-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Fc26w0FZlikHxYEeF+D4UZVo13VuEQNHyiRLXIj3fsUA0szWNe4XAGvscov7aUwR rk+f1tkqlFiyZsgtqnupaA== 0000950156-01-500319.txt : 20010823 0000950156-01-500319.hdr.sgml : 20010823 ACCESSION NUMBER: 0000950156-01-500319 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010630 FILED AS OF DATE: 20010822 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CDC NVEST FUNDS TRUST I CENTRAL INDEX KEY: 0000770540 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 000000000 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-04323 FILM NUMBER: 1720849 BUSINESS ADDRESS: STREET 1: 399 BOYLSTON ST CITY: BOSTON STATE: MA ZIP: 02116 BUSINESS PHONE: 8002831155 MAIL ADDRESS: STREET 1: 399 BOYLSTON STREET CITY: BOSTON STATE: MA ZIP: 02116 FORMER COMPANY: FORMER CONFORMED NAME: NEW ENGLAND FUNDS DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: NEW ENGLAND FUNDS TRUST I DATE OF NAME CHANGE: 19940614 FORMER COMPANY: FORMER CONFORMED NAME: NVEST FUNDS TRUST I DATE OF NAME CHANGE: 20000202 N-30D 1 d568151.txt CDC NVEST STAR FUNDS [Logo] CDC NVEST FUNDS(SM) CDC IXIS Asset Management Distributors CDC NVEST STAR VALUE FUND CDC NVEST STAR SMALL CAP FUND CDC NVEST STAR ADVISERS FUND CDC NVEST STAR WORLDWIDE FUND WHERE THE BEST MINDS MEET(R) SEMIANNUAL REPORT JUNE 30, 2001 RISKS OF THE CDC NVEST STAR FUNDS Any mutual fund investment involves risk. The following notes describe the risks of each of the CDC Nvest funds discussed in this report. These risks may affect the value of your investment. See the funds' prospectus for details. CDC NVEST STAR VALUE FUND may invest in foreign securities that have special risks, including political, regulatory and currency risks. Value stocks can fall out of favor with investors and may underperform growth stocks during certain market conditions. CDC NVEST STAR SMALL CAP FUND invests in small-cap and emerging-growth companies that are more volatile than the overall market. The fund may also invest in foreign and emerging market securities that have special risks; lower rated bonds that offer higher yields in return for more risk; real estate investment trusts (REITs) that change in price with underlying real estate values and have other mortgage-related risks; and derivative securities whose value is based on other securities or indices that may have significant risk, impact the fund's performance and may increase your tax liability. Frequent portfolio turnover may increase your risk of greater tax liability and lower your total return. CDC NVEST STAR ADVISERS FUND invests in foreign and emerging market securities that have special risks; small-cap and emerging-growth companies that are more volatile than the overall market; lower rated bonds that offer higher yields in return for more risk; real estate investment trusts (REITs) that change in price with underlying real estate values and have other mortgage-related risks; derivative securities whose value is based on other securities or indices; and initial public offerings (IPOs) that may have significant risk, impact the fund's performance and may increase your tax liability. Frequent portfolio turnover may increase your risk of greater tax liability and lower your total return. CDC NVEST STAR WORLDWIDE FUND invests in foreign and emerging market securities that have special risks. These may include political, regulatory and currency risks. Emerging markets may be more subject to these risks than developed markets. The fund may invest in small-cap companies that are more volatile than the overall market; lower rated bonds that offer higher yields in return for more risk and price fluctuations; real estate investment trusts (REITs) that change in price with underlying real estate values and have other mortgage-related risks. The fund may also invest in derivative securities whose value is based on other securities or indices; such investments may have significant risk and may impact the fund's performance and increase tax liability. - ------------------------------------------------------------------------------- NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- TABLE OF CONTENTS - ------------------------------------------------------------------------------- SEMIANNUAL REPORT JUNE 30, 2001 President's Letter ...................................................... i Economic Update ......................................................... 1 Portfolio Managers' Commentary and Performance CDC Nvest Star Value Fund ............................................. 2 CDC Nvest Star Small Cap Fund ......................................... 4 CDC Nvest Star Advisers Fund .......................................... 6 CDC Nvest Star Worldwide Fund ......................................... 8 Schedules of Investments CDC Nvest Star Value Fund ............................................. 11 CDC Nvest Star Small Cap Fund ......................................... 14 CDC Nvest Star Advisers Fund .......................................... 18 CDC Nvest Star Worldwide Fund ......................................... 22 Statements of Assets and Liabilities .................................... 26 Statements of Operations ................................................ 27 Statements of Changes in Net Assets ..................................... 28 Financial Highlights .................................................... 30 Notes to Financial Statements ........................................... 34 Additional Information .................................................. 42 - ------------------------------------------------------------------------------- PRESIDENT'S LETTER - ------------------------------------------------------------------------------- AUGUST 2001 - ------------------------------------------------------------------------------- [Photo of John T. Hailer] John T. Hailer President and Trustee CDC Nvest Funds Dear Shareholder: As a multi-manager fund group that draws its investment talent from a diverse pool of investment managers, CDC Nvest Funds recently conducted a survey of our portfolio managers. The survey illustrated something we've been saying all along: the Best Minds we draw on to manage our funds don't always think alike. When we surveyed 29 mutual fund managers and teams at 10 different firms, we learned they held diverging views on everything from leading industry sectors to inflation estimates for the second half of 2001. Current market conditions have erased obvious trends and standard predictions, showing more clearly the extent to which investment managers' views can differ. Ever since the year 2000 brought an end to the longest economic expansion in peacetime history, investors have been re-learning an old, time-tested lesson: asset allocation is one of the best ways to build for your future. Jumping from fund to fund chasing yesterday's winners doesn't work. For example, during the six months ended June 30, 2001, only small-cap value indices showed gains on the equity side. Aggressive growth stocks - the big winners in 1999 - continued to slump. Meanwhile, high-yield bond prices enjoyed a strong recovery early in the year, only to decline again in June. What's next? In our survey, the consensus of the managers who participated believe the stock market will show modest gains for the second half of 2001, but they were evenly split over whether the technology sector would lag or outperform the market for the balance of the year. What sets CDC Nvest Funds apart is the breadth of diversification we offer you under a single roof - including investment managers with distinctive styles and expertise, as well as portfolios diversified by industry and by security. If you've ever wondered how the performance of other funds in our lineup compared to your fund's results, the new format we are introducing with this series of shareholder reports may help. By grouping comparable funds in a single book, we've made it easier for you to view a "snapshot" of each fund manager's strategies and investments. Everyone needs a portfolio tailored to his or her unique needs and characteristics - one with the right combination of stocks seeking growth or value from large-, mid- and small-cap companies; corporate, government and municipal bonds; domestic and international portfolios; and such basics as money market funds. Our new format not only enables us to reduce fund expenses; it's designed to help you and your financial adviser review your asset allocation plan and determine any adjustments you may need to make. This information and more is also available on our website, www.cdcnvestfunds.com. As part of a large, multi-national financial firm - CDC IXIS Asset Management - we have new resources and access to more Best Minds, and we are working on more new products and services aimed at helping you and your financial adviser build a diversified, all-market portfolio. As an affiliate of one of the 25 largest investment management firms in the world, with nearly $286 billion* in assets under management, we hope you share our confidence for the future. Sincerely yours, /s/ John T. Hailer *As of June 30, 2001. [callout] "What sets CDC Nvest Funds apart is the breadth of diversification we offer you under a single roof - including investment managers with distinctive styles and expertise, as well as portfolios diversified by industry and by security." - ------------------------------------------------------------------------------- ECONOMIC UPDATE - ------------------------------------------------------------------------------- AUGUST 2001 - ------------------------------------------------------------------------------- While U.S. manufacturers retrench and unemployment creeps higher, consumers are pushing slowly ahead. Leading economic indicators have turned modestly positive, led by resilient consumers whose confidence in their business and job prospects moved up in May and again in June, according to the Conference Board. Consumer confidence is viewed as a key indicator because spending by individuals accounts for about two-thirds of U.S. economic output. Homebuilding has been another area of persistent strength despite mortgage rates that have remained relatively high. Corporate retrenchment is the result of slumping profits, which also depress stock prices. Damage to earnings has been greatest in technology, where swollen inventories have only now begun to shrink, and in telecommunications, where overbuilding has left much costly new capacity idle. Meanwhile, international trade has been weak because the U.S. economy is the world's best customer. Much of what we buy - or don't buy - is produced abroad. Global markets turned in mixed results overall. LOWER RATES ARE STARTING TO MAKE AN IMPACT After six closely spaced interest-rate cuts in the first six months of 2001, the Federal Reserve Board has brought down the Discount Rate by 2.75% since January, in a series of moves that reversed its direction during the first half of 2000. (The Discount Rate - the only rate the Board controls directly - is the interest rate the Fed charges banks on short-term loans.) Investors reacted to lower rates by putting money to work in stocks and bonds. Cash reserves currently barely earn enough to offset underlying inflation, now around 3.6%. Low interest rates also encourage business investment. After dropping sharply in February and March, most stock market indices began a steep climb in April, only to sag in June and close the period at or below their levels at the beginning of the year. While no one can state definitively that the low point is behind us, encouraging signs include increased investor participation as stock prices were rising. A further impact of lower rates has been to reduce yields on short-term Treasury bills. Longer-term Treasuries fell in price and their yields moved higher, implying higher rates to come if economic growth resumes. Municipal bonds performed well as higher tax revenues strengthened the finances of many of the nation's cities and towns. On the other hand, high-yield bonds were volatile and offered mixed results. LOOKING AHEAD Except for energy and utility companies, second-quarter corporate earnings were largely disappointing and third quarter earnings may be weak as well. Nevertheless, investors have driven up stock prices in the heavy industry, basic materials and retail sectors, all of which should benefit from a rebounding economy. Uncertainties surrounding the current economic situation are considerable. This summer's tax rebates, together with lower interest rates and falling energy costs, may stimulate consumer spending. In the past, market rallies often have followed tax cuts. In summary, interest rates are lower, inflation is moderate and taxes are coming down. This may be the right mix of ingredients for renewed economic growth late this year or early next. FEDERAL RESERVE BOARD'S CHANGES IN INTEREST RATES DISCOUNT RATE: 2000 THROUGH FIRST HALF OF 2001 12/31/99 5.00% 1/31/00 5.00% 2/29/00 5.25% 3/31/00 5.50% 4/30/00 5.50% 5/31/00 6.00% 6/30/00 6.00% 7/31/00 6.00% 8/31/00 6.00% 9/30/00 6.00% 10/31/00 6.00% 11/30/00 6.00% 12/31/00 6.00% 1/31/01 5.00% 2/28/01 5.00% 3/31/01 4.50% 4/30/01 4.00% 5/31/01 4.00% 6/30/01 3.75% - ------------------------------------------------------------------------------- CDC NVEST STAR VALUE FUND - ------------------------------------------------------------------------------- PERFORMANCE OVERVIEW - -------------------------------------------------------------------------------- For the six months ended June 30, 2001, CDC Nvest Star Value Fund's total return was 3.95% based on the net asset value of Class A shares. The fund's benchmark, the Russell 1000 Value Index, returned -1.26% for the same period, and the return on the Morningstar Large Value Fund Average was -0.89%. Each of your fund's four portfolios has a separate manager with a distinctive style. The common denominator is a search for value. The Harris/Oakmark portfolio concentrates on mid- and large-sized companies priced at a deep discount. The Loomis Sayles portfolio focuses on under-valued, large-cap stocks with strong earnings prospects, while the Vaughan, Nelson, Scarborough and McCullough (VNSM) portfolio seeks stocks selling at a low price relative to their dividend yield. The Westpeak segment invests in both value and growth stocks. VALUE STOCKS LED THE MARKET SO FAR THIS YEAR During the past six months, investors generally by-passed growth stocks - once so highly prized - searching instead for value stocks, which tend to be more conservative investments. However, the relatively good performance of value stocks was not spread evenly among all economic sectors. Technology, healthcare and financial services stocks were weak, while consumer staples - including food, beverage and personal care products - performed relatively well. Consumer cyclicals - companies whose profits are highly sensitive to changes in economic activity - were also relatively strong. The Harris/Oakmark portfolio contributed the most to performance during the period because it emphasizes stocks selling at less than 60% of the underlying company's intrinsic value. Harris/Oakmark made relatively few changes to the portfolio in the past six months. Consumer discretionary companies - retailers, casinos and small airlines - made up the portfolio's largest position (42% of assets). Technology stocks accounted for about 13% of assets, with approximately 12% in financial services. The Loomis Sayles segment focused on mid- and large-cap stocks with below-average valuations and above-average earnings prospects. The portfolio's financial stocks, which accounted for nearly 30% of assets, were disappointing, as were its communications services stocks (13% of assets) during the past six months. However, stock selection in the volatile tech-nology sector was successful and performance in the consumer cyclical area was strong. VNSM reduced financial services stocks to 10% of assets at the end of June, from 25% at the beginning of the year and invested the proceeds in companies that provide discretionary consumer goods and services, which tend to perform well during economic recoveries. The electric utility companies VNSM selected proved disappointing because the industry as a whole was affected by the energy crisis in California. However, the stocks of large, established technology companies VNSM selected had a positive impact on the portfolio. Westpeak favored large-cap stocks in the healthcare, financial services and technology sectors. While many of the portfolio's healthcare and financial services stocks lagged the market, some of the technology leaders in the portfolio were positive. In spite of this, the market's bias against large-cap stocks during the period was so strong that the Westpeak portfolio held back the fund's overall return. VALUE INVESTMENTS SHOULD CONTINUE TO DO WELL Over the next several months, we believe economic growth and corporate profits will remain weak. This is likely to continue the market's bias toward value, which is generally regarded as a more conservative investment style than growth. The search for value often leads investors to companies in more traditional areas of the economy, and stock performance may be less volatile in uncertain economic and investment climates. We believe that value stocks will continue to reward investors over time. [sidebar] PORTFOLIO PROFILE OBJECTIVE: Seeks a reasonable, long-term investment return from a combination of market appreciation and dividend income from equity securities - -------------------------------------------------------------------------------- STRATEGY: Invests primarily in value-oriented equity securities - -------------------------------------------------------------------------------- INCEPTION DATE: June 5, 1970 - -------------------------------------------------------------------------------- SUBADVISERS: Harris Associates L.P. Loomis, Sayles & Company, L.P. Vaughan, Nelson, Scarborough & McCullough, L.P. Westpeak Investment Advisors, L.P. - -------------------------------------------------------------------------------- SYMBOLS: Class A NEFVX Class B NEVBX Class C NECVX Class Y NEVYX - -------------------------------------------------------------------------------- NET ASSET VALUE PER SHARE:(JUNE 30, 2001) Class A $7.90 Class B 7.47 Class C 7.47 Class Y 7.93 - ------------------------------------------------------------------------------- CDC NVEST STAR VALUE FUND - ------------------------------------------------------------------------------- INVESTMENT RESULTS THROUGH JUNE 30, 2001 - ------------------------------------------------------------------------------- PERFORMANCE IN PERSPECTIVE The charts comparing CDC Nvest Star Value Fund's performance to a benchmark index provide you with a general sense of how the fund performed. To put this information in context, it may be helpful to understand the special differences between the two. The fund's total return for the period shown below appears with and without sales charges and includes fund expenses and management fees. A securities index measures the performance of a theoretical portfolio. Unlike a fund, the index is unmanaged and does not have expenses that affect the results. It is not possible to invest directly in an index. In addition, few investors could purchase all of the securities necessary to match the index and would incur transaction costs and other expenses even if they could. GROWTH OF A $10,000 INVESTMENT IN CLASS A SHARES - ------------------------------------------------------------------------------- JUNE 1991 THROUGH JUNE 2001 NET ASSET MAXIMUM RUSSELL 1000 VALUE(1) SALES CHARGE(2) VALUE(4) 6/30/91 10000 9425 10000 10325 9731 10419 10387 9790 10609 10155 9571 10530 10232 9644 10705 9598 9046 10156 10704 10089 11007 11104 10466 11024 11536 10873 11295 11408 10752 11131 11712 11039 11610 11696 11024 11669 6/30/92 11424 10767 11596 11792 11114 12044 11312 10662 11675 11488 10828 11836 11520 10858 11847 12144 11446 12236 12484 11766 12527 12758 12025 12890 12844 12105 13344 13110 12356 13737 12886 12145 13562 13247 12485 13834 6/30/93 13281 12518 14140 13213 12453 14298 13728 12939 14815 13780 12987 14838 13969 13165 14828 13969 13165 14522 14605 13765 14798 15328 14447 15358 14920 14062 14832 14048 13240 14281 14345 13520 14555 14493 13660 14722 6/30/94 14182 13366 14369 14684 13839 14816 15316 14435 15241 14684 13839 14735 14776 13927 14940 14126 13314 14336 14401 13573 14501 14441 13610 14948 14995 14133 15538 15550 14656 15878 16124 15197 16380 16798 15832 17070 6/30/95 17135 16149 17300 17689 16672 17902 17689 16672 18155 18229 17181 18812 17785 16762 18626 18759 17680 19570 19055 17959 20061 19706 18573 20687 19966 18818 20844 20031 18880 21199 20270 19105 21279 20617 19432 21545 6/30/96 20617 19432 21563 19944 18798 20747 20530 19350 21341 21694 20447 22190 22366 21080 23049 24118 22731 24720 24068 22684 24404 24669 23251 25587 24945 23511 25963 23993 22613 25029 24444 23038 26080 25823 24338 27538 6/30/97 27176 25614 28719 29232 27551 30879 28104 26488 29779 29292 27607 31578 28030 26418 30697 28688 27039 32054 29109 27435 32990 29052 27381 32521 31004 29221 34710 32238 30384 36834 32209 30357 37081 31291 29492 36532 6/30/98 31262 29465 37000 30200 28463 36349 25090 23647 30940 26521 24996 32716 28747 27094 35252 30240 28502 36894 31167 29375 38149 30362 28617 38454 29815 28101 37912 29944 28222 38696 32262 30407 42311 31972 30134 41845 6/30/99 32809 30923 43059 31328 29527 41797 29976 28252 40246 28247 26623 38838 29628 27925 41075 29201 27522 40754 29010 27342 40950 28114 26498 39615 25700 24222 36672 28348 26718 41146 28270 26645 40668 28114 26498 41095 6/30/00 27452 25874 39217 27530 25947 39708 29208 27529 41915 28702 27051 42301 29481 27785 43342 28546 26905 41734 29597 27896 43824 30532 28777 43991 29714 28006 42768 28702 27051 41258 30493 28740 43280 31311 29511 44254 6/30/01 30766 28997 43271 The illustration represents past performance and does not guarantee future results. Share price and return will vary and you may have a gain or loss when you sell your shares. Other classes of shares are available for which performance, fees, and expenses will differ. All results include reinvestment of dividends and capital gains. AVERAGE ANNUAL TOTAL RETURNS-- JUNE 30, 2001 - ------------------------------------------------------------------------------- CLASS A (Inception 6/5/70) 6 MONTHS 1 YEAR 5 YEARS 10 YEARS Net Asset Value(1) 3.95% 12.07% 8.34% 11.89% With Maximum Sales Charge(2) -1.99 5.63 7.06 11.22 - ------------------------------------------------------------------------------- CLASS B (Inception 9/13/93) 6 MONTHS 1 YEAR 5 YEARS SINCE INCEPTION Net Asset Value(1) 3.46% 11.18% 7.50% 10.10% With CDSC(3) -1.54 6.18 7.26 10.10 - ------------------------------------------------------------------------------- CLASS C (Inception 12/30/94) 6 MONTHS 1 YEAR 5 YEARS SINCE INCEPTION Net Asset Value(1) 3.46% 11.18% 7.51% 11.52% With CDSC(3) 1.48 9.04 7.31 11.36 - ------------------------------------------------------------------------------- CLASS Y (Inception 3/31/94) 6 MONTHS 1 YEAR 5 YEARS SINCE INCEPTION Net Asset Value(1) 4.20 12.66% 8.70% 11.71% - -------------------------------------------------------------------------------
SINCE SINCE SINCE FUND'S FUND'S FUND'S CLASS B CLASS C CLASS Y COMPARATIVE PERFORMANCE 6 MONTHS 1 YEAR 5 YEARS 10 YEARS INCEPT. INCEPT. INCEPT. Russell 1000 Value(4) -1.26% 10.33% 14.95% 15.75% 14.81% 18.32% 16.53% Morningstar Large Value Fund Avg.(5) -0.89 7.95 12.07 13.57 13.19 15.66 14.36 Lipper Multi-Cap Value Funds Avg.(6) 1.36 11.37 12.76 14.23 13.73 15.83 14.65
NOTES TO CHARTS These returns represent past performance and do not guarantee future results. Share price and return will vary, and you may have a gain or loss when you sell your shares. Recent returns may be higher or lower than those shown. (1) These results include reinvestment of any dividends and capital gains, but do not include a sales charge. (2) These results include reinvestment of any dividends and capital gains, and the maximum sales charge of 5.75%. (3) These results include reinvestment of any dividends and capital gains. Performance for Class B shares assumes a maximum 5.00% contingent deferred sales charge ("CDSC") applied when you sell shares. Class C share performance assumes a 1.00% sales charge and a 1.00% CDSC applied when you sell shares within one year of purchase. (4) Russell 1000 Value Index is an unmanaged index of the largest 1000 U.S. companies within the Russell 3000, selected for their value orientation. You may not invest directly in an index. Class B since-inception return is calculated from 9/30/93. (5) Morningstar Large Cap Value Fund Average is the average performance without sales charges of funds with similar investment objectives as calculated by Morningstar, Inc. Class B since-inception return is calculated from 9/30/93. (6) Lipper Multi-Cap Value Funds Average is the average performance without sales charges at net asset value of mutual funds with a similar current investment style or objective as determined by Lipper Inc. Class B since-inception return is calculated from 9/30/93. [sidebar] PORTFOLIO FACTS - ------------------------------------------------------------------------------- % OF NET ASSETS AS OF FUND COMPOSITION 6/30/01 12/31/00 - ------------------------------------------------------------------------------- COMMON STOCKS 97.5 98.8 - ------------------------------------------------------------------------------- SHORT TERM INVESTMENTS AND OTHER 2.5 1.2 - ------------------------------------------------------------------------------- % OF NET ASSETS AS OF TEN LARGEST HOLDINGS 6/30/01 12/31/00 - ------------------------------------------------------------------------------- EXXON MOBIL CORP. 3.7 3.6 - ------------------------------------------------------------------------------- CITIGROUP, INC. 2.7 3.2 - ------------------------------------------------------------------------------- ELECTRONIC DATA SYSTEMS CORP. 2.6 2.1 - ------------------------------------------------------------------------------- CENDANT CORP. 2.4 1.2 - ------------------------------------------------------------------------------- TOYS R US 2.1 2.1 - ------------------------------------------------------------------------------- TRICON GLOBAL RESTAURANTS, INC. 2.1 1.6 - ------------------------------------------------------------------------------- WASHINGTON MUTUAL, INC. 2.1 1.7 - ------------------------------------------------------------------------------- EQUIFAX, INC. 1.9 1.6 - ------------------------------------------------------------------------------- VERIZON COMMUNICATIONS, INC. 1.9 0.7 - ------------------------------------------------------------------------------- MATTEL, INC. 1.8 1.6 % OF NET ASSETS AS OF FIVE LARGEST INDUSTRIES 6/30/01 12/31/00 - ------------------------------------------------------------------------------- FINANCIAL SERVICES 9.5 6.1 - ------------------------------------------------------------------------------- TELECOMMUNICATIONS 7.8 5.9 - ------------------------------------------------------------------------------- INSURANCE 5.7 5.9 - ------------------------------------------------------------------------------- ENERGY RESERVES 5.2 0.1 - ------------------------------------------------------------------------------- BUSINESS SERVICES 3.9 -- Portfolio holdings and asset allocations will vary. - ------------------------------------------------------------------------------- CDC NVEST STAR SMALL CAP FUND - ------------------------------------------------------------------------------- PERFORMANCE OVERVIEW - ------------------------------------------------------------------------------- For the six months ended June 30, 2001, Class A shares of CDC Nvest Star Small Cap Fund had a total return of -4.48% at net asset value. The fund's benchmark, the Russell 2000 Index, returned 6.94% for the same period, while the return on the Morningstar Small Cap Growth Fund Average was -3.27%. Each of CDC Nvest Star Small Cap Fund's four small-cap portfolios is managed by a separate management company. Harris/Oakmark emphasizes value stocks. Loomis Sayles, Montgomery Asset Management, and RS Investment Management use various approaches to identifying companies that have the potential to grow rapidly. SMALL-CAP VALUE STOCKS WERE MARKET LEADERS Small-cap stocks outperformed large-cap stocks during the first half of 2001, and small-cap value stocks outperformed growth stocks. Because the Harris/Oakmark portfolio looks for value, it's portfolio performed best so far this year. Although the firm selects stocks on a case-by-case basis, holdings tended to cluster in three industries: technology, financial services and consumer cyclical stocks. While the technology stocks in the portfolio lagged, the financial services and consumer cyclical com-panies were relatively strong performers. As the fund's most aggressive portfolio, the Loomis Sayles segment seeks young, rapidly growing companies that dominate niches within their industries or exhibit dynamic earnings growth. During the period, the managers increased technology stocks to 36% of assets, from 29% at the end of December, and trimmed healthcare to 20% from 27%. Both of these sectors performed poorly. Consumer discretionary stocks - retailers, restaurants and automotive-related businesses - performed well during the first half of 2001, but aggressive growth stocks in general were out of favor, so this segment held the fund back. Montgomery Asset Management seeks growth at a reasonable price. During the period, the managers sold some disappointing technology stocks and added holdings in healthcare, financial services and consumer discretionary products. While the healthcare and financial services stocks generated relatively flat returns, the consumer discretionary stocks, which included a number of retail companies, performed well. RS Investment Management seeks small companies with catalysts that may spur growth, such as new products, new management and new markets. At 23% of assets, consumer discretionary stocks accounted for the largest sector allocation and provided the best returns. About 21% of the portfolio was invested in technology, and about 20% was committed to healthcare stocks, including biotechnology companies. Neither of these sectors did well during this period. OUTLOOK FOR SMALL-CAP STOCKS IS POSITIVE Small-cap stocks may be returning to popularity with investors. If history is any judge, this segment of the market tends to do well during periods of declining interest rates because lower rates make it easier for young companies with limited budgets to raise capital to finance expansion - a key issue for companies in the early stages of growth. The success of small companies is also tied more closely to the domestic economy because they are less likely to be dependent on international markets than larger companies. If the Fed's program of cutting interest rates succeeds in stimulating the U.S. economy within the next six to twelve months, smaller companies may be among the first beneficiaries. Historically, small-cap stocks have outperformed large-cap companies over the long term. [sidebar] PORTFOLIO PROFILE OBJECTIVE: Seeks capital appreciation - -------------------------------------------------------------------------------- STRATEGY: Invests primarily in equity securities of small-capitalization companies - -------------------------------------------------------------------------------- INCEPTION DATE: December 31, 1996 - -------------------------------------------------------------------------------- SUBADVISERS: Harris Associates L.P. Loomis, Sayles & Company, L.P. Montgomery Asset Management, LLC RS Investment Management, L.P. - -------------------------------------------------------------------------------- SYMBOLS: Class A NEFJX Class B NEJBX Class C NEJCX - -------------------------------------------------------------------------------- NET ASSET VALUE PER SHARE:(JUNE 30, 2001) Class A $15.77 Class B 15.09 Class C 15.09 - ------------------------------------------------------------------------------- CDC NVEST STAR SMALL CAP FUND - ------------------------------------------------------------------------------- INVESTMENT RESULTS THROUGH JUNE 30, 2001 - ------------------------------------------------------------------------------- PERFORMANCE IN PERSPECTIVE The charts comparing CDC Nvest Star Small Cap Fund's performance to a benchmark index provide you with a general sense of how the fund performed. To put this information in context, it may be helpful to understand the special differences between the two. The fund's total return for the period shown below appears with and without sales charges and includes fund expenses and management fees. A securities index measures the performance of a theoretical portfolio. Unlike a fund, the index is unmanaged and does not have expenses that affect the results. It is not possible to invest directly in an index. In addition, few investors could purchase all of the securities necessary to match the index and would incur transaction costs and other expenses even if they could. GROWTH OF A $10,000 INVESTMENT IN CLASS A SHARES - ------------------------------------------------------------------------------- DECEMBER 1996 (INCEPTION) THROUGH JUNE 2001 NET ASSET MAXIMUM RUSSELL 2000 VALUE(1) SALES CHARGE(2) INDEX(4) 12/31/96 10000 9425 10000 10192 9606 10200 9920 9350 9952 9352 8814 9482 9264 8731 9509 10448 9847 10566 6/30/97 11040 10405 11020 11784 11106 11532 12104 11408 11796 13160 12403 12660 12672 11943 12104 12376 11664 12025 12697 11967 12236 12342 11632 12042 13349 12582 12932 14126 13314 13465 13994 13189 13539 13135 12379 12809 6/30/98 13341 12574 12836 12300 11593 11798 9624 9070 9507 10293 9701 10251 10748 10130 10669 11758 11082 11228 12958 12212 11923 13231 12470 12082 12122 11425 11103 12957 12212 11277 13934 13133 12287 13818 13023 12466 6/30/99 14968 14107 13030 14786 13936 12673 14654 13811 12204 15060 14194 12206 16201 15270 12255 18064 17025 12987 21428 20196 14457 21401 20171 14224 26680 25146 16573 25665 24189 15480 22655 21352 14548 20816 19619 13700 6/30/00 22509 21215 14895 20926 19723 14415 23526 22174 15515 22775 21466 15059 20859 19659 14387 17222 16232 12910 18810 17729 14019 19631 18502 14749 17101 16118 13782 15472 14582 13108 17021 16043 14133 17375 16376 14480 6/30/01 17978 16945 14993 The illustration represents past performance and does not guarantee future results. Share price and return will vary and you may have a gain or loss when you sell your shares. Other classes of shares are available for which performance, fees, and expenses will differ. All results include reinvestment of dividends and capital gains. AVERAGE ANNUAL TOTAL RETURNS -- JUNE 30, 2001 - ------------------------------------------------------------------------------- CLASS A (Inception 12/31/96) 6 MONTHS 1 YEAR SINCE INCEPTION Net Asset Value(1) -4.48% -20.18% 13.92% With Maximum Sales Charge(2) -9.99 -24.76 12.44 - -------------------------------------------------------------------------------- CLASS B (Inception 12/31/96) 6 MONTHS 1 YEAR SINCE INCEPTION Net Asset Value(1) -4.85% -20.76% 13.07% With CDSC(3) -9.61 -23.92 12.78 - -------------------------------------------------------------------------------- CLASS C (Inception 12/31/96) 6 MONTHS 1 YEAR SINCE INCEPTION Net Asset Value(1) -4.85% -20.76% 13.07% With CDSC(3) -6.75 -22.17 12.81 - -------------------------------------------------------------------------------- SINCE FUND'S CLASS A, B,C COMPARATIVE PERFORMANCE 6 MONTHS 1 YEAR INCEPTION Russell 2000 Index(4) 6.94% 0.66% 9.42% Morningstar Small Cap Growth Fund Average(5) -3.27 -16.05 13.82 Lipper Small Cap Growth Funds Average(6) -4.80 -18.99 11.15 NOTES TO CHARTS These returns represent past performance and do not guarantee future results. Share price and returns will vary and you may have a gain or loss when you sell your shares. Recent returns may be higher or lower than those shown. (1) These results include reinvestment of any dividends and capital gains, but do not include a sales charge. (2) These results include reinvestment of any dividends and capital gains, and the maximum sales charge of 5.75%. (3) These results include reinvestment of any dividends and capital gains. Performance for Class B shares assumes a maximum 5.00% contingent deferred sales charge ("CDSC") applied when you sell shares. Class C share performance assumes a 1.00% sales charge and a 1.00% CDSC applied when you sell shares within one year of purchase. (4) Russell 2000 Index is an unmanaged index measuring the stock price performance of the 2,000 smallest companies within the Russell 3000 Index. You may not invest directly in an index. (5) Morningstar Small Cap Growth Fund Average is the average performance without sales charges of funds with similar investment objectives as calculated by Morningstar, Inc. (6) Lipper Small Cap Growth Funds Average is the average performance without sales charges of funds with similar investment objectives as calculated by Lipper Inc. [sidebar] PORTFOLIO FACTS - ------------------------------------------------------------------------------- % OF NET ASSETS AS OF FUND COMPOSITION 6/30/01 12/31/00 - ------------------------------------------------------------------------------- COMMON STOCKS 95.3 95.1 - ------------------------------------------------------------------------------- SHORT TERM INVESTMENTS AND OTHER 4.7 4.9 % OF NET ASSETS AS OF TEN LARGEST HOLDINGS 6/30/01 12/31/00 - ------------------------------------------------------------------------------- GOLDEN STATE BANCORP, INC. 1.4 1.9 - ------------------------------------------------------------------------------- CHECKPOINT SYSTEMS, INC. 1.1 0.3 - ------------------------------------------------------------------------------- RALCORP HOLDINGS, INC. 1.0 0.7 - ------------------------------------------------------------------------------- MSC SORTWARE CORP. 0.9 0.3 - ------------------------------------------------------------------------------- FIRST HEALTH GROUP CORP. 0.9 1.2 - ------------------------------------------------------------------------------- ITT EDUCATIONAL SERVICES, INC. 0.9 1.3 - ------------------------------------------------------------------------------- PMI GROUP, INC. 0.9 0.8 - ------------------------------------------------------------------------------- CATELLUS DEVELOPMENT CORP. 0.9 0.8 - ------------------------------------------------------------------------------- VIEWPOINT CORP. 0.8 0.4 - ------------------------------------------------------------------------------- MARKEL CORP. 0.8 -- % OF NET ASSETS AS OF FIVE LARGEST INDUSTRIES 6/30/01 12/31/00 - ------------------------------------------------------------------------------- DRUGS & HEALTHCARE 15.3 10.0 - ------------------------------------------------------------------------------- COMPUTERS & BUSINESS EQUIPMENT 9.1 4.3 - ------------------------------------------------------------------------------- RETAIL 5.3 4.6 - ------------------------------------------------------------------------------- COMPUTER SOFTWARE & SERVICES 5.3 8.7 - ------------------------------------------------------------------------------- BANKS & THRIFTS 4.8 6.2 Portfolio holdings and asset allocations will vary. - ------------------------------------------------------------------------------- CDC NVEST STAR ADVISERS FUND - ------------------------------------------------------------------------------- PERFORMANCE OVERVIEW - ------------------------------------------------------------------------------- For the six months ended June 30, 2001, CDC Nvest Star Advisers Fund's Class A shares had a total return of -5.77% based on net asset value, including reinvestment of a distribution of $0.01 per share. During the same period, the Wilshire 4500 Index returned -4.00%, and the Standard & Poor's 500 returned - -6.70%. The Wilshire 4500 Index, the fund's new benchmark, includes both mid- and small-cap stocks, making it a better yardstick for the fund. The Morningstar Large Cap Growth Fund Average returned -15.75% for the period. The fund's four portfolios are managed by three firms: mid- and large-cap value stocks by Harris/Oakmark; small cap value stocks, Loomis Sayles; mid-cap growth stocks, assumed by Loomis Sayles during the reporting period; and large-cap growth stocks, Kobrick. Effective July 1, 2001, the Kobrick portfolio will be managed by Mercury Advisors. SMALL-CAP VALUE STOCKS WERE MARKET LEADERS A sluggish economy and weak corporate profits created an uncertain environment - - one in which most stocks struggled, although there were pockets of strength. Value stocks outperformed growth stocks, and small-cap and mid-cap stocks bested large-caps. The Harris/Oakmark portfolio's concentration on value stocks contributed the most to performance, benefiting from a 33% allocation to consumer cyclical stocks, which tend to do well during economic recoveries. A 27% commitment to consumer staples, whose demand for products tends to remain constant regardless of the economic environment, also aided performance. During the period, the portfolio raised its technology weighting from 5% to 10% of assets, but these stocks underperformed. Because small-cap value stocks made some of the strongest gains over the period, the Loomis Sayles small-cap value portfolio performed well for the fund. The portfolio's largest position was a 25% investment in financial-services stocks, a portion of which was allocated to Real Estate Investment Trusts (REITS), one of the best performing sectors. At 10% of assets, the portfolio's technology stocks also boosted performance. Since demand for consumer discretionary products reflects changes in the economy, these companies (20% of assets) were also positive for the fund's overall return. The Loomis Sayles mid-cap growth portfolio emphasizes companies that have the potential for rapid earnings growth. Leading-edge technology and healthcare companies accounted for a large portion of assets, including biotechnology firms, which were out of favor and among the most volatile stocks in the market. These two sectors detracted from performance. Consumer discretionary stocks (at 11% of assets) did well in the Loomis Sayles portfolio. The Kobrick portfolio's emphasis on large-cap growth stocks detracted from the fund's performance, as growth stocks trailed other types of stocks. During the period, the managers trimmed the fund's technology, healthcare and financial-services holdings and increased its position in consumer cyclical stocks from 6% to 26% of assets. NEAR-TERM, STOCKS ARE LIKELY TO TRADE WITHIN A NARROW RANGE Because forecasts for economic growth are weak, it may take several months before the stock market can sustain a recovery. Until then, it is likely that the broad market will trade within a narrow range, making relatively strong gains for a short time and then falling back to lower levels. While this may be frustrating for investors, it is important to keep in mind that even in lackluster markets, certain sectors and individual stocks perform well. The Star multi-manager approach may be beneficial in this type of environment because each investment manager uses a different investment style and focuses on different companies. As a result, CDC Nvest Star Advisers Fund is exposed to wide-ranging areas of the equity market. [sidebar] PORTFOLIO PROFILE OBJECTIVE: Seeks long-term growth of capital - -------------------------------------------------------------------------------- STRATEGY: Invests primarily in a wide variety of equity securities - -------------------------------------------------------------------------------- INCEPTION DATE: July 7, 1994 - -------------------------------------------------------------------------------- SUBADVISERS: Harris Associates L.P. Kobrick Funds LLC Loomis, Sayles & Company, L.P - -------------------------------------------------------------------------------- SYMBOLS: Class A NEFSX Class B NESBX Class C NECCX Class Y NESYX - -------------------------------------------------------------------------------- NET ASSET VALUE PER SHARE:(JUNE 30, 2001) Class A $16.53 Class B 15.28 Class C 15.29 Class Y 17.10 - -------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- CDC NVEST STAR ADVISERS FUND - ------------------------------------------------------------------------------- INVESTMENT RESULTS THROUGH JUNE 30, 2001 - ------------------------------------------------------------------------------- PERFORMANCE IN PERSPECTIVE The charts comparing CDC Nvest Star Advisers Fund's performance to a benchmark index provide you with a general sense of how the fund performed. To put this information in context, it may be helpful to understand the special differences between the two. The fund's total return for the period shown below appears with and without sales charges and includes fund expenses and management fees. A securities index measures the performance of a theoretical portfolio. Unlike a fund, the index is unmanaged and does not have expenses that affect the results. It is not possible to invest directly in an index. In addition, few investors could purchase all of the securities necessary to match the index and would incur transaction costs and other expenses even if they could. GROWTH OF A $10,000 INVESTMENT IN CLASS A SHARES - ------------------------------------------------------------------------------- JULY 1994 (INCEPTION) THROUGH JUNE 2001 NET ASSET MAXIMUM WILSHIRE VALUE(1) SALES CHARGE(2) S&P 400(4) S&P 500(5) 4500(6) 7/7/94 10000 9425 10000 10000 10000 10120 9538 10226 10228 10270 10600 9990 10762 10644 10760 10656 10043 10561 10388 10687 10960 10330 10676 10626 10733 10576 9968 10194 10236 10299 10638 10026 10288 10385 10420 10622 10011 10395 10655 10521 10959 10329 10940 11069 10968 11240 10594 11130 11396 11209 11425 10768 11354 11728 11354 11690 11018 11627 12191 11607 6/30/95 12252 11547 12101 12478 12166 13143 12387 12732 12893 12882 13416 12644 12968 12928 13182 13833 13038 13282 13470 13539 13505 12728 12940 13422 13176 14094 13284 13506 14013 13736 14293 13471 13472 14272 13909 14455 13623 13667 14763 14053 15017 14153 14132 14905 14509 15272 14394 14302 15048 14731 16090 15165 14738 15269 15416 16592 15638 14937 15663 15902 6/30/96 16098 15173 14713 15727 15403 14863 14009 13717 15027 14246 15587 14691 14508 15346 15015 16454 15508 15141 16209 15731 16317 15379 15185 16653 15498 17124 16139 16040 17917 16152 17006 16028 16057 17565 16298 17764 16742 16659 18656 16824 17174 16187 16523 18807 16469 16454 15508 15819 18025 15610 16772 15807 16229 19101 15649 18034 16997 17647 20274 17206 6/30/97 18773 17694 18143 21178 18021 20279 19113 19939 22860 19261 19699 18567 19915 21589 19436 20653 19466 21060 22772 20783 19985 18836 20144 22011 19991 20139 18981 20442 23030 19997 20435 19260 21235 23426 20487 20525 19345 20832 23686 20194 22032 20765 22559 25394 21739 22954 21635 23576 26694 22863 23213 21878 24005 26964 23154 22572 21274 22925 26500 22072 6/30/98 23292 21953 23069 27576 22417 22595 21296 22174 27284 21146 18850 17766 18048 23339 17048 20219 19057 19733 24835 18278 21461 20227 21498 26854 19317 22532 21237 22570 28481 20518 24370 22969 25297 30121 22254 25515 24048 24313 31380 22612 24760 23336 23039 30405 21382 26245 24736 23682 31621 22216 27292 25722 25550 32844 23989 26537 25011 25660 32069 23780 6/30/99 28205 26583 27035 33849 24779 27267 25700 26462 32793 24028 27158 25596 25554 32629 23430 27255 25688 24765 31735 23247 28234 26610 26028 33744 24435 30637 28875 27394 34429 26497 35689 33636 29021 36457 30149 35251 33224 28203 34627 29787 39577 37302 30177 33972 34419 39169 36917 32703 37295 33145 36154 34075 31562 36172 29158 33183 31275 31167 35431 27006 6/30/00 33823 31879 31625 36302 30249 32949 31055 32125 35736 29390 35533 33490 35710 37955 32670 34489 32506 35464 35951 31341 32853 30964 34262 35800 28780 28881 27220 31675 32979 23882 29630 27926 34098 33141 25393 30474 28722 34858 34317 26775 27418 25842 32868 31187 23522 25561 24091 30426 29210 21362 27806 26208 33782 31480 23623 28076 26462 34569 31691 24182 6/30/01 27937 26330 34431 30921 24378 The illustration represents past performance and does not guarantee future results. Share price and return will vary and you may have a gain or loss when you sell your shares. Other classes of shares are available for which performance, fees, and expenses will differ. All results include reinvestment of dividends and capital gains. AVERAGE ANNUAL TOTAL RETURNS -- JUNE 30, 2001 - ------------------------------------------------------------------------------- CLASS A (Inception 7/7/94) 6 MONTHS 1 YEAR 5 YEARS SINCE INCEPTION Net Asset Value(1) -5.77% -17.45% 11.64% 15.85% With Maximum Sales Charge(2) -11.18 -22.21 10.33 14.87 - ------------------------------------------------------------------------------- CLASS B (Inception 7/7/94) 6 MONTHS 1 YEAR 5 YEARS SINCE INCEPTION Net Asset Value(1) -6.16% -18.06% 10.81% 15.00% With CDSC(3) -10.85 -21.56 10.59 15.00 - ------------------------------------------------------------------------------- CLASS C (Inception 7/7/94) 6 MONTHS 1 YEAR 5 YEARS SINCE INCEPTION Net Asset Value(1) -6.15% -18.09% 10.80% 15.00% With CDSC(3) -7.99 -19.60 10.58 14.82 - ------------------------------------------------------------------------------- CLASS Y (Inception 11/15/94) 6 MONTHS 1 YEAR 5 YEARS SINCE INCEPTION Net Asset Value(1) -5.64% -17.07% 12.05% 15.70% - ------------------------------------------------------------------------------- SINCE SINCE FUND'S FUND'S CLASS A, B, C CLASS Y COMPARATIVE PERFORMANCE 6 MONTHS 1 YEAR 5 YEARS INCEPTION INCEPTION S&P 400 Midcap Index(4) 0.97% 8.87% 18.54% 19.19% 20.31% S&P 500 Index(5) -6.70 -14.83 14.48 17.35 18.29 Wilshire 4500 Index.(6) -4.00 -19.41 9.62 13.31 13.98 Morningstar Large Cap Growth Fund Avg.(7) -15.75 -29.75 11.80 15.67 16.20 Lipper Multi-Cap Growth Funds Average(8) -6.34 -12.73 12.38 15.16 16.11 NOTES TO CHARTS These returns represent past performance and do not guarantee future results. Share price and return will vary and you may have a gain or loss when you sell your shares. Recent returns may be higher or lower than those shown. Class Y shares are available to certain institutional investors only. (1) These results include reinvestment of any dividends and capital gains, but do not include a sales charge. (2) These results include reinvestment of any dividends and capital gains, and the maximum sales charge of 5.75%. (3) These results include reinvestment of any dividends and capital gains. Performance for Class B shares assumes a maximum 5.00% contingent deferred sales charge ("CDSC") applied when you sell shares. Class C share performance assumes a 1.00% sales charge, and a 1.00% CDSC applied when you sell shares within one year of purchase. (4) S&P 400 Midcap Index is an unmanaged index of U.S. mid-sized company stocks. You may not invest directly in an index. (5) S&P 500 Index is an unmanaged index of U.S. common stock performance. You may not invest directly in an index. (6) Wilshire 4500 Index is an unmanaged index of 4500 mid- and small-size companies. You may not invest directly in an index. (7) Morningstar Large Cap Growth Fund Average is an average of performance without sales charges of funds with similar investment objectives as calculated by Morningstar, Inc. Class A, B and C since-inception return is calculated from 7/31/94. Class Y since-inception return is calculated from 11/30/94. (8) Lipper Multi-Cap Growth Funds Average is the average performance without sales charges of funds with similar investment objectives as calculated by Lipper Inc. Class Y since-inception return is calculated from 11/30/94. [side bar] PORTFOLIO FACTS - ------------------------------------------------------------------------------- % OF NET ASSETS AS OF FUND COMPOSITION 6/30/01 12/31/00 - ------------------------------------------------------------------------------- COMMON STOCKS 96.1 94.8 - ------------------------------------------------------------------------------- SHORT TERM INVESTMENTS AND OTHER 3.9 8.6 % OF NET ASSETS AS OF TEN LARGEST HOLDINGS 6/30/01 12/31/00 - ------------------------------------------------------------------------------- FORTUNE BRANDS, INC. 1.8 0.7 - ------------------------------------------------------------------------------- H&R BLOCK, INC. 1.5 0.8 - ------------------------------------------------------------------------------- TRICON GLOBAL RESTAURANTS, INC. 1.5 0.8 - ------------------------------------------------------------------------------- AT&T CORP. 1.3 0.4 - ------------------------------------------------------------------------------- TYCO INTERNATIONAL, LTD. 1.2 0.3 - ------------------------------------------------------------------------------- APOGENT TECHNOLOGIES, INC. 1.2 0.7 - ------------------------------------------------------------------------------- KNIGHT-RIDDER, INC. 1.2 0.7 - ------------------------------------------------------------------------------- WASHINGTON MUTUAL, INC. 1.1 1.3 - ------------------------------------------------------------------------------- MOODY'S CORP. 1.1 0.8 - ------------------------------------------------------------------------------- COMERICA, INC. 1.1 -- % OF NET ASSETS AS OF FIVE LARGEST INDUSTRIES 6/30/01 12/31/00 - ------------------------------------------------------------------------------- HOUSEHOLD APPLIANCES & HOME FURNISHINGS 4.8 0.6 - ------------------------------------------------------------------------------- RETAIL 4.8 1.7 - ------------------------------------------------------------------------------- FINANCIAL SERVICES 4.4 2.9 - ------------------------------------------------------------------------------- REPURCHASE AGREEMENT 4.3 4.6 - ------------------------------------------------------------------------------- OIL & GAS - EXPLORATION & Production 3.3 1.4 Portfolio holdings and asset allocations will vary. - ------------------------------------------------------------------------------- CDC NVEST STAR WORLDWIDE FUND - ------------------------------------------------------------------------------- PERFORMANCE OVERVIEW - ------------------------------------------------------------------------------- For the six months ended June 30, 2001, the total return on CDC Nvest Star Worldwide Fund's Class A shares was -4.74% based on net asset value, including $0.08 in reinvested distributions. For the same period, the fund's primary benchmark, the MSCI World Index, returned -10.66%, and its secondary benchmark, the MSCI EAFE Index returned -14.87%. The MSCI World Index includes U.S. stocks, while the MSCI EAFE Index focuses on overseas stocks. The Morningstar World Stock Fund Average returned -11.22% for the first half of 2001. CDC Nvest Star Worldwide Fund's broad diversification and multi-manager approach may have helped defend it from some of the negative pressures that impacted its benchmarks and an index of its peers during the six months ended June 30, 2001. MARKET TURBULENCE WAS WORLDWIDE So far this year, stock markets in many countries moved in tandem, as slow economic growth affected most major markets. However, small- and mid-cap stocks generally out- performed large-cap stocks, and value stocks outpaced growth stocks. The two Harris/Oakmark portfolios seek stocks selling at prices that don't seem to reflect the full value of a company's assets or growth potential. Both the international and domestic portfolios were strongly positive during the first half of 2001. Most of Harris/Oakmark's international portfolio was in Europe. Positive results in the United Kingdom, France, Finland, the Netherlands and Sweden were partially offset by continued weakness in the Pacific Rim, including Japan. The fund's industry allocations included financial services, miscellaneous industrial companies, manufacturing, food and beverage companies, retailers, media and transportation. The Harris/Oakmark domestic portfolio focused on mid- and large-cap value stocks. The portfolio benefited from a 33% allocation to consumer cyclical companies, which tend to do well during periods of economic recovery. A 27% commitment to consumer staples companies - those whose demand for products tends to remain constant regardless of the economic environment - also aided performance. The managers increased technology to 10% of assets at the end of June, from 5% at the beginning of the year, but performance in this sector was weak. The Loomis Sayles portfolio diversified assets across a number of countries and sectors. During the past six months, the manager reduced the portfolio's allocation to financial and technology stocks, and increased investments in energy, health care and utilities. They also trimmed the fund's holdings in Brazil, Canada, Germany and Japan, and increased investments in France and Spain. Montgomery focused on growth stocks in the United Kingdom, Scotland, France, Japan, Italy and the United States. Although negative results from the portfolio's financial services and technology holdings caused the Montgomery team to trim these positions during the period, they still accounted for the largest sectors in the portfolio at the end of June. In the financial area, Montgomery emphasized companies active in lending. In technology, they focused on software companies. Healthcare stocks made the strongest contribution to this segment's results during this period. THE LONG-TERM OUTLOOK FOR GLOBAL INVESTMENTS IS POSITIVE While world economies continue to be weak, we expect a recovery to get underway sometime in the next six to 12 months, starting in the United States and spreading overseas. By putting assets to work in markets around the world - managed by a diverse group of investment professionals - we believe CDC Nvest Star Worldwide Fund shareholders will be able to participate in the growth of some of the world's best companies, while minimizing risk through broad diversification. [sidebar] PORTFOLIO PROFILE OBJECTIVE: Seeks long-term growth of capital - -------------------------------------------------------------------------------- STRATEGY: Invests primarily in equity securities of both U.S. and foreign countries - -------------------------------------------------------------------------------- INCEPTION DATE: December 29, 1995 - -------------------------------------------------------------------------------- SUBADVISERS: Harris Associates L.P. Loomis, Sayles & Company, L.P. Montgomery Asset Management,LLC. - -------------------------------------------------------------------------------- SYMBOLS: Class A NEFDX Class B NEDBX Class C NEDCX - -------------------------------------------------------------------------------- NET ASSET VALUE PER SHARE:(JUNE 30, 2001) Class A $13.66 Class B 12.96 Class C 12.97 - -------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- CDC NVEST STAR WORLDWIDE FUND - ------------------------------------------------------------------------------- INVESTMENT RESULTS THROUGH JUNE 30, 2001 - ------------------------------------------------------------------------------- PERFORMANCE IN PERSPECTIVE The charts comparing CDC Nvest Star Worldwide Fund's performance to a benchmark index provide you with a general sense of how the fund performed. To put this information in context, it may be helpful to understand the special differences between the two. The fund's total return for the period shown below appears with and without sales charges and includes fund expenses and management fees. A securities index measures the performance of a theoretical portfolio. Unlike a fund, the index is unmanaged and does not have expenses that affect the results. It is not possible to invest directly in an index. In addition, few investors could purchase all of the securities necessary to match the index and would incur transaction costs and other expenses even if they could. GROWTH OF A $10,000 INVESTMENT IN CLASS A SHARES - ------------------------------------------------------------------------------- DECEMBER 1995 (INCEPTION) THROUGH JUNE 2001 NET ASSET MAXIMUM MSCI WORLD MSCI EAFE VALUE(1) SALES CHARGE(2) INDEX(4) INDEX(5) 12/29/95 10000 9425 10000 10000 10000 9425 10000 10000 10088 9508 10183 10043 10264 9674 10247 10079 10528 9923 10419 10296 10872 10247 10666 10598 11136 10496 10677 10405 6/30/96 11176 10533 10732 10466 10664 10051 10355 10163 10952 10322 10476 10187 11136 10496 10887 10460 11048 10413 10966 10355 11496 10835 11582 10770 11667 10996 11399 10634 12136 11439 11538 10264 12388 11675 11673 10434 12266 11561 11444 10475 12388 11675 11821 10532 13028 12278 12553 11220 6/30/97 13627 12844 13180 11842 14146 13332 13789 12036 13352 12584 12870 11139 14082 13272 13571 11765 13061 12310 12858 10864 12908 12166 13089 10756 13146 12390 13250 10852 13104 12350 13621 11352 13996 13192 14544 12083 14566 13729 15161 12457 14651 13809 15311 12558 14353 13528 15121 12500 6/30/98 14056 13248 15482 12598 14013 13208 15459 12729 11794 11116 13400 11154 11683 11012 13640 10815 12534 11813 14876 11945 13206 12446 15762 12561 13673 12887 16535 13059 14150 13336 16898 13024 13971 13168 16450 12717 14541 13705 17138 13251 15323 14442 17817 13790 14940 14081 17168 13083 6/30/99 15816 14907 17972 13595 15638 14738 17920 14003 15527 14634 17891 14058 15170 14298 17719 14203 15706 14803 18642 14738 16879 15909 19170 15254 18819 17736 20725 16625 18119 17077 19539 15571 19253 18146 19594 15993 19310 18200 20950 16617 17911 16881 20066 15746 17097 16114 19560 15365 6/30/00 17599 16587 20221 15969 17126 16141 19655 15303 17637 16623 20298 15439 16973 15997 19220 14690 16329 15390 18901 14347 15586 14690 17755 13812 16519 15569 18045 14306 16840 15872 18400 14310 15763 14857 16844 13240 14732 13885 15725 12341 15683 14781 16879 13189 15866 14954 16643 12701 6/30/01 15723 14819 16121 12179 The illustration represents past performance and does not guarantee future results. Share price and return will vary and you may have a gain or loss when you sell your shares. Other classes of shares are available for which performance, fees, and expenses will differ. All results include reinvestment of dividends and capital gains. AVERAGE ANNUAL TOTAL RETURNS -- JUNE 30, 2001 - ------------------------------------------------------------------------------- CLASS A (Inception 12/29/95) 6 MONTHS 1 YEAR 5 YEARS SINCE INCEPTION Net Asset Value(1) -4.74% -10.59% 7.08% 8.58% With Maximum Sales Charge(2) -10.23 -15.75 5.82 7.43 - -------------------------------------------------------------------------------- CLASS B (Inception 12/29/95) 6 MONTHS 1 YEAR 5 YEARS SINCE INCEPTION Net Asset Value(1) -5.13% -11.27% 6.31% 7.80% With CDSC(3) -9.84 -14.88 6.02 7.67 - -------------------------------------------------------------------------------- CLASS C (Inception 12/29/95) 6 MONTHS 1 YEAR 5 YEARS SINCE INCEPTION Net Asset Value(1) -5.12% -11.27% 6.31% 7.81% With CDSC(3) -7.01 -12.86 6.09 7.61 - -------------------------------------------------------------------------------- SINCE FUND'S CLASS A, B, C COMPARATIVE PERFORMANCE 6 MONTHS 1 YEAR 5 YEARS INCEPTION MSCI World Index(4) -10.66% -20.40% 8.13% 8.71% MSCI EAFE Index(5) -14.87 -23.84 2.83 3.39 Morningstar World Stock Fund Average(6) -11.22 -20.15 7.88 9.65 Lipper Global Funds Average(7) -11.69 -19.52 8.00 9.32 - -------------------------------------------------------------------------------- NOTES TO CHARTS These returns represent past performance and do not guarantee future results. Share price and return will vary, and you may have a gain or loss when you sell your shares. Recent returns may be higher or lower than those shown. (1) These results include reinvestment of any dividends and capital gains, but do not include a sales charge. (2) These results include reinvestment of any dividends and capital gains, and the maximum sales charge of 5.75%. (3) These results include reinvestment of any dividends and capital gains. Performance for Class B shares assumes a maximum 5.00% contingent deferred sales charge ("CDSC") applied when you sell shares. Class C share performance assumes a 1.00% sales charge and a 1.00% CDSC applied when you sell shares within one year of purchase. (4) Morgan Stanley Capital International World Index (MSCI World) is an unmanaged index of common stocks from the MSCI developed-market countries. You may not invest directly in an index. (5) Morgan Stanley Capital International Europe Australasia and Far East Index (MSCI EAFE) is an unmanaged index of common stocks traded outside the U.S. You may not invest directly in an index. (6) Morningstar World Stock Fund Average is the average performance without sales charges of funds with similar investment objectives as calculated by Morningstar, Inc. (7) Lipper Global Funds Average is the average performance without sales charges of mutual funds with a similar current investment style or objective as calculated by Lipper Inc. [sidebar] PORTFOLIO FACTS - ------------------------------------------------------------------------------- % OF NET ASSETS AS OF FUND COMPOSITION 6/30/01 12/31/00 - ------------------------------------------------------------------------------- COMMON STOCKS 96.4 95.7 - ------------------------------------------------------------------------------- SHORT TERM INVESTMENTS AND OTHER 3.6 4.3 % OF NET ASSETS AS OF TEN LARGEST HOLDINGS 6/30/01 12/31/00 - ------------------------------------------------------------------------------- DIAGEO PLC 2.0 1.9 - ------------------------------------------------------------------------------- H&R BLOCK, INC. 1.7 1.0 - ------------------------------------------------------------------------------- TRICON GLOBAL RESTAURANTS, INC. 1.4 1.1 - ------------------------------------------------------------------------------- ENODIS PLC 1.4 1.0 - ------------------------------------------------------------------------------- SOMERFIELD PLC 1.4 1.6 - ------------------------------------------------------------------------------- FORTUNE BRANDS, INC. 1.3 1.0 - ------------------------------------------------------------------------------- BRUNSWICK CORP. 1.3 0.8 - ------------------------------------------------------------------------------- METSO OYJ 1.2 1.4 - ------------------------------------------------------------------------------- KNIGHT-RIDDER, INC. 1.2 1.0 - ------------------------------------------------------------------------------- HUNTER DOUGLAS NV 1.2 1.0 % OF NET ASSETS AS OF FIVE LARGEST COUNTRIES 6/30/01 12/31/00 - ------------------------------------------------------------------------------- UNITED STATES 32.2 26.8 - ------------------------------------------------------------------------------- UNITED KINGDOM 13.1 13.2 - ------------------------------------------------------------------------------- JAPAN 9.2 6.7 - ------------------------------------------------------------------------------- FRANCE 6.2 7.5 - ------------------------------------------------------------------------------- NETHERLANDS 4.4 3.9 Portfolio holdings and asset allocations will vary. FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- STAR VALUE FUND -- SCHEDULE OF INVESTMENTS - -------------------------------------------------------------------------------- Investments as of June 30, 2001 (Unaudited) SHARES DESCRIPTION VALUE(a) - -------------------------------------------------------------------------------- COMMON STOCK -- 97.5% OF TOTAL NET ASSETS AEROSPACE -- 0.5% 25,900 Honeywell International, Inc. .................... $ 904,810 2,700 United Technologies Corp. ........................ 197,802 ------------- 1,102,612 ------------- AEROSPACE/DEFENSE-- 0.4% 12,000 General Dynamics Corp. ........................... 933,720 ------------- AIRLINES-- 0.2% 6,600 Continental Airlines, Inc. (c) ................... 325,050 ------------- AUTOMOTIVE-- 1.4% 90,667 Ford Motor Co. ................................... 2,225,875 22,900 Lear Corp. (c) ................................... 799,210 ------------- 3,025,085 ------------- BANKS-- 3.6% 37,100 Bank America Corp. ............................... 2,227,113 2,600 Charter One Financial, Inc. ...................... 82,940 25,800 FleetBoston Financial Corp. ...................... 1,017,810 3,100 M & T Bank Corp. ................................. 234,050 7,800 Mercantile Bankshares Corp. ...................... 308,568 3,400 Northern Trust Corp. ............................. 218,960 8,400 PNC Bancorp, Inc. ................................ 552,636 37,300 US Bancorp Delaware .............................. 850,067 45,600 Wells Fargo & Co. ................................ 2,117,208 ------------- 7,609,352 ------------- BANKS & THRIFTS-- 2.0% 113,800 Washington Mutual, Inc. .......................... 4,273,190 ------------- BEVERAGES-ALCOHOLIC-- 0.8% 41,200 Anheuser-Busch Companies, Inc. ................... 1,697,440 ------------- BUILDING & RELATED-- 0.1% 3,300 Lennar Corp. ..................................... 137,610 ------------- BUSINESS SERVICES-- 3.9% 120,000 Ceridian Corp. (c) ....................... 2,300,400 85,200 Electronic Data Systems Corp. .................... 5,325,000 14,400 The Interpublic Group of Companies, Inc. ......... 422,640 ------------- 8,048,040 ------------- CHEMICALS-- 0.3% 5,500 Ashland, Inc. .................................... 220,550 20,700 Lyondell Petrochemical Co. ....................... 318,366 ------------- 538,916 ------------- CHEMICALS-MAJOR-- 0.3% 16,200 Dow Chemical Co. ................................. 538,650 ------------- CHEMICALS-SPECIALTY-- 0.4% 16,000 Praxair, Inc. .................................... 752,000 ------------- COMMUNICATION SERVICES-- 1.1% 140,000 Motorola, Inc. ................................... 2,318,400 ------------- COMPUTER HARDWARE-- 2.7% 47,600 Apple Computer, Inc. (c) ......................... 1,148,112 28,650 Compaq Computer Corp. ............................ 443,789 36,700 Dell Computer Corp. (c) .......................... 976,220 6,200 Diebold, Inc. .................................... 199,330 8,800 EMC Corp. ........................................ 255,640 33,000 Hewlett-Packard Co. .............................. 943,800 8,300 International Business Machines Corp. ............ 937,900 9,600 Lexmark International Group, Inc., Class A (c) ......................... 645,600 10,600 Quantum Corp. (c) ................................ 106,954 ------------- 5,657,345 ------------- COMPUTER SOFTWARE & SERVICES-- 1.5% 33,200 Computer Associates International, Inc. .............................. 1,195,200 9,800 Mentor Graphics Corp. (c) ........................ 170,520 11,700 Microsoft Corp. (c) .............................. 840,177 10,200 PeopleSoft, Inc. (c) ............................. 493,680 2,500 Sabre Group Holdings, Inc. (c) ................... 125,000 5,500 Synopsys, Inc. (c) ............................... 260,700 ------------- 3,085,277 ------------- CONSUMER DURABLES-- 1.0% 70,000 Maytag Corp. ..................................... 2,048,200 ------------- CONSUMER GOODS & SERVICES-- 2.5% 12,800 Colgate-Palmolive Co. ............................ 755,072 200,000 Mattel, Inc. ............................. 3,784,000 26,000 Newell Rubbermaid, Inc. .......................... 652,600 ------------- 5,191,672 ------------- DEFENSE & AEROSPACE-- 0.1% 3,200 ITT Industries, Inc. ............................. 141,600 ------------- DOMESTIC OIL-- 0.5% 5,250 Chevron Corp. .................................... 475,125 7,500 Texaco, Inc. ..................................... 499,500 ------------- 974,625 ------------- DRUGS & HEALTHCARE-- 3.2% 12,300 Bristol-Myers Squibb Co. ......................... 643,290 41,820 Merck & Co. ...................................... 2,672,716 37,000 Pfizer, Inc. ..................................... 1,481,850 14,280 Pharmacia & Upjohn, Inc. ......................... 656,166 34,000 Schering-Plough Corp. ............................ 1,232,160 ------------- 6,686,182 ------------- ELECTRIC UTILITIES-- 1.2% 3,900 American Electric Power, Inc. .................... 180,063 23,000 Duke Power Co. ................................... 897,230 12,400 FPL Group, Inc. .................................. 746,604 8,800 Mirant Corp. (c) ................................. 302,720 5,800 PPL Corp. ........................................ 319,000 ------------- 2,445,617 ------------- ELECTRONICS-- 3.5% 15,000 Agilent Technologies, Inc. (c) ................... 487,500 5,700 CIENA Corp. (c) .................................. 216,258 5,300 Comverse Technology, Inc. (c) .................... 306,022 3,200 Corning, Inc. .................................... 53,472 11,000 Emerson Electric Co. ............................. 665,500 24,500 Ingram Micro, Inc. (c) ........................... 355,005 18,800 Koninklijke (Royal) Philips Electronics NV (ADR) ............................. 496,884 7,400 PerkinElmer, Inc. ................................ 203,722 5,700 Scientific-Atlanta, Inc. ......................... 231,420 14,500 Solectron Corp. (c) .............................. 265,350 15,400 Tech Data Corp. (c) .............................. 539,154 2,800 Tektronix, Inc. .................................. 76,020 35,000 Teradyne, Inc. (c) ............................... 1,158,500 35,700 Tyco International, Ltd. ......................... 1,945,650 9,300 UTStarcom, Inc. (c) .............................. 225,804 ------------- 7,226,261 ------------- ENERGY-- 0.5% 18,000 Exelon Corp. ..................................... 1,154,160 ------------- ENERGY RESERVES-- 5.2% 35,619 El Paso Corp. .................................... 1,871,422 87,600 Exxon Mobil Corp. ................................ 7,651,860 21,100 Occidental Petroleum Corp. ....................... 561,049 13,000 Phillips Petroleum Co. ........................... 741,000 ------------- 10,825,331 ------------- ENTERTAINMENT-- 0.3% 13,200 Viacom, Inc., Class B (c) ........................ 683,100 ------------- FINANCIAL SERVICES-- 9.5% 107,699 Citigroup, Inc. .................................. 5,690,815 110,000 Equifax, Inc. .................................... 4,034,800 41,800 Fannie Mae ....................................... 3,559,270 13,500 Household International, Inc. .................... 900,450 68,000 J.P. Morgan & Co., Inc. .......................... 3,032,800 13,300 Lincoln National Corp., Inc. ..................... 688,275 40,000 Mellon Financial Corp. ........................... 1,840,000 ------------- 19,746,410 ------------- FOOD & BEVERAGES-- 1.9% 15,925 Kraft Foods Inc. (c) ............................. 493,675 11,400 Pepsi Bottling Group, Inc. ....................... 457,140 38,500 PepsiCo, Inc. .................................... 1,701,700 10,000 Quaker Oats Co. .................................. 912,500 5,000 Sysco Corp. ...................................... 135,750 4,800 Unilever NV ...................................... 285,936 ------------- 3,986,701 ------------- FREIGHT TRANSPORTATION-- 0.2% 10,000 Teekay Shipping Corp. ............................ 400,200 ------------- HARDWARE-- 0.4% 19,000 Black & Decker Corp. ............................. 749,740 ------------- HEALTHCARE-MANAGED CARE-- 0.2% 5,800 UnitedHealth Group, Inc. ......................... 358,150 ------------- HEALTH CARE-PRODUCTS-- 2.4% 47,400 Baxter International, Inc. ....................... 2,322,600 53,400 Johnson & Johnson, Inc. .......................... 2,670,000 ------------- 4,992,600 ------------- HEALTH CARE-SERVICES-- 1.4% 39,000 HCA-The Healthcare Co. ........................... 1,762,410 24,000 Tenet Healthcare Corp. (c) ....................... 1,238,160 ------------- 3,000,570 ------------- HOME BUILDERS-- 0.1% 4,600 Centex Corp. ..................................... 187,450 3,200 Pulte Corp. ...................................... 136,416 ------------- 323,866 ------------- HOUSEHOLD PRODUCTS-- 0.3% 28,800 Leggett & Platt, Inc. ............................ 634,464 ------------- INDUSTRIAL SERVICES-- 0.2% 10,900 Rockwell International Corp. ..................... 415,508 ------------- INFORMATION SERVICES-- 1.2% 20,400 First Data Corp. ................................. 1,310,700 5,600 Jack Henry & Associates, Inc. .................... 170,240 1,600 Omnicom Group, Inc. .............................. 137,600 9,000 Paychex, Inc. .................................... 371,610 13,000 SunGard Data Systems, Inc. (c) ................... 390,130 4,300 West Corp. (c) ................................... 106,167 ------------- 2,486,447 ------------- INSURANCE-- 5.7% 75,600 ACE, Ltd. ........................................ 2,955,204 13,500 Allstate Corp. ................................... 593,865 45,000 American General Corp. ........................... 2,090,250 27,300 American International Group, Inc. ............... 2,347,800 60,000 Conseco, Inc. .................................... 819,000 8,000 John Hancock Financial Services, Inc. ............ 322,080 7,700 Marsh & McLennan Co., Inc. ....................... 777,700 25,400 Radian Group, Inc. (c) ........................... 1,027,430 10,500 XL Capital Ltd., Class A ......................... 862,050 ------------- 11,795,379 ------------- INVESTMENT BANKING/BROKER/MANAGEMENT-- 2.1% 16,000 Lehman Brothers Holdings, Inc. ................... 1,244,000 28,700 Merrill Lynch & Co., Inc. ........................ 1,700,475 12,000 Morgan Stanley Dean Witter & Co. ................. 770,760 7,500 The Goldman Sachs Group, Inc. .................... 643,500 ------------- 4,358,735 ------------- LEISURE-- 0.4% 34,800 Royal Caribbean Cruises, Ltd. .................... 769,428 ------------- MACHINERY-- 0.3% 13,500 Applied Materials, Inc. (c) ...................... 691,200 ------------- MANUFACTURING-DIVERSIFIED-- 1.9% 20,400 General Electric Co. ............................. 994,500 24,000 SPX Corp. (c) .................................... 3,004,320 ------------- 3,998,820 ------------- MEDIA & ENTERTAINMENT-- 2.1% 24,100 AOL Time Warner, Inc. (c) ........................ 1,277,300 3,100 Cablevision Systems Corp. (c) .................... 181,350 100,400 The Walt Disney Co. ...................... 2,900,556 ------------- 4,359,206 ------------- MEDICAL PRODUCTS-- 1.2% 70,000 Guidant Corp. (c) ................................ 2,520,000 ------------- MEDICAL PRODUCTS & SUPPLIES-- 0.2% 7,050 Cardinal Health, Inc. ............................ 486,450 ------------- MEDICAL TECHNOLOGY-- 1.5% 60,000 Chiron Corp. (c) ................................. 3,124,800 ------------- OFFICE FURNISHINGS & SUPPLIES-- 0.2% 10,000 Avery Dennison Corp. ............................. 510,500 ------------- OIL & GAS-- 0.4% 20,000 Conoco, Inc., Class A ............................ 564,000 6,000 Mitchell Energy & Development Corp. .............. 277,500 ------------- 841,500 ------------- OIL & GAS-MAJOR INTEGRATED-- 0.7% 20,300 BP Amoco PLC (ADR) ............................... 1,011,955 12,500 Santa Fe International Corp. ..................... 362,500 ------------- 1,374,455 ------------- OIL & GAS-REFINING/MARKETING-- 0.2% 7,200 Ultramar Diamond Shamrock ........................ 340,200 ------------- PAPER & FOREST PRODUCTS-- 0.9% 11,600 Bowater, Inc. .................................... 518,984 21,500 International Paper Co. .......................... 767,550 10,000 Weyerhaeuser Co. ................................. 549,700 ------------- 1,836,234 ------------- POLLUTION CONTROL-- 1.4% 94,300 Waste Management, Inc. ........................... 2,906,326 ------------- PROPERTY & CASUALTY INSURANCE-- 0.4% 11,700 Loews Corp. ...................................... 753,831 ------------- PUBLISHING-- 0.9% 10,000 Gannett Co. ...................................... 659,000 10,100 Knight-Ridder, Inc. .............................. 598,930 10,300 McGraw-Hill Co., Inc. ............................ 681,345 ------------- 1,939,275 ------------- RESTAURANTS-- 2.8% 16,000 Harrahs Entertainment, Inc. (c) .................. 564,800 25,200 McDonald's Corp. ................................. 681,912 100,000 Tricon Global Restaurants, Inc. (c) ...... 4,390,000 7,800 Wendy's International, Inc. ...................... 199,212 ------------- 5,835,924 ------------- RETAIL-- 0.4% 34,900 Family Dollar Stores, Inc. ....................... 894,487 ------------- RETAIL-APPAREL-- 0.5% 2,400 American Eagle Outfitters, Inc. (c) .............. 88,224 15,700 Jones Apparel Group, Inc. (c) .................... 678,240 12,300 Venator Group, Inc. (c) .......................... 188,190 ------------- 954,654 ------------- RETAIL-DEPARTMENT STORE-- 3.0% 38,200 Federated Department Stores, Inc. (c) ............ 1,623,500 80,200 J.C. Penney, Inc. ................................ 2,114,072 46,200 May Department Stores Co. ........................ 1,582,812 14,000 Sears, Roebuck & Co. ............................. 592,340 6,300 Wal-Mart Stores, Inc. ............................ 307,440 ------------- 6,220,164 ------------- RETAIL-GROCERY-- 0.4% 36,600 The Kroger Co. (c) ............................... 915,000 ------------- RETAIL-SPECIALTY-- 3.3% 3,100 CVS Corp. ........................................ 119,660 220,000 Office Depot, Inc. (c) ........................... 2,283,600 180,000 Toys R Us, Inc. (c) .............................. 4,455,000 ------------- 6,858,260 ------------- SEMICONDUCTORS-- 0.7% 31,000 Arrow Electronics, Inc. (c) ...................... 752,990 6,500 Integrated Device Technology, Inc. (c) ........... 200,850 9,700 Novellus Systems, Inc. (c) ....................... 540,193 ------------- 1,494,033 ------------- SERVICES-COMMERCIAL & CONSUMER-- 2.4% 260,000 Cendant Corp. (c) ................................ 5,070,000 ------------- TELECOMMUNICATIONS-- 7.8% 54,700 ADC Telecommunications, Inc. (c) ................. 376,883 140,000 AT&T Corp. ....................................... 3,080,000 63,100 BellSouth Corp. .................................. 2,541,037 245,000 Citizens Communications Co. (c) .................. 2,947,350 10,000 Qwest Communications International, Inc. (c) .......................... 318,700 36,800 SBC Communications, Inc. ......................... 1,474,208 42,900 Sprint Corp. ..................................... 916,344 3,700 Time Warner Telecom, Inc. (c) .................... 123,950 74,800 Verizon Communications, Inc. ..................... 4,001,800 30,000 Worldcom, Inc. (c) ............................... 447,000 1,200 Worldcom, Inc. - MCI Group ....................... 20,280 ------------- 16,247,552 ------------- TELECOMMUNICATIONS-CELLULAR-- 0.1% 7,700 Nextel Partners, Inc. (c) ........................ 118,965 ------------- TELECOMMUNICATION-SERVICES-- 0.0% 22,400 Global Crossing, Ltd. (c) ........................ 193,536 ------------- TOBACCO-- 0.6% 17,400 Philip Morris Companies, Inc. .................... 883,050 16,200 UST, Inc. ........................................ 467,532 ------------- 1,350,582 ------------- Total Common Stock (Identified Cost $171,297,946) 203,273,587 ------------- PRINCIPAL AMOUNT DESCRIPTION VALUE(a) - -------------------------------------------------------------------------------- SHORT TERM INVESTMENTS-- 3.0% $1,179,000 UBS Finance, Inc., 4.080%, 7/02/2001 ................................ $ 1,178,866 360,000 Repurchase Agreement with State Street Bank and Trust Co. dated 6/29/2001 at 2.75% to be repurchased at $360,083 on 7/02/01, collateralized by $345,000 U.S. Treasury Bond, 6.125%, due 8/15/2029 valued at $367,808 ........ 360,000 4,828,000 Repurchase Agreement with State Street Bank and Trust Co. dated 6/29/2001 at 3.85% to be repurchased at $4,829,549 on 7/02/2001, collateralized by $5,240,000 U.S. Treasury Bond, 5.25%, due 2/15/2029 valued at $4,929,184 ........ 4,828,000 ------------- Total Short Term Investments (Identified Cost $6,366,866) 6,366,866 ------------- Total Investments -- 100.5% (Identified Cost $177,664,812) (b) 209,640,453 Other assets less liabilities (1,063,769) ------------- Total Net Assets-- 100% $ 208,576,684 ============= (a) See Note 2a of Notes to Financial Statements. (b) Federal Tax Information: At June 30, 2001 the net unrealized appreciation on investments based on cost of $177,664,812 for federal income tax purposes was as follows: Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost ........................................... $ 40,491,890 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value ......................................... (8,516,249) ------------- Net unrealized appreciation ............................. $ 31,975,641 ------------- (c) Non-income producing security. ADR An American Depositary Receipt (ADR) is a cetificate issued by a U.S. bank representing the right to receive securities of the foreign issuer described. The values of ADRs are significantly influenced by trading on exchanges not located in the United States. See accompanying notes to financial statements. - -------------------------------------------------------------------------------- STAR SMALL CAP FUND -- SCHEDULE OF INVESTMENTS - -------------------------------------------------------------------------------- Investments as of June 30, 2001 (Unaudited) SHARES DESCRIPTION VALUE(a) - -------------------------------------------------------------------------------- COMMON STOCK-- 95.3% OF TOTAL NET ASSETS ADVERTISING-- 0.1% 7,800 Getty Images, Inc. (c) ........................... $ 205,725 ------------- AEROSPACE-- 0.8% 12,000 Alliant Techsystems, Inc. (c) .................... 1,078,800 20,000 Titan Corp. (c) .................................. 458,000 ------------- 1,536,800 ------------- AIR TRAVEL-- 0.3% 17,400 Atlantic Coast Airlines, Inc. (c) ................ 476,586 8,100 SkyWest, Inc. .................................... 222,588 ------------- 699,174 ------------- APPAREL & Textiles-- 0.2% 69,500 R.G. Barry Corp. (c) ............................. 319,700 ------------- AUTOMOTIVE-- 1.4% 23,000 Arvinmeritor, Inc. ............................... 385,020 37,500 Dollar Thrifty Automotive Group, Inc. (c) ........ 900,000 39,700 Monaco Coach Corp. (c) ........................... 1,318,040 20,000 Standard Motor Products, Inc. .................... 266,000 ------------- 2,869,060 ------------- BANKS & THRIFTS-- 4.8% 8,500 Astoria Financial Corp. .......................... 492,660 25,400 Bank United Financial Corp. ...................... 358,140 75,000 BankAtlantic Bancorp, Inc. (d) ................... 651,750 13,500 Commerce Bancorp, Inc. ........................... 946,350 20,000 Dime Bancorp, Inc. ............................... 745,000 90,000 Golden State Bancorp, Inc. ....................... 2,772,000 11,300 Investors Financial Services Corp. ............... 761,846 21,650 New York Community Bancorp, Inc. ................. 802,782 30,000 People's Bank .................................... 706,200 22,500 Webster Financial Corp. .......................... 751,500 11,500 Wilmington Trust Corp. ........................... 720,475 ------------- 9,708,703 ------------- BUILDING CONSTRUCTION-- 0.2% 25,300 Elcor Corp. ...................................... 512,325 ------------- BUILDING & RELATED-- 1.1% 80,100 Dal-Tile International, Inc. (c) ................. 1,485,855 11,000 Simpson Manufacturing Co. (c) .................... 665,500 ------------- 2,151,355 ------------- BUSINESS SERVICES-- 3.1% 21,700 Administaff, Inc. (c) ............................ 564,200 26,925 ChoicePoint, Inc. (c) ............................ 1,132,196 8,500 Corinthian Colleges, Inc. (c) .................... 401,370 22,300 Corporate Executive Board Co. (c) ................ 931,917 48,000 Heidrick & Struggles International, Inc. (c) .......................... 967,200 5,000 Professional Detailing, Inc. (c) ................. 454,950 30,000 Spherion Corp. (c) ............................... 268,500 27,500 Sylvan Learning Systems, Inc. (c) ................ 670,450 16,000 Tetra Tech, Inc. (c) ............................. 428,000 36,500 Xcare.net, Inc. (c) .............................. 474,500 ------------- 6,293,283 ------------- CHEMICALS-- 1.1% 30,000 Arqule, Inc. (c) ................................. 610,500 25,000 Georgia Gulf Corp. ............................... 387,500 25,000 HB Fuller Co. .................................... 1,248,750 ------------- 2,246,750 ------------- COMMERCIAL SERVICES-- 0.9% 55,000 Coinstar, Inc. (c) ............................... 1,130,250 75,000 TeleTech Holdings, Inc. (c) ...................... 677,250 ------------- 1,807,500 ------------- COMMUNICATION SERVICES-- 1.0% 23,400 Insight Communications Co., Inc. (c) ............. 607,464 120,000 Mpower Communications Corp. ...................... 116,400 29,750 Ulticom, Inc. (c) ................................ 991,568 90,000 Williams Communications Group, Inc. (c) .................................. 265,500 ------------- 1,980,932 ------------- COMPUTER HARDWARE-- 0.7% 70,000 Adept Technology, Inc. (c) ....................... 666,400 17,200 Echelon Corp. (c)(d) ............................. 516,000 10,200 NYFIX, Inc. (c) .................................. 255,000 ------------- 1,437,400 ------------- COMPUTER SOFTWARE & SERVICEs-- 5.3% 17,700 BISYS Group, Inc. ................................ 1,059,345 152,800 CIBER, Inc. (c) .................................. 1,451,600 15,700 Factset Research Systems, Inc. ................... 560,490 21,850 IntraNet Solutions, Inc. (c) ..................... 799,710 19,500 Macrovision Corp. (c) ............................ 1,320,150 25,050 Manhattan Associates, Inc. (c) ................... 1,000,998 14,400 Manugistics Group, Inc. (c) ...................... 373,104 9,200 Mercury Interactive Corp. (c) .................... 562,764 100,000 MSC.Software Corp. (c) ........................... 1,875,000 23,000 PeopleSoft, Inc. (c) ............................. 1,113,200 27,500 Verity, Inc. (c) ................................. 542,575 ------------- 10,658,936 ------------- COMPUTERS & BUSINESS EQUIPMENT-- 9.1% 43,800 Advanced Digital Information Corp. (c) ........... 825,192 8,600 Astropower, Inc. (c)(d) .......................... 415,724 180,000 Auspex Systems, Inc. (c) ......................... 1,249,200 8,900 Cabot Microelectronics Corp. (c) ................. 558,386 43,300 Cirrus Logic (c) ................................. 1,099,820 11,900 Comverse Technology, Inc. (c) .................... 687,106 27,400 Cree Research, Inc. (c) .......................... 731,580 37,400 Cymer, Inc. (c) .................................. 991,100 80,000 Ditech Communications Corp. (c) .................. 574,400 21,700 Emcore Corp. (c) ................................. 661,850 27,700 Emulex Corp. (c) ................................. 1,080,854 43,200 Finisar Corp. (c) ................................ 805,248 45,000 Infocus Corp. (c) ................................ 753,750 95,000 Intergraph Corp. (c) ............................. 1,450,650 8,300 LTX Corp. (c) .................................... 210,820 40,000 M Sys Flash Disk Pioneers, Ltd. (c) .............. 284,000 23,800 Marvell Technology Group, Ltd. (c) ............... 643,790 14,500 McData Corp. ..................................... 289,275 14,000 Mercury Computer Systems, Inc. (c) ............... 718,620 70,100 Metawave Communications Corp. (c) ................ 238,270 7,300 Metro One Telecomm, Inc. (c) ..................... 474,427 237,800 Micron Electronics, Inc. (c) ..................... 385,236 11,600 Microsemi Corp. (c) .............................. 815,944 12,900 Multilink Technology Corp. (c)(d) ................ 185,760 12,600 Pixelworks, Inc. (c) ............................. 432,558 23,300 SanDisk Corp. (c) ................................ 645,410 34,700 Tellium, Inc. (c)(d) ............................. 605,515 15,200 Varian Semiconductor Equipment Associates, Inc. (c) ................... 614,080 ------------- 18,428,565 ------------- CONSTRUCTION-- 2.7% 12,700 Cal Dive International, Inc. (c) ................. 306,070 20,000 Core Laboratories NV (c) ......................... 375,000 28,800 Foster Wheeler, Ltd. ............................. 260,640 40,200 Global Industries, Inc. (c) ...................... 527,826 21,300 Grant Pride, Inc. (c) ............................ 372,537 40,000 Horizon Offshore, Inc. (c) ....................... 506,800 8,600 Jacobs Engineering Group, Inc. (c) ............... 560,978 65,000 Newpark Resources, Inc. (c) ...................... 721,500 20,600 Patterson UTI Energy, Inc. (c) ................... 391,400 55,600 Superior Energy Services, Inc. (c) ............... 439,240 20,000 Tetra Technologies, Inc. Delaware (c) ............ 489,000 16,600 Texas Industries, Inc. ........................... 570,874 ------------- 5,521,865 ------------- CONSUMER GOODS & SERVICES-- 1.6% 130,000 American Greetings Corp. ......................... 1,430,000 25,000 Central Parking Corp. ............................ 467,500 169,600 Department 56, Inc. (c) .......................... 1,297,440 ------------- 3,194,940 ------------- CONTAINERS & GLASS-- 0.2% 31,500 Pactiv, Corp. (c) ................................ 422,100 ------------- DIVERSIFIED CONGLOMERATES-- 0.2% 30,000 Walter Industries, Inc. .......................... 357,000 ------------- DOMESTIC OIL-- 0.7% 40,000 Berry Petroleum Co. .............................. 580,000 40,000 St. Mary Land & Exploration Co. .................. 850,400 ------------- 1,430,400 ------------- DRUGS & HEALTHCARE-- 15.3% 19,200 Abgenix, Inc. (c) ................................ 845,952 8,800 Abiomed, Inc. (c) ................................ 207,680 11,100 Advancepcs (c) ................................... 702,075 14,000 Alkermes, Inc. (c) ............................... 489,020 10,000 American Healthcorp, Inc. (c) .................... 400,000 8,000 Amerisource Health Corp. (c) ..................... 442,400 30,000 Amsurg Corp. (c) ................................. 854,700 13,000 Applera Corp. - Celera Genomics Group (c) ........ 515,580 150,000 Aradigm Corp. (c) ................................ 976,500 45,300 Arena Pharmaceuticals, Inc. (c)(d) ............... 1,431,933 5,500 Aviron (c) ....................................... 315,645 23,450 Barr Labs, Inc. (c) .............................. 1,651,114 25,000 Bergen Brunswig Corp. ............................ 480,500 80,500 Beverly Enterprises, Inc. (c) .................... 861,350 42,000 Britesmile, Inc. (c) ............................. 428,820 65,000 Caremark Rx, Inc. (c) ............................ 1,069,250 10,700 Celgene Corp. (c) ................................ 307,625 5,200 Cima Labs, Inc. (c) .............................. 398,008 10,400 COR Therapeutics, Inc. (c)(d) .................... 316,160 50,000 Covance, Inc. (c) ................................ 1,132,500 10,000 CV Therapeutics, Inc. (c) ........................ 569,000 12,350 D & K Healthcare Resources, Inc. ................. 455,098 11,100 Enzon, Inc. (c)(d) ............................... 686,535 160,000 Esperion Therapeutics (c) ........................ 1,446,400 30,000 Harvard Bioscience, Inc. (c) ..................... 331,800 16,200 IDEXX Laboratories, Inc. (c) ..................... 499,608 175,000 Insmed, Inc. (c) ................................. 1,431,500 1,800 Intermune, Inc. (c) .............................. 64,116 10,800 LifePoint Hospitals, Inc. (c) .................... 479,304 11,700 Medicis Pharmaceutical Corp. (c) ................. 620,100 14,500 Myriad Genetics, Inc. (c) ........................ 911,180 90,000 Novavax, Inc. (c) ................................ 990,000 16,600 Oratec Interventions, Inc. (c) ................... 145,250 110,000 Orchid Biosciences, Inc. (c) ..................... 770,000 10,700 OSI Pharmaceuticals, Inc. (c) .................... 590,640 13,800 Pharmaceutical Product Development, Inc. (c) ..... 485,760 8,900 Polymedica Corp. (c) ............................. 356,178 18,600 Priority Healthcare Corp. (c) .................... 519,684 9,800 Quintiles Transnational Corp. (c) ................ 251,664 120,000 Regeneration Tech, Inc. (c) ...................... 1,086,000 23,200 Scios Nova, Inc. (c) ............................. 519,216 55,000 Service Corp. International (c) .................. 349,800 30,000 Sybron Dental Specialties, Inc. (c) .............. 614,700 9,300 Tanox, Inc. (c) .................................. 278,442 15,000 Techne Corp. (c) ................................. 451,500 33,200 Titan Pharmaceuticals, Inc. (c) .................. 996,332 12,700 Tularik, Inc. (c) ................................ 338,963 14,800 United Surgical Partners (c)(d) .................. 319,680 30,850 Xoma, Ltd. (c) ................................... 526,301 ------------- 30,911,563 ------------- EDUCATION-- 0.9% 40,000 ITT Educational Services, Inc. (c) ............... 1,800,000 ------------- ELECTRIC-- 0.7% 25,000 Power Integrations, Inc. (c) ..................... 391,250 44,300 Thermo Electron Corp. (c) ........................ 975,486 ------------- 1,366,736 ------------- ELECTRONIC COMPONENTS-- 0.3% 16,800 Plexus Corp. (c) ................................. 531,888 ------------- ELECTRONICS-- 2.7% 16,300 Active Power, Inc. (c) ........................... 263,897 125,000 Checkpoint Systems, Inc. (c) ..................... 2,225,000 110,000 Conductus, Inc. (c) .............................. 567,600 12,300 Exar Corp. (c) ................................... 242,925 15,800 Fuelcell Energy, Inc. (c)(d) ..................... 365,928 6,100 Harman International Industries, Inc. ............ 232,349 10,200 Intermagnetics General Corp. (c) ................. 330,480 12,700 Mettler Toledo International, Inc. (c) ........... 549,275 17,500 PerkinElmer, Inc. ................................ 481,775 5,000 Rudolph Technologies, Inc. (c) ................... 230,050 ------------- 5,489,279 ------------- FINANCIAL SERVICES-- 2.3% 6,300 AmeriCredit Corp. (c) ............................ 327,285 58,300 IndyMac Mortgage Holdings, Inc. (c) .............. 1,562,440 24,325 Metris Co. ....................................... 819,996 42,200 Nextcard, Inc. (c) ............................... 443,100 67,300 Saxon Cap Acquisition Corp. (c) .................. 673,000 26,050 Waddell & Reed Financial, Inc. ................... 827,087 ------------- 4,652,908 ------------- FOOD & BEVERAGES-- 2.3% 27,300 Constellation Brands, Inc. (c) ................... 1,119,300 185,000 Del Monte Foods Co. (c) .......................... 1,550,300 107,000 Ralcorp Holdings, Inc. (c) ............... 2,005,180 ------------- 4,674,780 ------------- GAS & PIPELINE UTILITIES-- 0.1% 1,300 Energen Corp. .................................... 35,880 6,600 MDU Resources Group, Inc. ........................ 208,824 ------------- 244,704 ------------- HEALTH CARE-MEDICAL TECHNOLOGY-- 1.7% 20,800 Cerus Corp. (c) .................................. 1,504,880 56,000 Endocardial Solutions, Inc. (c) .................. 322,000 21,150 Exelixis, Inc. (c) ............................... 388,102 14,600 MiniMed, Inc. (c) ................................ 687,076 11,800 Trimeris, Inc. (c) ............................... 551,060 ------------- 3,453,118 ------------- HEALTH CARE-SERVICES-- 1.3% 68,800 First Health Group Corp. (c) ..................... 1,850,032 28,100 Oxford Health Plans, Inc. (c) .................... 803,660 ------------- 2,653,692 ------------- HOTELS & RESTAURANTS-- 1.3% 9,700 CEC Entertainment, Inc. (c) ...................... 478,695 19,350 Cheesecake Factory, Inc. (c) ..................... 549,927 4,400 Four Seasons Hotels, Inc. ........................ 243,540 27,400 Penn National Gaming, Inc. (c) ................... 701,440 60,000 Prime Hospitality Corp. (c) ...................... 711,000 97,300 Steakhouse Partners, Inc. (c) .................... 96,327 ------------- 2,780,929 ------------- HOUSEHOLD APPLIANCES & HOME FURNISHINGS-- 0.1% 50,000 Oakwood Homes Corp ............................... 250,000 ------------- HOUSEHOLD PRODUCTS-- 0.2% 23,000 Oakley, Inc. (c) ................................. 425,500 ------------- INDUSTRIAL GOODS & SERVICES-- 0.5% 10,000 Gardner Denver Machinery, Inc. (c) ............... 205,500 74,000 Intergrated Electrical Services (c) .............. 721,500 ------------- 927,000 ------------- INDUSTRIAL MACHINERY-- 0.5% 60,000 Columbus McKinnon Corp. .......................... 597,000 30,000 Maverick Tube Corp. (c) .......................... 508,500 ------------- 1,105,500 ------------- INSURANCE-- 3.0% 20,500 HCC Insurance Holdings, Inc. ..................... 502,250 8,600 Markel Corp. (c) ................................. 1,689,900 25,000 PMI Group, Inc. .................................. 1,791,500 17,184 Radian Group, Inc. ............................... 695,093 6,700 RenaissanceRe Holdings, Ltd. ..................... 496,470 20,100 StanCorp Financial Group, Inc. ................... 952,539 ------------- 6,127,752 ------------- INTERNET-- 0.3% 13,500 Internet Security Systems, Inc. (c) .............. 654,210 ------------- INTERNET CONTENT-- 2.1% 340,300 billserv.com, Inc. (c) ........................... 697,615 122,500 C Bridge Internet Solutions, Inc. (c) ............ 193,231 40,900 DigitalThink, Inc. (c) ........................... 316,975 60,000 Earthlink, Inc. (c) .............................. 868,800 13,500 Skillsoft Corp. (c) .............................. 459,675 226,000 Viewpoint Corp. (c) .............................. 1,695,000 ------------- 4,231,296 ------------- LEISURE-- 0.5% 21,500 Cheap Tickets, Inc. .............................. 269,825 11,100 Expedia, Inc. (c) ................................ 525,585 8,500 Travelocity Common, Inc. ......................... 260,950 ------------- 1,056,360 ------------- MACHINERY-- 0.5% 40,000 Imation Corp. (c) ................................ 1,008,000 ------------- MEDIA & ENTERTAINMENT-- 0.7% 25,000 4 Kids Entertainment, Inc. (c)(d) ................ 478,750 51,500 At Home Corp. (c) ................................ 109,180 132,300 Pinnacle Systems, Inc. (c) ....................... 805,707 ------------- 1,393,637 ------------- MEDICAL PRODUCTS-- 1.0% 60,000 Conmed Corp. (c) ................................. 1,566,000 160,000 Hanger Orthopedic Group, Inc. (c) ................ 408,000 ------------- 1,974,000 ------------- MINING-- 0.6% 17,700 Shaw Group, Inc. (c) ............................. 709,770 25,000 USX-U.S. Steel Group ............................. 503,750 ------------- 1,213,520 ------------- OIL & GAS-- 0.5% 2,700 Stone Energy Corp. (c) ........................... 119,610 30,600 Veritas DGC, Inc. (c) ............................ 849,150 ------------- 968,760 ------------- OIL & GAS-DRILLING EQUIPMENT-- 1.1% 21,500 Hanover Compressor Co. (c) ....................... 711,435 32,700 National-Oilwell, Inc. (c) ....................... 876,360 13,850 Transocean Sedco Forex, Inc. ..................... 571,313 ------------- 2,159,108 ------------- OIL & GAS-EXPLORATION & PRODUCTION-- 0.5% 29,500 Newfield Exploration Co. (c) ..................... 945,770 ------------- OTHER FINANCE-- 0.3% 20,000 NCO Group, Inc. .................................. 618,600 ------------- PETROLEUM SERVICES-- 0.8% 79,900 Key Energy Group (c) ............................. 866,116 18,700 Spinnaker Exploration Co. (c) .................... 745,382 ------------- 1,611,498 ------------- RADIO-- 1.6% 16,900 Entercom Communications Corp. (c) ................ 906,009 29,400 Radio One, Inc. (c) .............................. 633,570 44,000 Westwood One, Inc. (c) ........................... 1,621,400 ------------- 3,160,979 ------------- RAILROADS & EQUIPMENT-- 1.4% 12,500 Landstar Systems, Inc. (c) ....................... 867,375 52,500 Railamerica, Inc. (c) ............................ 599,550 28,100 Swift Transportation Co., Inc. (c) ............... 539,520 40,000 Werner Enterprises, Inc. ......................... 870,000 ------------- 2,876,445 ------------- REAL ESTATE INVESTMENT TRUSTS-- 1.9% 100,000 Catellus Development Corp. (c) ................... 1,745,000 10,200 CBL & Associates Properties, Inc. ................ 313,038 40,000 Redwood Trust, Inc. .............................. 910,000 11,000 Rent A Center, Inc. (c) .......................... 590,700 35,000 Trammell Crow Co. (c) ............................ 386,750 ------------- 3,945,488 ------------- RETAIL-- 5.3% 4,800 Abercrombie & Fitch Co. (c) ...................... 213,600 18,200 AnnTaylor Stores Corp. (c) ....................... 651,560 36,500 bebe Stores, Inc. (c)(d) ......................... 1,095,000 130,000 Delias Corp. (c) ................................. 897,000 2,100 Hot Topic, Inc. (c) .............................. 66,339 35,000 J. Jill Group, Inc. (c) .......................... 675,500 24,300 O'Reilly Automotive, Inc. (c) .................... 698,625 60,000 Priceline.com, Inc. (c) .......................... 541,800 173,600 Shopko Stores, Inc. (c) .......................... 1,263,808 170,000 Stamps.com, Inc. (c) ............................. 601,800 20,000 The Men's Wearhouse, Inc. (c) .................... 552,000 30,000 Too, Inc. (c) .................................... 822,000 3,900 Tweeter Home Entertainment Group, Inc. (c) ....... 137,202 30,000 Ugly Duckling Corp. (c) .......................... 131,100 38,500 ValueVision International, Inc. (c) .............. 880,495 37,000 Williams-Sonoma, Inc. (c) ........................ 1,436,340 ------------- 10,664,169 ------------- RETAIL-FOOD & DRUG-- 1.0% 24,000 Duane Reade, Inc. (c)(d) ......................... 780,000 42,500 United Natural Foods, Inc. (c) ................... 892,500 15,600 Whole Foods Market, Inc. (c)(d) .................. 424,632 ------------- 2,097,132 ------------- SOFTWARE-- 4.4% 14,000 Agile Software Corp. (c) ......................... 239,120 45,000 FreeMarkets, Inc. (c)(d) ......................... 852,750 12,700 HNC Software, Inc. (c) ........................... 274,320 349,900 Imanage, Inc. (c) ................................ 1,238,646 28,500 Informatica Corp. (c) ............................ 484,500 3,400 Iona Technologies PLC (ADR) (c) .................. 130,900 39,300 Legato Systems, Inc. (c) ......................... 624,084 55,000 MatrixOne, Inc. (c) .............................. 1,127,500 35,000 Nuance Communications (c) ........................ 623,000 3,900 Quest Software, Inc. (c) ......................... 147,498 17,000 Retek, Inc. (c) .................................. 740,180 47,000 SilverStream Software, Inc. (c) .................. 331,350 24,800 Smartforce PLC (c) ............................... 872,960 104,400 Support.com, Inc. (c) ............................ 632,664 10,500 THQ, Inc. (c) .................................... 642,390 ------------- 8,961,862 ------------- TELECOMMUNICATIONS-- 0.9% 18,750 C&D Technologies, Inc. ........................... 581,250 50,000 McLeodUSA, Inc. (c) .............................. 219,500 615,000 Motient Corp. (c) ................................ 615,000 525,000 Primus Telecomm Group, Inc. (c) .................. 451,500 ------------- 1,867,250 ------------- TELECOMMUNICATION-SERVICES-- 0.6% 112,000 FiberNet Telecom Group, Inc. (c) ................. 117,600 50,000 Global Crossing, Ltd. (c) ........................ 432,000 225,000 Latitude Communications, Inc. (c) ................ 443,948 10,700 Leap Wireless International, Inc. (c) ............ 324,638 ------------- 1,318,186 ------------- TRANSPORTATION-- 0.6% 10,000 Frontline, Ltd. .................................. 171,000 25,000 Teekay Shipping Corp. ............................ 1,000,500 225,000 United Shipping and Technology, Inc. (c) ......... 130,500 ------------- 1,302,000 ------------- Total Common Stock (Identified Cost $182,789,298) 193,206,132 ------------- PRINCIPAL AMOUNT DESCRIPTION VALUE(a) - -------------------------------------------------------------------------------- SHORT TERM INVESTMENTS-- 4.4% $7,129,000 Repurchase Agreement with State Street Bank and Trust Co. dated 6/29/2001 at 3.85% to be repurchased at $7,131,287 on 7/02/2001, collateralized by $6,800,000 U.S. Treasury Bond, 6.250%, due 8/15/2023 valued at $7,271,818 ....... $ 7,129,000 721,000 Repurchase Agreement with State Street Bank and Trust Co. dated 6/29/2001 at 2.75% to be repurchased at $721,165 on 7/02/2001, collateralized by $625,000 U.S. Treasury Bond, 7.500%, due 11/15/2016 valued at $737,275 ........ 721,000 ------------- 1,041,000 Repurchase Agreement with State Street Bank and Trust Co. dated 6/29/2001 at 2.75% to be repurchased at $1,041,239 on 7/02/2001, collateralized by $905,000 U.S. Treasury Bond, 7.500%, due 11/15/2016 valued at $1,067,574 ...... 1,041,000 ------------- Total Short Term Investments (Identified Cost $8,891,000) 8,891,000 ------------- Total Investments-- 99.7% (Identified Cost $191,680,298) (b) 202,097,132 Other assets less liabilities 525,628 ------------- Total Net Assets-- 100% $ 202,622,760 ============= (a) See Note 2a of Notes to Financial Statements. (b) Federal Tax Information: At June 30, 2001 the net unrealized appreciation on investments based on cost of $191,680,298 for federal income tax purposes was as follows: Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost ........................................... $ 37,297,253 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value ................................................... (26,880,419) ------------- Net unrealized appreciation ............................. $ 10,416,834 ============= (c) Non-income producing security. (d) All or a portion of this security was on loan to brokers at June 30, 2001. ADR An American Depositary Receipt (ADR) is a cetificate issued by a U.S. bank representing the right to receive securities of the foreign issuer described. The values of ADRs are significantly influenced by trading on exchanges not located in the United States. See accompanying notes to financial statements. - -------------------------------------------------------------------------------- STAR ADVISERS FUND -- SCHEDULE OF INVESTMENTS - -------------------------------------------------------------------------------- Investments as of June 30, 2001 (Unaudited) SHARES DESCRIPTION VALUE(a) - -------------------------------------------------------------------------------- COMMON STOCK-- 96.1% OF TOTAL NET ASSETS AEROSPACE-- 0.8% 42,000 Alliant Techsystems, Inc. (c) .................... $ 3,775,800 106,500 Triumph Group, Inc. (c) .......................... 5,218,500 ------------- 8,994,300 ------------- APPAREL & TEXTILES-- 0.8% 97,300 Coach, Inc. (c) .................................. 3,702,265 69,900 Jones Apparel Group, Inc. (c) .................... 3,019,680 60,800 Liz Claiborne, Inc. .............................. 3,067,360 ------------- 9,789,305 ------------- AUTOMOTIVE-- 1.9% 259,000 Ford Motor Co. ................................... 6,358,450 300,000 General Motors Corp. ............................. 6,075,000 265,700 Lear Corp. (c) ................................... 9,272,930 ------------- 21,706,380 ------------- BANKS-- 1.7% 215,500 Comerica, Inc. ................................... 12,412,800 45,700 Investors Financial Services Corp. ............... 3,081,094 210,000 US Bancorp ....................................... 4,785,900 ------------- 20,279,794 ------------- BANKS-MAJOR REGIONAL-- 0.5% 58,900 Citigroup, Inc. .................................. 3,112,276 53,700 Fifth Third Bancorp .............................. 3,241,332 ------------- 6,353,608 ------------- BANKS & THRIFTS-- 2.9% 40,500 Astoria Financial Corp. .......................... 2,347,380 221,200 Banknorth Group, Inc. ............................ 4,979,212 66,100 Charter One Financial, Inc. ...................... 2,108,590 42,400 City National Corp. .............................. 1,877,896 147,800 Colonial BancGroup, Inc. ......................... 2,125,364 59,500 Downey Financial ................................. 2,811,970 154,700 North Fork Bancorp, Inc. ......................... 4,795,700 346,500 Washington Mutual, Inc. .......................... 13,011,075 ------------- 34,057,187 ------------- BIOTECHNOLOGY-- 1.3% 54,100 ICOS Corp. (c) ................................... 3,419,120 57,200 IDEC Pharmaceuticals Corp. (c) ................... 3,726,008 39,000 Medicis Pharmaceutical Corp. (c) ................. 2,067,000 35,100 Protein Design Labs, Inc. (c) .................... 2,948,400 95,900 Tularik, Inc. (c) ................................ 2,559,571 ------------- 14,720,099 ------------- BROADCASTING-- 2.5% 305,800 Charter Communications, Inc. (c) ................. 7,131,256 145,300 Clear Channel Communications, Inc. (c) ........... 9,110,310 152,245 Comcast Corp. (c) ................................ 6,607,433 57,000 E. W. Scripps Co. ................................ 3,933,000 67,400 Univision Communications, Inc. (c) ............... 2,883,372 ------------- 29,665,371 ------------- BUILDING CONSTRUCTION-- 0.4% 137,700 Crane Co. ........................................ 4,268,700 ------------- BUILDING & RELATED-- 0.8% 395,000 Masco Corp. ...................................... 9,859,200 ------------- BUSINESS SERVICES-- 2.4% 95,700 Apollo Group (c) ................................. 4,043,325 588,500 Cendant Corp. (c) ................................ 11,475,750 51,600 Concord EFS, Inc. (c) ............................ 2,881,860 145,200 National Processing, Inc. (c) .................... 4,065,600 78,400 Sabre Group Holdings, Inc. (c) ................... 3,920,000 78,200 Viad Corp. ....................................... 2,064,480 ------------- 28,451,015 ------------- CHEMICALS-- 0.7% 186,200 Engelhard Corp. .................................. 4,802,098 97,900 Valspar Corp. .................................... 3,475,450 ------------- 8,277,548 ------------- CHEMICALS-SPECIALTY-- 0.3% 47,300 Cabot Microelectronics Corp. (c) ................. 2,967,602 ------------- COMMUNICATION SERVICES-- 2.2% 50,000 Gannett Co. ...................................... 3,295,000 117,200 Macrovision Corp. (c) ............................ 7,934,440 365,000 Sprint Corp. ..................................... 7,796,400 67,500 Triton PCS Holdings, Inc. (c) .................... 2,713,500 113,500 Westwood One, Inc. (c) ........................... 4,182,475 13,036 Worldcom, Inc. ................................... 220,308 ------------- 26,142,123 ------------- COMPUTER HARDWARE-- 0.6% 63,500 International Business Machines Corp. ............ 7,175,500 ------------- COMPUTER-NETWORKING-- 1.7% 117,100 Brocade Communications Systems, Inc. (c) ......... 5,082,140 229,100 Cabletron Systems, Inc. (c) ...................... 5,234,935 149,000 Emulex Corp. (c) ................................. 5,813,980 191,900 McData Corp. (c) ................................. 3,828,405 ------------- 19,959,460 ------------- COMPUTER SOFTWARE & SERVICES-- 2.1% 100,000 Electronic Arts, Inc. (c) ........................ 5,755,000 296,000 Entergris, Inc. (c) .............................. 3,170,160 113,000 SunGard Data Systems, Inc. (c) ................... 3,391,130 55,400 Synopsys, Inc. (c) ............................... 2,625,960 373,600 TIBCO Software, Inc. (c) ......................... 5,137,000 62,700 VERITAS Software Corp. (c) ....................... 4,225,353 ------------- 24,304,603 ------------- COMPUTERS & BUSINESS EQUIPMENT-- 0.7% 794,000 Xerox Corp. ...................................... 7,598,580 ------------- CONGLOMERATES-- 0.1% 46,700 General Maritime Corp. (c) ....................... 681,820 ------------- CONSTRUCTION-- 0.5% 126,100 Halliburton Co. .................................. 4,489,160 53,000 Phoenix Companies, Inc. (c) (d) .................. 985,800 ------------- 5,474,960 ------------- CONSUMER GOODS & SERVICES-- 3.2% 470,000 Brunswick Corp. .................................. 11,294,100 276,000 H & R Block, Inc. ................................ 17,815,800 459,000 Mattel, Inc. ..................................... 8,684,280 ------------- 37,794,180 ------------- CONSUMER PRODUCTS-- 0.3% 78,300 Avery Dennison Corp. ............................. 3,997,215 ------------- CONTAINERS & PACKAGING-- 0.7% 201,600 Packaging Corporation of America (c) ............. 3,130,848 90,000 Temple-Inland, Inc. .............................. 4,796,100 ------------- 7,926,948 ------------- DOMESTIC OIL-- 0.7% 70,200 Phillips Petroleum Co. ........................... 4,001,400 126,900 Unocal Corp. ..................................... 4,333,635 ------------- 8,335,035 ------------- DRUGS & HEALTHCARE-- 1.9% 89,700 Abgenix, Inc. (c) ................................ 3,952,182 26,900 Cephalon, Inc. (c) ............................... 1,924,695 64,300 COR Therapeutics, Inc. (c)(d) .................... 1,954,720 64,800 MAXIMUS, Inc. (c) ................................ 2,597,832 54,400 MedImmune, Inc. (c) .............................. 2,586,176 96,500 Pfizer, Inc. ..................................... 3,864,825 34,700 Quest Diagnostics, Inc. (c) ...................... 2,597,295 50,600 UnitedHealth Group, Inc. ......................... 3,124,550 ------------- 22,602,275 ------------- ELECTRIC COMPANIES-- 0.7% 175,000 TXU Corp. ........................................ 8,433,250 ------------- ELECTRIC UTILITIES-- 2.8% 115,600 Alliant Energy Corp. (c) ......................... 3,369,740 105,700 American Power Conversion Corp. (c) .............. 1,571,759 163,100 Calpine Corp. (c) ................................ 6,165,180 90,200 Cinergy Corp. .................................... 3,152,490 45,300 Dominion Resources, Inc. ......................... 2,723,889 230,900 Energy East Corp. ................................ 4,828,119 210,600 Mirant Corp. (c) ................................. 7,244,640 132,200 Reliant Resources, Inc. (c) ...................... 3,265,340 ------------- 32,321,157 ------------- ELECTRICAL EQUIPMENT-- 0.5% 73,000 Avnet, Inc. ...................................... 1,636,660 39,900 Ballard Power Systems, Inc. (c)(d) ............... 1,863,330 156,300 Sensormatic Electronics Corp. (c) ................ 2,657,100 ------------- 6,157,090 ------------- ELECTRONIC COMPONENTS-- 1.5% 104,900 Capstone Turbine Corp. (c) ....................... 2,307,800 66,800 CTS Corp. ........................................ 1,369,400 139,500 LSI Logic Corp. (c) .............................. 2,622,600 54,200 Maxim Integrated Products, Inc. (c) .............. 2,515,422 97,700 Rogers Corp. (c) ................................. 2,589,050 44,900 SPX Corp. (c) .................................... 5,620,582 ------------- 17,024,854 ------------- ELECTRONICS-- 0.9% 149,000 Beckman Coulter, Inc. ............................ 6,079,200 127,500 Research in Motion, Ltd. (c)(d) .................. 4,110,600 ------------- 10,189,800 ------------- ELECTRONICS-SEMICONDUCTORS-- 0.2% 86,900 Semtech Corp. (c) ................................ 2,711,280 ------------- FINANCIAL SERVICES-- 4.4% 289,000 Equifax, Inc. .................................... 10,600,520 144,600 Freddie Mac ...................................... 10,122,000 55,700 Heller Financial, Inc. ........................... 2,228,000 371,200 Moody's Corp. .................................... 12,435,200 295,900 The New Dun and Bradstreet Corp. (c) ............. 8,344,380 110,800 USA Education, Inc. .............................. 8,088,400 ------------- 51,818,500 ------------- FOOD & BEVERAGES-- 2.2% 96,500 Corn Products International, Inc. ................ 3,088,000 234,000 H.J. Heinz Co. ................................... 9,568,260 217,600 Hormel Foods Corp. ............................... 5,296,384 390,000 Sara Lee Corp. ................................... 7,386,600 ------------- 25,339,244 ------------- GAS & PIPELINE UTILITIES-- 0.4% 93,300 El Paso Corp. .................................... 4,901,982 ------------- HEALTHCARE-DIVERSIFIED-- 0.8% 176,300 Bristol-Myers Squibb Co. ......................... 9,220,490 ------------- HEALTHCARE-DRUGS MAJOR-- 0.4% 95,600 King Pharmaceuticals, Inc. (c) ................... 5,138,500 ------------- HEALTHCARE-LONG TERM CARE-- 0.3% 122,500 Manor Care, Inc. (c) ............................. 3,889,375 ------------- HEALTHCARE-MANAGED CARE-- 0.2% 49,600 Universal Health Services, Inc. .................. 2,256,800 ------------- HEALTHCARE-MEDICAL PRODUCTS & SUPPLIES-- 2.4% 559,000 Apogent Technologies, Inc. (c) ................... 13,751,400 250,100 Cytyc Corp. (c) .................................. 5,759,803 35,200 Enzon, Inc. (c)(d) ............................... 2,177,120 39,400 Genzyme Corp. (c) ................................ 2,321,842 170,500 Sybron Dental Specialties, Inc. (c) .............. 3,493,545 ------------- 27,503,710 ------------- HEALTH CARE-PRODUCTS-- 1.1% 175,100 American Home Products Corp. ..................... 10,232,844 273,700 Water Pik Tech, Inc. (c) ......................... 2,312,765 ------------- 12,545,609 ------------- HEALTH CARE-SERVICES-- 0.7% 112,600 IMS Health, Inc. ................................. 3,209,100 57,600 Laboratory Corp. ................................. 4,429,440 ------------- 7,638,540 ------------- HEALTHCARE-SPECIALIZED SERVICES-- 0.6% 58,100 Human Genome Sciences, Inc. (c) .................. 3,481,352 104,400 IDEXX Laboratories, Inc. (c) ..................... 3,219,696 ------------- 6,701,048 ------------- HOTELS & RESTAURANTS-- 1.7% 81,600 Darden Restaurants, Inc. ......................... 2,276,640 389,000 Tricon Global Restaurants, Inc. (c) .............. 17,077,100 ------------- 19,353,740 ------------- HOUSEHOLD APPLIANCES & HOME FURNISHINGS-- 4.8% 130,000 American Greetings Corp. ......................... 1,430,000 298,000 Black & Decker Corp. ............................. 11,759,080 131,421 D.R. Horton, Inc. ................................ 2,983,257 540,300 Fortune Brands, Inc. ............................. 20,725,908 222,100 Leggett & Platt, Inc. ............................ 4,892,863 191,800 Mohawk Industries, Inc. (c) ...................... 6,751,360 295,000 Newell Rubbermaid, Inc. .......................... 7,404,500 ------------- 55,946,968 ------------- HOUSEHOLD PRODUCTS-- 0.8% 630,000 The Dial Corp. ................................... 8,977,500 ------------- INSURANCE-- 2.4% 201,400 AFLAC, Inc. (c) .................................. 6,342,086 70,800 Annuity & Life Re (Holdings) Ltd. ................ 2,531,100 63,500 Arthur J. Gallagher & Co. ........................ 1,651,000 114,100 First American Financial Corp. ................... 2,161,054 101,200 John Hancock Financial Services, Inc. ............ 4,074,312 91,800 Lincoln National Corp., Inc. ..................... 4,750,650 150,200 Old Republic International Co. ................... 4,355,800 60,600 Protective Life Corp. ............................ 2,082,822 2,700 Willis Group Holdings Ltd. (c) ................... 47,925 ------------- 27,996,749 ------------- INVESTMENT COMPANIES-- 1.0% 136,000 Allied Capital Corp. ............................. 3,148,400 163,200 Federated Investors, Inc. ........................ 5,255,040 108,600 Instinet Group, Inc. (c) ......................... 1,981,950 31,100 Investment Technology Group, Inc. (c) ............ 1,564,019 ------------- 11,949,409 ------------- LEISURE & LODGING-- 0.6% 233,100 The Walt Disney Co. .............................. 6,734,259 ------------- LEISURE-- 0.2% 45,100 Harman International Industries, Inc. ............ 1,717,859 ------------- MACHINERY-- 1.6% 90,100 Applied Materials, Inc. (c) ...................... 4,613,120 240,000 Cooper Industries, Inc. .......................... 9,501,600 65,000 Eaton Corp. ...................................... 4,556,500 ------------- 18,671,220 ------------- MANUFACTURING-DIVERSIFIED-- 1.2% 263,900 Tyco International, Ltd. ................. 14,382,550 ------------- MANUFACTURING-SPECIALIZED-- 0.0% 2,300 Global Power Equipment Group, Inc. (c) ........... 67,390 ------------- MINING-- 0.0% 16,200 Peabody Energy Corp. ............................. 530,550 ------------- MULTIMEDIA-- 1.1% 186,100 AOL Time Warner, Inc. (c) ................ 9,863,300 66,900 Viacom, Inc. (c) ................................. 3,462,075 ------------- 13,325,375 ------------- NETWORK SYSTEMS-- 1.1% 170,900 Extreme Networks, Inc. (c) ....................... 4,896,285 275,100 Foundry Networks, Inc. (c) ....................... 5,364,450 114,100 ONI Systems Corp. (c) ............................ 3,107,057 ------------- 13,367,792 ------------- OIL & GAS-DRILLING & EQUIPMENT-- 0.1% 42,600 Santa Fe International Corp. ..................... 1,235,400 ------------- OIL & GAS-EXPLORATION & PRODUCTION-- 3.3% 132,600 Anadarko Petroleum Corp. ......................... 7,164,378 110,000 Burlington Resources, Inc. ....................... 4,394,500 240,000 Conoco, Inc. ..................................... 6,768,000 98,400 Exxon Mobil Corp. ................................ 8,595,240 145,000 Sunoco, Inc. ..................................... 5,311,350 61,800 Texaco, Inc. ..................................... 4,115,880 60,300 Triton Energy, Ltd. (c) .......................... 1,974,825 ------------- 38,324,173 ------------- OIL & GAS-REFINING & MARKETING-- 0.8% 107,200 Chevron Corp. .................................... 9,701,600 ------------- OIL & GAS-SERVICES-- 1.0% 154,400 BJ Services Co. (c) .............................. 4,381,872 112,500 Shaw Group, Inc. (c) ............................. 4,511,250 112,900 Veritas DGC, Inc. (c) ............................ 3,132,975 ------------- 12,026,097 ------------- OIL-INDEPENDENT PRODUCERS-- 0.2% 53,800 Devon Energy Corp. ............................... 2,824,500 ------------- PAPER-- 0.2% 76,600 Boise Cascade Corp. .............................. 2,694,022 ------------- PUBLISHING-- 2.2% 230,000 Knight-Ridder, Inc. .............................. 13,639,000 116,300 Lamar Advertising Co. (c) ........................ 5,367,245 108,200 R. H. Donnelley Corp. (c) ........................ 3,462,400 110,300 Wiley, John & Son, Inc. .......................... 2,608,595 ------------- 25,077,240 ------------- RAILROADS & EQUIPMENT-- 0.6% 110,800 Canadian Pacific, Ltd. ........................... 4,293,500 143,000 Wabtec ........................................... 2,145,000 ------------- 6,438,500 ------------- REAL ESTATE INVESTMENT TRUSTS-- 1.0% 86,300 Boston Properties, Inc. .......................... 3,529,670 76,600 Istar Financial, Inc. ............................ 2,160,120 124,300 Liberty Property Trust ........................... 3,679,280 117,901 MeriStar Hospitality Corp. ....................... 2,800,149 ------------- 12,169,219 ------------- RETAIL-- 4.8% 162,700 Costco Wholesale Corp. (c) ....................... 6,839,908 215,400 CVS Corp. ........................................ 8,314,440 120,200 Dollar Tree Stores, Inc. (c) ..................... 3,311,510 417,000 Kroger Co. (c) ................................... 10,425,000 120,900 Lowe's Co., Inc. ................................. 8,771,295 80,800 Michaels Stores, Inc. (c) ........................ 3,179,480 209,700 Ross Stores, Inc. ................................ 5,024,412 168,000 Target Corp. ..................................... 5,812,800 98,300 Williams-Sonoma, Inc. (c) ........................ 3,816,006 ------------- 55,494,851 ------------- RETAIL-APPAREL-- 0.4% 118,600 American Eagle Outfitters, Inc. (c) .............. 4,359,736 ------------- RETAIL-COMPUTER & ELECTRONICS-- 0.2% 66,700 CDW Computer Centers, Inc. (c) ................... 2,637,985 ------------- RETAIL-GENERAL MERCHANDISE-- 0.3% 294,600 K-Mart (c) ....................................... 3,379,062 ------------- RETAIL-GROCERY-- 0.3% 53,300 Kraft Foods, Inc. (c) ............................ 1,652,300 134,400 SUPERVALU, Inc. .................................. 2,358,720 ------------- 4,011,020 ------------- RETAIL-SPECIALTY-- 0.9% 100,800 Bed Bath & Beyond, Inc. (c) ...................... 3,076,416 116,000 Home Depot, Inc. ................................. 5,399,800 57,900 Zale Corp. (c) ................................... 1,951,230 ------------- 10,427,446 ------------- SEMICONDUCTOR-ELECTRONICS-- 1.9% 146,900 Cree Research, Inc. (c) .......................... 3,922,230 165,900 Intersil Holding Corp. (c) ....................... 5,682,075 119,700 QLogic Corp. (c) ................................. 7,705,089 218,700 Symbol Technologies, Inc. ........................ 4,855,140 ------------- 22,164,534 ------------- SEMICONDUCTOR-EQUIPMENT-- 1.7% 140,300 Integrated Device Technology, Inc. (c) ............................. 4,335,270 108,000 KLA-Tencor Corp. (c) ............................. 6,354,720 137,200 Lattice Semiconductor Corp. (c) .................. 3,395,700 149,500 Marvell Technology Group, Ltd. (c) ............... 4,043,975 39,600 Novellus Systems, Inc. (c) ....................... 2,205,324 ------------- 20,334,989 ------------- SOFTWARE-- 2.3% 52,600 Hotel Reservations Network, Inc. (c) ............. 2,447,478 315,400 Informix Corp. (c) ............................... 1,734,700 117,700 Mercury Interactive Corp. (c) .................... 7,199,709 107,900 Openwave Systems, Inc. (c) ....................... 3,511,174 326,700 Oracle Corp. (c) ................................. 6,439,257 155,100 Quest Software, Inc. (c) ......................... 5,865,882 ------------- 27,198,200 ------------- SPECIALTY PRINTING-- 0.9% 145,900 Harte-Hanks, Inc. ................................ 3,612,484 183,100 Valassis Communications, Inc. (c) ................ 6,554,980 ------------- 10,167,464 ------------- TELECOMMUNICATIONS-- 2.4% 697,400 AT&T Corp. ....................................... 15,342,800 50,000 CenturyTel, Inc. ................................. 1,515,000 254,100 Nextel Communications, Inc. (c) .................. 4,426,422 71,900 Sprint Corp. (PCS Group) (c) ..................... 1,736,385 325,900 WorldCom, Inc. (c) ............................... 4,855,910 ------------- 27,876,517 ------------- TELECOMMUNICATIONS-CELLULAR-- 0.9% 360,000 Motorola, Inc. ................................... 5,961,600 160,600 RF Micro Devices, Inc. (c) ....................... 4,252,688 ------------- 10,214,288 ------------- TELECOMMUNICATIONS-EQUIPMENT-- 1.2% 170,400 Advanced Fibre Communications, Inc. (c) .......... 3,897,048 76,000 Commscope, Inc. (c) .............................. 1,786,000 267,800 Finisar Corp. (c) ................................ 4,991,792 162,900 Sonus Networks, Inc. (c) ......................... 3,648,960 ------------- 14,323,800 ------------- TRANSPORTATION-- 0.2% 59,100 GATX Corp. ....................................... 2,369,910 ------------- Total Common Stock (Identified Cost $1,018,714,133) .............. 1,123,645,951 ------------- PRINCIPAL AMOUNT DESCRIPTION VALUE(a) - -------------------------------------------------------------------------------- SHORT TERM INVESTMENTS-- 4.8% $23,383,000 Repurchase Agreement with State Street Bank and Trust Co. dated 6/29/2001 at 2.75% to be repurchased at $23,388,359 on 7/02/2001, collateralized by $18,740,000 U.S. Treasury Bond, 8.125%, due 5/15/2021 valued at $23,851,298 ...... $ 23,383,000 -------------- 26,391,000 Repurchase Agreement with State Street Bank and Trust Co. dated 6/29/2001 at 3.85% to be repurchased at $26,399,467 on 7/02/2001, collateralized by $25,175,000 U.S. Treasury Bond, 6.25%, due 8/15/2023 valued at $26,921,767 ....... 26,391,000 -------------- 1,796,000 Repurchase Agreement with State Street Bank and Trust Co. dated 6/29/2001 at 2.75% to be repurchased at $1,796,412 on 7/02/2001, collateralized by $1,555,000 U.S. Treasury Bond, 7.500%, due 11/15/2016 valued at $1,834,340 ...... 1,796,000 -------------- 4,549,000 UBS Finance, Inc., 080%, 7/02/2001 ............... 4,548,484 -------------- Total Short Term Investments (Identified Cost $56,118,484)................. 56,118,484 -------------- Total Investments -- 100.9% (Identified Cost $1,074,832,617)(b)........... 1,179,764,435 Other assets less liabilities (10,956,912) -------------- Total Net Assets-- 100% .............. $1,168,807,523 -------------- (a) See Note 2a of Notes to Financial Statements. (b) Federal Tax Information: At June 30, 2001 the net unrealized appreciation on investments based on cost of $1,074,832,617 for federal income tax purposes was as follows: Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost ............................................ $ 150,702,985 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value ............................................... (45,771,167) -------------- Net unrealized appreciation .......................... $ 104,931,818 -------------- (c) Non-income producing security. (d) All or a portion of this security was on loan to brokers at June 30, 2001. See accompanying notes to financial statements. - -------------------------------------------------------------------------------- STAR WORLDWIDE FUND -- SCHEDULE OF INVESTMENTS - -------------------------------------------------------------------------------- Investments as of June 30, 2001 (Unaudited) SHARES DESCRIPTION VALUE(a) - -------------------------------------------------------------------------------- COMMON STOCK -- 96.4% OF TOTAL NET ASSETS ARGENTINA -- 0.6% 60,850 Quilmes Indl Quinsa Societe ...................... $ 1,277,850 ------------- AUSTRALIA-- 2.8% 58,500 Australia & New Zealand Banking Group, Ltd. .............................. 504,380 17,400 Commonwealth Bank of Australia ................... 303,077 28,300 CRA, Ltd. ........................................ 492,791 203,100 Foster's Brewing Group Ltd. ...................... 567,680 644,000 John Fairfax Holdings, Ltd. ...................... 1,330,312 21,600 National Australia Bank, Ltd. .................... 386,171 668,532 Nufarm, Ltd. ..................................... 1,000,790 108,200 QBE Insurance Group, Ltd. (c) .................... 651,763 38,600 Wesfarmers, Ltd. (d) ............................. 533,740 ------------- 5,770,704 ------------- AUSTRIA-- 0.1% 5,800 Flughafen Wien AG ................................ 188,007 ------------- BELGIUM-- 0.3% 23,700 Interbrew ........................................ 634,672 ------------- BRAZIL-- 1.2% 15,488 Embraer Empresa De Brasileira .................... 604,806 187,200,000 Telemig Celular Participacoes SA (c) ............. 592,739 49,900 Unibanco - Uniao de Bancos Brasileiros SA (GDR) .. 1,269,955 ------------- 2,467,500 ------------- CANADA-- 2.1% 31,300 Anderson Exploration, Ltd. (c) ................... 632,146 8,100 Ballard Power Systems, Inc. (d) .................. 378,270 36,600 Bombardier, Inc., Class B ........................ 549,868 14,700 Canadian Pacific, Ltd. ........................... 568,007 22,200 Petro-Canada ..................................... 526,914 15,400 Precision Drilling Corp. (c) ..................... 480,489 19,000 Royal Bank of Canada ............................. 608,085 50,000 TransCanada Pipelines, Ltd. ...................... 617,752 ------------- 4,361,531 ------------- DENMARK-- 1.4% 39,300 Danske Bank A/S .................................. 706,738 36,170 Novo Nordisk AS (c) .............................. 1,601,426 13,510 Vestas Wind Systems AS ........................... 630,446 ------------- 2,938,610 ------------- FINLAND-- 2.5% 24,900 Kone Corp. ....................................... 1,688,120 228,800 Metso OYJ ........................................ 2,540,044 41,790 Nokia OYJ ........................................ 948,058 ------------- 5,176,222 ------------- FRANCE-- 6.2% 14,800 Accor SA ......................................... 625,232 19,400 Aventis SA ....................................... 1,550,342 3,000 Bic .............................................. 109,321 11,200 BNP Paribas SA ................................... 975,720 11,400 Carrefour SA ..................................... 603,808 1,520 Castorama Dubois Investissement SA (d) ............................ 327,055 25,648 Chargeurs SA ..................................... 1,804,037 5,700 Coflexip SA (d) .................................. 826,009 43,500 Compagnie Generale des Establissements Michelin, Class B (d) ............ 1,377,610 35,149 JCDecaux SA (c) .................................. 470,635 37,600 Orange SA (c) .................................... 305,895 9,100 STMicroelectronics NV (d) ........................ 309,400 9,795 TotalFinaElf SA .................................. 1,372,947 18,000 Vivendi Environnemt (d) .......................... 758,281 19,316 Vivendi Universal SA ............................. 1,127,029 ------------- 12,543,321 ------------- GERMANY-- 1.9% 2,650 Allianz AG (d) ................................... 774,220 4,280 Muenchener Rueckversicherungs- Gesellschaft AG (d) .............................. 1,194,036 1,920 Porsche AG ....................................... 662,231 4,740 Sap AG ........................................... 658,412 8,220 Software AG ...................................... 537,778 ------------- 3,826,677 ------------- GREECE-- 0.4% 157,000 Panafon Hellenic Telecom SA ...................... 851,517 ------------- HONG KONG-- 2.4% 141,500 China Mobile (Hong Kong), Ltd. (c) ............... 745,615 484,500 Cnooc, Ltd. (c) .................................. 462,772 13,600 Dah Sing Financial Group ......................... 70,269 1,519,951 First Pacific Co., Ltd. .......................... 329,331 1,893,000 Giordano International, Ltd. ..................... 995,064 708,000 Huaneng Power International, Inc. ................ 433,434 37,000 Hutchison Whampoa, Ltd. .......................... 373,567 2,078,000 Mandarin Oriental International, Ltd. ............ 1,101,340 47,000 Sun Hung Kai Properties, Ltd., 144A (d) .......... 423,312 ------------- 4,934,704 ------------- INDIA-- 0.2% 26,200 Dr. Reddy's Laboratories, Ltd. (c) ............... 486,010 ------------- IRELAND-- 1.9% 162,700 Anglo Irish Bank Corp., 144A ..................... 619,081 35,000 Bank of Ireland .................................. 347,031 21,600 Elan Corp., PLC (ADR) (c)(d) ..................... 1,317,600 537,000 Independent News & Media PLC ..................... 1,069,439 56,200 Ryanair Holdings (c) ............................. 583,427 ------------- 3,936,578 ------------- ISRAEL-- 0.9% 7,800 Check Point Software Technolgies, Ltd. ................................ 397,800 2,500 Comverse Technology, Inc. (c) .................... 144,350 22,900 Orbotech, Ltd. (ADR) (c) ......................... 825,545 5,900 Teva Pharmaceutical Industries, Ltd. (ADR) ........................... 366,095 ------------- 1,733,790 ------------- ITALY-- 1.8% 137,000 BCA Popolare Di Verona (d) ....................... 1,298,005 51,100 ENI .............................................. 623,587 212,500 Fila Holdings SpA (ADR) .......................... 796,875 80,800 Riunione Adriatica di Sicurta SpA (d) ............................... 994,242 ------------- 3,712,709 ------------- JAPAN-- 9.2% 12,000 Canon, Inc. ...................................... 484,965 81,000 Daiwa House Industry Co., Ltd. ................... 635,218 162,000 Daiwa Securities Group, Inc. ..................... 1,695,213 3,700 Fast Retailing Co., Ltd. ......................... 643,814 17,000 Fuji Photo Film Co. .............................. 733,381 37,000 Hitachi, Ltd. (d) ................................ 363,443 15,000 Honda Motor Co. .................................. 659,129 84,800 JGC Corp. ........................................ 707,177 12,500 Kirin Beverage ................................... 265,616 34,000 Marui Co ......................................... 490,738 13,000 Matsumotokiyoshi Co., Ltd. (d) ................... 501,403 47,600 Meitec Corp. ..................................... 1,591,629 201,000 Mitsui O.S.K. Lines, Ltd. ........................ 589,897 18,000 NEC Corp. ........................................ 243,204 4,600 Nintendo Co. ..................................... 837,302 162,000 Nishimatsu Construction Co., Ltd. (d) ............ 626,125 176,000 Nissan Motor Co., Ltd. ........................... 1,215,107 56 NTT DoCoMo, Inc. ................................. 974,421 4,700 Orix Corp. ....................................... 457,149 10,000 Pioneer Corp. .................................... 303,905 22,000 Ricoh Co. ........................................ 474,541 33,000 Shimano, Inc. .................................... 486,360 4,630 Shohkoh Fund & Co., Ltd. ......................... 756,631 13,100 Sony Corp. ....................................... 861,358 10,000 Takeda Chemical Industries, Ltd. ................. 465,079 7,400 Takefuji Corp. ................................... 672,296 111,000 Teijin ........................................... 623,935 24,000 The Nomura Securities Co., Ltd. .................. 459,947 ------------- 18,818,983 ------------- MEXICO -- 1.6% 43,200 Fomento Economico Mexicano SA de CV (d) ............................ 1,849,392 15,000 Grupo Aeroportuario del Sureste SA de CV (c) ......................... 280,500 22,000 Grupo Televisa SA de CV (ADR) .................... 880,220 87,000 Kimberly-Clark de Mexico, SA de CV ................................. 257,589 ------------- 3,267,701 ------------- NETHERLANDS-- 4.4% 17,600 ASM Lithography Holding NV (c) ................... 394,240 34,778 Fortis NV ........................................ 846,453 14,350 Heineken NV (c)(d) ............................... 579,224 45,600 Holdingmaatschappij De Telegraaf NV .................................. 811,518 85,000 Hunter Douglas NV (d) ............................ 2,384,300 12,800 ING Groep NV ..................................... 837,416 21,700 Koninklijke Ahold NV ............................. 680,417 12,310 Royal Dutch Petroleum Co. (c) .................... 709,175 12,000 Vedior NV (c) .................................... 108,813 12,700 VNU NV ........................................... 430,504 40,600 Wolters Kluwer NV ................................ 1,092,405 ------------- 8,874,465 ------------- PANAMA-- 0.7% 36,400 Banco Latinoamericano de Exportaciones SA, Class E ........................ 1,338,428 ------------- PORTUGAL-- 0.4% 97,641 Portugal Telecom, SGPS, SA ....................... 681,826 ------------- SINGAPORE-- 0.4% 86,572 Datacraft Asia, Ltd. ............................. 353,214 60,616 United Overseas Bank, Ltd. ....................... 382,593 ------------- 735,807 ------------- SOUTH AFRICA-- 0.2% 100,100 Standard Bank Investment Corp., Ltd. (c) ......... 436,385 ------------- SOUTH KOREA-- 2.3% 12,520 Dongah Tire Industry Co. ......................... 268,114 20,000 Kookmin Bank (c) ................................. 268,358 25,180 Kumkang Koren Chemical Co., Ltd. ................. 1,430,836 7,400 Lotte Chilsung Beverage Co. ...................... 1,086,813 1,500 Lotte Confectionery Co., Ltd. .................... 202,999 4,820 Samsung Electronics .............................. 711,603 9,120 Samsung Securities Co., Ltd. ..................... 259,469 3,400 SK Telecomm Co., Ltd. ............................ 500,654 ------------- 4,728,846 ------------- SPAIN-- 1.4% 33,700 Endesa SA ........................................ 538,053 34,400 Grupo Auxiliar Metalurgico, SA (Gamesa) ......................... 731,722 37,600 Grupo Ferrovial, SA .............................. 621,987 23,000 Inditex .......................................... 367,412 45,495 Telefonica SA (ADR) .............................. 561,357 ------------- 2,820,531 ------------- SWEDEN-- 1.8% 48,000 Autoliv, Inc. (c) ................................ 825,531 257,000 Gambro ........................................... 1,571,829 107,500 SSAB Svenskt Stal AB ............................. 929,366 20,000 Svenska Handelsbanken AB ......................... 286,030 ------------- 3,612,756 ------------- SWITZERLAND-- 2.0% 6,280 Adecco SA ........................................ 295,735 6,600 Givaudan AG ...................................... 1,831,394 3,000 Nestle SA ........................................ 637,907 1,220 Synthes-Stratec, Inc. ............................ 749,045 4,100 UBS AG ........................................... 587,678 ------------- 4,101,759 ------------- UNITED KINGDOM-- 13.1% 128,900 Allied Domecq PLC ................................ 804,631 20,800 Anglo American PLC ............................... 311,967 118,300 Billiton PLC ..................................... 590,187 89,100 BP Amoco ......................................... 733,428 165,100 British Telecom PLC .............................. 1,039,321 87,100 Capita Group PLC ................................. 567,316 109,900 Compass Group .................................... 880,654 142,000 Cordiant Communications Group PLC ................ 365,961 365,500 Diageo PLC ....................................... 4,014,922 68,700 Energis .......................................... 182,616 1,442,000 Enodis PLC ....................................... 2,873,538 97,865 FKI PLC .......................................... 375,568 27,300 Glaxosmithkline .................................. 768,932 316,000 IMI PLC .......................................... 995,738 109,800 Matalan .......................................... 766,971 276,000 Michael Page International ....................... 568,694 112,000 Morgan Crucible Co., PLC ......................... 504,735 29,470 Pearson PLC ...................................... 486,410 519,000 Rolls-Royce PLC .................................. 1,662,815 49,300 Royal Bank of Scotland Group PLC ................. 1,087,955 95,500 Shire Pharmaceuticals Group PLC (c)(d) ........... 1,740,335 1,516,000 Somerfield PLC ................................... 2,807,502 58,300 Standard Chartered PLC (c) ....................... 747,966 207,800 Tesco ............................................ 750,634 472,709 Vodafone Group PLC ............................... 1,048,503 ------------- 26,677,299 ------------- UNITED STATES-- 32.2% 8,400 Amdocs, Ltd. (c) ................................. 452,340 20,000 American Greetings Corp. ......................... 220,000 5,700 Amgen, Inc. (c) .................................. 351,690 12,400 AOL Time Warner, Inc. (c) ........................ 657,200 67,000 Apogent Technologies, Inc. (c) ................... 1,648,200 8,300 Applied Materials, Inc. (c) ...................... 424,960 76,000 AT&T Corp. ....................................... 1,672,000 10,000 Bank of New York Co., Inc. ....................... 480,000 2,800 Best Buy Company, Inc. (c) ....................... 177,856 55,000 Black & Decker Corp. ............................. 2,170,300 12,900 BMC Software, Inc. (c) ........................... 290,766 110,000 Brunswick Corp. .................................. 2,643,300 20,000 Burlington Resources, Inc. ....................... 799,000 15,100 Cadence Design Systems, Inc. (c) ................. 281,313 3,600 Calpine Corp. (c) ................................ 136,080 26,400 Capstone Turbine Corp. (c) ....................... 580,800 21,500 Cisco Systems, Inc. (c) .......................... 416,025 10,900 Citigroup, Inc. .................................. 575,956 39,000 Conoco, Inc. ..................................... 1,099,800 50,000 Cooper Industries, Inc. .......................... 1,979,500 30,000 CVS Corp. ........................................ 1,158,000 12,000 Eaton Corp. ...................................... 841,200 6,600 Enron Corp. ...................................... 323,400 59,000 Equifax, Inc. .................................... 2,164,120 8,000 Estee Lauder Companies, Inc. ..................... 344,800 6,400 Extreme Networks, Inc. (c) ....................... 183,360 50,000 Ford Motor Co. ................................... 1,227,500 70,000 Fortune Brands, Inc. ............................. 2,685,200 7,300 Freddie Mac ...................................... 511,000 9,500 Gannett Co. ...................................... 626,050 22,000 Gap, Inc. ........................................ 638,000 8,900 General Electric Co. ............................. 433,875 54,000 General Motors Corp., Class H (c) ................ 1,093,500 52,000 H & R Block, Inc. ................................ 3,356,600 40,000 H.J. Heinz Co. ................................... 1,635,600 15,600 Intel Corp. ...................................... 472,056 3,500 International Business Machines Corp. ............ 395,500 3,200 Johnson & Johnson, Inc. .......................... 160,000 40,400 Knight-Ridder, Inc. .............................. 2,395,720 9,400 Kraft Foods Inc. (c) ............................. 291,400 1,600 Lehman Brothers Holdings, Inc. ................... 124,400 80,000 Masco Corp. ...................................... 1,996,800 85,000 Mattel, Inc. ..................................... 1,608,200 47,200 McLeodUSA, Inc. (c) .............................. 207,208 8,000 Microsoft Corp. (c) .............................. 574,480 8,800 Mirant Corp. (c) ................................. 302,720 55,000 Moody's Corp. .................................... 1,842,500 63,000 Motorola, Inc. ................................... 1,043,280 55,000 Newell Rubbermaid, Inc. .......................... 1,380,500 13,700 Pfizer, Inc. ..................................... 548,685 2,800 Providian Financial Corp. ........................ 165,760 8,800 Qwest Communications International, Inc. (c) ..... 280,456 5,500 Reliant Resources, Inc. (c) ...................... 135,850 7,300 Safeway, Inc. (c) ................................ 350,400 69,000 Sara Lee Corp. ................................... 1,306,860 8,100 SBC Communications, Inc. ......................... 324,486 65,000 Sprint Corp. ..................................... 1,388,400 4,200 Teradyne, Inc. (c) ............................... 139,020 120,000 The Dial Corp. ................................... 1,710,000 84,000 The Kroger Co. (c) ............................... 2,100,000 31,000 The New Dun and Bradstreet Corp. (c) ............. 874,200 67,000 Tricon Global Restaurants, Inc. (c) .............. 2,941,300 31,500 TXU Corp. ........................................ 1,517,985 39,000 US Bancorp ....................................... 888,810 61,500 Washington Mutual, Inc. .......................... 2,309,325 5,100 Wells Fargo & Co. ................................ 236,793 146,000 Xerox Corp. ...................................... 1,397,220 ------------- 65,689,605 ------------- Total Common Stock (Identified Cost $187,988,719) 196,624,793 ------------- SHORT TERM INVESTMENTS-- 4.2% $2,493,000 Repurchase Agreement with State Street Bank and Trust Co. dated 6/29/2001 at 2.75% to be repurchased at $2,493,571 on 7/02/2001, collateralized by $2,160,000 U.S. Treasury Bond, 7.500%, due 11/15/2016 valued at $2,548,022 ...... $ 2,493,000 ------------- 783,000 Repurchase Agreement with State Street Bank and Trust Co. dated 6/29/2001 at 2.75% to be repurchased at $783,179 on 7/02/2001, collateralized by $680,000 U.S. Treasury Bond, 7.500%, due 11/15/2016 valued at $802,155 ........ 783,000 ------------- 261,000 Repurchase Agreement with State Street Bank and Trust Co. dated 6/29/2001 at 3.85% to be repurchased at $261,084 on 7/02/2001, collateralized by $250,000 U.S. Treasury Bond, 6.125%, due 8/15/2007 valued at $268,438 ............................... 261,000 ------------- 5,148,000 Repurchase Agreement with State Street Bank and Trust Co. dated 6/29/2001 at 3.85% to be repurchased at $5,149,652 on 7/02/2001, collateralized by $4,455,000 U.S. Treasury Bond, 7.500%, due 11/15/2016 valued at $5,255,296 ............................. 5,148,000 ------------- Total Short Term Investments (Identified Cost $8,685,000) 8,685,000 ------------- Total Investments-- 100.6% (Identified Cost $196,673,719) 205,309,793 Other assets less liabilities (1,282,066) ------------- Total Net Assets-- 100% $ 04,027,727 ============= (a) See note 2a of Notes to Financial Statements. (b) Federal Tax Information: At June 30, 2001 the net unrealized appreciation on investments based on cost of $196,673,719 for federal income tax purposes was as follows: Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost ................................................. $ 21,793,844 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value .................................................... (13,157,770) ------------- Net unrealized appreciation $ 8,636,074 ============= (c) Non-income producing security. (d) All or a portion of this security was on loan to brokers at June 30, 2001. 144A Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the period end, the value of these securities amounted to $1,042,393 or 0.5% of net assets. ADR/GDR An American Depositary Receipt (ADR) or Global Depositary Receipt (GDR) is a certificate issued by a Custodian Bank representing the right to receive securities of the foreign issuer described. The values of ADRs and GDRs are significantly influenced by trading on exchanges not located in the United States. Industry Holdings at June 30, 2001 - ---------------------------------- Consumer Goods & Services 8.6% Food & Beverages 7.8% Financial Services 5.5% Manufacturing-Diversified 5.3% Bank & Thrifts 5.3% Health Care-Drugs 4.8% Retail 4.3% Automotive 3.6% Telecommunications 3.5% Oil-Major Integrated 3.0% Banks 2.6% Communications Services 2.3% Publishing 2.3% Building & Related 2.2% Other, less than 2.0% each 44.2% See accompanying notes to financial statements. - -------------------------------------------------------------------------------- STATEMENTS OF ASSETS & LIABILITIES - -------------------------------------------------------------------------------- June 30, 2001 (Unaudited)
STAR VALUE STAR SMALL CAP STAR ADVISERS STAR WORLDWIDE FUND FUND FUND FUND ------------- ------------- ------------- ------------- ASSETS Investments at cost ...................................... $ 177,664,812 $ 191,680,298 $1,074,832,617 $ 196,673,719 Net unrealized appreciation (depreciation) ............... 31,975,641 10,416,834 104,931,818 8,636,074 ------------- ------------- ------------- ------------- Investments at value ............................. 209,640,453 202,097,132 1,179,764,435 205,309,793 Cash ..................................................... 24,702 -- 1,321 -- Foreign cash at value (identified cost $1,039,864) ....... -- -- -- 1,026,591 Investments held as collateral for loaned securities ..... -- 9,193,095 10,636,967 10,572,736 Receivable for Fund shares sold .......................... 102,790 249,723 309,519 24,213 Receivable for securities sold ........................... 523,484 5,013,585 6,739,276 1,471,736 Dividends and interest receivable ........................ 118,084 39,814 896,547 329,109 Tax reclaims receivable .................................. -- -- 5,367 111,798 Securities lending income receivable ..................... -- 32,083 268,787 213,889 Unamortized organization expense ......................... -- 3,760 -- -- ------------- ------------- ------------- ------------- TOTAL ASSETS ............................... 210,409,513 216,629,192 1,198,622,219 219,059,865 ------------- ------------- ------------- ------------- LIABILITIES Collateral on securities loaned, at value ................ -- 9,193,095 10,636,967 10,572,736 Payable for securities purchased ......................... 940,844 3,191,761 14,873,835 2,355,434 Payable for Fund shares redeemed ......................... 530,637 708,404 2,586,191 654,704 Payable to custodian bank ................................ -- 515,634 -- 985,361 Withholding taxes payable ................................ -- 24 1,532 19,823 Management fees payable .................................. 129,691 170,779 1,008,669 178,449 Deferred Trustees' fees .................................. 95,711 40,283 149,345 35,456 Transfer agent fees payable .............................. 64,510 79,540 345,456 76,365 Accounting and administrative fees payable ............... 7,773 7,286 43,318 7,613 Other accounts payable and accrued expenses .............. 63,663 99,626 169,385 146,197 ------------- ------------- ------------- ------------- TOTAL LIABILITIES ...................................... 1,832,829 14,006,432 29,814,698 15,032,138 ------------- ------------- ------------- ------------- NET ASSETS ................................................. $ 208,576,684 $ 202,622,760 $1,168,807,521 $ 204,027,727 ============= ============= ============= ============= NET ASSETS CONSIST OF: Paid in capital .......................................... $ 184,486,318 $ 219,431,755 $1,305,554,200 $ 214,699,576 Undistributed (overdistributed) net investment income (loss) .......................................... (485,466) (1,751,003) (4,985,761) 1,006,639 Accumulated net realized gain (loss) on investments ...... (7,399,809) (25,474,826) (236,691,827) (20,306,197) Net unrealized appreciation (depreciation) of investments and foreign currency transactions .......... 31,975,641 10,416,834 104,930,909 8,627,709 ------------- ------------- ------------- ------------- NET ASSETS ................................................. $ 208,576,684 $ 202,622,760 $1,168,807,521 $ 204,027,727 ============= ============= ============= ============= COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE: CLASS A SHARES: Net assets ....................................... $ 148,909,484 $ 81,156,435 $ 442,529,483 $ 87,032,280 ============= ============= ============= ============= Shares of beneficial interest .................... 18,854,660 5,144,968 26,772,767 6,373,294 ============= ============= ============= ============= Net asset value and redemption price per share ... $ 7.90 $ 15.77 $ 16.53 $ 13.66 ============= ============= ============= ============= Offering price per share ......................... $ 8.38 $ 16.73 $ 17.54 $ 14.49 ============= ============= ============= ============= CLASS B SHARES: (redemption price is equal to net asset value less any applicable contingent deferred sales charges) Net assets ....................................... $ 47,341,166 $ 95,376,777 $ 562,134,757 $ 97,445,113 ============= ============= ============= ============= Shares of beneficial interest .................... 6,334,310 6,319,145 36,793,663 7,520,002 ============= ============= ============= ============= Net asset value and offering price per share ..... $ 7.47 $ 15.09 $ 15.28 $ 12.96 ============= ============= ============= ============= CLASS C SHARES: (redemption price is equal to net asset value less any applicable contingent deferred sales charges) Net assets ....................................... $ 2,849,345 $ 26,089,548 $ 101,039,031 $ 19,550,334 ============= ============= ============= ============= Shares of beneficial interest .................... 381,254 1,728,382 6,606,530 1,507,466 ============= ============= ============= ============= Net asset value per share ........................ $ 7.47 $ 15.09 $ 15.29 $ 12.97 ============= ============= ============= ============= Offering price per share ......................... $ 7.55 $ 15.24 $ 15.44 $ 13.10 ============= ============= ============= ============= CLASS Y SHARES: Net assets ....................................... $ 9,476,689 $ -- $ 63,104,250 $ -- ============= ============= ============= ============= Shares of beneficial interest .................... 1,195,014 -- 3,690,847 -- ============= ============= ============= ============= Net asset value, offering and redemption price per share ..................................... $ 7.93 $ -- $ 17.10 $ -- ============= ============= ============= =============
See accompanying notes to financial statements. - -------------------------------------------------------------------------------- STATEMENTS OF OPERATIONS - -------------------------------------------------------------------------------- For the Six Months Ended June 30, 2001 (Unaudited)
STAR VALUE STAR SMALL CAP STAR ADVISERS STAR WORLDWIDE FUND FUND FUND FUND ------------- ------------- ------------- ------------- INVESTMENT INCOME Dividends ................................................ $ 1,220,933 $ 301,191 $ 5,808,631 $ 2,418,253 Interest ................................................. 126,709 214,482 1,903,127 147,181 Securities lending income ................................ -- 208,750 1,768,111 1,391,667 Less net foreign taxes withheld .......................... (2,483) (195) (1,960) (234,446) ------------- ------------- ------------- ------------- 1,345,159 724,228 9,477,909 3,722,655 ------------- ------------- ------------- ------------- Expenses Management fees .................................. 780,627 1,057,663 6,362,238 1,134,370 Service fees - Class A ........................... 188,375 100,910 584,215 114,534 Service and distribution fees - Class B ......... 230,107 475,583 2,916,664 515,469 Service and distribution fees - Class C .......... 14,225 128,075 536,210 106,746 Trustees' fees and expenses ...................... 8,825 8,512 60,710 8,905 Accounting and administrative .................... 45,256 43,543 264,405 46,723 Custodian ........................................ 100,877 154,095 218,481 247,398 Transfer agent - Class A, Class B, Class C ....... 337,182 392,584 1,919,771 405,011 Transfer agent - Class Y ......................... 4,658 -- 32,456 -- Audit and tax services ........................... 14,309 20,172 22,831 21,044 Legal ............................................ 6,766 4,684 46,805 8,603 Printing ......................................... 33,341 34,955 189,259 43,787 Registration ..................................... 19,549 12,945 1,851 15,170 Amortization of organization expenses ............ -- 4,416 -- -- Miscellaneous .................................... 8,833 11,416 55,367 11,422 ------------- ------------- ------------- ------------- Total expenses before reductions ......................... 1,792,930 2,449,553 13,211,263 2,679,182 Less reductions .................................. (12,701) (8,719) (155,673) (14,848) ------------- ------------- ------------- ------------- Net expenses ............................................. 1,780,229 2,440,834 13,055,590 2,664,334 ------------- ------------- ------------- ------------- Net investment income (loss) ............................. (435,070) (1,716,606) (3,577,681) 1,058,321 ------------- ------------- ------------- ------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FORWARD CURRENCY CONTRACTS AND FOREIGN CURRENCY TRANSACTIONS Realized gain (loss) on: Investments - net ................................ 6,383,084 (12,462,447) (127,254,878) (11,085,102) Forward currency contracts - net ................. -- -- (2,812,027) (8,769) Foreign currency transactions - net .............. -- -- (1,393,980) (162,108) Change in unrealized appreciation (depreciation) of: Investments - net ................................ 2,216,129 2,613,219 49,781,415 (1,613,273) Forward currency contracts - net ................. -- 2,225,003 16,881 Foreign currency transactions - net .............. -- -- (476) (22,917) ------------- ------------- ------------- ------------- Net realized and unrealized gain (loss) on investments, forward currency contracts and foreign currency transactions ......................... 8,599,213 (9,849,228) (79,454,943) (12,875,288) ------------- ------------- ------------- ------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ....................................... $ 8,164,143 $ (11,565,834) $ (83,032,624) $ (11,816,967) ============= ============= ============= =============
See accompanying notes to financial statements. - -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS - -------------------------------------------------------------------------------- For the Six Months Ended June 30, 2001 (Unaudited)
STAR VALUE STAR SMALL CAP FUND FUND ------------------------------ ------------------------------ SIX MONTHS SIX MONTHS ENDED ENDED JUNE 30, YEAR ENDED JUNE 30, YEAR ENDED 2001 DECEMBER 31, 2001 DECEMBER 31, (UNAUDITED) 2000 (UNAUDITED) 2000 ------------- ------------- ------------- ------------- FROM OPERATIONS: Net investment income (loss) ............................. $ (435,070) $ (85,400) $ (1,716,606) $ (4,124,252) Net realized gain (loss) on investments, forward currency contracts and foreign currency transactions ... 6,383,084 (8,446,134) (12,462,447) 22,602,507 Net change in unrealized appreciation (depreciation) of investments, forward currency contracts and foreign currency transactions ........................... 2,216,129 8,942,292 2,613,219 (55,774,762) ------------- ------------- ------------- ------------- Increase (decrease) in net assets resulting from operations ......................................... 8,164,143 410,758 (11,565,834) (37,296,507) ------------- ------------- ------------- ------------- FROM DISTRIBUTIONS TO SHAREHOLDERS: Net investment income Class A .......................................... -- (19,976) -- -- Class B .......................................... -- (5,633) -- -- Class C .......................................... -- (317) -- -- Class Y .......................................... -- (1,092) -- -- Net realized gain on investments Class A .......................................... -- -- -- (16,889,157) Class B .......................................... -- -- -- (20,755,405) Class C .......................................... -- -- -- (5,518,272) Class Y .......................................... -- -- -- -- In excess of net realized gain on investments Class A .......................................... -- -- -- (2,952,150) Class B .......................................... -- -- -- (3,627,954) Class C .......................................... -- -- -- (964,570) Class Y .......................................... -- -- -- -- ------------- ------------- ------------- ------------- -- (27,018) -- (50,707,508) ------------- ------------- ------------- ------------- INCREASE (DECREASE) IN NET ASSETS DERIVED FROM CAPITAL SHARE TRANSACTIONS .................. (10,758,176) (79,053,138) (10,697,768) 100,109,343 ------------- ------------- ------------- ------------- Total increase (decrease) in net assets .................. (2,594,033) (78,669,398) (22,263,602) 12,105,328 NET ASSETS Beginning of the period .................................. 211,170,717 289,840,115 224,886,362 212,781,034 ------------- ------------- ------------- ------------- End of the period ........................................ $ 208,576,684 $ 211,170,717 $ 202,622,760 $ 224,886,362 ============= ============= ============= ============= UNDISTRIBUTED (OVERDISTRIBUTED) NET INVESTMENT INCOME (LOSS) ............................................ $ (485,466) $ (50,396) $ (1,751,003) $ (34,397) ============= ============= ============= =============
See accompanying notes to financial statements. - -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS (continued) - --------------------------------------------------------------------------------
STAR ADVISERS STAR WORLDWIDE FUND FUND ------------------------------ ------------------------------ SIX MONTHS SIX MONTHS ENDED ENDED JUNE 30, YEAR ENDED JUNE 30, YEAR ENDED 2001 DECEMBER 31, 2001 DECEMBER 31, (UNAUDITED) 2000 (UNAUDITED) 2000 ------------- ------------- ------------- ------------- FROM OPERATIONS: Net investment income (loss) ............................. $ (3,577,681) $ (10,485,924) $ 1,058,321 $ (1,539,521) Net realized gain (loss) on investments, forward currency contracts and foreign currency transactions .... (131,460,885) 21,100,776 (11,255,979) 26,740,967 Net change in unrealized appreciation (depreciation) of investments, forward currency contracts and foreign currency transactions ........................... 52,005,942 (304,099,318) (1,619,309) (61,085,877) ------------- ------------- ------------- ------------- Increase (decrease) in net assets resulting from operations ......................................... (83,032,624) (293,484,466) (11,816,967) (35,884,431) ------------- ------------- ------------- ------------- FROM DISTRIBUTIONS TO SHAREHOLDERS: Net investment income Class A .......................................... -- -- -- -- Class B .......................................... -- -- -- -- Class C .......................................... -- -- -- -- Class Y .......................................... -- -- -- -- Net realized gain on investments Class A .......................................... (191,758) (48,970,279) (473,120) (16,575,111) Class B .......................................... (262,839) (64,321,093) (567,426) (19,068,510) Class C .......................................... (47,582) (12,163,801) (114,871) (4,075,550) Class Y .......................................... (26,139) (6,493,598) -- -- In excess of net realized gain on investments Class A .......................................... -- (33,196,895) -- (2,523,066) Class B .......................................... -- (43,603,195) -- (2,902,612) Class C .......................................... -- (8,245,826) -- (620,381) Class Y .......................................... -- (4,402,002) -- -- ------------- ------------- ------------- ------------- (528,318) (221,396,689) (1,155,417) (45,765,230) ------------- ------------- ------------- ------------- INCREASE (DECREASE) IN NET ASSETS DERIVED FROM CAPITAL SHARE TRANSACTIONS .................. (114,449,302) 304,883,507 (23,905,880) 26,099,328 ------------- ------------- ------------- ------------- Total increase (decrease) in net assets .................. (198,010,244) (209,997,648) (36,878,264) (55,550,333) NET ASSETS Beginning of the period .................................. 1,366,817,765 1,576,815,413 240,905,991 296,456,324 ------------- ------------- ------------- ------------- End of the period ........................................ $1,168,807,521 $1,366,817,765 $ 204,027,727 $ 240,905,991 ============= ============= ============= ============= UNDISTRIBUTED (OVERDISTRIBUTED) NET INVESTMENT INCOME (LOSS) ............................................ $ (4,985,761) $ (1,408,080) $ 1,006,639 $ (51,682) ============= ============= ============= =============
See accompanying notes to financial statements. - ----------------------------------------------------------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS - ----------------------------------------------------------------------------------------------------------------------------------- For a share outstanding throughout each period.
INCOME (LOSS) FROM INVESTMENT OPERATIONS: LESS DISTRIBUTIONS: ---------------------------------------- ------------------------------------------------------------------ DISTRI- DISTRI- BUTIONS NET ASSET DIVIDENDS BUTIONS IN EXCESS VALUE, NET NET REALIZED TOTAL DIVIDENDS IN EXCESS FROM NET OF NET BEGINNING INVESTMENT AND UNREALIZED FROM FROM NET OF NET REALIZED REALIZED RETURN OF THE INCOME GAIN (LOSS) ON INVESTMENT INVESTMENT INVESTMENT CAPITAL CAPITAL OF TOTAL PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME INCOME GAINS GAINS CAPITAL DISTRIBUTIONS ------ ---------- ----------- ---------- ---------- ---------- ------- --------- ------- ------------- STAR VALUE FUND - --------------- CLASS A 2001(f) $ 7.60 $ (0.01) $ 0.31 $ 0.30 $ -- $ -- $ -- $ -- $ -- $ -- 2000 7.45 0.01 0.14 0.15 0.00(e) -- -- -- -- -- 1999 9.68 0.03 (0.71) (0.68) (0.02) -- (1.38) (0.15) -- (1.55) 1998 10.14 0.03(d) 0.59 0.62 (0.02) -- (1.06) -- -- (1.08) 1997 9.60 0.03(d) 1.96 1.99 (0.02) -- (1.43) -- -- (1.45) 1996 8.78 0.06 2.12 2.18 (0.06) -- (1.30) -- -- (1.36) CLASS B 2001(f) 7.22 (0.04) 0.29 0.25 -- -- -- -- -- -- 2000 7.13 (0.04) 0.13 0.09 0.00(e) -- -- -- -- -- 1999 9.38 (0.04) (0.68) (0.72) -- -- (1.38) (0.15) -- (1.53) 1998 9.91 (0.05)(d) 0.58 0.53 -- -- (1.06) -- -- (1.06) 1997 9.47 (0.05)(d) 1.92 1.87 -- -- (1.43) -- -- (1.43) 1996 8.70 0.01 2.07 2.08 (0.01) -- (1.30) -- -- (1.31) CLASS C 2001(f) 7.22 (0.04) 0.29 0.25 -- -- -- -- -- -- 2000 7.14 (0.05) 0.13 0.08 0.00(e) -- -- -- -- -- 1999 9.39 (0.04) (0.68) (0.72) -- -- (1.38) (0.15) -- (1.53) 1998 9.92 (0.05)(d) 0.58 0.53 -- -- (1.06) -- -- (1.06) 1997 9.46 (0.05)(d) 1.94 1.89 -- -- (1.43) -- -- (1.43) 1996 8.70 0.01 2.06 2.07 (0.01) -- (1.30) -- -- (1.31) CLASS Y 2001(f) 7.61 0.01 0.31 0.32 -- -- -- -- -- -- 2000 7.42 0.05 0.14 0.19 0.00(e) -- -- -- -- -- 1999 9.65 0.06 (0.71) (0.65) (0.05) -- (1.38) (0.15) -- (1.58) 1998 10.10 0.06(d) 0.59 0.65 (0.04) -- (1.06) -- -- (1.10) 1997 9.55 0.06(d) 1.95 2.01 (0.03) -- (1.43) -- -- (1.46) 1996 8.75 0.08 2.10 2.18 (0.08) -- (1.30) -- -- (1.38) STAR SMALL CAP FUND - ------------------- CLASS A 2001(f) $16.51 $ (0.09) $(0.65) $(0.74) $ -- $ -- $ -- $ -- $ -- $ -- 2000 23.42 (0.28) (2.30) (2.58) -- -- (3.69) (0.64) -- (4.33) 1999 15.66 (0.27) 10.22 9.95 -- -- (2.19) -- -- (2.19) 1998 15.37 (0.23) 0.54 0.31 -- -- (0.02) -- -- (0.02) 1997(g) 12.50 (0.20) 3.55 3.35 -- -- (0.48) -- -- (0.48) CLASS B 2001(f) 15.86 (0.15) (0.62) (0.77) -- -- -- -- -- -- 2000 22.85 (0.44) (2.22) (2.66) -- -- (3.69) (0.64) -- (4.33) 1999 15.43 (0.39) 10.00 9.61 -- -- (2.19) -- -- (2.19) 1998 15.26 (0.33) 0.52 0.19 -- -- (0.02) -- -- (0.02) 1997(g) 12.50 (0.30) 3.54 3.24 -- -- (0.48) -- -- (0.48) CLASS C 2001(f) 15.86 (0.15) (0.62) (0.77) -- -- -- -- -- -- 2000 22.85 (0.44) (2.22) (2.66) -- -- (3.69) (0.64) -- (4.33) 1999 15.43 (0.39) 10.00 9.61 -- -- (2.19) -- -- (2.19) 1998 15.26 (0.33) 0.52 0.19 -- -- (0.02) -- -- (0.02) 1997(g) 12.50 (0.30) 3.54 3.24 -- -- (0.48) -- -- (0.48) (a) A sales charge for Class A and Class C shares and a contingent deferred sales charge for Class B and Class C shares are not reflected in total return calculations. Periods less than one year are not annualized. (b) Computed on an annualized basis for periods less than one year. (c) Certain Funds have entered into agreements with certain brokers to rebate a portion of brokerage commissions. The rebated commissions are used to reduce operating expenses of the Fund. (d) Per share net investment income (loss) has been calculated using the average shares outstanding during the period. (e) Amount rounds to less than $0.01 per share. (f) For the six months ended June 30, 2001 (unaudited). (g) The Star Small Cap Fund commenced operations December 31, 1996. See accompanying notes to financial statements.
RATIOS TO AVERAGE NET ASSETS: ------------------------------------------------ NET ASSET NET ASSETS, EXPENSES VALUE, TOTAL END OF AFTER EXPENSE NET INVESTMENT PORTFOLIO END OF RETURN THE PERIOD EXPENSES REDUCTIONS INCOME (LOSS) TURNOVER THE PERIOD (%)(a) (000'S) (%)(b) (%)(b)(c) (b) RATE (%) ---------- ------- ----------- -------- -------- ---- -------------- ---------- $ 7.90 4.0 $ 148,909 1.56 1.55 (0.26) 41 7.60 2.0 154,179 1.62 1.59 0.10 129 7.45 (6.9) 216,740 1.33 1.33 0.32 70 9.68 7.1 317,902 1.26 1.26 0.29 75 10.14 21.0 348,988 1.25 1.25 0.28 55 9.60 26.3 297,581 1.31 1.31 0.78 64 7.47 3.5 47,341 2.31 2.30 (1.01) 41 7.22 1.3 45,364 2.37 2.34 (0.65) 129 7.13 (7.6) 59,497 2.08 2.08 (0.43) 70 9.38 6.3 86,243 2.01 2.01 (0.46) 75 9.91 20.0 80,008 2.00 2.00 (0.47) 55 9.47 25.4 48,210 2.06 2.06 0.03 64 7.47 3.5 2,849 2.31 2.30 (1.01) 41 7.22 1.1 2,496 2.40 2.37 (0.68) 129 7.14 (7.6) 3,398 2.08 2.08 (0.43) 70 9.39 6.3 6,445 2.01 2.01 (0.46) 75 9.92 20.2 6,527 2.00 2.00 (0.47) 55 9.46 25.2 3,735 2.06 2.06 0.03 64 7.93 4.2 9,477 1.08 1.07 0.22 41 7.61 2.6 9,132 1.09 1.06 0.63 129 7.42 (6.7) 10,205 1.08 1.08 0.57 70 9.65 7.4 17,789 1.01 1.01 0.54 75 10.10 21.3 24,164 1.00 1.00 0.53 55 9.55 26.4 12,716 1.06 1.06 1.03 64 $15.77 (4.5) $ 81,156 1.98 1.97 (1.25) 90 16.51 (12.2) 89,714 1.88 1.88 (1.19) 216 23.42 65.4 84,725 2.06 2.06 (1.54) 263 15.66 2.1 56,161 2.07 2.07 (1.52) 182 15.37 27.0 52,066 2.20 2.20 (1.44) 140 15.09 (4.9) 95,377 2.73 2.72 (1.99) 90 15.86 (12.9) 107,083 2.63 2.63 (1.94) 216 22.85 64.1 102,029 2.81 2.81 (2.29) 263 15.43 1.3 61,409 2.82 2.82 (2.27) 182 15.26 26.1 52,616 2.95 2.95 (2.19) 140 15.09 (4.9) 26,090 2.73 2.72 (1.99) 90 15.86 (12.9) 28,090 2.63 2.63 (1.94) 216 22.85 64.1 26,027 2.81 2.81 (2.29) 263 15.43 1.3 15,412 2.82 2.82 (2.27) 182 15.26 26.1 13,970 2.95 2.95 (2.19) 140
See accompanying notes to financial statements. - ----------------------------------------------------------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS - ----------------------------------------------------------------------------------------------------------------------------------- For a share outstanding throughout each period.
INCOME (LOSS) FROM INVESTMENT OPERATIONS: LESS DISTRIBUTIONS: ---------------------------------------- ------------------------------------------------------------------ DISTRI- DISTRI- BUTIONS DISTRI- NET ASSET DIVIDENDS BUTIONS IN EXCESS BUTIONS VALUE, NET NET REALIZED TOTAL DIVIDENDS IN EXCESS FROM NET OF NET FROM BEGINNING INVESTMENT AND UNREALIZED FROM FROM NET OF NET REALIZED REALIZED PAID OF THE INCOME GAIN (LOSS) ON INVESTMENT INVESTMENT INVESTMENT CAPITAL CAPITAL IN TOTAL PERIOD (LOSS)(d) INVESTMENTS OPERATIONS INCOME INCOME GAINS GAINS CAPITAL DISTRIBUTIONS ------ ---------- ----------- ---------- ---------- ---------- ------- --------- ------- ------------- STAR ADVISERS FUND - ------------------ Class A 2001(f) $17.55 $ (0.02) $(0.99) $(1.01) $ -- $ -- $(0.01) $ -- $ -- $(0.01) 2000 24.50 (0.06) (3.87) (3.93) -- -- (1.80) (1.22) -- (3.02) 1999 20.02 (0.12) 8.91 8.79 -- -- (4.31) -- -- (4.31) 1998 18.17 (0.05) 3.28 3.23 -- -- (1.38) -- -- (1.38) 1997 18.18 (0.02) 3.62 3.60 -- -- (3.61) -- -- (3.61) 1996 16.78 (0.06) 3.17 3.11 -- -- (1.71) -- -- (1.71) Class B 2001(f) 16.29 (0.07) (0.93) (1.00) -- -- (0.01) -- -- (0.01) 2000 23.14 (0.22) (3.61) (3.83) -- -- (1.80) (1.22) -- (3.02) 1999 19.23 (0.27) 8.49 8.22 -- -- (4.31) -- -- (4.31) 1998 17.63 (0.18) 3.16 2.98 -- -- (1.38) -- -- (1.38) 1997 17.86 (0.17) 3.55 3.38 -- -- (3.61) -- -- (3.61) 1996 16.63 (0.20) 3.14 2.94 -- -- (1.71) -- -- (1.71) Class C 2001(f) 16.30 (0.07) (0.93) (1.00) -- -- (0.01) -- -- (0.01) 2000 23.16 (0.22) (3.62) (3.84) -- -- (1.80) (1.22) -- (3.02) 1999 19.25 (0.27) 8.49 8.22 -- -- (4.31) -- -- (4.31) 1998 17.64 (0.18) 3.17 2.99 -- -- (1.38) -- -- (1.38) 1997 17.87 (0.17) 3.55 3.38 -- -- (3.61) -- -- (3.61) 1996 16.65 (0.20) 3.13 2.93 -- -- (1.71) -- -- (1.71) Class Y 2001(f) 18.13 0.02 (1.04) (1.02) -- -- (0.01) -- -- (0.01) 2000 25.08 0.03 (3.96) (3.93) -- -- (1.80) (1.22) -- (3.02) 1999 20.37 (0.07) 9.09 9.02 -- -- (4.31) -- -- (4.31) 1998 18.41 0.00(e) 3.34 3.34 -- -- (1.38) -- -- (1.38) 1997 18.33 0.03 3.66 3.69 -- -- (3.61) -- -- (3.61) 1996 16.83 (0.02) 3.23 3.21 -- -- (1.71) -- -- (1.71) STAR WORLDWIDE FUND - ------------------- CLASS A 2001(f) $14.42 $ 0.10 $(0.78) $(0.68) $ -- $ -- $(0.08) $ -- $ -- $(0.08) 2000 19.90 (0.02) (2.43) (2.45) -- -- (2.63) (0.40) -- (3.03) 1999 16.08 (0.07) 5.98 5.91 -- -- (2.09) -- -- (2.09) 1998 15.46 0.01 0.61 0.62 -- -- -- -- -- -- 1997 14.40 (0.02) 1.88 1.86 -- -- (0.76) -- (0.04) (0.80) 1996 12.50 (0.03) 2.11 2.08 -- -- (0.18) -- -- (0.18) CLASS B 2001(f) 13.74 0.04 (0.74) (0.70) -- -- (0.08) -- -- (0.08) 2000 19.26 (0.16) (2.33) (2.49) -- -- (2.63) (0.40) -- (3.03) 1999 15.73 (0.20) 5.82 5.62 -- -- (2.09) -- -- (2.09) 1998 15.23 (0.11) 0.61 0.50 -- -- -- -- -- -- 1997 14.30 (0.14) 1.87 1.73 -- -- (0.76) -- (0.04) (0.80) 1996 12.50 (0.12) 2.10 1.98 -- -- (0.18) -- -- (0.18) CLASS C 2001(f) 13.75 0.04 (0.74) (0.70) -- -- (0.08) -- -- (0.08) 2000 19.27 (0.16) (2.33) (2.49) -- -- (2.63) (0.40) -- (3.03) 1999 15.75 (0.21) 5.82 5.61 -- -- (2.09) -- -- (2.09) 1998 15.24 (0.11) 0.62 0.51 -- -- -- -- -- -- 1997 14.31 (0.13) 1.86 1.73 -- -- (0.76) -- (0.04) (0.80) 1996 12.50 (0.12) 2.11 1.99 -- -- (0.18) -- -- (0.18) (a) A sales charge for Class A and Class C shares and a contingent deferred sales charge for Class B and Class C shares are not reflected in total return calculations. Periods less than one year are not annualized. (b) Computed on an annualized basis for periods less than one year. (c) Certain Funds have entered into agreements with certain brokers to rebate a portion of brokerage commissions. The rebated commissions are used to reduce operating expenses of the Fund. (d) Per share net investment income (loss) has been calculated using the average shares outstanding during the period. (e) Amount rounds to less than $0.01 per share. (f) For the six months ended June 30, 2001 (unaudited). See accompanying notes to financial statements.
RATIOS TO AVERAGE NET ASSETS: ------------------------------------------------ NET ASSET NET ASSETS, EXPENSES VALUE, TOTAL END OF AFTER EXPENSE NET INVESTMENT PORTFOLIO END OF RETURN THE PERIOD EXPENSES REDUCTIONS INCOME (LOSS) TURNOVER THE PERIOD (%)(a) (000'S) (%)(b) (%)(b)(c) (b) RATE (%) ---------- ------- ----------- -------- -------- ---- -------------- ---------- $16.53 (5.8) $ 442,529 1.76 1.74 (0.19) 114 17.55 (17.0) 525,479 1.62 1.60 (0.25) 524 24.50 46.4 619,184 1.62 1.62 (0.54) 186 20.02 19.3 443,165 1.62 1.62 (0.24) 101 18.17 20.2 416,938 1.66 1.66 (0.14) 168 18.18 19.0 348,573 1.68 1.68 (0.36) 127 15.28 (6.2) 562,135 2.51 2.49 (0.94) 114 16.29 (17.6) 649,107 2.37 2.35 (1.00) 524 23.14 45.4 742,908 2.37 2.37 (1.29) 186 19.23 18.4 508,937 2.37 2.37 (0.99) 101 17.63 19.3 462,034 2.41 2.41 (0.89) 168 17.86 18.1 366,314 2.43 2.43 (1.11) 127 15.29 (6.2) 101,039 2.51 2.48 (0.93) 114 16.30 (17.6) 118,921 2.37 2.35 (1.00) 524 23.16 45.3 139,710 2.37 2.37 (1.29) 186 19.25 18.5 97,849 2.37 2.37 (0.99) 101 17.64 19.3 94,412 2.41 2.41 (0.89) 168 17.87 18.0 80,312 2.43 2.43 (1.11) 127 17.10 (5.6) 63,104 1.28 1.26 0.27 114 18.13 (16.6) 73,310 1.25 1.23 0.12 524 25.08 46.8 75,013 1.37 1.37 (0.29) 186 20.37 19.6 42,517 1.37 1.37 0.01 101 18.41 20.5 37,006 1.41 1.41 0.11 168 18.33 19.6 18,649 1.43 1.43 (0.11) 127 $13.66 (4.8) $ 87,032 2.05 2.03 1.41 59 14.42 (12.2) 102,507 2.01 2.01 (0.13) 175 19.90 37.6 126,415 2.06 2.06 (0.42) 91 16.08 4.0 106,763 2.09 2.09 0.03 84 15.46 12.7 118,381 2.07 2.07 (0.12) 80 14.40 16.7 68,509 2.58 2.58 (0.21) 57 12.96 (5.1) 97,445 2.80 2.79 0.66 59 13.74 (12.8) 114,450 2.76 2.76 (0.88) 175 19.26 36.6 141,338 2.81 2.81 (1.17) 91 15.73 3.3 116,305 2.84 2.84 (0.72) 84 15.23 11.9 123,467 2.82 2.82 (0.87) 80 14.30 15.9 65,367 3.33 3.33 (0.96) 57 12.97 (5.1) 19,550 2.80 2.78 0.65 59 13.75 (12.8) 23,949 2.76 2.76 (0.88) 175 19.27 36.5 28,703 2.81 2.81 (1.17) 91 15.75 3.3 23,016 2.84 2.84 (0.72) 84 15.24 11.8 26,137 2.82 2.82 (0.87) 80 14.31 15.9 17,980 3.33 3.33 (0.96) 57
- ------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS - ------------------------------------------------------------------------------- For the Six Months Ended June 30, 2001 (Unaudited) 1. ORGANIZATION. CDC Nvest Funds Trust I, formerly Nvest Funds Trust I (the "Trust") is organized as a Massachusetts business trust. The Trust is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. The Declaration of Trust permits the Trustees to issue an unlimited number of shares of the Trust in multiple series (individually, a "Fund" and, collectively, the "Funds"). Information presented in these financial statements pertains to the Star multi-manager Funds of the Trust, the financial statements of the other Funds of the Trust are presented in separate reports. The following table provides a list of the Funds included in this report. CDC Nvest Star Value Fund (the "Star Value Fund"), formerly Nvest Star Value Fund CDC Nvest Star Small Cap Fund (the "Star Small Cap Fund"), formerly Nvest Star Small Cap Fund CDC Nvest Star Advisers Fund (the "Star Advisers Fund"), formerly Nvest Star Advisers Fund CDC Nvest Star Worldwide Fund (the "Star Worldwide Fund"), formerly Nvest Star Worldwide Fund Each Fund offers Class A, Class B, and Class C shares. Star Value Fund and Star Advisers Fund also offer Class Y shares. Class A shares are sold with a maximum front end sales charge of 5.75%. Class B shares do not pay a front end sales charge, but pay a higher ongoing distribution fee than Class A shares for eight years (at which point they automatically convert to Class A shares), and are subject to a contingent deferred sales charge ("CDSC") if those shares are redeemed within six years of purchase (or five years if purchased before May 1, 1997). Class C shares are sold with a maximum front end sales charge of 1.00%, do not convert to any other class of shares and pay a higher ongoing distribution fee than Class A shares and may be subject to a CDSC of 1.00% if those shares are redeemed within one year. Class Y shares do not pay a front end sales charge, a CDSC or distribution fees. They are intended for institutional investors with a minimum initial investment of $1,000,000. Expenses of a Fund are borne pro rata by the holders of each class of shares, except that each class bears expenses unique to that class (including the Rule 12b-1 service and distribution fees and transfer agent fees applicable to such class), and votes as a class only with respect to its own Rule 12b-1 Plan. Shares of each class would receive their pro rata share of the net assets of a Fund, if the Fund were liquidated. The Trustees approve separate dividends from net investment income on each class of shares. 2. SIGNIFICANT ACCOUNTING POLICIES. The following is a summary of significant accounting policies consistently followed by each Fund in the preparation of its financial statements. The Funds' financial statements are prepared in accordance with accounting principles generally accepted in the United States of America that require the use of management estimates that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. A. SECURITY VALUATION. Equity securities are valued on the basis of valuations furnished to the Fund by a pricing service which has been authorized by the Trustees. The pricing service provides the last reported sale price for securities listed on an applicable securities exchange or on the NASDAQ national market system, or, if no sale was reported and in the case of over-the-counter securities not so listed, the last reported bid price. Short-term obligations with a remaining maturity of less than sixty days are stated at amortized cost, which approximates market value. All other securities and assets are valued at their fair value as determined in good faith by the Fund's investment adviser and subadviser, under the supervision of the Fund's Trustees. B. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME. Security transactions are accounted for on trade date. Dividend income is recorded on ex-dividend date and interest income is recorded on an accrual basis. Interest income is increased by the accretion of discount and decreased by the amortization of premium. In determining net gain or loss on securities sold, the cost of securities has been determined on an identified cost basis. C. FOREIGN CURRENCY TRANSLATION. The books and records of the Funds are maintained in U.S. dollars. The value of securities, currencies and other assets and liabilities denominated in currencies other than U.S. dollars are translated into U.S. dollars based upon foreign exchange rates prevailing at the end of the period. Purchases and sales of investment securities, income and expenses are translated on the respective dates of such transactions. Since the values of investment securities are presented at the foreign exchange rates prevailing at the end of the period, it is not practical to isolate that portion of the results of operations arising from changes in exchange rates from fluctuations arising from changes in market prices of the investment securities. Such changes are included with the net realized and unrealized gain or loss on investments. Net realized foreign exchange gains or losses arise from sales of foreign currency; currency gains or losses realized between the trade and settlement dates on securities transactions; the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities at the end of fiscal periods, resulting from changes in exchange rates. D. FORWARD FOREIGN CURRENCY CONTRACTS. Star Advisers Fund and Star Worldwide Fund may use foreign currency contracts to facilitate transactions in foreign securities and to manage the Funds' currency exposure. Contracts to buy generally are used to acquire exposure to foreign currencies, while contracts to sell are used to hedge the Fund's investments against currency fluctuation. Also, a contract to buy or sell can offset a previous contract. These contracts involve market risk in excess of the unrealized gain or loss reflected in the Fund's Statement of Assets and Liabilities. The U.S. dollar value of the currencies the Fund has committed to buy or sell (if any) is shown in the portfolio composition under the caption "Forward Currency Contracts Outstanding." These amounts represent the aggregate exposure to each currency the Fund has acquired or hedged through currency contracts outstanding at period end. All contracts are "marked-to-market" daily at the applicable exchange rates and any gains or losses are recorded for financial statement purposes as unrealized until settlement date. Risks may arise upon entering into these contracts from the potential inability of counterparties to meet the terms of their contracts and from unanticipated movements in the value of a foreign currency relative to the U.S. dollar. E. FEDERAL AND FOREIGN INCOME TAXES. The Trust treats each Fund as a separate entity for federal income tax purposes. Each Fund intends to meet the requirements of the Internal Revenue Code applicable to regulated investment companies, and to distribute to its shareholders substantially all of its net investment income and any net realized capital gains, at least annually. Accordingly, no provision for federal income tax has been made. A Fund may be subject to foreign taxes on income and gains on investments that are accrued based upon the Fund's understanding of the tax rules and regulations that exist in the countries in which the Fund invests. Foreign governments may also impose taxes or other payments on investments with respect to foreign securities, such taxes are accrued as applicable. F. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions are recorded on ex-dividend date. The timing and characterization of certain income and capital gains distributions are determined in accordance with federal tax regulations which may differ from accounting principles generally accepted in the United States of America. These differences are primarily due to differing treatments for book and tax purposes of items such as distributions from real estate investment trusts, net operating losses, paydowns on mortgage-backed securities, non-deductible expenses, foreign currency transactions and gains realized from passive foreign investment companies. Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications to capital accounts. G. REPURCHASE AGREEMENTS. Each Fund, through its custodian, receives delivery of the underlying securities collateralizing repurchase agreements. It is each Fund's policy that the market value of the collateral be at least equal to 100% of the repurchase price, including interest. Each Fund's subadvisers are responsible for determining that the value of the collateral is at all times at least equal to the repurchase price, including interest. Repurchase agreements could involve certain risks in the event of default or insolvency of the counterparty including possible delays or restrictions upon a Fund's ability to dispose of the underlying securities. H. ORGANIZATION EXPENSE. Costs incurred by Star Small Cap Fund in connection with the Fund's organization and initial registration, amounting to $41,674 in the aggregate, are being amortized over 60 months. 2. PURCHASES AND SALES OF SECURITIES. For the period ended June 30, 2001, purchases and sales of securities (excluding short-term investments) were as follows: Fund Purchases Sales ---- --------- ----- Star Value Fund $ 72,951,144 $ 86,938,751 Star Small Cap Fund 175,397,609 186,338,348 Star Advisers Fund 1,328,094,541 1,420,020,478 Star Worldwide Fund 124,707,873 148,713,568 3A. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES. CDC IXIS Asset Management Advisers, L.P. ("CDC IXIS Advisers") is the investment adviser to each of the Funds. Under the terms of the management agreements, each Fund pays a management fee at the following annual rates, calculated daily and payable monthly, based on each Fund's average daily net assets: Percentage of Average Daily Net Assets -------------------------------------------------------------- First Next Next Next Over Fund $200 million $300 million $500 million $1 billion $2 billion ---- ------------ ------------ ------------ ---------- ---------- Star Value Fund 0.750% 0.700% 0.650% 0.650% 0.650% Star Small Cap Fund 1.050% 1.050% 1.050% 1.050% 1.050% Star Advisers Fund 1.050% 1.050% 1.050% 1.000% 0.950% Star Worldwide Fund 1.050% 1.050% 1.050% 1.050% 1.050% For the period ended June 30, 2001, the management fees for each Fund were as follows: Management Percentage of Average Fund Fee Daily Net Assets ---- ---------- --------------------- Star Value Fund $ 780,627 0.75% Star Small Cap Fund 1,057,622 1.05% Star Advisers Fund 6,362,238 1.04% Star Worldwide Fund 1,134,370 1.05% CDC IXIS Advisers has entered into subadvisory agreements for each Fund. Payments to CDC IXIS Advisers are reduced by payments to the subadvisers. The subadvisers for each of the Funds at June 30, 2001, were as follows: Star Value Fund Loomis, Sayles & Company, L.P. ("Loomis Sayles") Harris Associates, L.P. ("Harris") Vaughan, Nelson, Scarborough & McCullough, L.P. ("VNSM") Westpeak Investment Advisors, L.P. ("Westpeak") Star Small Cap Fund Loomis, Sayles & Company, L.P. Harris Associates, L.P. Montgomery Asset Management, LLC RS Investment Management, L.P. Star Advisers Fund Loomis, Sayles & Company, L.P. Harris Associates, L.P. Kobrick Funds LLC ("Kobrick") Star Worldwide Fund Loomis, Sayles & Company, L.P. Harris Associates, L.P. Montgomery Asset Management, LLC CDC IXIS Advisers, Loomis Sayles, Harris, VNSM, Westpeak and Kobrick are subsidiaries of CDC IXIS Asset Management North America, L.P. Certain officers and directors of CDC IXIS Advisers are also officers or Trustees of the Funds. Loomis Sayles replaced Janus Capital Corporation as subadviser for one segment of Star Advisers Fund effective March 1, 2001. B. ACCOUNTING AND ADMINISTRATIVE EXPENSE. CDC IXIS Asset Management Services, Inc. ("CIS"), a wholly owned subsidiary of CDC IXIS Asset Management North America, L.P., performs certain accounting and administrative services for the Funds. Pursuant to an agreement among the Trusts, CDC Nvest Funds Trust II, CDC Nvest Funds Trust III, CDC Nvest Cash Management Trust, CDC Nvest Tax Exempt Money Market Trust, CDC Nvest Companies Trust I and CIS each Fund pays CIS its pro rata portion of a group fee for these services representing the higher amount based on the following calculations: (1) Percentage of Eligible Average Daily Net Assets First Next Over $5 billion $5 billion $10 billion ---------- ---------- ----------- 0.0350% 0.0325% 0.0300% or (2) Each Trust's pro rata portion, based on eligible assets, of the annual aggregate minimum fee of $2.5 million. For the period ended June 30, 2001, amounts paid to CIS for accounting and administrative expense were as follows: Accounting And Percentage of Average Fund Administrative Daily Net Assets ---- -------------- ---------------- Star Value Fund $ 45,256 0.043% Star Small Cap Fund 43,543 0.043% Star Advisers Fund 264,405 0.043% Star Worldwide Fund 46,723 0.043% C. TRANSFER AGENT FEES. CIS is the transfer and shareholder servicing agent for each Fund and has subcontracted with Boston Financial Data Services ("BFDS") to serve as sub-transfer agent. Each Fund pays CIS service fees for servicing shareholder accounts. Class A, B and C shareholders pay service fees monthly representing the higher amount based on the following calculations: (1) Annual aggregate fee determined by applying an annual fee rate (see schedule below) to the eligible average daily net assets. Eligible assets are the average daily net assets of all non-networked accounts in equity funds offered within the CDC Nvest Family of Funds for which there are exchange privileges among the Funds. First Next Over $5.7 billion $5 billion $10.7 billion ------------ ---------- ------------- 0.184% 0.180% 0.175% Each Class of shares is subject to an annual class minimum of $18,000. or (2) An allocated portion, based on eligible assets, of an annual aggregate minimum fee of $10.5 million. In addition, pursuant to other servicing agreements, Class A, B and C shareholders pay service fees to other firms that provide similar services for their own shareholder accounts. Class Y shareholders pay service fees monthly at an annual rate of 0.10% of their average daily net assets. CIS, BFDS and other firms are also reimbursed by the Funds for out-of-pocket expenses. For the period ended June 30, 2001, amounts paid to CIS as compensation for its services as transfer agent were as follows: Transfer Agent Percentage of Average Fund Fee Daily Net Assets - ---- -------------- --------------------- Star Value Fund $ 261,708 0.251% Star Small Cap Fund 240,943 0.239% Star Advisers Fund 1,462,148 0.239% Star Worldwide Fund 267,897 0.248% D. SERVICE AND DISTRIBUTION FEES. Pursuant to Rule 12b-1 under the 1940 Act, the Trusts have adopted a Service Plan relating to each Fund's Class A shares (the "Class A Plan") and Service and Distribution Plans relating to each Fund's Class B and Class C shares (the "Class B and Class C Plans"). Under the Class A Plan, the Fund pays CDC IXIS Asset Management Distributors, L.P. ("CDC IXIS Distributors"), the Fund's distributor (a wholly owned subsidiary of CDC IXIS Asset Management North America, L.P. ), a monthly service fee at the annual rate of 0.25% of the average daily net assets attributable to the Fund's Class A shares, as reimbursement for expenses incurred by CDC IXIS Distributors in providing personal services to investors in Class A shares and/or the maintenance of shareholder accounts. Under the Class B and Class C Plans, the Fund pays CDC IXIS Distributors a monthly service fee at the annual rate of 0.25% of the average daily net assets attributable to the Fund's Class B and Class C shares, as compensation for services provided and expenses incurred by CDC IXIS Distributors in providing personal services to investors in Class B and Class C shares and/or the maintenance of shareholder accounts. Also under the Class B and Class C Plans, the Fund pays CDC IXIS Distributors a monthly distribution fee at the annual rate of 0.75% of the average daily net assets attributable to the Fund's Class B and Class C shares, as compensation for services provided and expenses incurred by CDC IXIS Distributors in connection with the marketing or sale of Class B and Class C shares. For the period ended June 30, 2001, the Funds paid the following service and distribution fees: Service Fee Distribution Fee -------------------------------- ------------------- Fund Class A Class B Class C Class B Class C ---- ------- ------- ------- ------- ------- Star Value Fund $188,375 $ 57,527 $ 3,556 $ 172,580 $ 10,669 Star Small Cap Fund 100,910 118,896 32,019 356,687 96,056 Star Advisers Fund 584,215 729,166 134,053 2,187,498 402,157 Star Worldwide Fund 294,478 325,022 68,809 975,067 206,428 Prior to September 13, 1993 for Star Value Fund, to the extent that reimburseable expenses of CDC IXIS Distributors in prior years exceeded the maximum amount payable under the Plan for that year, such expenses could be carried forward for reimbursement in future years in which the Class A Plan remains in effect. Unreimbursed expenses carried forward at December 31, 2000 were $1,651,994. Commissions (including contingent deferred sales charges) on Fund shares paid to CDC IXIS Distributors by investors in shares of the Funds during the period ended June 30, 2001 were as follows: Fund ---- Star Value Fund $ 200,615 Star Small Cap Fund 281,549 Star Advisers Fund 1,113,545 Star Worldwide Fund 242,894 E. TRUSTEES FEES AND EXPENSES. The Funds do not pay any compensation directly to their officers or Trustees who are directors, officers or employees of CDC IXIS Advisers, CDC IXIS Distributors, CDC IXIS Asset Management North America, L.P., CIS or their affiliates. Each other Trustee receives a retainer fee at the annual rate of $40,000 and meeting attendance fees of $3,500 for each meeting of the Board of Trustees attended. Each committee member receives an additional retainer fee at the annual rate of $6,000 while each committee chairman receives a retainer fee (beyond the $6,000 fee) at the annual rate of $4,000. These fees are allocated to the various CDC Nvest Funds based on a formula that takes into account, among other factors, the relative net assets of each Fund. A deferred compensation plan (the "Plan") is available to the Trustees on a voluntary basis. Each participating Trustee will receive an amount equal to the value that such deferred compensation would have been had it been invested in the Funds or certain other CDC Nvest Funds on the normal payment date. Deferred amounts remain in the Funds until distributed in accordance with the Plan. For the Six Months Ended June 30, 2001 (Unaudited) 4. CAPITAL SHARES. Each Fund may issue an unlimited number of shares of beneficial interest. Transactions in capital shares were as follows:
STAR VALUE FUND ------------------- SIX MONTHS ENDED YEAR ENDED JUNE 30, 2001 DECEMBER 31, 2000 --------------------- -------------------- SHARES AMOUNT SHARES AMOUNT ------ ------ ------ ------ CLASS A - ------- Shares sold 1,245,489 $ 9,524,113 2,153,423 $ 15,491,891 Shares issued in connection with the reinvestment of: Dividends from net investment income -- -- 2,603 19,471 Distributions from net realized gain -- -- -- -- ---------- ------------ ----------- ------------ 1,245,489 9,524,113 2,156,026 15,511,362 Shares repurchased (2,686,092) (20,806,605) (10,954,362) (78,414,524) ---------- ------------ ----------- ------------ Net increase (decrease) (1,440,603) $(11,282,492) (8,798,336) $(62,903,162) ---------- ------------ ----------- ------------ CLASS B - ------- Shares sold 786,033 $ 5,722,023 1,069,518 $ 7,409,239 Shares issued in connection with the reinvestment of: Dividends from net investment income -- -- 754 5,367 Distributions from net realized gain -- -- -- -- ---------- ------------ ----------- ------------ 786,033 5,722,023 1,070,272 7,414,606 Shares repurchased (738,422) (5,403,304) (3,129,145) (21,369,738) ---------- ------------ ----------- ------------ Net increase (decrease) 47,611 $ 318,719 (2,058,873) $(13,955,132) ---------- ------------ ----------- ------------ CLASS C - ------- Shares sold 108,902 $ 797,184 77,518 $ 536,780 Shares issued in connection with the reinvestment of: Dividends from net investment income -- -- 42 302 Distributions from net realized gain -- -- -- -- ---------- ------------ ----------- ------------ 108,902 797,184 77,560 537,082 Shares repurchased (73,522) (547,570) (207,759) (1,430,702) ---------- ------------ ----------- ------------ Net increase (decrease) 35,380 $ 249,614 (130,199) $ (893,620) ---------- ------------ ----------- ------------ CLASS Y - ------- Shares sold 109,095 $ 845,769 237,628 $ 1,673,635 Shares issued in connection with the reinvestment of: Dividends from net investment income -- -- 146 1,092 Distributions from net realized gain -- -- -- -- ---------- ------------ ----------- ------------ 109,095 845,769 237,774 1,674,727 Shares repurchased (114,161) (889,786) (413,049) (2,975,951) ---------- ------------ ----------- ------------ Net increase (decrease) (5,066) $ (44,017) (175,275) $ (1,301,224) ---------- ------------ ----------- ------------ Increase (decrease) derived from capital shares transactions (1,362,678) $(10,758,176) (11,162,683) $(79,053,138) =========== ============ =========== ============
STAR SMALL CAP FUND STAR ADVISERS FUND ------------------- ------------------ SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED JUNE 30, 2001 DECEMBER 31, 2000 JUNE 30, 2001 DECEMBER 31, 2000 ---------------------- --------------------- --------------------- --------------------- SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ------ ------ ------ ------ ------ ------ ------ ------ 986,554 $ 14,617,799 3,632,351 $ 87,884,595 988,443 $ 16,368,655 5,848,496 $140,076,868 -- -- -- -- -- -- -- -- -- -- 1,034,597 19,061,808 11,559 185,177 4,048,851 79,578,946 ----------- ------------ ----------- ------------ ---------- ------------ --------- ------------ 986,554 14,617,799 4,666,948 106,946,403 1,000,002 16,553,832 9,897,347 219,655,814 (1,276,236) (18,748,187) (2,849,940) (67,561,240) (4,164,209) (68,321,712) (5,237,234) (120,790,269) ----------- ------------ ----------- ------------ ---------- ------------ --------- ------------ (289,682) $ (4,130,388) 1,817,008 $ 39,385,163 (3,164,207) $(51,767,880) 4,660,113 $ 98,865,545 ----------- ------------ ----------- ------------ ---------- ------------ --------- ------------ 435,599 $ 6,345,153 1,747,478 $ 40,700,957 1,494,236 $ 22,973,177 7,675,309 $170,659,148 -- -- -- -- -- -- -- -- -- -- 1,270,416 22,548,271 16,751 248,250 5,559,324 101,704,821 ----------- ------------ ----------- ------------ ---------- ------------ --------- ------------ 435,599 6,345,153 3,017,894 63,249,228 1,510,987 23,221,427 13,234,633 272,363,969 (868,617) (12,342,108) (730,484) (15,881,202) (4,576,130) (69,764,441) (5,485,076) (117,316,129) ----------- ------------ ----------- ------------ ---------- ------------ --------- ------------ (433,018) $ (5,996,955) 2,287,410 $ 47,368,026 (3,065,143) $(46,543,014) 7,749,557 $155,047,840 ----------- ------------ ----------- ------------ ---------- ------------ --------- ------------ 193,182 $ 2,918,461 705,111 $ 16,522,872 393,920 $ 6,156,378 1,818,026 $ 39,969,726 -- -- -- -- -- -- -- -- -- -- 290,382 5,172,529 2,733 40,524 962,632 17,673,230 ----------- ------------ ----------- ------------ ---------- ------------ --------- ------------ 193,182 2,918,461 995,493 21,695,401 396,653 6,196,902 2,780,658 57,642,956 (236,182) (3,488,886) (363,176) (8,339,247) (1,084,085) (16,638,086) (1,519,450) (30,956,803) ----------- ------------ ----------- ------------ ---------- ------------ --------- ------------ (43,000) $ (570,425) 632,317 $ 13,356,154 (687,432) $(10,441,184) 1,261,208 $ 26,686,153 ----------- ------------ ----------- ------------ ---------- ------------ --------- ------------ -- $ -- -- $ -- 254,569 $ 4,317,280 1,064,549 $ 26,464,395 -- -- -- -- -- -- -- -- -- -- -- -- 1,576 26,111 538,191 10,876,770 ----------- ------------ ----------- ------------ ---------- ------------ --------- ------------ -- -- -- -- 256,145 4,343,391 1,602,740 37,341,165 -- -- -- -- (609,989) (10,040,615) (549,044) (13,057,196) ----------- ------------ ----------- ------------ ---------- ------------ --------- ------------ -- $ -- -- $ -- (353,844) $ (5,697,224) 1,053,696 $ 24,283,969 ----------- ------------ ----------- ------------ ---------- ------------ --------- ------------ (765,700) $(10,697,768) 4,736,735 $100,109,343 (7,270,626) $(114,449,302) 14,724,574 $304,883,507 =========== ============ =========== ============ =========== ============ =========== ============
For the Six Months Ended June 30, 2001 (Unaudited)
STAR WORLDWIDE FUND ------------------- SIX MONTHS ENDED YEAR ENDED JUNE 30, 2001 DECEMBER 31, 2000 --------------------- -------------------- SHARES AMOUNT SHARES AMOUNT ------ ------ ------ ------ Class A - ------- Shares sold ................................................ 1,690,881 $ 23,031,628 11,169,165 $204,236,025 Shares issued in connection with the reinvestment of: Distributions from net realized gain ............... 34,052 461,751 1,248,452 18,555,461 ---------- ------------ ----------- ------------ 1,724,933 23,493,379 12,417,617 222,791,486 Shares repurchased ......................................... (2,460,989) (33,695,482) (11,660,151) (213,733,340) ---------- ------------ ----------- ------------ Net increase (decrease) .................................... (736,056) $(10,202,103) 757,466 $ 9,058,146 ---------- ------------ ----------- ------------ Class B - ------- Shares sold ................................................ 221,094 $ 2,892,913 1,047,575 $ 18,681,009 Shares issued in connection with the reinvestment of: Distributions from net realized gain ............... 41,367 532,388 1,444,753 20,488,058 ---------- ------------ ----------- ------------ 262,461 3,425,301 2,492,328 39,169,067 Shares repurchased ......................................... (1,075,103) (14,025,247) (1,497,656) (25,902,342) ---------- ------------ ----------- ------------ Net increase (decrease) .................................... (812,642) $(10,599,946) 994,672 $ 13,266,725 ---------- ------------ ----------- ------------ Class C - ------- Shares sold ................................................ 123,967 $ 1,677,431 640,499 $ 11,425,930 Shares issued in connection with the reinvestment of: Distributions from net realized gain ............... 8,589 110,631 317,323 4,514,587 ---------- ------------ ----------- ------------ 132,556 1,788,062 957,822 15,940,517 Shares repurchased ......................................... (367,302) (4,891,893) (704,804) (12,166,060) ---------- ------------ ----------- ------------ Net increase (decrease) .................................... (234,746) $ (3,103,831) 253,018 $ 3,774,457 ---------- ------------ ----------- ------------ Increase (decrease) derived from capital shares transactions (1,783,444) $(23,905,880) 2,005,156 $ 26,099,328 ========== ============ ========= ============
5. LINE OF CREDIT. Each Fund, along with certain other portfolios that comprise the CDC Nvest Funds Trusts participate in a $100,000,000 committed line of credit provided by Citibank, N.A. under a credit agreement (the "Agreement") dated March 2, 2001. Advances under the Agreement are taken primarily for temporary or emergency purposes. Borrowings under the Agreement bear interest at a rate tied to one of several short-term rates that may be selected by the lender from time to time. In addition, the Funds are charged a facility fee equal to 0.08% per annum on the unused portion of the line of credit. The annual cost of maintaining the line of credit and the facility fee is apportioned pro rata among the participating Funds. There were no borrowings as of or during the period ended June 30, 2001. 6. SECURITY LENDING. The Funds have each entered into an agreement with a third party to lend their securities. The loans are collateralized at all times with cash or securities with a market value at least equal to the market value of the securities on loan. The Funds receive fees for lending their securities. The market value of securities on loan to third parties and the value of collateral held by the Funds with respect to such loans at June 30, 2001, is as follows: Market Value of Value of Collateral Fund Securities on Loan Received ---- ------------------ ------------------- Star Value Fund $ -- $ -- Star Small Cap Fund 8,715,494 9,193,095 Star Advisers Fund 10,441,131 10,636,967 Star Worldwide Fund 9,482,859 10,572,736 7. EXPENSE REDUCTIONS. Each Fund has entered into agreements with certain brokers whereby the brokers will rebate a portion of brokerage commissions. Amounts earned by the Funds under such agreements are presented as a reduction of expenses in the statements of operations. For the period ended June 30, 2001, expenses were reduced under these agreements as follows: Fund ---- Star Value Fund $ 12,701 Star Small Cap Fund 8,719 Star Advisers Fund 155,673 Star Worldwide Fund 14,848 8. CONCENTRATION OF RISK. Star Worldwide Fund had the following geographic concentrations in excess of 10% of its total net assets at June 30, 2001: United Kingdom 13.1%, United States 32.2%. The Fund pursues its objectives by investing in foreign securities. There are certain risks involved in investing in foreign securities that are in addition to the usual risks inherent in domestic investments. These risks include those resulting from future adverse political or economic developments and the possible imposition of currency exchange blockages or other foreign governmental laws or restrictions. 9. SUBSEQUENT EVENT. For Star Advisers Fund, effective July 1, 2001, pursuant to an interim subadvisory agreement, Mercury Advisors replaced Kobrick Funds LLC, pending approval by the Board of Trustees of the new subadvisory agreement in August. - -------------------------------------------------------------------------------- ADDITIONAL INFORMATION - -------------------------------------------------------------------------------- SHAREHOLDER MEETING (UNAUDITED). At a special shareholders' meeting held on May 18, 2001, shareholders of the CDC Nvest Star Advisers Fund voted for the following proposal: Approval of a new subadvisory agreement relating to a segment of the CDC Nvest Star Advisers Fund among CDC Nvest Funds Trust I, on behalf of the Fund, CDC IXIS Asset Management Advisers, L.P. and Loomis, Sayles & Company, L.P. Voted For Voted Against Abstained Votes Total Votes -------------- ------------- --------------- -------------- 44,177,697.630 423,227.730 1,108,019.473 45,708,944.833 - -------------------------------------------------------------------------------- CDC NVEST FUNDS - -------------------------------------------------------------------------------- CDC Nvest AEW Real Estate Fund CDC Nvest Balanced Fund CDC Nvest Bond Income Fund CDC Nvest Bullseye Fund CDC Nvest Capital Growth Fund CDC Nvest Cash Management Trust -- Money Market Series* CDC Nvest Government Securities Fund CDC Nvest Growth Fund CDC Nvest Growth and Income Fund CDC Nvest High Income Fund CDC Nvest International Equity Fund CDC Nvest Large Cap Value Fund CDC Nvest Limited Term U.S. Government Fund CDC Nvest Massachusetts Tax Free Income Fund CDC Nvest Mid Cap Growth Fund CDC Nvest Municipal Income Fund CDC Nvest Select Fund CDC Nvest Short Term Corporate Income Fund CDC Nvest Star Advisers Fund CDC Nvest Star Small Cap Fund CDC Nvest Star Value Fund CDC Nvest Star Worldwide Fund CDC Nvest Strategic Income Fund CDC Nvest Tax Exempt Money Market Trust* Kobrick Capital Fund Kobrick Emerging Growth Fund Kobrick Growth Fund * Investments in money market funds are not insured or guaranteed by the FDIC or any government agency. - -------------------------------------------------------------------------------- INVESTMENT MANAGERS AEW Management and Advisors Montgomery Asset Management Capital Growth Management Reich & Tang Asset Management Harris Associates/Oakmark Funds RS Investment Management Jurika & Voyles Vaughan, Nelson, Scarborough & McCullough Loomis, Sayles & Company Westpeak Investment Advisors Mercury Advisors - -------------------------------------------------------------------------------- For current fund performance, ask your financial representative, access the CDC Nvest Funds' website at www.cdcnvestfunds.com, or call CDC Nvest Funds at 800-225-5478 for the current edition of FUND FACTS. This material is authorized for distribution to prospective investors when it is preceded or accompanied by the Fund's current prospectus, which contains information about sales charges, management and other items of interest. Investors are advised to read the prospectus carefully before investing. CDC IXIS Asset Management Distributors, L.P., and other firms selling shares of CDC Nvest Funds are members of the National Association of Securities Dealers, Inc. (NASD). As a service to investors, the NASD has asked that we inform you of the availability of a brochure on its Public Disclosure Program. The program provides access to information about securities firms and their representatives. Investors may obtain a copy by contacting the NASD at 800-289-9999 or by visiting their website at www.NASDR.com. [Logo] CDC NVEST FUNDS(SM) ----------------- CDC IXIS Asset Management Distributors PRESORT STANDARD U.S. POSTAGE PAID BROCKTON, MA PERMIT NO. 770 ----------------- - ------------------------ P.O. Box 8551 Boston, Massachusetts 02266-8551 - ------------------------ www.cdcnvestfunds.com TO THE HOUSEHOLD OF: DROWNING IN PAPER? Go to: www.cdcnvestfunds.com Click on: Sign up now for E-delivery* Get your next CDC Nvest Funds report online. * Not available for Corporate Retirement Plans and SIMPLE IRAs SF58-0601 -----END PRIVACY-ENHANCED MESSAGE-----