DEVCAP Trust
DEVCAP Shared Return Fund
Semiannual Report
January 31, 1996
<PAGE>
April 1, 1996
Dear Shareholder:
We are pleased to announce that the first six months of operations of the DEVCAP
Shared Return Fund have been met with significant enthusiasm and a great deal of
positive publicity. As you may have seen, in recent months DEVCAP has appeared
in the Wall Street Journal, The Washington Post and The New York Times.
All of the articles have highlighted the fact that the DEVCAP Shared Return Fund
is the only U.S. mutual fund that allows investors to make a tax-deductible
contribution of a part of their annual investment returns to support
microenterprise development throughout the world.
This publicity has been beneficial not only for DEVCAP, but also for the entire
microenterprise development movement. It has heightened the awareness of the
general public of the undeniable impact of providing much-needed financial
services to the working poor.
DEVCAP has made an effort to document these microenterprise success stories
through its quarterly newsletter, Global Dividends, which you should have
already begun receiving. If you have any friends or family members who might be
interested in receiving Global Dividends, or who might be interested in
investing in the DEVCAP Shared Return Fund, please feel free to call our
toll-free number with their names and addresses.
In addition, if you have any questions or comments about your investment in the
DEVCAP Shared Return Fund, please do not hesitate to call us at (800) 371-2655.
We are pleased to have you as a shareholder and value your opinions. Thank you
once again for your investment in the DEVCAP Shared Return Fund.
Sincerely,
/s/ GIL CRAWFORD
Gil Crawford
Chairman of the Board of Trustees
P.S. Have you considered participating in the Automatic Investment Plan? It
allows you to gradually increase your investment through automatic
withdrawals from your checking account. You can invest as little as $25
on a monthly, quarterly, semi-annual or annual basis. If you are
interested, please call (800) 371-2655, choose option one, and ask how
you can enroll in the Automatic Investment Plan.
<PAGE>
<TABLE>
<CAPTION>
DEVCAP SHARED RETURN FUND
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1996 (UNAUDITED)
- -------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS:
Investment in Domini Social Index Portfolio, at value (Note 1) $ 232,791
Deferred organization expenses (Note 1) 53,993
Receivable from affiliate (Note 2) 21,735
---------------
Total Assets 308,519
---------------
LIABILITIES:
Organization expenses payable (Note 1) 57,289
Accrued expenses 19,421
---------------
Total Liabilities 76,710
---------------
NET ASSETS $ 231,809
===============
NET ASSETS CONSIST OF:
Paid - in capital $ 219,630
Undistributed net investment income (314)
Accumulated net realized gain on investment 754
Net unrealized appreciation of investment 11,739
---------------
NET ASSETS 231,809
===============
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION
PRICE PER SHARE($231,809/21,756 SHARES) $ 10.65
===============
</TABLE>
See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
DEVCAP SHARED RETURN FUND
STATEMENT OF OPERATIONS
FOR THE PERIOD OCTOBER 19, 1995 (COMMENCEMENT OF OPERATIONS) TO JANUARY 31, 1996
(UNAUDITED)
- -------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME FROM PORTFOLIO (NOTE 1):
Interest income from Portfolio $ 909
Expenses from Portfolio (241)
---------
Net Income from Portfolio 668
EXPENSES (NOTES 1 AND 2):
Transfer agent fee 8,770
Professional fees 7,047
Amortization of organization expenses (Note 1) 3,296
Servicing and fund accounting agent fee(Note 2 ) 2,589
Trustee fees and expenses (Note 2 ) 867
Registration fees 76
Administration fees (Note 2) 72
---------
Total Expenses 22,717
Less:Reimbursement of expenses (Note 2) (21,735)
---------
Net Expenses 982
---------
NET INVESTMENT INCOME (314)
---------
NET REALIZED AND UNREALIZED GAIN FROM PORTFOLIO
Net realized gain from Portfolio 754
Net change in unrealized appreciation from Portfolio 11,739
---------
Net realized and unrealized gain from Portfolio 12,493
---------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 12,179
=========
</TABLE>
See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
DEVCAP SHARED RETURN FUND
STATEMENT OF CHANGES IN NET ASSETS
- -----------------------------------------------------------------------------------------
For the period
October 19, 1995
(commencement of
of operations) to
January 31, 1996
(Unaudited)
-------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment loss $ (314)
Net realized gain from Portfolio 754
Accumulated undistributed net unrealized gain from Portfolio 11,739
-----------
Net increase in net assets resulting from operations 12,179
-----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from sales of shares 220,550
Payments for shares redeemed (920)
-----------
Net increase in Net Assets from Capital Share Transactions 219,630
-----------
Total Increase in Net Assets 231,809
NET ASSETS:
Beginning of period 0
-----------
End of period (including undistributed net investment loss of $314) $ 231,809
===========
OTHER INFORMATION:
SHARE TRANSACTIONS:
Sold 21,845
Redeemed (89)
-----------
Net increase 21,756
===========
</TABLE>
See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
DEVCAP SHARED RETURN FUND
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------------------
For the period
October 19, 1995
(commencement of
of operations) to
January 31, 1996
(Unaudited)
-------------------
<S> <C> <C>
Net Asset Value, beginning of period $ 10.00
---------
Income from investment operations:
Net investment income (0.01)
Net realized and unrealized gain on investments 0.66
---------
Total income from investment operations 0.65
---------
Net Asset Value, end of period $ 10.65
=========
Ratios/supplemental data
Total return 6.50%
Net Assets, end of period (in 000's) $ 232
Ratio of expenses to average net assets * 2.50%**
Ratio of net investment income to average net assets * -0.65%**
- -------------------
* Reflects the Fund's proportionate share of the Portfolio's expenses as well as reimbursements
by agents of the Fund. If the reimbursements had not been in place, the ratios of expenses and
net investment income to average net assets would have been as follows:
Ratio of expenses to average net assets 47.75%
Ratio of net investment income to average net assets -45.86%
** Annualized.
</TABLE>
See Notes to Financial Statements
<PAGE>
DEVCAP SHARED RETURN FUND
January 31, 1996
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
DEVCAP Shared Return Fund (the "Fund") is a separate series of shares
of DEVCAP Trust, which is organized as a business trust under the laws of the
Commonwealth of Massachusetts. The Fund is a diversified open-end management
investment company registered under the Investment Company Act of 1940 (the
"Act"). The Fund has two primary objectives: (i) an investment objective, to
provide its shareholders with long-term total return which corresponds to the
total return performance of the Domini Social Index (sm), an index comprised of
stocks selected based upon social criteria and; (ii) a charitable objective, to
enable each shareholder of the Fund to make a donation of a portion of that
shareholder's annual contribution basis to finance the economic development of
underprivileged people in developing countries. The Fund seeks to achieve its
investment objective by investing all of its investable assets in the Domini
Social Index Portfolio (the "Portfolio"), a diversified open-end management
investment company having the same investment objective as the Fund. The
Portfolio invests in the common stocks included in the Domini Social Index.
Following is a summary of the significant accounting policies of the
Fund:
A. INVESTMENT VALUATION -
Valuation of securities by the Portfolio is discussed in Note 1 of the
Portfolio's Notes to Financial Statements which are included elsewhere
in this report.
B. INVESTMENT INCOME AND DIVIDENDS TO SHAREHOLDERS -
The Fund earns income, net of Portfolio expenses, daily based on its
investment in the Portfolio. Dividends to shareholders are declared and
paid semiannually from net investment income. Distributions to
shareholders of realized capital gains, if any are made annually.
C. FEDERAL TAXES -
The Fund's policy is to comply with the provisions of the Internal
Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income, including net
realized gains, if any, within the prescribed time periods.
Accordingly, no provisions for Federal income or excise tax are
necessary.
D. DEFERRED ORGANIZATION EXPENSES -
Organizational costs are being amortized on a straight line basis over
a five year period. The amount paid by the Fund on any redemption of
the Fund's initial shares will be reduced by the pro rata number of
initial shares outstanding immediately prior to such redemption. To the
extent that the proceeds of the redemptions are less than such pro rata
portion of any unamortized organization expenses,
NOTE 2 - TRANSACTIONS WITH AFFILIATES
A. ADMINISTRATION -
The Fund has retained Signature Broker Dealer Services, Inc. ("Signature")
to serve as the Administrator and Distributor. Signature provides
administrative services necessary for the operations of the Fund, furnishes
office space and facilities required for the conducting of business of the
Fund and pays the compensation of the Fund's officers. For its services
under the Administrative Services Agreement, Signature receives from the
Fund a fee accrued daily at an annual rate equal to 0.15% of the Fund's
average daily net assets.
B. DISTRIBUTION -
The Fund has adopted a Distribution Plan in accordance with Rule 12b-1
under the Act. Signature acts as agent of the Fund and principal
underwriter of shares of the Fund pursuant to the Plan. Under the Plan, the
Fund may pay the Signature a fee not to exceed 0.25% per annum of the
Fund's average daily net assets in anticipation of, or in reimbursement
for, expenses incurred in connection with the sale of shares of the Fund.
Such expenses include payments to broker-dealers who advise shareholders
regarding the purchase, sale or retention of shares of the Fund, payments
to employees of the Distributor, advertising used for sales purposes,
expenses of preparing and printing sales literature and other
distribution-related expenses.
C. TRUSTEES -
Independent Trustees are reimbursed for reasonable expenses incurred when
acting in their capacity as Trustees.
D. REIMBURSEMENT OF EXPENSES -
DEVCAP has agreed that it will reimburse the Fund through at least November
30, 1996 to the extent necessary to maintain the Fund's total operating
expenses (which includes expenses of the Fund and Portfolio) at the annual
rate of 1.75% of the Fund's average daily net assets. This limit does not
cover extraordinary increases in these expenses during the period and no
longer applies in the event of a precipitous decline in assets due to
unforeseen circumstances. DEVCAP will review its undertaking annually,
however, there is no assurance that DEVCAP will continue this reimbursement
beyond the specific period, except as required by the following sentence.
DEVCAP has agreed to reimburse the Fund as necessary if in any fiscal year
the sum of the Fund's expenses exceeds the limits set by applicable
regulations of state securities commissions. Such annual limits are
currently 2.5.% of the first $30 million of average net assets, 2% of the
next $70 million of such net assets, and 1.50% of such net assets in excess
of $100 million for any fiscal year.
NOTE 3 - INVESTMENT TRANSACTIONS
Additions and reductions in the Fund's investment in the Portfolio
aggregated $220,550 and $920 for the period from October 19, 1995 (commencement
of operations) to January 31, 1996.
<PAGE>
DOMINI SOCIAL INDEX PORTFOLIO
PORTFOLIO OF INVESTMENTS
JANUARY 31, 1996 (UNAUDITED)
COMMON STOCKS--98.4%
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
<S> <C> <C>
APPAREL--0.8%
Brown Group Inc............................................... 400 $ 5,500
Hartmax Corp. (b)............................................. 600 2,325
Lands' End Inc................................................ 800 11,700
Liz Claiborne, Inc............................................ 2,400 66,900
Nike Inc. (Class B)........................................... 4,400 306,900
Oshkosh B'Gosh, Inc........................................... 300 5,100
Phillips-Van Heusen Corp...................................... 600 6,300
Reebok International Ltd...................................... 2,500 67,500
Russell Corp.................................................. 1,400 38,500
Stride Rite Corp.............................................. 1,200 9,900
Timberland Co................................................. 250 4,719
VF Corp....................................................... 1,950 98,475
---------
623,819
---------
COMMERCIAL PRODUCTS & SERVICES--1.7%
Autodesk Inc.................................................. 1,400 42,350
Banta Corp.................................................... 700 29,575
Cintas Corp................................................... 1,400 64,400
Deluxe Corp................................................... 2,600 76,375
Donnelley, R.R. & Sons........................................ 4,800 172,200
Harland (J.H.) Co............................................. 900 19,800
HON Industries Inc............................................ 800 16,600
Kelly Services (Class A)...................................... 1,475 42,775
Miller, (Herman) Inc.......................................... 800 25,600
Moore Corp., Ltd.............................................. 3,300 65,175
National Education Corporation................................ 600 5,400
National Service Industries, Inc.............................. 1,700 59,287
New England Business Services, Inc............................ 300 5,325
Pitney Bowes Inc.............................................. 4,900 221,725
Standard Register Co.......................................... 700 13,475
Xerox Corp.................................................... 3,300 407,962
---------
1,268,024
---------
CONSTRUCTION--0.3%
Centex Corp................................................... 900 29,025
Fleetwood Enterprises, Inc.................................... 1,300 33,150
Graco Inc..................................................... 500 13,875
Kaufman & Broad Home Corp..................................... 800 12,800
Rouse Co...................................................... 1,700 31,662
Sherwin-Williams Co........................................... 2,500 105,313
TJ International Inc.......................................... 400 6,500
---------
232,325
---------
CONSUMER PRODUCTS & SERVICES--0.1%
Avery Dennison Corp........................................... 1,700 90,738
ISCO Inc...................................................... 200 1,850
Tennant Co.................................................... 200 4,750
---------
97,338
---------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
ENERGY--3.7%
Amoco Corp.................................................. 15,600 $ 1,097,850
Anadarko Petroleum Corp..................................... 1,800 90,900
Apache Corp................................................. 2,300 61,812
Atlantic Richfield Co....................................... 5,000 568,125
Consolidated Natural Gas Co................................. 2,900 130,500
ENERGEN Corp................................................ 300 7,463
Enron Corp.................................................. 8,100 299,700
Helmerich & Payne Inc....................................... 900 28,350
Louisiana Land & Exploration Co............................. 1,200 51,600
Oryx Energy Company (b)..................................... 3,100 40,688
Pennzoil Co................................................. 1,600 65,000
Rowan Companies Inc. (b).................................... 2,700 29,363
Santa Fe Energy Resources Inc. (b).......................... 2,500 24,062
Sun Company................................................. 3,000 81,750
Williams Companies Inc. (The)............................... 3,100 146,088
-----------
2,723,251
-----------
FINANCIAL--11.2%
Ahmanson (H.F.) & Co........................................ 4,100 98,400
American Express Co......................................... 15,200 699,200
Banc One Corp............................................... 12,823 485,671
Bank of Boston.............................................. 3,600 164,700
BankAmerica Corp............................................ 11,500 774,813
Bankers Trust (N.Y.) Corp................................... 2,500 162,188
Barnett Banks Inc........................................... 3,100 181,350
Beneficial Corp............................................. 1,600 78,200
Block (H. & R.), Inc........................................ 3,200 118,000
Cincinnati Financial Corp................................... 1,705 106,989
CoreStates Financial Corp................................... 4,300 172,000
Dime Bancorp Inc. (b)....................................... 3,200 37,200
Edwards (A.G.), Inc......................................... 2,225 55,903
Federal National Mortgage Assoc............................. 34,500 1,190,250
Fifth Third Bancorp......................................... 3,300 156,131
First Chicago Corp.......................................... 10,106 392,892
First Fed Financial Corp. (b)............................... 200 2,725
Golden West Financial Corp.................................. 1,900 98,325
Great Western Financial Corp................................ 4,200 100,800
Household International Inc................................. 3,050 197,869
Mellon Bank Corp............................................ 4,400 233,200
Merrill Lynch & Co., Inc.................................... 5,500 312,812
Morgan (J.P.) & Co., Inc.................................... 5,900 479,375
Norwest Corp................................................ 11,000 378,125
PNC Bank Corp............................................... 10,600 318,000
Piper Jaffray Inc........................................... 300 4,125
ReliaStar Financial Corp.................................... 1,100 51,838
Schwab (Charles) Corp....................................... 5,300 132,500
Student Loan Marketing Association.......................... 1,950 143,569
SunTrust Banks Inc.......................................... 3,500 241,938
Transamerica Corp........................................... 2,100 159,862
Value Line Inc.............................................. 300 11,700
Vermont Financial Services Corp............................. 100 3,200
</TABLE>
12
<PAGE>
PORTFOLIO OF INVESTMENTS
JANUARY 31, 1996 (UNAUDITED)
COMMON STOCKS--CONTINUED
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
<S> <C> <C>
FINANCIAL--CONTINUED
Wachovia Corp................................................. 5,300 $ 237,175
Wells Fargo & Co.............................................. 1,400 328,475
Wesco Financial Corp.......................................... 200 34,500
----------
8,344,000
----------
FOODS & BEVERAGES--10.2%
Archer-Daniels-Midland Co..................................... 1 19
Ben & Jerry's (Class A) (b)................................... 100 1,625
CPC International Inc......................................... 4,600 334,650
Campbell Soup Co.............................................. 7,700 487,988
Coca-Cola Company............................................. 39,300 2,962,237
Fleming Cos. Inc.............................................. 1,200 22,800
General Mills, Inc............................................ 5,200 299,000
Heinz (H.J.) Company.......................................... 11,800 405,625
Hershey Foods Corp............................................ 2,500 176,875
Kellogg Co.................................................... 6,700 513,388
Odwalla Inc................................................... 300 5,325
PepsiCo., Inc................................................. 24,700 1,472,737
Quaker Oats Co................................................ 4,100 140,937
Ralston Purina Group.......................................... 3,500 225,313
Smucker (J.M.) Co. (Class A).................................. 1,000 20,750
Super Valu Inc................................................ 2,300 71,300
Sysco Corp.................................................... 5,700 182,400
TCBY Enterprises, Inc......................................... 500 2,000
Tootsie Roll Industries, Inc.................................. 618 24,109
Wrigley, (Wm.) Jr. Co......................................... 3,600 214,200
----------
7,563,278
----------
HEALTH CARE--9.5%
Acuson Corp. (b).............................................. 1,000 14,875
Allergan Inc.................................................. 1,900 63,175
Alza Corp. (b)................................................ 2,800 79,100
Angelica Corp................................................. 300 6,075
Apogee Enterprises, Inc....................................... 300 5,250
Becton Dickinson & Company.................................... 2,000 172,750
Bergen Brunswig Corp. (Class A)............................... 1,245 32,837
Biomet Inc. (b)............................................... 3,800 71,250
Community Psychiatric Centers (b)............................. 1,000 11,500
Forest Laboratories, Inc. (b)................................. 1,500 81,000
Humana Inc. (b)............................................... 5,000 138,125
Johnson & Johnson............................................. 20,300 1,948,800
Manor Care Inc................................................ 2,100 82,425
Medtronic Inc................................................. 7,200 411,300
Merck & Co., Inc.............................................. 38,700 2,718,675
Mylan Laboratories Inc........................................ 3,600 68,400
Oxford Health Plans........................................... 1,100 75,900
Schering-Plough Corp.......................................... 11,400 617,025
St. Jude Medical Inc.......................................... 2,100 92,663
Stryker Corp.................................................. 1,600 89,400
</TABLE>
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
<S> <C> <C>
HEALTH CARE--CONTINUED
Sunrise Medical Inc. (b)..................................... 600 $ 11,325
US Healthcare Inc............................................ 4,900 237,650
United American Healthcare................................... 200 2,200
----------
7,031,700
----------
HOUSEHOLD GOODS--5.9%
Alberto Culver Co. (Class B)................................. 700 25,200
Avon Products, Inc........................................... 2,100 165,900
Bassett Furniture Industries, Inc............................ 300 7,350
Church & Dwight Co., Inc..................................... 900 17,437
Clorox Co.................................................... 1,600 132,200
Colgate-Palmolive Co......................................... 4,600 340,400
Handleman Co................................................. 700 4,463
Harman International Industries, Inc......................... 630 24,176
Hasbro Inc................................................... 2,800 116,200
Huffy Corp................................................... 300 3,300
Kimberly-Clark Corp.......................................... 8,732 704,018
Leggett & Platt Inc.......................................... 2,500 60,000
Mattel, Inc.................................................. 6,969 224,750
Maytag Co.................................................... 3,400 66,725
Newell Co.................................................... 5,100 134,513
Oneida, Ltd.................................................. 200 3,100
Procter & Gamble Co.......................................... 21,600 1,811,700
Rubbermaid Inc............................................... 5,200 147,550
Shaw Industries.............................................. 4,700 59,337
Snap-On Tools Corp........................................... 1,300 57,038
Springs Industries Inc. (Class A)............................ 600 24,000
Stanhome, Inc................................................ 600 16,050
Stanley Works (The).......................................... 1,400 72,100
Thomas Industries............................................ 200 4,275
Whirlpool Corp............................................... 2,300 125,062
----------
4,346,844
----------
INSURANCE--6.5%
Aetna Life & Casualty Co..................................... 3,600 268,200
Alexander & Alexander Services Inc........................... 1,400 27,125
American General Corp........................................ 6,300 237,825
American International Group, Inc............................ 14,800 1,433,750
Chubb Corp................................................... 2,700 280,125
CIGNA Corp................................................... 2,350 278,769
General Re Corp.............................................. 2,600 397,800
Hartford Steam Boiler........................................ 600 31,350
Jefferson-Pilot Corp......................................... 2,250 112,219
Lincoln National Corp........................................ 3,200 169,200
Marsh & McLennan Companies, Inc.............................. 2,300 209,300
Providian Corp............................................... 3,100 136,012
SAFECO Corp.................................................. 3,800 136,325
St. Paul Companies........................................... 2,700 153,900
Torchmark Corp............................................... 2,200 104,225
Travelers Corp............................................... 9,909 651,517
</TABLE>
13
<PAGE>
PORTFOLIO OF INVESTMENTS
JANUARY 31, 1996 (UNAUDITED)
COMMON STOCKS--CONTINUED
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
<S> <C> <C>
INSURANCE--CONTINUED
UNUM Corp..................................................... 2,300 $ 141,450
USF&G Corp.................................................... 3,400 54,400
USLIFE Corp................................................... 1,125 36,141
----------
4,859,633
----------
MANUFACTURING--2.1%
Applied Materials, Inc. (b)................................... 5,900 218,300
Briggs & Stratton Corp........................................ 800 35,100
Boston Scientific Corp........................................ 5,400 276,750
Cincinnati Milacron........................................... 900 21,487
Clarcor, Inc.................................................. 300 6,188
Deere & Co.................................................... 8,400 315,000
Dionex Corp. (b).............................................. 400 15,000
Fastenal Co................................................... 1,200 40,650
Goulds Pumps, Inc............................................. 600 13,350
Hunt Manufacturing Co......................................... 400 6,400
Illinois Tool Works Inc....................................... 3,600 220,950
James River Corp. of Virginia................................. 2,600 68,250
Lawson Products, Inc.......................................... 300 7,200
Millipore Corp................................................ 1,500 64,125
Nordson Corp.................................................. 500 27,000
Thermo Electron Corp.......................................... 2,700 147,150
Watts Industries Inc. (Class A)............................... 1,000 17,375
Wellman Inc................................................... 1,000 20,000
Zum Industries Inc............................................ 400 8,950
----------
1,529,225
----------
MEDIA--5.5%
BET Holdings Inc. (Class B) (b)............................... 800 19,600
Capital Cities/ABC, Inc....................................... 4,600 591,675
Comcast Corp. (Class A)....................................... 7,700 154,963
Disney (Walt) Company (The)................................... 16,300 1,047,275
Dow Jones & Co. Inc........................................... 3,300 129,112
Frontier Corp................................................. 5,000 148,750
Gannett Co., Inc.............................................. 4,400 279,400
King World Productions Inc. (b)............................... 1,100 47,300
Knight-Ridder Inc............................................. 1,600 106,200
Lee Enterprises, Inc.......................................... 1,400 29,225
McGraw-Hill Inc............................................... 1,500 133,500
Media General Inc. (Class A).................................. 800 26,700
Meredith Corp................................................. 800 36,400
New York Times Co. (The) (Class A)............................ 2,900 84,100
Scholastic Corp............................................... 500 36,500
Tele-Communications, Inc.
(Class A) (b)................................................ 20,000 422,500
Times Mirror Co. (Class A).................................... 3,500 108,500
Turner Broadcasting System Inc.
(Class A).................................................... 5,000 135,000
US West Media Group (b)....................................... 14,900 314,762
</TABLE>
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
<S> <C> <C>
MEDIA--CONTINUED
Viacom Inc. (b).............................................. 2,500 $ 100,000
Washington Post Co. (The) (Class B).......................... 350 101,325
----------
4,052,787
----------
MISCELLANEOUS--1.9%
Alco Standard Corp........................................... 3,700 145,225
Allwaste, Inc. (b)........................................... 1,200 5,700
American Greetings Corp. (Class A)........................... 2,450 66,762
Avnet, Inc................................................... 1,300 55,738
Bemis Co., Inc............................................... 1,800 50,850
CPI Corp..................................................... 400 5,900
Cross, A.T. Co. (Class A).................................... 500 7,313
DeVRY Inc. (b)............................................... 400 10,900
Fedders Corp................................................. 600 3,600
Fuller (H.B.) Co............................................. 500 18,125
General Signal Corp.......................................... 1,650 55,687
Groundwater Technology, Inc.................................. 200 2,650
Harcourt General Inc......................................... 2,400 93,600
Hillenbrand Industries Inc................................... 2,400 79,800
Ionics Inc. (b).............................................. 400 16,050
Jostens Inc.................................................. 1,400 32,200
KENETECH Corp. (b)........................................... 900 1,125
Marriott International Corp.................................. 3,900 167,213
Omnicom Group, Inc........................................... 2,400 92,700
Polaroid Corporation......................................... 1,350 60,581
Premier Industrial Corp...................................... 2,850 87,637
Sealed Air Corp. (b)......................................... 1,400 41,125
Service Corp. International.................................. 3,900 169,163
Sonoco Products Co........................................... 3,005 80,384
Toro Co. (The)............................................... 300 10,425
Whitman Corp................................................. 3,100 70,525
----------
1,430,978
----------
RESOURCE DEVELOPMENT--2.6%
Air Products & Chemicals, Inc................................ 3,500 186,812
Aluminum Co. of America...................................... 5,600 310,800
ARCO Chemical Company........................................ 3,000 155,625
Battle Mountain Gold Co...................................... 2,400 25,500
Betz Laboratories, Inc....................................... 1,000 41,375
Cabot Corp................................................... 1,200 69,000
Calgon Carbon Corp........................................... 1,200 13,350
Consolidated Papers Inc...................................... 1,600 87,200
Cyprus Amax Minerals Co...................................... 3,000 79,500
Echo Bay Mines Ltd........................................... 3,900 50,213
Inland Steel Industries Inc.................................. 1,500 42,937
Mead Corp.................................................... 1,600 88,400
Morton International Inc..................................... 4,600 170,200
Nalco Chemical Co............................................ 2,300 70,437
Nucor Corp................................................... 2,700 156,938
</TABLE>
14
<PAGE>
PORTFOLIO OF INVESTMENTS
JANUARY 31, 1996 (UNAUDITED)
COMMON STOCKS--CONTINUED
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
<S> <C> <C>
RESOURCE DEVELOPMENT--CONTINUED
Praxair Inc................................................... 4,500 $ 153,000
Sigma-Aldrich Corp............................................ 1,500 78,750
Westvaco Corp................................................. 3,000 87,000
Worthington Industries, Inc................................... 2,700 56,700
----------
1,923,737
----------
RETAIL--9.9%
Albertson's, Inc.............................................. 8,000 273,000
American Stores Co............................................ 4,900 127,400
Bob Evans Farms, Inc.......................................... 1,200 20,100
Charming Shoppes Inc.......................................... 2,500 6,875
Circuit City Stores Inc....................................... 3,100 79,825
Claire's Stores Inc........................................... 500 9,562
Dayton-Hudson Corp............................................ 2,200 164,450
Dillard Department Stores..................................... 3,500 101,500
Dollar General Corp........................................... 1,956 48,655
Egghead Inc. (b).............................................. 300 1,838
Gap, Inc. (The)............................................... 4,400 207,350
Giant Food Inc. (Class A)..................................... 2,100 67,200
Gibson Greetings Inc.......................................... 500 7,750
Great Atlantic & Pacific Tea Co., Inc......................... 1,200 28,200
Hannaford Brothers Co......................................... 1,300 35,263
Hechinger Co. (Class A)....................................... 800 4,600
Home Depot, Inc. (The)........................................ 14,833 682,318
International Dairy Queen, Inc.
(Class A) (b)................................................ 600 13,050
K-Mart Corp................................................... 13,300 78,137
Kroger Co. (b)................................................ 4,000 139,000
Lillian Vernon Corp........................................... 200 2,700
Limited, Inc. (The)........................................... 11,150 186,762
Longs Drug Stores, Inc........................................ 700 31,675
Lowe's Companies, Inc......................................... 4,900 152,513
Luby's Cafeterias, Inc........................................ 1,000 21,000
May Department Stores Co...................................... 7,700 342,650
McDonald's Corp............................................... 22,000 1,105,500
Melville Corp................................................. 3,200 91,200
Mercantile Stores Co., Inc.................................... 1,200 56,550
Morrison Restaurants Inc...................................... 1,000 16,000
Nordstrom Inc................................................. 2,700 105,975
Penney, J.C. Co., Inc......................................... 6,850 335,650
Pep Boys-Manny, Moe & Jack.................................... 2,250 65,250
Petrie Stores Corp............................................ 1,200 2,550
Price/Costco Inc. (b)......................................... 5,865 91,641
Ryan's Family Steakhouse, Inc. (b)............................ 1,300 9,100
Sears Roebuck & Co............................................ 12,200 506,300
Skyline Corp.................................................. 200 4,150
Specs Music Inc. (b).......................................... 200 475
Starbucks Corp................................................ 2,000 33,500
TJX Companies Inc. (The)...................................... 2,600 49,075
Tandy Corp.................................................... 2,000 76,500
Toys "R' Us, Inc. (b)......................................... 8,770 194,036
</TABLE>
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
<S> <C> <C>
RETAIL--CONTINUED
Wal-Mart Stores, Inc........................................ 71,900 $ 1,464,963
Walgreen Co................................................. 7,700 268,537
Whole Foods Market (b)...................................... 300 4,462
Woolworth (F.W.) Co......................................... 4,000 45,000
-----------
7,359,787
-----------
TECHNOLOGIES--14.1%
Advanced Micro Devices, Inc. (b)............................ 4,100 81,487
Amdahl Corp. (b)............................................ 3,900 28,519
American Power Conversion
Corp. (b) 2,900 25,194
Analog Devices, Inc......................................... 3,600 81,000
Apple Computer, Inc......................................... 3,800 104,975
Automatic Data Processing, Inc.............................. 8,900 354,888
Baldor Electric Co.......................................... 1,050 21,525
Borland International, Inc. (b)............................. 1,200 22,350
Caliber Systems Inc......................................... 1,100 41,800
Cisco Systems, Inc. (b)..................................... 8,700 724,275
Compaq Computer Corp. (b)................................... 8,400 395,850
Computer Assoc. International Inc........................... 7,600 519,650
Cooper Industries Inc....................................... 3,600 135,450
DSC Communications Corp. (b)................................ 3,950 115,044
Digital Equipment Corp. (b)................................. 4,800 347,400
Grainger, (W.W.) Inc........................................ 1,600 107,800
Hewlett-Packard Co.......................................... 16,000 1,356,000
Hubbell Inc. (Class B)...................................... 1,130 75,993
Intel Corp.................................................. 25,700 1,419,522
International Business Machines, Inc........................ 17,800 1,935,750
MCI Communications Corp..................................... 21,400 612,575
Micron Technology, Inc...................................... 6,500 222,625
Molex, Inc.................................................. 3,000 96,750
National Semiconductor Corp................................. 4,200 72,450
Novell Inc. (b)............................................. 11,300 152,550
Perkin-Elmer Corp........................................... 1,400 66,150
Quarterdeck Corp. (b)....................................... 1,000 16,000
Raychem Corp................................................ 1,400 93,625
Shared Medical Systems Corp................................. 800 45,600
Solectron Corp. (b)......................................... 1,500 69,000
Sprint Corp................................................. 10,900 470,062
Stratus Computer Inc. (b)................................... 700 18,550
Sun Microsystems Inc. (b)................................... 5,900 271,400
Tandem Computers Inc. (b)................................... 3,400 31,875
Tektronix, Inc.............................................. 1,000 45,750
Tellabs, Inc. (b)........................................... 2,800 123,200
Thomas & Betts Corp......................................... 600 47,175
Xilinx Inc. (b)............................................. 2,400 92,700
-----------
10,442,509
-----------
TRANSPORTATION--2.2%
AMR Corp. (b)............................................... 2,500 190,000
Airborne Freight Corp....................................... 600 15,975
</TABLE>
15
<PAGE>
PORTFOLIO OF INVESTMENTS
JANUARY 31, 1996 (UNAUDITED)
COMMON STOCKS--CONTINUED
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
<S> <C> <C>
TRANSPORTATION--CONTINUED
Alaska Air Group, Inc. (b)..................................... 300 $ 5,925
CSX Corp....................................................... 6,700 310,712
Conrail Inc.................................................... 2,700 191,025
Consolidated Freightways, Inc.................................. 1,500 34,500
Delta Air Lines, Inc........................................... 1,600 109,400
Federal Express Corp. (b)...................................... 1,900 144,637
GATX Corp...................................................... 600 27,750
Norfolk Southern Corp.......................................... 4,100 323,387
Roadway Services............................................... 550 6,050
Ryder System, Inc.............................................. 2,700 63,113
Southwest Airlines Inc......................................... 4,800 124,800
UAL Corp. (b).................................................. 450 72,450
Yellow Corp.................................................... 600 7,200
---------
1,626,924
---------
UTILITIES--9.6%
American Water Works Co., Inc.................................. 1,200 45,750
Ameritech Corp................................................. 17,300 1,040,163
Atlanta Gas & Light Co......................................... 2,000 40,500
Bell Atlantic Corp............................................. 13,700 943,587
BellSouth Corp................................................. 31,100 1,333,413
Brooklyn Union Gas Company (The)............................... 1,650 46,200
California Energy Co., Inc. (b)................................ 1,700 34,000
Citizens Utilities Co. (Class A) (b)........................... 7,287 88,357
Connecticut Energy Corp........................................ 200 4,200
Eastern Enterprises............................................ 900 31,050
El Paso Natural Gas Co......................................... 1,000 32,375
Equitable Resources Inc........................................ 1,200 34,050
Idaho Power Co................................................. 1,400 43,050
LG & E Energy Corp............................................. 1,100 47,437
MCN Corp....................................................... 2,100 51,712
NICOR Inc...................................................... 1,900 51,775
Noram Energy Corp.............................................. 4,300 37,625
Northwestern Public Service Co................................. 200 5,850
NYNEX.......................................................... 13,500 723,938
Oklahoma Gas & Electric Co..................................... 1,200 50,400
ONEOK Inc...................................................... 700 14,612
Pacific Enterprises............................................ 2,500 69,375
Pacific Telesis Group.......................................... 13,300 392,350
Peoples Energy Corp............................................ 1,200 39,150
Potomac Electric Power Co...................................... 3,600 97,200
Public Service Co. of Colorado................................. 2,100 75,600
</TABLE>
<TABLE>
<CAPTION>
DESCRIPTION SHARES VALUE
<S> <C> <C>
UTILITIES--CONTINUED
SBC Telecommunications.................................... 19,200 $ 1,087,200
Southern New England Telecom.............................. 2,000 80,000
Telephone & Data Systems.................................. 1,800 73,125
US West Communications Group.............................. 14,700 516,338
Washington Gas Light Co................................... 1,200 26,250
-----------
7,156,632
-----------
VEHICLE COMPONENTS--0.6%
Cooper Tire & Rubber Co................................... 2,550 63,112
Cummins Engine Inc........................................ 1,450 56,006
Dana Corp................................................. 3,100 101,913
Federal-Mogul Corp........................................ 1,100 21,312
Genuine Parts............................................. 3,800 169,100
Modine Manufacturing Co................................... 800 20,200
SPX Corp.................................................. 200 2,950
Smith, A.O................................................ 600 15,075
Spartan Motors Inc. (b)................................... 300 2,887
-----------
452,555
-----------
Total Common Stocks (Cost $56,214,285)........................... 73,065,346
-----------
PREFERRED STOCK--0.6%
FEDERAL SPONSORED CREDIT--0.6%
Federal Home Loan Mortgage Corp........................... 5,600 479,500
-----------
Total Preferred Stocks (Cost $309,353)........................... 479,500
-----------
TOTAL INVESTMENTS (A)--99.0%
(Cost $56,523,638).............................................. 73,544,846
Other Assets Less Liabilities--1.0%.............................. 740,826
-----------
NET ASSETS--100.0%............................................... $74,285,672
===========
</TABLE>
- -------
(a) The aggregate cost for federal income tax purposes is $56,523,637, the
aggregate gross unrealized appreciation is $18,591,743, and the aggregate
gross unrealized depreciation is $1,570,535, resulting in net unrealized
appreciation of $17,021,208.
(b) Non-income producing security.
See Notes to Financial Statements
16
<PAGE>
DOMINI SOCIAL INDEX PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS:
<S> <C>
Investments at value (Cost $56,523,638) (Note 1)................... $73,544,846
Cash............................................................... 991,492
Dividends receivable............................................... 132,636
Deferred organization expenses (Note 1)............................ 3,435
-----------
Total assets.................................................... 74,672,409
-----------
LIABILITIES:
Expenses payable (Note 2).......................................... 104
Payable for securities purchased................................... 386,633
-----------
Total liabilities............................................... 386,737
-----------
NET ASSETS APPLICABLE TO INVESTORS' BENEFICIAL INTERESTS........... $74,285,672
===========
NET ASSETS CONSIST OF:
Paid-in Capital.................................................... $74,285,672
===========
</TABLE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JANUARY 31, 1996
(UNAUDITED)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends........................................................... $ 640,453
EXPENSES (NOTES 1 AND 2):
Investment management fee................................ $ 46,898
Investment advisory fee.................................. 16,200
Administration fee....................................... 16,200
Expense payment fees..................................... 77,540
Amortization of organization expenses.................... 5,222
----------
Total expenses................................................... 162,060
----------
NET INVESTMENT INCOME............................................... 478,393
NET REALIZED GAIN ON INVESTMENTS (NOTE 3):
Proceeds from sales...................................... 1,935,525
Cost of securities sold.................................. 1,600,204
----------
Net realized gain on investments................................. 335,321
NET UNREALIZED APPRECIATION OF INVESTMENTS:
Beginning of year........................................ 9,759,028
End of year.............................................. 17,021,208
----------
Net unrealized appreciation of investments....................... 7,262,180
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................ $8,075,894
==========
</TABLE>
See Notes to Financial Statements
17
<PAGE>
DOMINI SOCIAL INDEX PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS FOR THE
ENDED YEAR ENDED
JANUARY 31, 1996 JULY 31, 1995
(UNAUDITED) (AUDITED)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From Operations:
Net investment income.......................... $ 478,393 $ 734,456
Net realized gain on investments............... 335,321 405,427
Net change in unrealized appreciation.......... 7,262,180 8,729,434
----------- -----------
Net increase resulting from operations......... 8,075,894 9,869,317
----------- -----------
Transactions in Investors' Beneficial Interests:
Additions...................................... 13,013,750 14,888,452
Reductions..................................... (806,760) (2,076,641)
----------- -----------
Net increase from transactions in investors'
beneficial interests.......................... 12,206,990 12,811,811
----------- -----------
Total Increase in Net Assets.................... 20,282,884 22,681,128
NET ASSETS:
Beginning of period............................ 54,002,788 31,321,660
----------- -----------
End of period.................................. $74,285,672 $54,002,788
=========== ===========
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE FOR THE
SIX MONTHS PERIOD
ENDED FOR THE YEAR ENDED JULY 31, AUGUST 10, 1990(c)
JANUARY 31, 1996 --------------------------------------------- TO JULY 31, 1991
1995 1994 1993 1992
(UNAUDITED) (AUDITED) (AUDITED) (AUDITED) (AUDITED) (AUDITED)
<S> <C> <C> <C> <C> <C> <C>
Ratio of net investment
income to average net
assets................. 1.48%(b) 1.85%(a) 2.13%(a) 1.88%(a) 1.99%(a) 1.85%(a)(b)
Ratio of expenses to av-
erage net assets....... 0.50%(b) 0.43%(a) 0.29%(a) 0.29%(a) 0.29%(a) 0.29%(a)(b)
Portfolio Turnover...... 3% 6% 8% 4% 3% --
</TABLE>
(a) Reflects a voluntary waiver of fees by the Administrator and Adviser of the
Index Portfolio. Due to the limitations set forth in the Expense
Reimbursement Agreement, had the Administrator and Adviser not waived their
fees, the ratios of net investment income and expenses to average net
assets as stated would not have changed for the periods ended July 31,
1993, 1992 and 1991. For the years ended July 31, 1995 and 1994, the ratios
of net investment income and expenses to average net assets would have been
1.75% and 0.53% and 2.00% and 0.42%, respectively. (See Note 2.)
(b) Annualized.
(c) Commencement of operations.
See Notes to Financial Statements
18
<PAGE>
DOMINI SOCIAL INDEX PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1996
(UNAUDITED)
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
Domini Social Index Portfolio (the "Index Portfolio") is registered under the
Investment Company Act of 1940 (the "Act") as a no-load, diversified, open-end
management investment company which was organized as a trust under the laws of
the State of New York on June 7, 1989. The Index Portfolio intends to correlate
its investment portfolio as closely as is practicable with the Domini Social
Index (the "Index"), which is a common stock index developed and maintained by
Kinder, Lydenberg, Domini & Co., Inc. ("KLD"), the Index Portfolio's Adviser.
The Declaration of Trust permits the Trustees to issue an unlimited number of
beneficial interests in the Index Portfolio. The Index Portfolio commenced
operations upon effectiveness on August 10, 1990 and began investment
operations on June 3, 1991. The following is a summary of the significant
accounting policies of the Index Portfolio:
(A) VALUATION OF INVESTMENTS: The Index Portfolio values securities at the last
reported sale price, or at the last reported bid price if no sales are
reported.
(B) DIVIDEND INCOME: Dividend income is recorded on the ex-dividend date.
(C) FEDERAL TAXES: The Index Portfolio's policy is to comply with the
applicable provisions of the Internal Revenue Code. Accordingly, no provision
for Federal taxes is necessary.
(D) DEFERRED ORGANIZATION EXPENSE: Expenses incurred by the Index Portfolio in
connection with its organization are being amortized by the Index Portfolio on
a straight-line basis over a five-year period.
(E) OTHER: Investment transactions are accounted for on the trade date. Gains
and losses are determined on the basis of identified cost.
NOTE 2--TRANSACTIONS WITH AFFILIATES
(A) INVESTMENT ADVISORY FEES: The Index Portfolio has retained KLD as the
Investment Adviser of the Index Portfolio. The services provided by KLD consist
of the determination of the stocks to be included in the Index and evaluating,
in accordance with KLD's criteria, debt securities which may be purchased by
the Index Portfolio. For its services under the Investment Advisory Agreement,
KLD receives from the Index Portfolio a fee accrued daily at an annual rate
equal to 0.05% of the Index Portfolio's average daily net assets.
(B) INVESTMENT MANAGEMENT FEES: The Index Portfolio has retained Mellon Equity
Associates ("MEA") as the Investment Manager of the Index Portfolio. MEA does
not determine the composition of the Index. Under the Management Agreement, the
Index Portfolio pays MEA an investment management fee equal on an annual basis
to the following percentages of the Index Portfolio's average daily net assets
for its then-current fiscal year: 0.10% of assets up to $50 million; 0.30% of
assets between $50 million and $100 million; 0.20% of assets between $100
million and $500 million; and 0.15% of assets over $500 million.
(C) ADMINISTRATION FEES: The Index Portfolio has retained Signature Broker-
Dealer Services, Inc. ("Signature") to serve as Administrator of the Index
Portfolio. Certain officers of Signature serve as officers and trustee to the
Index Portfolio. Under the Administrative Services Agreement, Signature
provides management and administrative services necessary for the operations of
the Index Portfolio, furnishes office space and facilities required for
conducting the business of the Index Portfolio and pays the compensation of the
Index Portfolio's officers and Trustee affiliated with Signature. For these
services, Signature receives from the Index Portfolio a fee accrued daily at an
annual rate equal to 0.05% of the Index Portfolio's average daily net assets.
(D) REIMBURSEMENT OF EXPENSES: The Administrator has agreed to pay certain
expenses of the Index Portfolio subject to reimbursement. To accomplish such
reimbursement, the Administrator will receive an expense reimbursement fee from
the Index Portfolio such that after such reimbursement the aggregate expenses
of the Index Portfolio will not exceed 0.50% of the average daily net assets of
the Index Portfolio. The expense reimbursement fee agreement will terminate on
the earlier of April 30, 2000, or the date on which the cumulative
reimbursement fee equals the cumulative payments of the reimbursable expenses
made by the Administrator. For the six months ended January 31, 1996, the
Administrator incurred approximately $56,590 in expenses on behalf of the Index
Portfolio.
NOTE 3--INVESTMENT TRANSACTIONS
Purchase and sales of investments, other than U.S. Government securities and
short-term obligations, aggregated $14,086,023 and $1,600,204, respectively.
