Comfort
spirits; Bolla, Fetzer, Korbel wines, and Lenox china. Although alcohol
consumption is flat in the United States, it is rapidly growing overseas where
the sweeter taste of Jack Daniels and Southern Comfort cocktails have become
popular.
GAYLORD ENTERTAINMENT COMPANY is Country Music and Country Music is becoming
the fastest growing segment of family entertainment in this country. Gaylord
Entertainment owns the Grand Ole Opry, Opryland Hotel (the largest hotel
convention center east of the Mississippi) and two very strong cable
television networks: The Nashville Network (TNN) and Country Music Television
(CMT).
HARLEY-DAVIDSON, INC. manufactures heavyweight custom motorcycles and
accessories. Until a few months ago, Harley-Davidson also sold recreational
and commercial vehicles. It has since sold these two divisions and used the
proceeds to reinvest in its fast growing international motorcycle business.
SOTHEBY'S HOLDINGS, INC. is one of the world's two leading fine art
auctioneers; Christie's is the other. The art market is a cyclical business,
but over time, the growth of this market averages better than 12%
-2-
<PAGE>
per year. The auction business can be a very profitable business particularly
as inventory requires very little capital outlay.
We believe that each of these four companies has been a beneficial addition to
our portfolio. The challenge in investing our cash was not to find investments
that would generate returns greater than cash but to find investments that
raised the economic level of our other holdings. Looking at our equity
investments, I am glad to report that not only has our projected owner-
earnings growth rate increased, but we have also increased the aggregate
return on our equity invested. Both of these measures are instrumental in
increasing our long-term intrinsic value.
Although it is too early to evaluate the long-term results, our portfolio and
investment techniques reflect our strong investment discipline. This
disciplined investment approach is in accordance with our Investment Adviser--
Shareholder Principles. In managing the Fund's portfolio, we constantly keep
these Principles in mind. Please take a moment to read the next page.
If you know investors who think similarly to us, send them our way. We are
interested in the continued growth of Focus Trust, but only with a core group
of individuals who appreciate this investment strategy. As always we
appreciate your support. If you have any questions or concerns, please do not
hesitate to contact us at 1-800-665-2550.
Sincerely,
/s/ Robert G. Hagstrom
Robert G. Hagstrom, Jr.
Portfolio Manager
-3-
<PAGE>
INVESTMENT ADVISER--SHAREHOLDER PRINCIPLES
You should read carefully the following Investment Adviser--Shareholder
Principles before making an investment in the Fund.
. Although the Fund is organized as a mutual fund, the principals of Lloyd,
Leith & Sawin, Inc. (the "Adviser") take the view that it is a managing
partner with you, the shareholders of this Fund. This commitment is
reinforced by having the principals of the Adviser also invest a portion of
their assets in the Fund and thus become co-owners of the Fund.
. As managing partners, the Adviser will attempt to locate and invest in a few
outstanding businesses which it believes possess favorable long-term pros-
pects with superb underlying economics run by trustworthy and able manage-
ment and finally, are available at sensible prices.
. Once invested in a particular security, the Adviser looks forward to
becoming a long-term holder of these outstanding businesses. The Adviser is
not, nor will it ever be, interested in constantly buying and selling
mediocre businesses where economic gain depends more on profiting from
short-term price changes rather than the economic gain afforded by companies
that are able to grow their long-term intrinsic value.
. Because long-term maximum growth of intrinsic value, not profits from short-
term price changes, is the Adviser's prime objective, the Adviser expects
that the Fund may, from time to time, underperform various stock market
indices. This fact does not cause the Adviser any alarm. However, the
Adviser would be disappointed if the gain in the intrinsic value of the
companies selected for investment by the Fund, and hence the long-term rise
in their respective stock prices, did not advance at a rate greater than the
average large American company.
. It would be unfair to ask you, the shareholder, to ignore short-term price
movements as a way to measure investment results unless the Adviser offers
an alternative means by which to judge the Fund's progress. As a managing
partner, the Adviser is continually focused on, and will communicate to you,
the economic progress of the companies selected for investment by the Fund.
The Adviser believes that if a company is advancing economically at a
satisfactory rate, over time, the price of the company will correlate to
this change in value.
. The Adviser promises to be honest and forthcoming with you, the Fund's
shareholders. The Adviser promises to check periodic successes with an
equally hard look at any investment failures. The Adviser believes that this
public self-examination will be a benefit to shareholders and to the Adviser
over the long term. The Adviser's goal in reporting is to be as forthright
with you as it would like if the roles were reversed.
. STOP!!! If, after reading these principles, you have any reservation about
investing in the Fund, please don't. We would much prefer that you not
invest with us if the slightest short-term disruption in the markets or
individual stock prices will cause you to sell your shares. The Adviser
believes that long-term investment results should approximate the value of
the underlying businesses and not be affected by the excessive trading of
any of the Fund's shareholders.
-4-
<PAGE>
FOCUS TRUST, INC.
SCHEDULE OF INVESTMENTS
JUNE 30, 1996 (UNAUDITED)
COMMON STOCKS (93.49%)
<TABLE>
<CAPTION>
VALUE
SHARES COST (NOTE 1)
------ ---------- ----------
<C> <S> <C> <C>
AMUSEMENT & RECREATION (16.81%)
2,120 International Speedway Corp. ................ $ 520,040 $ 625,400
6,749 The Walt Disney Company...................... 404,072 424,343
---------- ----------
924,112 1,049,743
---------- ----------
BEVERAGES (4.68%)
7,300 Brown-Forman Corp., Class B.................. 289,357 292,000
---------- ----------
BUSINESS SERVICES (4.69%)
20,200 Sotheby's Holdings Inc., Class A............. 296,495 292,900
---------- ----------
ENTERTAINMENT (5.06%)
11,183 Gaylord Entertainment Company, Class A....... 281,471 315,906
---------- ----------
GAMES/TOYS (4.58%)
8,000 Hasbro, Inc. ................................ 251,338 286,000
---------- ----------
INSURANCE (7.37%)
15 Berkshire Hathaway, Inc., Class A*........... 415,055 460,500
---------- ----------
MOTORCYCLES, BICYCLES (4.28%)
6,500 Harley-Davidson, Inc. ....................... 258,244 267,312
---------- ----------
NEWSPAPER (19.63%)
6,500 Central Newspapers Inc., Class A............. 235,275 243,750
7,650 Gannett Company.............................. 415,111 541,238
9,000 Lee Enterprises, Inc. ....................... 192,575 213,750
700 Washington Post Company, Class B............. 186,560 226,800
---------- ----------
1,029,521 1,225,538
---------- ----------
PHARMACEUTICALS (5.07%)
6,400 Johnson & Johnson............................ 232,327 316,800
---------- ----------
SECURITY BROKER (7.86%)
11,000 American Express Company..................... 425,783 490,875
---------- ----------
SERVICES (7.80%)
2,800 Federal Home Loan Mortgage Corp. ............ 184,358 239,400
7,400 Federal National Mortgage Association........ 175,484 247,900
---------- ----------
359,842 487,300
---------- ----------
SUGAR PRODUCTS (5.66%)
7,000 Wrigley (WM) Jr. Company..................... 324,505 353,500
---------- ----------
TOTAL COMMON STOCKS ......................... 5,088,050 5,838,374
---------- ----------
U.S. GOVERNMENT AGENCY OBLIGATIONS (3.99%)
<CAPTION>
PAR AMORTIZED
AMOUNT COST
------ ----------
<C> <S> <C> <C>
Federal Home Loan Bank disc. note, 5.000%,
$250,000 due 07/24/96................................. 249,201 249,201
---------- ----------
TOTAL INVESTMENTS (COST $5,337,251)#
(97.48%)..................................... 6,087,575
OTHER ASSETS IN EXCESS OF LIABILITIES
(2.52%)...................................... 157,550
----------
NET ASSETS (100.00%) ........................ $6,245,125
==========
</TABLE>
# Also represents cost for Federal income tax purposes
* Non-income producing security
See Notes to Financial Statements.
-5-
<PAGE>
FOCUS TRUST, INC.
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1996 (UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value (cost $5,337,251)(Note 1).... $6,087,575
Cash............................................................. 71,753
Receivable for capital stock sold................................ 27,350
Dividends and interest receivable................................ 10,289
Deferred organization costs (Note 1)............................. 49,327
Other assets..................................................... 58,666
----------
Total assets................................................... 6,304,960
----------
LIABILITIES:
Payable to Adviser............................................... 59,835
----------
Total liabilities.............................................. 59,835
----------
NET ASSETS"
Applicable to 523,797 shares of capital stock outstanding (Note
1).............................................................. $6,245,125
==========
NET ASSETS CONSIST OF:
Paid-in capital.................................................. $5,525,003
Undistributed net investment loss................................ (9,850)
Accumulated net realized loss on investments..................... (20,352)
Net unrealized appreciation of investments....................... 750,324
----------
Net assets..................................................... $6,245,125
==========
NET ASSET VALUE AND OFFERING PRICE PER SHARE:
($6,245,125/523,797 shares)...................................... $ 11.92
==========
</TABLE>
See Notes to Financial Statements
-6-
<PAGE>
FOCUS TRUST, INC.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1996 (UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends.......................................................... $ 32,930
Interest........................................................... 14,075
--------
Total income..................................................... 47,055
--------
EXPENSES:
Investment advisory fees (Note 2).................................. 19,899
Administration fees................................................ 27,180
Registration fees.................................................. 33,829
Transfer agent fees................................................ 19,587
Accounting fees.................................................... 10,000
Amortization of organization costs (Note 1)........................ 6,483
Audit fees......................................................... 11,400
Directors fees..................................................... 11,200
Custodian fees..................................................... 2,412
Printing expense................................................... 11,657
Insurance expense.................................................. 1,617
Other expenses..................................................... 365
--------
Total expenses................................................... 155,629
Less expenses reimbursed by Adviser and waived by Administrator
(Note 2).......................................................... (98,774)
--------
Net expenses..................................................... 56,855
--------
NET INVESTMENT LOSS.................................................. (9,850)
--------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss from security transactions....................... (20,352)
Net change in unrealized appreciation on investments............... 361,597
--------
Net realized and unrealized gain on investments.................... 341,245
--------
NET INCREASE IN NET ASSETS FROM OPERATIONS........................... $331,395
========
</TABLE>
See Notes to Financial Statements.
-7-
<PAGE>
FOCUS TRUST, INC.
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED PERIOD
06/30/96 ENDED
(UNAUDITED) 12/31/95*
----------- ----------
<S> <C> <C>
OPERATIONS:
Net investment income (loss)............ $ (9,850) $ 26,202
Net realized loss on investments........ (20,352) 0
Net change in unrealized
appreciation on investments............ 361,597 388,727
---------- ----------
Net increase in net assets
from operations...................... 331,395 414,929
---------- ----------
DIVIDENDS TO SHAREHOLDERS
FROM:
Net investment income..... 0 (26,252)
---------- ----------
CAPITAL STOCK TRANSACTIONS
(NET)--NOTE 1.............. 852,741 4,572,312
---------- ----------
Total increase in net assets............ 1,184,136 4,960,989
---------- ----------
NET ASSETS:
Beginning of period....... 5,060,989 100,000
---------- ----------
End of period............. $6,245,125 $5,060,989
========== ==========
</TABLE>
* The Fund commenced investment operations on April 17, 1995.
See Notes to Financial Statements.
-8-
<PAGE>
FOCUS TRUST, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 -- SIGNIFICANT ACCOUNTING POLICIES:
Focus Trust, Inc. (the "Fund") is a no-load, non-diversified, open-end
management investment company registered under the Investment Company Act of
1940, as amended. The Fund was incorporated under the laws of Maryland on
January 27, 1995 and commenced operations on April 17, 1995. The following is
a summary of significant accounting policies consistently followed by the Fund
in the preparation of its financial statements. The preparation of financial
statements includes the use of management estimates.
A. SECURITY VALUATION: The Fund calculates the net asset value and
completes orders to purchase, exchange or repurchase Fund shares on each
business day as of 4:00 p.m. Eastern time, with the exception of those days
on which the New York Stock Exchange is closed.
The Fund's securities are valued based on market quotations or, when no
market quotations are available, at fair value as determined in good faith
by or under direction of the Board of Directors. Securities listed on any
national securities exchange are valued at their last sale price on the
exchange where the securities are principally traded or, if there has been
no sale on that date, at the mean between the last reported bid and asked
prices. Securities traded over-the-counter are priced at the mean of the
last bid and asked price. Short-term investments having a maturity of 60
days or less are valued at amortized cost, which the Board of Directors
believes represents fair value.
B. FEDERAL INCOME TAXES: It is the policy of the Fund to comply with all
requirements of the Internal Revenue Code (the "Code") applicable to
regulated investment companies and to distribute substantially all of its
taxable income to its shareholders. The Fund has met the requirements of
the Code applicable to regulated investment companies for the six months
ended June 30, 1996. Therefore, no federal income or excise tax provision
is required.
C. DETERMINATION OF GAINS OR LOSSES ON SALES OF SECURITIES: Gains or losses
on the sale of securities are determined on the identified cost basis.
D. ORGANIZATION COSTS: Costs incurred by the Fund in connection with their
organization and initial registration and public offering of shares have
been deferred by the Fund. Organization costs are being amortized on a
straight-line basis for a five-year period beginning at the commencement of
operations of the Fund. The principals of Lloyd, Leith & Sawin, Inc., (the
"Investment Adviser") has agreed that in the event it redeems any of its
shares during such period, it will reimburse the Fund for any unamortized
organization costs in the same proportion as the number of shares to be
redeemed bears to the number of shares that were initially purchased by the
Investment Adviser and remain outstanding at the time of redemption.
E. DISTRIBUTIONS TO SHAREHOLDERS: It is the policy of the Fund to
distribute net investment income in December and capital gains, if any,
annually. Distributions to shareholders are recorded on the ex-dividend
date. Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles.
F. OTHER: Securities transactions are accounted for on the date the
securities are purchased or sold. Interest income is recorded on the
accrual basis and dividend income on the ex-dividend date.
G. CAPITAL SHARE TRANSACTIONS: The Fund is authorized to issue one hundred
million shares of capital stock with a par value of $0.001 per share.
Transactions in shares of capital stock from the commencement of investment
operations were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD FROM
JUNE 30, 1996 APRIL 17, 1995 TO
(UNAUDITED) DECEMBER 31, 1995
------------------- -------------------
SHARES AMOUNT SHARES AMOUNT
------- ---------- ------- ----------
<S> <C> <C> <C> <C>
Shares sold..................... 118,942 $1,407,822 454,998 $4,696,237
Shares issued through
reinvestment of dividends...... (13) (146) 2,249 25,148
Shares redeemed*................ (48,352) (554,935) (14,027) (149,073)
------- ---------- ------- ----------
Net Increase.................... 70,577 $ 852,741 443,220 $4,572,312
======= ========== ======= ==========
</TABLE>
* Redemptions are subject to a 1.00% fee if redeemed within two years of
purchase. Thus, the redemption price may differ from the net asset value per
share.
-9-
<PAGE>
NOTE 2 -- INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES:
The Fund retains Lloyd, Leith & Sawin, Inc., as its Investment Adviser. The
Investment Adviser provides the Fund with investment advice, administrative
services and facilities. As compensation for these services, the Fund pays the
Investment Adviser a monthly fee based on the Fund's average daily net assets.
For the period April 17, 1995 (commencement of operations) through August 31,
1995, the Investment Adviser had voluntarily agreed to reduce its fees and
reimburse the Fund to the extent total annualized expenses exceed 1.75% of the
Fund's average daily net assets. Effective September 1, 1995 the Investment
Adviser has agreed to reduce its fees and reimburse the Fund to the extent
total annualized expenses exceed 2.00% of the Fund's average daily net assets.
Certain officers of the Fund are also officers and directors of the Investment
Adviser. All officers serve without direct compensation from the Fund during
the period. There were no directors' fees paid to affiliated directors of the
Fund. Robert G. Hagstrom, Jr., Chairman, is considered an affiliated director
of the Fund, but receives no compensation. Investment advisory fees, for the
six months ended June 30, 1996, are as follows:
<TABLE>
<CAPTION>
EXPENSES
ADVISORY ADVISORY REIMBURSED
FEE FEE FROM ADVISER
-------- -------- ------------
<S> <C> <C>
0.70% $19,899 $88,774
</TABLE>
Fund/Plan Services, Inc. (the "Administrator") provides the Fund with
administrative, pricing and shareholder services. As compensation for these
services, the Fund pays the Administrator a monthly fee based on a minimal
contractual basis. The Administrator voluntarily agreed to waive a portion of
its fees for the various services, for the six months ended June 30, 1996, as
follows:
<TABLE>
<CAPTION>
EXPENSES WAIVED
FEE BY ADMINISTRATOR
------- ----------------
<S> <C> <C>
Administration.................................... $27,180 $6,000
Transfer agent.................................... 19,587 2,000
Accounting........................................ 10,000 2,000
</TABLE>
NOTE 3 -- INVESTMENT TRANSACTIONS:
Investment transactions for the Fund for the six months ended June 30, 1996,
excluding temporary short-term investments, are as follows:
<TABLE>
<CAPTION>
PROCEEDS FROM
PURCHASES SALES
--------- -------------
<S> <C>
$1,719,824 $240,885
</TABLE>
NOTE 4 -- UNREALIZED APPRECIATION AND DEPRECIATION:
At June 30, 1996, the net unrealized appreciation of securities for Federal
income tax purposes consisted of:
<TABLE>
<CAPTION>
AMOUNT
--------
<S> <C>
Gross unrealized appreciation.................................... $753,919
Gross unrealized depreciation.................................... (3,595)
--------
Net unrealized appreciation...................................... $750,324
========
</TABLE>
-10-
<PAGE>
FOCUS TRUST, INC.
FINANCIAL HIGHLIGHTS
The table below sets forth financial data for one share of capital stock
outstanding throughout the periods presented.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED PERIOD
06/30/96 ENDED
(UNAUDITED) 12/31/95*
----------- ---------
<S> <C> <C>
Net Asset Value, beginning of period..................... $ 11.17 $10.00
------- ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss)......................... (0.02) 0.06
Net realized and unrealized gain on investments...... 0.77 1.17
------- ------
Total from investment operations................... 0.75 1.23
Dividends from net investment income................. 0.00 (0.06)
------- ------
Net Asset Value, end of period........................... $ 11.92 $11.17
======= ======
TOTAL RETURN(1).......................................... 13.50% 12.29%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's)................... $ 6,245 $5,061
Ratio of expenses to average net assets before
reimbursement of expenses by Adviser(1)............... 5.47% 7.89%
Ratio of expenses to average net assets after
reimbursement of expenses by Adviser(1)............... 2.00% 1.92%
Ratio of net investment income to average net assets
before reimbursement of expenses by Adviser(1)........ (3.82%) (4.78%)
Ratio of net investment income to average net assets
after reimbursement of expenses by Adviser(1)......... (0.35%) 1.19%
Portfolio turnover(2).................................. 4.71% 0.00%
Average commission rate paid........................... $0.0958 N/A
</TABLE>
(1) Annualized
(2) Not Annualized
* The Fund commenced investment operations on April 17, 1995.
See Notes to Financial Statements.
-11-
<PAGE>
FOCUS TRUST, INC.
(800) 665-2550
DIRECTORS
Robert J. Coleman, Jr. Robert G. Hagstrom, Jr.
Joan Lamm-Tennant Allan S. Mostoff
OFFICERS
Robert G. Hagstrom, Jr, President
Virginia B. Leith, Vice President & Treasurer
John S. Lloyd, Vice President & Secretary
INVESTMENT ADVISER
Lloyd, Leith & Sawin, Inc.
230 Sugartown Road, Suite 150
Wayne, PA 19087
UNDERWRITER
Fund/Plan Broker Services, Inc.
2 W. Elm Street
Conshohocken, PA 19428
SHAREHOLDER SERVICES
Fund/Plan Services, Inc.
2 W. Elm Street
Conshohocken, PA 19428
CUSTODIAN
The Bank of New York
48 Wall Street
New York, NY 10286
LEGAL COUNSEL
Dechert Price & Rhoads
1500 K Street, N.W.
Washington, DC 20005
AUDITORS
Coopers & Lybrand L.L.P.
2400 Eleven Penn Center
Philadelphia, PA 19103
This report is submitted for general information of the shareholders of the
Fund. It is not authorized for distribution to prospective investors in the Fund
unless preceded or accompanied by an effective Prospectus which includes details
regarding the Fund's objectives, policies, expenses and other information.
[LOGO OF FOCUS TRUST, INC. APPEARS HERE]
SEMI-ANNUAL
REPORT
JUNE 30, 1996
