SEMI-ANNUAL REPORT
Jhaveri Value Fund
A No-Load Capital Appreciation Fund
September 30, 1999
<PAGE>
JHAVERI VALUE FUND
(440) 356-1565
www.jhaverivaluefund.com
November 18, 1999
Dear Fellow Shareholders:
The market in the 3rd quarter reacted to the uncertainty about future tightening
by the Federal Reserve as well as the uncertainty about Y2K. The S&P 500
corrected over 6.5% and year to date through the 3rd quarter was up only 4.4%.
The S&P Barra Value Index corrected over 9.5% and closed the quarter up only
2.1%. JVF closed the 3rd quarter with a Net Asset Value of $12.44. This
translates to a year to date return of 12.4%. JVF over the last year (9/30/98 -
9/30/99) is up over 29%. JVF's current NAV is $13.16 as of November 18, 1999
which equates to a year to date performance of 18.9%. This compares favorably
to the S&P 500 Index which is up only 15.9% and the S&P Barra Value Index which
is up only 11.8% year to date.
The current market continues to be a rotationally correcting market. This means
many stocks and industries are making new highs, and at the same time, many
stocks and industries are making new lows. This market environment is ideal for
our enhanced investment strategy. With the recent rise in the market, we have
raised our cash position by selling overvalued securities. Our cash position
has risen from 0% at the end of October to a current position of 5%.
Market Outlook:
The economy continues to be on its non-inflationary growth path. Worker
productivity is growing above 4% and the Consumer Price Index and the Producer
Price Index are under 2%. The GDP Growth is also above 4%. All these
indicators bode well for the economy. However, the cost of employment index is
rising, prices paid component of the purchasing managers index is also rising,
along with rising employment. These all indicate future inflation, so the
Federal Reserve raised the Federal Funds rateand the Discount rate by 0.25%.
The market, however, reacted positively because it removed the uncertainty about
the rates. Analysts believe this will be the last rate increase until at least
the February 2000 Open Market Committee meeting because of all the uncertainty
surrounding the "Year 2000".
New cashflow into the market during July - September slowed down to $10 billion/
month. The cashflow in October and November is estimated to be above $20
billion/month. With the slowdown in the IPO calendar and with the rising demand
for stock, we expect the current rally to continue and the Dow Jones Industrial
Average to make new highs. This rally, however, may be a late stage rally and
Y2K and tax-loss selling in December may temper this rally. Our strategy is to
remain close to fully invested and to continue to sell fully valued and
overvalued stocks in the portfolio and buy undervalued stocks.
Sincerely,
Ramesh C. Jhaveri Saumil R. Jhaveri
Chief Executive Officer President
<PAGE>
Schedule of Investments
Jhaveri Value Fund
September 30, 1999 (unaudited)
Units Description Value
COMMON STOCK - 98.58%
Aerospace/Aircraft/Defense - 1.18%
1,800 B.F. Goodrich Co. 52,200
2,000 Boeing Co. 85,250
500 Lockheed Martin Corp. 16,344
---------
153,794
Auto Parts-Retail/Wholesale - 1.5%
2,800 Autozone Inc.* 78,575
3,000 Delphi Automotive 48,188
4,700 Pep Boys-Manny, Moe & Jack 69,913
---------
196,676
Auto/Truck Replace/Orig Parts - .51%
1,800 Exide Corp. 17,213
1,800 Federal Mogul Corp. 49,613
---------
66,826
Automobile-Manufacturing - 1.41%
1,800 Daimler Chrysler Corp.* 124,987
900 Ford Motor Co. 45,169
500 Volvo Aktiebolaget 14,344
---------
184,500
Banks-Money Center - 1.30%
7,000 Bank Tokyo - Mitsubishi 107,188
3,200 Toronto-Dominion Bank 62,400
---------
169,588
Banks - Regional - 2.00%
1,100 Banc One Corp. 38,294
2,800 First Union Corp. 99,575
2,000 Firstar Corp. 51,250
1,800 KeyCorp 46,462
700 Suiza Foods* 26,250
---------
261,831
Beverages - Alcoholic/Soft Drink - 1.33%
1,800 Coca Cola Co. 86,513
2,900 Pepsico, Inc. 87,725
---------
174,238
Broadcasting - Radio/TV/Cable - 0.89%
7,400 Cabletron Systems, Inc.* 116,088
Building- Construction/Prod/MIS - .39%
2,000 Stanley Works 50,375
---------
<PAGE>
Schedule of Investments
Jhaveri Value Fund
September 30, 1999 (unaudited)
Units Description Value
Building-Heavy Construction - 1.18%
15,500 Empresas Ica Socie ADR 45,531
2,500 Fluor Corp. 100,625
16,600 Grupo Tribasa ADR * 8,300
---------
154,456
Chemicals-Diversified - 0.89%
924 CK Witco Corp. 13,459
1,700 Dupont E.I. Denemours & Co. 103,488
116,947
Commercial Services - 1.33%
5,500 Budget Group* 38,844
5,800 Computer Learning Ctrs * 21,388
3,200 Diebold Inc. 74,000
1,900 Sensormatic Electronics Corp. * 24,106
1,000 Snyder Communications* 15,187
---------
173,525
Computer Graphics - 3.49%
3,600 Autodesk Inc. 78,750
8,200 Cadence Design* 108,650
19,000 Scitex Corp. LTD. Ord Israel * 207,813
5,600 Silicon Graphics Inc. * 61,250
456,463
Computer Integrated Systems - 1.18%
3,400 Oracle Corp. * 154,700
---------
Computer Services - 0.77%
8,700 Computer Horizons* 101,138
---------
Computer Software - 2.69%
500 Computer Associates Int'L. Inc 30,625
900 Edwards, J.D. & Co.* 18,647
1,800 Informix Corp. * 14,288
900 Microsoft Corp.* 81,505
5,500 Parametric Technology* 74,250
3,600 Peoplesoft Inc.* 60,975
1,400 Sap Aktiengesellschaft 52,850
1,000 Sterling Comm* 18,563
---------
351,703
Computer-Local Network - 1.67%
7,600 3Com Corp. * 218,500
---------
Computer-Mini/Micro - 1.68%
7,400 Compaq Computer Corp. 169,738
1,200 Dell Computer Corp.* 50,175
---------
219,913
<PAGE>
Schedule of Investments
Jhaveri Value Fund
September 30, 1999 (unaudited)
Units Description Value
Computer-Peripheral Eqpmt - 1.98%
1,200 American Power Conversion 22,800
8,500 Iomega Corp * 28,687
11,000 Read Rite Corp. * 48,469
1,000 Security Dynamics * 26,562
1,800 Smart Mdoulat Tech.* 61,313
3,700 Storage Technology* 71,225
---------
259,056
Consumer Products-Glass/Metal - 0.24%
4,543 Samsonite Corp * 31,091
---------
Container-Metal/Glass - 0.37%
2,000 Crown Cork & Seal Co 48,500
---------
Cosmetics & Personal Care - 1.60%
4,700 Gillette Co. 159,506
4,000 Rexall Sundown* 49,250
---------
208,756
Diversified Operation - 1.49%
7,000 Ikon Office Solutions 74,812
2,000 Monsanto Co. 71,375
3,000 Sybase Inc. * 35,438
800 Tenneco Inc.* 13,600
---------
195,225
Electronic Equipment - 0.40%
400 Emerson Electric Co. 25,275
2,000 Thermo Electron Corp.* 26,875
---------
52,150
Electronic Parts-Distributor - 0.57%
12,200 Healthsouth Rehab. Corp. 73,963
Electronic Products/Misc - .57%
11,200 Input/Output * 74,200
---------
Electronic-Semiconductors - 1.01%
5,800 Advanced Micro Devices Inc. * 99,688
3,000 Cirrus Logic Inc. * 33,000
132,688
Fertilizers - 1.77%
11,800 Imc Global Inc 171,838
6,000 Phosphate Resources Partners LP 60,000
231,838
Finance - Investment Brokers - 0.43%
1,400 Edwards, A.G. Inc. 36,925
1,000 Raymond James Financial Inc. 19,938
56,863
<PAGE>
Schedule of Investments
Jhaveri Value Fund
September 30, 1999 (unaudited)
Units Description Value
Finance - Savings & Loan - 0.27%
1,200 Washington Mutual 35,100
---------
Financial Services Misc - .25%
900 Advanta Corp Cl A 13,163
5,500 Per Se Technologies 18,906
---------
32,069
Food-Misc Preparation - 5.43%
3,589 Archer Daniels-Midland Co. 43,740
900 Campbell Soup Co. 35,213
33,100 Chiquita Brands Intl. Inc. 196,531
3,600 Conagra Inc. 81,225
1,100 H.J. Heinz Co. 47,300
400 Hershey Foods Corp. 19,475
1,600 Kellogg Co. 59,900
500 Nabisco Holdings 17,281
1,600 Ralston Purina 44,500
800 Sara Lee Corp. 18,750
1400 State Street 90,475
800 Wrigley (Wm.) Jr. Co. 55,050
---------
709,440
Funeral Services & Related - 0.42%
5,000 Loewen Group* 2,813
4,900 Service Corp. Int'l 51,756
---------
54,569
Hotels & Motels - 0.47%
6,200 Hilton Hotels Corp. 61,225
---------
Household Appliances - .98%
1,800 Maytag Corp. 59,963
16,100 Singer Co. 17,106
9,000 Sunbeam Oster Co.* 51,187
---------
128,256
Housewares - 0.73%
1,300 Newell Rubbermaid Inc. 37,131
2,900 Tupperware Corp 58,725
---------
95,856
Insurance-Life/Property/Casual - 2.24%
400 Aegon NV Ord. 34,600
1,200 Allstate Corp. 29,925
7,999 Conseco Inc. 154,479
900 Progressive Corp. 73,519
---------
292,523
Leisure Products - .97%
4,400 Callaway Golf 53,625
2,400 Mattel Inc. 45,600
4,400 Oakley Inc * 27,225
---------
126,450
<PAGE>
Schedule of Investments
Jhaveri Value Fund
September 30, 1999 (unaudited)
Units Description Value
Leisure Services - 1.68%
3,100 Disney (Walt) Co. 80,212
7,500 Mirage Resorts, Inc.* 105,469
2,700 Park Place Entertainment* 33,750
---------
219,431
Machinery-Constrct/Mining/Farm - 0.17%
400 Caterpillar Inc. 21,925
---------
Medical Instruments/Products - 0.15%
800 Boston Scientific Corp.* 19,750
Medical-Drugs - 8.99%
1,600 Abbott Laboratories 58,800
3,100 American Home Products Corp. 128,650
7,000 Bergin Brunswig Corp. 72,625
3,000 Carter Wallace Inc. 53,625
2,200 Dura Pharmaceutical * 30,663
1,300 Elan Corp.* 43,631
1,300 Glaxo Holdings PLC ADR 67,600
2,300 Lilly, Eli & Co. 147,200
6,500 McKesson Corp. 188,500
1,700 Merck & Co Inc. 110,181
3,400 Pfizer Inc. 122,187
400 Pharmacia UpJohn 19,850
1,500 Schering-Plough Corp. 65,437
800 Smith Kline Beecham 46,100
300 Warner Lambert Co. 19,913
---------
1,174,962
Medical-Generic Drugs - 2.18%
6,500 Ivax Corporation * 107,250
9,700 Mylan Laboratories Inc. 178,238
---------
285,488
Medical-Health Maint Org - 1.66%
3,500 Columbia/Hca Healthcare Corp. 74,156
6,000 Humana Inc.* 41,250
184 Lifepoint Hospitals 1,595
7,062 Olsten Corp. * 73,710
2,000 Oxford Health Plans * 25,000
184 Triad Hospitals 1,863
---------
217,574
Medical-Hospitals/Nursing Home - .42%
7,500 Health Management Inc Cl A* 55,313
Medical-Outpatient/Home Care - 0.54%
12,554 Coram Healthcare * 8,631
6,100 Phycor Inc * 26,687
1,400 Walgreen Co. 35,525
---------
70,843
<PAGE>
Schedule of Investments
Jhaveri Value Fund
September 30, 1999 (unaudited)
Units Description Value
Medical/Dental-Supplies - 1.18%
4,400 Becton Dickinson & Co. 123,475
2,200 Steris Corp.* 30,250
---------
153,725
Metal Ores-Gold/Non Ferrous - 3.21%
2,700 Asa Limited 56,363
4,000 Cyprus Amax Minerals Co. 78,500
5,600 Homestake Mining 51,450
7,300 Inco Ltd.* 156,037
3,000 Newmont Mining Corp. 77,625
---------
419,975
Office Equipment & Supplies - 1.11%
1,600 Danka Business Systems 16,300
3,400 Staples Inc.* 74,162
1,300 Xerox Corp. 54,519
---------
144,981
Oil & Gas-Drilling - 0.51%
800 Ensco Intl 14,450
2,400 Santa Fe Intl 51,750
---------
66,200
Oil & Gas-Field Services - 2.66%
3,000 Baker Hughes Inc 87,000
2,000 Halliburton Co. 82,000
2,300 Schlumberger LTD. 143,319
1,400 Tidewater 35,700
---------
348,019
Oil & Gas-International Integ - 0.78%
700 Chevron Corp. 62,125
400 Mobil Corp. 40,300
---------
102,425
Oil & Gas-Us Explore & Prod - 1.02%
2,580 Devon Energy 106,909
1,600 Rowan Companies* 26,000
---------
132,909
Oil & Gas-Us Integrated - 0.82%
900 Atlantic Richfield Co. 79,763
1,200 Occidental Petroleum 27,750
---------
107,513
Oil Refining & Marketing - .81%
8,414 Pennzoil Quaker State 106,227
---------
<PAGE>
Schedule of Investments
Jhaveri Value Fund
September 30, 1999 (unaudited)
Units Description Value
Pollution Control-Eqpmt/Svcs - 2.84%
5,000 Allied Waste* 58,438
8,4000 Autonation Inc. 105,525
10,800 Waste Management 207,900
---------
371,863
Retail-Apparel/Shoe - .13%
2,500 Gymboree Corp * 17,188
---------
Retail-Department Stores - 3.68%
41,200 K Mart Corporation * 481,525
---------
Retail-Discount & Variety - 1.23%
7,600 Toys-R-Us Inc. * 114,000
5,500 Venator Group, Inc. * 47,094
---------
161,094
Retail-Diversified/Misc - 1.17%
1,000 Barnes & Noble* 26,000
5,700 Borders Group* 83,719
4,700 Petsmart Inc * 17,478
8,000 Sports Authority Inc * 25,500
---------
152,697
Retail-Drug Stores - 0.50%
4,700 Rite Aid 64,919
---------
Retail-Food & Restaurant - 2.73%
11,900 Fleming Companies Inc 116,769
1,000 McDonalds Corp. 43,000
4,000 Starbucks Corp.* 99,125
2,400 Tricon Global Rest.* 98,250
---------
357,144
Retail-Mail Order & Direct - 0.75%
5,500 Cendant Corp * 97,625
---------
Retail-Supermarkets - 0.45%
1,000 Albertsons Inc. 39,563
500 Safeway Inc.* 19,031
---------
58,594
Retail/Wholesale Computers - 0.63%
7,300 Chs Electronics * 10,494
5,800 Compusa Inc * 35,525
2,800 Ingram Micro Inc.* 36,050
---------
82,069
Retail/Wholesale-Office Supplies - 1.20%
9,000 Corp Express * 84,656
5,700 Office Depot* 58,069
2,500 Office Max * 14,531
---------
157,256
<PAGE>
Schedule of Investments
Jhaveri Value Fund
September 30, 1999 (unaudited)
Units Description Value
Rubber-Tires - 0.20%
1,500 Cooper Tire & Rubber Co. 26,438
---------
Shoes & Related Apparel - 1.72%
15,900 Fila Holdings* 198,750
2,500 Reebok Int'L LTD. * 26,719
---------
225,469
Soap & Cleaning Preparations - .59%
2,000 Clorox Co. 76,500
---------
Steel-Producers - 2.03%
13,800 Bethlehem Steel Corp.* 101,775
6,100 Birmingham Steel 46,513
3,000 USX-U.S. Steel Group New 77,250
4,000 WHX Corp.* 40,000
---------
265,538
Telecommunication Equipment - 1.06%
2,200 Alcatel 61,050
2,400 Andrew Corp. * 41,700
500 Newbridge Networks Corp. * 13,031
5,500 Picturetel Corp * 23,375
---------
139,156
Telecommunications Services - 2.56%
2,500 American Tel & Telegraph 108,750
940 Hongkong Telecom 20,445
600 Mastec Inc * 17,663
1,200 Qwest Communications* 35,475
2,200 Telefonos De Venezuela 58,987
13,500 Telekomunik Indonesia 93,656
---------
334,976
Textile-Apparel/Mill Products - 0.45%
3,500 Fruit of the Loom Inc. Cl A 11,594
2,600 Polo Ralph Lauren* 46,637
58,231
Tobacco - 0.13%
500 Philip Morris Companies Inc. 17,094
Transport-Air Freight - 0.13%
800 Airborne Freight Corp. 16,850
---------
Transportation-Airline - 0.43%
3,700 Southwest Airlines Co. 56,194
---------
Utility-Electric Power - 0.70%
2,000 Edison Intl. 48,625
2,000 Western Resources 42,750
---------
91,375
<PAGE>
Schedule of Investments
Jhaveri Value Fund
September 30, 1999 (unaudited)
Units Description Value
Utility-Telephone - 0.64%
1,000 Telefonica De Argent 26,375
1,000 U.S. West Inc. 57,063
---------
83,438
Total Common Stocks
(Cost $14,321,608) $13,261,563
============
Other assets less liabilities - 1.42% (185,647)
-----------
Total Net Assets - 100.00% $13,075,916
===========
equivalent to $12.44 per share,
based on 1,050,823 shares of capital
stock outstanding
* Non Income Producing
<PAGE>
The accompanying notes are an integral part of these financial statements
JHAVERI VALUE FUND
FINANCIAL HIGHLIGHTS
For a share outstanding throughout the period
(unaudited)
<TABLE>
<S> <C> <C> <C> <C>
For six For the year For the year For the year
months ending ended ended ended
9-30-99 3/31/99 3/31/98 3/31/97
Net asset value - beginning of period $11.36 $14.07 $12.64 $12.38
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (.08) (.17) (.09) (.11)
Net gain on investments both
realized and unrealized 1.16 (2.33) 3.97 1.27
---- ----- --- ----
Total from investment operations 1.08 (2.50) 3.88 1.16
LESS DISTRIBUTIONS
Dividends from net investment income 0.00 0.00 0.00 .00
Dividends from capital gains 0.00 (.21) (2.45) (.90)
---- ---- ------ -----
Net asset value - end of period $12.44 $11.36 $14.07 $12.64
====== ====== ====== ======
Total Return 9.51% (17.66)% 33.74% 9.23%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's) 13,076 12,227 16,174 11,104
Ratio of expenses to average net assets 2.50%** 2.50% 2.50% 2.50%
Ratio of net investment income (loss)
to average net assets (1.25)%** (1.43)% (.70)% (.87)%
Portfolio turnover rate 64.82% 83.09% 58.92% 54.48%
</TABLE>
*Commencement of Operations
**Annualized
<PAGE>
JHAVERI VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1999
(unaudited)
ASSETS
Investments in securities at value (cost $14,321,607) 13,261,563
Receivable for securities sold 86,895
Receivable for dividends and interest 9,413
-------------
Total assets 13,357,871
LIABILITIES
Payable for investment securities purchased 161,803
Payable 92,375
Payable for Fund shares redeemed 0
Accrued operating expenses & other 27,777
------------
Total Liabilities 281,955
NET ASSETS
Net assets (equivalent to $12.44 per share based on
1,050,823 shares of capital stock outstanding) 13,075,916
============
Composition of Net Assets:
Paid in capital 12,741,997
Undistributed Net Investment Income (Loss) (85,018)
Accumulated net realized gain on investments 1,478,981
Net unrealized appreciation/(depreciation) on investments (1,060,044)
-------------
NET ASSETS, September 30, 1999 13,075,916
============
The accompanying notes are an integral part of the financial statements.
<PAGE>
JHAVERI VALUE FUND
STATEMENT OF OPERATIONS
For six months ending
September 30, 1999
(unaudited)
INVESTMENT INCOME
Interest 16,600
Dividends 69,843
----------
Total Investment Income 86,443
----------
EXPENSES
Operating Expenses (Note 3) 171,461
----------
Net investment income/(loss) (85,018)
Net realized gain/(loss) on securities transactions 1,485,997
Net change in unrealized appreciation/(depreciation)
on investments (238,774)
Net gain on investments 1,247,223
Net increase in net assets resulting from operations 1,162,205
===========
The accompanying notes are an integral part of the financial statements.
<PAGE>
JHAVERI VALUE FUND
STATEMENT OF CHANGES IN NET ASSETS
(unaudited)
<TABLE>
<S> <C> <C>
For the six For the year
months ending ended
9/30/99 3/31/99
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investments income (loss) $(85,018) $(192,434)
Net realized gain on securities transactions 1,485,997 (207,455)
Net change in unrealized appreciation/(depreciation)
of investments (238,774) (2,485,670)
------------- ------------
Net increase in net assets resulting from operations 1,162,205 (2,885,559)
------------ ------------
DISTRIBUTION TO SHAREHOLDERS:
From net investment income 0 0
From net realized gain investments 0 (248,351)
FUND SHARE TRANSACTIONS:
Net proceeds from shares sold 431,509 1,388,967
Dividends reinvested 0 248,351
Payment for shares redeemed (744,821) (2,450,208)
------------- ------------
Net increase in net assets from fund share transactions (313,312) (812,890)
------------- ------------
Net increase in net assets 848,893 (3,946,800)
------------ ------------
NET ASSETS:
Beginning of period 12,227,023 16,173,823
------------ -----------
End of period $13,075,916 $12,227,023
============= ==============
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
JHAVERI VALUE FUND
NOTES TO FINANCIAL STATEMENTS
September 30,1999
(unaudited)
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"). The Fund's investment objective is to provide long term capital
appreciation. The Fund seeks to achieve its objective by investing primarily in
a broad range of common stocks believed by its Adviser to have above average
prospects for appreciation, based on a proprietary investment model developed by
the Adviser.
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 investment 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.
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 reported
period. Actual results could differ from those estimates.
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. Discounts and premiums on securities purchased are amortized over the
life of the respective securities.
<PAGE>
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 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. 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 ending September 30, 1999, the Adviser has received
a fee of $171,461 from the Fund.
Note 4. Distributions to Shareholders
On December 15, 1998, a long-term capital gain distribution of $0.21135
aggregating $248,351 was declared from net realized gains from investment
transactions during 1998. The dividend was paid December 15, 1998, to
shareholders of record on December 14, 1998.
Note 5. Capital Share Transactions
As of September 30, 1999 there was an unlimited number of no par value shares of
capital stock authorized for the Fund. Transactions in capital stock were as
follows:
For the six months ending
September 30, 1999
Shares Amount
Shares sold 33,792 $431,509
Shares issued in
reinvestment of dividends 0 0
Shares redeemed (58,863) (744,821)
-------- ---------
Net increase (25,071) $(313,312)
======== ==========
Share outstanding/Paid in capital
Beginning of Period 1,075,894 $13,055,309
End of Period 1,050,823 $12,741,997
========= ===========
Note 6. Investments
For the six months ending September 30, 1999 purchases and sales of investment
securities, other than short-term investments, aggregated $8,346,115 and
$8,334,232 respectively. The gross unrealized appreciation for all securities
totaled $1,445,257 and the gross unrealized depreciation for all securities
totaled $(2,505,301) or a net unrealized depreciation of $(1,060,044). The
aggregate cost of securities for federal income tax purposes at September 30,
1999 was $14,321,607.
<PAGE>
Board of Trustees
Ramesh C. Jhaveri
Saumil R. Jhaveri
Mukul M. Mehta
James F. Mueller
David R. Zavagno
Investment Adviser
Investments Technology, Inc.
18820 High Parkway
Cleveland, OH 44116
Dividend Paying Agent,
Shareholders' Servicing Agent,
Transfer Agent
Mutual Shareholder Services
1301 E. 9th St., Suite 1005
Cleveland, Ohio 44114
Custodian
Firstar Bank, N.A.
P.O. Box 640994
Cincinnati, Ohio 45264-0994
Counsel
Brown, Cummins & Brown Co., LPA
3500 Carew Tower
Cincinnati, Ohio 45202
Independent Auditors
McCurdy & Associates CPA's, Inc.
27955 Clemens Rd
Westlake, Ohio 44145
<PAGE>
