<PAGE> 1
JHAVERI VALUE FUND
(216) 356-1565
Please note - the 800 number has been changed to the above number
Dear Fellow Shareholders:
The first nine months of operation for the Jhaveri Value Fund (JVF) during 1996
were successful. During this period, JVF increased 10.92% whereas the S&P 500
increased 13.17%. The performance for JVF during this period fluctuated above
and below the S&P 500. (See 1996 performance - JVF vs S&P 500) Please note that
the S&P 500 performance does not include transaction costs and management fees
whereas JVF does. This mixed performance was a result of imbalance in cashflow.
(purchases, sales, subscriptions, and redemptions) This imbalance will be less
of a problem as the portfolio matures and the Fund increases in size.
The cash as a percent of total net assets during the first nine months
fluctuated between 1% and 9%. Ideally, we would like cash level to be higher
when the market is approaching the cyclical bottom (more stock in the Optimum
Buy Range - OBR) and cash level to be at a lower level when the market is
approaching the cyclical top. (more stocks in the Optimum Sell Range - OSR)
Portfolio turnover rate for the last six months was 19%. We expect the turnover
rate to increase to between 80-120% per year. Historically, as more stocks in
the portfolio move from OBR to OSR, portfolio turnover rate increases and
profitability of the Fund also increases.
The first nine months of 1996, the market has been extremely volatile with some
prognosticators forecasting the Dow breaking out to 6500 and others predicting a
collapse to 4500. During this period we have had computer trading curbs (market
up or down 50 points) put in place more than 80 times. Volatility has continued
to increase as the November election come closer. If Clinton wins and the
Democrats take control of both Congressional Houses, financial stocks and health
care stocks will come under intense pressure. If Clinton wins and the
Republicans retain control of at least one of the Houses, it will be a non-event
for the market. If Dole gets elected, it will be extremely bullish for the
market.
I believe the market will continue to be dominated by the interest rate outlook,
inflation rate, and quarterly earnings reports. Based on historical market
statistics, the market appears to be overbought and overvalued. Based on current
and future economic statistics, the market could make further gains. For these
reasons, we will continue to use our disciplined investment strategy of sound
stock selection valuation and risk management strategy; buying stocks in the OBR
and selling stocks in the OSR.
We wish to express our sincere thanks for your continued support during these
early years of The Jhaveri Value Fund.
Sincerely,
/s/ Ramesh C. Jhaveri /s/ Saumil R. Jhaveri
- ---------------------- ---------------------
Ramesh C. Jhaveri Saumil R. Jhaveri
Chief Executive Officer President
<PAGE> 2
1996 PERFORMANCE - JVF VS S&P 500
<TABLE>
<CAPTION>
12/31/95 1/31/96 2/29/96 3/31/96 4/30/96 5/31/96 6/30/96 7/31/96 8/30/96 9/30/96
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
JVF
S&P
</TABLE>
- - Past performance is not predictive of future performance. The value of your
shares will fluctuate and will be worth more or less than their original cost at
the time of redemption.
JVF TOP HOLDINGS - 9/30/96
--------------------------
<TABLE>
<CAPTION>
<S> <C>
INDIVIDUAL COMPANIES
- --------------------
1. K Mart Corp 4.01%
2. Empresas ICA ADR 3.92%
3. Woolworth Corp 3.14%
4. Chiquita Brands International 2.62%
5. Telefonos de Mexicao ADR 2.41%
6. Westinghouse Electric 2.37%
7. American Power Conversion 2.04%
8. Edison International 1.63%
9. General Motors 1.57%
10 Micron Technology 1.47%
TOTAL 25.18%
INDUSTRIES
- ----------
1. Electronic Semiconductor 11.07%
2. Utilities-Electric 5.75%
3. Computers-Peripheral Equipment 5.34%
4. Building/Construction 4.66%
5. Retail - Department Stores 4.57%
6. Retail - Discount/Variety 4.10%
7. Telecommunication Equipment 4.00%
8. Computer Software 3.11%
9. Food 3.03%
10. Utilities-Telecom 2.44%
TOTAL 48.07%
</TABLE>
<PAGE> 3
JHAVERI VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1996
<TABLE>
<CAPTION>
<S> <C>
ASSETS
Investments in securities, at value (cost $10,385,994)............................ $10,398,811
Receivable for securities sold ................................................... 66,634
Receivable for dividends and interest ............................................ 8,321
-----------
Total assets ................................................................... 10,473,766
-----------
LIABILITIES
Payable for investment securities purchased....................................... 21,590
Payable for Fund shares redeemed ................................................. 3,630
Accrued operating expenses........................................................ 54,473
-----------
Total Liabilities .............................................................. 79,693
-----------
NET ASSETS
Net assets (equivalent to $12.90 per share based on 806,011
shares of capital stock outstanding) ........................................... $10,394,073
===========
Composition of Net Assets:
Paid in capital .................................................................. $ 9,834,704
Accumulated net investment income/(loss)......................................... (88,598)
Accumulated net realized gain on investments..................................... 635,150
Net unrealized appreciation/(depreciation) on investments ........................ 12,817
-----------
NET ASSETS, SEPTEMBER 30, 1996 ................................................... $10,394,073
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 4
JHAVERI VALUE FUND
STATEMENT OF OPERATIONS
for the six months ended
September 30, 1996
<TABLE>
<CAPTION>
<S> <C>
INVESTMENT INCOME
Interest $ 7,883
Dividends 57,518
---------
Total Investment Income 65,401
---------
EXPENSES
Operating Expenses (Note 3) 123,232
---------
Net investment income/(loss) (57,831)
---------
Net realized gain on securities transactions 408,752
Net change in unrealized appreciation/(depreciation) on
investments 59,937
---------
Net gain on investments 468,689
---------
Net increase in net assets resulting
from operations $ 410,858
=========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 5
JHAVERI VALUE FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the period May 1,
For the six months 1995 (Commencement
ended of Operations) through
September 30, 1996 March 31, 1996
------------------ ----------------------
<S> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income/(loss) ..................................................... $ (57,831) $ (1,942)
Net realized gain on securities transactions ..................................... 408,752 493,020
Net change in unrealized appreciation/(depreciation)
of investments................................................................. 59,937 (47,120)
------------ -----------
Net increase in net assets resulting from operations ............................. 410,858 443,958
------------ -----------
DISTRIBUTION TO SHAREHOLDERS:
From net investment income ...................................................... 0 (28,824)
From net realized gain on investments ........................................... 0 (266,622)
FUND SHARE TRANSACTIONS:
Net proceeds from shares sold .................................................... 1,266,738 9,304,052
Dividends reinvested ............................................................. 0 294,450
Payment for shares redeemed ...................................................... (407,874) (722,663)
------------ -----------
Net increase in net assets from fund share transactions .......................... 858,864 8,875,839
------------ -----------
NET ASSETS:
Beginning of period .............................................................. 9,124,351 100,000
------------ -----------
End of period .................................................................... $ 10,394,073 $ 9,124,351
============ ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 6
JHAVERI VALUE FUND
FINANCIAL HIGHLIGHTS
For a share outstanding throughout the period
<TABLE>
<CAPTION>
For the period May 1,
For the six months 1995 (Commencement of
ended Operations) through
September 30, 1996 March 31, 1996
------------------ --------------------
<S> <C> <C>
Net asset value - beginning of period.................................. $ 12.38 $ 12.00
Income from investment operations
Net investment income ................................................. (.08) .00
Net gain on investments both realized and unrealized .................. .60 .79
------------ ------------
Total from investment operations ...................................... .52 12.79
Less distributions
Dividends from net investment income .................................. -- .04
Dividends from capital gains .......................................... -- .37
------------ ------------
Net asset value - end of period ....................................... $ 12.90 $ 12.38
============ ============
Total Return** ........................................................ 8.38% 7.45%
Ratios/supplemental data
Net assets, end of period (in 000's) .................................. 10,394 9,124
Ratio of expenses to average net assets ** ............................ 2.50% 2.50%
Ratio of net investment income to average net assets** ................ (1.17)% (.02)%
Portfolio turnover rate................................................ 19.23% 45.23%
Average commission rate paid .......................................... .0490
</TABLE>
**Annualized
<PAGE> 7
JHAVERI VALUE FUND
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
NOTE 1. ORGANIZATION
The Jhaveri Trust (the "Trust") is registered under the Investment Company
Act of 1940, as amended, as a diversified, open-end management investment
company. The Trust was established under the laws of Ohio by an Agreement and
Declaration of Trust dated January 18, 1995 (the "Trust Agreement"). The Trust
Agreement permits the Trustees to issue an unlimited number of shares of
beneficial interest of separate series without par value. Shares of one series
have been authorized, which shares constitute the interests in the Jhaveri Value
Fund (the "Fund").
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Fund in the preparation of its financial statements.
Security Valuation-Securities which are traded on any exchange or on the
NASDAQ over-the-counter market are valued at the last quoted sale price. Lacking
a last sale price, a security is valued at its last bid price except when, in
the Adviser's opinion, the last bid price does not accurately reflect the
current value of the security. All other securities for which over-the-counter
market quotations are readily available are valued at their last bid price. When
market quotations are not readily available, when the Adviser determines the
last bid price does not accurately reflect the current value or when restricted
securities are being valued, such securities are valued as determined in good
faith by the Adviser, in conformity with guidelines adopted by and subject to
review of the Board of Trustees of the Trust.
Fixed income securities generally are valued by using market quotations,
but may be valued on the basis of prices furnished by a pricing service when the
Adviser believes such prices accurately reflect the fair market value of such
securities. A pricing service utilizes electronic data processing techniques
based on yield spreads relating to securities with similar characteristics to
determine prices for normal institutional-size trading units of debt securities
without regard to sale or bid prices. When prices are not readily available from
a pricing service, or when restricted or illiquid securities are being valued,
securities are valued at fair value as determined in good faith by the Adviser,
subject to review of the Board of Trustees. Short term investments in fixed
income securities with maturities of less than 60 days when acquired, or which
subsequently are within 60 days of maturity, are valued by using the amortized
cost method of valuation, which the Board has determined will represent fair
value.
Federal Income Taxes-The Fund intends to qualify each year as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended. By so
qualifying, the Fund will not be subject to federal income taxes to the extent
that it distributes substantially all of its net invesment income and any
realized capital gains.
Dividends and Distributions-The Fund intends to distribute substantially
all of its net investment income as dividends to its shareholders on an annual
basis. The Fund intends to distribute its net long term capital gains and its
net short term capital gains at least once a year.
Other- The Fund follows industry practice and records security transactions
on the trade date. The specific identification method is used for determining
gains or losses for financial statements and income tax purposes. Dividend
income is recorded on the ex-dividend date and interest income is recorded on an
accrued basis.
NOTE 3. INVESTMENT ADVISORY AGREEMENT
The Trust has an investment advisory agreement with Investments Technology,
Inc. Ramesh C. Jhaveri and Saumil R. Jhaveri may be deemed to be controlling
persons and affiliates of the Adviser due to their
<PAGE> 8
ownership of its shares and their positions as officers and directors of the
Adviser. They, because of such affiliation, may receive benefits from the
management fees paid to the Adviser.
Under the terms of the management agreement, (the "Agreement"), the Adviser
manages the Fund's investments subject to approval of the Board of Trustees and
pays all of the expenses of the Fund except brokerage, taxes, interest, expenses
incurred in connection with the organization and initial registration of its
shares and extraordinary expenses. As compensation for its management services
and agreement to pay the Fund's expenses, the Fund is obligated to pay the
Adviser a fee computed and accrued daily and paid monthly at an annual rate of
2.50% of the average daily net assets of the Fund. The rate of the advisory fees
paid by most investment companies to their investment advisers is lower than the
rate of the advisory fees paid by the Fund. In this regard, it should be noted
that most investment companies pay their own operating expenses directly, while
the Fund's expenses, except those specified above, are paid by the Adviser. For
the six months ended September 30, 1996, the Adviser has received a fee of
$123,232 from the Fund.
NOTE 4. DISTRIBUTIONS TO SHAREHOLDERS
On December 26, 1995, a distribution of $0.41 aggregating $295,446 was
declared from net investment income and net realized gains from investment
transactions (including $0.37 applicable to short-term gains that are taxable to
shareholders as ordinary income dividends) during 1995. The dividend was paid
December 28, 1995, to shareholders of record on December 26, 1995.
NOTE 5. CAPITAL SHARE TRANSACTIONS
As of September 30, 1996 there was an unlimited number of no par value
shares of capital stock authorized for the Fund.
Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
For the six months ended
September 30, 1996
Shares Amount
------ ------
<S> <C> <C>
Shares sold 101,153 $ 1,266,738
Shares issued in reinvestment
of dividends 0 0
Shares redeemed (31,896) (407,874)
------- --------
Net increase 69,257 $ 858,864
======= ===========
Total paid in capital $ 9,834,704
===========
</TABLE>
NOTE 6. INVESTMENTS
For the six months ended September 30, 1996, purchases and sales of
investment securities, other than short-term investments, aggregated $2,294,346
and $1,831,516 respectively. The gross unrealized appreciation for all
securities totaled $1,075,273 and the gross unrealized depreciation for all
securities totaled $1,062,456 or a net unrealized appreciation of $12,817. The
aggregate cost of securities for federal income tax purposes at September 30,
1996 was $10,390,750.
<PAGE> 9
SCHEDULE OF INVESTMENTS
JHAVERI VALUE FUND
SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
COMMON STOCKS - 94.07%
-------------
Shares Company Market Value
- ------ ------- ------------
<S> <C> <C>
AUTO/TRUCK-REPLACE/ORIGPARTS 0.70%
2,800 Exide Corp 72,450
AUTOMOBILE-MANUFACTURING 1.92%
5,600 Consorcio Grupo Dina Saadr 14,000
720 Ford Motor Company 22,500
3,400 General Motors Corp 163,200
------
199,700
BANKS-MONEY CENTER 0.91%
1,200 Bankers Trust NY Corp 94,350
BANKS-REGIONAL 0.22%
700 Pnc Bank Corp 23,363
BEVERAGES-ALCOHOLIC/SOFT DRINK 0.82%
10,200 Buenas Aires Embot 58,650
3,500 Cott Corp (New) * 26,469
------
85,119
BUILDING-HEAVY CONSTRUCTION 4.67%
26,700 Empresas Ica Sociedad Sa ADR * 407,175
14,300 Grupo Tribasa Sa Adr * 78,650
------
485,825
BUILDING-RESIDENT/COMMERCIAL 0.28%
2,200 Kaufman & Broad Home Corp 28,600
------
28,600
BUSINESS PRODUCTS-RETAIL/WHLES 0.19%
1,400 BMC West Corp * 19,425
CHEMICALS-DIVERSIFIED 0.11%
1,000 Rexene Corp 11,875
CHEMICALS-SPECIALTY 0.26%
3,400 Methanex Corp * 26,775
COMMERCIAL SERVICES-MISC 1.70%
1,000 American Oncology Res 11,250
4,400 First Alert Inc * 25,850
1,700 Franklin Quest Co * 31,875
3,700 Sensormatic Electronics Corp 66,138
2,200 Value Health Inc * 41,250
-------
176,363
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE> 10
<TABLE>
<S> <C> <C>
COMPUTER-GRAPHICS 2.03%
5,000 Diamond Multimedia Systems * 71,250
1,900 Q M S Inc * 11,638
10,300 Radius Inc * 16,738
7,200 Scitex Ltd Ord 89,100
1,000 Silicon Graphics Inc * 22,125
--------
210,850
COMPUTER-INTEGRATED SYSTEMS 0.11%
700 Cognex Corp * 11,375
COMPUTER-LOCAL NETWORK 0.17%
500 Bay Networks, Inc 13,625
1,600 Tricord Sys Inc * 4,300
--------
17,925
COMPUTER-MAINFRAMES 2.09%
3,700 Amdahl Corporation * 34,919
400 Intlbusiness Machines Corp 49,800
3,900 Sequent Computer Systems 50,700
13,400 Unisys Corp * 82,075
--------
217,494
COMPUTER-MINI/MICRO 1.81%
2,400 Apple Computer * 53,250
9,300 AST Research Inc * 46,500
1,300 Digital Equipment Corp 46,475
700 Micron Electronics Inc * 14,438
2,600 Tandem Computers * 27,950
--------
188,613
COMPUTER-PERIPHERAL EQUIPMENT 5.08%
9,900 Alliance Semiconductor Corp * 73,631
14,500 American Power Conversion * 212,063
1,900 Applied Magnetics * 33,725
3,500 Quantum Corp * 61,469
2,500 Read-Rite Corp * 39,375
300 Seagate Technology * 16,763
2,418 Storage Tech Corp * 91,582
--------
528,607
COMPUTER-SERVICES 0.67%
8,400 Intelligent Electronics Inc * 69,825
COMPUTER-SOFTWARE 3.01%
4,900 Acclaim Entertainment * 37,975
300 Adobe Systems Inc 11,175
7,900 Banyan Systems Inc * 42,463
3,200 Borland Intl Inc * 22,000
400 Broderbund Software * 11,600
6,700 FTP Software Inc * 49,413
600 Macromedia Inc * 12,450
1,800 Microcom Inc * 15,300
2,500 Netmanage Inc * 21,953
1,500 Novell Inc * 16,500
2,000 Quarterdeck Corp * 13,750
1,600 Symantec Corp * 17,400
1,800 Wall Data Inc * 40,950
--------
312,928
The accompanying notes are an integral part of these financial statements
</TABLE>
<PAGE> 11
<TABLE>
<S> <C> <C>
CONSUMER PRODUCTS-GLASS/METAL 0.20%
3,340 Vitro S A 20,875
COSMETICS & PERSONAL CARE 0.08%
500 General Nutrition Cos * 8,781
DIVERSIFIED OPERATION 1.36%
6,570 Hanson Plc Adr 81,304
1,400 Jostens Incorporated 29,225
700 Sybase Inc * 10,413
1,700 Triarc Cos Inc(Del) * 20,400
--------
141,341
ELECTRONIC COMPONENTS 0.14%
700 Kemet Corp * 14,088
ELECTRONIC-EQUIPMENT 0.35%
2,200 Teradyne Inc * 36,575
ELECTRONIC-SEMICONDUCTORS 11.23%
6,200 Advanced Micro Devices * 91,450
700 Applied Materials Inc * 19,338
3,000 Cirrus Logic Inc * 62,625
2,300 Credence Systems Inc * 36,225
2,400 Cypress Semiconductor * 30,000
1,000 Cyrix Corp * 16,375
3,900 Integrated Device Technology * 38,756
1,200 Integrated Process Equiptment * 19,050
6,700 Integrated Silicon Solution * 76,631
3,000 International Rectifier * 41,625
1,000 K L A Instruments * 22,500
4,500 Kulicke & Soffa Ind * 51,188
3,100 Lam Research Corp * 82,538
2,200 Lsi Logic Corp * 51,150
5,000 Micron Technology Inc 152,500
300 Motorola Inc 15,488
2,500 National Semiconductor * 50,313
1,300 Network Peripherals Inc * 19,663
300 Novllus Systems Inc * 12,788
3,600 Oak Technology Inc * 37,350
10,300 Opti Inc * 60,513
1,000 Sierra Semiconductor * 12,000
1,100 Silicon Valley Group Inc * 19,525
1,200 Tencor Instruments * 21,675
700 Tseng Labs Inc * 5,513
4,800 Vlsi Technology Inc * 78,000
2,100 Watkins Johnson 42,525
---------
1,167,300
FINANCE-INVESTMENT BROKERS 0.85%
1,400 Paine Webber Group Inc 29,400
1,300 Salomon Inc 59,313
---------
88,713
FINANCE-SAVINGS & LOAN 0.33%
1,300 Great Western Financial Corp 34,450
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE> 12
<TABLE>
<S> <C> <C>
FINANCIAL SERVICES MISC 0.31%
300 American Express 13,875
1,200 Medaphis Corp * 18,000
--------
31,875
FOOD-MISCPREPARATION 3.03%
2,257 Archer Daniels Midland 43,447
22,200 Chiquita Brands Intl Inc 271,950
--------
315,397
HOTELS & MOTELS 0.21%
500 ITT Corp * 21,813
HOUSEWARES 0.75%
5,800 Shaw Industries Inc 77,575
INSURANCE-LIFE/PROPERTY/CAS 0.46%
2,300 John Alden Finl Corp 47,438
LASERS-SYSTEMS/COMPONENTS 1.44%
6,200 Baby Superstore Inc * 128,650
3,500 Summit Technology, Inc * 21,438
--------
150,088
LEISURE PRODUCTS 1.65%
2,200 Avid Technology Inc * 29,975
700 Brunswick Corp 16,800
21,000 C M L Group Inc 102,375
10,900 Kennetech Corp * 2,507
1,900 Score Board Inc New * 3,919
700 Topps Company Inc * 2,975
2,300 Tyco Toys Inc * 13,225
--------
171,776
LEISURE SERVICES 0.24%
4,700 Discovery Zone Inc * 3,231
900 Intl Game Technology 18,450
2,600 President Casinos Inc * 2,925
--------
24,606
MACHINERY-ELECTRICAL EQUIPMENT 2.37%
13,250 Westinghouse Electric Corp 246,781
MEDICAL INSTRUMENTS/PRODUCTS 0.53%
1,300 United States Surgical Corp 55,250
MEDICAL-DRUGS 1.08%
8,500 Carter Wallace Inc 105,188
700 Perrigo Company * 6,913
--------
112,100
MEDICAL-GENERIC DRUGS 0.63%
700 Copley Pharmaceutical * 9,888
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE> 13
<TABLE>
<S> <C> <C>
500 Ivax Corp 7,813
2,800 Mylan Labs Inc 47,950
--------
65,650
MEDICAL-HEALTH MAINTORG 1.31%
2,000 Healthsource Inc * 29,500
1,700 Humana Inc * 34,425
2,414 Olsten Corporation 60,048
300 United Healthcare 12,488
--------
136,461
MEDICAL-HOSPITALS/NURSING HOME 0.73%
800 Beverly Enterprises Inc * 8,700
1,500 Community Psychiatric Centers Inc * 14,063
2,500 Horizon Healthcare * 30,000
1,800 Sun Healthcare Group * 23,400
--------
76,163
MEDICAL-OUTPATIENT/HOME CARE 0.99%
800 Coastal Physician Group * 4,900
13,200 Coram Healthcare Corp * 51,150
5,000 Novacare Inc * 46,875
--------
102,925
MEDICAL/DENTAL-SUPPLIES 0.21%
600 Bausch & Lomb Inc 22,050
METAL ORES-GOLD/NON-FERROUS 0.08%
400 Cyprus Amax Minerals Co 8,600
MISC 0.00%
74 Emcor Group Inc * 19
200 Texas General Res * 0
--------
19
OFFICE AND ART MATERIAL 0.14%
500 American Greetings 14,313
OIL & GAS-FIELD SERVICES 0.34%
800 McDermott Intl Inc 17,400
1,300 USX-Delhi Group 18,363
--------
35,763
OIL & GAS-INTERNATIONAL INTEGR 0.29%
1,400 USX-Marathon Group 30,275
OIL & GAS-US EXPLORE & PROD 0.09%
500 Oryx Energy Co * 8,875
OIL & GAS-US INTEGRATED 0.09%
400 Occidental Petroleum Corp 9,350
OIL REFINING & MARKETING 0.28%
1,000 Lubrizol Corp 28,750
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE> 14
<TABLE>
<CAPTION>
<S> <C> <C>
PAPER & PAPER PRODUCTS 0.06%
500 Abitibi Price Inc 6,438
POLLUTION CONTROL-EQUIPMENT/SV 1.09%
6,900 Safety Kleen Corp 113,850
RETAIL-APPAREL/SHOE 1.24%
3,100 Ann Taylor Stores * 52,313
3,300 Burlington Coat Factory WHSE Corp * 36,300
2,700 Charming Shoppes Inc * 16,200
1,600 Designs Inc * 10,600
700 Limited Inc 13,388
--------
128,800
RETAIL-CONSUMER ELECTRIC 0.88%
4,000 Best Buy Co Inc (MN) * 91,000
RETAIL-DEPARTMENT STORES 4.49%
24,700 Caldor Corp * 49,400
40,700 K Mart Corporation * 417,175
--------
466,575
RETAIL-DISCOUNT & VARIETY 4.36%
3,000 Bradlees Inc * 3,375
3,800 Toys R Us Inc * 110,675
500 Wal-Mart Stores Inc 13,188
15,800 Woolworth Corp * 325,875
--------
453,113
RETAIL-DIVERSIFIED/MISC 1.06%
6,800 Michaels Stores Inc * 99,875
5,200 Musicland Stores Corp * 7,800
300 Sports & Rec Inc * 2,513
--------
110,188
RETAIL-FOOD & RESTAURANT 1.27%
3,700 Checkers Drive-In Restaurants Inc * 3,584
6,400 Fleming Companies Inc 111,200
1,900 Shoney's Inc * 17,338
--------
132,122
RETAIL-HOME FURNISHINGS 0.52%
9,600 Bombay Co Inc * 54,000
RETAIL-MAIL ORDER & DIRECT 0.29%
2,300 Fingerhut Cos Inc 30,475
RETAIL-SUPERMARKETS 0.09%
1,000 Food Lion Inc Cl A 9,000
RETAIL/WHOLESALE-JEWELRY 0.35%
11,300 Jan Bell Marketing Inc * 24,719
2,500 Service Merchandise Co Inc * 11,563
--------
36,281
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE> 15
<TABLE>
<CAPTION>
<S> <C> <C>
RUBBER-TIRES 0.10%
500 Cooper Tire & Rubber 10,813
SHOES & RELATED APPAREL 0.84%
1,300 Brown Group Inc 30,225
6,400 Stride Rite Corp 57,600
--------
87,825
STEEL-PRODUCERS 2.36%
9,300 Bethlehem Steel Corp * 93,000
4,200 Birmingham Steel Corp 66,675
1,600 LTV Corp New * 18,600
1,200 USX-US Steel 34,200
3,200 WHX Corp * 32,400
--------
244,875
TELECOMMUNICATION CELLULAR 0.73%
9,500 Cellstar Corp * 76,000
TELECOMMUNICATION EQUIPMENT 3.92%
5,900 Antec Corp * 86,288
3,000 California Microwave Inc * 39,750
13,900 Compression Labs Inc * 90,350
3,000 General Instruments Corp * 74,250
300 Nokia Corp ADR 13,275
6,500 Scientific Atlantic Inc 103,188
--------
407,100
TEXTILE/APPAREL-MILL PRODUCTS 0.15%
200 Longview Fibre Co 3,150
700 Phillips Van Heusen Corp 7,788
700 Starter Corp * 4,375
--------
15,313
TOBACCO 1.01%
4,031 Rjr Nabisco Holdings Corp 104,806
TRANSPORTATION-EQUIP/LEASING 0.45%
3,000 Wabash National Corp 47,250
TRANSPORTATION-TRUCK 0.38%
4,500 American Freightways * 39,938
TRUCKS & PARTS-LONG HAUL 0.50%
6,100 Navistar Intl Corp * 51,850
UTILITY-ELECTRIC POWER 5.68%
13,500 Centerior Energy Corp 123,188
500 Consolidated Edison Co Ny Inc 13,875
9,500 Edison Intl 169,813
1,600 Entergy Corp New 43,200
7,300 Niagara Mohawk Power Corp * 58,400
7,700 Northeast Utility 95,288
3,500 Pacific Gas & Electric Co 76,125
400 Public Services Enterprises 10,700
--------
590,588
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE> 16
<TABLE>
<CAPTION>
<S> <C> <C>
UTILITY-GAS DISTRIBUTION 1.17%
8,150 Noram Energy Corp 121,231
UTILITY-TELEPHONE 2.54%
400 Pacific Telesis Group 13,450
7,800 Telefonos De Mexico SA ADR 250,575
--------
264,025
TOTAL COMMON STOCKS 9,780,925
--------
SHORT TERM INVESTMENTS - 5.97%
----------------------
621,136 Star Treasury Fund 621,136
TOTAL INVESTMENTS 100.05% 10,402,061
Other assets less liabilities -0.05% -4,738
------ ----------
TOTAL NET ASSETS 100.00% 10,397,323
====== ==========
Total Investments (Other than Short-Term) 10,402,061
----------
Cash equivalents (Net)
Certificates of deposit due within the next
two months (at cost) 0
Commercial notes due within the next two months
(at cost) 0
Cash, receivalbles & other assets 74,955
----------
74,955
TOTAL ASSETS 10,477,016
Less Liabilities 79,693
------------
NET ASSETS (NAV $12.90 on 806,011 common shares
outstanding) $ 10,397,323
============
</TABLE>
* Non-Income Producing
The accompanying notes are an integral part of these financial statements.
