-----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, F5sV1JAMrwpO+52GaKP2/h7WOJxLyL6LHy1RIB4v3nruhZ+PxOfUkTVDIhjvHnpd HaVKp4PxxcVG6jJANh8sLA== 0000935069-02-000434.txt : 20020507 0000935069-02-000434.hdr.sgml : 20020507 ACCESSION NUMBER: 0000935069-02-000434 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020228 FILED AS OF DATE: 20020507 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RBB FUND INC CENTRAL INDEX KEY: 0000831114 FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-05518 FILM NUMBER: 02636574 BUSINESS ADDRESS: STREET 1: 400 BELLEVUE PKWY STE 100 CITY: WILMINGTON STATE: DE ZIP: 19809 BUSINESS PHONE: 3027911791 MAIL ADDRESS: STREET 1: 103 BELLEVUE PKWY STREET 2: SUITE 152 CITY: WILMINGTON STATE: DE ZIP: 19809 FORMER COMPANY: FORMER CONFORMED NAME: FUND INC /DE/ DATE OF NAME CHANGE: 19600201 N-30D 1 g02-0148bogle.txt BOGLE SEMI-ANNUAL REPORT 2-02 =================== BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND SEMI-ANNUAL REPORT FEBRUARY 28, 2002 =================== - -------------------------------------------------------------------------------- BOGLE SMALL CAP GROWTH FUND SEMI-ANNUAL REPORT - -------------------------------------------------------------------------------- Fellow Shareholder: This marks our fifth "official" report to shareholders since we launched the Fund in October of 1999. Looking back over the last two and a half years, it is striking what a variety of wild environments we have experienced. Our investment process has now been tested through a stock market bubble, a "correction" (euphemism for "bear market"), economic recession, and the unfortunate reality of terrorism and war. Today we are cautiously optimistic that the economy and market environment will continue to stabilize as the year progresses. At its last meeting, the Federal Reserve Board commented that "risks are now evenly balanced between economic weakness and price pressures," perhaps suggesting that interest rate cuts are over and rate increases may occur in the not-too-distant future. Corporate earnings appear to have turned a corner as indicated by a decrease in the number of downward revisions to earnings estimates. Having said that, a cloud of uncertainty surrounding corporate accounting and disclosure has emerged in the wake of the Enron scandal. While we would argue that the public's trust has been shaken, investors seem to have remained committed to the equity markets. However, in our opinion, it is now more important than ever that investors dig into financial statements in order to understand the true financial health of the companies in which they invest. INVESTMENT PERFORMANCE. Results of the Bogle Small Cap Growth Fund over the semi-annual period were modestly positive on an absolute basis, slightly ahead of the benchmark, and well ahead of other market indices, such as those presented in the chart below. For the six-month period ended February 28, 2002, the Bogle Small Cap Growth Fund gained +2.62% for the Investor shares and +2.66% for the Institutional shares. These returns were ahead of the unmanaged Russell 2000 index of smaller companies, which gained +0.86%. These results, along with longer-term results for the one-year, two-year, and since-inception periods, are presented below. [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC INVESTMENT PERFORMANCE - MULTIPERIODS Bogle Fund vs. Russell 2000 Benchmark and other Market Indices Russell 2000 Growth
Bogle Bogle Russell Investor Institutional Russell S&P 2000 Class Class 2000 500 NASDAQ Growth ----- ----- ---- --- ------ ------ Semi-Annual Period (9/1/01 - 2/28/02) 2.6% 2.7% 0.9% -1.7% -3.9% -4.6% One-Year Period (3/1/01 - 2/28/02) 8.9 9 0.3 -9.5 -19.3 -12.2 Two-Year Period Annualized (3/1/00 - 2/28/02) 7.9 8 -8.6 -8.9 -39.1 -27.9 Since Inception Annualized (10/1/99 - 2/28/02) 25.3 25.4 5.3 -4.7 -17.2 -6.6
MARKET ENVIRONMENT. Just as we have experienced varied markets over the last few years, it appears to us that three distinctly different environments in terms of market sentiment and investment results occurred in just the most recent six-month reporting period. First, in September 2001, the terrorist attacks pushed markets to new lows (bottoming on September 21st), in a classic flight to quality. Sentiment then shifted sharply in the fourth quarter and markets rebounded strongly on the assumption that we had finally seen a bottom. Finally, in January of this year, when companies began to announce fourth quarter 2001 earnings and discuss prospects for the future, in our view it became clear that equity returns had gotten a little bit ahead of themselves. More important, the market was hit with increased skepticism about corporate accounting practices and disclosure. In January and February of 2002, as investors focused on questions about earnings "management" and the truth behind the reported numbers, stocks gave back a significant portion of their fourth quarter gains. The end result was that, over the September 2001-February 2002 period, markets were generally flat, with the Russell 2000 Index up +0.9%, the S&P 500 Index down - -1.7%, and the NASDAQ Index down -3.9% (these numbers are presented on the previous page). It is worth noting that since the Fund's inception (October of 1999), returns to small cap stocks generally have remained positive despite a severe market correction and economic recession. In our opinion, attractive relative valuation levels have supported small cap stock prices, particularly small value stocks. Small cap value stocks have advanced +17.5% on an annualized basis over the last two years, compared to -27.9% for small cap growth stocks. PERFORMANCE ATTRIBUTION. The Fund's relative returns were strong in September of last year and then again in January and February of this year. These three months provided the Fund's +1.8% performance advantage relative to benchmark. In September, the Fund benefited from a slightly defensive position and underweighting of speculative stocks. In the fourth quarter, expectations for future corporate earnings seemed to reach a turning point, which we believe rendered any focus on historical earnings and quality trends ineffective. Consequently, our investment models struggled throughout the fourth quarter. Fund performance rebounded nicely, however, in January and February. Our financial quality model, which helps us to identify those companies that have aggressive versus conservative accounting practices, was particularly effective in these two months. In terms of stock specific performance, many of our biggest winners over the six-month reporting period were in the consumer-oriented and technology sectors. Profitable investments were made in stocks such as Alliance Gaming, a maker of gambling equipment; CarMax, a specialty retailer of used cars; and Avant Corp., a design software company. INVESTMENT POSITIONING. We manage the Fund in an attempt to "look and feel" very much like the Russell 2000 benchmark in terms of sector weightings and other fundamental characteristics. This is why we expect most of our benchmark-relative return to come from stock selection. Fundamental characteristics are presented in the chart on the next page. Given the current market environment and the shakeout among growth stocks, our investment signals are currently favoring less expensive stocks than they normally do. We believe that there currently exists an investment opportunity to buy growth stocks cheaply, and it has led 2 to a slightly less growth-oriented portfolio (based on the fundamental statistics) than would normally be the case. This is a temporary phenomenon that we expect will reverse as the economy stabilizes. PROGRESS AT BOGLE INVESTMENT MANAGEMENT. By the end of February 2002, Fund assets had reached $143 million and on March 7, 2002 we officially closed the Fund to new investors. As you know, we believe that closing the Fund at this level will improve our ability to deliver the best returns we can, and will also leave enough room to allow existing shareholders to make additional investments with us for the foreseeable future. We thank you again for your continued support and confidence in our investment team. As a reminder, information about the mutual fund, including historical NAVs, sector allocation, fundamental characteristics, and top ten holdings, can be viewed on our website, WWW.BOGLEFUNDS.COM. The NAVs are updated daily while the other Fund information is updated quarterly. Please feel free to call on us at any time with questions you may have about the portfolio or anything else that might be on your mind. Respectfully, Bogle Investment Management, L.P. Management Office: 781-283-5000 Shareholder Services Toll Free: 1-877-BOGLEIM (264-5346) FUNDAMENTAL CHARACTERISTICS FEBRUARY 28, 2002 RUSSELL MEDIAN BOGLX 2000 - -------- ------- -------- Estimated Long-Term Earnings Growth Rate 115.0% 15.3% Median Market Cap (mil.) $817mm $778mm Price/Historical Earnings 23.0x 21.9x Price/Forward Earnings 17.4x 17.3x Price/Sales 1.0x 1.6x - -------------------------------------------------------------------------------- PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE PERFORMANCE. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE, SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN ORIGINAL COST. THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS. THE RUSSELL 2000 IS AN INDEX OF STOCKS 1001 THROUGH 3000 IN THE RUSSELL 3000 INDEX AS RANKED BY TOTAL MARKET CAPITALIZATION. A DIRECT INVESTMENT IN THE INDEX IS NOT POSSIBLE. INVESTING IN SMALL COMPANIES CAN INVOLVE MORE VOLATILITY, LESS LIQUIDITY, AND LESS PUBLICLY AVAILABLE INFORMATION THAN INVESTING IN LARGE COMPANIES. 3 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND PORTFOLIO OF INVESTMENTS FEBRUARY 28, 2002 (UNAUDITED) NUMBER OF SHARES VALUE --------- ------------ COMMON STOCKS--96.7% BASIC INDUSTRY--4.8% Airgas, Inc.* ............. 57,700 $ 1,015,520 Brady Corp., Class A ...... 23,000 851,000 Chesapeake Corp. .......... 34,600 963,610 Crompton Corp. ............ 69,700 692,818 Louisiana-Pacific Corp. ... 112,000 1,130,080 PolyOne Corp. ............. 83,800 838,000 Rock-Tenn Co., Class A .... 25,800 502,584 Schulman (A.), Inc. ....... 47,800 873,784 ------------ 6,867,396 ------------ CONSUMER CYCLICAL--14.6% Action Performance Companies, Inc.* ........ 21,200 861,780 Activision, Inc.* ......... 32,800 936,768 Alliance Gaming Corp.* .... 18,700 604,758 American Woodmark Corp. ................... 8,900 587,400 Atlantic Coast Airlines Holdings, Inc.* ......... 28,500 779,190 Aztar Corp.* .............. 38,600 885,870 Bob Evans Farms, Inc. ..... 39,200 1,087,016 Circuit City Stores, Inc. - Carmax Group* .... 24,200 647,108 Cooper Tire & Rubber Co. .............. 57,100 1,091,752 Energizer Holdings, Inc.* ................... 34,400 750,952 Finish Line, Inc., (The), Class A* ................ 47,800 774,838 Fred's, Inc. .............. 27,200 851,088 Griffon Corp.* ............ 63,200 1,191,320 Group 1 Automotive, Inc.* ................... 26,900 1,009,557 Hollywood Entertainment Corp.* .................. 58,600 832,120 Lee Enterprises, Inc. ..... 7,700 276,045 Lone Star Steakhouse & Saloon, Inc. .......... 30,800 607,376 Multimedia Games, Inc.* ................... 9,400 296,758 PC Connection, Inc.* ...... 46,000 397,900 NUMBER OF SHARES VALUE --------- ------------ CONSUMER CYCLICAL--(CONTINUED) Pep Boys-Manny, Moe & Jack, (The) ............. 40,900 $ 573,418 Priceline.Com, Inc. ....... 18,000 72,000 Ryan's Family Steak Houses, Inc.* ........... 37,600 845,624 Ryland Group, Inc., (The) ................... 5,900 527,047 Saks, Inc. ................ 61,800 710,700 Sola International, Inc. .................... 43,400 488,684 Sonic Automotive, Inc., Class A ................. 35,300 927,684 Sports Authority, Inc., (The)* .................. 81,500 733,500 West Marine, Inc. ......... 27,000 572,400 Winnebago Industries, Inc. .................... 17,800 846,212 ------------ 20,766,865 ------------ CONSUMER GROWTH--18.6% aaiPharma, Inc.* .......... 18,000 508,680 Bio-Rad Laboratories, Inc., Class A* .......... 17,600 1,151,920 BioReliance Corp.* ........ 39,100 815,235 Coventry Health Care, Inc.* ................... 25,100 578,806 DaVita, Inc.* ............. 19,600 438,060 Dial Corp., (The) ......... 57,100 959,280 Digene Corp.* ............. 19,300 610,459 DIMON, Inc. ............... 38,700 288,315 Dole Food Co., Inc. ....... 26,300 776,639 Dynacare, Inc.* ........... 47,700 691,650 Edwards Lifesciences Corp.* .................. 30,900 881,577 Endo Pharmaceuticals Holdings, Inc.* ......... 66,600 699,300 First Consulting Group, Inc.* ................... 48,200 436,692 First Horizon Pharmaceutical Corp.* .................. 18,800 389,912 Fresh del Monte Produce, Inc. ........... 65,700 1,146,465 The accompanying notes are an integral part of the financial statements. 4 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND PORTFOLIO OF INVESTMENTS (CONTINUED) FEBRUARY 28, 2002 (UNAUDITED) NUMBER OF SHARES VALUE --------- ------------ CONSUMER GROWTH--(CONTINUED) Genencor International, Inc.* ................... 69,500 $ 708,900 Gentiva Health Services, Inc.* ................... 28,600 684,970 Great Atlantic & Pacific Tea Co., Inc., (The)* ... 25,400 688,340 Health Net, Inc.* ......... 33,200 804,768 Henry Schein, Inc.* ....... 14,000 602,140 Horizon Organic Holding Corp.* .................. 23,900 371,645 Interstate Bakeries Corp. ................... 36,500 920,895 ITT Educational Services, Inc.* ................... 12,800 563,840 Medical Action Industries, Inc.* ....... 45,500 480,025 Merit Medical Systems, Inc.* ................... 64,275 1,010,403 Nash-Finch Co. ............ 25,200 721,224 Panamerican Beverages, Inc., Class A ........... 48,800 792,024 PSS World Medical, Inc.* ................... 97,400 871,730 Ralcorp Holdings, Inc.* ... 37,700 987,740 Respironics, Inc.* ........ 18,900 555,660 Select Medical Corp.* ..... 21,400 270,924 SICOR, Inc. ............... 39,800 636,800 Sierra Health Services, Inc.* ................... 71,700 781,530 Standard Commercial Corp.* .................. 35,300 660,110 Steris Corp.* ............. 44,500 913,140 Strategic Diagnostics, Inc.* ................... 43,100 230,546 U.S. Oncology, Inc.* ...... 91,300 739,530 Unilab Corp.* ............. 20,700 437,805 Varian Medical Systems, Inc.* ................... 19,000 767,220 ------------ 26,574,899 ------------ ENERGY--1.9% Frontier Oil Corp. ........ 41,800 764,940 Peabody Energy Corp. ...... 27,200 684,080 NUMBER OF SHARES VALUE --------- ------------ ENERGY--(CONTINUED) Plains Resources, Inc.* ... 28,300 $ 636,750 Western Gas Resources, Inc. .................... 18,500 593,110 ------------ 2,678,880 ------------ FINANCIAL--16.3% BancorpSouth, Inc. ........ 60,400 1,117,400 BankAtlantic Bancorp, Inc., Class A ........... 101,500 1,160,145 BankUnited Financial Corp., Class A* ......... 73,900 1,126,975 Bok Financial Corp.* ...... 35,800 1,142,378 Citizens Banking Corp. .... 17,100 543,780 Commerce Group, Inc., (The) ................... 30,500 1,134,295 Commercial Federal Corp. ................... 49,300 1,232,500 Dime Community Bancshares, Inc. ........ 26,250 769,125 Federal Agricultural Mortgage Corp., Class C* ................ 15,500 677,970 First Citizens BancShares, Inc., Class A ................. 9,200 920,000 First Commonwealth Financial Corp. ......... 93,500 1,150,050 Flagstar Bancorp, Inc. .... 47,400 1,118,640 H & R Block, Inc. ......... 14,300 721,435 Hilb, Rogal & Hamilton Co. ..................... 29,500 1,048,725 Interactive Data Corp.* ... 34,100 554,125 Phoenix Companies, Inc., (The)* .................. 56,700 1,014,930 Provident Bankshares Corp. ................... 17,400 420,384 R & G Financial Corp., Class B ................. 44,700 938,700 S1 Corp.* ................. 40,500 610,335 Scottish Annuity & Life Holdings, Ltd. .......... 50,200 798,180 Seacoast Financial Services Corp. .......... 36,600 693,936 The accompanying notes are an integral part of the financial statements. 5 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND PORTFOLIO OF INVESTMENTS (CONTINUED) FEBRUARY 28, 2002 (UNAUDITED) NUMBER OF SHARES VALUE --------- ------------ FINANCIAL--(CONTINUED) StanCorp Financial Group, Inc. ............. 19,800 $ 1,066,230 Staten Island Bancorp, Inc. .................... 61,600 1,142,680 Susquehanna Bancshares, Inc. .................... 43,900 1,007,944 Trustmark Corp. ........... 43,600 1,064,712 ------------ 23,175,574 ------------ INDUSTRIAL--19.2% Actuant Corp., Class A* ... 24,300 960,093 Aftermarket Technology Corp.* .................. 45,600 713,640 Airborne, Inc. ............ 68,200 1,233,056 Albany International Corp., Class A* ......... 41,100 1,106,412 Apogee Enterprises, Inc. .................... 74,200 834,750 ArvinMeritor, Inc. ........ 39,300 1,107,867 Casella Waste Systems, Inc., Class A* .......... 58,100 729,155 Commercial Metals Co. ..... 28,200 1,027,890 Deluxe Corp.* ............. 16,800 796,320 EMCOR Group, Inc.* ........ 15,100 797,129 General Cable Corp. ....... 65,000 767,000 Global Imaging Systems, Inc.* ................... 43,300 674,181 HON INDUSTRIES, Inc. ...... 13,400 363,274 Hubbell, Inc., Class B .... 23,900 764,561 IKON Office Solutions, Inc. .................... 85,800 1,149,720 John H. Harland Co. ....... 31,800 852,876 Kelly Services, Inc., Class A ................. 22,600 571,102 Knight Transportation, Inc.* ................... 32,500 669,500 Lear Corp.* ............... 22,100 987,870 Mcdermott International, Inc.* ................... 53,700 768,984 Moore Corp., Ltd.* ........ 95,900 1,078,875 NUMBER OF SHARES VALUE --------- ------------ INDUSTRIAL--(CONTINUED) Msc Industrial Direct Co., Inc., Class A* .......... 30,200 $ 636,918 Office Depot, Inc.* ....... 47,800 908,678 Pactiv Corp.* ............. 44,800 852,544 Pittston Brink's Group .... 47,800 1,110,394 Right Management Consultants, Inc.* ...... 39,400 986,576 Rpm, Inc. ................. 51,900 866,730 Spherion Corp.* ........... 56,000 520,800 Tech Data Corp.* .......... 21,700 993,860 Tractor Supply Co.* ....... 17,100 740,601 Wallace Computer Services, Inc. .......... 54,500 1,018,060 WD-40 Co. ................. 30,200 842,882 ------------ 27,432,298 ------------ INTERNET/TELECOMMUNICATIONS--1.7% Expedia, Inc., Class A* ... 12,600 704,340 Harmonic, Inc.* ........... 55,600 591,584 Inrange Technologies Corp., Class B* ......... 38,100 350,139 Overture Services, Inc.* ................... 25,900 783,734 ------------ 2,429,797 ------------ TECHNOLOGY--19.0% 3Com Corp.* ............... 115,300 553,440 Adaptec, Inc.* ............ 30,200 344,280 Andrew Corp.* ............. 25,800 433,698 Arris Group, Inc.* ........ 58,100 492,688 ATI Technologies, Inc.* ... 65,500 778,795 Avid Technology, Inc.* .... 54,400 724,064 Caci International, Inc., Class A* ................ 15,500 526,225 Chordiant Software, Inc.* ................... 93,300 494,490 Cognos, Inc.* ............. 30,600 779,994 Concord Communications, Inc.* ................... 39,100 737,035 Creative Tecchnology Ltd. .................... 65,200 752,408 The accompanying notes are an integral part of the financial statements. 6 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND PORTFOLIO OF INVESTMENTS (CONCLUDED) FEBRUARY 28, 2002 (UNAUDITED) NUMBER OF SHARES VALUE --------- ------------ TECHNOLOGY--(CONTINUED) Documentum, Inc.* ............ 24,400 $ 435,052 Engineered Support Systems, Inc. .............. 11,500 460,000 Entrust, Inc.* ............... 67,400 324,868 Ess Technology, Inc.* ........ 49,600 1,033,664 Filenet Corp.* ............... 45,100 739,189 FSI International, Inc.* ..... 63,700 612,794 General Communication, Inc., Class A* ............. 60,100 540,299 Hologic, Inc.* ............... 65,000 830,700 Hyperion Solutions Corp.* ..................... 39,400 849,464 Inter-Tel, Inc. .............. 38,800 640,200 J. D. Edwards & Co.* ......... 68,200 999,130 Kana Software, Inc.* ......... 51,900 629,028 Kronos, Inc.* ................ 10,650 476,800 McAfee.com Corp., Class A* ................... 46,000 544,180 Mercator Software, Inc.* ...................... 62,200 306,646 MICROS Systems, Inc.* ........ 24,900 560,997 MRO Software, Inc.* .......... 43,600 813,140 MTS Systems Corp. ............ 44,000 459,800 Network Associates, Inc.* ...................... 21,100 500,492 Oak Technology, Inc.* ........ 44,900 630,845 OpticNet, Inc.*(1) ........... 3,100 0 OSI Systems, Inc.* ........... 31,000 651,016 Pinnacle Systems, Inc.* ...... 126,300 1,007,874 Rainbow Technologies, Inc.* ...................... 65,300 493,015 Siliconix, Inc.* ............. 31,700 836,880 Storage Technology Corp.* ..................... 41,200 791,040 Sykes Enterprises, Inc.* ..... 58,500 485,550 Systems & Computer Technology Corp.* .......... 70,700 905,667 Terayon Communications Systems, Inc.* ............. 78,100 461,571 Tripos, Inc.* ................ 1,000 21,800 Verisity Ltd.* ............... 54,200 869,368 Vimpelcom - ADR .............. 18,900 559,251 NUMBER OF SHARES VALUE --------- ------------ TECHNOLOGY--(CONTINUED) Websense, Inc.* .............. 15,200 $ 340,632 Zarlink Semiconductor, Inc.* ...................... 68,200 625,394 ------------ 27,053,463 ------------ UTILITY--0.6% Enersis S.A. - ADR* .......... 97,000 901,130 ------------ TOTAL COMMON STOCKS (Cost $129,704,153) ............................ 137,880,302 ------------ RIGHTS--0.1% BASIC INDUSTRY--0.1% Imperial Chemicals Industries plc, $11.42 expires 3/14/02 - ADR ...... 12,536 67,320 ------------ TOTAL RIGHTS (Cost $81,984) ................................... 67,320 ------------ PAR (000) VALUE --------- ------------ SHORT TERM INVESTMENTS--5.4% Wilmington Prime Money Market Portfolio 1.49% 03/01/02 ........................... $7,759 7,759,483 ------------ TOTAL SHORT TERM INVESTMENTS (Cost $7,759,483) ................................ 7,759,483 ------------ TOTAL INVESTMENTS--102.2% (Cost $137,545,620) .............................. 145,707,105 ------------ LIABILITIES IN EXCESS OF OTHER ASSETS--(2.2)% .......................... (3,164,104) ------------ NET ASSETS--100.0% $142,543,001 ============ - ------------- * Non-income producing. ADR -- American Depository Receipt. (1) This security was received as a distribution from BEI Technologies, Inc. and is currently not trading. The accompanying notes are an integral part of the financial statements. 7 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND STATEMENT OF ASSETS AND LIABILITIES FEBRUARY 28, 2002 (UNAUDITED) ASSETS Investments, at value (cost - $137,545,620) ........ $ 145,707,105 Receivable for Investments Sold .................... 2,024,582 Receivable for Fund shares sold .................... 2,606,094 Dividends and interest receivable .................. 80,027 Prepaid expenses and other assets .................. 13,199 ------------- Total assets ..................................... 150,431,007 ------------- LIABILITIES Payable for investments purchased .................. 6,965,728 Accrued expenses and other liabilities ............. 40,642 Payable for fund shares redeemed ................... 881,636 ------------- Total liabilities ................................ 7,888,006 ------------- NET ASSETS Capital stock, $0.001 par value .................... 7,122 Additional paid-in capital ......................... 135,324,004 Accumulated net realized loss from investments ..... (949,610) Net unrealized appreciation on investmentS ......... 8,161,485 ------------- Net assets ....................................... $ 142,543,001 ============= INSTITUTIONAL CLASS Net assets ......................................... $ 55,657,878 ------------- Shares outstanding ................................. 2,777,695 ------------- Net asset value, offering and redemption price per share .................................. $ 20.04 ============= INVESTOR CLASS Net assets ......................................... $ 86,885,123 ------------- Shares outstanding ................................. 4,343,908 ------------- Net asset value, offering and redemption price per share ........................................ $ 20.00 ============= The accompanying notes are an integral part of the financial statements. 8 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND STATEMENT OF OPERATIONS (UNAUDITED) FOR THE SIX MONTHS ENDED FEBRUARY 28, 2002 ----------------- INVESTMENT INCOME Dividends ............................................. $ 259,980 Interest .............................................. 44,191 ----------- Total investment income ............................. 304,171 ----------- EXPENSES Advisory fees ......................................... 513,035 Administration fees ................................... 73,768 Transfer agent fees and expenses ...................... 53,692 Shareholder servicing fees ............................ 31,656 Printing fees ......................................... 11,662 Federal and state registration fees ................... 9,767 Custodian fees and expenses ........................... 15,391 Audit and Legal fees .................................. 10,553 Administrative service fees ........................... 76,955 Trustee fees and expenses ............................. 2,951 Insurance and other expenses .......................... 1,907 ----------- Total expenses before waivers and reimbursements .... 801,337 Less: waivers and reimbursements .................... (128,485) ----------- Net expenses after waivers and reimbursements ....... 672,852 ----------- Net investment loss ................................... (368,681) ----------- NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS Net realized gain from investments .................... 2,186,140 Net change in unrealized appreciation on investments .. 1,163,918 ----------- Net realized and unrealized gain from investments ..... 3,350,058 ----------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ..... $ 2,981,377 =========== The accompanying notes are an integral part of the financial statements. 9 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS FOR THE ENDED YEAR ENDED FEBRUARY 28, 2002 AUGUST 31, 2001 ----------------- --------------- (UNAUDITED) INCREASE/(DECREASE) IN NET ASSETS FROM OPERATIONS Net investment loss ..................................... $ (368,681) $ (234,790) Net realized gain (loss) from investments ............... 2,186,140 (2,525,980) Net change in unrealized appreciation on investments .... 1,163,918 2,377,604 ------------- ------------ Net increase (decrease) in net assets resulting from operations ....................................... 2,981,377 (383,166) ------------- ------------ LESS DISTRIBUTIONS TO SHAREHOLDERS FROM: Net realized capital gains Institutional shares ......... -- (370,538) Net realized capital gains Investor shares .............. -- (805,459) ------------- ------------ Total dividends and distributions to shareholders ..... -- (1,175,997) ------------- ------------ INCREASE IN NET ASSETS DERIVED FROM CAPITAL SHARE TRANSACTIONS (NOTE 4) ..................... 48,780,799 67,389,714 ------------- ------------ Total increase in net assets ............................ 51,762,176 65,830,551 ============= ============ NET ASSETS Beginning of period ..................................... 90,780,825 24,950,274 ------------- ------------ End of period ........................................... $ 142,543,001 $ 90,780,825 ============= ============
The accompanying notes are an integral part of the financial statements. 10 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- Contained below is per share operating performance data for each class of shares outstanding, total investment return, ratios to average net assets and other supplemental data for the respective periods. This information has been derived from information provided in the financial statements. - --------------------------------------------------------------------------------
INSTITUTIONAL CLASS -------------------------------------------------------------- FOR THE FOR THE PERIOD SIX MONTHS FOR THE OCTOBER 1, 1999* ENDED YEAR ENDED THROUGH FEBRUARY 28, 2002 AUGUST 31, 2001 AUGUST 31, 2000 ------------------- --------------- ---------------- (UNAUDITED) PER SHARE OPERATING PERFORMANCE Net asset value, beginning of period ............. $ 19.52 $ 20.91 $ 12.00 ---------- ---------- --------- Net investment loss(1)** ......................... (0.06) (0.07) (0.05) Net realized and unrealized gain (loss) on investments(2)** ........................... 0.58 (0.66) 8.96 ---------- ---------- --------- Net increase (decrease) in net assets resulting from operations ............................... 0.52 (0.73) 8.91 ---------- ---------- --------- Distributions to shareholders from: Net realized capital gains ....................... 0.00 (0.66) 0.00 ---------- ---------- --------- Net asset value, end of period ................... $ 20.04 $ 19.52 $ 20.91 ========== ========== ========= Total investment return(3) ....................... 2.66% (3.39)% 74.25% ========== ========== ========= RATIOS/SUPPLEMENTAL DATA Net assets, end of period (000's omitted) ........ $ 55,658 $ 36,526 $ 5,593 Ratio of expenses to average net assets(1)(4) .... 1.25% 1.25% 1.25% Ratio of expenses to average net assets without waivers and expense reimbursements(4) ..................... 1.50% 1.68% 3.91% Ratio of net investment loss to average net assets(1)(4) .............................. (0.66)% (0.36)% (0.58)% Portfolio turnover rate .......................... 85.75% 125.99% 94.31% - ----------------- * Commencement of operations. ** Calculated based on average shares method. (1) Reflects waivers and reimbursements. (2) The amounts shown for each share outstanding throughout the respective period are not in accordance with the changes in the aggregate gains and losses on investments during the respective period because of the timing of sales and repurchases of Fund shares in relation to fluctuating net asset values during the respective period. (3) Total investment return is calculated assuming a purchase of shares on the first day and a sale of shares on the last day of each period reported and includes reinvestments of dividends and distributions, if any. Total investment returns are not annualized. (4) Annualized.
The accompanying notes are an integral part of the financial statements. 11 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- Contained below is per share operating performance data for each class of shares outstanding, total investment return, ratios to average net assets and other supplemental data for the respective periods. This information has been derived from information provided in the financial statements. - --------------------------------------------------------------------------------
INVESTOR CLASS -------------------------------------------------------------- FOR THE FOR THE PERIOD SIX MONTHS FOR THE OCTOBER 1, 1999* ENDED YEAR ENDED THROUGH FEBRUARY 28, 2002 AUGUST 31, 2001 AUGUST 31, 2000 ------------------- --------------- ---------------- (UNAUDITED) PER SHARE OPERATING PERFORMANCE Net asset value, beginning of period .......... $ 19.49 $ 20.89 $ 12.00 ------- ------- -------- Net investment loss(1)** ...................... (0.07) (0.09) (0.06) Net realized and unrealized gain (loss) on investments(2)** ........................ 0.58 (0.65) 8.95 ------- ------- ------- Net increase (decrease) in net assets resulting from operations ............................ 0.51 (0.74) 8.89 ------- ------- ------- Distributions to shareholders from: Net realized capital gains .................... 0.00 (0.66) 0.00 ------- ------- ------- Net asset value, end of period ................ $ 20.00 $ 19.49 $ 20.89 ======= ======= ======= Total investment return(3) .................... 2.62% (3.45)% 74.08% ======= ======= ======= RATIOS/SUPPLEMENTAL DATA Net assets, end of period (000's omitted) ..... $86,885 $54,255 $19,358 Ratio of expenses to average net assets(1)(4) . 1.35% 1.35% 1.35% Ratio of expenses to average net assets without waivers and expense reimbursements(4) .................. 1.60% 1.78% 4.01% Ratio of net investment loss to average net assets(1)(4) ........................... (0.76)% (0.46)% (0.68)% Portfolio turnover rate ....................... 85.75% 125.99% 94.31% - ----------------- * Commencement of operations. ** Calculated based on average shares method. (1) Reflects waivers and reimbursements. (2) The amounts shown for each share outstanding throughout the respective period are not in accordance with the changes in the aggregate gains and losses on investments during the respective period because of the timing of sales and repurchases of Fund shares in relation to fluctuating net asset values during the respective period. (3) Total investment return is calculated assuming a purchase of shares on the first day and a sale of shares on the last day of each period reported and includes reinvestments of dividends and distributions, if any. Total investment returns are not annualized. (4) Annualized.
The accompanying notes are an integral part of the financial statements. 12 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND NOTES TO FINANCIAL STATEMENTS 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES The RBB Fund, Inc. ("RBB") was incorporated under the laws of the State of Maryland on February 29, 1988 and is registered under the Investment Company Act of 1940, as amended, (the "Investment Company Act") as an open-end management investment company. RBB is a "series fund", which is a mutual fund divided into separate portfolios. The portfolio is treated as a separate entity for certain matters under the Investment Company Act, and for other purposes, and a shareholder of one portfolio is not deemed to be a shareholder of any other portfolio. Currently RBB has thirteen investment portfolios, including the Bogle Investment Management Small Cap Growth Fund (the "Fund"), which commenced investment operations on October 1, 1999. As of the date hereof, the Fund offers two classes of shares, Institutional Class and Investor Class. RBB has authorized capital of thirty billion shares of common stock of which 20.97 billion are currently classified into ninety-four classes. Each class represents an interest in one of thirteen investment portfolios of RBB. The classes have been grouped into fourteen separate "families," nine of which have begun investment operations including the Bogle Investment Management Small Cap Growth Fund. PORTFOLIO VALUATION -- The net asset value of the Fund is determined as of 4:00 p.m. eastern time on each business day. The Fund's securities are valued at the last reported sales price on the national securities exchange or national securities market on which such shares are primarily traded. If no sales are reported, as in the case of some securities traded over-the-counter, portfolio securities are valued at the mean between the last reported bid and ask prices. Securities for which market quotations are not readily available are valued at fair market value as determined in good faith by the Adviser according to procedures adopted by RBB's Board of Directors. With the approval of RBB's Board of Directors, the Fund may use a pricing service, bank or broker-dealer experienced in such matters to value its securities. Short-term obligations with maturities of 60 days or less are valued at amortized cost that approximates market value. Expenses and fees, including investment advisory and administration fees are accrued daily and taken into account for the purpose of determining the net asset value of the Fund. USE OF ESTIMATES -- The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilites at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. REPURCHASE AGREEMENTS -- The Fund has agreed to purchase securities from financial institutions subject to the seller's agreement to repurchase them at an agreed-upon time and price ("repurchase agreements"). The financial institutions with whom the Fund enters into repurchase agreements are banks and broker/dealers that Bogle Investment Management, L.P. (the "Adviser") considers creditworthy. The seller under a repurchase agreement will be required to maintain the value of the securities as collateral, subject to the agreement at not less than the repurchase price plus accrued interest. The Adviser marks to market daily the value of the 13 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) collateral, and, if necessary, requires the seller to maintain additional securities, to ensure that the value is not less than the repurchase price. Default by or bankruptcy of the seller would, however, expose the Fund to possible loss because of adverse market action or delays in connection with the disposition of the underlying securties. For the six months ended February 28, 2002, the Fund did not enter into any repurchase agreements. INVESTMENT TRANSACTIONS AND INVESTMENT INCOME -- Securities are accounted for on the trade date. The cost of investments sold is determined by use of the specific identification method for both financial reporting and income tax purposes in determining realized gains and losses on investments. Interest income is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date. The Fund's net investment income (other than class specific shareholder servicing fees) and unrealized and realized gains and losses are allocated daily to each class of shares based upon the relative proportion of net assets of each class at the beginning of the day (after adjusting for current capital share activity of the respective classes). Expenses incurred on behalf of a specific class, fund or fund family are charged directly to the class, fund or fund family (in proportion to net assets). Expenses incurred for all of the RBB families (such as director or professional fees) are charged to all funds in proportion to their net assets of the RBB Funds. DIVIDENDS AND DISTRIBUTIONS -- Dividends from net investment income, if any, will be declared and paid at least annually to shareholders. Distributions from net realized capital gains, if any, will be declared and distributed at least annually. Income and capital gain distributions are determined in accordance with U.S. federal income tax regulations which may differ from accounting principles generally accepted in the United States. U.S. FEDERAL TAX STATUS -- No provision is made for U.S. federal income taxes as it is the Fund's intention to qualify for and elect the tax treatment applicable to regulated investment companies under Subchapter M of the Internal Revenue Code of 1986, as amended, and make the requisite distributions to its shareholders which will be sufficient to relieve it from U.S. federal income and excise taxes. For U.S. federal income tax purposes, realized capital losses incurred after October 31, 2000, within the fiscal year ("post-October losses"), are deemed to arise on the first day of the following fiscal year (September 1, 2001). The fund incurred and elected to defer such losses of $1,097,395. 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES Bogle Investment Managment, L.P. serves as the Fund's investment adviser. For its advisory services, the Adviser is entitled to receive 1.00% of the Fund's average daily net assets, computed daily and payable monthly. The adviser has agreed to limit the Fund's total operating expenses for the current fiscal year to the extent that such expenses exceed 1.25% of the Fund's Institutional Class average daily net assets and 1.35% of the Fund's Investor Class average daily net assets. As necessary, this limitation is effected in waivers of advisory fees and reimbursements of expenses exceeding the advisory fee. For the six months ended February 28, 2002, investment advisory fees and waivers were as follows: 14 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED)
GROSS NET ADVISORY FEES WAIVERS ADVISORY FEES ------------- -------- ------------- Bogle Investment Management Small Cap Growth Fund $513,035 $(63,921) $449,114
The Fund will not pay the Adviser at a later time for any amounts it may waive or any amounts which the Adviser has assumed. PFPC Inc. ("PFPC"), a wholly-owned subsidiary of PFPC Worldwide Inc., and an indirect majority-owned subsidiary of The PNC Financial Services Group, Inc., serves as administrator for the Fund. For providing administrative services, PFPC is entitled to receive a monthly fee equal to an annual rate of 0.115% of the Fund's average daily net assets. In addition, PFPC serves as the Fund's transfer and dividend disbursing agent. PFPC, at its discretion, voluntarily agreed to waive a portion of its transfer agency fees for the Fund. For the six months ended February 28, 2002, transfer agency fees and waivers were as follows:
GROSS TRANSFER NET TRANSFER AGENCY FEES WAIVERS AGENCY FEES -------------- -------- ------------ Bogle Investment Management Small Cap Growth Fund $36,000 $(3,000) $33,000
PFPC Distributors, Inc., a wholly-owned subsidiary of PFPC Worldwide, Inc. and an indirect majority-owned subsidiary of the PNC Financial Services Group, Inc., provides certain administrative services to the Fund. As compensation for such administrative services, PFPC Distributors receives a monthly fee equal to an annual rate of 0.15% of the Fund's average daily net assets. PFPC Distributors, at its discretion, voluntarily agreed to waive a portion of its administrative services fees for the Fund. For this period, administrative services fees and waivers were as follows:
GROSS ADMINISTRATIVE NET ADMINISTRATIVE SERVICES FEES WAIVERS SERVICES FEES -------------------- -------- ------------------ Bogle Investment Management Small Cap Growth Fund $76,955 $(61,564) $15,391
PFPC Distributors, Inc. provides certain shareholder services to the Investor Class Shares of the Fund. As compensation for such shareholder services, PFPC Distributors receives a monthly fee equal to an annual rate of 0.10% of the Investor Class' average daily net assets. This Agreement ended February 28, 2002. In addition to serving as the Fund's investment adviser, since March 1, 2002, Bogle Investment Management, L.P. provides certain shareholder services to the Investor Class of the Fund. As compensation for such shareholder services, Bogle Investment Management, L.P. receives a monthly fee equal to an annual rate of 0.10% of the Investor Class' average daily net assets. 15 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) PFPC Trust Company provides certain custodial services to the Fund. PFPC Trust Company is a wholly-owned subsidiary of PFPC Worldwide, Inc., an indirect majority-owned subsidiary of the PNC Financial Services Group, Inc. As compensation for such custodial services, PFPC Trust Co. is entitled to receive a monthly fee equal to an annual rate of 0.03% of the Fund's average daily net assets. 3. INVESTMENT IN SECURITIES For U.S. federal income tax purposes, the cost of securities owned at February 28, 2002 was $137,660,792. Accordingly, the net unrealized appreciation/(depreciation) of investments was as follows:
NET APPRECIATION/ APPRECIATION DEPRECIATION (DEPRECIATION) ------------ ------------ ----------------- Bogle Investment Management Small Cap Growth Fund $14,329,432 $(6,283,119) $8,046,313
For the six months ended February 28, 2002, aggregate purchases and sales of investment securities (excluding short-term investments) were as follows: INVESTMENT SECURITIES -------------------------------- PURCHASES SALES ------------ ----------- Bogle Investment Management Small Cap Growth Fund $133,311,366 $87,783,706 4. CAPITAL SHARE TRANSACTIONS As of February 28, 2002, the Fund has 100,000,000 shares of $0.001 par value common stock authorized for the Institutional Class and 100,000,000 shares of $0.001 par value common stock authorized for the Investor Class. 16 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) Transactions in capital shares were as follows:
INSTITUTIONAL CLASS ------------------------------------------------------------ FOR THE SIX MONTHS ENDED FOR THE FEBRUARY 28, 2002 YEAR ENDED (UNAUDITED) AUGUST 31, 2001 --------------------------- --------------------------- SHARES VALUE SHARES VALUE --------- ------------ --------- ------------ Sales .......................... 1,440,726 $ 28,182,629 1,627,098 $ 31,538,382 Redemptions .................... (534,357) (10,191,952) (42,401) (818,960) Reinvestments .................. -- -- 19,129 362,502 --------- ------------ --------- ------------ Net Increase ................... 906,369 $ 17,990,677 1,603,826 $ 31,081,924 ========= ============ ========= ============ INVESTOR CLASS ------------------------------------------------------------ FOR THE SIX MONTHS ENDED FOR THE FEBRUARY 28, 2002 YEAR ENDED (UNAUDITED) AUGUST 31, 2001 --------------------------- --------------------------- SHARES VALUE SHARES VALUE --------- ------------ --------- ------------ Sales .......................... 2,359,984 $ 46,124,329 2,427,827 $ 47,223,625 Redemptions .................... (799,479) (15,334,207) (608,924) (11,647,144) Reinvestments .................. -- -- 38,014 731,309 --------- ------------ --------- ------------ Net Increase ................... 1,560,505 $ 30,790,122 1,856,917 $ 36,307,790 ========= ============ ========= ============
5. RECLASS OF CAPITAL ACCOUNTS In accordance with accounting pronouncements, the Fund has recorded reclassifications in the capital accounts. These reclassifications have no impact on the net asset value of the Fund and are designed generally to present undistributed income and realized gains on a tax basis which is considered to be more informative to the shareholder. As of February 28, 2002, the Fund recorded the following reclassification to increase (decrease) the accounts listed below:
ACCUMULATED UNDISTRIBUTED NET REALIZED ADDITIONAL NET INVESTMENT GAIN ON PAID-IN LOSS INVESTMENTS CAPITAL -------------- ------------- ---------- Bogle Investment Management Small Cap Growth Fund $368,681 $ (368,681) $ --
6. CAPITAL LOSS CARRYOVER At February 28, 2002 capital loss carryovers of $1,206,354 which expire in 2009 were available to offset possible future realized gains. 17 [THIS PAGE INTENTIONALLY LEFT BLANK] [THIS PAGE INTENTIONALLY LEFT BLANK] INVESTMENT ADVISER Bogle Investment Management, L.P. 57 River Street Suite 206 Wellesley, MA 02481 ADMINISTRATOR/TRANSFER AGENT PFPC Inc. 400 Bellevue Parkway Wilmington, DE 19809 DISTRIBUTOR PFPC Distributors, Inc. 3200 Horizon Drive King of Prussia, PA 19046 CUSTODIAN PFPC Trust Company 8800 Tinicum Blvd. Suite 200 Philadelphia, PA 19153 INDEPENDENT ACCOUNTANTS PricewaterhouseCoopers LLP Two Commerce Square 2001 Market Street Philadelphia, PA 19103-7042 COUNSEL Drinker Biddle & Reath LLP One Logan Square 18th and Cherry Streets Philadelphia, PA 19103-6996 The financial information included herein is taken from the records of each Fund without examination by independent accountants who do not express an opinion thereon. This report is submitted for the general information of the shareholders of the Fund. It is not authorized for the distribution to prospective investors in the Fund unless it is preceded or accompanied by a current prospectus which includes details regarding the Fund's objectives, policies and other information. Total investment return is based on historical results and is not intended to indicate future performance. The investment return and principal value of an investment in the Fund will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than original cost. -----END PRIVACY-ENHANCED MESSAGE-----