DEVCAP
SHARED RETURN FUND
(PHOTO)
ANNUAL REPORT
JULY 31, 2000
(LOGO)
DEVCAP
DEVELOPMENT CAPITAL
GLOBALLY RESPONSIBLE INVESTMENTS
<PAGE>
DEVCAP SHARED RETURN FUND
DRAFT ANNUAL REPORT
--------------------------------------------------------------------------------
PRESIDENT'S LETTER TO SHAREHOLDERS
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Dear Investor,
The DEVCAP Shared Return Fund has had a very productive year. We
enthusiastically look forward to even greater accomplishments well into our
socially responsible investment and charitable giving futures.
For the year ended July 31, 2000, DEVCAP returned 10.16%. This return
exceeded the return of the S&P 500/R Index by 1.18%. The total return for the
S&P 500/R Index was 8.98% over this same period. The S&P 500/R Index is
unmanaged, and does not reflect the deduction of fees associated with a mutual
fund. An investor can not invest directly in an index. Past performance is not
indicative of future performance; the return and net asset value of the Fund
will fluctuate.
In this letter, I will report on the more significant accomplishments of our
last year, and then move on to disclose our plan to expand our operations so
that we can be worthy of your continued financial support and generosity.
You, the owners of DEVCAP, chose to further distinguish yourselves as a new
force for socially responsible investing when you elected to sever our
relationship with the Domini Social Index Portfolio and Domini 400 Social Index
SM in February 2000 and approved the retention of Christian Brothers Investment
Services, Inc. as the Fund's investment manager. In doing so, you have
spotlighted the importance of Life Ethics, abortion and contraception, in the
Fund's socially responsible investing approach. In addition, under this new
socially responsible investing approach, we make clear our opposition to
violence, tobacco, pornography and threats to the environment through the
Fund's exclusionary investment screens. Not content to simply avoid certain
investments, the Fund actively supports efforts to change corporate behavior
with respect to such issues as human rights, diversity and justice in the
workplace, all through the active ownership efforts of CBIS in which CBIS
representatives may actively engage corporate management on these issues
through dialogue, proxy voting and shareholder resolutions.
Stepping away from the Domini Social Index Portfolio and the Domini 400
Social Index/SM may at first be seen as moving into a riskier domain, away from
a large investment pool that has had solid performance and was built upon an
index philosophy. However, the new investment strategy is to limit the Fund's
universe of securities to those securities which make up the S&P 500/R Index.
Next, we eliminate any investment that fails any one of our exclusionary
screens. The Fund's investment weighting is based upon the securities' market
capitalization as a proportion of the remaining S&P 500/R Index securities. The
Fund's performance goal is to seek a correlation of 0.95 or better with the
performance of the S&P 500/R Index. We expect to lag this benchmark to the
extent that the expense ratio impacts the Fund's performance, and to the extent
that liquidity requirements prevent the Fund from being fully invested. We see
the measure of success in meeting the Fund's performance standards as most
indicated in our tracking error relative to the S&P 500/R Index. The lower the
percentage tracking error, the closer our performance is to that of the S&P
500/R Index. We believe that the Fund's returns will over time be comparable to
those of the S&P 500/R Index and that such anticipated returns are suitable for
an investment intended in part to support charitable giving.
DEVCAP's relationship with Catholic Relief Services has remained a mutually
beneficial arrangement that deserves greater explanation and analysis on the
part of all investors. CRS is a substantial investor in the Fund, owning over
60% of the net equity as of July 31, 2000. Also, CRS has become the sole sponsor
of the Fund, as sole owner of Development Capital Fund. CRS finances the
marketing efforts of the Fund, and has agreed to reimburse the Fund for all
expenses (excluding brokerage fees and commissions, interest, taxes and other
extraordinary expenses) in excess of 1.75%. We hope that continuing marketing
efforts will result in the
<PAGE>
growth of the Fund and a lowering of the expense ratio of the Fund so that in
time the Fund will become self-sufficient. We believe this multifaceted support
enhances the Fund's chance for long-term viability and makes possible the
continued existence of a unique mutual fund that reflects what we consider
essential ethical principles in social screening mechanisms and active ownership
strategies.
The Fund's close affiliation with Catholic Relief Services allows the Fund
to identify appropriate micro-enterprise operations around the world, which are
in need of support. CRS is a most respected provider of relief and development,
and has been well established as a professionally staffed sponsor of technical
training and a provider of loan capital for the world's most needy
entrepreneurs. In the last three years, DEVCAP shareholders have given $796,000
in donations around the world in support of these programs. DEVCAP this year
identified a program in Armenia where resources will be used in conjunction with
a micro-enterprise program of Save the Children, one of the original sponsors of
the Fund.
In the year ahead, we expect to expand our marketing efforts to make the
Fund better known as an alternative to other investment opportunities. We
believe that there is much to say about the benefits of investing with DEVCAP
that is unique and that sets our Fund apart. We believe in the value of life and
in the solidarity of the human spirit that we demonstrate in the market place.
At the heart of these efforts will always be our commitment to share our
good fortune and successes with the world's poor. We are committed to
maintaining a charitable giving intent as a prime motivator toward our
investment success. We strongly believe that the more people who see the Fund
and understand its intent, the more investors we will have in our Fund. As the
assets in the Fund increase, the expense ratio should decline, which should
increase the overall net return of the Fund, and allow the possibility of more
donations being channeled toward small business owners. As the assets of the
Fund increase, the closer will be our fit to the S&P 500/R Index. We estimate
that the Fund will hold approximately 450 of the 500 securities comprising the
Index after applying the exclusionary screens. We also recognize that larger
investments allow us to speak with a more noticeable voice on socially
responsible issues through the active ownership initiatives of CBIS.
The overall investment market has cooled down from its overly energetic days
of this past winter. There has been a stock market correction as overly inflated
values resulted from a technology-enticed, internet-exaggerated, communication-
intoxicated market place. The Federal Reserve's interest rate hikes gradually
tightened down some of the euphoria and the raging bull market lost its rage.
Apart from these self-inflicted wounds, there was a real dampening as oil prices
surged upward before a surprised but wealthier U.S. public. Therefore, we paid a
bit more, but we still traveled. We are still fully employed and we are still
inviting skilled technicians to help us derive more benefits from new technology
and new improved working conditions. The economy is still expanding and
improving its efficiencies. We are still very soundly based in an economic
expansion. There are emerging strengths around the world, particularly in Europe
where economic expansion is picking up, but we should not be negatively impacted
by Europe's success. In the years to come we should be celebrating Europe's
growth, Latin America's expansion and Asia's market potential. We believe that
the S&P 500/R Index will benefit from a growing international market and clearly
corporate America's success stories will always be among the vast contingent of
that Index.
There you have our long range philosophy: invest in socially screened S&P
500/R Index stocks because we expect the long term winners will stay in that
mix; use active ownership of the securities the Fund holds to improve the social
responsibility of corporate issuers; share the benefits of our economy with the
world's most needy; and enhance their chance for self-sufficiency.
Thank you for participating and sharing,
/s/ Joseph N. St. Clair
Joseph N. St. Clair
<PAGE>
COMPARISON OF $10,000 INVESTMENT IN THE
DEVCAP SHARED RETURN FUND AND S&P 500/R INDEX<F1>
-------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
-------------------------------------------------
1 Year ended 7/31/00 10.16%
-------------------------------------------------
3 Years ended 7/31/00 17.23%
-------------------------------------------------
Inception (10/19/95) 22.27%
to 7/31/00
-------------------------------------------------
DEVCAP S&P 500
------ -------
31-Oct-95 9,880 9,903
31-Jan-96 10,650 10,896
30-Apr-96 10,980 11,266
31-Jul-96 10,710 11,088
31-Oct-96 11,860 12,289
31-Jan-97 13,351 13,765
30-Apr-97 13,751 14,097
31-Jul-97 16,233 16,869
31-Oct-97 15,572 16,235
31-Jan-98 17,071 17,469
30-Apr-98 19,145 19,886
31-Jul-98 19,616 20,122
31-Oct-98 19,305 19,805
31-Jan-99 23,437 23,145
30-Apr-99 23,619 24,226
31-Jul-99 23,740 24,187
31-Oct-99 24,337 24,889
31-Jan-00 25,319 25,540
30-Apr-00 26,588 26,680
31-Jul-00 26,151 26,358
<F1> The S&P 500(R) Index is an unmanaged index used to portray the pattern
of common stock movement based on the average performance of 500 widely
held common stocks and does not reflect the deduction of fees and expenses.
Past performance does not guarantee future results. Investment return and
principal value of an investment will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost.
PHOTO ON COVER DEPICTS WOMEN WHO ARE MEMBERS OF A VILLAGE BANK IN EL SALVADOR
WHERE CATHOLIC RELIEF SERVICES SPONSORS MICROENTERPRISE WITH DEVCAP DONATIONS.
<PAGE>
DEVCAP SHARED RETURN FUND
SCHEDULE OF INVESTMENTS
JULY 31, 2000
NUMBER
OF SHARES VALUE
---------- -----
COMMON STOCKS - 99.13%
BASIC INDUSTRIES - 2.18%
300 Alcan Aluminum Ltd. $ 9,844
2,012 Alcoa, Inc. 60,863
100 Allegheny Technologies, Inc. 2,069
300 Allied Waste Industries, Inc.<F1> 2,794
147 Arch Coal, Inc. 1,158
300 Avery Dennison Corp. 16,275
400 B.F. Goodrich Co. (The) 14,275
1,400 Barrick Gold Corp. 22,313
100 Bemis Company, Inc. 3,437
500 Bethlehem Steel Corp. 2,312
900 Dow Chemical Co. (The) 25,875
400 Engelhard Corp. 7,225
100 FMC Corp. 6,025
200 Georgia-Pacific Group 4,962
1,300 Homestake Mining Co. 7,069
300 Inco Limited 4,406
370 International Paper Co. 12,580
300 Louisiana-Pacific Corp. 2,906
300 Mead Corp. (The) 7,612
100 Milacron, Inc. 1,437
500 Minnesota Mining and Manufacturing Co. 45,031
500 Newell Rubbermaid, Inc. 13,469
500 Newmont Mining Corp. 8,875
400 Owens-Illinois, Inc.<F1> 5,325
600 Pactiv Corp.<F1> 5,550
1,100 Placer Dome, Inc. 9,350
400 Praxair, Inc. 15,825
200 Sealed Air Corp.<F1> 10,075
300 USX-U.S. Steel Group 5,381
700 Waste Management, Inc. 13,081
200 Westvaco Corp. 5,488
200 Weyerhaeuser Co. 9,137
200 Worthington Industries, Inc. 2,113
----------
364,137
----------
CAPITAL GOODS - 4.80%
200 Caterpillar, Inc. 6,813
100 Centex Corp. 2,394
100 Crane Co. 2,200
100 Cummins Engine Co., Inc. 3,200
100 Dana Corp. 2,294
500 Deere & Co. 19,281
200 Emerson Electric Co. 12,212
266 Energizer Holdings, Inc.<F1> 6,417
NUMBER
OF SHARES VALUE
---------- -----
CAPITAL GOODS - CONTINUED
12,300 General Electric Co. $ 632,681
1,000 Honeywell International, Inc. 33,625
700 Illinois Tool Works, Inc. 40,075
100 Ingersoll-Rand Co. 3,925
100 Kaufman & Broad Home Corp. 1,956
100 Millipore Corp. 6,288
200 Pall Corp. 4,150
100 Parker-Hannifin Corp. 3,556
200 Stanley Works (The) 5,238
300 Timken Co. (The) 5,344
500 W.R. Grace & Co.<F1> 4,937
200 W.W. Grainger, Inc. 6,350
----------
802,936
----------
CONSUMER DURABLES - 2.08%
300 Corning, Inc. 70,181
1,200 Ford Motor Co. 55,875
600 General Motors Corp. 34,162
500 Goodyear Tire & Rubber Co. 9,969
200 Harley-Davidson, Inc. 8,975
500 Leggett & Platt, Inc. 8,750
200 Lexmark International, Inc.<F1> 9,012
200 Maytag Corp. 6,775
742 Palm, Inc.<F1> 28,938
100 Snap-on, Inc. 3,019
30 Toys "R" Us, Inc.<F1> 495
2,000 Tyco International Ltd. 107,000
100 Whirlpool Corp. 4,319
----------
347,470
----------
CONSUMER NON-DURABLES - 6.51%
100 Alberto-Culver Co. 3,038
300 Anheuser-Busch Cos., Inc. 24,150
600 Avon Products, Inc. 23,812
100 Ball Corp. 3,469
700 Bestfoods Co. 48,737
900 Campbell Soup Co. 23,850
600 Clorox Co. (The) 24,787
4,200 Coca Cola Co. (The) 257,513
1,500 Colgate-Palmolive Co. 83,531
800 General Mills, Inc. 27,500
1,100 Gillette Co. 32,106
<PAGE>
DEVCAP SHARED RETURN FUND
SCHEDULE OF INVESTMENTS
JULY 31, 2000
NUMBER
OF SHARES VALUE
---------- -----
CONSUMER NON-DURABLES - CONTINUED
900 H.J. Heinz Co. $35,944
300 Hasbro, Inc. 3,413
300 Hershey Foods Corp. 13,875
1,400 Kimberly-Clark Corp. 80,412
100 Liz Claiborne, Inc. 3,900
200 Nabisco Group Holding Corp. 5,300
3,200 PepsiCo, Inc. 146,600
100 Polaroid Corp. 1,813
2,200 Procter & Gamble Co. 125,125
300 Quaker Oats Co. (The) 20,175
700 Sara Lee Corp. 12,906
400 Seagram Co., Ltd. (The) 22,425
400 Sherwin Williams Co. (The) 8,325
600 Unilever NV 26,550
300 V. F. Corp. 6,600
300 Wm. Wrigley Jr. Co. 22,800
----------
1,088,656
----------
CONSUMER SERVICES - 12.01%
648 Agilent Technologies, Inc.<F1> 26,406
1,100 Albertson's, Inc. 33,206
6,742 AT&T Corp. 208,581
100 Best Buy Co., Inc.<F1> 7,275
200 Block H&R, Inc. 6,400
300 Brunswick Corp. 5,644
500 Cendant Corp.<F1> 6,406
500 Circuit City Stores-Circuit City Group 11,469
200 Clear Channel Communications, Inc.<F1> 15,238
2,200 Comcast Corp. 74,834
1,100 Conoco, Inc. 25,369
1,100 Costco Wholesale Corp.<F1> 35,819
1,000 CVS Corp. 39,438
1,000 Delphi Automotive Systems 14,813
875 Dollar General Corp. 16,078
200 Dow Jones & Co., Inc. 13,187
400 Eastman Kodak Co. 21,950
100 Ecolab, Inc. 3,581
1,600 Gap, Inc. (The) 57,300
200 Harcourt General, Inc. (The) 11,038
3,800 Home Depot, Inc. (The) 196,650
200 IKON Office Solutions, Inc. 813
100 Interpublic Group of Cos., Inc. (The) 4,006
NUMBER
OF SHARES VALUE
---------- -----
CONSUMER SERVICES - CONTINUED
700 Kmart Corp. $4,900
2,100 Kroger Co. 43,444
800 Limited, Inc. 16,350
1,000 Lowe's Cos., Inc. (The) 42,188
600 Marriott International, Inc. 24,000
800 May Department Stores Co. (The) 19,000
3,400 McDonald's Corp. 107,100
500 McGraw-Hill Cos., Inc. (The) 29,719
100 Meredith Corp. 3,181
400 New York Times Co. (The) 16,475
100 Office Depot, Inc.<F1> 625
400 Omnicom Group, Inc. 34,000
400 Safeway, Inc.<F1> 18,025
200 Sears, Roebuck & Co. 5,975
1,800 Sprint Corp. 64,125
500 Staples, Inc.<F1> 6,906
300 SUPERVALU, Inc. 5,306
800 SYSCO Corp. 31,500
800 TJX Cos., Inc. 13,400
500 Tribune Co. 16,250
1,151 Viacom, Inc., Class B<F1> 76,326
157 Visteon Corp. 2,200
6,700 Wal Mart Stores, Inc. 368,081
2,500 Walgreen Co. 77,969
3,700 Walt Disney Co. (The) 143,144
200 Winn-Dixie Stores, Inc. 2,863
----------
2,008,553
----------
ENERGY - 5.32%
500 Amerada Hess Corp. 30,250
1,037 Anadarko Petroleum Corp. 49,582
300 Apache Corp. 14,925
600 Ashland, Inc. 19,762
1,000 Baker Hughes, Inc. 34,625
300 Coastal Corp. (The) 17,325
1,800 Enron Corp. 132,525
4,900 Exxon Mobil Corp. 392,000
900 Halliburton Co. 41,513
400 McDermott International, Inc. 2,975
200 Rowan Cos., Inc. 5,050
500 Schlumberger Ltd. 36,969
400 Sunoco, Inc. 9,750
<PAGE>
DEVCAP SHARED RETURN FUND
SCHEDULE OF INVESTMENTS
JULY 31, 2000
NUMBER
OF SHARES VALUE
---------- -----
ENERGY - CONTINUED
500 Tosco Corp. $ 13,250
500 Transocean Sedco Forex, Inc. 24,750
800 USX-Marathon Group 19,450
1,100 Williams Cos., Inc. (The) 45,925
----------
890,626
----------
FINANCIAL SERVICES - 16.90%
300 Aetna, Inc. 16,650
900 Allstate Corp. 24,806
3,300 American Express Co. 187,069
600 American General Corp. 40,012
5,139 American International Group, Inc. 450,626
300 AmSouth Bancorporation 5,044
100 Aon Corp. 3,600
700 Associates First Capital Corp. 18,331
1,900 Bank of America Corp. 90,012
300 Bank of New York Co., Inc. (The) 14,044
2,900 Bank One Corp. 92,256
2,850 Charles Schwab Corp. (The) 102,956
1,050 Chase Manhattan Corp. 52,172
400 Chubb Corp. (The) 29,600
500 CIGNA Corp. 49,938
400 Cincinnati Financial Corp. 15,100
3,600 Citigroup, Inc. 254,025
100 Comerica, Inc. 5,100
2,600 Fannie Mae 129,675
1,200 Fifth Third Bancorp 49,575
1,100 First Union Corp. 28,394
800 FleetBoston Financial Corp. 28,650
1,700 Freddie Mac 67,044
400 Golden West Financial Corp. 18,400
100 Hartford Financial Services Group, Inc. (The) 6,425
1,200 Household International, Inc. 53,475
110 Huntington Bancshares, Inc. 1,726
400 J.P. Morgan & Co., Inc. 53,400
300 Jefferson-Pilot Corp. 18,300
400 Keycorp 7,025
500 Lincoln National Corp. 21,813
700 Marsh & McLennan Cos., Inc. 85,400
2,000 MBNA Corp. 66,750
1,300 Mellon Financial Corp. 48,994
900 Merrill Lynch & Co. 116,325
200 MGIC Investment Corp. 11,362
1,000 Morgan Stanley Dean Witter & Co. 91,250
NUMBER
OF SHARES VALUE
---------- -----
FINANCIAL SERVICES - CONTINUED
200 Northern Trust Corp. $14,975
900 Paychex, Inc. 41,175
700 PNC Financial Services Group 35,613
400 Providian Financial Corp. 40,775
300 Regions Financial Corp. 5,981
289 Sabre Holdings Corp.<F1> 7,062
400 SLM Holding Corp. 17,225
300 St. Paul Cos., Inc. (The) 13,331
100 Summit Bancorp. 2,456
800 SunTrust Banks, Inc. 38,300
300 Torchmark Corp. 7,462
200 Union Planters Corp. 5,737
500 Wachovia Corp. 27,500
1,400 Washington Mutual, Inc. 44,975
4,100 Wells Fargo & Co. 169,381
----------
2,827,272
----------
FOOD PROCESSING - 0.01%
100 Archer-Daniels-Midland Co. 938
----------
HEALTH CARE - 8.16%
2,200 Abbott Laboratories 91,575
300 Allergan, Inc. 20,081
1,400 Amgen, Inc. 90,912
400 Baxter International, Inc. 31,100
600 Becton Dickinson & Co. 15,150
300 Biomet, Inc. 13,425
500 Boston Scientific Corp.<F1> 8,281
100 C.R. Bard, Inc. 5,006
400 Cardinal Health, Inc. 29,400
80 Edwards Lifesciences Corp.<F1> 1,745
1,700 Eli Lilly & Co. 176,588
800 Guidant Corp. 45,100
800 HEALTHSOUTH Corp.<F1> 4,750
500 Humana, Inc. 3,656
200 Mallinckrodt, Inc. 9,150
600 McKesson HBOC, Inc. 14,587
3,000 Medtronic, Inc. 153,188
5,300 Merck & Co., Inc. 379,944
5,500 Pfizer, Inc. 237,187
200 St. Jude Medical, Inc. 8,250
200 UnitedHealth Group, Inc. 16,362
100 Wellpoint Health Networks, Inc.<F1> 8,719
----------
1,364,156
----------
<PAGE>
DEVCAP SHARED RETURN FUND
SCHEDULE OF INVESTMENTS
JULY 31, 2000
NUMBER
OF SHARES VALUE
---------- -----
MEDIA - 0.69%
1,500 Time Warner, Inc. $115,031
----------
MERCHANDISING - 0.55%
500 Radioshack Corp. 28,187
2,200 Target Corp. 63,800
----------
91,987
----------
OIL & GAS - 0.41%
1,312 BP Amoco PLC ADR<F1> 68,634
----------
TECHNOLOGY - 36.70%
500 3COM Corp.<F1> 6,781
300 Adaptec, Inc.<F1> 7,425
1,000 ADC Telecommunications, Inc.<F1> 41,937
100 Adobe Systems, Inc. 11,450
300 Advanced Micro Devices, Inc.<F1> 21,581
2,900 America Online, Inc.<F1> 154,606
600 Analog Devices, Inc.<F1> 40,125
800 Apple Computer, Inc. 40,650
1,200 Applied Materials, Inc.<F1> 91,050
200 Autodesk, Inc. 4,325
1,600 Automatic Data Processing, Inc. 79,300
4,000 Bellsouth Corp. 159,250
200 BMC Software, Inc.<F1> 3,775
10,200 Cisco Systems, Inc.<F1> 667,462
3,200 Compaq Computer Corp. 89,800
1,100 Computer Associates International, Inc. 27,294
300 Compuware Corp.<F1> 2,400
3,800 Dell Computer Corp.<F1> 166,962
300 Electronic Data Systems Corp. 12,900
3,200 EMC Corp.<F1> 272,400
200 First Data Corp. 9,213
100 Gateway, Inc.<F1> 5,519
400 Global Crossing Ltd.<F1> 9,725
1,700 Hewlett-Packard Co. 185,619
9,800 Intel Corp. 654,150
2,200 International Business Machines Corp. 247,362
1,300 JDS Uniphase Corp.<F1> 153,562
600 LSI Logic Corp.<F1> 20,325
4,500 Lucent Technologies, Inc. 196,875
1,000 Micron Technology, Inc. 81,500
7,400 Microsoft Corp.<F1> 516,613
500 Molex, Inc. 23,523
2,400 Motorola, Inc. 79,350
400 National Semiconductor Corp.<F1> 14,475
NUMBER
OF SHARES VALUE
---------- -----
TECHNOLOGY - CONTINUED
3,400 Nortel Networks Corp. $ 252,875
700 Novell, Inc.<F1> 6,628
3,700 Oracle Corp.<F1> 278,194
100 PE Corp-PE Biosystems Group 8,719
400 Peoplesoft, Inc.<F1> 8,725
700 Pitney Bowes, Inc. 24,238
1,000 QUALCOMM, Inc.<F1> 64,937
2,248 Qwest Communications International, Inc.<F1> 105,516
5,916 SBC Communications, Inc. 251,800
400 Scientific-Atlanta, Inc. 30,800
100 Seagate Technology, Inc.<F1> 5,069
1,400 Solectron Corp.<F1> 56,437
400 Sprint Corp (PCS Group)<F1> 22,100
2,400 Sun Microsystems, Inc.<F1> 253,050
100 Tektronix, Inc. 6,150
800 Tellabs, Inc.<F1> 52,000
100 Teradyne, Inc.<F1> 6,338
2,600 Texas Instruments, Inc. 152,587
3,410 Verizon Communications 160,270
3,500 WorldCom, Inc.<F1> 136,719
1,400 Xerox Corp. 20,825
600 Xilinx, Inc.<F1> 45,038
700 Yahoo!, Inc.<F1> 90,081
----------
6,138,380
----------
TRANSPORTATION - 0.68%
600 Burlington Northern Santa Fe Corp. 14,662
500 CSX Corp. 12,406
300 Delta Air Lines, Inc. 16,106
700 FedEx Corp.<F1> 27,738
1,300 Southwest Airlines Co. 30,712
300 Union Pacific Corp. 12,956
----------
114,580
----------
UTILITIES - 2.13%
400 Ameren Corp. 14,475
940 American Electric Power, Inc. 30,844
200 C P & L Energy, Inc. 6,687
400 Cinergy Corp. 10,400
200 CMS Energy Corp. 5,113
500 Consolidated Edison, Inc. 15,156
200 Constellation Energy Group 6,663
300 Dominion Resources, Inc. 13,631
200 DTE Energy Co. 6,275
<PAGE>
DEVCAP SHARED RETURN FUND
SCHEDULE OF INVESTMENTS
JULY 31, 2000
NUMBER
OF SHARES VALUE
---------- -----
UTILITIES - CONTINUED
500 Duke Energy Corp. $ 30,844
600 El Paso Energy Corp. 29,025
500 Entergy Corp. 13,563
600 FirstEnergy Corp. 15,300
100 Florida Progress Corp. 4,900
200 FPL Group, Inc. 9,650
400 GPU, Inc. 10,600
300 Niagara Mohawk Holdings, Inc. 3,994
100 NICOR, Inc. 3,469
800 Northern States Power Co. 17,650
400 ONEOK, Inc. 10,675
800 PG&E Corp. 20,700
100 Pinnacle West Capital Corp. 3,956
400 PPL Corp. 10,800
300 Public Service Enterprise Group, Inc. 10,088
600 Reliant Energy, Inc. 20,100
600 Sempra Energy 11,250
400 Southern Co. (The) 9,775
100 TXU Corp. 3,125
200 Unicom Corp. 8,213
----------
356,921
----------
Total Common Stocks
(cost $12,084,319) 16,580,277
----------
PRINCIPAL
VALUE
----------
INVESTMENT COMPANIES - 1.41%
$235,260 Dreyfus Institutional Government
Money Market Fund 235,260
----------
Total Investment Companies
(cost $235,260) 235,260
----------
Total Investments - 100.54%
(cost $12,319,579) 16,815,537
Liabilities Less Other Assets - (0.54)% (90,559)
----------
NET ASSETS - 100.00% $16,724,978
===========
<F1> Non-income producing
<PAGE>
DEVCAP SHARED RETURN FUND
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 2000
--------------------------------------------------------------------------------
ASSETS:
Investments at value (cost $12,319,579) $16,815,537
Due from advisor 75,252
Dividends and interest receivable 11,713
Deferred organization expenses (Note 1) 2,316
Prepaid expenses 13,612
Cash 10,000
------------
Total Assets 16,928,430
------------
LIABILITIES:
Payable for securities purchased 154,048
Accrued investment advisory fees 3,632
Accrued expenses 45,772
------------
Total Liabilities 203,452
------------
NET ASSETS $16,724,978
============
NET ASSETS CONSIST OF:
Paid-in capital $10,807,798
Undistributed net realized gain 1,421,222
Net unrealized appreciation 4,495,958
------------
NET ASSETS $16,724,978
============
SHARES OUTSTANDING 648,989
============
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION
PRICE PER SHARE $25.77
============
See Notes to Financial Statements
<PAGE>
DEVCAP SHARED RETURN FUND
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JULY 31, 2000
--------------------------------------------------------------------------------
INVESTMENT INCOME
Dividends $ 158,561<F1>
Interest 5,090
------------
Total Investment Income 163,651
EXPENSES (NOTES 1 AND 2):
Legal fees $207,276
Audit fees 61,674
Fund administration and accounting fees 51,516
Transfer agent fees and expenses 42,292
Investment advisory fees 36,472
Registration fees 15,659
Printing 14,320
Amortization of organization expenses 11,221
Insurance 8,463
Other 8,568
------------
Total expenses before reimbursement 457,461
Reimbursement of expenses (140,915)
------------
Net Expenses 316,546
------------
EXPENSES IN EXCESS OF INVESTMENT INCOME (152,895)
------------
NET REALIZED AND UNREALIZED GAIN
Net realized gain 1,306,319
Net change in unrealized appreciation 416,528
------------
Net realized and unrealized gain 1,722,847
------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $1,569,952
============
<F1> Net of $115 in foreign withholding tax.
See Notes to Financial Statements
<PAGE>
DEVCAP SHARED RETURN FUND
STATEMENT OF CHANGES IN NET ASSETS
------------------------------------------------------------------------------
YEAR ENDED
---------------------------
JULY 31, 2000 JULY 31, 1999
------------- -------------
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Expenses in excess of investment income $(152,895) $(115,227)
Net realized gain 1,306,319 219,391
Net change in unrealized appreciation 416,528 2,204,098
------------ ------------
Net increase in net assets resulting
from operations 1,569,952 2,308,262
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM
NET REALIZED GAIN (62,094) (111,246)
------------ ------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from sales of shares 1,113,576 2,649,040
Net asset value of shares issued
in reinvestment of distributions 60,163 107,930
Payments for shares redeemed (622,847) (271,633)
Payment for shares redeemed
for DEVCAP Non-Profit (Note 3) (380,104) (332,878)
------------ ------------
Net increase in net assets from
capital share transactions 170,788 2,152,459
------------ ------------
Total increase in net assets 1,678,646 4,349,475
NET ASSETS:
Beginning of period 15,046,332 10,696,857
------------ ------------
End of period $16,724,978 $15,046,332
============ ============
Undistributed net investment income,
end of period $ 0 $ 0
============ ============
OTHER INFORMATION:
SHARE TRANSACTIONS:
Sold 45,237 119,601
Reinvested 2,295 4,947
Redeemed (24,424) (13,762)
Withdrawal of charitable
contributions (Note 3) (14,947) (16,382)
------------ ------------
Net increase 8,161 94,404
============ ============
See Notes to Financial Statements
<PAGE>
DEVCAP SHARED RETURN FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------
FOR THE PERIOD
OCTOBER 19, 1995
FOR THE YEAR ENDED (COMMENCEMENT OF
---------------------------------------------------------- OPERATIONS) TO
JULY 31, 2000 JULY 31, 1999 JULY 31, 1998 JULY 31, 1997 JULY 31, 1996
-------------- -------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, beginning of period $23.48 $19.58 $16.22 $10.71 $10.00
---------- ---------- ---------- ---------- ----------
Income from investment operations:
Expenses in excess of investment income (0.24) (0.18) (0.06) (0.03) (0.02)
Net realized and unrealized gain
on investments 2.63 4.28 3.44 5.55 0.73
---------- ---------- ---------- ---------- ----------
Total income from investment operations 2.39 4.10 3.38 5.52 0.71
Less distributions from net realized gain (0.10) (0.20) (0.02) (0.01) _
---------- ---------- ---------- ---------- ----------
Net Asset Value, end of period $25.77 $23.48 $19.58 $16.22 $10.71
========== ========== ========== ========== ==========
Ratios/supplemental data
Total return 10.16% 21.03% 20.84% 51.57% 7.10%<F1>
Net Assets, end of period (in 000's) $16,725 $15,046 $10,697 $5,326 $643
Ratio of expenses to average net assets<F2> 1.95%<F2> 1.97%<F3> 1.75%<F3> 1.75%<F3> 2.50%<F3><F4>
Ratio of net investment income to average
net assets<F2> (0.94)%<F2> (0.92)%<F3> (0.51)%<F3> (0.21)%<F3> (0.54)%<F3><F4>
Portfolio turnover<F5><F6> 31%<F5> 8%<F6> 5%<F6> 1%<F6> 5%<F1><F6>
</TABLE>
<F1> Not annualized.
<F2> Reflects the Fund's proportionate share of the Domini Social Index
Portfolio's expenses as well as reimbursements by agents of the Fund from
August 1, 1999 through February 21, 2000, and net of waiver and
reimbursements from February 22, 2000 through July 21, 2000. If the
reimbursements had not been in place, the ratio of expenses and net
investment income to average net assets would have been as follows:
Ratio of expenses to average net assets 2.80%
Ratio of net investment income to average net assets (1.80)%
<F3> Reflects the Fund's proportionate share of the Domini Social Index
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 1.97% 2.76% 5.93% 26.30%<F4>
Ratio of net investment income
to average net assets (0.92)% (1.52)% (4.39)% (24.34)%<F4>
<F4> Annualized.
<F5> Represents portfolio turnover for the period February 22, 2000 through July
31, 2000.
<F6> Represents portfolio turnover for the Index Portfolio.
See Notes to Financial Statements
<PAGE>
DEVCAP SHARED RETURN FUND
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JULY 31, 2000
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. DEVCAP Shared Return Fund
(the "Fund") is a series of DEVCAP Trust which is registered as an open-end
management investment company under the Investment Company Act of 1940 (the
"Act").
Effective February 23, 2000, the Fund changed its investment objective and
now invests only in those S&P 500R Index stocks which pass the Fund's social and
exclusionary screens. Prior to February 22, 2000, the Fund invested
substantially all of its assets in the Domini Social Index Portfolio. The Fund
became effective on September 13, 1995, and commenced investment operations on
October 19, 1995.
The presentation of financial statements in conformity with accounting
principles generally accepted in the United States of America, requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosures of contingent 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 those estimates.
The following is a summary of the Fund's significant accounting policies.
A. VALUATION OF INVESTMENTS. The Fund values securities at the last reported
sale price, or at the average of the latest bid and asked prices if no sales are
reported.
B. INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date.
Interest income is recorded as earned.
C. DIVIDENDS TO SHAREHOLDERS. Dividends to shareholders are declared and paid
annually from net investment income. Distributions to shareholders of net
realized capital gains, if any, are made annually. The amount and character of
income and net realized gains to be distributed are determined in accordance
with federal income tax rules and regulations, which may differ from generally
accepted accounting principles. These differences are attributable to permanent
book and tax accounting differences. At July 31, 2000 a reclassification was
recorded to increase accumulated net investment income by $152,895, increase
accumulated net realized gain by $56,394 and reduce paid-in capital by $209,289.
D. 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 provision for
federal income or excise tax is necessary.
E. DEFERRED ORGANIZATION EXPENSES. Organization 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
portion of any unamortized organization expenses which the number of the initial
shares redeemed bears to the total 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, Development Capital Fund ("DEVCAP Non-Profit"), the Fund's sponsor,
has agreed to reimburse the Fund for such difference.
<PAGE>
DEVCAP SHARED RETURN FUND
NOTES TO FINANCIAL STATEMENTS - CONT'D
FOR THE YEAR ENDED JULY 31, 2000
F. OTHER. Security transactions are recorded on the trade date. Gains and
losses are determined on the basis of identified cost.
2. TRANSACTIONS WITH AFFILIATES.
A. REIMBURSEMENT OF EXPENSES. Effective November 29, 1999, DEVCAP Non-Profit
has agreed to reimburse the Fund to the extent necessary to maintain the Fund's
total operating expenses (which include expenses of the Fund and Portfolio) at
an annual rate of 1.75% of the Fund's average daily net assets.
3. CHARITABLE CONTRIBUTIONS. Shareholders contributed approximately $380,000
and $341,000 to DEVCAP Non-Profit in December 1999 and 1998, respectively, as
described in the Fund's prospectus. Upon a shareholder's initial investment in
the Fund, the shareholder may choose to make an annual donation to DEVCAP Non-
Profit of zero percent, ten percent, twenty-five percent, fifty percent,
seventy-five percent, or all of the Annual Contribution Basis, as defined in the
Fund's registration statement, derived from the shareholder's investment in the
Fund. DEVCAP Non-Profit will direct these shareholder donations to non-profit
organizations (primarily Catholic Relief Services) working to improve the
welfare of underprivileged persons in developing countries.
4. INVESTMENT TRANSACTIONS. The aggregate cost of purchases and proceeds from
sales of securities, excluding short-term investments, for the Fund for the
period from February 22, 2000 to July 31, 2000 were $5,151,637 and $5,051,731,
respectively.
At July 31, 2000, gross unrealized appreciation and depreciation of
investments, based on cost for federal income tax purposes of $12,320,693 were
as follows:
Appreciation $4,846,802
Depreciation (351,958)
----------
Net appreciation
on investments $4,494,844
==========
5. TAX INFORMATION-UNAUDITED. The federal tax status of distributions made to
shareholders on December 23, 1999 was as follows:
NET SHORT-TERM LONG-TERM
INVESTMENT CAPITAL CAPITAL
INCOME GAINS GAINS
---------- ---------- ----------
SHARED RETURN FUND $0 $0 $62,094
For the year ended July 31, 2000, the Shared Return Fund did not pay any
dividends from net investment income or short-term gains that would qualify for
the dividends received reduction available to corporate shareholders.
<PAGE>
INDEPENDENT AUDITORS' REPORT
THE BOARD OF TRUSTEES
DEVCAP SHARED RETURN FUND:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of DEVCAP Shared Return Fund as of July 31, 2000,
and the related statement of operations for the year then ended, the statements
of changes in net assets for each of the years in the two-year period then
ended, and the financial highlights for each of the years in the four-year
period then ended and the period from October 19, 1995 (commencement of
operations) to July 31, 1996. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of July 31, 2000, by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of DEVCAP
Shared Return Fund as of July 31, 2000, the results of its operations for the
year then ended, changes in its net assets for each of the years in the two-year
period then ended, and financial highlights for each of the years or periods in
the five-year period described above, in conformity with accounting principles
generally accepted in the United States of America.
/s/ KPMG LLP
Boston, Massachusetts
September 15, 2000
<PAGE>
DEVCAP
SHARED RETURN FUND
209 West Fayette Street
Baltimore, Maryland 21201
(800) 371-2655
www.DEVCAP.org
INVESTMENT MANAGER
Christian Brothers Investment Services, Inc.
90 Park Avenue, 29th Floor
New York, NY 10016-1301
SUB-ADVISER
RhumbLine Advisers
30 Rowes Wharf
Boston, MA 02110
INDEPENDENT AUDITORS
KPMG LLP
99 High Street
Boston, MA O2110
ADMINISTRATOR AND TRANSFER AGENT
Sunstone Financial Group, Inc.
803 West Michigan Street, Suite A
Milwaukee, WI 53233-2301
DISTRIBUTOR
CBIS Financial Services, Inc.
915 Harger Road
Oak Brook, IL 60521-1476
CUSTODIAN
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
LEGAL COUNSEL
Mayer, Brown & Platt
1675 Broadway
New York, NY 10019
(LOGO)
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