<PAGE>
FARRELL ALPHA STRATEGIES
780 THIRD AVENUE
38TH FLOOR
NEW YORK, NEW YORK 10017
THE JAPAN ALPHA FUND
SEMI-ANNUAL REPORT
SEPTEMBER 30, 1997
INVESTMENT ADVISOR
Farrell-Wako Global Investment Management, Inc.
780 Third Avenue, 38th Floor
New York, New York 10017
(212) 319-3944
UNDERWRITER
FPS Broker Services, Inc.
3200 Horizon Drive
P.O. Box 61503
King of Prussia, Pennsylvania 19406
(610) 239-4700
LEGAL COUNSEL
Brown Raysman Millstein Felder & Steiner LLP
120 West 45th Street
New York, New York 10036
CUSTODIAN
Sumitomo Bank of New York Trust Company
2 World Financial Center, Tower B
225 Liberty Street, 35th Floor
New York, New York 10281
SHAREHOLDER SERVICES
FPS Services, Inc.
3200 Horizon Drive
P.O. Box 61503
King of Prussia, Pennsylvania 19406
(800) 262-7751
(610) 239-4600
AUDITORS
Coopers & Lybrand, LLP
2400 Eleven Penn Center
Philadelphia, Pennsylvania 19103
For Additional Information about The Japan Alpha Fund call:
(800) 262-7751
(610) 239-4600
<PAGE>
To our shareholders:
The market in Japan continued the sharp decline plummeting another 17% in
the third quarter of this year. While the market rebounded somewhat in the
second quarter, the overall market return was -11% for year to 3rd quarter
end. The Japan Alpha portfolio was also down.
Despite tax increases, the economic data indicates that the economy is on a
continued growth path. Those sectors of the market most exposed to deregulation
have suffered the greatest decline in this year to reflect that risk. Longer
term deregulation should create opportunities for greater economic growth. We
continue to think that there will be some defined resolutions to the banks' loan
problem.
At the same time, Japan represents an attractive market in a world context.
In comparison to the U.S., where the economic cycle is at a mature stage, Japan
is in the early stages of a recovery. We think that this contrary price action
between the two major world markets has shifted the relative value
attractiveness toward the market in Japan. Correspondingly, the trends in
corporate earnings for the two countries is now favoring companies in Japan. For
the first time in a decade, there should be a predominance of upward revisions
to earnings for companies in Japan.
Longer range, we continue to think that the restructuring of industry in
Japan will become a wide-spread phenomenon. As happened in the U.S. in the
1980's, it should provide a firm underpinning to the market in Japan over the
balance of the 1990's and beyond. A second favorable long term factor is the
emergence of a trend toward share repurchase programs by Japanese industrial
corporations. Over time buybacks by these companies and others should represent
an important and potentially positive change in the market's supply and demand
framework. While creating uncertainty in the near term, deregulation should be a
positive influence in the longer term.
Sincerely,
/s/ James L. Farrell, Jr.
James L. Farrell, Jr.
Chairman and Portfolio Manager
Farrell-Wako Global Investment Management, Inc.
Distributed by FPS Broker Services, Inc., 3200 Horizon Drive, King of Prussia,
PA 19406.
To be proceeded or accompanied by a prospectus. DFU 11-97
<PAGE>
THE JAPAN ALPHA FUND
SCHEDULE OF INVESTMENTS (unaudited) September 30, 1997
- --------------------------------------------------------------------------------
Market
Shares Value
---------- ----------
Equities - Japan 94.50%
Achilles Corp. ......................................... 12,000 $ 20,177
Best Denki Co., Ltd. ................................... 4,000 26,174
Chichibu Onoda Cement Corp. ............................ 15,000 40,628
Chiyoda Fire & Marine Insurance Co., Ltd. .............. 17,850 68,307
Chubu Electric Power Co., Inc. ......................... 34 577
Chugai Pharmaceutical Co., Ltd. ........................ 4,000 34,457
Daicel Chemical Industries, Ltd. ....................... 12,000 30,713
Daikin Industries, Ltd. ................................ 9,000 56,730
East Japan Railway Co. ................................. 9 42,193
Fuji Fire & Marine Insurance............................ 17,000 53,367
Fuji Heavy Industries, Ltd. ............................ 8,000 32,800
Fukuyama Transporting Co., Ltd. ........................ 4,000 19,382
General Sekiyu K.K. .................................... 8,000 45,457
Gunze, Ltd. ............................................ 12,000 37,870
Hitachi Koki............................................ 8,000 45,722
Hokkaido Electric Power................................. 3,570 57,366
Hokuetsu Paper Mills, Ltd. ............................. 6,000 32,105
Inax.................................................... 10,000 48,041
Itoham Foods............................................ 12,000 46,716
Japan Tobacco, Inc. .................................... 8 62,221
Joyo Bank............................................... 5,000 25,429
Kaken Pharmaceutical.................................... 8,000 27,632
Kamigumi Co., Ltd. ..................................... 10,000 39,758
Kubota Corp. ........................................... 7,000 27,251
Kyudenko Co., Ltd. ..................................... 4,000 22,861
Lion Corp. ............................................. 12,000 43,038
Long-Term Credit Bank of Japan, Ltd. ................... 9,000 39,286
Makita Corp. ........................................... 3,000 41,001
Maruetsu, Inc. ......................................... 10,000 31,061
Matsushita Refrigeration................................ 11,000 46,558
Mitsubishi Heavy Industries, Ltd. ...................... 8,000 43,800
Mitsubishi Motors Corp. ................................ 10,000 51,354
Mitsui Petrochemical Industries......................... 10,000 29,322
Morinaga Milk Industry Co. ............................. 15,000 41,001
NHK Spring Co., Ltd. ................................... 15,000 44,728
Nichimen Corp. ......................................... 16,000 31,807
Nintendo Co., Ltd. ..................................... 800 74,878
Nippon Hodo............................................. 6,000 35,931
Nippon Paint Co., Ltd. ................................. 15,000 32,925
Nippon Road............................................. 8,000 17,891
Nippon Telegraph & Telephone Corp. ..................... 5 45,970
Nishi-Nippon Railroad................................... 10,300 29,775
Nissan Motor Co., Ltd. ................................. 12,000 71,565
Nisshin Steel Co., Ltd. ................................ 27,000 45,846
Orient Corp. ........................................... 12,000 26,439
See accompanying notes to financial statements.
<PAGE>
THE JAPAN ALPHA FUND
SCHEDULE OF INVESTMENTS (unaudited) September 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Value
---------- -----------
<S> <C> <C>
Equities (continued)
Rengo Co., Ltd........................................... 11,000 $ 47,378
Ryobi, Ltd............................................... 18,000 50,841
Ryoden Trading Co........................................ 8,000 36,114
Sakura Bank, Ltd......................................... 7,000 33,455
Sankyo Aluminum Industry Co.............................. 17,000 26,472
Sanyo Electric Co., Ltd.................................. 13,000 39,841
Seino Transportation..................................... 5,000 45,142
Seiyu, Ltd............................................... 4,000 16,698
Sekisui House, Ltd....................................... 8,000 76,203
Sharp Corp............................................... 6,000 54,667
Shionogi & Co., Ltd...................................... 5,000 31,102
Snow Brand Milk Products................................. 11,000 35,898
Sumitomo Rubber Industries............................... 11,000 62,412
Sun Wave Corp............................................ 3,000 15,903
Taisei Rotec Corp........................................ 13,000 28,858
Takara Standard.......................................... 8,000 56,854
Toho Gas................................................. 24,000 44,728
Tohoku Electric Power.................................... 1,717 27,733
Tokico, Ltd.............................................. 17,000 35,907
Toshiba Corp............................................. 12,000 60,830
Toyo Ink Manufacturing................................... 14,000 41,166
Yamamura Glass Co........................................ 14,000 35,368
Yodogawa Steel Works..................................... 9,000 47,486
Yokohama Rubber Co., Ltd................................. 11,000 28,336
Yoshitomi Pharmaceutical................................. 8,000 53,674
Zexel Corp............................................... 9,000 40,404
----------
Total Equities - Japan
(Cost $4,357,247)...................................... 2,841,580
----------
Total Investments - 94.50%
(Cost $4,357,247*)..................................... 2,841,580
----------
Cash and Other Assets,
Less Liabilities - 5.50%............................... 165,348
----------
Net Assets - 100%........................................ $ 3,006,928
==========
<CAPTION>
* Cost for Federal income tax purposes is $4,357,247 and net
unrealized depreciation consists of:
<S> <C>
Gross unrealized appreciation.................. $ 20,398
Gross unrealized depreciation.................. (1,536,065)
----------
Net unrealized depreciation.................... $(1,515,667)
==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
THE JAPAN ALPHA FUND
STATEMENT OF ASSETS AND LIABILITIES (unaudited) September 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments at market value (Cost $4,357,247) (Note 1) ............................. $ 2,841,580
Foreign currency at market value (Cost $32,370) .................................... 31,886
Cash ............................................................................... 43,724
Dividends receivable ............................................................... 14,493
Deferred organization costs (Note 1) ............................................... 61,697
Reimbursement due from Advisor ..................................................... 14,819
Other assets ....................................................................... 805
------------
TOTAL ASSETS ............................................................. 3,009,004
------------
LIABILITIES:
Accrued Expenses ................................................................ 2,076
TOTAL LIABILITIES ........................................................ 2,076
------------
NET ASSETS:
Applicable to 516,106 shares; unlimited number of shares
of beneficial interest authorized without par value ............................. $ 3,006,928
=============
Net asset value and redemption price ($3,006,928/516,106 shares) ................ $ 5.83
=============
NET ASSETS CONSIST OF:
Paid-in capital ................................................................... 4,903,379
Accumulated net realized loss on investments ...................................... (380,186)
Net unrealized depreciation on investments and foreign currency related
transactions .................................................................... (1,516,265)
-------------
NET ASSETS .............................................................. $ 3,006,928
=============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
THE JAPAN ALPHA FUND
STATEMENT OF OPERATIONS (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the
Six Months
Ended
September 30, 1997
------------------
<S> <C>
INVESTMENT INCOME
Dividends (Net of foreign tax withholdings of $3,486) ....... $ 19,757
TOTAL INCOME....................................... 19,757
-----------
EXPENSES:
Investment advisory fees (Note 2) ........................... 17,658
Administration fees ......................................... 40,109
Accounting fees ............................................. 25,443
Transfer agent fees ......................................... 14,081
Registration fees ........................................... 17,282
Amortization of organization costs (Note 1) ................. 11,653
Custodian fees .............................................. 5,000
Trustees' fees .............................................. 1,500
Legal fees .................................................. 6,305
Insurance expense ........................................... 562
TOTAL EXPENSES .................................... 139,593
Expenses reimbursed and waived by Advisor
(Note 2) ......................................... (99,051)
-----------
NET EXPENSES ...................................... 40,542
-----------
NET INVESTMENT LOSS ............................................ (20,785)
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY:
Net realized loss on investments ............................ (103,594)
Net realized gain on foreign currency related transactions .. 2,610
Net change in unrealized depreciation on investments and
foreign currency related transactions ...................... (324,766)
-----------
Net realized and unrealized loss on investments and foreign
currency related transactions ............................. (425,750)
-----------
Net decrease in net assets resulting from operations ........... $ (446,535)
===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
THE JAPAN ALPHA FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Six
Months Ended For the
September 30, Year Ended
1997 March 31,
(unaudited) 1997
--------------- ------------
<S> <C> <C>
OPERATIONS:
Net investment loss ..................................................... $ (20,785) $ (59,141)
Net realized loss on investments ........................................ (103,594) (274,276)
Net realized gain (loss) on foreign currency related transactions ....... 2,610 (5,881)
Net change in unrealized depreciation on investments and foreign
currency related transactions ....................................... (324,766) (1,010,530)
------------- -----------
Net decrease in net assets resulting from operations .................... (446,535) (1,349,828)
------------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gains on investments ....................................... 0 (2,316)
------------- -----------
CAPITAL SHARE TRANSACTIONS (NOTE I):
Proceeds from shares issued due to exchange of
Class A shares for Class D shares ................................... 0 4,577,248
Proceeds from sale of shares ............................................ 0 28,712
Proceeds from shares issued on reinvestment of distributions ............ 0 2,313
Cost of shares from redemption of Class A shares for Class D shares ..... 0 (4,577,248)
Cost of shares redeemed ................................................. (4,100) (40,826)
------------- -----------
Decrease in net assets derived from capital share transactions .......... (4,100) (9,801)
------------- -----------
TOTAL DECREASE IN NET ASSETS..................................... (450,635) (1,361,945)
------------- -----------
NET ASSETS:
Beginning of period ...................................................... 3,457,563 4,819,508
------------- -----------
End of period ........................................................... $ 3,006,928 $ 3,457,563
============= ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
THE JAPAN ALPHA FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) SEPTEMBER 30, 1997
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Farrell Alpha Strategies (the "Trust") is organized as a Delaware business trust
pursuant to a Trust Agreement dated April 6, 1995. The Trust is registered
under the Investment Company Act of 1940 (the "Act") as an open-end management
investment company. The Trust consists of a separate investment series called
The Japan Alpha Fund (the "Fund"). On July 14, 1995, pursuant to an Agreement
and Plan of Reorganization and Liquidation, the Trust acquired all of the assets
of the Japan Alpha Fund (the "Acquired Fund") of the Advisors' Inner Circle
Fund, a Massachusetts business trust. The acquisition was accomplished by a
tax-free exchange of 502,529 of the Class A Shares and 9,605 of the Class D
Shares of the Acquired Fund for the same amount of shares of the Fund. Shares
of the Fund were reissued to shareholders at the time of the reorganization.
The net assets of the Fund prior to and directly after the reorganization was
$4,649,123, including $230,630 of unrealized depreciation. The Fund assumed the
prior operating history of the Acquired Fund.
From April 18, 1995 (commencement of operations) to July 29, 1996, the Fund
offered two classes of shares, the Class A Shares and Class D Shares, which
varied with respect to sales charges, distribution costs, voting rights and
dividends. Shares of Class A were offered at net asset value per share plus a
maximum sales charge at the time of purchase of 2.75%. Shares of Class D were
not subject to a sales load or distribution fees and therefore, had lower
expenses than the Class A Shares.
The Board of Trustees determined that it was no longer in the best interest of
shareholders to maintain two classes of shares of the Fund and decided to
eliminate the Class A Shares and reduce the initial investment minimum of the
Class D Shares from $5,000 to $1,000. Accordingly, the Class A shareholders
were offered the option of either converting their Class A Shares to Class D
Shares based upon the relative net asset values of the two classes as part of a
one-time tax-free exchange privilege or redeeming their Class A Shares and
receiving full redemption benefits. All the Class A Shares were converted to
Class D Shares as of July 26, 1996, and on July 29, 1996 the Trust eliminated
the Class A Shares. The following is a summary of significant accounting
policies consistently followed by the Fund in the preparation of its financial
statements.
A. SECURITY VALUATION: Foreign securities are valued as of the close of
trading on the primary exchange on which they trade. The value is then
converted to U.S. dollars using current exchange rates. 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 prices. Listed securities which are traded by foreign investors in Japan
in over-the-counter transactions are valued at prices at which it is expected
that such securities may be sold, as determined in good faith by, or under the
direction of, the Board of Trustees. Securities are valued through valuations
obtained from a commercial pricing service or at the most recent mean of the
bid and asked prices provided by investment dealers in accordance with
procedures established by the Board of Trustees. Short-term investments having
a maturity of 60 days or less are valued at amortized cost, which the Board of
Trustees believes represents fair value. All other securities are valued at
their fair value as determined in good faith under procedures established by
and under the supervision of the Board of Trustees. As of September 30, 1997,
there were no securities valued by the Board of Trustees.
The books and records of the Fund are maintained in U.S. dollars. Transactions
denominated in foreign currencies are recorded at the current prevailing
exchange rates. All assets and liabilities denominated in foreign currencies
are translated into U.S. dollars at the current exchange rate. Translation
gains or losses resulting from changes in the exchange rate during the
reporting period and realized gains and losses on the settlement of foreign
currency transactions are reported in the results of operations for the current
period. The Fund does not isolate that portion of gains and losses on
investments in equity securities which is due to changes in the foreign
exchange rate from that which is due to changes in market prices of equity
securities.
<PAGE>
THE JAPAN ALPHA FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) SEPTEMBER 30, 1997
- --------------------------------------------------------------------------------
B. RISKS ASSOCIATED WITH FOREIGN SECURITIES: Investments by the Fund in
securities of foreign issuers may involve investment risks different from those
of U.S. issuers, including possible political or economic instability of the
country of the issuer, the difficulty of predicting international trade
patterns, the possibility of currency exchange controls, possible imposition of
foreign withholding tax on the interest income payable on such instruments,
possible establishment of foreign controls, the possible seizure or
nationalization of foreign deposits or assets, or the adoption of other foreign
government restrictions that might adversely affect the foreign securities held
by the Fund. Foreign securities may also be subject to greater fluctuations in
price than securities of domestic corporations or the U.S. government.
C. FEDERAL INCOME TAXES: It is the policy of the Fund to continue 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 month period
ended September 30, 1997. Therefore, no provision has been made for Federal
income taxes.
D. DETERMINATION OF GAINS OR LOSSES ON SALES OF SECURITIES: Gains or losses
on the sale of securities are determined by use of the specific identification
method for both financial reporting and income tax purposes.
E. ORGANIZATION COSTS: Organization costs are being amortized on a straight-
line basis over five years from the Fund's commencement of operations.
F. DISTRIBUTIONS TO SHAREHOLDERS: The Fund will distribute substantially all
of its net investment income annually in December. Any net gains realized from
the sale of portfolio securities and net gains realized from foreign currency
transactions are distributed at least once each year unless they are used to
offset losses carried forward from prior years. Distributions to shareholders
will be 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.
G. 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 at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from these estimates.
H. 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.
I. CAPITAL SHARE TRANSACTIONS: The Fund is authorized to issue an unlimited
number of shares of beneficial interest without par value. Transactions in
shares of beneficial interest reflects the conversion of Class A Shares for
Class D Shares on July 29, 1996, and were as follows:
<TABLE>
<CAPTION>
FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 1997 (UNAUDITED) MARCH 31, 1997
------------------------------- ---------------
CLASS D SHARES CLASS D SHARES
-------------- ---------------
SHARES AMOUNT SHARES AMOUNT
------- ------ ------ ------
<S> <C> <C> <C> <C>
Shares issued due to exchange
of Class A Shares for Class D Shares......... 0 $ 0 501,297 $4,577,248
Shares sold..................................... 0 0 3,604 25,016
Shares issued on reinvestment of distributions.. 0 0 297 2,313
Shares redeemed................................. (616) (4,100) (4,891) (40,826)
---- -------- ------- ----------
Net Increase (Decrease)......................... (616) ($4,100) 500,307 $4,563,751
==== ======== ======= ==========
</TABLE>
Wako Securities Co., Ltd., an affiliated broker of Farrell-Wako Global
Investment Management, Inc., the Fund's advisor, holds 498,228 (96.5%) of the
516,106 shares of the Japan Alpha Fund.
<PAGE>
THE JAPAN ALPHA FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) SEPTEMBER 30, 1997
- --------------------------------------------------------------------------------
2. ADVISORY AND ADMINISTRATION AGREEMENTS
Farrell-Wako Global Investment Management, Inc. (the "Advisor"), a registered
investment advisor, provides the Fund with investment management services. As
compensation for these services, the Fund pays the Advisor a monthly fee which
is calculated daily by applying an annual rate of 0.98% to the average daily net
assets of the Fund. The Advisor has voluntarily agreed to waive its fees and
reimburse the Fund to the extent total annualized expenses exceed 2.25% of the
Fund's average daily net assets. For the six month period ended September 30,
1997, the Advisor agreed to waive fees of $17,658 and reimburse fees totaling
$81,393.
Certain officers and trustees of the Fund are also officers and directors of the
Advisor. All officers serve without direct compensation from the Fund.
Under its Administrative Services Agreement (the "Agreement") with the Fund, FPS
Services, Inc., the Fund's Administrator, provides certain administrative
services for which the Fund pays a fee computed at the annual rate of 0.15% of
the first $75 million of total average net assets, 0.10% of the next $75 million
of total average net assets and 0.05% of total net assets in excess of $150
million. As stated in the Agreement, aggregate administration fees will not be
less than $95,000.
3. INVESTMENT TRANSACTIONS
Investment transactions for the six month period ended September 30, 1997,
excluding temporary short-term investments, aggregated $857,723 and $889,658 in
purchases and proceeds from sales, respectively. During the period, the Fund
conducted all of its brokerage transactions through Wako Securities Co., Ltd.,
an affiliated broker of the Advisor. The commissions on these transactions are
deemed by the Fund to be fair and reasonable compared to the commissions, fees
or other remunerations received by other brokers in connection with comparable
transactions involving similar securities being purchased or sold on a
securities exchange during a comparable period. For the six month period ended
September 30, 1997, brokerage fees paid to Wako Securities Co., Ltd. were
$13,154.
4. CAPITAL LOSS CARRYOVER
At March 31, 1997, The Japan Alpha Fund had a capital loss carryover of $274,490
expiring March 31, 2005 to offset possible future capital gains of the Fund.
<PAGE>
THE JAPAN ALPHA FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The table below sets forth financial data for one share of capital stock
outstanding throughout each period presented.
<TABLE>
<CAPTION>
Class A Shares Class D Shares
------------------------------- --------------------------------------------------
For the For the For the Six For the
Period Period Months Ended For the Period
April 1, 1996 April 18, 1995* September 30, Year Ended April 18, 1995*
through through 1997 March 31, through
July 26, 1996+ March 31, 1996 (unaudited) 1997 March 31, 1996
-------------- --------------- ------------- ---------- ---------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period .. $ 9.28 $ 10.00 $ 6.69 $ 9.31 $ 10.00
----------- ------------- ------------ ---------- -----------
Loss from investment operations:
Net investment income (loss)......... 0.07 (0.14)/1/ (0.03) 0.01 (0.12)/1/
Net realized and unrealized loss on
investments and foreign currency
related transactions................ (0.26) (0.58)/1/ (0.83) (2.62) (0.57)/1/
----------- ------------- ------------ ---------- -----------
Total loss from investment
operations........................ (0.19) (0.72) (0.86) (2.61) (0.69)
Less distributions from realized
gains............................... 0.00 0.00 0.00 (0.01) 0.00
----------- ------------- ------------ ---------- -----------
Net asset value, end of period.......... $ 9.09 $ 9.28 $ 5.83 $ 6.69 $ 9.31
=========== ============= ============ ========== ===========
Total return (Not annualized)........... (2.05%)/2/ (7.20%)/2/ (12.86%) (28.10%) (6.90%)
Ratios/Supplemental Data
Net assets, end of period (in 000s).. $ 4,577 $ 4,667 $ 3,007 $ 3,458 $ 153
Ratio of expenses to average net
assets:
Before expense reimbursement and
waiver............................ 6.17%/3/ 8.79%/3/ 7.75%/3/ 7.97% 8.54%/3/
After expense reimbursement and
waiver............................ 2.50%/3/ 2.50%/3/ 2.25%/3/ 2.25% 2.25%/3/
Ratio of net investment income to
average net assets:
Before expense reimbursement and
waiver............................ (5.74%)/3/ (7.92%)/3/ (6.65%)/3/ (6.99%) (7.67%)/3/
After expense reimbursement and
waiver............................ (2.07%)/3/ (1.63%)/3/ (1.15%)/3/ (1.27%) (1.38%)/3/
Portfolio turnover rate............ 115.07% 122.71% 25.60% 115.07% 122.71%
Average commission rate............ $ 0.0608 $0.0658 $0.0411 $0.0608 $0.0658
</TABLE>
* Commencement of operations
/1/ Calculated using the average shares method
/2/ Total return calculation does not reflect sales load
/3/ Annualized
+ Since July 29, 1996, no Class A Shares have been outstanding.
See accompanying notes to financial statements.
