N-CSRS 1 b51137ncsrscombined.txt RBB N-CSRS 2_09 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-05518 --------- The RBB Fund, Inc. ---------------------------------------------------------------- (Exact name of registrant as specified in charter) 103 Bellevue Parkway, 4th Floor Wilmington, DE 19809 ---------------------------------------------------------------- (Address of principal executive offices) (Zip code) Edward J. Roach, President & Treasurer 103 Bellevue Parkway, 4th Floor Wilmington, DE 19809 ---------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: 302-791-1112 ------------ Date of fiscal year end: August 31 --------- Date of reporting period: February 28, 2009 ----------------- Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507. ITEM 1. REPORTS TO STOCKHOLDERS. The Report to Shareholders is attached herewith. ================================================================================ THE BEDFORD CLASS OF THE RBB FUND, INC. MONEY MARKET PORTFOLIO SEMI-ANNUAL REPORT FEBRUARY 28, 2009 (UNAUDITED) AN INVESTMENT IN THE PORTFOLIO IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. ALTHOUGH THE PORTFOLIO SEEKS TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT'S POSSIBLE TO LOSE MONEY BY INVESTING IN THE PORTFOLIO. THIS REPORT IS SUBMITTED FOR THE GENERAL INFORMATION OF THE SHAREHOLDERS OF THE PORTFOLIO. IT IS NOT AUTHORIZED FOR DISTRIBUTION UNLESS PRECEDED OR ACCOMPANIED BY A PROSPECTUS FOR THE PORTFOLIO. ================================================================================ THE RBB FUND, INC. MONEY MARKET PORTFOLIO FUND EXPENSE EXAMPLES (UNAUDITED) As a shareholder of the Portfolio, you incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees, distribution fees, and other Portfolio expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Portfolio and to compare these costs with the ongoing costs of investing in other mutual funds. These examples are based on an investment of $1,000 invested at the beginning of the six-month period from September 1, 2008 through February 28, 2009 and held for the entire period. ACTUAL EXPENSES The first line of the accompanying tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second line of the accompanying tables provides information about hypothetical account values and hypothetical expenses based on the Portfolio's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare these 5% hypothetical examples with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that the expenses shown in the accompanying tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees that may be incurred by shareholders of other funds. Therefore, the second line of the accompanying tables is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
MONEY MARKET PORTFOLIO - BEDFORD CLASS --------------------------------------------------------------- BEGINNING ENDING EXPENSES PAID ACCOUNT VALUE ACCOUNT VALUE DURING SEPTEMBER 1, 2008 FEBRUARY 28, 2009 PERIOD* -------------------- -------------------- ---------------- Actual $1,000.00 $1,006.40 $4.48 Hypothetical (5% return before expenses) 1,000.00 1,024.79 4.52
MONEY MARKET PORTFOLIO - SANSOM STREET CLASS --------------------------------------------------------------- BEGINNING ENDING EXPENSES PAID ACCOUNT VALUE ACCOUNT VALUE DURING SEPTEMBER 1, 2008 FEBRUARY 28, 2009 PERIOD* -------------------- -------------------- ---------------- Actual $1,000.00 $1,009.60 $1.25 Hypothetical (5% return before expenses) 1,000.00 1,024.79 1.26
* Expenses are equal to the Portfolio's annualized six month expense ratio of 0.90% for the Bedford Class shares and 0.25% for the Sansom Street Class shares, which includes waived fees or reimbursed expenses, multiplied by the average account value over the period, multiplied by the number of days (181) in the most recent fiscal half-year, then divided by 365 to reflect the one-half year period. The Portfolio's ending account value on the first line in each table is based on the actual six-month total return of 0.64% for the Bedford Class shares and 0.96% for the Sansom Street Class shares. 1 THE RBB FUND, INC. MONEY MARKET PORTFOLIO PORTFOLIO HOLDINGS SUMMARY TABLE FEBRUARY 28, 2009 (UNAUDITED) SECURITY % OF NET FAIR TYPE ASSETS VALUE -------- -------- ------------ Short Term Investments: Commercial Paper .......................... 44.3% $178,643,035 Certificates of Deposit ................... 29.8 120,251,155 Agency Obligations ........................ 13.1 52,670,339 U.S. Treasury Obligations ................. 5.6 22,515,521 Variable Rate Obligations ................. 4.0 15,880,000 Repurchase Agreements ..................... 3.2 12,883,000 Other Assets in Excess of Liabilities ..... -- 142,258 ----- ------------ NET ASSETS ................................... 100.0% $402,985,308 ===== ============ Portfolio holdings are subject to change at any time. 2 THE RBB FUND, INC. MONEY MARKET PORTFOLIO SCHEDULE OF INVESTMENTS FEBRUARY 28, 2009 (UNAUDITED) PAR FAIR (000) VALUE -------- ------------- CERTIFICATES OF DEPOSIT--29.8% DOMESTIC CERTIFICATES OF DEPOSIT--5.9% Bank of America N.A. 2.450%, 05/19/09 ........................ $ 1,000 $ 1,000,000 Chase Bank USA, N.A. 0.520%, 07/15/09 ........................ 5,000 5,000,000 Citibank N.A. 1.500%, 03/17/09 ........................ 2,000 2,000,000 1.330%, 03/31/09 ........................ 850 850,000 State Street Bank & Trust Co. 0.850%, 04/27/09 ........................ 10,000 10,000,000 U.S. Bank National Association 0.500%, 04/23/09 ........................ 5,000 5,000,000 ------------ 23,850,000 ------------ YANKEE DOLLAR CERTIFICATES OF DEPOSIT--23.9% Banco Bilbao Vizcaya Argentaria S.A., New York 1.930%, 03/12/09 ........................ 2,000 2,000,006 2.710%, 04/14/09 ........................ 3,000 3,000,036 0.810%, 04/29/09 ........................ 3,000 3,000,049 2.770%, 05/12/09 ........................ 3,500 3,500,069 1.150%, 08/03/09 ........................ 5,000 5,000,214 Barclays Bank PLC, New York 0.950%, 04/14/09 ........................ 10,000 10,000,000 BNP Paribas SA, New York 2.080%, 03/05/09 ........................ 6,000 6,000,000 1.010%, 05/19/09 ........................ 3,000 3,000,000 2.290%, 06/08/09 ........................ 3,600 3,600,000 1.170%, 07/08/09 ........................ 2,000 2,000,000 Intesa San Paolo SpA, New York 1.850%, 03/10/09 ........................ 1,250 1,250,000 1.450%, 03/11/09 ........................ 2,700 2,700,000 Lloyds TSB Bank PLC, New York 2.080%, 03/05/09 ........................ 2,500 2,500,000 Rabobank Nederland NV, New York 3.020%, 03/09/09 ........................ 3,500 3,500,781 0.700%, 07/13/09 ........................ 5,000 5,000,000 0.850%, 08/03/09 ........................ 5,000 5,000,000 Royal Bank of Scotland, New York 3.140%, 03/09/09 ........................ 3,000 3,000,000 Sanpaolo Imi SpA, New York 3.240%, 03/03/09 ........................ 3,000 3,000,000 2.850%, 05/12/09 ........................ 3,000 3,000,000 PAR FAIR (000) VALUE -------- ------------- CERTIFICATES OF DEPOSIT--(CONTINUED) YANKEE DOLLAR CERTIFICATES OF DEPOSIT--(CONTINUED) Societe Generale, New York 1.960%, 03/05/09 ........................ $ 2,000 $ 2,000,000 1.500%, 03/11/09 ........................ 750 750,000 1.050%, 07/13/09 ........................ 2,500 2,500,000 0.820%, 07/14/09 ........................ 5,000 5,000,000 Svenska Handelsbanken, New York 1.950%, 03/11/09 ........................ 3,000 3,000,000 0.790%, 05/04/09 ........................ 3,000 3,000,000 Toronto Dominion Bank, New York 2.500%, 06/09/09 ........................ 1,350 1,350,000 2.420%, 06/11/09 ........................ 2,250 2,250,000 UBS AG, Stamford 1.400%, 03/31/09 ........................ 1,500 1,500,000 1.300%, 04/30/09 ........................ 5,000 5,000,000 ------------ 96,401,155 ------------ TOTAL CERTIFICATES OF DEPOSIT (Cost $120,251,155) ................... 120,251,155 ------------ COMMERCIAL PAPER--44.3% ASSET BACKED--17.7% Barton Capital Corp. 0.701%, 05/04/09 ........................ 5,000 4,993,778 CAFCO LLC 0.872%, 03/09/09 ........................ 3,000 2,999,419 0.400%, 04/02/09 ........................ 8,000 7,997,156 0.400%, 04/14/09 ........................ 2,000 1,999,022 0.802%, 04/23/09 ........................ 3,000 2,996,467 Cancara Asset Securitization LLC 0.701%, 03/09/09 ........................ 3,000 2,999,533 0.651%, 03/10/09 ........................ 3,000 2,999,512 Ciesco LLC 0.982%, 05/14/09 ........................ 3,000 2,993,957 CRC Funding LLC 0.832%, 05/04/09 ........................ 7,500 7,488,933 Kitty Hawk Funding Corp. 0.450%, 03/17/09 ........................ 7,000 6,998,600 Old Line Funding LLC 0.451%, 03/16/09 ........................ 3,000 2,999,437 Park Avenue Receivables Co. LLC 0.450%, 03/09/09 ........................ 3,700 3,699,630 See Accompanying Notes to Financial Statements. 3 THE RBB FUND, INC. MONEY MARKET PORTFOLIO SCHEDULE OF INVESTMENTS (CONTINUED) FEBRUARY 28, 2009 (UNAUDITED) PAR FAIR (000) VALUE -------- ------------- COMMERCIAL PAPER--(CONTINUED) ASSET BACKED--(CONTINUED) Ranger Funding Co. LLC 0.671%, 05/01/09 ........................ $ 8,000 $ 7,990,918 Thunder Bay Funding LLC 0.470%, 03/03/09 ........................ 12,000 11,999,687 ------------ 71,156,049 ------------ BANKS--17.7% Bank of America Corp. 3.005%, 03/12/09 ........................ 4,000 3,996,382 Bank of Nova Scotia 0.741%, 05/01/09 ........................ 10,000 9,987,461 BNP Paribas Finance, Inc. 0.851%, 04/13/09 ........................ 4,100 4,095,837 Danske Corp. 0.591%, 04/20/09 ........................ 5,000 4,995,903 0.741%, 05/05/09 ........................ 5,000 4,993,319 DnB NOR BANK ASA 0.922%, 05/18/09 ........................ 3,000 2,994,020 1.003%, 05/22/09 ........................ 5,000 4,988,611 1.248%, 07/21/09 ........................ 2,000 1,990,218 Nordea North America, Inc. 1.963%, 03/05/09 ........................ 7,500 7,498,375 1.255%, 04/15/09 ........................ 2,570 2,565,984 Rabobank USA Financial Corp. 0.691%, 05/05/09 ........................ 6,000 5,992,525 San Paolo IMI US Financial Co. 1.106%, 07/15/09 ........................ 8,000 7,966,756 Santander Central Hispano Finance (Delaware), Inc. 1.664%, 08/03/09 ........................ 3,000 2,978,688 Societe Generale North America, Inc. 1.400%, 07/07/09 ........................ 6,500 6,467,876 ------------ 71,511,955 ------------ CHEMICALS--2.0% BASF AG 0.420%, 04/15/09 ........................ 8,000 7,995,800 ------------ PAR FAIR (000) VALUE -------- ------------- COMMERCIAL PAPER--(CONTINUED) FINANCIAL SERVICES--6.9% ING US Funding LLC 1.324%, 04/02/09 ........................ $ 9,000 $ 8,989,440 0.741%, 04/07/09 ........................ 5,000 4,996,197 Prudential Funding LLC 0.601%, 03/06/09 ........................ 10,000 9,999,167 UBS Finance (Delaware) LLC 1.143%, 04/14/09 ........................ 4,000 3,994,427 ------------ 27,979,231 ------------ TOTAL COMMERCIAL PAPER (Cost $178,643,035) ................... 178,643,035 ------------ VARIABLE RATE OBLIGATIONS--4.0% BANKS--4.0% Bank of America Securities LLC(b)(d) 0.540%, 03/02/09 ........................ 4,000 4,000,000 Bank of Montreal, Chicago(a)(b)(c) 0.945%, 10/05/09 ........................ 2,850 2,850,000 HSBC USA, Inc.(b) 1.560%, 10/15/09 ........................ 525 525,000 ING Bank NV(b)(c) 1.571%, 08/24/09 ........................ 1,750 1,750,000 ING USA Global Funding Trust VI(b) 2.029%, 09/18/09 ........................ 855 855,000 Lloyds Banking Group PLC(a)(b)(c) 1.541%, 08/07/09 ........................ 2,250 2,250,000 Nordea Bank AB(b)(c) 1.509%, 10/23/09 ........................ 2,050 2,050,000 Wachovia Bank N.A.(b) 1.845%, 08/04/09 ........................ 1,600 1,600,000 ------------ TOTAL VARIABLE RATE OBLIGATIONS (Cost $15,880,000) .................... 15,880,000 ------------ See Accompanying Notes to Financial Statements. 4 THE RBB FUND, INC. MONEY MARKET PORTFOLIO SCHEDULE OF INVESTMENTS (CONTINUED) FEBRUARY 28, 2009 (UNAUDITED) PAR FAIR (000) VALUE -------- ------------- AGENCY OBLIGATIONS--13.1% Federal Home Loan Bank 1.345%, 03/20/09(b) ..................... $ 1,605 $ 1,605,074 0.378%, 08/13/09(b) ..................... 1,600 1,600,000 0.360%, 08/14/09(b) ..................... 2,495 2,494,887 0.592%, 08/21/09 ........................ 3,500 3,490,076 0.592%, 08/25/09 ........................ 1,500 1,495,649 0.602%, 08/28/09 ........................ 1,000 997,000 0.780%, 02/05/10(b) ..................... 2,385 2,385,000 0.865%, 02/06/10(b) ..................... 2,385 2,385,000 1.248%, 07/09/10(b) ..................... 4,265 4,263,841 Federal Home Loan Mortgage Corp. 0.339%, 09/28/09(b) ..................... 2,950 2,949,579 1.060%, 07/14/10(b) ..................... 2,500 2,498,807 1.229%, 08/24/10(b) ..................... 1,895 1,895,121 1.244%, 09/03/10(b) ..................... 2,865 2,864,136 Federal National Mortgage Assoc. 2.021%, 05/14/09 ........................ 1,500 1,493,833 1.227%, 05/15/09 ........................ 2,000 1,994,917 0.562%, 08/05/09 ........................ 10,000 9,975,578 0.592%, 08/12/09 ........................ 3,000 2,991,937 0.602%, 08/26/09 ........................ 3,000 2,991,100 1.184%, 08/05/10(b) ..................... 2,300 2,298,804 ------------ TOTAL AGENCY OBLIGATIONS (Cost $52,670,339) ..................... 52,670,339 ------------ U.S. TREASURY OBLIGATIONS--5.6% U.S. Treasury Bills 0.325%, 05/21/09 ........................ 2,400 2,398,245 0.300%, 05/28/09 ........................ 2,400 2,398,240 0.335%, 06/04/09 ........................ 2,200 2,198,055 0.397%, 07/02/09 ........................ 5,000 4,993,235 0.391%, 08/06/09 ........................ 2,600 2,595,550 0.446%, 08/13/09 ........................ 2,500 2,494,901 0.471%, 08/20/09 ........................ 3,000 2,993,270 0.492%, 08/27/09 ........................ 2,450 2,444,025 ------------ TOTAL U.S. TREASURY OBLIGATIONS (Cost $22,515,521) ..................... 22,515,521 ------------ PAR FAIR (000) VALUE -------- ------------- REPURCHASE AGREEMENTS--3.2% Deutsche Bank Securities, Inc. (Tri-Party Agreement dated 2/27/09 to be repurchased at $12,883,290, collateralized by $2,320,000 par value, Federal Home Loan Bank, 2.80%, due 09/24/09; $10,922,000 par value, Federal Mortgage Assoc., 0.00%, due 03/23/09 Market Value of the collateral is $13,272,135) 0.270%, 03/02/09 ........................ $ 12,883 $ 12,883,000 ------------ TOTAL REPURCHASE AGREEMENTS (Cost $12,883,000) ..................... 12,883,000 ------------ TOTAL INVESTMENTS AT VALUE--100.0% (Cost $402,843,050)* .................... 402,843,050 ------------ OTHER ASSETS IN EXCESS OF LIABILITIES--0.0% ....................... 142,258 ------------ NET ASSETS (APPLICABLE TO 359,700,340 BEDFORD SHARES AND 43,242,284 SANSOM STREET SHARES)--100.0% ......................... $402,985,308 ============ * Aggregate cost is the same for financial reporting and Federal tax purposes. (a) Security is a foreign domiciled issuer which is registered with the Securities and Exchange Commission. (b) Variable Rate Obligations -- The interest rate shown is the rate as of February 28, 2009. (c) Security is 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 investors. (d) Rate shown is as of report date and the date shown is date on which principal and accrued interest may be recovered through demand. See Accompanying Notes to Financial Statements. 5 THE RBB FUND, INC. MONEY MARKET PORTFOLIO SCHEDULE OF INVESTMENTS (CONCLUDED) FEBRUARY 28, 2009 (UNAUDITED) SFAS 157 DISCLOSURE -------------------------------------------------------------------------------- The following is a summary of the inputs used, as of February 28, 2009, in valuing the Portfolio's assets carried at fair value:
INVESTMENTS IN VALUATION INPUTS SECURITIES -------------------------------- ------------- Level 1 - Quoted Prices ................................ $ -- Level 2 - Other Significant Observable Inputs .......... 402,843,050 Level 3 - Significant Unobservable Inputs .............. -- ------------- Total .................................................. $ 402,843,050 =============
See Accompanying Notes to Financial Statements. 6 THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES FEBRUARY 28, 2009 (UNAUDITED)
ASSETS Investments, at fair value (Cost $389,960,050) .......................... $ 389,960,050 Repurchase agreement, at fair value (Cost $12,883,000) .................. 12,883,000 Cash .................................................................... 470 Receivables Investments sold ..................................................... 2,876,542 Interest receivable .................................................. 409,019 Prepaid expenses and other assets ....................................... 90,972 ------------- Total assets ...................................................... 406,220,053 ------------- LIABILITIES Payables Investments purchased ................................................ 2,864,137 Distribution to shareholders ......................................... 119,852 Distribution fees .................................................... 182,874 Investment advisory and administration fees .......................... 19,380 Transfer agent fees .................................................. 13,029 Custodian fees ....................................................... 9,993 Directors' and officers' fees ........................................ 2,315 Regulatory administration fees ....................................... 1,499 Service organization fees (Sansom Class) ............................. 70 Other accrued expenses and liabilities ............................... 21,596 ------------- Total liabilities ................................................. 3,234,745 ------------- Net Assets .............................................................. $ 402,985,308 ============= NET ASSETS CONSIST OF Paid-in capital ......................................................... 402,942,623 Undistributed net investment income ..................................... 831 Accumulated net realized gain from investments .......................... 41,854 ------------- Net Assets .............................................................. $ 402,985,308 ============= BEDFORD CLASS Net assets .............................................................. $ 359,742,475 ------------- Shares outstanding ($0.001 par value, 1,500,000,000 shares authorized) .. 359,700,340 ------------- Net asset value, offering and redemption price per share ................ $ 1.00 ============= SANSOM CLASS Net assets .............................................................. $ 43,242,833 ------------- Shares outstanding ($0.001 par value, 1,500,000,000 shares authorized) .. 43,242,284 ------------- Net asset value, offering and redemption price per share ................ $ 1.00 =============
See Accompanying Notes to Financial Statements. 7 THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED FEBRUARY 28, 2009 (UNAUDITED)
INVESTMENT INCOME Interest ........................................................... $4,117,090 ---------- Total investment income ....................................... 4,117,090 ---------- EXPENSES Distribution fees(1) ............................................... 1,245,277 Investment advisory and administration fees ........................ 825,801 Temporary Guarantee Program Participation fees ............................................... 65,093 Directors' and officers' fees ...................................... 63,269 Professional fees .................................................. 49,586 Custodian fees ..................................................... 40,305 Transfer agent fees ................................................ 34,259 Regulatory administration fees ..................................... 19,718 Printing and shareholder reporting fees ............................ 18,083 Insurance fees ..................................................... 17,711 Registration and filing fees ....................................... 12,397 Service organization fees (Sansom Class) ........................... 694 Other expenses ..................................................... 5,329 ---------- Total expenses before waivers ................................. 2,397,522 Less: waivers ................................................. (762,571) ---------- Net expenses after waivers ......................................... 1,634,951 ---------- Net investment income 2,482,139 ---------- Net realized gain from investments ................................. 28,705 ---------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .................. $2,510,844 ==========
(1) See Note 2 in Notes to Financial Statements. See Accompanying Notes to Financial Statements. 8 THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED FOR THE YEAR FEBRUARY 28, 2009 ENDED (UNAUDITED) AUGUST 31, 2008 ------------- ------------- FROM OPERATIONS: Net investment income ................................................... $ 2,482,139 $ 9,100,028 Net realized gain from investments ...................................... 28,705 20,643 ------------- ------------- Net increase in net assets resulting from operations ....................... 2,510,844 9,120,671 ------------- ------------- DIVIDENDS TO SHAREHOLDERS FROM: Net investment income: Bedford Class ........................................................ (2,267,776) (8,433,248) Sansom Class ......................................................... (214,363) (666,780) ------------- ------------- Net decrease in net assets from dividends to shareholders .................. (2,482,139) (9,100,028) ------------- ------------- CAPITAL SHARE TRANSACTIONS (AT $1.00 PER SHARE): Proceeds from shares sold: Bedford Class ........................................................ 479,736,478 693,423,026 Sansom Class ......................................................... 103,836,058 154,552,391 Shares issued on reinvestment of distributions: Bedford Class ........................................................ 2,171,221 8,739,785 Sansom Class ......................................................... 34,777 147,473 Shares repurchased: Bedford Class ........................................................ (441,579,027) (601,709,451) Sansom Class ......................................................... (89,379,027) (141,303,481) ------------- ------------- Net increase in net assets from capital share transactions ................. 54,820,480 113,849,743 ------------- ------------- Total increase in net assets ............................................... 54,849,185 113,870,386 NET ASSETS Beginning of period ..................................................... 348,136,123 234,265,737 ------------- ------------- End of period ........................................................... $ 402,985,308 $ 348,136,123 ============= ============= Undistributed net investment income, end of period ......................... $ 831 $ 831 ============= =============
See Accompanying Notes to Financial Statements. 9 THE RBB FUND, INC. MONEY MARKET PORTFOLIO FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
THE BEDFORD CLASS --------------------------------------------------------------------------------- FOR THE SIX MONTHS FOR THE FOR THE FOR THE FOR THE FOR THE ENDED YEAR YEAR YEAR YEAR YEAR FEBRUARY 28, ENDED ENDED ENDED ENDED ENDED 2009 AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, (UNAUDITED) 2008 2007 2006 2005 2004 ------------- ------------ ----------- ----------- ----------- ------------ Net asset value, beginning of period . $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 -------- -------- -------- -------- -------- -------- Income from investment operations: Net investment income ............. 0.0064 0.0307 0.0447 0.0388 0.0162 0.0025 Net gains (losses) on securities .. --(b) --(b) --(b) --(b) --(b) --(b) -------- -------- -------- -------- -------- -------- Total net income from investment operations .................... 0.0064 0.0307 0.0447 0.0388 0.0162 0.0025 -------- -------- -------- -------- -------- -------- Less dividends and distributions: Dividends (from net investment income) .............. (0.0064) (0.0307) (0.0447) (0.0388) (0.0162) (0.0025) -------- -------- -------- -------- -------- -------- Net asset value, end of period ....... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======== ======== ======== ======== ======== ======== Total Return .................... 0.64% 3.12% 4.56% 3.95% 1.63% 0.25% Ratios/Supplemental Data Net assets, end of period (000's omitted) ................. $359,742 $319,387 $218,914 $150,657 $109,495 $ 72,001 Ratios of expenses to average net assets(a) ................... 0.90%(c) 0.90% 0.90% 0.85% 0.97% 0.94% Ratios of net investment income to average net assets ........... 1.27%(c) 2.94% 4.47% 3.81% 1.68% 0.24%
(a) Without the waiver of advisory fees and reimbursement of certain operating expenses, the ratios of expenses to average net assets for the Bedford Class of the Money Market Portfolio would have been 1.25% for the six months ended February 28, 2009 and 1.23%, 1.29%, 1.34%, 1.23% and 1.34% for the years ended August 31, 2008, 2007, 2006, 2005 and 2004, respectively. (b) Amount is less than $0.00005 per share. (c) Annualized. See Accompanying Notes to Financial Statements. 10 THE RBB FUND, INC. MONEY MARKET PORTFOLIO FINANCIAL HIGHLIGHTS (CONCLUDED) (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
THE SANSOM STREET CLASS --------------------------------------------------------------------------------- FOR THE SIX MONTHS FOR THE FOR THE FOR THE FOR THE FOR THE ENDED YEAR YEAR YEAR YEAR YEAR FEBRUARY 28, ENDED ENDED ENDED ENDED ENDED 2009 AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, (UNAUDITED) 2008 2007 2006 2005 2004 ------------- ------------ ----------- ----------- ----------- ------------ Net asset value, beginning of period ... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ------- -------- -------- -------- -------- -------- Income from investment operations: Net investment income ............... 0.0096 0.0365 0.0502 0.0434 0.0239 0.0100 Net gains (losses) on securities .... --(b) --(b) --(b) --(b) --(b) --(b) ------- -------- -------- -------- -------- -------- Total net income from investment operations ...................... 0.0096 0.0365 0.0502 0.0434 0.0239 0.0100 ------- -------- -------- -------- -------- -------- Less dividends and distributions: Dividends (from net investment income) ................ (0.0096) (0.0365) (0.0502) (0.0434) (0.0239) (0.0100) ------- -------- -------- -------- -------- -------- Net asset value, end of period ......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======= ======== ======== ======== ======== ======== Total Return ...................... 0.96% 3.71% 5.14% 4.42% 2.41% 1.00% Ratios/Supplemental Data Net assets, end of period (000's omitted) ................... $43,243 $ 28,749 $ 15,352 $ 15,525 $ 87,304 $141,372 Ratios of expenses to average net assets(a) ..................... 0.25%(c) 0.31% 0.35% 0.26% 0.20% 0.20% Ratios of net investment income to average net assets ................ 1.66%(c) 3.64% 5.02% 4.25% 2.39% 0.98%
(a) Without the waiver of advisory fees and reimbursement of certain operating expenses, the ratios of expenses to average net assets for the Sansom Street Class of the Money Market Portfolio would have been 0.60% for the six months ended February 28, 2009 and 0.60%, 0.69%, 0.67%, 0.67% and 0.59% for the years ended August 31, 2008, 2007, 2006, 2005 and 2004, respectively. (b) Amount is less than $0.00005 per share. (c) Annualized. See Accompanying Notes to Financial Statements. 11 THE RBB FUND, INC. MONEY MARKET PORTFOLIO NOTES TO FINANCIAL STATEMENTS FEBRUARY 28, 2009 (UNAUDITED) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The RBB Fund, Inc. ("RBB" or the "Company") 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 "1940 Act"), as an open-end management investment company. RBB is a "series fund," which is a mutual fund divided into separate portfolios. Each portfolio is treated as a separate entity for certain matters under the 1940 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 eighteen active investment portfolios, including the Money Market Portfolio ("Portfolio"), which comprise the RBB family of funds. RBB has authorized capital of one hundred billion shares of common stock of which 78.773 billion shares are currently classified into one hundred and twenty-seven classes of common stock. The Portfolio has issued shares with a par value of $0.001. Each class represents an interest in an active or inactive RBB investment portfolio. The active classes have been grouped into nine separate "families." SECURITY VALUATION -- Securities held in the Portfolio are valued under the amortized cost method, which approximates fair value. Under this method, securities are valued at cost when purchased and thereafter a constant accretion of discount or amortization of premium is recorded until maturity of the security. Regular review and monitoring of the valuation is performed to ensure that cost continues to approximate fair value and to avoid dilution or other unfair results to shareholders. The Portfolio seeks to maintain net asset value per share at $1.00. Effective September 1, 2008, the Portfolio adopted Financial Accounting Standards Board ("FASB") Statement of Financial Accounting Standards No. 157 ("SFAS 157"). This standard clarifies the definition of fair value for financial reporting, establishes a framework for measuring fair value and requires additional disclosures about the use of fair value measurements. The three levels of the fair value hierarchy under SFAS 157 are described below: o Level 1 -- quoted prices in active markets for identical securities o Level 2 -- other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) o Level 3 -- significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments) The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. A summary of the inputs used to value the Portfolio's investments as of February 28, 2009 is included with the Portfolio's Schedule of Investments. SECURITY TRANSACTIONS, INVESTMENT INCOME, AND EXPENSES -- Security transactions 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. Interest income is accrued when earned. Certain expenses, such as distribution, transfer agency and printing, are class specific expenses and vary by class. Expenses not directly attributable to a specific portfolio or class are allocated based on relative net assets of each portfolio and class. 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 portfolios within the Company (such as director or professional fees) are charged to all portfolios in proportion to their average net assets. 12 THE RBB FUND, INC. MONEY MARKET PORTFOLIO NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2009 (UNAUDITED) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net investment income are declared daily, recorded on the ex-date and paid monthly. All dividends from net investment income are taxed as ordinary income. Any net realized capital gains are distributed at least annually. Income subject to dividends and capital gain subject to distributions are determined in accordance with income tax regulations, which may differ from accounting principles generally accepted in the United States of America. FEDERAL INCOME TAXES -- No provision is made for federal income taxes. It is the Company's intention to have each portfolio continue to qualify for and elect the tax treatment applicable to regulated investment companies under Subchapter M of the Internal Revenue Code and make the requisite distributions to its shareholders which will be sufficient to relieve it from federal income and excise taxes. REPURCHASE AGREEMENTS -- Money market instruments may be purchased from financial institutions, such as banks and non-bank dealers, subject to the seller's agreement to repurchase them at an agreed upon date and price. Collateral for repurchase agreements may have longer maturities than the maximum permissible remaining maturity of portfolio investments, provided the repurchase agreements themselves mature in 13 months or less. The seller is required on a daily basis to maintain the value of the securities subject to the agreement at no less than the repurchase price. The agreements are conditioned upon the collateral being deposited under the Federal Reserve book entry system or held in a separate account by the Portfolio's custodian or an authorized securities depository. 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. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. OTHER -- In the normal course of business, the Portfolio may enter into contracts that provide general indemnifications. The Portfolio's maximum exposure under these arrangements is dependent on claims that may be made against the Portfolio in the future and therefore, cannot be estimated; however, based on experience, the risk of material loss for such claims is considered remote. 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES Pursuant to an Investment Advisory and Administration Agreement, BlackRock Institutional Management Corp. (the "Adviser" or "BIMC"), an indirect subsidiary of The PNC Financial Services Group, Inc., serves as investment adviser and administrator for the Portfolio. BIMC and PNC Global Investment Servicing (U.S.), Inc. ("PNC"), a member of The PNC Financial Services Group, Inc., entered into a delegation agreement on behalf of the Portfolio, wherein PNC has agreed to perform administration and accounting services for an annual fee of 0.10% of the average net assets of the Portfolio, paid out of the fee paid to BIMC. 13 THE RBB FUND, INC. MONEY MARKET PORTFOLIO NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2009 (UNAUDITED) 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONTINUED) For its advisory services, BIMC is entitled to receive the following fees, computed daily and payable monthly, and based on the Portfolio's average daily net assets: ANNUAL RATE ---------------------------------------------- 0.45% of first $250 million of net assets; 0.40% of next $250 million of net assets; and 0.35% of net assets in excess of $500 million. BIMC may, at its discretion, voluntarily waive and/or reimburse all or any portion of its advisory fee for the Portfolio. For each class of shares within the Portfolio, the net advisory fee charged to each class is the same on a relative basis. For the six months ended February 28, 2009, advisory fees and waivers for the investment portfolio were as follows: GROSS NET ADVISORY ADVISORY FEE WAIVER FEE ----------- -------------- -------------- $825,801 $(673,997) $151,804 As of February 28, 2009, the Portfolio owed BIMC $19,380 in advisory fees. PNC and PFPC Distributors, Inc. ("PFPC Distributors"), an affiliate of PNC, may also voluntarily waive a portion of their fees and/or reimburse expenses. The Portfolio will not pay BIMC, PNC or PFPC Distributors at a later time for any amounts waived or assumed. For providing regulatory administration services to RBB, PNC is entitled to receive compensation as agreed to by the Company and PNC. This fee is allocated to each portfolio of the Company in proportion to its net assets. PNC serves as the transfer and dividend disbursing agent for each class. For providing transfer agent services, PNC is entitled to receive fees from the Portfolio. PNC may, at its discretion, voluntarily waive all or any portion of its transfer agency fee for any class of shares. PFPC Trust Company, an affiliate of PNC, provides certain custodial services to the Portfolio. As compensation for such custodial services, PFPC Trust Company is entitled to receive the following fees, computed daily and payable monthly, and based on the Portfolio's average gross assets: ANNUAL RATE -------------------------------------------------------------- 0.025% per thousand of first $50 million of gross assets; 0.020% per thousand of next $50 million of gross assets; 0.015% per thousand of gross assets in excess of $100 million. The Portfolio, on behalf of the Bedford Class of shares of the Portfolio, has adopted a Distribution Plan pursuant to Rule 12b-1 under the 1940 Act (the "Plan"). The Portfolio has entered into a Distribution Agreement with PFPC Distributors. 14 THE RBB FUND, INC. MONEY MARKET PORTFOLIO NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2009 (UNAUDITED) 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONTINUED) The Plan provides for the Bedford Class to make monthly payments, based on average net assets, to PFPC Distributors of up to 0.65% on an annualized basis. PFPC Distributors may voluntarily waive these fees at its discretion. For the six months ended February 28, 2009, distribution fees paid to PFPC Distributors for the Bedford Class were as follows: GROSS NET DISTRIBUTION DISTRIBUTION FEE WAIVER FEE -------------- -------------- -------------- Bedford Class $1,245,277 $(88,574) $1,156,703 The Portfolio has entered into service agreements with banks affiliated with PNC who render support services to customers who are the beneficial owners of the Sansom Street Class in consideration of the payment of 0.10% of the daily net asset value of such shares. For the six months ended February 28, 2009, service organization fees were $694 for the Portfolio. 3. FEDERAL INCOME TAX INFORMATION The Portfolio intends to continue to qualify as a regulated investment company and distribute all of its taxable income. Therefore, no federal tax provision is required. FASB Interpretation No. 48 ("FIN 48"), Accounting for Uncertainty in Income Taxes, sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has analyzed the Portfolio's tax positions and has concluded that no provision for income tax is required in the Portfolio's financial statements. The Portfolio is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. However, management's conclusions regarding the adoption of FIN 48 may be subject to review and adjustment at a later date based on factors including, but not limited to, further implementation guidance from the FASB, new tax laws, regulations and administrative interpretations (including court decisions). The Portfolio's federal tax returns for each of the prior three fiscal years remain subject to examination by the Internal Revenue Service. For federal income tax purposes, realized capital losses may be carried forward and applied against future realized gains. At August 31, 2008, the Portfolio had no capital loss carryforwards. Prior period capital loss carryforwards of $5,533 were utilized to offset current realized gains. Under federal tax law, foreign currency and capital losses realized after October 31 may be deferred and treated as having arisen on the first day of the following fiscal year. For the year ended August 31, 2008, the Portfolio incurred no post-October capital losses. The tax character of dividends and distributions paid during the last fiscal year was as follows: ORDINARY LONG-TERM INCOME GAINS ------------------ ------------- 2008 $9,100,028 $ -- 15 THE RBB FUND, INC. MONEY MARKET PORTFOLIO NOTES TO FINANCIAL STATEMENTS (CONCLUDED) FEBRUARY 28, 2009 (UNAUDITED) 4. U.S. DEPARTMENT OF THE TREASURY'S GUARANTEE PROGRAM FOR MONEY MARKET FUNDS On October 1, 2008, the Board of Directors of the Company approved the Portfolio's participation in the Guarantee Program for Money Market Funds (the "Guarantee Program") established by the U.S. Department of the Treasury (the "Treasury"). The Guarantee Program provides coverage to shareholders of record in the Portfolio as of the close of business on September 19, 2008 and would be triggered if the Portfolio's NAV falls below $0.9950. The number of shares covered will be the lesser of (1) shares owned on September 19, 2008 or (2) shares owned on the date on which the Portfolio's NAV is less than $0.9950 ("Guarantee Event"). In order for payment to occur under the Guarantee Program, the Portfolio would need to initiate the liquidation of the Portfolio within five business days of the Guarantee Event. To participate in the Guarantee Program, the Department of Treasury requires publicly offered money market funds that are regulated under Rule 2a-7 of the 1940 Act ("eligible money market funds") with an NAV per share greater than or equal to $0.9975 as of the close of business on September 19, 2008, to pay an upfront, non-refundable fee of 0.01 percent (one basis point) for the original period and 0.015 percent (1.5 basis points) for the first and second extension periods based on the number of shares outstanding on that date. Eligible money market funds with an NAV per share greater than or equal to $0.9950 and below $0.9975 as of the close of business on September 19, 2008, are required to pay an upfront, non-refundable fee of 0.015 percent (1.5 basis points) for the original period and 0.023 percent (2.3 basis points) for the first and second extension periods based on the number of shares outstanding on that date. Funds with an NAV per share below $0.9950 as of the close of business on September 19, 2008 may not participate in the Guarantee Program. On October 6, 2008, the Portfolio paid $35,923 to participate in the Guarantee Program, which amount was amortized through December 18, 2008. The initial term of the Guarantee Program expired on December 18, 2008. On December 5, 2008, the Portfolio paid $53,882 to participate in the first extension of the Guarantee Program which extended the Guarantee Program through April 30, 2009. This amount will be amortized through April 30, 2009. On April 1, 2009, the U.S. Treasury Department announced a second extension of its Guarantee Program through September 18, 2009, in order to support ongoing stability in financial markets. On April 9, 2009, the Portfolio paid $53,882 to participate in the second extension of the Guarantee Program. This amount will be amortized through September 18, 2009. 5. SUBSEQUENT EVENTS Effective March 13, 2009, the Distributor has agreed to voluntarily waive a portion of the Distribution and Service (12b-1) Fees payable by Bedford Shares of the Portfolio to the extent necessary to maintain a minimum annualized net yield of at least 0.00%. This waiver is voluntary and may be changed or terminated by the Distributor at any time. 16 THE RBB FUND, INC. MONEY MARKET PORTFOLIO ADDITIONAL INFORMATION (UNAUDITED) PROXY VOTING Policies and procedures that the Portfolio uses to determine how to vote proxies relating to portfolio securities as well as information regarding how the Portfolio voted proxies relating to portfolio securities for the most recent 12-month period ended June 30 are available without charge, upon request, by calling the number shown below and on the Securities and Exchange Commission's ("SEC") website at http://www.sec.gov. Bedford (800) 888-9723 Sansom Street (800) 430-9618 QUARTERLY PORTFOLIO SCHEDULES The Company files its complete schedule of portfolio holdings with the SEC for the first and third fiscal quarter of each fiscal year (quarters ended November 30 and May 31) on Form N-Q. The Company's Form N-Q is available on the SEC website at http://www.sec.gov and may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. Information on the operation of the SEC Public Reference Room may be obtained by calling (202) 551-8090. 17 [THIS PAGE INTENTIONALLY LEFT BLANK.] [THIS PAGE INTENTIONALLY LEFT BLANK.] INVESTMENT ADVISER BlackRock Institutional Management Corporation 100 Bellevue Parkway Wilmington, DE 19809 TRANSFER AGENT PNC Global Investment Servicing (U.S.), Inc. 101 Sabin Street Pawtucket, RI 02866 PRINCIPAL UNDERWRITER PFPC Distributors, Inc. 760 Moore Road King of Prussia, PA 19406 CUSTODIAN PFPC Trust Company 8800 Tinicum Blvd. Suite 200 Philadelphia, PA 19153 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Deloitte & Touche LLP 1700 Market Street Philadelphia, PA 19103-3984 COUNSEL Drinker Biddle & Reath LLP One Logan Square 18th and Cherry Streets Philadelphia, PA 19103-6996 THE SANSOM STREET CLASS OF THE RBB FUND, INC. MONEY MARKET PORTFOLIO SEMI-ANNUAL REPORT FEBRUARY 28, 2009 (UNAUDITED) AN INVESTMENT IN THE PORTFOLIO IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. ALTHOUGH THE PORTFOLIO SEEKS TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT'S POSSIBLE TO LOSE MONEY BY INVESTING IN THE PORTFOLIO. THIS REPORT IS SUBMITTED FOR THE GENERAL INFORMATION OF THE SHAREHOLDERS OF THE PORTFOLIO. IT IS NOT AUTHORIZED FOR DISTRIBUTION UNLESS PRECEDED OR ACCOMPANIED BY A PROSPECTUS FOR THE PORTFOLIO. ================================================================================ THE RBB FUND, INC. MONEY MARKET PORTFOLIO FUND EXPENSE EXAMPLES (UNAUDITED) As a shareholder of the Portfolio, you incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees, distribution fees, and other Portfolio expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Portfolio and to compare these costs with the ongoing costs of investing in other mutual funds. These examples are based on an investment of $1,000 invested at the beginning of the six-month period from September 1, 2008 through February 28, 2009 and held for the entire period. ACTUAL EXPENSES The first line of the accompanying tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second line of the accompanying tables provides information about hypothetical account values and hypothetical expenses based on the Portfolio's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare these 5% hypothetical examples with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that the expenses shown in the accompanying tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees that may be incurred by shareholders of other funds. Therefore, the second line of the accompanying tables is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
MONEY MARKET PORTFOLIO - BEDFORD CLASS --------------------------------------------------------------- BEGINNING ENDING EXPENSES PAID ACCOUNT VALUE ACCOUNT VALUE DURING SEPTEMBER 1, 2008 FEBRUARY 28, 2009 PERIOD* -------------------- -------------------- ---------------- Actual $1,000.00 $1,006.40 $4.48 Hypothetical (5% return before expenses) 1,000.00 1,024.79 4.52
MONEY MARKET PORTFOLIO - SANSOM STREET CLASS --------------------------------------------------------------- BEGINNING ENDING EXPENSES PAID ACCOUNT VALUE ACCOUNT VALUE DURING SEPTEMBER 1, 2008 FEBRUARY 28, 2009 PERIOD* -------------------- -------------------- ---------------- Actual $1,000.00 $1,009.60 $1.25 Hypothetical (5% return before expenses) 1,000.00 1,024.79 1.26
* Expenses are equal to the Portfolio's annualized six month expense ratio of 0.90% for the Bedford Class shares and 0.25% for the Sansom Street Class shares, which includes waived fees or reimbursed expenses, multiplied by the average account value over the period, multiplied by the number of days (181) in the most recent fiscal half-year, then divided by 365 to reflect the one-half year period. The Portfolio's ending account value on the first line in each table is based on the actual six-month total return of 0.64% for the Bedford Class shares and 0.96% for the Sansom Street Class shares. 1 THE RBB FUND, INC. MONEY MARKET PORTFOLIO PORTFOLIO HOLDINGS SUMMARY TABLE FEBRUARY 28, 2009 (UNAUDITED) SECURITY % OF NET FAIR TYPE ASSETS VALUE -------- -------- ------------ Short Term Investments: Commercial Paper .......................... 44.3% $178,643,035 Certificates of Deposit ................... 29.8 120,251,155 Agency Obligations ........................ 13.1 52,670,339 U.S. Treasury Obligations ................. 5.6 22,515,521 Variable Rate Obligations ................. 4.0 15,880,000 Repurchase Agreements ..................... 3.2 12,883,000 Other Assets in Excess of Liabilities ..... -- 142,258 ----- ------------ NET ASSETS ................................... 100.0% $402,985,308 ===== ============ Portfolio holdings are subject to change at any time. 2 THE RBB FUND, INC. MONEY MARKET PORTFOLIO SCHEDULE OF INVESTMENTS FEBRUARY 28, 2009 (UNAUDITED) PAR FAIR (000) VALUE -------- ------------- CERTIFICATES OF DEPOSIT--29.8% DOMESTIC CERTIFICATES OF DEPOSIT--5.9% Bank of America N.A. 2.450%, 05/19/09 ........................ $ 1,000 $ 1,000,000 Chase Bank USA, N.A. 0.520%, 07/15/09 ........................ 5,000 5,000,000 Citibank N.A. 1.500%, 03/17/09 ........................ 2,000 2,000,000 1.330%, 03/31/09 ........................ 850 850,000 State Street Bank & Trust Co. 0.850%, 04/27/09 ........................ 10,000 10,000,000 U.S. Bank National Association 0.500%, 04/23/09 ........................ 5,000 5,000,000 ------------ 23,850,000 ------------ YANKEE DOLLAR CERTIFICATES OF DEPOSIT--23.9% Banco Bilbao Vizcaya Argentaria S.A., New York 1.930%, 03/12/09 ........................ 2,000 2,000,006 2.710%, 04/14/09 ........................ 3,000 3,000,036 0.810%, 04/29/09 ........................ 3,000 3,000,049 2.770%, 05/12/09 ........................ 3,500 3,500,069 1.150%, 08/03/09 ........................ 5,000 5,000,214 Barclays Bank PLC, New York 0.950%, 04/14/09 ........................ 10,000 10,000,000 BNP Paribas SA, New York 2.080%, 03/05/09 ........................ 6,000 6,000,000 1.010%, 05/19/09 ........................ 3,000 3,000,000 2.290%, 06/08/09 ........................ 3,600 3,600,000 1.170%, 07/08/09 ........................ 2,000 2,000,000 Intesa San Paolo SpA, New York 1.850%, 03/10/09 ........................ 1,250 1,250,000 1.450%, 03/11/09 ........................ 2,700 2,700,000 Lloyds TSB Bank PLC, New York 2.080%, 03/05/09 ........................ 2,500 2,500,000 Rabobank Nederland NV, New York 3.020%, 03/09/09 ........................ 3,500 3,500,781 0.700%, 07/13/09 ........................ 5,000 5,000,000 0.850%, 08/03/09 ........................ 5,000 5,000,000 Royal Bank of Scotland, New York 3.140%, 03/09/09 ........................ 3,000 3,000,000 Sanpaolo Imi SpA, New York 3.240%, 03/03/09 ........................ 3,000 3,000,000 2.850%, 05/12/09 ........................ 3,000 3,000,000 PAR FAIR (000) VALUE -------- ------------- CERTIFICATES OF DEPOSIT--(CONTINUED) YANKEE DOLLAR CERTIFICATES OF DEPOSIT--(CONTINUED) Societe Generale, New York 1.960%, 03/05/09 ........................ $ 2,000 $ 2,000,000 1.500%, 03/11/09 ........................ 750 750,000 1.050%, 07/13/09 ........................ 2,500 2,500,000 0.820%, 07/14/09 ........................ 5,000 5,000,000 Svenska Handelsbanken, New York 1.950%, 03/11/09 ........................ 3,000 3,000,000 0.790%, 05/04/09 ........................ 3,000 3,000,000 Toronto Dominion Bank, New York 2.500%, 06/09/09 ........................ 1,350 1,350,000 2.420%, 06/11/09 ........................ 2,250 2,250,000 UBS AG, Stamford 1.400%, 03/31/09 ........................ 1,500 1,500,000 1.300%, 04/30/09 ........................ 5,000 5,000,000 ------------ 96,401,155 ------------ TOTAL CERTIFICATES OF DEPOSIT (Cost $120,251,155) ................... 120,251,155 ------------ COMMERCIAL PAPER--44.3% ASSET BACKED--17.7% Barton Capital Corp. 0.701%, 05/04/09 ........................ 5,000 4,993,778 CAFCO LLC 0.872%, 03/09/09 ........................ 3,000 2,999,419 0.400%, 04/02/09 ........................ 8,000 7,997,156 0.400%, 04/14/09 ........................ 2,000 1,999,022 0.802%, 04/23/09 ........................ 3,000 2,996,467 Cancara Asset Securitization LLC 0.701%, 03/09/09 ........................ 3,000 2,999,533 0.651%, 03/10/09 ........................ 3,000 2,999,512 Ciesco LLC 0.982%, 05/14/09 ........................ 3,000 2,993,957 CRC Funding LLC 0.832%, 05/04/09 ........................ 7,500 7,488,933 Kitty Hawk Funding Corp. 0.450%, 03/17/09 ........................ 7,000 6,998,600 Old Line Funding LLC 0.451%, 03/16/09 ........................ 3,000 2,999,437 Park Avenue Receivables Co. LLC 0.450%, 03/09/09 ........................ 3,700 3,699,630 See Accompanying Notes to Financial Statements. 3 THE RBB FUND, INC. MONEY MARKET PORTFOLIO SCHEDULE OF INVESTMENTS (CONTINUED) FEBRUARY 28, 2009 (UNAUDITED) PAR FAIR (000) VALUE -------- ------------- COMMERCIAL PAPER--(CONTINUED) ASSET BACKED--(CONTINUED) Ranger Funding Co. LLC 0.671%, 05/01/09 ........................ $ 8,000 $ 7,990,918 Thunder Bay Funding LLC 0.470%, 03/03/09 ........................ 12,000 11,999,687 ------------ 71,156,049 ------------ BANKS--17.7% Bank of America Corp. 3.005%, 03/12/09 ........................ 4,000 3,996,382 Bank of Nova Scotia 0.741%, 05/01/09 ........................ 10,000 9,987,461 BNP Paribas Finance, Inc. 0.851%, 04/13/09 ........................ 4,100 4,095,837 Danske Corp. 0.591%, 04/20/09 ........................ 5,000 4,995,903 0.741%, 05/05/09 ........................ 5,000 4,993,319 DnB NOR BANK ASA 0.922%, 05/18/09 ........................ 3,000 2,994,020 1.003%, 05/22/09 ........................ 5,000 4,988,611 1.248%, 07/21/09 ........................ 2,000 1,990,218 Nordea North America, Inc. 1.963%, 03/05/09 ........................ 7,500 7,498,375 1.255%, 04/15/09 ........................ 2,570 2,565,984 Rabobank USA Financial Corp. 0.691%, 05/05/09 ........................ 6,000 5,992,525 San Paolo IMI US Financial Co. 1.106%, 07/15/09 ........................ 8,000 7,966,756 Santander Central Hispano Finance (Delaware), Inc. 1.664%, 08/03/09 ........................ 3,000 2,978,688 Societe Generale North America, Inc. 1.400%, 07/07/09 ........................ 6,500 6,467,876 ------------ 71,511,955 ------------ CHEMICALS--2.0% BASF AG 0.420%, 04/15/09 ........................ 8,000 7,995,800 ------------ PAR FAIR (000) VALUE -------- ------------- COMMERCIAL PAPER--(CONTINUED) FINANCIAL SERVICES--6.9% ING US Funding LLC 1.324%, 04/02/09 ........................ $ 9,000 $ 8,989,440 0.741%, 04/07/09 ........................ 5,000 4,996,197 Prudential Funding LLC 0.601%, 03/06/09 ........................ 10,000 9,999,167 UBS Finance (Delaware) LLC 1.143%, 04/14/09 ........................ 4,000 3,994,427 ------------ 27,979,231 ------------ TOTAL COMMERCIAL PAPER (Cost $178,643,035) ................... 178,643,035 ------------ VARIABLE RATE OBLIGATIONS--4.0% BANKS--4.0% Bank of America Securities LLC(b)(d) 0.540%, 03/02/09 ........................ 4,000 4,000,000 Bank of Montreal, Chicago(a)(b)(c) 0.945%, 10/05/09 ........................ 2,850 2,850,000 HSBC USA, Inc.(b) 1.560%, 10/15/09 ........................ 525 525,000 ING Bank NV(b)(c) 1.571%, 08/24/09 ........................ 1,750 1,750,000 ING USA Global Funding Trust VI(b) 2.029%, 09/18/09 ........................ 855 855,000 Lloyds Banking Group PLC(a)(b)(c) 1.541%, 08/07/09 ........................ 2,250 2,250,000 Nordea Bank AB(b)(c) 1.509%, 10/23/09 ........................ 2,050 2,050,000 Wachovia Bank N.A.(b) 1.845%, 08/04/09 ........................ 1,600 1,600,000 ------------ TOTAL VARIABLE RATE OBLIGATIONS (Cost $15,880,000) .................... 15,880,000 ------------ See Accompanying Notes to Financial Statements. 4 THE RBB FUND, INC. MONEY MARKET PORTFOLIO SCHEDULE OF INVESTMENTS (CONTINUED) FEBRUARY 28, 2009 (UNAUDITED) PAR FAIR (000) VALUE -------- ------------- AGENCY OBLIGATIONS--13.1% Federal Home Loan Bank 1.345%, 03/20/09(b) ..................... $ 1,605 $ 1,605,074 0.378%, 08/13/09(b) ..................... 1,600 1,600,000 0.360%, 08/14/09(b) ..................... 2,495 2,494,887 0.592%, 08/21/09 ........................ 3,500 3,490,076 0.592%, 08/25/09 ........................ 1,500 1,495,649 0.602%, 08/28/09 ........................ 1,000 997,000 0.780%, 02/05/10(b) ..................... 2,385 2,385,000 0.865%, 02/06/10(b) ..................... 2,385 2,385,000 1.248%, 07/09/10(b) ..................... 4,265 4,263,841 Federal Home Loan Mortgage Corp. 0.339%, 09/28/09(b) ..................... 2,950 2,949,579 1.060%, 07/14/10(b) ..................... 2,500 2,498,807 1.229%, 08/24/10(b) ..................... 1,895 1,895,121 1.244%, 09/03/10(b) ..................... 2,865 2,864,136 Federal National Mortgage Assoc. 2.021%, 05/14/09 ........................ 1,500 1,493,833 1.227%, 05/15/09 ........................ 2,000 1,994,917 0.562%, 08/05/09 ........................ 10,000 9,975,578 0.592%, 08/12/09 ........................ 3,000 2,991,937 0.602%, 08/26/09 ........................ 3,000 2,991,100 1.184%, 08/05/10(b) ..................... 2,300 2,298,804 ------------ TOTAL AGENCY OBLIGATIONS (Cost $52,670,339) ..................... 52,670,339 ------------ U.S. TREASURY OBLIGATIONS--5.6% U.S. Treasury Bills 0.325%, 05/21/09 ........................ 2,400 2,398,245 0.300%, 05/28/09 ........................ 2,400 2,398,240 0.335%, 06/04/09 ........................ 2,200 2,198,055 0.397%, 07/02/09 ........................ 5,000 4,993,235 0.391%, 08/06/09 ........................ 2,600 2,595,550 0.446%, 08/13/09 ........................ 2,500 2,494,901 0.471%, 08/20/09 ........................ 3,000 2,993,270 0.492%, 08/27/09 ........................ 2,450 2,444,025 ------------ TOTAL U.S. TREASURY OBLIGATIONS (Cost $22,515,521) ..................... 22,515,521 ------------ PAR FAIR (000) VALUE -------- ------------- REPURCHASE AGREEMENTS--3.2% Deutsche Bank Securities, Inc. (Tri-Party Agreement dated 2/27/09 to be repurchased at $12,883,290, collateralized by $2,320,000 par value, Federal Home Loan Bank, 2.80%, due 09/24/09; $10,922,000 par value, Federal Mortgage Assoc., 0.00%, due 03/23/09 Market Value of the collateral is $13,272,135) 0.270%, 03/02/09 ........................ $ 12,883 $ 12,883,000 ------------ TOTAL REPURCHASE AGREEMENTS (Cost $12,883,000) ..................... 12,883,000 ------------ TOTAL INVESTMENTS AT VALUE--100.0% (Cost $402,843,050)* .................... 402,843,050 ------------ OTHER ASSETS IN EXCESS OF LIABILITIES--0.0% ....................... 142,258 ------------ NET ASSETS (APPLICABLE TO 359,700,340 BEDFORD SHARES AND 43,242,284 SANSOM STREET SHARES)--100.0% ......................... $402,985,308 ============ * Aggregate cost is the same for financial reporting and Federal tax purposes. (a) Security is a foreign domiciled issuer which is registered with the Securities and Exchange Commission. (b) Variable Rate Obligations -- The interest rate shown is the rate as of February 28, 2009. (c) Security is 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 investors. (d) Rate shown is as of report date and the date shown is date on which principal and accrued interest may be recovered through demand. See Accompanying Notes to Financial Statements. 5 THE RBB FUND, INC. MONEY MARKET PORTFOLIO SCHEDULE OF INVESTMENTS (CONCLUDED) FEBRUARY 28, 2009 (UNAUDITED) SFAS 157 DISCLOSURE -------------------------------------------------------------------------------- The following is a summary of the inputs used, as of February 28, 2009, in valuing the Portfolio's assets carried at fair value:
INVESTMENTS IN VALUATION INPUTS SECURITIES -------------------------------- ------------- Level 1 - Quoted Prices ................................ $ -- Level 2 - Other Significant Observable Inputs .......... 402,843,050 Level 3 - Significant Unobservable Inputs .............. -- ------------- Total .................................................. $ 402,843,050 =============
See Accompanying Notes to Financial Statements. 6 THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES FEBRUARY 28, 2009 (UNAUDITED)
ASSETS Investments, at fair value (Cost $389,960,050) .......................... $ 389,960,050 Repurchase agreement, at fair value (Cost $12,883,000) .................. 12,883,000 Cash .................................................................... 470 Receivables Investments sold ..................................................... 2,876,542 Interest receivable .................................................. 409,019 Prepaid expenses and other assets ....................................... 90,972 ------------- Total assets ...................................................... 406,220,053 ------------- LIABILITIES Payables Investments purchased ................................................ 2,864,137 Distribution to shareholders ......................................... 119,852 Distribution fees .................................................... 182,874 Investment advisory and administration fees .......................... 19,380 Transfer agent fees .................................................. 13,029 Custodian fees ....................................................... 9,993 Directors' and officers' fees ........................................ 2,315 Regulatory administration fees ....................................... 1,499 Service organization fees (Sansom Class) ............................. 70 Other accrued expenses and liabilities ............................... 21,596 ------------- Total liabilities ................................................. 3,234,745 ------------- Net Assets .............................................................. $ 402,985,308 ============= NET ASSETS CONSIST OF Paid-in capital ......................................................... 402,942,623 Undistributed net investment income ..................................... 831 Accumulated net realized gain from investments .......................... 41,854 ------------- Net Assets .............................................................. $ 402,985,308 ============= BEDFORD CLASS Net assets .............................................................. $ 359,742,475 ------------- Shares outstanding ($0.001 par value, 1,500,000,000 shares authorized) .. 359,700,340 ------------- Net asset value, offering and redemption price per share ................ $ 1.00 ============= SANSOM CLASS Net assets .............................................................. $ 43,242,833 ------------- Shares outstanding ($0.001 par value, 1,500,000,000 shares authorized) .. 43,242,284 ------------- Net asset value, offering and redemption price per share ................ $ 1.00 =============
See Accompanying Notes to Financial Statements. 7 THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED FEBRUARY 28, 2009 (UNAUDITED)
INVESTMENT INCOME Interest ........................................................... $4,117,090 ---------- Total investment income ....................................... 4,117,090 ---------- EXPENSES Distribution fees(1) ............................................... 1,245,277 Investment advisory and administration fees ........................ 825,801 Temporary Guarantee Program Participation fees ............................................... 65,093 Directors' and officers' fees ...................................... 63,269 Professional fees .................................................. 49,586 Custodian fees ..................................................... 40,305 Transfer agent fees ................................................ 34,259 Regulatory administration fees ..................................... 19,718 Printing and shareholder reporting fees ............................ 18,083 Insurance fees ..................................................... 17,711 Registration and filing fees ....................................... 12,397 Service organization fees (Sansom Class) ........................... 694 Other expenses ..................................................... 5,329 ---------- Total expenses before waivers ................................. 2,397,522 Less: waivers ................................................. (762,571) ---------- Net expenses after waivers ......................................... 1,634,951 ---------- Net investment income 2,482,139 ---------- Net realized gain from investments ................................. 28,705 ---------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .................. $2,510,844 ==========
(1) See Note 2 in Notes to Financial Statements. See Accompanying Notes to Financial Statements. 8 THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED FOR THE YEAR FEBRUARY 28, 2009 ENDED (UNAUDITED) AUGUST 31, 2008 ------------- ------------- FROM OPERATIONS: Net investment income ................................................... $ 2,482,139 $ 9,100,028 Net realized gain from investments ...................................... 28,705 20,643 ------------- ------------- Net increase in net assets resulting from operations ....................... 2,510,844 9,120,671 ------------- ------------- DIVIDENDS TO SHAREHOLDERS FROM: Net investment income: Bedford Class ........................................................ (2,267,776) (8,433,248) Sansom Class ......................................................... (214,363) (666,780) ------------- ------------- Net decrease in net assets from dividends to shareholders .................. (2,482,139) (9,100,028) ------------- ------------- CAPITAL SHARE TRANSACTIONS (AT $1.00 PER SHARE): Proceeds from shares sold: Bedford Class ........................................................ 479,736,478 693,423,026 Sansom Class ......................................................... 103,836,058 154,552,391 Shares issued on reinvestment of distributions: Bedford Class ........................................................ 2,171,221 8,739,785 Sansom Class ......................................................... 34,777 147,473 Shares repurchased: Bedford Class ........................................................ (441,579,027) (601,709,451) Sansom Class ......................................................... (89,379,027) (141,303,481) ------------- ------------- Net increase in net assets from capital share transactions ................. 54,820,480 113,849,743 ------------- ------------- Total increase in net assets ............................................... 54,849,185 113,870,386 NET ASSETS Beginning of period ..................................................... 348,136,123 234,265,737 ------------- ------------- End of period ........................................................... $ 402,985,308 $ 348,136,123 ============= ============= Undistributed net investment income, end of period ......................... $ 831 $ 831 ============= =============
See Accompanying Notes to Financial Statements. 9 THE RBB FUND, INC. MONEY MARKET PORTFOLIO FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
THE BEDFORD CLASS --------------------------------------------------------------------------------- FOR THE SIX MONTHS FOR THE FOR THE FOR THE FOR THE FOR THE ENDED YEAR YEAR YEAR YEAR YEAR FEBRUARY 28, ENDED ENDED ENDED ENDED ENDED 2009 AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, (UNAUDITED) 2008 2007 2006 2005 2004 ------------- ------------ ----------- ----------- ----------- ------------ Net asset value, beginning of period . $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 -------- -------- -------- -------- -------- -------- Income from investment operations: Net investment income ............. 0.0064 0.0307 0.0447 0.0388 0.0162 0.0025 Net gains (losses) on securities .. --(b) --(b) --(b) --(b) --(b) --(b) -------- -------- -------- -------- -------- -------- Total net income from investment operations .................... 0.0064 0.0307 0.0447 0.0388 0.0162 0.0025 -------- -------- -------- -------- -------- -------- Less dividends and distributions: Dividends (from net investment income) .............. (0.0064) (0.0307) (0.0447) (0.0388) (0.0162) (0.0025) -------- -------- -------- -------- -------- -------- Net asset value, end of period ....... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======== ======== ======== ======== ======== ======== Total Return .................... 0.64% 3.12% 4.56% 3.95% 1.63% 0.25% Ratios/Supplemental Data Net assets, end of period (000's omitted) ................. $359,742 $319,387 $218,914 $150,657 $109,495 $ 72,001 Ratios of expenses to average net assets(a) ................... 0.90%(c) 0.90% 0.90% 0.85% 0.97% 0.94% Ratios of net investment income to average net assets ........... 1.27%(c) 2.94% 4.47% 3.81% 1.68% 0.24%
(a) Without the waiver of advisory fees and reimbursement of certain operating expenses, the ratios of expenses to average net assets for the Bedford Class of the Money Market Portfolio would have been 1.25% for the six months ended February 28, 2009 and 1.23%, 1.29%, 1.34%, 1.23% and 1.34% for the years ended August 31, 2008, 2007, 2006, 2005 and 2004, respectively. (b) Amount is less than $0.00005 per share. (c) Annualized. See Accompanying Notes to Financial Statements. 10 THE RBB FUND, INC. MONEY MARKET PORTFOLIO FINANCIAL HIGHLIGHTS (CONCLUDED) (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
THE SANSOM STREET CLASS --------------------------------------------------------------------------------- FOR THE SIX MONTHS FOR THE FOR THE FOR THE FOR THE FOR THE ENDED YEAR YEAR YEAR YEAR YEAR FEBRUARY 28, ENDED ENDED ENDED ENDED ENDED 2009 AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, (UNAUDITED) 2008 2007 2006 2005 2004 ------------- ------------ ----------- ----------- ----------- ------------ Net asset value, beginning of period ... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ------- -------- -------- -------- -------- -------- Income from investment operations: Net investment income ............... 0.0096 0.0365 0.0502 0.0434 0.0239 0.0100 Net gains (losses) on securities .... --(b) --(b) --(b) --(b) --(b) --(b) ------- -------- -------- -------- -------- -------- Total net income from investment operations ...................... 0.0096 0.0365 0.0502 0.0434 0.0239 0.0100 ------- -------- -------- -------- -------- -------- Less dividends and distributions: Dividends (from net investment income) ................ (0.0096) (0.0365) (0.0502) (0.0434) (0.0239) (0.0100) ------- -------- -------- -------- -------- -------- Net asset value, end of period ......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======= ======== ======== ======== ======== ======== Total Return ...................... 0.96% 3.71% 5.14% 4.42% 2.41% 1.00% Ratios/Supplemental Data Net assets, end of period (000's omitted) ................... $43,243 $ 28,749 $ 15,352 $ 15,525 $ 87,304 $141,372 Ratios of expenses to average net assets(a) ..................... 0.25%(c) 0.31% 0.35% 0.26% 0.20% 0.20% Ratios of net investment income to average net assets ................ 1.66%(c) 3.64% 5.02% 4.25% 2.39% 0.98%
(a) Without the waiver of advisory fees and reimbursement of certain operating expenses, the ratios of expenses to average net assets for the Sansom Street Class of the Money Market Portfolio would have been 0.60% for the six months ended February 28, 2009 and 0.60%, 0.69%, 0.67%, 0.67% and 0.59% for the years ended August 31, 2008, 2007, 2006, 2005 and 2004, respectively. (b) Amount is less than $0.00005 per share. (c) Annualized. See Accompanying Notes to Financial Statements. 11 THE RBB FUND, INC. MONEY MARKET PORTFOLIO NOTES TO FINANCIAL STATEMENTS FEBRUARY 28, 2009 (UNAUDITED) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The RBB Fund, Inc. ("RBB" or the "Company") 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 "1940 Act"), as an open-end management investment company. RBB is a "series fund," which is a mutual fund divided into separate portfolios. Each portfolio is treated as a separate entity for certain matters under the 1940 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 eighteen active investment portfolios, including the Money Market Portfolio ("Portfolio"), which comprise the RBB family of funds. RBB has authorized capital of one hundred billion shares of common stock of which 78.773 billion shares are currently classified into one hundred and twenty-seven classes of common stock. The Portfolio has issued shares with a par value of $0.001. Each class represents an interest in an active or inactive RBB investment portfolio. The active classes have been grouped into nine separate "families." SECURITY VALUATION -- Securities held in the Portfolio are valued under the amortized cost method, which approximates fair value. Under this method, securities are valued at cost when purchased and thereafter a constant accretion of discount or amortization of premium is recorded until maturity of the security. Regular review and monitoring of the valuation is performed to ensure that cost continues to approximate fair value and to avoid dilution or other unfair results to shareholders. The Portfolio seeks to maintain net asset value per share at $1.00. Effective September 1, 2008, the Portfolio adopted Financial Accounting Standards Board ("FASB") Statement of Financial Accounting Standards No. 157 ("SFAS 157"). This standard clarifies the definition of fair value for financial reporting, establishes a framework for measuring fair value and requires additional disclosures about the use of fair value measurements. The three levels of the fair value hierarchy under SFAS 157 are described below: o Level 1 -- quoted prices in active markets for identical securities o Level 2 -- other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) o Level 3 -- significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments) The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. A summary of the inputs used to value the Portfolio's investments as of February 28, 2009 is included with the Portfolio's Schedule of Investments. SECURITY TRANSACTIONS, INVESTMENT INCOME, AND EXPENSES -- Security transactions 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. Interest income is accrued when earned. Certain expenses, such as distribution, transfer agency and printing, are class specific expenses and vary by class. Expenses not directly attributable to a specific portfolio or class are allocated based on relative net assets of each portfolio and class. 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 portfolios within the Company (such as director or professional fees) are charged to all portfolios in proportion to their average net assets. 12 THE RBB FUND, INC. MONEY MARKET PORTFOLIO NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2009 (UNAUDITED) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net investment income are declared daily, recorded on the ex-date and paid monthly. All dividends from net investment income are taxed as ordinary income. Any net realized capital gains are distributed at least annually. Income subject to dividends and capital gain subject to distributions are determined in accordance with income tax regulations, which may differ from accounting principles generally accepted in the United States of America. FEDERAL INCOME TAXES -- No provision is made for federal income taxes. It is the Company's intention to have each portfolio continue to qualify for and elect the tax treatment applicable to regulated investment companies under Subchapter M of the Internal Revenue Code and make the requisite distributions to its shareholders which will be sufficient to relieve it from federal income and excise taxes. REPURCHASE AGREEMENTS -- Money market instruments may be purchased from financial institutions, such as banks and non-bank dealers, subject to the seller's agreement to repurchase them at an agreed upon date and price. Collateral for repurchase agreements may have longer maturities than the maximum permissible remaining maturity of portfolio investments, provided the repurchase agreements themselves mature in 13 months or less. The seller is required on a daily basis to maintain the value of the securities subject to the agreement at no less than the repurchase price. The agreements are conditioned upon the collateral being deposited under the Federal Reserve book entry system or held in a separate account by the Portfolio's custodian or an authorized securities depository. 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. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. OTHER -- In the normal course of business, the Portfolio may enter into contracts that provide general indemnifications. The Portfolio's maximum exposure under these arrangements is dependent on claims that may be made against the Portfolio in the future and therefore, cannot be estimated; however, based on experience, the risk of material loss for such claims is considered remote. 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES Pursuant to an Investment Advisory and Administration Agreement, BlackRock Institutional Management Corp. (the "Adviser" or "BIMC"), an indirect subsidiary of The PNC Financial Services Group, Inc., serves as investment adviser and administrator for the Portfolio. BIMC and PNC Global Investment Servicing (U.S.), Inc. ("PNC"), a member of The PNC Financial Services Group, Inc., entered into a delegation agreement on behalf of the Portfolio, wherein PNC has agreed to perform administration and accounting services for an annual fee of 0.10% of the average net assets of the Portfolio, paid out of the fee paid to BIMC. 13 THE RBB FUND, INC. MONEY MARKET PORTFOLIO NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2009 (UNAUDITED) 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONTINUED) For its advisory services, BIMC is entitled to receive the following fees, computed daily and payable monthly, and based on the Portfolio's average daily net assets: ANNUAL RATE ---------------------------------------------- 0.45% of first $250 million of net assets; 0.40% of next $250 million of net assets; and 0.35% of net assets in excess of $500 million. BIMC may, at its discretion, voluntarily waive and/or reimburse all or any portion of its advisory fee for the Portfolio. For each class of shares within the Portfolio, the net advisory fee charged to each class is the same on a relative basis. For the six months ended February 28, 2009, advisory fees and waivers for the investment portfolio were as follows: GROSS NET ADVISORY ADVISORY FEE WAIVER FEE ----------- -------------- -------------- $825,801 $(673,997) $151,804 As of February 28, 2009, the Portfolio owed BIMC $19,380 in advisory fees. PNC and PFPC Distributors, Inc. ("PFPC Distributors"), an affiliate of PNC, may also voluntarily waive a portion of their fees and/or reimburse expenses. The Portfolio will not pay BIMC, PNC or PFPC Distributors at a later time for any amounts waived or assumed. For providing regulatory administration services to RBB, PNC is entitled to receive compensation as agreed to by the Company and PNC. This fee is allocated to each portfolio of the Company in proportion to its net assets. PNC serves as the transfer and dividend disbursing agent for each class. For providing transfer agent services, PNC is entitled to receive fees from the Portfolio. PNC may, at its discretion, voluntarily waive all or any portion of its transfer agency fee for any class of shares. PFPC Trust Company, an affiliate of PNC, provides certain custodial services to the Portfolio. As compensation for such custodial services, PFPC Trust Company is entitled to receive the following fees, computed daily and payable monthly, and based on the Portfolio's average gross assets: ANNUAL RATE -------------------------------------------------------------- 0.025% per thousand of first $50 million of gross assets; 0.020% per thousand of next $50 million of gross assets; 0.015% per thousand of gross assets in excess of $100 million. The Portfolio, on behalf of the Bedford Class of shares of the Portfolio, has adopted a Distribution Plan pursuant to Rule 12b-1 under the 1940 Act (the "Plan"). The Portfolio has entered into a Distribution Agreement with PFPC Distributors. 14 THE RBB FUND, INC. MONEY MARKET PORTFOLIO NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2009 (UNAUDITED) 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONTINUED) The Plan provides for the Bedford Class to make monthly payments, based on average net assets, to PFPC Distributors of up to 0.65% on an annualized basis. PFPC Distributors may voluntarily waive these fees at its discretion. For the six months ended February 28, 2009, distribution fees paid to PFPC Distributors for the Bedford Class were as follows: GROSS NET DISTRIBUTION DISTRIBUTION FEE WAIVER FEE -------------- -------------- -------------- Bedford Class $1,245,277 $(88,574) $1,156,703 The Portfolio has entered into service agreements with banks affiliated with PNC who render support services to customers who are the beneficial owners of the Sansom Street Class in consideration of the payment of 0.10% of the daily net asset value of such shares. For the six months ended February 28, 2009, service organization fees were $694 for the Portfolio. 3. FEDERAL INCOME TAX INFORMATION The Portfolio intends to continue to qualify as a regulated investment company and distribute all of its taxable income. Therefore, no federal tax provision is required. FASB Interpretation No. 48 ("FIN 48"), Accounting for Uncertainty in Income Taxes, sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has analyzed the Portfolio's tax positions and has concluded that no provision for income tax is required in the Portfolio's financial statements. The Portfolio is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. However, management's conclusions regarding the adoption of FIN 48 may be subject to review and adjustment at a later date based on factors including, but not limited to, further implementation guidance from the FASB, new tax laws, regulations and administrative interpretations (including court decisions). The Portfolio's federal tax returns for each of the prior three fiscal years remain subject to examination by the Internal Revenue Service. For federal income tax purposes, realized capital losses may be carried forward and applied against future realized gains. At August 31, 2008, the Portfolio had no capital loss carryforwards. Prior period capital loss carryforwards of $5,533 were utilized to offset current realized gains. Under federal tax law, foreign currency and capital losses realized after October 31 may be deferred and treated as having arisen on the first day of the following fiscal year. For the year ended August 31, 2008, the Portfolio incurred no post-October capital losses. The tax character of dividends and distributions paid during the last fiscal year was as follows: ORDINARY LONG-TERM INCOME GAINS ------------------ ------------- 2008 $9,100,028 $ -- 15 THE RBB FUND, INC. MONEY MARKET PORTFOLIO NOTES TO FINANCIAL STATEMENTS (CONCLUDED) FEBRUARY 28, 2009 (UNAUDITED) 4. U.S. DEPARTMENT OF THE TREASURY'S GUARANTEE PROGRAM FOR MONEY MARKET FUNDS On October 1, 2008, the Board of Directors of the Company approved the Portfolio's participation in the Guarantee Program for Money Market Funds (the "Guarantee Program") established by the U.S. Department of the Treasury (the "Treasury"). The Guarantee Program provides coverage to shareholders of record in the Portfolio as of the close of business on September 19, 2008 and would be triggered if the Portfolio's NAV falls below $0.9950. The number of shares covered will be the lesser of (1) shares owned on September 19, 2008 or (2) shares owned on the date on which the Portfolio's NAV is less than $0.9950 ("Guarantee Event"). In order for payment to occur under the Guarantee Program, the Portfolio would need to initiate the liquidation of the Portfolio within five business days of the Guarantee Event. To participate in the Guarantee Program, the Department of Treasury requires publicly offered money market funds that are regulated under Rule 2a-7 of the 1940 Act ("eligible money market funds") with an NAV per share greater than or equal to $0.9975 as of the close of business on September 19, 2008, to pay an upfront, non-refundable fee of 0.01 percent (one basis point) for the original period and 0.015 percent (1.5 basis points) for the first and second extension periods based on the number of shares outstanding on that date. Eligible money market funds with an NAV per share greater than or equal to $0.9950 and below $0.9975 as of the close of business on September 19, 2008, are required to pay an upfront, non-refundable fee of 0.015 percent (1.5 basis points) for the original period and 0.023 percent (2.3 basis points) for the first and second extension periods based on the number of shares outstanding on that date. Funds with an NAV per share below $0.9950 as of the close of business on September 19, 2008 may not participate in the Guarantee Program. On October 6, 2008, the Portfolio paid $35,923 to participate in the Guarantee Program, which amount was amortized through December 18, 2008. The initial term of the Guarantee Program expired on December 18, 2008. On December 5, 2008, the Portfolio paid $53,882 to participate in the first extension of the Guarantee Program which extended the Guarantee Program through April 30, 2009. This amount will be amortized through April 30, 2009. On April 1, 2009, the U.S. Treasury Department announced a second extension of its Guarantee Program through September 18, 2009, in order to support ongoing stability in financial markets. On April 9, 2009, the Portfolio paid $53,882 to participate in the second extension of the Guarantee Program. This amount will be amortized through September 18, 2009. 5. SUBSEQUENT EVENTS Effective March 13, 2009, the Distributor has agreed to voluntarily waive a portion of the Distribution and Service (12b-1) Fees payable by Bedford Shares of the Portfolio to the extent necessary to maintain a minimum annualized net yield of at least 0.00%. This waiver is voluntary and may be changed or terminated by the Distributor at any time. 16 THE RBB FUND, INC. MONEY MARKET PORTFOLIO ADDITIONAL INFORMATION (UNAUDITED) PROXY VOTING Policies and procedures that the Portfolio uses to determine how to vote proxies relating to portfolio securities as well as information regarding how the Portfolio voted proxies relating to portfolio securities for the most recent 12-month period ended June 30 are available without charge, upon request, by calling the number shown below and on the Securities and Exchange Commission's ("SEC") website at http://www.sec.gov. Bedford (800) 888-9723 Sansom Street (800) 430-9618 QUARTERLY PORTFOLIO SCHEDULES The Company files its complete schedule of portfolio holdings with the SEC for the first and third fiscal quarter of each fiscal year (quarters ended November 30 and May 31) on Form N-Q. The Company's Form N-Q is available on the SEC website at http://www.sec.gov and may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. Information on the operation of the SEC Public Reference Room may be obtained by calling (202) 551-8090. 17 [THIS PAGE INTENTIONALLY LEFT BLANK.] [THIS PAGE INTENTIONALLY LEFT BLANK.] INVESTMENT ADVISER BlackRock Institutional Management Corporation 100 Bellevue Parkway Wilmington, DE 19809 TRANSFER AGENT PNC Global Investment Servicing (U.S.), Inc. 101 Sabin Street Pawtucket, RI 02866 PRINCIPAL UNDERWRITER PFPC Distributors, Inc. 760 Moore Road King of Prussia, PA 19406 CUSTODIAN PFPC Trust Company 8800 Tinicum Blvd. Suite 200 Philadelphia, PA 19153 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Deloitte & Touche LLP 1700 Market Street Philadelphia, PA 19103-3984 COUNSEL Drinker Biddle & Reath LLP One Logan Square 18th and Cherry Streets Philadelphia, PA 19103-6996 [GRAPHICS OMITTED] Hilliard Lyons SENBANC FUND SENBANC of THE RBB FUND, INC. SEMI-ANNUAL REPORT FEBRUARY 28, 2009 (UNAUDITED) This report is submitted for the general information of the shareholders of the Fund. It is not authorized for distribution unless preceded or accompanied by a current prospectus for the Fund. Shares of Senbanc Fund are distributed by PFPC Distributors, Inc., 760 Moore Road, King of Prussia, PA 19406. SIX MONTHS ENDED FEBRUARY 28, 2009 TO: SHAREHOLDERS OF SENBANC FUND There was broad capitulation by bank stock investors worldwide on January 20th, 2009. The specter of bank nationalization and its potential elimination of shareholder value panicked investors. The British Government's large stake in Royal Bank of Scotland precipitated a stampede of opinion, and the herd mentality of institutional investors completed the scenes of carnage. We now have an open debate on bank nationalization, a course of action anathema even to Socialist governments in Europe except as the last of last resorts. Banks appear to be managing their earnings reasonably well in these trying times. Only a fraction of banks recorded losses for all of 2008, and fewer still have recorded negative earnings in total since bank stock prices began their slide in May 2004. Reserves for loan losses in excess of non-performing assets provide an additional cushion to equity. Excess reserves taken in an adverse economic climate are no detriment to comparative valuation; at such times stock prices are not supported by earnings. It therefore behooves financial institutions to over-reserve, to cut dividends, and to take any measures necessary to preserve capital for some future date. In consequence, the last four years has seen average bank stock prices decline at a rate close to the drop in earnings, while tangible equity within these banks has increased. Our ten largest holdings represent a significant 64% of the total portfolio of 46 stocks. Large regional and money center banks represent 57% of these top ten. The total portfolio has a price to book value at a 27% discount to the Nasdaq Bank Index, with a dividend yield slightly double that Index. By any gross yardstick, our methodology has accumulated significant positions in severely undervalued banks. JPMorgan is our largest position by default. To meet fund redemptions we have sold enough stocks that the relative size of this position has increased. We are content to hold this position, because JPMorgan's 65% price decline between May 4th, 2007 and January 20th, 2009, has run counter to its record of positive quarterly operating earnings. We accumulated this stock as its tangible book value was rising. We are quite prepared to await proper valuation of this and other stocks in our portfolio in their next normal year of operation. Beginning in the second half of 2009, we expect quarterly earnings to be stronger on a consecutive quarter basis, and in year to year quarterly comparisons. Even with a rising tide of favorable perception for banks through the remainder of 2009 and throughout 2010, we do not expect a full return of value for the higher-performing banks in our portfolio until 2011. Very truly yours, /s/ Alan F. Morel Alan F. Morel Portfolio Manager Senbanc Fund 1 SENBANC FUND PERFORMANCE DATA FEBRUARY 28, 2009 (UNAUDITED) -------------------------------------------------------------------------------- SINCE TOTAL RETURNS (%) SIX 1 3 YEAR 5 YEAR INCEPTION* AS OF 2/28/09 MONTHS YEAR ANNUALIZED ANNUALIZED ANNUALIZED ------------------------------------------------------------------------------ Senbanc Fund -51.28 -60.55 -34.31 -21.27 -4.37 -------------------------------------------------------------------------------- *Inception Date -- 7/8/99 THE PERFORMANCE SHOWN ABOVE REPRESENTS PAST PERFORMANCE. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS AND CURRENT PERFORMANCE MAY BE HIGHER OR LOWER THAN THE PERFORMANCE SHOWN ABOVE. INVESTMENT RESULTS AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. TO OBTAIN PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH-END, CALL 1-800-444-1854. THE FUND'S GROSS ANNUAL OPERATING EXPENSES, AS STATED IN THE CURRENT PROSPECTUS IS 1.79%. TOTAL RETURNS SHOWN INCLUDE FEE WAIVERS AND EXPENSE REIMBURSEMENTS. RETURNS COULD HAVE BEEN LOWER IF THESE WAIVERS WERE NOT IN EFFECT. THE MAXIMUM SALES CHARGE, AS STATED IN THE PROSPECTUS, IS 2.25%. SENBANC FUND PORTFOLIO HOLDINGS SUMMARY TABLE FEBRUARY 28, 2009 (UNAUDITED) % of Industry Classification Net Assets ----------------------- -------------- Savings, Credit & Other Financial Institutions.............. 86.2% State & National Banks...................................... 10.7 Temporary Investments....................................... 4.2 ----- Total Investments........................................... 101.1 Liabilities in Excess of Other Assets....................... (1.1) ----- Net Assets.................................................. 100.0% ===== Portfolio holdings are subject to change at any time. 2 SENBANC FUND FUND EXPENSE EXAMPLES (UNAUDITED) As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments; and (2) ongoing costs, including management fees; distribution (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the six-month period from September 1, 2008 to February 28, 2009, and held for the entire period. ACTUAL EXPENSES The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use the information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads). Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. Beginning Account Ending Account Value Value Expenses Paid 9/01/08 2/28/09 During Period* ----------------- -------------- -------------- Actual ....................... $1,000.00 $ 487.20 $6.45 Hypothetical (5% return before expenses). 1,000.00 1,016.01 8.79 --------------- * Expenses are equal to the Fund's annualized six-month expense ratio of 1.75% multiplied by the average account value over the period, multiplied by the number of days (181) in the most recent fiscal half-year, then divided by 365 to reflect the one-half year period. The Fund's ending account value is based on the actual six-month total return of -51.28%. 3 SENBANC FUND SCHEDULE OF INVESTMENTS FEBRUARY 28, 2009 (UNAUDITED) COMMON STOCK -- 96.9% ------------------------------------------------------------------------------- FAIR SHARES DESCRIPTION VALUE ------ ----------- --------- SAVINGS, CREDIT & OTHER FINANCIAL INSTITUTIONS -- 86.2% ------------------------------------------------------------- 15,655 American River Bankshares .................... $ 126,806 26,900 Associated Banc-Corp. ........................ 388,974 71,600 Bank Holdings (The)* ......................... 52,268 116,400 Bank of America Corp. ........................ 459,780 42,478 C&F Financial Corp. .......................... 497,417 87,500 Capital Bank Corp. ........................... 473,375 52,398 Centrue Financial Corp. ...................... 196,493 72,800 Citizens Republic Bancorp, Inc.* ............. 54,600 45,400 CityBank ..................................... 77,634 35,700 Comerica, Inc. ............................... 535,857 331,300 Corus Bankshares, Inc. ....................... 49,695 4,630 Crescent Banking Co. ......................... 18,289 42,600 Financial Institutions, Inc. ................. 140,580 40,500 First United Corp. ........................... 465,750 87,368 Hampton Roads Bankshares, Inc. ............... 567,018 234,000 JPMorgan Chase & Co. ......................... 5,346,900 180,400 KeyCorp ...................................... 1,264,604 3,917 MainSource Financial Group, Inc. ............. 21,896 172,111 National Bankshares, Inc. .................... 3,230,523 186,199 Northrim BanCorp, Inc. ....................... 1,502,626 276,928 PAB Bankshares, Inc. ......................... 567,702 15,000 Pacific Capital Bancorp N.A. ................. 108,600 122,900 Pacific Premier Bancorp, Inc.* ............... 460,875 25,200 PacWest Bancorp .............................. 344,736 26,600 Peoples Bancorp of North Carolina, Inc. ...... 151,354 12,000 Peoples Financial Corp. ...................... 201,720 101,094 Premier Financial Bancorp .................... 586,345 186,800 Regions Financial Corp. ...................... 638,856 11,700 Umpqua Holdings Corp. ........................ 99,450 5,472 United Security Bancshares, Inc. ............. 76,663 ----------- 18,707,386 ----------- STATE & NATIONAL BANKS -- 10.7% ------------------------------------------------------------- 55,899 Bancorp, Inc. (The)* ......................... 160,430 14,296 Bay National Corp.* .......................... 11,437 40,700 Cascade Financial Corp. ...................... 97,273 See Notes to Financial Statements. 4 SENBANC FUND SCHEDULE OF INVESTMENTS (CONCLUDED) FEBRUARY 28, 2009 (UNAUDITED) COMMON STOCK (CONTINUED) ------------------------------------------------------------------------------- FAIR SHARES DESCRIPTION VALUE ------ ----------- --------- 18,186 Central Virginia Bankshares, Inc. ............ $ 94,567 106,100 Community Bancorp* ........................... 95,490 11,801 Cowlitz Bancorp*.. ........................... 56,055 59,900 East West Bancorp, Inc. ...................... 425,889 58,600 First Regional Bancorp* ...................... 41,606 68,200 Rainier Pacific Financial Group, Inc. ........ 64,790 67,897 Rurban Financial Corp. ....................... 570,335 50,400 Summit Financial Group, Inc. ................. 385,056 26,100 Synovus Financial Corp. ...................... 90,828 18,600 Taylor Capital Group, Inc. ................... 74,214 100,499 Temecula Valley Bancorp, Inc. ................ 30,049 118,032 Vineyard National Bancorp* ................... 17,469 23,700 Yadkin Valley Financial Corp. ................ 108,072 ----------- 2,323,560 ----------- TOTAL COMMON STOCK (COST $64,243,548) ..... 21,030,946 ----------- TEMPORARY INVESTMENTS -- 4.2% ------------------------------------------------------------------------------- 914,657 PNC Bank Money Market ........................ 914,657 ----------- TOTAL TEMPORARY INVESTMENTS (COST $914,657) ........................... 914,657 ----------- TOTAL INVESTMENTS -- 101.1% (COST $65,158,205) ........................ 21,945,603 ----------- LIABILITIES IN EXCESS OF OTHER ASSETS -- (1.1%) .................... (230,830) ----------- NET ASSETS -- 100% ........................ $21,714,773 =========== * Non-income producing security. SFAS 157 DISCLOSURE -------------------------------------------------------------------------------- The following is a summary of the inputs used, as of February 28, 2009, in valuing the Fund's assets carried at fair value: INVESTMENTS IN VALUATION INPUTS SECURITIES ------------------ ----------- Level 1 - Quoted Prices................................ $21,945,603 Level 2 - Other Significant Observable Inputs.......... -- Level 3 - Significant Unobservable Inputs.............. -- ----------- Total.................................................. $21,945,603 =========== See Notes to Financial Statements. 5 SENBANC FUND STATEMENT OF ASSETS & LIABILITIES FEBRUARY 28, 2009 (UNAUDITED) ASSETS Investments, at fair value (Cost $65,158,205) ............ $ 21,945,603 Receivables Dividends and interest................................. 24,553 Capital shares sold.................................... 24,436 Investment adviser..................................... 10,838 Prepaid expenses and other assets......................... 12,221 ------------ Total assets........................................ 22,017,651 ------------ LIABILITIES Payables Capital shares redeemed................................ 140,869 Distribution fees...................................... 64,066 Transfer agent fees.................................... 29,851 Professional fees...................................... 25,048 Administration and accounting fees..................... 12,335 Director's and officers' fees.......................... 7,763 Custodian fees......................................... 4,900 Other accrued expenses and liabilities................. 18,046 ------------ Total Liabilities................................... 302,878 ------------ Net Assets................................................ $ 21,714,773 ============ NET ASSETS CONSIST OF Paid-in capital........................................... 79,287,124 Undistributed net investment income....................... 107,067 Accumulated net realized loss from investments............ (14,466,816) Net unrealized depreciation on investments................ (43,212,602) ------------ Net Assets................................................ $ 21,714,773 ============ Shares outstanding ($0.001 par value, 50,000,000 shares authorized)..................................... 5,646,658 ------------ Net asset value and redemption price per share............ $ 3.85 ============ Maximum offering price per share (NAV / (1-2.25%)......... $ 3.94 ============ See Notes to Financial Statements. 6 SENBANC FUND STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED FEBRUARY 28, 2009 (UNAUDITED) INVESTMENT INCOME Dividends .............................................. $ 736,834 Interest................................................ 11,584 ------------ Total investment income............................ 748,418 ------------ EXPENSES Advisory fees........................................... 110,508 Distribution fees....................................... 110,508 Transfer agent fees..................................... 62,595 Administration and accounting fees...................... 54,510 Professional fees....................................... 26,547 Printing and shareholder reporting fees................. 24,384 Directors' and officers' fees........................... 13,884 Custodian fees.......................................... 12,005 Insurance fees.......................................... 9,124 Registration and filing fees............................ 7,439 Other expenses.......................................... 2,232 ------------ Total expenses before waivers and reimbursements... 433,736 Less: waivers and reimbursements................... (111,423) ------------ Net expenses after waivers and reimbursements...... 322,313 ------------ Net Investment Income .................................. 426,105 ------------ NET REALIZED AND UNREALIZED GAIN/(LOSS) FROM INVESTMENTS NET REALIZED GAIN/(LOSS) FROM: Investments........................................ (8,183,783) NET CHANGE IN UNREALIZED APPRECIATION/(DEPRECIATION) ON: Investments........................................ (16,551,452) ------------ Net realized and unrealized loss from investments....... (24,735,235) ------------ NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS......... $(24,309,130) ============ See Notes to Financial Statements. 7 SENBANC FUND STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED FOR THE YEAR FEBRUARY 28, 2009 ENDED (UNAUDITED) AUGUST 31, 2008 ----------------- --------------- FROM OPERATIONS: Net investment income......................................... $ 426,105 $ 2,056,071 Net realized loss from investments............................ (8,183,783) (5,510,341) Net change in unrealized depreciation from investments........................................... (16,551,452) (31,531,724) ------------ ------------ Net decrease in net assets resulting from operations............... (24,309,130) (34,985,994) ------------ ------------ DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income......................................... (1,363,146) (3,969,785) Net realized capital gains.................................... (9,202) (4,489,732) ------------ ------------ Net decrease in net assets from dividends and distributions to shareholders....................................................... (1,372,348) (8,459,517) ------------ ------------ CAPITAL SHARE TRANSACTIONS Proceeds from shares sold (75,356 and 491,710 shares, respectively).............................................. 489,301 4,914,054 Reinvestment of distributions (230,768 and 732,453 shares, respectively).............................................. 1,273,840 7,947,115 Shares redeemed (948,821 and 2,498,242 shares, respectively).............................................. (6,233,695) (28,667,954) ------------ ------------ Net decrease in net assets from capital share transactions......... (4,470,554) (15,806,785) ------------ ------------ Total decrease in net assets....................................... (30,152,032) (59,252,296) NET ASSETS Beginning of period........................................... 51,866,805 111,119,101 ------------ ------------ End of period................................................. $ 21,714,773 $ 51,866,805 ============ ============ Undistributed net investment income, end of period................. $ 107,067 $ 1,044,108 ============ ============
See Notes to Financial Statements. 8 SENBANC FUND FINANCIAL HIGHLIGHTS
FOR THE SIX FOR THE FOR THE FOR THE FOR THE PERIOD FOR THE MONTHS ENDED FISCAL YEAR FISCAL YEAR FISCAL YEAR JULY 1, 2005 FISCAL YEARS ENDED FEBRUARY 28, ENDED ENDED ENDED THROUGH ---------------------- 2009 AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, JUNE 30, JUNE 30, (UNAUDITED) 2008 2007 2006 2005* 2005 2004 ------------ ----------- ----------- ----------- -------------- ---------- ---------- PER SHARE OPERATING PERFORMANCE Net asset value: Beginning of period...... $ 8.25 $ 14.69 $ 16.57 $ 16.27 $ 16.13 $ 16.54 $ 14.86 ------- ------- -------- -------- -------- -------- -------- Net investment income....... 0.09 0.39 0.41 0.29 0.03 0.15 0.04 Net realized and unrealized gain/(loss) on investments.............. (4.25) (5.52) (1.56) 0.44 0.11 0.78 2.59 ------- ------- -------- -------- -------- -------- -------- Total from investment operations............... (4.16) (5.13) (1.15) 0.73 0.14 0.93 2.63 ------- ------- -------- -------- -------- -------- -------- Less distributions from: Net investment income....... (0.24) (0.61) (0.31) (0.12) -- (0.10) (0.02) Net realized gain on investments.............. --(b) (0.70) (0.42) (0.31) -- (1.24) (0.93) ------- ------- -------- -------- -------- -------- -------- Total distributions......... (0.24) (1.31) (0.73) (0.43) -- (1.34) (0.95) ------- ------- -------- -------- -------- -------- -------- Net asset value: End of period............ $ 3.85 $ 8.25 $ 14.69 $ 16.57 $ 16.27 $ 16.13 $ 16.54 ======= ======= ======== ======== ======== ======== ======== Total investment return (excludes sales charge).. (51.28)%** (37.08)% (7.47)% 4.52% 0.87%** 5.25% 17.84% RATIOS/SUPPLEMENTAL DATA Net assets, end of period (000's omitted).......... $21,715 $51,867 $111,119 $185,593 $230,250 $231,651 $217,494 Ratio of operating expenses to average net assets, including waivers........ 1.75%*** 1.75% 1.53% 1.38% 1.43%*** 1.40% 1.25% Ratio of operating expenses to average net assets, excluding waivers........ 2.35%*** 1.79% 1.53% 1.38% 1.43%*** 1.40% 1.25% Ratio of net investment income/(loss) to average net assets, including waivers........ 2.31%*** 2.79% 1.84% 1.53% 0.93%*** 0.91% 0.29% Ratio of net investment income/(loss) to average net assets, excluding waivers........ 1.71%*** 2.75% 1.84% 1.53% 0.93%*** 0.91% 0.29% Portfolio turnover rate..... 2.20%** 11.01% 9.74% 7.47% 0.94% 19.90% 51.01%
--------------- * As a result of a reorganization that was effective August 31, 2005, the Fund changed its fiscal year end from June 30 to August 31. ** Not annualized. *** Annualized. (b) Amount is less than $0.005 per share. See Notes to Financial Statements. 9 SENBANC FUND NOTES TO FINANCIAL STATEMENTS FEBRUARY 28, 2009 (UNAUDITED) 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES The RBB Fund, Inc. ("RBB" or the "Company") 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 "1940 Act"), as an open-end management investment company. RBB is a "series fund," which is a mutual fund divided into separate portfolios. Each portfolio is treated as a separate entity for certain matters under the 1940 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 eighteen active investment portfolios, including the Senbanc Fund (the "Fund"). As of the date hereof, the Fund offers one class of shares and is a non-diversified fund. RBB has authorized capital of one hundred billion shares of common stock of which 78.773 billion shares are currently classified into one hundred and twenty-seven classes of common stock. Each class represents an interest in an active or inactive RBB investment portfolio. The active classes have been grouped into nine separate "families." The Fund commenced operations on July 8, 1999, as a separate portfolio (the "Predecessor Fund") of the Hilliard Lyons Research Trust. After the close of business on August 31, 2005, all of the assets and liabilities of the Predecessor Fund were transferred to the Fund, a newly created portfolio of the Company, that is continuing the business, including carrying forward the financial and performance history, of the Predecessor Fund. PORTFOLIO VALUATION -- The Fund's net asset value ("NAV") is calculated once daily at the close of regular trading hours on the New York Stock Exchange ("NYSE") (generally 4:00 p.m. Eastern time) on each day the NYSE is open. Securities held by the Fund are valued using the closing price or the last sale price on a national securities exchange or the National Association of Securities Dealers Automatic Quotation System ("NASDAQ") market system where they are primarily traded. Equity securities traded in the over-the-counter market are valued at their closing prices. If there were no transactions on that day, securities traded principally on an exchange or on NASDAQ will be valued at the mean of the last bid and ask prices prior to the market close. Fixed income securities having a remaining maturity of greater than 60 days are valued using an independent pricing service. Fixed income securities having a remaining maturity of 60 days or less are valued under the amortized cost method, which approximates fair value. Investments in other open-end investment companies are valued based on the NAV of the investment companies (which may use fair value pricing as discussed in their prospectuses). If market quotations are unavailable or deemed unreliable, securities will be valued in accordance with procedures adopted by the Board of Directors. Relying on prices supplied by pricing services or dealers or using fair valuation may result in values that are higher or lower than the values used by other investment companies and investors to price the same investments. Effective September 1, 2008, the Fund adopted Financial Accounting Standards Board ("FASB") Statement of Financial Accounting Standards No. 157 ("SFAS 157"). This standard clarifies the definition of fair value for financial reporting, establishes a framework for measuring fair value and requires additional disclosures about the use of fair value measurements. The three levels of the fair value hierarchy under SFAS 157 are described below: o Level 1 -- quoted prices in active markets for identical securities o Level 2 -- other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) 10 SENBANC FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2009 (UNAUDITED) o Level 3 -- significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments) The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. A summary of the inputs used to value the Fund's investments as of February 28, 2009 is included with the Fund's Schedule of Investments. 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 liabilities 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. INVESTMENT TRANSACTIONS, INVESTMENT INCOME AND EXPENSES -- The Fund records security transactions based on 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 accrued when earned. Dividend income is recorded on the ex-dividend date. 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 fund families (such as director or professional fees) are charged to all funds in proportion to their net assets of the RBB Funds, or in such other manner as the Board of Directors deems fair or equitable. Expenses and fees, including investment advisory and administration fees, are accrued daily and taken into account for the purpose of determining the NAV of the Fund. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net investment income and distributions from net realized capital gains, if any, will be declared and paid at least annually to shareholders and recorded on ex-date. Income dividends 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 of America. Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications within the components of net assets. U.S. TAX STATUS -- No provision is made for U.S. 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. income and excise taxes. OTHER -- In the normal course of business, the Fund may enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is dependent on claims that may be made against the Fund in the future, and, therefore, cannot be estimated; however, based on experience, the risk of material loss for such claims is considered remote. 11 SENBANC FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2009 (UNAUDITED) 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES Hilliard Lyons Research Advisors (the "Adviser"), a division of J.J.B. Hilliard, W.L. Lyons, LLC, provides management and investment advisory services to the Fund pursuant to an investment advisory agreement with the Company. For its services, the Adviser is paid a monthly fee at the annual rate of 0.60% of the Fund's average daily net assets. The Adviser has voluntarily agreed to limit the Fund's total operating expenses to 1.75%. This limit is calculated daily based on the Fund's average daily net assets. This limitation is effected in waivers of advisory fees and reimbursement of expenses exceeding the advisory fees as necessary. The Adviser may terminate the voluntary limit at any time upon notice to the Company's Board of Directors. PNC Global Investment Servicing (U.S.), Inc. ("PNC"), a member of The PNC Financial Services Group, Inc., serves as administrator for the Fund. For providing administrative and accounting services, PNC is entitled to receive a monthly fee equal to an annual rate of 0.095% of the Fund's first $250 million of average daily net assets; 0.080% of the next $250 million of average daily net assets; 0.060% of the next $250 million of average daily net assets; and 0.040% of the average daily net assets in excess of $750 million, subject to a minimum of $7,500 per month. Included in the administration and accounting fees shown on the Statement of Operations are fees for providing regulatory administration services to RBB. For providing those services, PNC is entitled to receive compensation as agreed to by the Company and PNC. This fee is allocated to the Fund in proportion to its net assets of the RBB Funds. In addition, PNC serves as the Fund's transfer and dividend disbursing agent. For providing transfer agent services, PNC is entitled to receive a monthly fee, subject to a minimum monthly fee of $3,000, plus out of pocket expenses. For providing custodial services to the Fund, PFPC Trust Company, an affiliate of PNC, is entitled to receive a monthly fee equal to an annual rate of 0.015% of the first $100 million of the Fund's average gross assets; 0.01% of the next $400 million of average gross assets; and 0.008% of average gross assets over $500 million, subject to a minimum monthly fee of $1,500. PFPC Distributors, Inc. ("PFPC Distributors"), an affiliate of PNC, provides certain administrative services to the Fund. The Board of Directors has adopted a distribution plan pursuant to Rule 12b-1 under the 1940 Act, to allow the Fund to reimburse PFPC Distributors for certain expenses incurred in connection with distribution activities. The Directors have authorized a payment of up to 0.60% of the Fund's average net assets annually to reimburse PFPC Distributors for such expenses. For the six months ended February 28, 2009, PFPC Distributors earned $1,253 in underwriting fees and $9,950 for commissions on sales of the Fund's shares. 12 SENBANC FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2009 (UNAUDITED) 3. INVESTMENT IN SECURITIES For the six months ended February 28, 2009, aggregate purchases and sales of investment securities (excluding short-term investments) were as follows: Investment Securities Purchases Sales ----------- --------- $5,365,773 $738,612 4. FEDERAL INCOME TAX INFORMATION FASB Interpretation No. 48, ("FIN 48") Accounting for Uncertainty in Income Taxes, sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has analyzed the Fund's tax positions and has concluded that no provision for income tax is required in the Fund's financial statements. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. However, management's conclusions regarding the adoption of FIN 48 may be subject to review and adjustment at a later date based on factors including, but not limited to, further implementation of guidance from the FASB, new tax laws, regulations and administrative interpretations (including court decisions). The Fund's federal tax returns for each of the prior three fiscal years remain subject to examination by the Internal Revenue Service. At February 28, 2009, federal tax cost, aggregate gross unrealized appreciation and depreciation of securities held by the Fund were as follows: Cost of investments for tax purposes.............. $ 65,158,205 ------------ Gross tax unrealized appreciation................. $ -- Gross tax unrealized depreciation................. (43,212,602) ------------ Net tax unrealized depreciation on investments.... $(43,212,602) ============ On August 31, 2008, the Fund had no capital loss carryforwards available to offset future capital gains. Under federal tax law, foreign currency and capital losses realized after October 31 may be deferred and treated as having arisen on the first day of the following fiscal year. For the year ended August 31, 2008, the Fund deferred post-October capital losses of $6,283,011. 13 SENBANC FUND NOTES TO FINANCIAL STATEMENTS (CONCLUDED) FEBRUARY 28, 2009 (UNAUDITED) The tax character of dividends and distributions paid were as follows: For the Year Ended August 31, 2008 ------------------ Distributions paid from: Ordinary income............................ $4,414,263 Long-term capital gains.................... 4,045,254 ---------- $8,459,517 ========== 5. INDUSTRY CONCENTRATION RISK Since the Fund's investments are concentrated in the banking industry, they are subject to risks in addition to those that apply to the general equity market. Events may occur that significantly affect the entire banking industry; therefore, the Fund's share value may at times increase or decrease at a faster rate than the share value of a mutual fund with investments in many industries. 14 SENBANC FUND OTHER INFORMATION FEBRUARY 28, 2009 (UNAUDITED) PROXY VOTING A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities and information regarding how the Fund voted proxies relating to portfolio securities for the most recent 12-month period ended June 30 is available without charge, upon request by calling Senbanc Fund at (877) 264-5346, at WWW.HILLIARD.COM and on the SEC's website at HTTP://WWW.SEC.GOV. QUARTERLY PORTFOLIO SCHEDULES The Fund files its complete schedule of portfolio holdings with the SEC for the first and third fiscal quarters of each fiscal year on Form N-Q. The Fund's Forms N-Q are available on the SEC's website at http://www.sec.gov and may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information on the operation of the SEC's Public Reference Room may be obtained by calling (202) 551-8090. 15 -------------------------------------------------- INVESTMENT ADVISER Hilliard Lyons Research Advisors 500 West Jefferson Street Louisville, KY 40202 ADMINISTRATOR PNC Global Investment Servicing (U.S.), Inc. 301 Bellevue Parkway Wilmington, DE 19809 TRANSFER AGENT PNC Global Investment Servicing (U.S.), Inc. 101 Sabin Street Pawtucket, RI 02866 UNDERWRITER PFPC Distributors, Inc. 760 Moore Road King of Prussia, PA 19406 CUSTODIAN PFPC Trust Company 8800 Tinicum Boulevard Suite 200 Philadelphia, PA 19153 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Deloitte & Touche LLP 1700 Market Street Philadelphia, PA 19103-3984 LEGAL COUNSEL Drinker Biddle & Reath LLP One Logan Square 18th and Cherry Streets Philadelphia, PA 19103-6996 -------------------------------------------------- [GRAPHIC OMMITTED] ROBECO ROBECO INVESTMENT FUNDS of The RBB Fund, Inc. Semi-Annual Report February 28, 2009 (Unaudited) Robeco Boston Partners Small Cap Value Fund II Robeco Boston Partners Long/Short Equity Fund Robeco Boston Partners Mid Cap Value Fund Robeco Boston Partners All-Cap Value Fund Robeco WPG Small Cap Value Fund Robeco WPG 130/30 Large Cap Core Fund SAM Sustainable Climate Fund SAM Sustainable Water Fund This report is submitted for the general information of the shareholders of the Funds. It is not authorized for distribution unless preceded or accompanied by a current prospectus for the Funds. Shares of Robeco Investment Funds are distributed by PFPC Distributors, Inc., 760 Moore Road, King of Prussia, PA 19406. ROBECO INVESTMENT FUNDS -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- GENERAL MARKET COMMENTARY -------------------------------------------------------------------------------- Dear Shareholder: In our view, the pessimism and fear observed in the current environment have been (in part) a function of the investment communities' own making. Analysts have quickly shifted from overly optimistic assessments of 2009 earnings per share (EPS) for the S&P 500 Index to a race to determine who can publish the most draconian EPS assessments the fastest. In the fourth quarter of 2008, sell and buy side estimates were in the range of $60 to $80 for 2009; now we see firms predicting low $40s, a decline of nearly 60% from the peak of 2007 and a scenario last realized in the Great Depression. Many pundits have likened this crisis to a natural disaster, such as a flood, that only occurs every century. This financial crisis, however, is not a natural occurrence. The recent problems are the result of human decision-making; hence they are solvable and we believe they will be solved. The massive monetary and fiscal stimuli being applied around the world should have a positive impact in preventing aggregate demand from collapsing and the global economy from falling into an abyss. The timing of this impact is impossible to predict, but the injection of $1 or $2 trillion into a $13 trillion US economy represents a demonstrably powerful weapon. We believe the pessimism we see all around us is actually creating valuations which set the stage for strong investment returns in the future. Successful investing has elements of contrarianism that run strongly counter to human nature. During stressful times, it is natural to want to wait for the situation to settle in order to have more clarity about the future. However, by then it will be too late. The market gravitates to the right solution, but it is inefficient; in its adjustment process it frequently overshoots, both to the downside and upside due to emotions of fear and greed. History shows that the great majority of stock market returns are earned on a very small number of big "up" days; being out of the market on those days is not only unbelievably costly but inherently destructive to the mathematics of compound returns. Having said that we see attractive valuations in this gloomy climate, the question is: where do we find them? Ultimately, it is our view that corporate performance in the shape of earnings and cash flow will dictate the direction of the stock market. This reasoning stems from the observation that corporations are not sitting on their hands during this crisis; they are cutting costs to improve their financial profile. As a result, we think that the momentum behind earnings will stabilize, or at least stop declining, as the year progresses. Given that our investment process relies on a bottom-up framework for identifying stock-specific investments in a risk-averse manner, we believe the current confluence of attractive valuations, serious-but-solvable issues and opportunities for long-term appreciation have created a target-rich environment for investing your portfolio. As for aggregate demand, the economic stimuli now being applied should ultimately prevent a collapse. In our view, as optimistic greed supplants pessimistic fear, stock prices will respond accordingly. We would be remiss if we did not take this opportunity to thank you for your business and for the confidence that you have placed in us. We look forward to keeping you informed as this extraordinary investment environment continues to evolve. Sincerely, Robeco Investment Funds SEMI-ANNUAL REPORT 2009 | 1 ROBECO INVESTMENT FUNDS -------------------------------------------------------------------------------- TOTAL RETURNS FOR THE PERIOD ENDED FEBRUARY 28, 2009 (UNAUDITED)
AVERAGE ANNUAL ------------------------------------------ SINCE SIX-MONTH 1 YEAR 5 YEAR 10 YEAR INCEPTION --------- ------ ------ ------- --------- ROBECO BOSTON PARTNERS SMALL CAP VALUE FUND II Institutional Class(1) -46.20% -44.75% -8.29% 8.11% N/A Investor Class(1) -46.30% -44.95% -8.54% 7.85% N/A Russell 2000(R) Value Index -47.16% -43.03% -6.64% 3.90% N/A Russell 2000(R) Index(2) -46.91% -42.38% -6.68% 1.22% N/A (1) Inception date July 1, 1998 (2) This is not a primary benchmark of the Fund. Results of index performance are presented for general comparative purposes. ROBECO BOSTON PARTNERS LONG/SHORT EQUITY FUND Institutional Class(1) -29.75% -26.02% 0.46% 6.11% N/A Investor Class(1) -29.90% -26.25% 0.19% 5.85% N/A S&P 500(R) Index -41.82% -43.32% -6.63% -3.43% N/A (1) Inception date November 17, 1998 ROBECO BOSTON PARTNERS MID CAP VALUE FUND Institutional Class(1) -39.67% -38.28% -2.19% 3.49% N/A Investor Class(1) -39.75% -38.46% -2.42% 3.24% N/A Russell 2500(R) Index -46.09% -43.82% -6.00% 2.64% N/A Russell 2500(R) Value Index(2) -46.05% -43.69% -6.22% 3.84% N/A Russell Midcap(R) Value Index(2) -48.03% -47.66% -5.38% 2.41% N/A (1) Inception date June 2, 1997 (2) This is not a primary benchmark of the Fund. Results of index performance are presented for general comparative purposes. ROBECO BOSTON PARTNERS ALL-CAP VALUE FUND Institutional Class(1) -34.88% -35.73% -2.07% N/A 2.84% Investor Class(1) -35.08% -35.98% -2.34% N/A 2.56% Russell 3000(R) Value Index -44.91% -47.02% -6.65% N/A -2.35% Russell 3000(R) Index(2) -42.63% -43.51% -6.40% N/A -2.05% (1) Inception date July 1, 2002 (2) This is not a primary benchmark of the Fund. Results of index performance are presented for general comparative purposes. ROBECO WPG SMALL CAP VALUE FUND Institutional Class -43.08% -43.50% -8.03% 0.96% N/A Russell 2000(R) Value Index -47.16% -43.03% -6.64% 3.90% N/A ROBECO WPG 130/30 LARGE CAP CORE FUND(1) Institutional Class -43.80% -47.42% -9.85% -6.07% N/A S&P 500(R) Index(2) -41.82% -43.32% -6.63% -3.43% N/A Russell 1000(R) Growth Index(2) -39.90% -40.03% -6.35% -5.58% N/A (1) Formerly Robeco WPG Large Cap Growth Fund (2) Effective September 4, 2007, the Robeco WPG 130/30 Large Cap Core Fund changed its benchmark from the Russell 1000(R) Growth Index to the S&P 500(R) Index.
2 | SEMI-ANNUAL REPORT 2009 ROBECO INVESTMENT FUNDS -------------------------------------------------------------------------------- TOTAL RETURNS FOR THE PERIOD ENDED FEBRUARY 28, 2009 (UNAUDITED)
AVERAGE ANNUAL ------------------------------------------ SINCE SIX-MONTH 1 YEAR 5 YEAR 10 YEAR INCEPTION --------- ------ ------ ------- --------- SAM SUSTAINABLE CLIMATE FUND Institutional Class(1) -48.83% -50.94% N/A N/A -45.28% Investor Class(1) -48.96% -51.07% N/A N/A -45.38% MSCI World Index -43.55% -47.12% N/A N/A -40.98% (1) Inception date October 1, 2007. SAM SUSTAINABLE WATER FUND Institutional Class(1) -44.59% -46.83% N/A N/A -40.05% Investor Class(1) -44.72% -46.96% N/A N/A -40.15% MSCI World Index -43.55% -47.12% N/A N/A -40.98% (1) Inception date October 1, 2007.
---------- THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH-END, PLEASE CALL 1-888-261-4073 OR VISIT OUR WEBSITE AT WWW.ROBECOINVEST.COM. ROBECO INVESTMENT MANAGEMENT, INC. CONTRACTUALLY AGREED TO WAIVE A PORTION OF ITS ADVISORY FEE AND REIMBURSE A PORTION OF THE FUNDS' OPERATING EXPENSES, IF NECESSARY, TO MAINTAIN THE EXPENSE LIMITATIONS, IF ANY, AS SET FORTH IN THE NOTES TO THE FINANCIAL STATEMENTS. TOTAL RETURNS SHOWN INCLUDE FEE WAIVERS AND EXPENSE REIMBURSEMENTS, IF ANY; TOTAL RETURNS WOULD HAVE BEEN LOWER HAD THERE BEEN NO WAIVER OR REIMBURSEMENT OF FEES AND EXPENSES IN EXCESS OF EXPENSE LIMITATIONS. RETURNS SHOWN INCLUDE THE REINVESTMENT OF ALL DIVIDENDS AND OTHER DISTRIBUTIONS AND DO NOT REFLECT TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR ON THE REDEMPTION OF FUND SHARES. INVESTORS SHOULD NOTE THAT THE FUNDS ARE ACTIVELY MANAGED MUTUAL FUNDS WHILE THE INDICES ARE UNMANAGED, DO NOT INCUR EXPENSES AND ARE NOT AVAILABLE FOR INVESTMENT. SMALL COMPANY STOCKS ARE GENERALLY RISKIER THAN LARGE COMPANY STOCKS DUE TO GREATER VOLATILITY AND LESS LIQUIDITY. THE SAM SUSTAINABLE CLIMATE FUND AND SAM SUSTAINABLE WATER FUND ARE NON-DIVERSIFIED. GAINS OR LOSSES IN A SINGLE SECURITY OR SECTOR MAY HAVE A GREATER IMPACT ON THESE FUNDS. The following are the Funds' gross annual operating expense ratios as stated in the most recent prospectus: INSTITUTIONAL INVESTOR CLASS CLASS ------------ -------- Robeco Boston Partners Small Cap Value Fund II....................... 1.39% 1.64% Robeco Boston Partners Long/Short Equity Fund........................ 4.36%(1) 4.61%(1) Robeco Boston Partners Mid Cap Value Fund............................ 1.48% 1.73% Robeco Boston Partners All-Cap Value Fund............................ 1.70% 1.95% Robeco WPG Small Cap Value Fund................. 1.65% N/A Robeco WPG 130/30 Large Cap Core Fund (formerly Robeco WPG Large Cap Growth Fund)... 3.43%(1) N/A SAM Sustainable Climate Fund.................... 9.18% 9.43% SAM Sustainable Water Fund...................... 8.89% 9.14% (1) Includes interest and dividend expense on short sales. SEMI-ANNUAL REPORT 2009 | 3 ROBECO INVESTMENT FUNDS -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- FUND EXPENSE EXAMPLES (unaudited) -------------------------------------------------------------------------------- As a shareholder of the Fund(s), you incur two types of costs: (1) transaction costs, redemption fees; and (2) ongoing costs, including management fees, distribution fees and other Fund expenses. The examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund(s) and to compare these costs with the ongoing costs of investing in other mutual funds. The examples are based on an investment of $1,000 invested at the beginning of the six-month period from September 1, 2008 through February 28, 2009, and held for the entire period. ACTUAL EXPENSES The first line of the accompanying tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second line of the accompanying tables provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare these 5% hypothetical examples with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that the expenses shown in the accompanying tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees. Therefore, the second line of the accompanying tables is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. EXPENSE TABLE
BEGINNING ACCOUNT ENDING ACCOUNT ANNUALIZED EXPENSES VALUE VALUE EXPENSE PAID DURING SEPTEMBER 1, 2008 FEBRUARY 28, 2009 RATIO PERIOD* ------------------ ----------------- ---------- ----------- ---------------------------------------------- ROBECO BOSTON PARTNERS SMALL CAP VALUE FUND II ---------------------------------------------- INSTITUTIONAL Actual.................................. $1,000.00 $ 538.00 1.30% $ 4.96 Hypothetical............................ 1,000.00 1,018.27 1.30 6.53 INVESTOR Actual.................................. $1,000.00 $ 537.00 1.55% $ 5.91 Hypothetical............................ 1,000.00 1,017.01 1.55 7.78 --------------------------------------------- ROBECO BOSTON PARTNERS LONG/SHORT EQUITY FUND --------------------------------------------- INSTITUTIONAL Actual.................................. $1,000.00 $ 702.50 3.73%(1) $15.75 Hypothetical............................ 1,000.00 1,006.07 3.73(1) 18.73 INVESTOR Actual.................................. $1,000.00 $ 701.00 3.98%(1) $16.79 Hypothetical............................ 1,000.00 1,004.81 3.98(1) 19.98 ----------------------------------------- ROBECO BOSTON PARTNERS MID CAP VALUE FUND ----------------------------------------- INSTITUTIONAL Actual.................................. $1,000.00 $ 603.30 1.00% $ 3.98 Hypothetical............................ 1,000.00 1,019.77 1.00 5.02 INVESTOR Actual.................................. $1,000.00 $ 602.50 1.25% $ 4.97 Hypothetical............................ 1,000.00 1,018.52 1.25 6.28
4 | SEMI-ANNUAL REPORT 2009 ROBECO INVESTMENT FUNDS -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- FUND EXPENSE EXAMPLES (unaudited) (continued) --------------------------------------------------------------------------------
BEGINNING ACCOUNT ENDING ACCOUNT ANNUALIZED EXPENSES VALUE VALUE EXPENSE PAID DURING SEPTEMBER 1, 2008 FEBRUARY 28, 2009 RATIO PERIOD* ------------------ ----------------- ---------- ----------- ----------------------------------------- ROBECO BOSTON PARTNERS ALL-CAP VALUE FUND ----------------------------------------- INSTITUTIONAL Actual.................................. $1,000.00 $ 651.20 0.95% $ 3.89 Hypothetical............................ 1,000.00 1,020.03 0.95 4.77 INVESTOR Actual.................................. $1,000.00 $ 649.20 1.20% $ 4.91 Hypothetical............................ 1,000.00 1,018.77 1.20 6.02 ------------------------------- ROBECO WPG SMALL CAP VALUE FUND ------------------------------- INSTITUTIONAL Actual.................................. $1,000.00 $ 569.20 1.69% $ 6.58 Hypothetical............................ 1,000.00 1,016.31 1.69 8.48 ------------------------------------- ROBECO WPG 130/30 LARGE CAP CORE FUND ------------------------------------- INSTITUTIONAL Actual.................................. $1,000.00 $ 562.00 2.37% $ 9.18 Hypothetical............................ 1,000.00 1,012.90 2.37 11.90 ---------------------------- SAM SUSTAINABLE CLIMATE FUND ---------------------------- INSTITUTIONAL Actual.................................. $1,000.00 $ 511.70 1.50% $ 5.62 Hypothetical............................ 1,000.00 1,017.26 1.50 7.53 INVESTOR Actual.................................. $1,000.00 $ 510.40 1.75% $ 6.55 Hypothetical............................ 1,000.00 1,016.01 1.75 8.79 -------------------------- SAM SUSTAINABLE WATER FUND -------------------------- INSTITUTIONAL Actual.................................. $1,000.00 $ 554.10 1.50% $ 5.78 Hypothetical............................ 1,000.00 1,017.26 1.50 7.53 INVESTOR Actual.................................. $1,000.00 $ 552.80 1.75% $ 6.74 Hypothetical............................ 1,000.00 1,016.01 1.75 8.79
* Expenses are equal to the Fund's annualized six-month expense ratios in the table below, which include waived fees or reimbursed expenses, multiplied by the average account value over the period, multiplied by the number of days (181) in the most recent fiscal half-year, then divided by 365 to reflect the one-half year period. (1) These amounts include dividends paid on securities which the Fund has sold short ("short-sale dividends") and related interest expense. The amount of short-sale dividends and related interest expense was 1.23% of average net assets for the most recent fiscal half-year. (2) These amounts include dividends paid on securities which the Fund has sold short ("short-sale dividends") and interest expense on borrowings. The amount of short-sale dividends and interest expense was 0.31% of average net assets for the most recent fiscal half-year. SEMI-ANNUAL REPORT 2009 | 5 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2009 (unaudited) -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- PORTFOLIO HOLDINGS SUMMARY TABLES -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS SMALL CAP VALUE FUND II % of Net Security Type/Sector Classification Assets Value -------------------------------------------- -------- ----------- COMMON STOCK Finance .................................. 20.4% $ 8,853,016 Consumer Services ........................ 20.3 8,782,906 Real Estate Investment Trusts ............ 11.0 4,790,505 Capital Goods ............................ 9.9 4,278,566 Health Care .............................. 9.8 4,268,455 Technology ............................... 6.4 2,771,889 Energy ................................... 5.3 2,307,929 Consumer Non-Durables .................... 5.3 2,293,045 Consumer Durables ........................ 3.9 1,680,645 Basic Industries ......................... 3.1 1,355,365 Utilities ................................ 1.1 469,013 Transportation ........................... 0.9 386,906 Communications ........................... 0.6 275,814 SHORT-TERM INVESTMENT ....................... 2.6 1,112,664 LIABILITIES IN EXCESS OF OTHER ASSETS ............................. (0.6) (255,446) ----- ----------- NET ASSETS -- 100.0% ........................ 100.0% $43,371,272 ===== =========== ---------- Portfolio holdings are subject to change at any time. ROBECO BOSTON PARTNERS MID CAP VALUE FUND % of Net Security Type/Sector Classification Assets Value -------------------------------------------- -------- ----------- COMMON STOCK Finance .................................. 16.5% $ 4,980,173 Consumer Services ........................ 16.4 4,924,113 Technology ............................... 15.7 4,732,629 Utilities ................................ 8.3 2,505,713 Capital Goods ............................ 7.4 2,227,287 Health Care .............................. 6.4 1,919,691 Basic Industries ......................... 5.6 1,671,054 Consumer Non-Durables .................... 5.2 1,549,702 Energy ................................... 5.0 1,510,640 Real Estate Investment Trusts............. 4.1 1,219,155 Consumer Durables ........................ 2.8 851,607 Communications ........................... 2.4 724,556 Transportation ........................... 1.1 329,339 SHORT-TERM INVESTMENT ....................... 2.9 880,828 OTHER ASSETS IN EXCESS OF LIABILITIES ........................... 0.2 67,472 ----- ----------- NET ASSETS -- 100.0% ........................ 100.0% $30,093,959 ===== =========== ---------- Portfolio holdings are subject to change at any time. ROBECO BOSTON PARTNERS LONG/SHORT EQUITY FUND % of Net Security Type/Sector Classification Assets Value -------------------------------------------- -------- ----------- DOMESTIC COMMON STOCK Technology ............................... 27.9% $ 5,790,544 Finance .................................. 16.8 3,469,265 Health Care .............................. 16.3 3,376,947 Consumer Services ........................ 12.9 2,680,424 Energy ................................... 8.0 1,662,871 Capital Goods ............................ 6.5 1,354,939 Consumer Non-Durables .................... 4.5 928,654 Basic Industries ......................... 4.0 821,395 Consumer Durables ........................ 2.6 532,748 Communications ........................... 1.6 334,973 Transportation ........................... 0.8 171,726 Real Estate Investment Trusts............. 0.1 18,529 PREFERRED STOCK ............................. 4.7 971,385 WARRANTS .................................... -- -- SECURITIES SOLD SHORT ....................... (11.9) (2,469,379) OTHER ASSETS IN EXCESS OF LIABILITIES ........................... 5.2 1,083,417 ----- ----------- NET ASSETS -- 100.0% ........................ 100.0% $20,728,438 ===== =========== ---------- Portfolio holdings are subject to change at any time. ROBECO BOSTON PARTNERS ALL-CAP VALUE FUND % of Net Security Type/Sector Classification Assets Value -------------------------------------------- -------- ----------- COMMON STOCK Finance .................................. 22.9% $ 8,509,651 Health Care .............................. 16.4 6,098,498 Consumer Services ........................ 13.5 5,012,731 Technology ............................... 13.1 4,858,062 Energy ................................... 9.1 3,393,591 Consumer Non-Durables .................... 7.0 2,624,304 Capital Goods ............................ 3.2 1,196,028 Communications ........................... 3.1 1,163,614 Real Estate Investment Trusts............. 2.6 966,148 Utilities ................................ 2.5 949,659 Consumer Durables ........................ 0.5 170,061 SHORT-TERM INVESTMENT ....................... 3.5 1,286,453 CORPORATE BONDS ............................. 2.1 789,179 PREFERRED STOCK ............................. 1.5 566,012 WARRANTS .................................... -- 323 OPTIONS WRITTEN ............................. (0.7) (264,091) LIABILITIES IN EXCESS OF OTHER ASSETS ............................. (0.3) (115,128) ----- ----------- NET ASSETS -- 100.0% ........................ 100.0% $37,205,095 ===== =========== ---------- Portfolio holdings are subject to change at any time. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 6 | SEMI-ANNUAL REPORT 2009 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2009 (unaudited) -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- PORTFOLIO HOLDINGS SUMMARY TABLES -------------------------------------------------------------------------------- ROBECO WPG SMALL CAP VALUE FUND % of Net Security Type/Sector Classification Assets Value -------------------------------------------- -------- ----------- COMMON STOCK Finance .................................. 33.2% $ 7,286,240 Commercial Services ...................... 13.4 2,936,825 Consumer Non-Cyclical .................... 9.1 2,008,817 Consumer Cyclical ........................ 8.9 1,944,326 Energy ................................... 8.2 1,791,339 Technology ............................... 6.4 1,397,621 Health Care .............................. 5.5 1,206,044 Utilities ................................ 3.7 808,931 Transportation ........................... 3.6 793,593 Consumer Services ........................ 3.2 712,303 Industrials .............................. 2.1 451,970 Basic Materials .......................... 1.5 333,170 OTHER ASSETS IN EXCESS OF LIABILITIES ........................... 1.2 267,235 ----- ----------- NET ASSETS -- 100.0% ........................ 100.0% $21,938,414 ===== =========== ---------- Portfolio holdings are subject to change at any time. SAM SUSTAINABLE CLIMATE FUND % of Net Security Type/Sector Classification Assets Value -------------------------------------------- -------- ----------- COMMON STOCK United States ............................ 27.5% $ 572,851 Spain .................................... 18.2 378,193 Austria .................................. 6.5 134,686 Brazil ................................... 5.3 109,990 Finland .................................. 5.2 108,844 Netherlands .............................. 4.5 93,966 Denmark .................................. 4.2 87,710 Switzerland .............................. 3.5 71,953 China .................................... 3.3 68,245 Canada ................................... 2.6 54,856 Germany .................................. 2.1 43,514 Greece ................................... 2.0 42,457 Sweden ................................... 0.5 10,073 Ireland .................................. 0.3 5,445 SHORT-TERM INVESTMENT ....................... 16.1 334,098 LIABILITIES IN EXCESS OF OTHER ASSETS ............................. (1.8) (36,951) ----- ----------- NET ASSETS -- 100.0% ........................ 100.0% $ 2,079,930 ===== =========== ---------- Portfolio holdings are subject to change at any time. ROBECO WPG 130/30 LARGE CAP CORE FUND % of Net Security Type/Sector Classification Assets Value -------------------------------------------- -------- ----------- DOMESTIC COMMON STOCK Technology ............................... 25.6% $ 1,820,154 Health Care .............................. 20.2 1,433,158 Energy ................................... 14.9 1,056,812 Finance .................................. 13.9 987,734 Consumer Cyclical ........................ 11.1 788,579 Consumer Non-Cyclical .................... 10.8 769,562 Basic Materials .......................... 7.0 499,916 Consumer Services ........................ 6.0 424,776 Industrials .............................. 5.8 414,906 Telecommunications ....................... 5.2 367,034 Utilities ................................ 5.1 361,818 Commercial Services ...................... 3.1 217,654 Transportation ........................... 2.2 158,156 Other .................................... 0.1 7,023 SHORT-TERM INVESTMENT ....................... 20.3 1,439,411 SECURITIES SOLD SHORT ....................... (31.0) (2,201,693) LIABILITIES IN EXCESS OF OTHER ASSETS ............................. (20.3) (1,442,164) ----- ----------- NET ASSETS -- 100.0% ........................ 100.0% $ 7,102,836 ===== =========== ---------- Portfolio holdings are subject to change at any time. SAM SUSTAINABLE WATER FUND % of Net Security Type/Sector Classification Assets Value -------------------------------------------- -------- ----------- COMMON STOCK United States ............................ 43.6% $ 1,265,686 Hong Kong ................................ 9.8 283,297 France ................................... 8.7 253,417 Netherlands .............................. 8.2 236,577 Switzerland .............................. 3.8 109,995 United Kingdom ........................... 3.7 107,326 Austria .................................. 2.5 71,349 Germany .................................. 2.4 71,051 Canada ................................... 2.3 66,123 Japan .................................... 2.1 60,464 Singapore ................................ 1.8 52,463 Brazil ................................... 1.3 37,848 China .................................... 0.8 24,135 Spain .................................... 0.6 18,309 Finland .................................. 0.4 12,693 Philippines .............................. 0.3 9,034 Australia ................................ 0.1 3,439 SHORT-TERM INVESTMENT ....................... 8.2 237,160 LIABILITIES IN EXCESS OF OTHER ASSETS ............................. (0.6) (17,967) ----- ----------- NET ASSETS -- 100.0% ........................ 100.0% $ 2,902,399 ===== =========== ---------- Portfolio holdings are subject to change at any time. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2009 | 7 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2009 (unaudited) -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS SMALL CAP VALUE FUND II PORTFOLIO OF INVESTMENTS -------------------------------------------------------------------------------- Number of Shares Value --------- ----------- COMMON STOCK--98.0% BASIC INDUSTRIES--3.1% Ashland, Inc. ............................ 7,810 $ 46,157 Massey Energy Co. ........................ 7,295 84,257 Neenah Paper, Inc. ....................... 9,825 51,581 Rock-Tenn Co., Class A ................... 5,055 139,569 Schweitzer-Mauduit International, Inc. ................................... 22,495 341,924 USEC, Inc.* .............................. 137,550 691,877 ----------- 1,355,365 ----------- CAPITAL GOODS--9.9% Actuant Corp., Class A ................... 10,075 103,672 Acuity Brands, Inc. ...................... 16,165 370,502 Beacon Roofing Supply, Inc.* ............. 66,945 734,387 Brady Corp., Class A ..................... 9,583 164,157 Drew Industries, Inc.* ................... 19,005 118,021 Gardner Denver, Inc.* .................... 10,645 201,403 Granite Construction, Inc. ............... 6,495 231,092 Griffon Corp.* ........................... 33,260 241,800 Lennox International, Inc. ............... 10,530 272,727 Lincoln Electric Holdings, Inc. .......... 8,885 273,036 LSI Industries, Inc. ..................... 18,350 64,592 Manitowoc Co., Inc., (The) ............... 19,915 81,651 Mueller Industries, Inc. ................. 9,575 173,020 Oshkosh Corp. ............................ 35,775 223,951 Perini Corp.* ............................ 10,880 166,682 RBC Bearings, Inc.* ...................... 6,880 102,650 Rofin-Sinar Technologies, Inc.* .......... 5,640 82,626 RTI International Metals, Inc.* .......... 17,500 189,700 Toro Co. ................................. 8,710 190,488 Wesco International, Inc.* ............... 17,615 292,409 ----------- 4,278,566 ----------- COMMUNICATIONS--0.6% EarthLink, Inc.* ......................... 43,780 275,814 ----------- CONSUMER DURABLES--3.9% Gentex Corp. ............................. 30,695 245,560 MDC Holdings, Inc. ....................... 9,400 237,162 Tempur-Pedic International, Inc. ......... 109,645 673,221 Thor Industries, Inc. .................... 37,375 400,286 Winnebago Industries, Inc. ............... 30,720 124,416 ----------- 1,680,645 ----------- CONSUMER NON-DURABLES--5.3% Alliance One International, Inc.* ........ 111,090 384,371 Brown Shoe Co., Inc. ..................... 34,102 121,744 NBTY, Inc.* .............................. 21,400 318,218 Nu Skin Enterprises, Inc., Class A ....... 32,390 304,466 RC2 Corp.* ............................... 22,065 103,485 Skechers U.S.A., Inc., Class A* .......... 33,015 210,636 Steven Madden Ltd.* ...................... 21,780 353,271 Take-Two Interactive Software, Inc.* .................................. 17,335 107,304 Tupperware Brands Corp. ................. 12,690 179,944 Universal Corp. .......................... 3,440 98,866 Warnaco Group, Inc., (The)* .............. 5,115 110,740 ----------- 2,293,045 ----------- Number of Shares Value --------- ----------- CONSUMER SERVICES--20.3% ABM Industries, Inc. ..................... 10,825 $ 132,390 American Eagle Outfitters, Inc. .......... 17,040 166,310 Asbury Automative Group, Inc. ............ 45,520 129,732 Asset Acceptance Capital Corp.* .......... 23,465 78,608 Build-A-Bear-Workshop, Inc.* ............. 22,490 81,414 Charming Shoppes, Inc.* .................. 177,100 123,970 Corporate Executive Board Co., (The) .................................. 11,805 177,075 Dress Barn, Inc. (The)* .................. 36,030 357,417 Ennis, Inc. .............................. 18,310 149,776 Foot Locker, Inc. ........................ 39,820 330,904 G&K Services, Inc., Class A .............. 15,462 275,997 Gevity HR, Inc. .......................... 42,430 90,376 Group 1 Automotive, Inc. ................. 15,370 164,459 Gymboree Corp. (The)* .................... 6,190 159,207 Heidrick & Struggles International, Inc. ................................... 26,305 421,932 Hertz Global Holdings, Inc.* ............. 167,355 528,842 InfoGROUP, Inc. .......................... 42,090 124,586 International Speedway Corp., Class A ................................ 21,628 418,069 Jackson Hewitt Tax Service, Inc. ......... 45,105 337,385 Kenexa Corp.* ............................ 22,130 101,798 Knoll, Inc. .............................. 51,143 337,544 Live Nation, Inc.* ....................... 91,945 322,727 MAXIMUS, Inc. ............................ 8,120 299,222 Men's Wearhouse, Inc., (The) ............. 21,750 232,290 Monster Worldwide, Inc.* ................. 44,015 290,059 MPS Group, Inc.* ......................... 31,280 155,462 PetMed Express, Inc.* .................... 13,296 183,219 Regis Corp. .............................. 21,640 272,664 Rent-A-Center, Inc.* ..................... 26,625 466,470 School Specialty, Inc.* .................. 7,620 107,213 Service Corp. International .............. 95,930 324,243 Spherion Corp.* .......................... 94,400 116,112 Steiner Leisure Ltd.* .................... 6,770 170,672 Steinway Musical Instruments* ............ 8,840 81,505 Watson Wyatt Worldwide, Inc., Class A ................................ 11,265 553,224 World Fuel Services Corp. ................ 17,926 520,033 ----------- 8,782,906 ----------- ENERGY--5.3% Approach Resources, Inc.* ................ 23,695 159,230 Bristow Group, Inc.* ..................... 34,625 701,156 Concho Resources, Inc.* .................. 20,560 410,172 Dril-Quip, Inc.* ......................... 12,540 263,591 Flotek Industries, Inc.* ................. 34,290 68,580 Helix Energy Solutions Group, Inc.* .................................. 125,760 391,114 Hornbeck Offshore Services, Inc.* .................................. 7,130 93,474 Petroleum Development Corp.* ............. 6,275 75,928 Rosetta Resources, Inc.* ................. 12,930 65,814 Whiting Petroleum Corp.* ................. 3,385 78,870 ----------- 2,307,929 ----------- THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 8 | SEMI-ANNUAL REPORT 2009 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2009 (unaudited) -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS SMALL CAP VALUE FUND II (concluded) PORTFOLIO OF INVESTMENTS -------------------------------------------------------------------------------- Number of Shares Value --------- ----------- FINANCE--20.4% Affiliated Managers Group, Inc.* ......... 17,670 $ 635,767 AMERISAFE, Inc.* ......................... 15,840 229,680 Apollo Investment Corp. .................. 29,005 119,791 Ares Capital Corp. ....................... 31,095 111,942 CNA Surety Corp.* ........................ 12,275 178,601 Cowen Group., Inc.* ...................... 23,525 95,512 FBR Capital Markets Corp.* ............... 28,530 59,913 Fifth Street Finance Corp. ............... 54,300 368,154 First American Corp. ..................... 19,590 453,900 First Citizens Bancshares, Inc. .......... 2,865 306,584 Gladstone Capital Corp. .................. 13,425 88,605 Hanover Insurance Group, Inc., (The) .................................. 4,735 166,530 Horace Mann Educators Corp. .............. 21,905 168,449 Infinity Property & Casualty Corp. .................................. 5,485 194,882 IPC Holdings Ltd. ........................ 26,180 665,234 JMP Group, Inc. .......................... 57,630 314,083 KKR Financial Holdings LLC ............... 61,725 66,663 Maiden Holdings Ltd. ..................... 85,880 383,025 Max Capital Group Ltd. ................... 63,390 1,045,935 Navigators Group, Inc., (The)* ........... 7,625 398,254 PHH Corp.* ............................... 45,975 442,279 Platinum Underwriters Holdings Ltd. ................................... 25,835 724,413 ProAssurance Corp.* ...................... 3,610 172,522 Reinsurance Group of America, Inc. ................................... 7,165 194,888 Safety Insurance Group, Inc. ............. 8,660 270,798 SeaBright Insurance Holdings, Inc.* .................................. 15,565 151,292 State Auto Financial Corp. ............... 10,995 183,836 United America Indemnity Ltd., Class A* ............................... 12,840 109,397 United Rentals, Inc.* .................... 11,405 46,190 Unitrin, Inc. ............................ 16,135 173,935 Washington Federal, Inc. ................. 29,145 331,962 ----------- 8,853,016 ----------- HEALTH CARE--9.8% Centene Corp.* ........................... 15,470 262,681 Charles River Laboratories International, Inc.* ................... 10,675 264,740 Conmed Corp.* ............................ 7,650 103,963 Healthspring, Inc.* ...................... 9,845 79,745 Home Diagnostics, Inc.* .................. 41,295 273,373 ICU Medical, Inc.* ....................... 6,705 211,409 Invacare Corp. ........................... 12,840 205,954 Kindred Healthcare, Inc.* ................ 38,060 547,683 LifePoint Hospitals, Inc.* ............... 20,060 421,661 Lincare Holdings, Inc.* .................. 30,495 642,530 Medical Action Industries, Inc.* ......... 17,445 116,533 Odyssey HealthCare, Inc.* ................ 34,520 357,627 Res-Care, Inc.* .......................... 10,805 132,145 U.S. Physical Therapy, Inc.* ............. 40,670 417,274 Zoll Medical Corp.* ...................... 16,810 231,137 ----------- 4,268,455 ----------- Number of Shares Value --------- ----------- REAL ESTATE INVESTMENT TRUSTS--11.0% Anworth Mortgage Asset Corp. ............. 180,832 $ 1,090,417 Capstead Mortgage Corp. .................. 68,805 689,426 Friedman, Billings, Ramsey Group, Inc., Class A* ......................... 157,630 23,645 Gladstone Commercial Corp. ............... 15,485 108,860 Hatteras Financial Corp. ................. 33,785 805,772 Jones Lang LaSalle, Inc. ................. 35,820 713,534 MFA Financial, Inc. ...................... 217,495 1,248,421 Redwood Trust, Inc. ...................... 8,180 110,430 ----------- 4,790,505 ----------- TECHNOLOGY--6.4% Acxiom Corp. ............................. 29,615 245,212 Bel Fuse, Inc., Class B .................. 13,700 128,369 Belden, Inc. ............................. 16,700 178,189 Brocade Communications Systems, Inc.* ......................... 33,645 93,533 CIBER, Inc.* ............................. 75,060 194,405 Coherent, Inc.* .......................... 6,245 95,549 Electronics For Imaging, Inc.* ........... 24,315 216,403 Emulex Corp.* ............................ 34,910 183,627 EnerSys* ................................. 33,910 363,515 Entegris, Inc.* .......................... 51,105 31,174 Gilat Satellite Networks Ltd.* ........... 30,025 93,678 Imation Corp. ............................ 26,265 211,171 Insight Enterprises, Inc.* ............... 16,770 44,105 Ness Technologies, Inc.* ................. 31,495 92,280 NETGEAR, Inc.* ........................... 24,785 273,874 PAR Technology Corp.* .................... 33,665 154,691 Technitrol, Inc. ......................... 31,030 40,029 Verigy Ltd.* ............................. 19,115 132,085 ----------- 2,771,889 ----------- TRANSPORTATION--0.9% Landstar System, Inc. .................... 8,210 259,847 Pacer International, Inc. ................ 43,365 127,059 ----------- 386,906 ----------- UTILITIES--1.1% PNM Resources, Inc. ...................... 60,990 469,013 ----------- TOTAL COMMON STOCK (Cost $69,741,118) ................... 42,514,054 ----------- SHORT-TERM INVESTMENT--2.6% PNC Bank Money Market Deposit Account ........................ 1,112,664 1,112,664 ----------- TOTAL SHORT-TERM INVESTMENT (Cost $1,112,664) .................... 1,112,664 ----------- TOTAL INVESTMENTS--100.6% (Cost $70,853,782) ....................... 43,626,718 ----------- LIABILITIES IN EXCESS OF OTHER ASSETS--(0.6)% ..................... (255,446) ----------- NET ASSETS--100.0% .......................... $43,371,272 =========== ---------- * Non-income Producing THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2009 | 9 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2009 (unaudited) -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS LONG/SHORT EQUITY FUND PORTFOLIO OF INVESTMENTS -------------------------------------------------------------------------------- Number of Shares Value --------- ----------- LONG POSITIONS--106.7% DOMESTIC COMMON STOCK--102.0% BASIC INDUSTRIES--4.0% Carpenter Technology Corp. ............... 4,170 $ 57,129 Cytec Industries, Inc. ................... 10,840 166,936 Freeport-McMoRan Copper & Gold, Inc., ............................ 6,820 207,464 Harry Winston Diamond Corp. .............. 16,220 41,361 Haynes International, Inc.* .............. 4,355 58,793 Innospec, Inc. ........................... 33,000 133,320 Kapstone Paper and Packaging Corp. +* ............................... 34,015 51,363 Kapstone Paper and Packaging Corp.* ................................. 48,420 1,404 Thompson Creek Metals Co., Inc.* .................................. 33,320 103,625 ----------- 821,395 ----------- CAPITAL GOODS--6.5% Acuity Brands, Inc. ...................... 5,200 119,184 Dynamics Research Corp. +* ............... 18,387 144,890 Griffon Corp.* ........................... 18,891 137,338 Hubbell, Inc., Class B + ................. 8,630 227,142 Key Technology, Inc.* .................... 6,427 64,141 Keystone Consolidated Industries, Inc.* .................................. 10,528 39,480 KHD Humboldt Wedag International Ltd. +* .................. 10,720 83,830 LSB Industries, Inc. +* .................. 25,665 222,259 Manitowoc Co., Inc., (The) ............... 20,705 84,890 Mohawk Industries, Inc.* ................. 3,840 86,746 RTI International Metals, Inc.* .......... 13,380 145,039 ----------- 1,354,939 ----------- COMMUNICATIONS--1.6% Check Point Software Technologies Ltd. +* ................................ 8,395 184,438 RRsat Global Communications Network Ltd. ........................... 13,685 150,535 ----------- 334,973 ----------- CONSUMER DURABLES--2.6% Amerigon, Inc.* .......................... 19,335 55,491 Gentex Corp. ............................. 13,165 105,320 Magna International, Inc., Class A ....... 1,790 45,931 Pulte Homes, Inc. ........................ 14,865 136,461 Stanley Furniture Co., Inc. .............. 6,035 48,280 Thor Industries, Inc. .................... 13,190 141,265 ----------- 532,748 ----------- CONSUMER NON-DURABLES--4.5% Coach, Inc.* ............................. 8,595 120,158 Coca-Cola Femsa S.A. de C.V. - Sponsored ADR + ........................ 5,520 172,003 Polo Ralph Lauren Corp. .................. 3,070 105,823 Skechers U.S.A., Inc., Class A +* ........ 12,535 79,973 Steven Madden Ltd. +* .................... 10,670 173,068 Number of Shares Value --------- ----------- CONSUMER NON-DURABLES--(CONTINUED) Tupperware Brands Corp. ................. 10,630 $ 150,733 VF Corp. ................................. 2,445 126,896 ----------- 928,654 ----------- CONSUMER SERVICES--12.9% AFC Enterprises, Inc.* ................... 44,775 188,055 BB Holdings Ltd.* ........................ 49,134 105,638 Bebe Stores, Inc. ........................ 9,250 47,730 Coinstar, Inc. +* ........................ 7,890 206,245 Cornell Companies, Inc. +* ............... 11,105 169,240 Corrections Corp. of America* ............ 17,520 186,062 Dress Barn, Inc. (The) +* ................ 21,410 212,387 eBay, Inc. +* ............................ 9,930 107,939 G&K Services, Inc., Class A .............. 8,650 154,403 H&R Block, Inc. + ........................ 10,605 202,556 Harte-Hanks, Inc. ........................ 18,740 105,131 Heidrick & Struggles International, Inc. + ................................. 12,895 206,836 Interval Leisure Group, Inc.* ............ 9,555 38,220 Ituran Location and Control Ltd. ......... 18,375 119,254 Monster Worldwide, Inc.* ................. 22,520 148,407 Ross Stores, Inc. ........................ 5,100 150,552 Steiner Leisure Ltd.* .................... 4,635 116,848 Unifirst Corp. ........................... 8,970 214,921 ----------- 2,680,424 ----------- ENERGY--8.0% Approach Resources, Inc. +* .............. 43,860 294,739 Bristow Group, Inc.* ..................... 8,690 175,973 CE Franklin Ltd.* ........................ 17,695 70,072 Concho Resources, Inc.* .................. 9,630 192,119 Devon Energy Corp. ....................... 4,610 201,319 EOG Resources, Inc. ...................... 3,180 159,127 Petrohawk Energy Corp.* .................. 16,675 283,808 Talisman Energy, Inc. .................... 30,525 285,714 ----------- 1,662,871 ----------- FINANCE--16.8% Ace Ltd. + ............................... 6,530 238,410 Berkshire Hathaway, Inc., Class B* ....... 74 189,736 E*TRADE Financial Corp.* ................. 31,440 25,152 Fidelity National Financial, Inc., Class A + .............................. 19,780 327,755 First American Corp. ..................... 9,915 229,730 Goldman Sachs Group, Inc., (The) + ................................ 1,455 132,521 Investors Title Co. + .................... 3,385 94,678 JPMorgan Chase & Co. + ................... 13,710 313,273 KKR Financial Holdings LLC + ............. 63,285 68,348 Loews Corp. .............................. 10,475 207,929 Maiden Holdings Ltd. ..................... 92,867 414,187 Mass Financial Corp. Class A* ............ 3,020 10,573 Morgan Stanley ........................... 5,305 103,660 SLM Corp.* ............................... 27,430 126,178 State Street Corp. ....................... 5,395 136,332 TFS Financial Corp. + .................... 16,750 195,640 Travelers Companies, Inc., (The) ......... 5,825 210,574 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 10 | SEMI-ANNUAL REPORT 2009 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2009 (unaudited) -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS LONG/SHORT EQUITY FUND (continued) PORTFOLIO OF INVESTMENTS -------------------------------------------------------------------------------- Number of Shares Value --------- ----------- FINANCE--(CONTINUED) Waddell & Reed Financial, Inc. Class A ................................ 9,965 $ 140,706 Wesco Financial Corp. + .................. 380 92,815 White Mountains Insurance Group Ltd. ............................. 635 125,736 XL Capital Ltd., Class A ................. 25,780 85,332 ----------- 3,469,265 ----------- HEALTH CARE--16.3% A.D.A.M., Inc.* .......................... 20,130 62,806 Alpha Pro Tech Ltd.* ..................... 607,355 522,325 American BIO Medica Corp.* ............... 179,645 19,761 Anika Therapeutics, Inc.* ................ 38,355 131,174 Charles River Laboratories International, Inc.* ................... 12,420 308,016 Health Grades, Inc. +* ................... 96,492 207,458 Lincare Holdings, Inc. +* ................ 5,480 115,463 McKesson Corp. + ......................... 4,945 202,844 MedQuist, Inc. +* ........................ 62,810 130,017 MTS Medication Technologies, Inc. +* ................................ 160,765 482,295 Odyssey HealthCare, Inc.* ................ 14,925 154,623 Orthofix International N.V. +* ........... 11,671 185,452 PHC, Inc., Class A* ...................... 289,490 231,592 RehabCare Group, Inc.* ................... 9,090 132,987 Schering-Plough Corp. .................... 11,730 203,985 Unilens Vision, Inc. ..................... 105,202 286,149 ----------- 3,376,947 ----------- REAL ESTATE INVESTMENT TRUSTS--0.1% Friedman, Billings, Ramsey Group, Inc., Class A* ......................... 123,525 18,529 ----------- TECHNOLOGY--27.9% Accenture Ltd., Class A + ................ 9,485 276,867 Adobe Systems, Inc.* ..................... 10,705 178,774 Amdocs Ltd.* ............................. 8,980 150,415 Analog Devices, Inc. ..................... 4,665 86,956 Avnet, Inc.* ............................. 5,190 89,631 BluePhoenix Solutions Ltd.* .............. 49,890 98,782 Brocade Communications Systems, Inc. +* ....................... 31,195 86,722 CGI Group, Inc. Class A +* ............... 29,065 210,721 ClickSoftware Technologies Ltd.* ......... 79,806 236,226 Digi International, Inc. +* .............. 55,531 397,602 Ener1, Inc.* ............................. 9,945 31,128 Gilat Satellite Networks Ltd.* ........... 63,665 198,635 Hewlett-Packard Co. ...................... 7,980 231,659 MIPS Technologies, Inc. +* ............... 108,475 216,950 NetList, Inc.* ........................... 61,049 12,210 NU Horizons Electronics Corp. +* ......... 47,501 95,002 Oracle Corp.* ............................ 16,450 255,633 PLATO Learning, Inc.* .................... 290,684 465,094 Richardson Electronics Ltd. + ............ 55,955 167,865 Sourcefire, Inc.* ........................ 34,700 234,919 SourceForge, Inc.* ....................... 232,967 193,363 Number of Shares Value --------- ----------- TECHNOLOGY--(CONTINUED) Sybase, Inc.* ............................ 7,225 $ 196,375 Symantec Corp. +* ........................ 15,345 212,221 Tech Data Corp.* ......................... 5,095 88,093 TeleTech Holdings, Inc.* ................. 33,415 289,374 Telular Corp. +* ......................... 387,431 654,758 Tier Technologies, Inc., Class B +* ...... 45,255 238,041 Virtusa Corp.* ........................... 32,060 196,528 ----------- 5,790,544 ----------- TRANSPORTATION--0.8% FedEx Corp. .............................. 3,130 135,247 Pacer International, Inc. ................ 12,450 36,479 ----------- 171,726 ----------- TOTAL DOMESTIC COMMON STOCK (Cost $29,395,161).................... 21,143,015 ----------- PREFERRED STOCK--4.7% FINANCE--4.7% Bank of America Corp. Capital Trust IV Pfd. 5.875% ................... 9,155 84,501 Capital One Capital II Pfd. 7.500% ................................. 13,590 159,682 Citigroup Capital XVI Pfd. 6.450% ................................. 14,290 126,038 Fifth Third Capital Trust V Pfd. 7.250% ................................. 10,270 80,620 KeyCorp Capital LX Pfd. 6.750% ................................. 11,580 120,779 SLM Corp. Pfd. 6.970%* ................... 3,010 42,893 Sovereign Capital Trust V Pfd. 7.750% ................................. 14,705 176,460 Wachovia Capital Trust IV Pfd. 6.375% ................................. 14,150 180,412 ----------- TOTAL PREFERRED STOCK (Cost $1,084,974)..................... 971,385 ----------- TOTAL LONG POSITIONS--106.7% (Cost $30,480,135)........................ 22,114,400 ----------- SECURITIES SOLD SHORT--(11.9%) BASIC INDUSTRIES--0.0% Ethanex Energy, Inc.* .................... (648) (65) Uranium Energy Corp.* .................... (11,655) (5,245) ----------- (5,310) ----------- CAPITAL GOODS--(0.2%) Applied Nanotech Holdings, Inc.* .................................. (8,285) (1,988) Broadwind Energy, Inc.* .................. (8,725) (37,954) DynaMotive Energy Systems Corp.* ................................. (72,185) (11,911) ----------- (51,853) ----------- THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2009 | 11 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2009 (unaudited) -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS LONG/SHORT EQUITY FUND (continued) PORTFOLIO OF INVESTMENTS -------------------------------------------------------------------------------- Number of Shares Value --------- ----------- COMMUNICATIONS--(1.8%) Baidu, Inc. - Sponsored ADR* ............. (620) $ (91,958) CTC Communications Group, Inc. ++* ............................... (98,900) (10) Equinix, Inc.* ........................... (2,195) (101,870) GSI Commerce, Inc.* ...................... (8,455) (93,766) Interliant, Inc.* ........................ (600) 0 One Communications Corp. ++* ............. (36,619) (4) Rostelecom - Sponsored ADR ............... (1,600) (76,992) ----------- (364,600) ----------- CONSUMER DURABLES--0.0% QSound Labs, Inc.* ....................... (4,440) (1,954) Superlattice Power, Inc.* ................ (1,125) (225) ----------- (2,179) ----------- CONSUMER NON-DURABLES--(1.4%) Amish Naturals, Inc.* .................... (25,959) (571) Cal-Maine Foods, Inc. .................... (6,275) (139,807) Green Mountain Coffee Roasters, Inc.* .................................. (2,505) (93,562) Skins, Inc.* ............................. (16,913) (1,691) Valence Technology, Inc.* ................ (27,585) (45,515) ----------- (281,146) ----------- CONSUMER SERVICES--(2.2%) Constant Contact, Inc.* .................. (6,350) (87,694) Escala Group, Inc.* ...................... (4,616) (6,601) Iron Mountain, Inc.* ..................... (8,350) (155,143) Kforce, Inc.* ............................ (9,715) (62,273) Panera Bread Co., Class A* ............... (2,050) (90,282) PokerTek, Inc.* .......................... (6,110) (5,193) Ritchie Bros. Auctioneers, Inc. .......... (3,825) (57,566) ----------- (464,752) ----------- FINANCE--(0.2%) China International Tourism Holdings Ltd.* ......................... (5,084) (25) Genmed Holding Corp.* .................... (5) (3) Life Partners Holdings, Inc. ............. (2,294) (39,246) ----------- (39,274) ----------- HEALTH CARE--(0.7%) Bodytel Scientific, Inc.* ................ (4,840) (5) Conceptus, Inc.* ......................... (8,850) (99,385) NuVasive, Inc.* .......................... (1,810) (51,313) Volu-Sol Reagents Corp. .................. (422) (51) ----------- (150,754) ----------- Number of Shares Value --------- ----------- TECHNOLOGY--(5.4%) ANTS Software, Inc.* ..................... (10,334) $ (5,684) Axis Technologies Group, Inc.* ........... (5,845) (1,812) Commvault Systems, Inc.* ................. (10,135) (110,776) ConSyGen, Inc.* .......................... (200) 0 Data Domain, Inc.* ....................... (4,475) (58,085) Dolby Laboratories, Inc. Class A* ........ (2,040) (57,222) Ener1, Inc. .............................. (24,423) (76,444) EPIQ Systems, Inc.* ...................... (7,675) (129,477) EZchip Semiconductor Ltd.* ............... (14,585) (187,709) Infinera Corp.* .......................... (15,535) (111,852) Infosys Technologies Ltd. - Sponsored ADR .......................... (3,495) (84,579) LML Payment Systems, Inc.* ............... (7,808) (4,294) NCI, Inc. Class A* ....................... (2,310) (62,832) Nestor, Inc.* ............................ (15,200) (365) Palm, Inc.* .............................. (16,850) (121,994) Syntel, Inc. ............................. (4,690) (95,395) Tiger Telematics, Inc.* .................. (6,510) (11) Xybernaut Corp. ++* ...................... (35,000) (980) ----------- (1,109,511) ----------- TOTAL SECURITIES SOLD SHORT (Proceeds $4,102,006)................. (2,469,379) ----------- WARRANTS--0.0% UTILITIES--0.0% Greenhunter Energy, Inc. Exercise Price $27.50, Exp. 09/15/11 ............ (423) 0 ----------- TOTAL WARRANTS (Proceeds $0)......................... 0 ----------- OTHER ASSETS IN EXCESS OF LIABILITIES--5.2%...................... 1,083,417 ----------- NET ASSETS--100.0%........................... $20,728,438 =========== ADR -- American Depositary Receipt * -- Non-income producing. + -- Security position is either entirely or partially held in a segregated account as collateral for securities sold short. ++ -- Security has been valued at fair value as determined in good faith by or under the direction of RBB's Board of Directors. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 12 | SEMI-ANNUAL REPORT 2009 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2009 (unaudited) -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS MID CAP VALUE FUND PORTFOLIO OF INVESTMENTS -------------------------------------------------------------------------------- Number of Shares Value --------- ----------- COMMON STOCK--96.9% BASIC INDUSTRIES--5.6% Albemarle Corp. .......................... 15,010 $ 290,443 Allegheny Technologies, Inc. ............. 5,345 105,136 Cliffs Natural Resources, Inc. ........... 4,405 67,969 Crown Holdings, Inc.* .................... 16,395 345,607 Lubrizol Corp., (The) .................... 13,800 379,362 Mosaic Co., (The) ........................ 2,890 124,415 PPG Industries, Inc. ..................... 11,530 358,122 ----------- 1,671,054 ----------- CAPITAL GOODS--7.4% AGCO Corp.* .............................. 8,905 152,632 Cooper Industries Ltd., Class A .......... 10,605 223,659 Ingersoll-Rand Co., Ltd., Class A ........ 8,405 119,183 KBR, Inc. ................................ 2,580 32,508 Kennametal, Inc. ......................... 2,030 33,130 Lennox International, Inc. ............... 7,080 183,372 Mettler-Toledo International, Inc.* ...... 5,685 303,067 Mohawk Industries, Inc.* ................. 7,210 162,874 Rockwell Automation, Inc. ................ 1,265 25,427 Stanley Works, (The) ..................... 10,190 272,684 Terex Corp.* ............................. 8,760 78,139 Thomas & Betts Corp.* .................... 12,570 287,979 W.W. Grainger, Inc. ...................... 5,330 352,633 ----------- 2,227,287 ----------- COMMUNICATIONS--2.4% CenturyTel, Inc. ......................... 17,265 454,588 Embarq Corp. ............................. 7,720 269,968 ----------- 724,556 ----------- CONSUMER DURABLES--2.8% BorgWarner, Inc. ......................... 6,450 111,263 Gentex Corp. ............................. 27,375 219,000 Johnson Controls, Inc. ................... 9,980 113,572 NVR, Inc.* ............................... 720 239,594 Pulte Homes, Inc. ........................ 18,320 168,178 ----------- 851,607 ----------- CONSUMER NON-DURABLES--5.2% Dr. Pepper Snapple Group, Inc.* .......... 19,880 279,314 Electronic Arts, Inc.* ................... 6,210 101,285 General Mills, Inc. ...................... 4,975 261,088 Lorillard, Inc. .......................... 5,095 297,752 Mattel, Inc. ............................. 37,910 448,854 VF Corp. ................................. 3,110 161,409 ----------- 1,549,702 ----------- CONSUMER SERVICES--16.4% Burger King Holdings, Inc. ............... 14,500 311,605 Dun & Bradstreet Corp., (The) ............ 4,415 326,577 eBay, Inc.* .............................. 9,125 99,189 Equifax, Inc. ............................ 18,870 405,705 Expedia, Inc.* ........................... 50,479 402,318 GameStop Corp., Class A* ................. 4,155 111,853 Number of Shares Value --------- ----------- CONSUMER SERVICES--(CONTINUED) Herbalife Ltd. ........................... 13,855 $ 188,982 Kohl's Corp.* ............................ 14,100 495,474 Kroger Co., (The) ........................ 16,580 342,709 Manpower, Inc. ........................... 16,665 464,620 McGraw-Hill Companies, Inc., (The) .................................. 17,330 341,921 Monster Worldwide, Inc.* ................. 16,070 105,901 Moody's Corp. ............................ 8,520 152,934 Omnicom Group, Inc. ...................... 15,355 368,981 Robert Half International, Inc. .......... 14,935 229,551 Safeway, Inc. ............................ 22,955 424,667 Staples, Inc. ............................ 9,475 151,126 ----------- 4,924,113 ----------- ENERGY--5.0% Baker Hughes, Inc. ....................... 1,090 31,948 Concho Resources, Inc.* .................. 9,815 195,809 Helix Energy Solutions Group, Inc.* .................................. 15,045 46,790 Noble Energy, Inc. ....................... 11,490 523,254 Petrohawk Energy Corp.* .................. 17,535 298,446 Pride International, Inc.* ............... 11,240 193,778 Talisman Energy, Inc. .................... 23,570 220,615 ----------- 1,510,640 ----------- FINANCE--16.5% Ace Ltd. ................................. 8,495 310,152 Affiliated Managers Group, Inc.* ......... 3,375 121,433 Alleghany Corp.* ......................... 1,700 446,471 AON Corp. ................................ 8,825 337,468 Assurant, Inc. ........................... 15,990 326,196 Capital One Financial Corp. .............. 6,285 75,734 Federated Investors, Inc., Class B ....... 12,515 236,033 Franklin Resources, Inc. ................. 7,555 346,019 Hanover Insurance Group, Inc., (The) .................................. 11,620 408,675 KeyCorp .................................. 17,190 120,502 Loews Corp. .............................. 15,320 304,102 M&T Bank Corp. ........................... 4,415 161,589 Marsh & McLennan Cos., Inc. .............. 22,325 400,287 Mercury General Corp. .................... 3,555 95,843 NYSE Euronext ............................ 1,415 23,885 People's United Financial, Inc. .......... 5,955 103,677 Reinsurance Group of America, Inc. ................................... 9,400 255,680 SEI Investments Co. ...................... 8,155 96,555 SLM Corp.* ............................... 23,895 109,917 State Street Corp. ....................... 5,790 146,313 Travelers Companies, Inc., (The) ......... 5,780 208,947 Unum Group ............................... 33,860 344,695 ----------- 4,980,173 ----------- THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2009 | 13 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2009 (unaudited) -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS MID CAP VALUE FUND (concluded) PORTFOLIO OF INVESTMENTS -------------------------------------------------------------------------------- Number of Shares Value --------- ----------- HEALTH CARE--6.4% Cardinal Health, Inc. .................... 6,945 $ 225,365 DaVita, Inc.* ............................ 12,045 565,152 Hospira, Inc.* ........................... 12,300 285,360 McKesson Corp. ........................... 9,320 382,306 Quest Diagnostics, Inc. .................. 10,070 461,508 ----------- 1,919,691 ----------- REAL ESTATE INVESTMENT TRUSTS--4.1% Annaly Capital Management, Inc. (REIT) ................................. 65,176 905,946 AvalonBay Communities, Inc. .............. 2,955 125,351 Kimco Realty Corp. ....................... 8,510 75,314 Nationwide Health Properties, Inc. ................................... 5,555 112,544 ----------- 1,219,155 ----------- TECHNOLOGY--15.7% Acxiom Corp. ............................. 42,735 353,846 Amdocs Ltd.* ............................. 10,190 170,683 Arrow Electronics, Inc.* ................. 18,745 311,729 Avnet, Inc.* ............................. 11,575 199,900 Broadridge Financial Solutions, Inc. ................................... 28,640 457,667 CACI International, Inc., Class A* ....... 7,905 338,097 Cymer, Inc.* ............................. 12,975 239,648 Emulex Corp.* ............................ 39,250 206,455 Flextronics International Ltd.* .......... 37,385 77,013 Harris Corp. ............................. 11,655 434,499 Ingram Micro, Inc., Class A* ............. 9,635 104,925 McAfee, Inc.* ............................ 11,162 311,978 SRA International, Inc., Class A* ........ 9,885 134,238 Sun Microsystems, Inc.* .................. 48,770 228,244 Sybase, Inc.* ............................ 7,140 194,065 Symantec Corp.* .......................... 44,115 610,111 Western Digital Corp.* ................... 7,415 101,289 Western Union Co. (The) .................. 23,140 258,242 ----------- 4,732,629 ----------- TRANSPORTATION--1.1% CSX Corp. ................................ 3,705 91,439 Norfolk Southern Corp. ................... 7,500 237,900 ----------- 329,339 ----------- UTILITIES--8.3% Allegheny Energy, Inc. ................... 12,770 301,883 Alliant Energy Corp. ..................... 20,110 465,144 American Electric Power Co., Inc. ........ 11,425 320,471 Edison International ..................... 13,120 357,127 FirstEnergy Corp. ........................ 2,865 121,934 Mirant Corp* ............................. 2,015 24,644 NV Energy, Inc. .......................... 30,170 279,676 PG&E Corp. ............................... 16,610 634,834 ----------- 2,505,713 ----------- TOTAL COMMON STOCK (Cost $44,501,098).................... 29,145,659 ----------- Number of Shares Value --------- ----------- SHORT-TERM INVESTMENT--2.9% PNC Bank Money Market Deposit Account ........................ 880,828 $ 880,828 ----------- TOTAL SHORT-TERM INVESTMENTS (Cost $880,828)....................... 880,828 ----------- TOTAL INVESTMENTS--99.8% (Cost $45,381,926)........................ 30,026,487 ----------- OTHER ASSETS IN EXCESS OF LIABILITIES--0.2%......................... 67,472 ----------- NET ASSETS--100.0%........................... $30,093,959 =========== ---------- * -- Non-income producing THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 14 | SEMI-ANNUAL REPORT 2009 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2009 (unaudited) -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS ALL-CAP VALUE FUND PORTFOLIO OF INVESTMENTS -------------------------------------------------------------------------------- Number of Shares Value --------- ----------- COMMON STOCK--93.9% CAPITAL GOODS--3.2% Dover Corp. .............................. 16,630 $ 414,752 General Electric Co. # ................... 19,000 161,690 Illinois Tool Works, Inc. ................ 5,795 161,101 Parker-Hannifin Corp. .................... 7,912 264,024 W.W. Grainger, Inc. ...................... 1,965 130,004 Wolseley PLC - Sponsored ADR ............. 25,680 64,457 ----------- 1,196,028 ----------- COMMUNICATIONS--3.1% Embarq Corp. ............................. 7,445 260,352 Vodafone Group PLC - ADR ................. 50,888 903,262 ----------- 1,163,614 ----------- CONSUMER DURABLES--0.5% Lennar Corp., Class A .................... 17,515 117,000 Pulte Homes, Inc. # ...................... 5,780 53,061 ----------- 170,061 ----------- CONSUMER NON-DURABLES--7.0% Electronic Arts, Inc.* ................... 26,415 430,829 Lorillard, Inc. .......................... 11,754 686,904 Mattel, Inc. ............................. 43,260 512,198 Nestle S.A.- Sponsored ADR ............... 11,885 386,381 NIKE, Inc., Class B ...................... 6,455 268,076 Oxford Industries, Inc. .................. 5,880 27,460 Tupperware Brands Corp. ................. 22,035 312,456 ----------- 2,624,304 ----------- CONSUMER SERVICES--13.5% eBay, Inc. #* ............................ 50,480 548,718 Equifax, Inc. ............................ 8,505 182,858 Expedia, Inc.* ........................... 47,603 379,396 First Advantage Corp., Class A* .......... 8,185 85,370 GameStop Corp., Class A* ................. 27,535 741,242 Harte-Hanks, Inc. ........................ 24,420 136,996 Herbalife Ltd. ........................... 12,030 164,089 HSN, Inc.* ............................... 5,405 23,079 IAC/Interactivecorp* ..................... 13,510 201,704 Interval Leisure Group, Inc.* ............ 5,405 21,620 Lender Processing Services, Inc. ......... 7,800 204,282 Manpower, Inc. ........................... 4,480 124,902 McGraw-Hill Companies, Inc., (The) .................................. 8,910 175,794 Monster Worldwide, Inc.* ................. 16,510 108,801 Moody's Corp. ............................ 10,385 186,411 Omnicom Group, Inc. ...................... 13,765 330,773 Regis Corp. .............................. 21,875 275,625 Rent-A-Center, Inc.* ..................... 12,325 215,934 Safeway, Inc. ............................ 22,895 423,557 Ticketmaster Entertainment, Inc.* ........ 12,515 61,198 Watson Wyatt Worldwide, Inc., Class A ................................ 8,560 420,382 ----------- 5,012,731 ----------- Number of Shares Value --------- ----------- ENERGY--9.1% Apache Corp. ............................. 4,005 $ 236,655 Chevron Corp. ............................ 6,725 408,275 Devon Energy Corp. # ..................... 12,765 557,448 Dresser-Rand Group, Inc.* ................ 5,130 107,781 EOG Resources, Inc. ...................... 3,480 174,139 Marathon Oil Corp. ....................... 11,345 263,998 Pioneer Natural Resources Co. ............ 8,185 119,419 Quest Resource Corp.* .................... 10,318 2,487 Talisman Energy, Inc. .................... 62,430 584,345 Total SA -ADR ............................ 19,895 939,044 ----------- 3,393,591 ----------- FINANCE--22.9% Ace Ltd. ................................. 19,090 696,976 Alleghany Corp.* ......................... 3,311 869,568 Allied World Assurance Co. Holdings Ltd. .......................... 8,080 310,353 AON Corp. ................................ 11,020 421,405 Comerica, Inc. ........................... 3,130 46,981 East West Bancorp, Inc. .................. 6,640 47,210 Federated Investors, Inc., Class B ....... 6,380 120,327 First American Corp. ..................... 4,225 97,893 Flagstone Reinsurance Holdings Ltd. ................................... 42,510 316,699 Hanover Insurance Group, Inc., (The) .................................. 12,305 432,767 Hatteras Financial Corp.144A ++* ......... 7,015 167,308 IPC Holdings Ltd. ........................ 20,770 527,766 J.G. Wentworth, Inc. ++* ................. 15,165 3,791 JPMorgan Chase & Co. # ................... 30,275 691,784 Kohlberg Capital Corp. ................... 16,590 32,516 Loews Corp. .............................. 41,524 824,251 M&T Bank Corp. ........................... 3,145 115,107 Maiden Holdings Ltd. ..................... 1,715 7,649 Maiden Holdings Ltd. 144A ++* ............ 9,925 44,265 Morgan Stanley ........................... 20,770 405,846 Peoples Choice Financial Corp. 144A ++* ............................... 1,465 0 SLM Corp.* ............................... 63,110 290,306 Solar Cayman Ltd. 144A ++* ............... 19,375 85,637 Specialty Underwriters' Alliance, Inc.* .................................. 8,645 27,664 Synovus Financial Corp. .................. 9,370 32,608 Tower Group, Inc. ........................ 2,830 57,704 Travelers Companies, Inc., (The) ......... 18,180 657,207 Tree.com, Inc.* .......................... 768 3,479 Unum Group ............................... 38,186 388,733 Wesco Financial Corp. .................... 110 26,868 White Mountains Insurance Group Ltd. ................................... 3,675 727,687 Zions Bancorporation ..................... 3,340 31,296 ----------- 8,509,651 ----------- HEALTH CARE--16.4% Aetna, Inc. .............................. 9,560 228,197 Amgen, Inc.* ............................. 21,065 1,030,710 Cardinal Health, Inc. .................... 5,470 177,502 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2009 | 15 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2009 (unaudited) -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS ALL-CAP VALUE FUND (continued) PORTFOLIO OF INVESTMENTS -------------------------------------------------------------------------------- Number of Shares Value --------- ----------- HEALTH CARE--(CONTINUED) DaVita, Inc.* ............................ 13,730 $ 644,212 Johnson & Johnson ........................ 23,605 1,180,250 Lincare Holdings, Inc.* .................. 17,540 369,568 Pfizer, Inc. ............................. 74,161 912,922 Sanofi-Aventis- ADR ...................... 14,520 372,002 UnitedHealth Group, Inc. ................. 10,260 201,609 WellPoint, Inc.* ......................... 6,240 211,661 Wyeth .................................... 18,860 769,865 ----------- 6,098,498 ----------- REAL ESTATE INVESTMENT TRUSTS--2.6% Annaly Capital Management, Inc. (REIT) ................................. 58,170 808,563 Ashford Hospitality Trust, Inc. .......... 44,525 44,525 Cypress Sharpridge Investments, Inc.144A ++* ........................... 10,771 77,982 Friedman, Billings, Ramsey Group, Inc., Class A* ......................... 28,740 4,311 Hatteras Financial Corp. ................. 720 17,172 Realty Finance Corp. ..................... 30,480 3,658 Thornburg Mortgage, Inc.* ................ 191,097 9,937 ----------- 966,148 ----------- TECHNOLOGY--13.1% Accenture Ltd., Class A .................. 13,740 401,071 Acxiom Corp. ............................. 21,830 180,752 Analog Devices, Inc. ..................... 6,935 129,268 Banctec, Inc., 144A ++* .................. 15,732 99,269 Belden, Inc. ............................. 4,145 44,227 Fidelity National Information Services, Inc. ......................... 7,635 133,612 GSI Group, Inc.* ......................... 15,905 15,110 Heartland Payment Systems, Inc. .......... 15,925 87,747 Hewlett-Packard Co. ...................... 23,220 674,077 International Business Machines Corp. .................................. 11,625 1,069,849 KLA-Tencor Corp.* ........................ 7,000 120,750 Microsoft Corp. # ........................ 62,195 1,004,449 Symantec Corp.* .......................... 25,090 346,995 Tech Data Corp.* ......................... 11,340 196,069 Tyco Electronics Ltd. .................... 17,280 163,814 Western Union Co. (The) .................. 17,115 191,003 ----------- 4,858,062 ----------- UTILITIES--2.5% Allegheny Energy, Inc. ................... 17,540 414,645 Alliant Energy Corp. ..................... 15,730 363,835 Korea Electric Power Corp.- ADR .......... 22,435 171,179 ----------- 949,659 ----------- TOTAL COMMON STOCK (Cost $52,572,349).................... 34,942,347 ----------- Number of Shares Value --------- ----------- PREFERRED STOCK--1.5% FINANCE--1.5% Citigroup Capital XV Pfd. 6.500%* ........ 19,545 $ 170,432 Federal National Mortgage Association Pfd. 8.750% ................ 9,697 6,303 Wachovia Capital Trust IV Pfd. 6.375% ................................. 10,685 136,234 Wachovia Capital Trust IX Pfd. 6.375% ................................. 11,795 146,848 Wachovia Capital Trust X Pfd. 7.850%* ................................ 6,340 106,195 ----------- TOTAL PREFERRED STOCK (Cost $1,091,296)..................... 566,012 ----------- WARRANTS--0.0% REAL ESTATE INVESTMENT TRUSTS--0.0% Cypress Sharpridge Investment, Inc. Strike Price $1.56, Exp. 4/30/11 ++ ........................ 32,315 323 ----------- TOTAL WARRANTS (Cost $0) .......................... 323 ----------- Par (000) --------- CORPORATE BONDS--2.1% Comverse Technology, Inc.(x) 0.00% 05/15/23 ......................... $ 200 197,000 Eastman Kodak Co.o 3.375% 10/15/33 ........................ 399 284,786 MBIA Insurance Corp.144A+ (x) 14.00% 01/15/33 ........................ 151 49,264 Sepracor, Inc.o 0.00% 10/15/24 ......................... 194 186,725 Thornburg Mortgage, Inc. (PIK)++ 18.00% 03/31/15 ........................ 74 5,896 Thornburg Mortgage, Inc. 144A++ 12.00% 03/31/15 ........................ 824 65,508 ----------- TOTAL CORPORATE BONDS (Cost $1,647,983)..................... 789,179 ----------- Number of Shares --------- SHORT-TERM INVESTMENT--3.5% PNC Bank Money Market Deposit Account 03/06/09........................ 1,286,453 1,286,453 ----------- TOTAL SHORT-TERM INVESTMENT (Cost $1,286,453)..................... 1,286,453 ----------- TOTAL INVESTMENTS--101.0% (Cost $56,598,081)........................ 37,584,314 ----------- THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 16 | SEMI-ANNUAL REPORT 2009 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2009 (unaudited) -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS ALL-CAP VALUE FUND (concluded) PORTFOLIO OF INVESTMENTS -------------------------------------------------------------------------------- Number of Shares Value --------- ----------- OPTIONS WRITTEN--(0.7%) Devon Energy Corp. Call Options Expires 01/16/10 Strike Price $50 ....................... (52) $ (37,960) eBay, Inc. Call Options Expires 01/16/10 Strike Price $15 ....................... (194) (15,520) General Electric Co. Call Options Expires 01/16/10 Strike Price $5 ........................ (89) (39,605) General Electric Co. Call Options Expires 06/20/09 Strike Price $5 ........................ (101) (40,905) JPMorgan Chase & Co. Call Options Expires 01/16/10 Strike Price $25 ....................... (134) (77,720) Microsoft Corp. Call Options Expires 07/18/09 Strike Price $15 ....................... (158) (42,976) Pulte Homes, Inc. Call Options Expires 01/16/09 Strike Price $15 ....................... (57) (9,405) ----------- TOTAL OPTIONS WRITTEN (Premiums received $(604,031))........ (264,091) ----------- TOTAL INVESTMENTS, NET OF OPTIONS WRITTEN--100.3% (Cost $55,994,051)........................ 37,320,223 ----------- LIABILITIES IN EXCESS OF OTHER ASSETS--(0.3)%...................... (115,128) ----------- NET ASSETS--100.0%........................... $37,205,095 =========== ---------- 144A -- Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may not be resold subject to that rule except to qualified institutional buyers. ADR -- American Depositary Receipt PIK -- Payment In Kind REIT -- Real Estate Investment Trust * -- Non-income producing. ++ -- Security has been valued at fair value as determined in good faith by or under the direction of RBB's Board of Directors. + Adjustable rate security. # Security segregated as collateral for options written. (x) Callable security. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2009 | 17 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2009 (unaudited) -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- ROBECO WPG SMALL CAP VALUE FUND PORTFOLIO OF INVESTMENTS -------------------------------------------------------------------------------- Number of Shares Value --------- ----------- COMMON STOCK--98.8% BASIC MATERIALS--1.5% Carpenter Technology Corp. ............... 8,600 $ 117,820 OM Group, Inc.* .......................... 6,900 106,950 RTI International Metals, Inc.* .......... 10,000 108,400 ----------- 333,170 ----------- COMMERCIAL SERVICES--13.4% Corrections Corp. of America* ............ 15,300 162,486 ICF International, Inc.* ................. 28,400 681,316 LECG Corp.* .............................. 58,500 158,535 MDC Partners, Inc., Class A* ............. 260,690 894,167 Ness Technologies, Inc.* ................. 66,800 195,724 PLATO Learning, Inc.* .................... 36,400 58,240 Princeton Review, Inc. (The)* ............ 120,646 554,972 RADWARE Ltd.* ............................ 38,500 231,385 ----------- 2,936,825 ----------- CONSUMER CYCLICAL--8.9% America's Car-Mart, Inc.* ................ 14,500 159,210 Beacon Roofing Supply, Inc.* ............. 8,800 96,536 Big 5 Sporting Goods Corp. ............... 28,500 149,340 Brown Shoe Co., Inc. ..................... 30,900 110,313 Casual Male Retail Group, Inc.* .......... 243,400 73,020 Dress Barn, Inc. (The)* .................. 20,100 199,392 DSW, Inc., Class A* ...................... 17,300 150,683 Gildan Activewear, Inc.* ................. 21,500 159,100 Jarden Corp.* ............................ 16,700 169,505 Lennar Corp., Class A .................... 8,000 53,440 NBTY, Inc.* .............................. 22,100 328,627 Shoe Carnival, Inc.* ..................... 14,000 95,900 Skechers U.S.A., Inc., Class A* .......... 8,300 52,954 Smith & Wesson Holding Corp.* ............ 38,200 146,306 ----------- 1,944,326 ----------- CONSUMER NON-CYCLICAL--9.1% Alliance One International, Inc.* ........ 182,400 631,104 Del Monte Foods Co. ...................... 91,700 655,655 Delek US Holdings, Inc. .................. 34,200 232,560 Lifetime Brands, Inc. .................... 89,700 127,374 Universal Corp. .......................... 12,600 362,124 ----------- 2,008,817 ----------- CONSUMER SERVICES--3.2% Carrols Restaurant Group, Inc.* .......... 46,500 127,875 Cheesecake Factory, Inc. (The)* .......... 8,700 70,818 Jack in the Box, Inc.* ................... 11,500 223,560 Lions Gate Entertainment Corp.* .......... 18,800 95,128 Meredith Corp. ........................... 6,500 83,525 New Frontier Media, Inc. ................. 77,900 111,397 ----------- 712,303 ----------- ENERGY--8.2% Aegean Marine Petroleum Network, Inc. .......................... 34,100 559,240 Approach Resources, Inc.* ................ 97,000 651,840 Number of Shares Value --------- ----------- ENERGY--(CONTINUED) GeoMet, Inc.* ............................ 222,100 $ 226,542 Holly Corp. .............................. 3,900 90,909 InterOil Corp.* .......................... 13,300 262,808 ----------- 1,791,339 ----------- FINANCE--33.2% Allied World Assurance Co. Holdings Ltd. .......................... 4,600 176,686 Apollo Investment Corp. .................. 17,000 70,210 Ares Capital Corp. ....................... 30,900 111,240 Aspen Insurance Holdings Ltd. ............ 18,700 407,473 Bancorp Rhode Island, Inc. ............... 5,800 105,850 Berkshire Hills Bancorp, Inc. ............ 13,100 275,886 Brookline Bancorp, Inc. .................. 19,000 166,820 Capstead Mortgage Corp. .................. 27,500 275,550 Danvers Bancorp, Inc. .................... 33,200 425,624 Delphi Financial Group, Inc., Class A ................................ 14,700 159,348 Encore Bancshares, Inc.* ................. 9,595 57,570 ESSA Bancorp, Inc. ....................... 18,200 218,582 Flushing Financial Corp. ................. 8,500 52,190 Hatteras Financial Corp. ................. 18,700 445,995 Home Financial Bancorp, Inc. ............. 15,000 110,550 Investors Bancorp, Inc.* ................. 15,100 108,116 Max Capital Group Ltd. ................... 9,900 163,350 Meadowbrook Insurance Group, Inc. ............................ 150,500 866,880 MFA Financial, Inc. ...................... 82,400 472,976 Nelnet, Inc., Class A* ................... 22,000 112,200 Redwood Trust, Inc. ...................... 21,100 284,850 SeaBright Insurance Holdings, Inc.* .................................. 12,800 124,416 Sun Communities, Inc. (REIT) ............. 20,100 177,282 United Financial Bancorp, Inc. ........... 30,800 396,396 Validus Holdings Ltd. .................... 22,700 543,438 ViewPoint Financial Group ................ 16,700 222,444 Westfield Financial, Inc. ................ 44,500 419,190 WSFS Financial Corp. ..................... 8,800 194,392 Zenith National Insurance Corp. .......... 6,400 140,736 ----------- 7,286,240 ----------- HEALTH CARE--5.5% HealthTronics, Inc.* ..................... 27,800 40,310 ICU Medical, Inc.* ....................... 8,000 252,240 Inverness Medical Innovations, Inc.* .................................. 6,700 150,549 Lakeland Industries, Inc.* ............... 50,300 349,585 Life Sciences Research, Inc.* ............ 40,700 206,349 NovaMed, Inc.* ........................... 42,062 109,361 Providence Service Corp. (The)* .......... 31,000 97,650 ----------- 1,206,044 ----------- THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 18 | SEMI-ANNUAL REPORT 2009 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2009 (unaudited) -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- ROBECO WPG SMALL CAP VALUE FUND (concluded) PORTFOLIO OF INVESTMENTS -------------------------------------------------------------------------------- Number of Shares Value --------- ----------- INDUSTRIALS--2.1% General Cable Corp.* ..................... 6,500 $ 100,295 GrafTech International Ltd.* ............. 6,700 37,855 Titan Machinery, Inc.* ................... 34,000 313,820 ----------- 451,970 ----------- TECHNOLOGY--6.4% Actuate Corp.* ........................... 34,700 124,226 Axesstel, Inc.* .......................... 169,920 61,171 Ciena Corp.* ............................. 15,800 84,846 CPI International, Inc.* ................. 17,000 125,290 Digi International, Inc.* ................ 39,100 279,956 Emulex Corp.* ............................ 17,500 92,050 Entrust, Inc.* ........................... 46,300 72,228 Lionbridge Technologies, Inc.* ........... 25,700 33,667 OmniVision Technologies, Inc.* ........... 19,200 130,368 Plantronics, Inc. ........................ 8,500 73,015 Qlogic Corp.* ............................ 12,200 112,484 Rackable Systems, Inc.* .................. 28,000 102,760 Zoran Corp.* ............................. 20,300 105,560 ----------- 1,397,621 ----------- TRANSPORTATION--3.6% Airtran Holdings, Inc.* .................. 58,400 174,616 DHT Maritime, Inc. ....................... 59,200 317,312 Diana Shipping, Inc. ..................... 10,100 118,473 Knight Transportation, Inc. .. ........... 9,600 124,416 Paragon Shipping, Inc., Class A .......... 15,800 58,776 ----------- 793,593 ----------- UTILITIES--3.7% El Paso Electric Co.* .................... 10,200 144,126 Great Plains Energy, Inc. ................ 7,400 100,196 Portland General Electric Co. ............ 9,600 157,632 Synthesis Energy Systems, Inc.* .......... 40,300 18,135 UGI Corp. ................................ 11,600 278,284 Vectren Corp. ............................ 5,300 110,558 ----------- 808,931 ----------- TOTAL COMMON STOCK (Cost $31,271,587).................... 21,671,179 ----------- TOTAL INVESTMENTS--98.8% (Cost $31,271,587)........................ 21,671,179 ----------- OTHER ASSETS IN EXCESS OF LIABILITIES--1.2%......................... 267,235 ----------- NET ASSETS--100.0%........................... $21,938,414 =========== ---------- REIT -- Real Estate Investment Trust * -- Non-income producing. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2009 | 19 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2009 (unaudited) -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- ROBECO WPG 130/30 LARGE CAP CORE FUND PORTFOLIO OF INVESTMENTS -------------------------------------------------------------------------------- Number of Shares Value --------- ----------- LONG POSITIONS--151.3% DOMESTIC COMMON STOCK--131.0% BASIC MATERIALS--7.0% 3M Co. # ................................. 904 $ 41,096 Ball Corp. # ............................. 1,137 45,810 CF Industries Holdings, Inc. ............. 455 29,270 Crown Holdings, Inc. #* .................. 5,571 117,437 Freeport-McMoRan Copper & Gold, Inc., # .......................... 2,657 80,826 Massey Energy Co. # ...................... 2,748 31,739 Monsanto Co. # ........................... 1,201 91,600 Potash Corp. of Saskatchewan, Inc. ................................... 740 62,138 ----------- 499,916 ----------- COMMERCIAL SERVICES--3.1% Accenture Ltd., Class A .................. 1,255 36,633 Apollo Group, Inc., Class A* ............. 241 17,473 Computer Sciences Corp. #* ............... 1,459 50,686 Hewitt Associates, Inc., Class A #* ...... 1,655 48,822 Omnicom Group, Inc. # .................... 2,665 64,040 ----------- 217,654 ----------- CONSUMER CYCLICAL--11.1% AutoZone, Inc. #* ........................ 914 129,998 Best Buy Co., Inc. # ..................... 2,305 66,430 Big Lots, Inc. #* ........................ 4,790 74,293 Fastenal Co. # ........................... 714 21,506 Jarden Corp. #* .......................... 5,839 59,266 Liz Claiborne, Inc. ...................... 6,669 18,607 RadioShack Corp. # ....................... 10,322 75,660 Ross Stores, Inc. ........................ 2,278 67,247 TJX Companies, Inc., (The) # ............. 2,294 51,087 Wal Mart Stores, Inc. # .................. 4,559 224,485 ----------- 788,579 ----------- CONSUMER NON-CYCLICAL--10.8% Archer-Daniels-Midland Co. # ............. 1,330 35,458 Campbell Soup Co. # ...................... 1,527 40,878 General Mills, Inc. ...................... 662 34,742 H.J. Heinz Co. ........................... 439 14,342 Hershey Co., (The) ....................... 1,970 66,369 Kraft Foods, Inc., Class A # ............. 2,819 64,217 Kroger Co., (The) # ...................... 2,947 60,914 Pepsi Bottling Group, Inc. # ............. 7,265 134,402 Philip Morris International, Inc. # ...... 3,177 106,334 Procter & Gamble Co. # ................... 2,533 122,015 Safeway, Inc. # .......................... 3,071 56,813 SUPERVALU, Inc. .......................... 2,119 33,078 ----------- 769,562 ----------- CONSUMER SERVICES--6.0% Brinker International, Inc. # ............ 3,127 34,397 CBS Corp., Class B # ..................... 8,537 36,453 Comcast Corp., Class A ................... 1,521 19,864 Dish Network Corp., Class A* ............. 2,734 30,758 Hasbro, Inc. # ........................... 2,406 55,073 Number of Shares Value --------- ----------- CONSUMER SERVICES--(CONTINUED) McDonald's Corp. # ....................... 3,013 $ 157,429 R. R. Donnelley & Sons Co. ............... 1,679 13,080 Royal Caribbean Cruises Ltd. # ........... 3,287 19,722 Yum! Brands, Inc. # ...................... 2,207 58,000 ----------- 424,776 ----------- ENERGY--14.9% Chevron Corp. # .......................... 608 36,912 ConocoPhillips # ......................... 1,696 63,346 Encore Acquisition Co. #* ................ 1,423 28,574 ENSCO International, Inc. # .............. 3,308 81,311 Exxon Mobil Corp. # ...................... 7,049 478,627 Helmerich & Payne, Inc. # ................ 2,323 54,962 Plains Exploration & Production Co. #* ................................. 6,048 115,759 Southwestern Energy Co. #* ............... 4,916 141,433 Talisman Energy, Inc. # .................. 5,971 55,888 ----------- 1,056,812 ----------- FINANCE--13.9% Annaly Capital Management, Inc. (REIT) ............................ 1,714 23,825 Bank of America Corp. # .................. 5,523 21,816 CapitalSource, Inc. ...................... 11,013 20,594 CBL & Associates Properties, Inc. (REIT) ............................ 6,807 21,102 Charles Schwab Corp., (The) # ............ 7,693 97,778 Chubb Corp., (The) # ..................... 2,331 91,002 Citigroup, Inc. # ........................ 5,686 8,529 Duke Realty Corp. ........................ 5,254 36,253 Goldman Sachs Group, Inc., (The) .................................. 388 35,339 H&R Block, Inc. # ........................ 2,787 53,232 Hartford Financial Services Group, Inc. # .......................... 3,300 20,130 Hudson City Bancorp, Inc. # .............. 2,766 28,683 JPMorgan Chase & Co. # ................... 3,862 88,247 Mastercard, Inc., Class A # .............. 62 9,798 MetLife, Inc. # .......................... 760 14,030 Morgan Stanley ........................... 1,708 33,374 Northern Trust Corp. # ................... 2,650 147,207 TD Ameritrade Holding Corp. #* ........... 7,855 93,239 US Bancorp ............................... 1,975 28,262 W.R. Berkley Corp. # ..................... 3,789 78,849 Wells Fargo & Co. # ...................... 3,012 36,445 ----------- 987,734 ----------- HEALTH CARE--20.2% Abbott Laboratories # .................... 2,332 110,397 Aetna, Inc. # ............................ 3,551 84,762 Amgen, Inc. #* ........................... 3,409 166,802 CIGNA Corp. # ............................ 6,757 106,490 Forest Laboratories, Inc. #* ............. 1,667 35,741 Johnson & Johnson # ...................... 3,681 184,050 Kinetic Concepts, Inc.* .................. 2,882 62,770 Medco Health Solutions, Inc. #* .......... 3,157 128,111 Pfizer, Inc. # ........................... 14,999 184,638 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 20 | SEMI-ANNUAL REPORT 2009 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2009 (unaudited) -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- ROBECO WPG 130/30 LARGE CAP CORE FUND (continued) PORTFOLIO OF INVESTMENTS -------------------------------------------------------------------------------- Number of Shares Value --------- ----------- HEALTH CARE--(CONTINUED) Schering-Plough Corp. # .................. 9,078 $ 157,866 Varian Medical Systems, Inc. #* .......... 1,830 55,833 Watson Pharmaceuticals, Inc. #* .......... 3,073 86,874 WellPoint, Inc. #* ....................... 2,029 68,824 ----------- 1,433,158 ----------- INDUSTRIALS--5.8% Caterpillar, Inc. # ...................... 609 14,987 Flowserve Corp. # ........................ 980 49,461 Foster Wheeler AG* ....................... 4,182 62,897 General Electric Co. # ................... 7,930 67,484 Hubbell, Inc., Class B ................... 3,531 92,936 Shaw Group, Inc., (The) #* ............... 4,228 98,682 United Technologies Corp. ................ 697 28,459 ----------- 414,906 ----------- OTHER--0.1% SPDR Trust Series 1 ...................... 95 7,023 ----------- TECHNOLOGY--25.6% Amazon.com, Inc. #* ...................... 1,313 85,069 Apple, Inc. #* ........................... 1,297 115,835 CA, Inc. # ............................... 7,614 129,057 General Dynamics Corp. # ................. 2,089 91,540 Goodrich Corp. ........................... 1,359 45,037 Google, Inc., Class A* ................... 299 101,059 Hewlett-Packard Co. # .................... 5,173 150,172 IAC/Interactivecorp* ..................... 3,291 49,135 Intel Corp. # ............................ 4,908 62,528 International Business Machines Corp. # ................................ 1,968 181,115 Lexmark International, Inc., Class A #* ............................. 5,216 89,402 LSI Corp.* ............................... 22,503 65,259 Novell, Inc. #* .......................... 29,059 91,827 QUALCOMM, Inc. # ......................... 1,516 50,680 Raytheon Co. # ........................... 3,655 146,090 Red Hat, Inc.* ........................... 3,717 50,886 STMicroelectronics N.V. # ................ 12,117 53,921 Symantec Corp.* .......................... 5,604 77,503 Taiwan Semiconductor Manufacturing Co., Ltd. - Sponsored ADR .......................... 15,111 113,937 Tellabs, Inc.* ........................... 18,448 70,102 ----------- 1,820,154 ----------- TELECOMMUNICATIONS--5.2% AT&T, Inc. ............................... 551 13,097 Embarq Corp. # ........................... 3,743 130,893 Qwest Communications International, Inc. .................... 32,047 108,639 Verizon Communications, Inc. # ........... 4,010 114,405 ----------- 367,034 ----------- TRANSPORTATION--2.2% J.B. Hunt Transport Services, Inc. ....... 2,352 47,934 Ryder System, Inc. ....................... 769 17,579 Number of Shares Value --------- ----------- TRANSPORTATION--(CONTINUED) Southwest Airlines Co. ................... 10,894 $ 64,165 Union Pacific Corp. ...................... 759 28,478 ----------- 158,156 ----------- UTILITIES--5.1% AES Corp., (The)* ........................ 16,109 101,487 Edison International # ................... 4,585 124,804 Entergy Corp. # .......................... 766 51,621 Exelon Corp. ............................. 1,151 54,350 Sempra Energy ............................ 711 29,556 ----------- 361,818 ----------- TOTAL DOMESTIC COMMON STOCK (Cost $13,783,010).................... 9,307,282 ----------- SHORT-TERM INVESTMENT--20.3% PNC Bank Money Market Deposit Account 03/06/09................ 1,439,411 1,439,411 ----------- TOTAL SHORT-TERM INVESTMENT (Cost $1,439,411)..................... 1,439,411 ----------- TOTAL LONG POSITIONS--151.3% (Cost $15,222,421)........................ 10,746,693 ----------- SECURITIES SOLD SHORT--(31.0%) BASIC MATERIALS--(2.6%) Cameco Corp. ............................. (2,618) (38,170) Commercial Metals Co. .................... (3,651) (37,277) Goldcorp, Inc. ........................... (1,584) (45,809) Schnitzer Steel Industries, Inc., Class A ................................ (1,083) (31,017) Titanium Metals Corp. .................... (5,757) (33,621) ----------- (185,894) ----------- COMMERCIAL SERVICES--(1.5%) Fidelity National Information Services, Inc. ......................... (2,072) (36,260) Monster Worldwide, Inc.* ................. (2,609) (17,193) Moody's Corp. ............................ (1,031) (18,507) MSCI, Inc., Class A* ..................... (2,041) (32,166) ----------- (104,126) ----------- CONSUMER CYCLICAL--(3.9%) Autoliv, Inc. ............................ (1,281) (19,061) Chico's FAS, Inc.* ....................... (8,734) (39,565) Cooper Tire & Rubber Co. ................. (6,555) (29,825) J.C. Penney Co., Inc. .................... (2,241) (34,355) KBR, Inc. ................................ (2,869) (36,149) MDC Holdings, Inc. ....................... (1,391) (35,095) Toll Brothers, Inc.* ..................... (2,094) (33,190) Walgreen Co. ............................. (1,815) (43,306) Weight Watchers International, Inc. ................................... (502) (9,086) ----------- (279,632) ----------- THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2009 | 21 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2009 (unaudited) -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- ROBECO WPG 130/30 LARGE CAP CORE FUND (concluded) PORTFOLIO OF INVESTMENTS -------------------------------------------------------------------------------- Number of Shares Value --------- ----------- CONSUMER NON-CYCLICAL--(0.6%) Hormel Foods Corp. ....................... (1,119) $ (35,618) Smithfield Foods, Inc.* .................. (738) (5,793) ----------- (41,411) ----------- CONSUMER SERVICES--(2.2%) Liberty Media Holding Capital, Series A* .............................. (4,127) (21,213) Penn National Gaming, Inc.* .............. (2,061) (39,345) Regal Entertainment Group, Class A ................................ (3,764) (38,543) Scientific Games Corp., Class A* ............................... (1,861) (19,689) Starbucks Corp.* ......................... (3,808) (34,843) ----------- (153,633) ----------- ENERGY--(0.8%) Anadarko Petroleum Corp. ................. (535) (18,698) Frontier Oil Corp. ....................... (2,710) (36,992) ----------- (55,690) ----------- FINANCE--(3.9%) First Horizon National Corp. ............. (4,241) (38,890) Franklin Resources, Inc. ................. (293) (13,419) Fulton Financial Corp. ................... (3,326) (20,688) Janus Capital Group, Inc. ................ (1,769) (7,801) Jefferies Group, Inc. .................... (2,213) (21,887) KeyCorp .................................. (5,210) (36,522) Kilroy Realty Corp. (REIT) ............... (653) (12,152) Legg Mason, Inc. ......................... (1,450) (18,603) Marshall & Ilsley Corp. .................. (6,510) (29,816) NASDAQ OMX Group, Inc., (The)* ................................. (1,382) (28,884) Old Republic International Corp. .................................. (3,524) (31,998) Taubman Centers, Inc. .................... (964) (15,087) ----------- (275,747) ----------- HEALTH CARE--(4.8%) Allergan, Inc. ........................... (960) (37,190) Covance, Inc.* ........................... (741) (28,143) Coventry Health Care, Inc.* .............. (1,839) (21,185) Elan Corp. PLC - Sponsored ADR* ................................... (1,632) (10,086) Health Net, Inc.* ........................ (1,282) (16,923) Hill-Rom Holdings, Inc. .................. (1,858) (18,246) Hologic, Inc.* ........................... (1,632) (18,474) Illumina, Inc.* .......................... (1,119) (35,058) Intuitive Surgical, Inc.* ................ (280) (25,469) Inverness Medical Innovations, Inc.* .................................. (1,376) (30,919) Pharmaceutical Product Development, Inc. ...................... (1,482) (35,553) VCA Antech, Inc.* ........................ (1,491) (30,998) Vertex Pharmaceuticals, Inc.* ............ (1,113) (33,646) ----------- (341,890) ----------- Number of Shares Value --------- ----------- INDUSTRIALS--(1.8%) Crane Co. ................................ (733) $ (11,054) Graco, Inc. .............................. (1,082) (18,372) Rockwell Automation, Inc. ................ (1,111) (22,331) SPX Corp ................................. (867) (38,391) Stericycle, Inc.* ........................ (731) (35,073) ----------- (125,221) ----------- TECHNOLOGY--(6.6%) Adobe Systems, Inc.* ..................... (1,223) (20,424) Akamai Technologies, Inc.* ............... (2,142) (38,749) Alliant Techsystems, Inc.* ............... (575) (40,630) Autodesk, Inc.* .......................... (1,454) (18,451) Citrix Systems, Inc.* .................... (1,060) (21,815) Compuware Corp.* ......................... (5,817) (34,378) FLIR Systems, Inc.* ...................... (1,436) (29,309) Linear Technology Corp. .................. (1,613) (35,163) MEMC Electronic Materials, Inc.* ......... (1,367) (20,519) Novellus Systems, Inc.* .................. (2,989) (38,110) Roper Industries, Inc. ................... (897) (37,091) Spirit Aerosystems Holdings, Inc., Class A* ......................... (1,771) (17,568) Tech Data Corp.* ......................... (1,714) (29,635) Tyco Electronics Ltd. .................... (2,154) (20,420) Varian Semiconductor Equipment Associates, Inc.* ...................... (2,044) (37,303) Zebra Technologies Corp., Class A* ............................... (1,891) (33,225) ----------- (472,790) ----------- TELECOMMUNICATIONS--(1.1%) Leap Wireless International, Inc.* ....... (1,469) (39,825) SBA Communications Corp., Class A* ............................... (1,754) (36,448) ----------- (76,273) ----------- TRANSPORTATION--(0.4%) Kirby Corp.* ............................. (1,292) (28,476) ----------- UTILITIES--(0.8%) Covanta Holding Corp.* ................... (1,462) (22,266) Great Plains Energy, Inc. ................ (1,883) (25,496) Nicor, Inc. .............................. (419) (13,148) ----------- (60,910) ----------- TOTAL SECURITIES SOLD SHORT (Proceeds $3,445,950)................. (2,201,693) ----------- TOTAL INVESTMENTS--120.3% (Cost $11,776,471)........................ 8,545,000 ----------- LIABILITIES IN EXCESS OF OTHER ASSETS--(20.3)%..................... (1,442,164) ----------- NET ASSETS--100.0%........................... $ 7,102,836 =========== ---------- * -- Non-income producing. REIT -- Real Estate Investment Trust # Security portion is either entirely or partially held in a segregated account as collateral for securities sold short. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 22 | SEMI-ANNUAL REPORT 2009 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2009 (unaudited) -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- ROBECO SAM SUSTAINABLE CLIMATE FUND PORTFOLIO OF INVESTMENTS -------------------------------------------------------------------------------- Number of Shares Value --------- ----------- COMMON STOCK--85.7% AUSTRIA--6.5% Verbund - Oesterreichische Elektrizitaetswirtschafts AG (Utilities) ............................ 1,870 $ 58,058 Wienerberger AG (Industrials) ............ 2,720 22,241 Zumtobel AG (Industrials) ................ 6,600 54,387 ----------- 134,686 ----------- BRAZIL--5.3% Cia Energetica de Minas Gerais - ADR (Utilities) ............... 8,052 109,990 ----------- CANADA--2.6% Canadian Hydro Developers, Inc. (Utilities)* ........................... 12,000 24,808 Canadian Solar, Inc. (Industrials)* ...... 4,500 16,155 Intermap Technologies Corp. (Industrials)* ......................... 10,100 13,893 ----------- 54,856 ----------- CHINA--3.3% Trina Solar Ltd. - ADR (Industrials)* ......................... 3,000 19,620 Yingli Green Energy Holding Co. Ltd. - ADR (Industrials)* .......... 12,500 48,625 ----------- 68,245 ----------- DENMARK--4.2% Greentech Energy Systems (Utilities)* ........................... 7,200 24,503 Novozymes A/S, Class B (Materials) ............................ 850 63,207 ----------- 87,710 ----------- FINLAND--5.2% Fortum Oyj (Utilities) ................... 4,300 74,356 Vaisala Oyj Class A (Industrials) ........ 1,200 34,488 ----------- 108,844 ----------- GERMANY--2.1% Steico AG (Industrials) .................. 4,000 5,578 Vossloh AG (Industrials) ................. 400 37,936 ----------- 43,514 ----------- GREECE--2.0% Terna Energy SA (Utilities) .............. 8,500 42,457 ----------- IRELAND--0.3% Kingspan Group, PLC (Industrials) .......................... 2,000 5,445 ----------- NETHERLANDS--4.5% Smit Internationale NV (Industrials) .......................... 2,180 93,966 ----------- Number of Shares Value --------- ----------- SPAIN--18.2% EDP Renovaveis SA (Utilities)* ........... 13,100 $ 96,656 Gamesa Corp. Tecnologica SA (Industrials) .......................... 2,600 34,840 Iberdrola Renovables SA (Utilities)* ........................... 28,800 117,566 Union Fenosa SA (Utilities) .............. 5,700 129,131 ----------- 378,193 ----------- SWEDEN--0.5% Munters AB (Industrials) ................. 3,299 10,073 ----------- SWITZERLAND--3.5% ABB Ltd. (Industrials)* .................. 4,500 54,969 Von Roll Holding AG (Industrials) ........ 3,129 16,984 ----------- 71,953 ----------- UNITED STATES--27.5% Covanta Holding Corp. (Industrials)* ......................... 3,640 55,437 Ecolab, Inc. (Materials) ................. 2,220 70,552 First Solar, Inc. (Industrials)* ......... 590 62,387 FPL Group, Inc. (Utilities) .. ........... 1,350 61,195 ITC Holdings Corp. (Utilities) ........... 2,340 86,416 LSB Industries, Inc. (Industrials)* ...... 4,100 35,506 Quanta Services, Inc. (Industrials)* ..... 3,860 67,936 Sunpower Corp., Class A (Industrials)* ......................... 2,270 63,310 Tetra Tech, Inc. (Industrials)* .......... 3,130 70,112 ----------- 572,851 ----------- TOTAL COMMON STOCK (Cost $2,770,556)..................... 1,782,783 ----------- SHORT-TERM INVESTMENT--16.1% PNC Bank Money Market Deposit Account......................... 334,098 334,098 ---------- TOTAL SHORT-TERM INVESTMENT (Cost $334,098)....................... 334,098 ----------- TOTAL INVESTMENTS--101.8% (Cost $3,104,654)......................... 2,116,881 ----------- LIABILITIES IN EXCESS OF OTHER ASSETS--(1.8)%...................... (36,951) ----------- NET ASSETS--100.0%........................... $ 2,079,930 =========== ---------- ADR -- American Depositary Receipt * -- Non-income Producing THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2009 | 23 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2009 (unaudited) -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- ROBECO SAM SUSTAINABLE WATER FUND PORTFOLIO OF INVESTMENTS -------------------------------------------------------------------------------- Number of Shares Value --------- ----------- COMMON STOCK--92.4% AUSTRALIA--0.1% Boart Longyear Group (Industrials) .......................... 56,610 $ 3,439 ----------- AUSTRIA--2.5% Andritz AG (Industrials) ................. 2,100 60,407 BWT AG (Industrials) ..................... 700 10,942 ----------- 71,349 ----------- BRAZIL--1.3% Cia de Saneamento Basico do Estado de Sao Paulo - ADR (Utilities) ............................ 1,900 37,848 ----------- CANADA--2.3% BioteQ Environmental Tech, Inc. (Industrials)* ......................... 12,285 5,022 Hanfeng Evergreen, Inc. (Materials)* ........................... 5,200 30,574 Intermap Technologies Corp. (Industrials)* ......................... 8,500 11,692 Stantec, Inc. (Industrials)* ............. 900 14,467 SunOpta, Inc. (Consumer Staples)* .................... 3,900 4,368 ----------- 66,123 ----------- CHINA--0.8% Epure International Ltd. (Industrials) .......................... 116,000 20,236 Xinjiang Tianye Water Saving Irrigation System Co. Ltd. (Industrials) .......................... 48,000 3,899 ----------- 24,135 ----------- FINLAND--0.4% Uponor Oyj (Industrials) ................. 1,250 12,693 ----------- FRANCE--8.7% Foraco International SA (Industrials) .......................... 7,700 5,871 Suez Environnement SA (Utilities)* ........................... 9,800 144,242 Veolia Environnement (Utilities) ............................ 4,750 103,304 ----------- 253,417 ----------- GERMANY--2.4% Krones AG (Industrials) .................. 240 8,693 KSB AG (Industrials) ..................... 190 55,639 Washtec AG (Industrials)* ................ 1,000 6,719 ----------- 71,051 ----------- HONG KONG--9.8% Chaoda Modern Agriculture (Consumer Staples) ..................... 236,040 136,963 Number of Shares Value --------- ----------- HONG KONG--(CONTINUED) China Green Holdings Ltd. Bermuda (Consumer Staples) ..................... 6,000 $ 3,829 China Water Affairs Group Ltd. (Utilities)* ........................... 160,000 22,282 Guangdong Investment Ltd. (Utilities) ............................ 286,000 120,223 ----------- 283,297 ----------- JAPAN--2.1% Kitz Corp. (Industrials) ................. 5,000 15,574 Kurita Water Industries Ltd. (Industrials) .......................... 2,600 44,890 ----------- 60,464 ----------- NETHERLANDS--8.2% Aalberts Industries NV (Industrials) .......................... 7,490 38,077 Arcadis NV (Industrials) ................. 2,900 32,051 Grontmij NV (Industrials) ................ 1,355 25,131 Koninklijke Boskalis Westminster NV (Industrials) ....................... 3,100 59,795 Ten Cate NV (Industrials) ................ 1,500 22,953 Wavin NV (Industrials) ................... 21,000 58,570 ----------- 236,577 ----------- PHILIPPINES--0.3% Manila Water Co., Inc. (Utilities) ....... 41,000 9,034 ----------- SINGAPORE--1.8% Boustead Singapore Ltd. (Industrials) .......................... 60,000 23,260 Hyflux Ltd. (Industrials) ................ 28,000 27,136 Sinomem Technology Ltd. (Materials)* ........................... 40,000 2,067 ----------- 52,463 ----------- SPAIN--0.6% Fluidra SA (Industrials) ................. 5,800 18,309 ----------- SWITZERLAND--3.8% Geberit AG (Industrials) ................. 650 58,508 Nestle SA (Consumer Staples) ............. 1,571 51,487 ----------- 109,995 ----------- UNITED KINGDOM--3.7% Cascal NV (Utilities) .................... 1,700 5,355 Pennon Group PLC (Utilities) ............. 2,900 17,976 PuriCore PLC (Health Care)* .............. 28,900 2,731 RPS Group PLC (Industrials) .............. 4,800 8,899 Severn Trent PLC (Utilities) ............. 3,200 49,842 United Utilities Group PLC (Utilities) ............................ 3,100 22,523 ----------- 107,326 ----------- THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 24 | SEMI-ANNUAL REPORT 2009 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2009 (unaudited) -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- ROBECO SAM SUSTAINABLE WATER FUND (concluded) PORTFOLIO OF INVESTMENTS -------------------------------------------------------------------------------- Number of Shares Value --------- ----------- UNITED STATES--43.6% American States Water Co. (Utilities) ............................ 500 $ 16,775 Aqua America, Inc. (Utilities) ........... 1,600 29,440 Calgon Carbon Corp. (Materials)* ......... 1,040 15,236 California Water Service Group (Utilities) ............................ 400 15,704 Danaher Corp. (Industrials) .............. 3,100 157,356 Dionex Corp. (Health Care)* .............. 600 28,074 Ecolab, Inc. (Materials) ................. 1,560 49,577 ICF International, Inc. (Industrials)* ......................... 200 4,798 IDEX Corp. (Industrials) ................. 2,800 54,096 Insituform Technologies, Inc., Class A (Industrials)* ................. 2,700 32,886 Itron, Inc. (Industrials)* ............... 1,500 66,990 ITT Corp. (Industrials) .................. 3,750 140,062 Layne Christensen Co. (Industrials)* ......................... 500 8,135 Lindsay Manufacturing Co. (Industrials) .......................... 200 4,850 Mueller Water Products, Inc., Class A (Industrials) .................. 12,700 27,305 Nalco Holding Co. (Materials) ............ 5,500 62,535 Pall Corp. (Industrials) ................. 5,000 118,850 Pentair, Inc. (Industrials) .............. 1,200 25,044 Roper Industries, Inc. (Industrials) ..... 3,200 132,320 Tetra Tech, Inc. (Industrials)* .......... 765 17,136 Thermo Fisher Scientific, Inc. (Health Care)* ......................... 5,300 192,178 Toro Co. (Industrials) ................... 700 15,309 TyraTech, Inc. (Materials)* .............. 3,500 1,879 URS Corp. (Industrials)* ................. 850 26,282 Valmont Industries, Inc. (Industrials) .......................... 525 22,869 ----------- 1,265,686 ----------- TOTAL COMMON STOCK (Cost $4,716,363)..................... 2,683,206 ----------- SHORT-TERM INVESTMENT--8.2% PNC Bank Money Market Deposit Account......................... 237,160 237,160 ----------- TOTAL SHORT-TERM INVESTMENT (Cost $237,160)....................... 237,160 ----------- TOTAL INVESTMENTS--100.6% (Cost $4,953,523)......................... 2,920,366 ----------- LIABILITIES IN EXCESS OF OTHER ASSETS--(0.6)%...................... (17,967) ----------- NET ASSETS--100.0%........................... $ 2,902,399 =========== ---------- ADR -- American Depositary Receipt * -- Non-income Producing THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2009 | 25 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2009 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- STATEMENTS OF ASSETS AND LIABILITIES (Unaudited) --------------------------------------------------------------------------------
ROBECO BOSTON ROBECO BOSTON ROBECO BOSTON ROBECO BOSTON PARTNERS PARTNERS PARTNERS PARTNERS SMALL CAP LONG/SHORT MID CAP ALL-CAP VALUE FUND II EQUITY FUND VALUE FUND VALUE FUND -------------- ------------- ------------- ------------- ASSETS Investments, at value+............................. $43,626,718 $22,114,400 $30,026,487 $37,584,314 Foreign currency, at value#........................ -- 2,161 -- -- Receivables Investments sold................................ -- 675,467 506,642 279,581 Deposits with brokers for securities sold short. -- 1,271,846 -- -- Dividends and interest.......................... 28,544 11,073 56,451 183,182 Capital shares sold............................. 6,603 1,072 8,852 24 Investment adviser.............................. -- -- 273 -- Prepaid expenses and other assets.................. 16,344 16,440 13,562 15,300 ----------- ----------- ----------- ----------- Total assets................................. 43,678,209 24,092,459 30,612,267 38,062,401 ----------- ----------- ----------- ----------- LIABILITIES Securities sold-short, at fair value++............. -- 2,469,379 -- -- Options written, at value*......................... -- -- -- 264,091 Cash overdraft..................................... -- 406,369 -- -- Payables Investments purchased........................... -- 374,415 356,771 536,596 Capital shares redeemed......................... 155,242 -- 115,234 12,268 Professional fees............................... 21,142 21,711 13,712 10,213 Administration and accounting fees.............. 14,871 12,938 9,891 8,334 Transfer agent fees............................. 19,530 9,180 968 8,242 Directors' and officers' fees................... 17,974 10,647 4,744 2,255 Investment advisory fees........................ 8,299 17,570 852 6,527 Custodian fees.................................. 3,167 6,018 2,633 4,481 Distribution and service fees................... 6,004 902 1,710 474 Dividends on securities sold-short.............. -- 710 -- -- Interest payable................................ -- 64 -- -- Other accrued expenses and liabilities.......... 60,708 34,118 11,793 3,825 ----------- ----------- ----------- ----------- Total liabilities............................ 306,937 3,364,021 518,308 857,306 ----------- ----------- ----------- ----------- Net Assets......................................... $43,371,272 $20,728,438 $30,093,959 $37,205,095 =========== =========== =========== =========== NET ASSETS CONSIST OF Paid-in capital.................................... 104,878,506 37,271,573 51,991,482 57,091,251 Undistributed net investment income/(accumulated net investment loss)............................. (246,985) (301,232) 61,186 453,778 Accumulated net realized loss from investments..... (34,033,185) (9,508,399) (6,603,270) (1,666,107) Net unrealized depreciation on investments and foreign currency translation..................... (27,227,064) (8,366,131) (15,355,439) (18,673,827) Net unrealized appreciation on investments sold-short -- 1,632,627 -- -- ----------- ----------- ----------- ----------- Net Assets......................................... $43,371,272 $20,728,438 $30,093,959 $37,205,095 =========== =========== =========== =========== INSTITUTIONAL CLASS Net assets......................................... $15,779,020 $16,475,535 $22,106,287 $34,886,086 ----------- ----------- ----------- ----------- Shares outstanding ($0.001 par value, 100,000,000 shares authorized)............................... 2,545,961 1,936,958 3,976,440 4,013,180 ----------- ----------- ----------- ----------- Net asset value, offering and redemption price per share........................................ $ 6.20 $ 8.51 $ 5.56 $ 8.69 =========== =========== =========== =========== INVESTOR CLASS Net assets......................................... $27,592,252 $ 4,252,903 $ 7,987,672 $ 2,319,009 ----------- ----------- ----------- ----------- Shares outstanding ($0.001 par value, 100,000,000 shares authorized)............................... 4,611,954 513,614 1,476,923 267,766 ----------- ----------- ----------- ----------- Net asset value, offering and redemption price per share........................................ $ 5.98 $ 8.28 $ 5.41 $ 8.66 =========== =========== =========== =========== + Investment in securities, at cost................ $70,853,782 $30,480,135 $45,381,926 $56,598,081 # Foreign currency, at cost....................... -- 2,557 -- -- ++ Proceeds received, securities sold short........ -- 4,102,006 -- -- * Premiums received, options written............. -- -- -- 604,031
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 26 | SEMI-ANNUAL REPORT 2009 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2009 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- STATEMENTS OF ASSETS AND LIABILITIES (Unaudited) --------------------------------------------------------------------------------
ROBECO ROBECO WPG WPG 130/30 SAM SAM SMALL CAP LARGE CAP SUSTAINABLE SUSTAINABLE VALUE FUND CORE FUND CLIMATE FUND WATER FUND ------------ ------------ ----------- ----------- ASSETS Investments, at value+............................. $21,671,179 $10,746,693 $ 2,116,881 $ 2,920,366 Receivables Investments sold................................ 565,996 614,802 -- 17,775 Dividends and interest ......................... 32,898 29,616 3,638 4,188 Investment adviser.............................. -- 16,193 23,540 26,048 Capital shares sold............................. -- -- 38 97 Prepaid expenses and other assets.................. 13,930 11,458 15,398 15,977 ----------- ----------- ----------- ----------- Total assets................................. 22,284,003 11,418,762 2,159,495 2,984,451 ----------- ----------- ----------- ----------- LIABILITIES Securities sold-short, at fair value++............. -- 2,201,693 -- -- Cash overdraft..................................... 95,222 -- -- -- Payables Due to prime broker............................. -- 1,486,186 -- -- Investments purchased........................... 179,072 553,256 10,525 15,221 Transfer agent fees............................. 18,429 28,642 26,855 22,634 Professional fees............................... 28,578 24,088 14,523 16,024 Administration and accounting fees.............. 9,664 2,599 7,379 5,789 Directors' and officers' fees................... 3,840 4,722 1,127 904 Custodian fees.................................. -- 2,736 1,287 3,212 Investment advisory fees........................ 5,555 -- -- -- Dividends on securities sold-short.............. -- 1,629 -- -- Distribution and service fees................... -- -- 32 59 Interest payable................................ -- 70 -- -- Other accrued expenses and liabilities.......... 5,229 10,305 17,837 18,209 ----------- ----------- ----------- ----------- Total liabilities............................ 345,589 4,315,926 79,565 82,052 ----------- ----------- ----------- ----------- Net Assets......................................... $21,938,414 $ 7,102,836 $ 2,079,930 $ 2,902,399 =========== =========== =========== =========== NET ASSETS CONSIST OF Paid-in capital.................................... 47,971,939 15,175,887 4,602,014 5,579,671 Undistributed net investment income/(accumulated net investment loss)............................. 242,038 59,396 (11,849) (11,220) Accumulated net realized loss from investments..... (16,675,155) (4,900,976) (1,523,494) (632,922) Net unrealized depreciation on investments and foreign currency translation..................... (9,600,408) (4,475,728) (986,741) (2,033,130) Net unrealized appreciation on investments sold-short -- 1,244,257 -- -- ----------- ----------- ----------- ----------- Net Assets......................................... $21,938,414 $ 7,102,836 $ 2,079,930 $ 2,902,399 =========== =========== =========== =========== INSTITUTIONAL CLASS Net assets......................................... $21,938,414 $ 7,102,836 $ 1,918,384 $ 2,613,182 ----------- ----------- ----------- ----------- Shares outstanding ($0.001 par value, 100,000,000 shares authorized)............................... 3,176,163 848,383 454,016 543,491 ----------- ----------- ----------- ----------- Net asset value, offering and redemption price per share........................................ $ 6.91 $ 8.37 $ 4.23 $ 4.81 =========== =========== =========== =========== INVESTOR CLASS Net assets......................................... $ -- $ -- $ 161,546 $ 289,217 ----------- ----------- ----------- ----------- Shares outstanding ($0.001 par value, 100,000,000 shares authorized)............................... -- -- 38,234 60,163 ----------- ----------- ----------- ----------- Net asset value, offering and redemption price per share........................................ $ -- $ -- $ 4.23 $ 4.81 =========== =========== =========== =========== + Investment in securities, at cost................ $31,271,587 $15,222,421 $ 3,104,654 $ 4,953,523 ++ Proceeds received, securities sold short....... -- 3,445,950 -- --
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2009 | 27 ROBECO INVESTMENT FUNDS FOR THE SIX-MONTHS ENDED FEBRUARY 28, 2009 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- STATEMENTS OF OPERATIONS (Unaudited) --------------------------------------------------------------------------------
ROBECO BOSTON ROBECO BOSTON ROBECO BOSTON ROBECO BOSTON PARTNERS PARTNERS PARTNERS PARTNERS SMALL CAP LONG/SHORT MID CAP ALL-CAP VALUE FUND II EQUITY FUND VALUE FUND VALUE FUND ------------- ------------- ------------- ------------- INVESTMENT INCOME Dividends+....................................... $ 990,822 $ 233,166 $ 501,136 $ 581,577 Interest......................................... -- -- -- 97,243 ------------ ------------ ------------ ------------ Total investment income........................ 990,822 233,166 501,136 678,820 ------------ ------------ ------------ ------------ EXPENSES Advisory fees.................................... 354,879 318,143 147,900 170,711 Transfer agent fees.............................. 61,553 37,845 45,282 37,822 Distribution fees (Investor Class)............... 51,566 6,763 14,282 3,082 Administration and accounting fees............... 50,730 49,362 44,156 42,669 Printing and shareholder reporting fees.......... 46,117 6,447 9,173 3,719 Directors' and officers' fees.................... 28,091 13,976 14,009 12,796 Professional fees................................ 25,785 22,811 19,340 18,348 Custodian fees................................... 18,210 17,913 8,244 11,642 Registration and filing fees..................... 14,380 10,909 11,405 12,397 Dividend expense on securities sold-short........ -- 8,301 -- -- Prime broker interest expense.................... -- 165,897 -- -- Other expenses................................... 17,412 6,421 5,012 3,644 ------------ ------------ ------------ ------------ Total expenses before waivers and reimbursements 668,723 664,788 318,803 316,830 Less: waivers and reimbursements............... (155,868) (130,390) (119,702) (111,070) ------------ ------------ ------------ ------------ Net expenses after waivers and reimbursements.... 512,855 534,398 199,101 205,760 ------------ ------------ ------------ ------------ Net investment income (loss)..................... 477,967 (301,232) 302,035 473,060 ------------ ------------ ------------ ------------ Net realized gain/(Loss) From: Investments.................................... (28,155,571) (6,885,866) (5,380,724) (1,601,904) Net change in unrealized appreciation/(depreciation) on: Investments.................................... (21,844,331) (4,747,158) (15,733,232) (18,084,320) Investments sold short......................... -- (519,217) -- -- Foreign currency translation................... -- (396) -- -- Written options................................ -- -- -- 294,453 ------------ ------------ ------------ ------------ Net realized and unrealized loss on investments.. (49,999,902) (12,152,637) (21,113,956) (19,391,771) ------------ ------------ ------------ ------------ NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS..................................... $(49,521,935) $(12,453,869) $(20,811,921) $(18,918,711) ============ ============ ============ ============ + Net of foreign witholding taxes of........... $ -- $ (5,155) $ (287) $ (4,414) ============ ============ ============ ============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 28 | SEMI-ANNUAL REPORT 2009 ROBECO INVESTMENT FUNDS FOR THE SIX-MONTHS ENDED FEBRUARY 28, 2009 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- STATEMENTS OF OPERATIONS (Unaudited) --------------------------------------------------------------------------------
ROBECO ROBECO WPG WPG 130/30 SAM SAM SMALL CAP LARGE CAP SUSTAINABLE SUSTAINABLE VALUE FUND CORE FUND CLIMATE FUND* WATER FUND* ------------ ------------ ------------- ------------ INVESTMENT INCOME Dividends+....................................... $ 488,140 $ 159,933 $ 6,640 $ 15,310 Income from securities loaned.................... 2,608 -- -- -- ------------ ------------ ------------ ------------ Total investment income........................ 490,748 159,933 6,640 15,310 ------------ ------------ ------------ ------------ EXPENSES Advisory fees.................................... 132,182 35,231 11,862 15,893 Transfer agent fees.............................. 50,213 53,146 49,269 49,269 Distribution fees (Investor Class)............... -- -- 221 393 Administration and accounting fees............... 41,429 41,577 40,289 40,784 Printing and shareholder reporting fees.......... 6,943 6,447 8,679 8,679 Directors' and officers' fees.................... 13,594 10,379 7,122 7,126 Professional fees................................ 28,265 20,810 16,909 16,909 Custodian fees................................... 9,751 11,710 8,230 17,962 Registration and filing fees..................... 7,687 12,397 27,273 31,241 Dividend expense on securities sold-short........ -- 31,148 -- -- Prime broker interest expense.................... -- 3,675 -- -- Other expenses................................... 4,671 3,831 1,964 1,974 ------------ ------------ ------------ ------------ Total expenses before waivers and reimbursements 294,735 230,351 171,818 190,230 Less: waivers and reimbursements............... (46,019) (126,547) (153,874) (166,067) Less: fees paid indirectly..................... -- (3,271) -- -- ------------ ------------ ------------ ------------ Net expenses after waivers and reimbursements.... 248,716 100,533 17,944 24,163 ------------ ------------ ------------ ------------ Net investment income (loss)..................... 242,032 59,400 (11,304) (8,853) ------------ ------------ ------------ ------------ Net realized gain/(loss) from: Investments.................................... (9,624,603) (3,041,358) (1,317,111) (562,623) Foreign currency transactions.................. -- -- (3,489) 357 Net change in unrealized appreciation/(depreciation) on: Investments.................................... (8,562,940) (3,740,339) (493,627) (1,540,579) Investments sold short......................... -- 905,830 -- -- Foreign currency translation................... -- -- 1,232 400 ------------ ------------ ------------ ------------ Net realized and unrealized loss on investments.. (18,187,543) (5,875,867) (1,812,995) (2,102,445) ------------ ------------ ------------ ------------ NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS..................................... $(17,945,511) $ (5,816,467) $ (1,824,299) $ (2,111,298) ============ ============ ============ ============ +Net of foreign witholding taxes of............ $ (309) $ (498) $ -- $ (202) ============ ============ ============ ============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2009 | 29 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2009 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS --------------------------------------------------------------------------------
ROBECO BOSTON PARTNERS ROBECO BOSTON PARTNERS SMALL CAP VALUE FUND II LONG/SHORT EQUITY FUND ---------------------------------- ---------------------------------- FOR THE SIX FOR THE FOR THE SIX FOR THE MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED FEBRUARY 28, 2009 AUGUST 31, 2008 FEBRUARY 28, 2009 AUGUST 31, 2008 ----------------- --------------- ----------------- --------------- (UNAUDITED) (UNAUDITED) FROM OPERATIONS: Net investment income/(loss)........................ $ 477,967 $ 510,903 $ (301,232) $(1,406,344) Net realized gain/(loss) from investments........... (28,155,571) 7,738,669 (6,885,866) 7,116,485 Net change in unrealized appreciation/(depreciation) from investments.................................. (21,844,331) (30,099,681 (5,266,771) (6,247,351) ------------ ------------ ------------ ----------- Net decrease in net assets resulting from operations (49,521,935) (21,850,109) (12,453,869) (537,210) ------------ ------------ ------------ ----------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income Institutional Class.............................. (546,776) -- -- -- Investor Class................................... (701,664) -- -- -- Net realized capital gains Institutional Class.............................. (141,171) (30,253,296) (3,859,742) (7,243,467) Investor Class................................... (222,896) (41,264,087) (1,041,399) (1,286,875) ------------ ------------ ------------ ----------- Net decrease in net assets from dividends and distributions to shareholders........................................ (1,612,507) (71,517,383) (4,901,141) (8,530,342) ------------ ------------ ------------ ----------- CAPITAL SHARE TRANSACTIONS (NOTE 5) Increase/(decrease) in net assets from share transactions Institutional Class.............................. (18,989,872) 2,011,748 (5,865,620) (29,635,308) Investor Class................................... (8,526,029) (35,505,940) (201,157) (5,581,036) ------------ ------------ ------------ ----------- Net decrease in net assets from capital share transactions (27,515,901) (33,494,192) (6,066,777) (35,216,344) ------------ ------------ ------------ ----------- Total decrease in net assets........................... (78,650,343) (126,861,684) (23,421,787) (44,283,896) NET ASSETS Beginning of period................................. 122,021,615 248,883,299 44,150,225 88,434,121 ------------ ------------ ------------ ----------- End of period....................................... $ 43,371,272 $122,021,615 $ 20,728,438 $44,150,225 ============ ============ ============ =========== Undistributed net investment income/(loss), end of period $ (246,985) $ 523,488 $ (301,232) $ -- ============ ============ ============ ===========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 30 | SEMI-ANNUAL REPORT 2009 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2009 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS --------------------------------------------------------------------------------
ROBECO BOSTON PARTNERS ROBECO BOSTON PARTNERS MID CAP VALUE FUND ALL CAP VALUE FUND ---------------------------------- ---------------------------------- FOR THE SIX FOR THE FOR THE SIX FOR THE MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED FEBRUARY 28, 2009 AUGUST 31, 2008 FEBRUARY 28, 2009 AUGUST 31, 2008 ----------------- --------------- ----------------- --------------- (UNAUDITED) (UNAUDITED) FROM OPERATIONS: Net investment income............................... $ 302,035 $ 357,500 $ 473,060 $ 531,890 Net realized gain/(loss) from investments........... (5,380,724) (392,105) (1,601,904) 590,704 Net change in unrealized appreciation/(depreciation) from investments.................................. (15,733,232) (3,105,700) (17,789,867) (2,882,310) ------------ ------------ ------------ ----------- Net decrease in net assets resulting from operations (20,811,921) (3,140,305) (18,918,711) (1,759,716) ------------ ------------ ------------ ----------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income Institutional Class.............................. (341,607) (195,014) (456,683) (156,892) Investor Class................................... (110,208) (46,318) (17,485) (24,174) Net realized capital gains Institutional Class.............................. (1,154) (4,230,671) (335,000) (1,351,923) Investor Class................................... (496) (1,659,111) (18,253) (300,869) ------------ ------------ ------------ ----------- Net decrease in net assets from dividends and distributions to shareholders........................................ (453,465) (6,131,114) (827,421) (1,833,858) ------------ ------------ ------------ ----------- CAPITAL SHARE TRANSACTIONS (NOTE 5) Increase/(decrease) in net assets from share transactions Institutional Class.............................. 1,423,012 6,019,308 1,581,254 41,104,037 Investor Class................................... (2,320,932) 7,009,344 356,820 (238,701) ------------ ------------ ------------ ----------- Net increase/(decrease) in net assets from capital share transactions........................................... (897,920) 13,028,652 1,938,074 40,865,336 ------------ ------------ ------------ ----------- Total increase/(decrease) in net assets................ (22,163,306) 3,757,233 (17,808,058) 37,271,762 NET ASSETS Beginning of period................................. 52,257,265 48,500,032 55,013,153 17,741,391 ------------ ------------ ------------ ----------- End of period....................................... $ 30,093,959 $ 52,257,265 $ 37,205,095 $55,013,153 ============ ============ ============ =========== Undistributed net investment income/(loss), end of period $ 61,186 $ 210,966 $ 453,778 $ 454,886 ============ ============ ============ ===========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2009 | 31 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2009 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS --------------------------------------------------------------------------------
ROBECO ROBECO WPG WPG SMALL CAP VALUE FUND 130/30 LARGE CAP CORE FUND ---------------------------------- ---------------------------------- FOR THE SIX FOR THE FOR THE SIX FOR THE MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED FEBRUARY 28, 2009 AUGUST 31, 2008 FEBRUARY 28, 2009 AUGUST 31, 2008 ----------------- --------------- ----------------- --------------- (UNAUDITED) (UNAUDITED) FROM OPERATIONS: Net investment income............................... $ 242,032 $ 50,718 $ 59,400 $ 42,342 Net realized gain/(loss) from investments........... (9,624,603) (4,964,281) (3,041,358) 936,792 Net change in unrealized appreciation/(depreciation) from investments.................................. (8,562,940) (3,287,345) (2,834,509) (3,745,343) ------------ ------------ ------------ ----------- Net decrease in net assets resulting from operations (17,945,511) (8,200,908) (5,816,467) (2,766,209) ------------ ------------ ------------ ----------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income Institutional Class.............................. (50,712) (43,780) (45,594) -- Net realized capital gains Institutional Class.............................. (38,110) (7,781,157) -- (4,297,083) ------------ ------------ ------------ ----------- Net decrease in net assets from dividends and distributions to shareholders.......................... (88,822) (7,824,937) (45,594) (4,297,083) ------------ ------------ ------------ ----------- CAPITAL SHARE TRANSACTIONS (NOTE 5) Increase/(decrease) in net assets from share transactions Institutional Class.............................. (3,160,454) 5,197,063 (536,873) 1,935,236 ------------ ------------ ------------ ----------- Net increase/(decrease) in net assets from capital share transactions..................................... (3,160,454) 5,197,063 (536,873) 1,935,236 ------------ ------------ ------------ ----------- Total decrease in net assets........................... (21,194,787) (10,828,782) (6,398,934) (5,128,056) NET ASSETS Beginning of period................................. 43,133,201 53,961,983 13,501,770 18,629,826 ------------ ------------ ------------ ----------- End of period....................................... $ 21,938,414 $ 43,133,201 $ 7,102,836 $13,501,770 ============ ============ ============ =========== Undistributed net investment income/(loss), end of period $ 242,038 $ 50,718 $ 59,396 $ 45,590 ============ ============ ============ ===========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 32 | SEMI-ANNUAL REPORT 2009 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2009 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS --------------------------------------------------------------------------------
SAM SAM SUSTAINABLE CLIMATE FUND SUSTAINABLE WATER FUND ---------------------------------- ---------------------------------- FOR THE SIX FOR THE FOR THE SIX FOR THE MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED FEBRUARY 28, 2009 AUGUST 31, 2008 FEBRUARY 28, 2009 AUGUST 31, 2008 ----------------- --------------- ----------------- --------------- (UNAUDITED) (UNAUDITED) FROM OPERATIONS: Net investment income/(loss)........................ $ (11,304) $ 9,164 $ (8,853) $ 16,860 Net realized loss from investments.................. (1,320,600) (197,558) (562,266) (68,933) Net change in unrealized appreciation/(depreciation) from investments.................................. (492,395) (494,346) (1,540,179) (492,951) ------------ ------------ ------------ ----------- Net decrease in net assets resulting from operations (1,824,299) (682,740) (2,111,298) (545,024) ------------ ------------ ------------ ----------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income Institutional Class.............................. (22,232) -- (28,831) -- Investor Class................................... (1,465) -- (2,732) -- ------------ ------------ ------------ ----------- Net decrease in net assets from dividends and distributions to shareholders........................................ (23,697) -- (31,563) -- ------------ ------------ ------------ ----------- CAPITAL SHARE TRANSACTIONS (NOTE 5) Increase/(decrease) in net assets from share transactions Institutional Class.............................. 232,140 4,047,578 469,000 4,584,775 Investor Class................................... 18,876 312,072 82,620 453,889 ------------ ------------ ------------ ----------- Net increase in net assets from capital share transactions 251,016 4,359,650 551,620 5,038,664 ------------ ------------ ------------ ----------- Total increase/(decrease) in net assets................ (1,596,980) 3,676,910 (1,591,241) 4,493,640 NET ASSETS Beginning of period................................. 3,676,910 -- 4,493,640 -- ------------ ------------ ------------ ----------- End of period....................................... $ 2,079,930 $ 3,676,910 $ 2,902,399 $ 4,493,640 ============ ============ ============ =========== Undistributed net investment income/(loss), end of period $ (11,849) $ 23,152 $ (11,220) $ 29,196 ============ ============ ============ ===========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2009 | 33 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2009 (unaudited) -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- STATEMENTS OF CASH FLOWS --------------------------------------------------------------------------------
ROBECO BOSTON PARTNERS ROBECO BOSTON PARTNERS LONG/SHORT EQUITY FUND WPG 130/30 LARGE CAP CORE FUND ---------------------- ------------------------------ FOR THE SIX FOR THE SIX MONTHS ENDED MONTHS ENDED FEBRUARY 28, 2009 FEBRUARY 28, 2009 ----------------- ----------------- (UNAUDITED) (UNAUDITED) ----------------- ----------------- CASH FLOWS PROVIDED FROM (USED IN) OPERATING ACTIVITIES: Net decrease in net assets resulting from operations.......... $(12,453,869) $(5,816,467) Adjustments to reconcile net decrease in net assets resulting from operations to net cash provided by (used in) operating activities Purchases of long-term portfolio investments.................. (25,655,658) (7,092,706) Proceeds from disposition of long-term portfolio investments.. 30,080,118 7,787,057 Net sales/(purchases) of short-term portfolio investments..... 6,587,468 (1,439,411) Net proceeds from short sales................................. (3,873,371) (207,801) Net realized loss on investments.............................. 6,885,866 3,041,358 Net unrealized depreciation on investments.................... 5,266,771 2,834,509 Decrease in deposits with brokers for securities sold short... 10,501,023 -- Increase in receivable for securities sold.................... (586,053) (614,802) Decerease in payable to adviser............................... (56,169) 24,866 Decrease in dividend and interest receivable.................. 14,622 407 Increase in payable for investments purchased................. 106,488 553,256 Decrease in accrued expenses ................................. (42,230) 13,763 ------------ ----------- NET CASH PROVIDED BY OPERATING ACTIVITIES..................... 16,775,006 (915,971) ------------ ----------- CASH FLOWS FROM FINANCING ACTIVITIES: (Decrease)/Increase in payable to Prime Broker................ (6,213,823) 258,191 Net payment for fund share activity........................... (10,908,028) (574,111) Dividends paid................................................ (59,524) (10,583) ------------ ----------- NET CASH USED IN FINANCING ACTIVITIES......................... (17,181,375) (326,503) ------------ ----------- NET DECREASE IN CASH.......................................... (406,369) (1,242,474) CASH AT BEGINNING OF YEAR..................................... -- 1,242,474 ------------ ----------- CASH AT THE END OF YEAR ...................................... (406,369) -- ============ ===========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 34 | SEMI-ANNUAL REPORT 2009 [THIS PAGE INTENTIONALLY LEFT BLANK] ROBECO INVESTMENT FUNDS -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS PER SHARE OPERATING PERFORMANCE -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 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. --------------------------------------------------------------------------------
NET DIVIDENDS TO DISTRIBUTIONS TO ASSET NET REALIZED TOTAL SHAREHOLDERS SHAREHOLDERS VALUE, NET AND UNREALIZED FROM FROM NET FROM NET BEGINNING INVESTMENT GAIN/(LOSS) ON INVESTMENT INVESTMENT REALIZED TOTAL OF PERIOD INCOME/(LOSS) INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS ------------------------------------------------------------------------------------------------------------------------------------ ROBECO BOSTON PARTNERS SMALL CAP VALUE FUND II ---------------------------------------------- INSTITUTIONAL CLASS 9/1/08 through 2/28/09+ $11.87 $ 0.06* $(5.50) $(5.44) $(0.18) $(0.05) $(0.23) 8/31/08 21.47 0.07* (1.97) (1.90) -- (7.70) (7.70) 8/31/07 22.82 (0.01)* 2.41 2.40 (0.09) (3.67) (3.76) 8/31/06 24.75 (0.08)* 1.57 1.49 -- (3.42) (3.42) 8/31/05 22.80 (0.10) 5.07 4.97 -- (3.03) (3.03) 8/31/04 20.19 (0.12)* 2.92 2.80 -- (0.20) (0.20) INVESTOR CLASS 9/1/08 through 2/28/09+ $11.43 $ 0.05* $(5.31) $(5.26) $(0.14) $(0.05) $(0.19) 8/31/08 21.02 0.03* (1.92) (1.89) -- (7.70) (7.70) 8/31/07 22.40 (0.07)* 2.37 2.30 (0.02) (3.67) (3.69) 8/31/06 24.35 (0.13)* 1.54 1.41 -- (3.36) (3.36) 8/31/05 22.53 (0.17) 5.01 4.84 -- (3.03) (3.03) 8/31/04 20.00 (0.18)* 2.90 2.72 -- (0.20) (0.20) ------------------------------------------------------------------------------------------------------------------------------------ ROBECO BOSTON PARTNERS LONG/SHORT EQUITY FUND --------------------------------------------- INSTITUTIONAL CLASS 9/1/08 through 2/28/09+ $15.47 $(0.12)* $(4.36) $(4.48) $ -- $(2.48) $(2.48) 8/31/08 17.23 (0.36)* 0.50 0.14 -- (1.90) (1.90) 8/31/07 18.57 (0.21)* 0.73 0.52 -- (1.86) (1.86) 8/31/06 17.89 (0.26)* 2.40 2.14 -- (1.47) (1.47) 8/31/05 14.70 (0.25) 3.43 3.18 -- -- -- 8/31/04 14.31 (0.32)* 0.69 0.37 -- -- -- INVESTOR CLASS 9/1/08 through 2/28/09+ $15.17 $(0.13)* $(4.28) $(4.41) $ -- $(2.48) $(2.48) 8/31/08 16.97 (0.39)* 0.49 0.10 -- (1.90) (1.90) 8/31/07 18.36 (0.26)* 0.73 0.47 -- (1.86) (1.86) 8/31/06 17.74 (0.30)* 2.38 2.08 -- (1.47) (1.47) 8/31/05 14.62 (0.28) 3.39 3.11 -- -- -- 8/31/04 14.27 (0.36)* 0.69 0.33 -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ ROBECO BOSTON PARTNERS MID CAP VALUE FUND ----------------------------------------- INSTITUTIONAL CLASS 9/1/08 through 2/28/09+ $ 9.35 $ 0.06* $(3.76) $(3.70) $(0.09) $ --(3) $(0.09) 8/31/07 13.05 0.05* 2.44 2.49 (0.03) (4.06) (4.09) 8/31/06 14.02 0.04* 0.86 0.90 (0.02) (1.85) (1.87) 8/31/05 13.16 --(3) 3.22 3.22 (0.01) (2.35) (2.36) 8/31/04 11.57 0.01* 1.65 1.66 (0.07) -- (0.07) INVESTOR CLASS 9/1/08 through 2/28/09+ $ 9.08 $ 0.05* $(3.65) $(3.60) $(0.07) $ --(3) $(0.07) 8/31/08 11.16 0.06* (0.74) (0.68) (0.04) (1.36) (1.40) 8/31/07 12.81 0.02* 2.39 2.41 -- (4.06) (4.06) 8/31/06 13.80 (0.01)(2)* 0.87 0.86 -- (1.85) (1.85) 8/31/05 13.02 --(3) 3.13 3.13 -- (2.35) (2.35) 8/31/04 11.43 (0.02)* 1.65 1.63 (0.04) -- (0.04) RATIO OF NET NET EXPENSES TO ASSET ASSETS, AVERAGE NET VALUE TOTAL END OF ASSETS WITH REDEMTPION END OF INVESTMENT PERIOD WAIVERS AND FEES PERIOD RETURN(1,2) (000) REIMBURSEMENTS ------------------------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS SMALL CAP VALUE FUND II ---------------------------------------------- INSTITUTIONAL CLASS 9/1/08 through 2/28/09+ $ --(3) $ 6.20 (46.20)% $ 15,779 1.30%(4) 8/31/08 --(3) 11.87 (10.15) 56,652 1.39 8/31/07 0.01 21.47 10.53 94,337 1.55 8/31/06 --(3) 22.82 6.39 114,153 1.52 8/31/05 0.01 24.75 22.65 138,143 1.53 8/31/04 0.01 22.80 13.96 133,060 1.49 INVESTOR CLASS 9/1/08 through 2/28/09+ $ -- $ 5.98 (46.30)% $ 27,592 1.55%(4) 8/31/08 -- 11.43 (10.40) 65,370 1.64 8/31/07 0.01 21.02 10.26 154,546 1.80 8/31/06 --(3) 22.40 6.12 230,362 1.77 8/31/05 0.01 24.35 22.32 274,648 1.78 8/31/04 0.01 22.53 13.69 327,569 1.74 ------------------------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS LONG/SHORT EQUITY FUND --------------------------------------------- INSTITUTIONAL CLASS 9/1/08 through 2/28/09+ $ -- $ 8.51 (29.75)% $ 16,476 3.73%(4) 8/31/08 --(3) 15.47 1.12 36,423 3.98 8/31/07 --(3) 17.23 2.61 73,770 3.44 8/31/06 0.01 18.57 12.93 90,313 3.24 8/31/05 0.01 17.89 21.70 99,748 3.13 8/31/04 0.02 14.70 2.73 58,293 3.02 INVESTOR CLASS 9/1/08 through 2/28/09+ $ -- $ 8.28 (29.90)% $ 4,253 3.98%(4) 8/31/08 --(3) 15.17 0.88 7,728 4.23 8/31/07 --(3) 16.97 2.35 14,664 3.69 8/31/06 0.01 18.36 12.69 20,706 3.48 8/31/05 0.01 17.74 21.34 24,716 3.37 8/31/04 0.02 14.62 2.45 14,322 3.27 ------------------------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS MID CAP VALUE FUND ----------------------------------------- INSTITUTIONAL CLASS 9/1/08 through 2/28/09+ $ -- $ 5.56 (39.67)% $ 22,106 1.00%(4) 8/31/07 -- 11.45 21.32 35,722 1.00 8/31/06 -- 13.05 6.82 27,538 1.00 8/31/05 -- 14.02 25.97 54,187 1.00 8/31/04 -- 13.16 14.39 42,240 1.00 INVESTOR CLASS 9/1/08 through 2/28/09+ $ -- $ 5.41 (39.75)% $ 7,988 1.25%(4) 8/31/08 -- 9.08 (6.62) 17,202 1.25 8/31/07 -- 11.16 21.02 12,778 1.25 8/31/06 -- 12.81 6.59 5,334 1.25 8/31/05 -- 13.80 25.47 4,462 1.25 8/31/04 -- 13.02 14.08 2,819 1.25 RATIO OF EXPENSES TO RATIO OF NET AVERAGE NET INVESTMENT ASSETS WITH RATIO OF INCOME (LOSS) WAIVERS AND EXPENSES TO TO AVERAGE REIMBURSEMENTS AVERAGE NET NET ASSETS (EXCLUDING ASSETS WITHOUT WITH WAIVERS PORTFOLIO DIVIDEND AND WAIVERS AND AND TURNOVER INTEREST EXPENSES) REIMBURSEMENTS REIMBURSEMENTS RATE --------------------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS SMALL CAP VALUE FUND II ---------------------------------------------- INSTITUTIONAL CLASS 9/1/08 through 2/28/09+ --% 1.72%(4) 1.51%(4) 37% 8/31/08 -- 1.54 0.47 54 8/31/07 -- 1.56 (0.09) 46 8/31/06 -- 1.53 (0.34) 34 8/31/05 -- 1.54 (0.42) 38 8/31/04 -- 1.49 (0.53) 47 INVESTOR CLASS 9/1/08 through 2/28/09+ --% 1.97%(4) 1.23%(4) 37% 8/31/08 -- 1.79 0.19 54 8/31/07 -- 1.81 (0.32) 46 8/31/06 -- 1.78 (0.58) 34 8/31/05 -- 1.79 (0.64) 38 8/31/04 -- 1.74 (0.77) 47 --------------------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS LONG/SHORT EQUITY FUND --------------------------------------------- INSTITUTIONAL CLASS 9/1/08 through 2/28/09+ 2.50%(4) 4.65%(4) (2.09)%(4) 84% 8/31/08 2.50 4.36 (2.27) 124 8/31/07 2.50 3.60 (1.17) 93 8/31/06 2.50 3.40 (1.51) 109 8/31/05 2.50 3.30 (1.82) 107 8/31/04 2.50 3.20 (2.26) 239 INVESTOR CLASS 9/1/08 through 2/28/09+ 2.75%(4) 4.90%(4) (2.32)%(4) 84% 8/31/08 2.75 4.61 (2.51) 124 8/31/07 2.75 3.85 (1.42) 93 8/31/06 2.75 3.65 (1.77) 109 8/31/05 2.75 3.55 (2.07) 107 8/31/04 2.75 3.45 (2.50) 239 --------------------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS MID CAP VALUE FUND ----------------------------------------- INSTITUTIONAL CLASS 9/1/08 through 2/28/09+ --% 1.65%(4) 1.71%(4) 31% 8/31/07 -- 1.48 0.38 89 8/31/06 -- 1.38 0.28 97 8/31/05 -- 1.31 0.03 74 8/31/04 -- 1.26 0.07 67 INVESTOR CLASS 9/1/08 through 2/28/09+ --% 1.90%(4) 1.46%(4) 31% 8/31/08 -- 1.73 0.55 64 8/31/07 -- 1.73 0.14 89 8/31/06 -- 1.70 (0.04) 97 8/31/05 -- 1.56 (0.22) 74 8/31/04 -- 1.51 (0.18) 67
------- + Unaudited * Calculated based on average shares outstanding for the period. (1) Total return is calculated by assuming a purchase of shares on the first day and a sale of shares on the last day of the period. (2) Redemption fees are reflected in total return calculations. (3) Amount is less than $0.01 per share. (4) Annualized THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 36 AND 37 | SEMI-ANNUAL REPORT 2009 ROBECO INVESTMENT FUNDS -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS (continued) PER SHARE OPERATING PERFORMANCE -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 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. --------------------------------------------------------------------------------
NET DIVIDENDS TO DISTRIBUTIONS TO ASSET NET REALIZED TOTAL SHAREHOLDERS SHAREHOLDERS VALUE, NET AND UNREALIZED FROM FROM NET FROM NET BEGINNING INVESTMENT GAIN/(LOSS) ON INVESTMENT INVESTMENT REALIZED TOTAL OF PERIOD INCOME/(LOSS) INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS ------------------------------------------------------------------------------------------------------------------------------------ ROBECO BOSTON PARTNERS ALL-CAP VALUE FUND ----------------------------------------- INSTITUTIONAL CLASS 9/1/08 through 2/28/09+ $13.61 $ 0.12* $(4.83) $(4.71) $(0.12) $(0.09) $(0.21) 8/31/08 16.47 0.23* (1.54) (1.31) (0.16) (1.39) (1.55) 8/31/07 15.69 0.16* 2.05 2.21 (0.13) (1.30) (1.43) 8/31/06 15.54 0.15* 1.03 1.18 (0.08) (0.95) (1.03) 8/31/05 13.29 0.07 2.83 2.90 (0.05) (0.60) (0.65) 8/31/04 10.82 0.06 2.48 2.54 (0.07) -- (0.07) INVESTOR CLASS 9/1/08 through 2/28/09+ $13.56 $ 0.10* $(4.83) $(4.73) $(0.08) $(0.09) $(0.17) 8/31/08 16.41 0.16* (1.51) (1.35) (0.11) (1.39) (1.50) 8/31/07 15.63 0.11* 2.06 2.17 (0.09) (1.30) (1.39) 8/31/06 15.49 0.11* 1.03 1.14 (0.05) (0.95) (1.00) 8/31/05 13.26 0.03 2.83 2.86 (0.03) (0.60) (0.63) 8/31/04 10.80 0.02 2.48 2.50 (0.04) -- (0.04) ------------------------------------------------------------------------------------------------------------------------------------ ROBECO WPG SMALL CAP VALUE FUND ------------------------------- INSTITUTIONAL CLASS 9/1/08 through 2/28/09+ $12.18 $ 0.07* $(5.32) $(5.25) $(0.01) $(0.01) $(0.02) 8/31/08 17.05 0.05 (2.46) (2.41) (0.01) (2.45) (2.46) 8/31/07 16.54 0.01 2.31 2.32 -- (1.81) (1.81) 8/31/06 17.42 --(2) 1.10 1.10 -- (1.98) (1.98) 8/31/053 17.55 (0.04) (0.09) (0.13) -- -- -- 12/31/04 16.34 --(2) 3.11 3.11 -- (1.90) (1.90) 12/31/03 11.24 --(2) 5.10 5.10 -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ ROBECO WPG 130/30 LARGE CAP CORE FUND+ -------------------------------------- INSTITUTIONAL CLASS 9/1/08 through 2/28/09+ $14.97 $ 0.07* $(6.62) $(6.55) $(0.05) $ -- $(0.05) 8/31/08 23.42 0.04* (2.93) (2.89) -- (5.56) (5.56) 8/31/07 22.27 (0.04) 3.40 3.36 -- (2.21) (2.21) 8/31/06 23.36 (0.01) 1.42 1.41 -- (2.50) (2.50) 8/31/053 23.10 (0.07) 0.33 0.26 -- -- -- 12/31/04 25.27 --(2) 0.93 0.93 -- (3.10) (3.10) 12/31/03 19.16 --(2) 6.11 6.11 -- -- -- RATIO OF NET NET EXPENSES TO ASSET ASSETS, AVERAGE NET VALUE TOTAL END OF ASSETS WITH REDEMTPION END OF INVESTMENT PERIOD WAIVERS AND FEES PERIOD RETURN(1,2) (000) REIMBURSEMENTS ---------------------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS ALL-CAP VALUE FUND ----------------------------------------- INSTITUTIONAL CLASS 9/1/08 through 2/28/09+ $ -- $ 8.69 (34.88)% $ 34,886 0.95%(4) 8/31/08 -- 13.61 (8.55) 51,850 0.95 8/31/07 -- 16.47 14.38 13,720 0.95 8/31/06 -- 15.69 7.95 9,374 1.09 8/31/05 -- 15.54 22.33 7,315 1.25 8/31/04 -- 13.29 23.50 5,177 1.25 INVESTOR CLASS 9/1/08 through 2/28/09+ $ -- $ 8.66 (35.08)% $ 2,319 1.20%(4) 8/31/08 -- 13.56 (8.82) 3,164 1.20 8/31/07 -- 16.41 14.16 4,021 1.20 8/31/06 -- 15.63 7.72 3,739 1.34 8/31/05 -- 15.49 22.06 2,840 1.50 8/31/04 -- 13.26 23.13 649 1.50 ------------------------------------------------------------------------------------------------- ROBECO WPG SMALL CAP VALUE FUND ------------------------------- INSTITUTIONAL CLASS 9/1/08 through 2/28/09+ $ -- $ 6.91 (43.08)% $ 21,938 1.69%(4) 8/31/08 -- 12.18 (15.12) 43,133 1.61 8/31/07 -- 17.05 14.28 53,962 1.47 8/31/06 -- 16.54 7.16 48,607 1.43 8/31/053 -- 17.42 (0.74) 52,368 1.57(4) 12/31/04 -- 17.55 19.35 57,787 1.55 12/31/03 -- 16.34 45.37 58,282 1.68 ------------------------------------------------------------------------------------------------- ROBECO WPG 130/30 LARGE CAP CORE FUND+ -------------------------------------- INSTITUTIONAL CLASS 9/1/08 through 2/28/09+ $ -- $ 8.37 (43.80)% $ 7,103 2.37% 8/31/08 --(2) 14.97 (15.84) 13,502 1.96 8/31/07 -- 23.42 15.74 18,630 1.40 8/31/06 -- 22.27 6.10 18,935 1.40 8/31/053 -- 23.36 1.13 20,626 1.40(4) 12/31/04 -- 23.10 3.82 26,222 1.40 12/31/03 -- 25.27 31.89 52,355 1.44 RATIO OF EXPENSES TO RATIO OF NET AVERAGE NET INVESTMENT ASSETS WITH RATIO OF INCOME (LOSS) WAIVERS AND EXPENSES TO TO AVERAGE REIMBURSEMENTS AVERAGE NET NET ASSETS (EXCLUDING ASSETS WITHOUT WITH WAIVERS PORTFOLIO DIVIDEND AND WAIVERS AND AND TURNOVER INTEREST EXPENSES) REIMBURSEMENTS REIMBURSEMENTS RATE ------------------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS ALL-CAP VALUE FUND ----------------------------------------- INSTITUTIONAL CLASS 9/1/08 through 2/28/09+ --% 1.47%(4) 2.23%(4) 38% 8/31/08 -- 1.70 1.59 44 8/31/07 -- 2.24 0.92 45 8/31/06 -- 2.93 0.94 51 8/31/05 -- 3.90 0.53 29 8/31/04 -- 5.82 0.51 27 INVESTOR CLASS 9/1/08 through 2/28/09+ --% 1.72%(4) 1.97%(4) 38% 8/31/08 -- 1.95 1.10 44 8/31/07 -- 2.49 0.67 45 8/31/06 -- 3.19 0.69 51 8/31/05 -- 4.04 0.20 29 8/31/04 -- 5.84 0.14 27 ----------------------------------------------------------------------------------------- ROBECO WPG SMALL CAP VALUE FUND ------------------------------- INSTITUTIONAL CLASS 9/1/08 through 2/28/09+ --% 2.01%(4) 1.65%(4) 60% 8/31/08 -- 1.65 0.11 131 8/31/07 -- 1.47 0.09 138 8/31/06 -- 1.43 0.02 139 8/31/053 -- 1.57(4) (0.35)(4) 136 12/31/04 -- 1.55 (0.55) 159 12/31/03 -- 1.68 0.83 228 ----------------------------------------------------------------------------------------- ROBECO WPG 130/30 LARGE CAP CORE FUND+ -------------------------------------- INSTITUTIONAL CLASS 9/1/08 through 2/28/09+ 1.40%(4) 5.07%(4) 1.26%(4) 56% 8/31/08 1.40 3.43 0.26 164 8/31/07 1.40 1.99 (0.17) 94 8/31/06 1.40 1.79 (0.06) 94 8/31/053 1.40 2.08(4) (0.42)(4) 100 12/31/04 1.40 1.50 (0.06) 139 12/31/03 1.44 1.44 (0.52) 127
---------- + Unaudited * Calculated based on average shares outstanding. (1) Total return is calculated by assuming a purchase of shares on the first day and a sale of shares on the last day of the period. (2) Amount is less than $0.01. (3) For the period January 1, 2005 through August 31, 2005. (4) Annualized. (5) Redemption fees are reflected in total return calculations. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 38 AND 39 | SEMI-ANNUAL REPORT 2009 ROBECO INVESTMENT FUNDS -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS (concluded) PER SHARE OPERATING PERFORMANCE -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 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. --------------------------------------------------------------------------------
NET DIVIDENDS TO ASSET NET REALIZED TOTAL SHAREHOLDERS VALUE, NET AND UNREALIZED FROM FROM NET BEGINNING INVESTMENT GAIN/(LOSS) ON INVESTMENT INVESTMENT TOTAL REDEMTPION OF PERIOD INCOME/(LOSS) INVESTMENTS OPERATIONS INCOME DISTRIBUTIONS FEES ------------------------------------------------------------------------------------------------------------------------------------ SAM SUSTAINABLE CLIMATE FUND ---------------------------- INSTITUTIONAL CLASS 9/1/08 through 2/28/09+ $ 8.36 $(0.02)* $(4.06) $(4.08) $(0.05) $(0.05) $ -- 10/1/07** through 8/31/08 10.00 0.02* (1.66) (1.64) -- -- --(4) INVESTOR CLASS 9/1/08 through 2/28/09+ $ 8.36 $(0.03)* $(4.06) $(4.09) $(0.04) $(0.04) $ -- 10/1/07** through 8/31/08 10.00 0.02* (1.66) (1.64) -- -- --(4) ------------------------------------------------------------------------------------------------------------------------------------ SAM SUSTAINABLE WATER FUND -------------------------- INSTITUTIONAL CLASS 9/1/08 through 2/28/09+ $ 8.78 $(0.02)* $(3.89) $(3.91) $(0.06) $(0.06) $ -- 10/1/07** through 8/31/08 10.00 0.04* (1.26) (1.22) -- -- -- INVESTOR CLASS 9/1/08 through 2/28/09+ $ 8.78 $(0.02)* $(3.90) $(3.92) $(0.05) $(0.05) $ -- 10/1/07** through 8/31/08 10.00 0.04* (1.26) (1.22) -- -- -- RATIO OF NET NET EXPENSES TO ASSET ASSETS, AVERAGE NET VALUE TOTAL END OF ASSETS WITH END OF INVESTMENT PERIOD WAIVERS AND PERIOD RETURN(1,2) (000) REIMBURSEMENTS ------------------------------------------------------------------------------------- SAM SUSTAINABLE CLIMATE FUND ---------------------------- INSTITUTIONAL CLASS 9/1/08 through 2/28/09+ $ 4.23 (48.83)% $ 1,918 1.50%(3) 10/1/07** through 8/31/08 8.36 (16.40) 3,390 1.50(3) INVESTOR CLASS 9/1/08 through 2/28/09+ $ 4.23 (48.96)% $ 162 1.75%(3) 10/1/07** through 8/31/08 8.36 (16.40) 287 1.75(3) ------------------------------------------------------------------------------------- SAM SUSTAINABLE WATER FUND -------------------------- INSTITUTIONAL CLASS 9/1/08 through 2/28/09+ $ 4.81 (44.59)% $ 2,613 1.50%(3) 10/1/07** through 8/31/08 8.78 (12.20) 4,071 1.50(3) INVESTOR CLASS 9/1/08 through 2/28/09+ $ 4.81 (44.72)% $ 289 1.75%(3) 10/1/07** through 8/31/08 8.78 (12.20) 423 1.75(3) RATIO OF NET INVESTMENT RATIO OF INCOME (LOSS) EXPENSES TO TO AVERAGE AVERAGE NET NET ASSETS ASSETS WITHOUT WITH WAIVERS PORTFOLIO WAIVERS AND AND TURNOVER REIMBURSEMENTS REIMBURSEMENTS RATE ----------------------------------------------------------------------- SAM SUSTAINABLE CLIMATE FUND ---------------------------- INSTITUTIONAL CLASS 9/1/08 through 2/28/09+ 14.48%(3) (0.94)%(3) 83% 10/1/07** through 8/31/08 9.18(3) 0.16(3) 34 INVESTOR CLASS 9/1/08 through 2/28/09+ 14.73%(3) (1.18)%(3) 83% 10/1/07** through 8/31/08 8.93(3) (0.09)(3) 34 ----------------------------------------------------------------------- SAM SUSTAINABLE WATER FUND -------------------------- INSTITUTIONAL CLASS 9/1/08 through 2/28/09+ 11.95%(3) (0.53)%(3) 32% 10/1/07** through 8/31/08 8.89(3) 0.42(3) 40 INVESTOR CLASS 9/1/08 through 2/28/09+ 12.20%(3) (0.78)%(3) 32% 10/1/07** through 8/31/08 8.64(3) 0.17(3) 40
---------- + Unaudited * Calculated based on average shares outstanding for the period. ** Commencement of operations. (1) Total return is calculated by 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 return for periods less than one year has not been annualized. (2) Redemption fees are reflected in total return calculations. (3) Annualized. (4) Amount is less than $0.01 per share. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 40 AND 41 | SEMI-ANNUAL REPORT 2009 ROBECO INVESTMENT FUNDS -------------------------------------------------------------------------------- 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES The RBB Fund, Inc. ("RBB" or the "Company") 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 "1940 Act"), as an open-end management investment company. RBB is a "series trust," which is a mutual fund divided into separate portfolios. Each portfolio is treated as a separate entity for certain matters under the 1940 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 eighteen active investment portfolios, including Robeco Boston Partners Small Cap Value Fund II ("BP Small Cap Value Fund II"), Robeco Boston Partners Long/Short Equity Fund ("BP Long/Short Equity Fund"), Robeco Boston Partners Mid Cap Value Fund ("BP Mid Cap Value Fund"), Robeco Boston Partners All-Cap Value Fund ("BP All-Cap Value Fund") (collectively "BP Funds"), Robeco WPG Small Cap Value Fund ("WPG Small Cap Value Fund"), Robeco WPG 130/30 Large Cap Core Fund ("WPG 130/30 Large Cap Core Fund"), (collectively "WPG Funds"), the SAM Sustainable Climate Fund and SAM Sustainable Water Fund (collectively "SAM Funds") (each a "Fund," collectively the "Funds"). As of February 28, 2009, the BP Funds, SAM Funds and the WPG 130/30 Large Cap Core Fund each offer two classes of shares, Institutional Class and Investor Class. The WPG Small Cap Value Fund is a single class fund offering only the Institutional Class of shares. RBB has authorized capital of one hundred billion shares of common stock of which 78.773 billion shares are currently classified into one hundred and twenty-seven classes of common stock. Each class represents an interest in an active or inactive RBB investment portfolio. The active classes have been grouped into nine separate "families." Portfolio Valuation -- Each Fund's net asset value ("NAV") is calculated once daily at the close of regular trading hours on the New York Stock Exchange ("NYSE") (generally 4:00 p.m. Eastern time) on each day the NYSE is open. Securities held by a Fund are valued using the closing price or the last sale price on a national securities exchange or the National Association of Securities Dealers Automatic Quotation System ("NASDAQ") market system where they are primarily traded. Equity securities traded in the over-the-counter market are valued at their closing prices. If there were no transactions on that day, securities traded principally on an exchange or on NASDAQ will be valued at the mean of the last bid and ask prices prior to the market close. Fixed income securities having a remaining maturity of greater than 60 days are valued using an independent pricing service. Fixed income securities having a remaining maturity of 60 days or less are valued at amortized cost. Foreign securities are valued based on prices from the primary market in which they are traded, and are translated from the local currency into U.S. dollars using current exchange rates. Investments in other open-end investment companies are valued based on the NAV of the investment companies (which may use fair value pricing as discussed in their prospectuses). If market quotations are unavailable or deemed unreliable, securities will be valued in accordance with procedures adopted by the Company's Board of Directors. Relying on prices supplied by pricing services or dealers or using fair valuation may result in values that are higher or lower than the values used by other investment companies and investors to price the same investments. The Funds have adopted the provisions of Statement of Financial Accounting Standards No. 157 ("SFAS 157"). This standard clarifies the definition of fair value for financial reporting, establishes a framework for measuring fair value and requires additional disclosures about the use of fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, the Funds utilize a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. o Level 1 - quoted prices in active markets for identical securities o Level 2 - prices determined using other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) o Level 3 - prices determined using significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments) The following is a summary of the inputs used to value the Funds' net assets as of February 28, 2009. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. 42 | SEMI-ANNUAL REPORT 2009 ROBECO INVESTMENT FUNDS -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (unaudited) (continued) --------------------------------------------------------------------------------
LEVEL 1 - LEVEL 2 - LEVEL 3 - QUOTED SIGNIFICANT SIGNIFICANT PRICES OBSERVABLE INPUTS UNOBSERVABLE INPUTS TOTAL ----------- ----------------- ------------------- ----------- ASSETS: ------------ INVESTMENTS IN SECURITIES (MARKET VALUE) ---------------------------------------- BP Small Cap Value Fund II $43,626,718 $ -- $ -- $43,626,718 BP Long/Short Equity Fund 22,114,400 -- -- 22,114,400 BP Mid Cap Value Fund 30,026,487 -- -- 30,026,487 BP All-Cap Value Fund 36,528,132 717,775 338,407 37,584,314 WPG Small Cap Value Fund 21,671,179 -- -- 21,671,179 WPG 130/30 Large Cap Core Fund 10,746,693 -- -- 10,746,693 SAM Sustainable Climate Fund 2,116,881 -- -- 2,116,881 SAM Sustainable Water Fund 2,920,366 -- -- 2,920,366
LEVEL 1 - LEVEL 2 - LEVEL 3 - QUOTED SIGNIFICANT SIGNIFICANT PRICES OBSERVABLE INPUTS UNOBSERVABLE INPUTS TOTAL ----------- ----------------- ------------------- ----------- LIABILITIES: ------------ INVESTMENTS IN SECURITIES (MARKET VALUE) ------------------------------------------------------ BP Long/Short Equity Fund $(2,469,379) $ -- $ -- $(2,469,379) BP All-Cap Value Fund (39,605) (224,486) -- (264,091) WPG 130/30 Large Cap Core Fund (2,201,693) -- -- (2,201,693)
The following is a reconciliation of assets of the Funds for Level 3 investments for which significant unobservable inputs were used to determine fair value: BP ALL-CAP INVESTMENTS IN SECURITIES VALUE FUND ---------------------------- ----------- BALANCE AS OF AUGUST 31, 2008...................... $ 1,661,009 Accrued discounts/premiums......................... 4,501 Realized gain (loss)............................... 28 Change in unrealized appreciation (depreciation)(1) (1,253,019) Net purchases (sales).............................. (409,197) Transfers in and/or out of Level 3(2).............. 335,085 ----------- BALANCE AS OF FEBRUARY 28, 2009.................... $ 338,407 =========== (1) Disclosed in the Statements of Operations under Net realized and unrealized gain (loss) on investments. (2) Transfers in or out of level 3 represents the ending value as of February 28, 2009, for any investment security where a change in the pricing level occurred from the beginning to the end of the period. USE OF ESTIMATES -- The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities 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. INVESTMENT TRANSACTIONS, INVESTMENT INCOME AND EXPENSES -- The Funds record security transactions based on 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 accrued when earned. Dividend income is recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gains are recorded as a reduction of cost of investments and/or as a realized gain. The Funds estimate the components of distributions received that may be considered return of capital distributions or capital gain distributions. The Funds' investment income, expenses (other than class specific distribution 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. 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 fund families (such as director or professional fees) are charged to all funds in proportion to their net assets of the RBB funds, or in such other manner as the Board of Directors deems fair or equitable. 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 Funds. SEMI-ANNUAL REPORT 2009 | 43 ROBECO INVESTMENT FUNDS -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (unaudited) (continued) -------------------------------------------------------------------------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net investment income and distributions from net realized capital gains, if any, are declared and paid at least annually to shareholders and recorded on ex-dividend date for all Funds. Income dividends and capital gain distributions are determined in accordance with U.S. federal income tax regulations which may differ from U.S. generally accepted accounting principles. Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications within the components of net assets. U.S. TAX STATUS -- No provision is made for U.S. income taxes as it is each Fund's intention to qualify or continue 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. income and excise taxes. OTHER -- In the normal course of business, the Funds may enter into contracts that provide general indemnifications. The Funds' maximum exposure under these arrangements is dependent on claims that may be made against the Funds in the future, and, therefore, cannot be estimated; however, based on experience, the risk of material loss for such claims is considered remote. FOREIGN CURRENCY TRANSLATION -- The books and records of the portfolios are maintained in U.S. dollars as follows: (1) the foreign currency market value of investment securities and other assets and liabilities stated in foreign currencies are translated at the exchange rate prevailing at the end of the period; and (2) purchases, sales, income and expenses are translated at the rate of exchange prevailing on the respective dates of such transactions. The resulting exchange gains and losses are included in the Statement of Operations. FOREIGN SECURITIES -- There are certain risks resulting from investing in foreign securities in addition to the usual risks inherent in domestic investments. Such risks include future political, economic and currency exchange developments including investment restrictions and changes in foreign laws. FORWARD CURRENCY CONTRACTS -- The Funds may enter into forward currency contracts. Such contracts may be utilized in connection with planned purchases or sales of securities or to hedge the U.S. dollar value of portfolios denominated in foreign currencies. Fluctuations in the value of the forward contracts are recorded as unrealized gains or losses by the Funds. 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 the foreign currency relative to the U.S. dollar. Upon entering into such a contract, a Fund is required to segregate assets with its custodian at least equal to the value of the Fund's assets committed to fulfilling the forward currency contract. As of February 28, 2009, the Funds did not hold any forward currency contracts. FUTURES -- The WPG Funds and the SAM Funds may enter into futures contracts. A futures contract is an agreement between two parties to buy and sell a security at a set price on a future date. Upon entering into such a contract, a Fund is required to pledge to the broker an amount of cash and/or securities equal to the minimum "initial margin" requirements of the exchange on which such contract is traded. Pursuant to the contract, the Fund agrees to receive from, or pay to the broker, an amount of cash equal to the daily fluctuation in value of the contract. Such a receipt of payment is known as a "variation margin" and is recorded by each Fund as an unrealized gain or loss. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The Fund is also required to fully collateralize futures contracts purchased. The Funds only enter into futures contracts that are traded on exchanges or boards of trade that are licensed and regulated by the Commodity Futures Trading Commission. As of February 28, 2009, the Funds did not hold any futures contracts. OPTIONS WRITTEN -- The BP All-Cap Value Fund, the WPG Funds and the SAM Funds write covered call and secured put options. Such options may relate to particular securities or domestic stock indices, and may or may not be listed on a domestic securities exchange or issued by the Options Clearing Corporation. The risk in writing a call option is that a Fund gives up the opportunity for profit if the market price of the security increases. The risk in writing a put option is that a Fund may incur a loss if the market price of the security decreases and the option is exercised. A Fund also has the additional risk of being unable to enter into a closing transaction at an acceptable price if a liquid secondary market does not exist. A Fund also may write over-the-counter options where completing the obligation depends upon the credit standing of the other party. Option contracts also involve the risk that they may result in loss due to unanticipated developments in market conditions or other causes. 44 | SEMI-ANNUAL REPORT 2009 ROBECO INVESTMENT FUNDS -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (unaudited) (continued) -------------------------------------------------------------------------------- Written options are recorded as liabilities to the extent of premiums paid or received. Gains or losses are realized when the option transaction expires or closes. When an option is exercised, the proceeds on sales for a written call option or the purchase cost for a written put option is adjusted by the amount of the premium received or paid. The BP All-Cap Value Fund had transactions in options written during the six-month period ended February 28, 2009 as follows: NUMBER OF PREMIUMS CONTRACTS RECEIVED --------- -------- Options outstanding at August 31, 2008 585 $334,241 Options written 493 386,631 Options expired (293) (116,841) Options exercised -- -- ---- -------- Options outstanding at February 28, 2009 785 $604,031 ==== ======== SHORT SALES -- When the investment adviser believes that a security is overvalued, the BP Long/Short Equity Fund, the BP All-Cap Value Fund and the WPG 130/30 Large Cap Core Fund may sell the security short by borrowing the same security from a broker or other institution and selling the security. A Fund will incur a loss as a result of a short sale if the price of the borrowed security increases between the date of the short sale and the date on which the Fund buys and replaces such borrowed security. A Fund will realize a gain if there is a decline in price of the security between those dates where the decline in price exceeds the costs of borrowing the security and other transaction costs. There can be no assurance that a Fund will be able to close out a short position at any particular time or at an acceptable price. Although a Fund's gain is limited to the amount at which it sold a security short, its potential loss is unlimited. Until a Fund replaces a borrowed security, it will maintain at all times cash, U.S. Government securities, or other liquid securities in an amount which, when added to any amount deposited with a broker as collateral, will at least equal the current market value of the security sold short. Depending on arrangements made with brokers, a Fund may not receive any payments (including interest) on collateral deposited with them. In accordance with the terms of its prime brokerage agreements, the BP Long/Short Equity Fund and WPG 130/30 Large Cap Core Fund may receive rebate income or be charged a fee on borrowed securities. Such income or fee is calculated on a daily basis based upon the market value of each borrowed security and a variable rate that is dependent upon the availability of such security. The Funds record these prime broker charges on a net basis as interest income or interest expense. For the six-month period ended February 28, 2009, the BP Long/Short Equity Fund had net charges of $145,647 and the WPG 130/30 Large Cap Core Fund had net income of $10,928 on borrowed securities. Such amounts are included in prime broker interest expense on the statement of operations. As of February 28, 2009, the BP Long/Short Equity Fund had securities sold short valued at $2,469,379 for which securities of $6,474,908 and cash deposits of $1,271,846 were pledged as collateral. At such date, the WPG 130/30 Large Cap Core Fund had securities sold short valued at $2,201,693 for which securities of $6,852,199 were pledged as collateral. In accordance with the Special Custody and Pledge Agreement with Goldman Sachs (the Funds' prime broker), the BP Long/Short Equity Fund may borrow from Goldman Sachs to the extent necessary to maintain required margin cash deposits on short positions. Interest on such borrowings is charged to the Fund based on the Libor rate plus a spread. The BP Long/Short Equity Fund utilized cash borrowings from Goldman Sachs to meet required margin cash deposits as follows during the six-month period ended February 28, 2009: AVERAGE DAILY WEIGHTED AVERAGE DAYS UTILIZED BORROWINGS INTEREST RATE ------------- ------------- ---------------- 178 $2,405,609 0.84% As of February 28, 2009, the Fund had borrowings of $1,396,474. Interest expense for the six-month period ended February 28, 2009 totaled $20,250. SEMI-ANNUAL REPORT 2009 | 45 ROBECO INVESTMENT FUNDS -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (unaudited) (continued) -------------------------------------------------------------------------------- The WPG 130/30 Large Cap Core Fund utilized cash borrowings from Goldman Sachs in connection with its short sales transactions as follows during the six-month period ended February 28, 2009: AVERAGE DAILY WEIGHTED AVERAGE DAYS UTILIZED BORROWINGS INTEREST RATE ------------- ------------- ---------------- 181 $1,206,546 0.50% As of February 28, 2009, the Fund had borrowings of $1,486,654. Interest on borrowings is charged to the Fund based on the LIBOR rate plus a spread. Interest expense for the six-month period ended February 28, 2009 totaled $14,603. 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES Robeco Investment Management, Inc. ("Robeco") provides investment advisory services to the BP Funds and the WPG Funds. For its advisory services with respect to the BP Funds, Robeco is entitled to receive 1.00% of the BP Small Cap Value Fund II's average daily net assets, 2.25% of the BP Long/Short Equity Fund's average daily net assets, 0.80% of the BP Mid Cap Value Fund's average daily net assets and 0.80% of the BP All-Cap Value Fund's average daily net assets, each accrued daily and payable monthly. Until December 31, 2011, Robeco has contractually agreed to limit the BP Funds' total operating expenses to the extent that such expenses exceed the ratios in the table below. This limit is calculated daily based on each Fund's average daily net assets. This limitation is effected in waivers of advisory fees and reimbursements of expenses exceeding the advisory fee as necessary. INSTITUTIONAL INVESTOR ------------- -------- BP Small Cap Value Fund II 1.30% 1.55% BP Long/Short Equity Fund 2.50%* 2.75%* BP Mid Cap Value Fund 1.00% 1.25% BP All-Cap Value Fund 0.95% 1.20% * Excluding short sale dividend expense and interest expense. For its advisory services with respect to the WPG Funds, Robeco is entitled to receive advisory fees, accrued daily and paid monthly, as follows: WPG Small Cap Value Fund 0.90% of net assets up to $300 million 0.80% of net assets $300 million to $500 million 0.75% of net assets in excess of $500 million WPG 130/30 Large Cap Core Fund 0.75% of net assets Until December 31, 2011, Robeco has contractually agreed to limit the WPG Funds' operating expenses to the extent such expenses exceed the ratios noted below, as a percentage of each Fund's average daily net assets. The WPG Small Cap Value Fund's expenses are capped at 1.70%, and WPG 130/30 Large Cap Core Fund expenses (excluding short sale dividend expense and interest expense) are capped at 1.40% for the Institutional Class and 1.65% for the Investor Class. Sustainable Asset Management USA, Inc. ("SAM") provides investment advisory services to the SAM Funds. SAM is an affiliate of Robeco Investment Management, Inc., and a subsidiary of Robeco Groep. SAM is entitled to an advisory fee at the annual rate of 1.00% of each SAM Fund's average daily net assets, computed daily and payable monthly. Until December 31, 2011, SAM has contractually agreed to limit the SAM Funds' operating expenses to 1.50% for the Institutional Class and 1.75% for the Investor Class. 46 | SEMI-ANNUAL REPORT 2009 ROBECO INVESTMENT FUNDS -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (unaudited) (continued) -------------------------------------------------------------------------------- PNC Global Investment Servicing (U.S.), Inc. ("PNC"), a member of The PNC Financial Services Group, Inc., serves as administrator for the Funds. For providing administration and accounting services, PNC is entitled to receive a monthly fee equal to an annual rate of 0.08% of each Fund's first $250 million of average daily net assets; 0.065% of each Fund's next $250 million of average daily net assets; 0.055% of each Fund's next $250 million of average daily net assets; 0.040% of each Fund's next $750 million of average daily net assets; and 0.03% of each Fund's average daily net assets in excess of $1.5 billion, with a minimum monthly fee of $5,417 for each Fund. Included in the administration and accounting service fees, shown on the Statement of Operations, are fees for providing regulatory administrative services to RBB. For providing these services, PNC is entitled to receive compensation as agreed to by the Company and PNC. This fee is allocated to each Fund in proportion to its net assets of the RBB funds. In addition, PNC serves as the Funds' transfer and dividend disbursing agent. For providing transfer agency services, PNC is entitled to receive a fee at the annual rate of $10 per account in the Fund, subject to a minimum monthly fee of $2,650 per class plus per account charges and out-of-pocket expenses. For providing custodial services, PFPC Trust Company, an affiliate of PNC, is entitled to receive a fee of 0.0075% of each Fund's average daily gross assets or a minimum monthly fee of $833 for each Fund. The Board of Directors of the Company has approved a Distribution Agreement and adopted a separate Plan of Distribution for the Investor Class (the "Plan") pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the Plan, PFPC Distributors, Inc. (the "Distributor") is entitled to receive from the Funds a distribution fee with respect to the Investor Class, which is accrued daily and paid monthly, of up to 0.25% on an annualized basis of the average daily net assets of the Class. Amounts paid to the Distributor under the Plan may be used by the Distributor to cover expenses that are related to (i) the sale of the Shares, (ii) ongoing servicing and/or maintenance of the accounts of shareholders, and (iii) sub-transfer agency services, subaccounting services or administrative services related to the sale of the Investor Class, all as set forth in the Funds' 12b-1 Plan. 3. CUSTODIAN FEES (WPG SMALL CAP VALUE FUND AND WPG 130/30 LARGE CAP CORE FUND) Until November 17, 2008, Mellon Trust of New England, N.A. ("Mellon") provided custodial services to the WPG Funds. Each WPG Fund has entered into an expense offset agreement with Mellon, wherein it received a credit toward the reduction of custodian fees whenever there are uninvested cash balances. Such credits for the period September 1, 2008 to November 16, 2008 are reported as "fees paid indirectly" on the Statement of Operations. As of November 17, 2008 PFPC Trust Company became the custodian for the Robeco WPG Funds. 4. INVESTMENT IN SECURITIES For the six-month period ended February 28, 2009, aggregate purchases and sales of investment securities (excluding short-term investments and U.S. government obligations) were as follows: INVESTMENT SECURITIES ----------------------------- PURCHASES SALES ----------- ----------- BP Small Cap Value Fund II $27,220,522 $55,857,689 BP Long/Short Equity Fund 25,655,658 30,080,118 BP Mid Cap Value Fund 11,985,907 11,464,790 BP All-Cap Value Fund 19,230,499 16,573,952 WPG Small Cap Value Fund 18,161,794 17,990,310 WPG 130/30 Large Cap Core Fund 7,092,706 7,787,057 SAM Sustainable Climate Fund 2,065,504 1,820,813 SAM Sustainable Water Fund 1,550,144 1,009,667 SEMI-ANNUAL REPORT 2009 | 47 ROBECO INVESTMENT FUNDS -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (unaudited) (continued) -------------------------------------------------------------------------------- 5. CAPITAL SHARE TRANSACTIONS As of February 28, 2009, each class of each Fund has 100,000,000 shares of $0.001 par value common stock authorized except for the Institutional Class of the WPG Small Cap Value Fund, and WPG 130/30 Large Cap Core Fund, each of which has 50,000,000 shares of $0.001 par value common stock authorized. Transactions in capital shares for the respective periods were as follows:
FOR THE FOR THE SIX-MONTH PERIOD ENDED YEAR ENDED FEBRUARY 28, 2009 AUGUST 31, 2008 --------------------------- --------------------------- SHARES VALUE SHARES VALUE ---------- ------------ ---------- ------------ -------------------------- BP SMALL CAP VALUE FUND II -------------------------- INSTITUTIONAL CLASS Sales.................................................. 421,530 $ 3,676,569 907,906 $ 13,446,388 Reinvestments.......................................... 91,297 672,856 2,128,887 26,185,309 Shares repurchased..................................... (2,740,567) (23,340,772) (2,657,341) (37,628,853) Redemption fees*....................................... -- 1,475 -- 8,904 ---------- ------------ ---------- ------------ Net increase (decrease)................................... (2,227,740) $(18,989,872) 379,452 $ 2,011,748 ========== ============ ========== ============ INVESTOR CLASS Sales.................................................. 93,140 $ 793,218 233,059 $ 3,143,741 Reinvestments.......................................... 128,055 911,751 3,393,510 40,280,964 Shares repurchased..................................... (1,327,349) (10,233,580) (5,261,517) (78,942,201) Redemption fees*....................................... -- 2,582 -- 11,556 ---------- ------------ ---------- ------------ Net increase (decrease)................................... (1,106,154) $ (8,526,029) (1,634,948) $(35,505,940) ========== ============ ========== ============ -------------------------------- BP LONG/SHORT EQUITY FUND -------------------------------- INSTITUTIONAL CLASS Sales.................................................. 382,216 $ 4,520,153 486,140 $ 7,217,557 Reinvestments.......................................... 425,002 3,803,773 481,370 7,230,172 Shares repurchased..................................... (1,224,948) (14,194,601) (2,894,572) (44,089,855) Redemption fees*....................................... -- 5,055 -- 6,818 ---------- ------------ ---------- ------------ Net increase (decrease)................................... (417,730) $ (5,865,620) (1,927,062) $(29,635,308) ---------- ------------ ---------- ------------ INVESTOR CLASS Sales.................................................. 34,477 $ 377,004 14,174 $ 212,230 Reinvestments.......................................... 118,937 1,037,134 87,064 1,284,194 Shares repurchased..................................... (149,354) (1,616,554) (455,993) (7,078,728) Redemption fees*....................................... -- 1,259 -- 1,268 ---------- ------------ ---------- ------------ Net increase (decrease)................................... 4,060 $ (201,157) (354,755) $ (5,581,036) ========== ============ ========== ============
48 | SEMI-ANNUAL REPORT 2009 ROBECO INVESTMENT FUNDS -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (unaudited) (continued) --------------------------------------------------------------------------------
FOR THE FOR THE SIX-MONTH PERIOD ENDED YEAR ENDED FEBRUARY 28, 2009 AUGUST 31, 2008 --------------------------- --------------------------- SHARES VALUE SHARES VALUE ---------- ------------ ---------- ------------ --------------------------- BP MID CAP VALUE FUND --------------------------- INSTITUTIONAL CLASS Sales.................................................. 518,350 $ 3,375,515 664,615 $ 6,424,242 Reinvestments.......................................... 53,081 335,472 444,123 4,312,435 Shares repurchased..................................... (343,719) (2,287,975) (479,829) (4,717,369) ---------- ------------ ---------- ------------ Net increase (decrease)................................... 227,712 $ 1,423,012 628,909 $ 6,019,308 ========== ============ ========== ============ INVESTOR CLASS Sales.................................................. 260,210 $ 1,782,092 1,172,629 $ 11,198,586 Reinvestments.......................................... 17,470 107,613 178,623 1,686,203 Shares repurchased..................................... (695,630) (4,210,637) (601,239) (5,875,445) ---------- ------------ ---------- ------------ Net increase (decrease)................................... (417,950) $ (2,320,932) 750,013 $ 7,009,344 ========== ============ ========== ============ -------------------------- BP ALL-CAP VALUE FUND -------------------------- INSTITUTIONAL CLASS Sales.................................................. 559,078 $ 5,459,184 3,054,460 $ 42,200,560 Reinvestments.......................................... 78,063 791,556 103,418 1,507,839 Shares repurchased..................................... (433,289) (4,669,486) (181,568) (2,604,362) ---------- ------------ ---------- ------------ Net increase (decrease)................................... 203,852 $ 1,581,254 2,976,310 $ 41,104,037 ========== ============ ========== ============ INVESTOR CLASS Sales.................................................. 72,262 $ 738,930 50,582 $ 703,592 Reinvestments.......................................... 3,154 31,921 19,543 284,356 Shares repurchased..................................... (40,919) (414,031) (81,989) (1,226,649) ---------- ------------ ---------- ------------ Net increase (decrease)................................... 34,497 $ 356,820 (11,864) $ (238,701) ========== ============ ========== ============ -------------------------------- WPG SMALL CAP VALUE FUND -------------------------------- INSTITUTIONAL CLASS Sales.................................................. 87,605 $ 676,412 384,461 $ 5,122,604 Reinvestments.......................................... 10,672 83,238 559,084 7,357,551 Shares repurchased..................................... (461,976) (3,920,104) (568,539) (7,283,092) ---------- ------------ ---------- ------------ Net increase (decrease)................................ (363,699) $ (3,160,454) 375,006 $ 5,197,063 ========== ============ ========== ============ ---------------------------------------- WPG 130/30 LARGE CAP CORE FUND ---------------------------------------- INSTITUTIONAL CLASS Sales.................................................. 3,977 $ 38,967 64,614 $ 1,112,805 Reinvestments.......................................... 3,750 37,238 202,253 3,559,650 Shares repurchased..................................... (61,086) (613,082) (160,536) (2,747,429) Redemption fees*....................................... -- 4 -- 10,210 ---------- ------------ ---------- ------------ Net increase (decrease)................................... (53,359) $ (536,873) 106,331 $ 1,935,236 ========== ============ ========== ============
SEMI-ANNUAL REPORT 2009 | 49 ROBECO INVESTMENT FUNDS -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (unaudited) (continued) --------------------------------------------------------------------------------
FOR THE FOR THE SIX-MONTH PERIOD ENDED YEAR ENDED FEBRUARY 28, 2009 AUGUST 31, 2008 --------------------------- --------------------------- SHARES VALUE SHARES VALUE ---------- ------------ ---------- ------------ -------------------------------------- SAM SUSTAINABLE CLIMATE FUND -------------------------------------- INSTITUTIONAL CLASS Sales.................................................. 44,128 $ 211,179 406,238 $ 4,053,797 Reinvestments.......................................... 4,622 22,232 -- -- Shares repurchased..................................... (274) (1,312) (698) (6,417) Redemption fees*....................................... -- 41 -- 198 ---------- ------------ ---------- ------------ Net increase (decrease)................................... 48,476 $ 232,140 405,540 $ 4,047,578 ========== ============ ========== ============ INVESTOR CLASS Sales.................................................. 14,991 $ 77,189 36,797 $ 336,612 Reinvestments.......................................... 300 1,444 -- -- Shares repurchased..................................... (11,334) (59,760) (2,520) (24,543) Redemption fees*....................................... -- 3 -- 3 ---------- ------------ ---------- ------------ Net increase (decrease)................................... 3,957 $ 18,876 34,277 $ 312,072 ========== ============ ========== ============ ------------------------------------ SAM SUSTAINABLE WATER FUND ------------------------------------ INSTITUTIONAL CLASS Sales.................................................. 103,410 $ 621,020 464,294 $ 4,590,777 Reinvestments.......................................... 5,290 28,831 -- -- Shares repurchased..................................... (28,832) (180,851) (671) (6,002) Redemption fees*....................................... -- -- -- -- ---------- ------------ ---------- ------------ Net increase (decrease)................................... 79,868 $ 469,000 463,623 $ 4,584,775 ========== ============ ========== ============ INVESTOR CLASS Sales.................................................. 23,604 $ 151,868 53,871 $ 503,368 Reinvestments.......................................... 497 2,708 -- -- Shares repurchased..................................... (12,084) (71,956) (5,725) (49,479) Redemption fees*....................................... -- -- -- -- ---------- ------------ ---------- ------------ Net increase (decrease)................................... 12,017 $ 82,620 48,146 $ 453,889 ========== ============ ========== ============
---------- * There is a 1.00% redemption fee on shares redeemed which have been held 365 days or less on the BP Small Cap Value Fund II. There is a 2.00% redemption fee on shares redeemed which have been held 365 days or less on the BP Long/Short Equity Fund. The redemption fees are retained by the Funds for the benefit of the remaining shareholders and recorded as paid-in capital. The WPG Funds and SAM Funds have a 2.00% and 1.00% redemption fee, respectively, on shares redeemed within 60 days of purchase. **Commencement of operations. 50 | SEMI-ANNUAL REPORT 2009 ROBECO INVESTMENT FUNDS -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (unaudited) (continued) -------------------------------------------------------------------------------- As of February 28, 2009, the following Funds had shareholders that held 10% or more of the outstanding shares of the Funds. These shareholders may be omnibus accounts which are comprised of many underlying shareholders. BP Small Cap Value Fund II (2 shareholders) 45% BP Long/Short Equity Fund (2 shareholders) 47% BP Mid Cap Value Fund (1 shareholder) 67% BP All-Cap Value Fund (2 shareholders) 80% WPG 130/30 Large Cap Core Fund (1 shareholder) 14% SAM Sustainable Climate Fund (1 shareholder) 78% SAM Sustainable Water Fund (2 shareholders) 78% 6. FEDERAL INCOME TAX INFORMATION Effective February 29, 2008, the Funds adopted FASB Interpretation No. 48 ("FIN 48"), Accounting for Uncertainty in Income Taxes. FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has analyzed the Funds' tax positions and has concluded that no provision for income tax is required in the Funds' financial statements. However, management's conclusions regarding the adoption of FIN 48 may be subject to review and adjustment at a later date based on factors including, but not limited to, further implementation guidance from the FASB, new tax laws, regulations and administrative interpretations (including court decisions). Each of the Funds' federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. As of February 28, 2009, federal tax cost and aggregate gross unrealized appreciation and depreciation of securities held by each Fund were as follows:
NET UNREALIZED FEDERAL TAX UNREALIZED UNREALIZED APPRECIATION FUND COST APPRECIATION DEPRECIATION (DEPRECIATION) ------ ------------ ------------ ------------ -------------- BP Small Cap Value Fund II $70,853,782 $1,738,153 $(28,965,217) $(27,227,064) BP Long/Short Equity Fund 26,378,129 2,347,700 (9,080,808) (6,733,108) BP Mid Cap Value Fund 45,381,926 244,871 (15,600,310) (15,355,439) BP All-Cap Value Fund 55,994,051 625,161 (19,298,989) (18,673,828) WPG Small Cap Value Fund 31,271,587 903,377 (10,503,785) (9,600,408) WPG 130/30 Large Cap Core Fund 11,776,471 1,414,076 (4,645,547) (3,231,471) SAM Sustainable Climate Fund 3,104,654 55,265 (1,043,038) (987,773) SAM Sustainable Water Fund 4,953,523 7,574 (2,040,731) (2,033,157)
As of August 31 2008, the components of distributable earnings on a tax basis were as follows: UNDISTRIBUTED UNDISTRIBUTED ORDINARY LONG-TERM FUND INCOME GAINS ------ ------------- ------------- BP Small Cap Value Fund II $ 887,531 $ -- BP Long/Short Equity Fund 5,386,611 -- BP Large Cap Value Fund 559,507 -- BP Mid Cap Value Fund 211,724 882 BP All-Cap Value Fund 454,886 353,246 WPG Small Cap Value Fund 88,826 -- WPG 130/30 Large Cap Core Fund 45,590 -- SAM Sustainable Climate Fund 23,698 -- SAM Sustainable Water Fund 31,563 -- SEMI-ANNUAL REPORT 2009 | 51 ROBECO INVESTMENT FUNDS -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (unaudited) (concluded) -------------------------------------------------------------------------------- As of August 31, 2008 the SAM Sustainable Climate Fund had a capital loss carryforward of $4,482 available to offset future capital gains. If not utilized against against future capital gains, this capital loss carryforward will expire on August 31, 2016. Distributions from net investment income and short-term capital gains are treated as ordinary income for federal tax purposes. 7. NEW ACCOUNTING PRONOUNCEMENTS In March 2008, Statement of Financial Accounting Standards No. 161, "Disclosures about Derivative Instruments and Hedging Activities" ("SFAS 161") was issued. SFAS 161 is effective for fiscal years and interim periods beginning after November 15, 2008. SFAS 161 is intended to improve financial reporting for derivative instruments by requiring enhanced disclosure that enables investors to understand how and why a fund uses derivatives, how derivative instruments and hedging activities are accounted for, and how derivative instruments and related hedging activities affect a fund's financial performance and financial position. Management is currently evaluating the impact of SFAS 161 on the Funds' financial statement disclosures, if any. 8. SUBSEQUENT EVENT On April 16, 2009, The Company convened a Special Meeting of Shareholders of the WPG 130/30 Large Cap Core Fund (the "Meeting"). At the Meeting, the WPG 130/30 Large Cap Core Fund's shareholders voted to approve a Plan of Reorganization which provided for and contemplated (a) the transfer of all of the assets and liabilities of the WPG 130/30 Large Cap Core Fund to the BP Long/Short Equity Fund in exchange for Institutional Class shares of the BP Long/Short Equity Fund; and (b) the distribution of the Institutional Class shares of the BP Long/Short Equity Fund to shareholders of the WPG 130/30 Large Cap Core Fund in redemption of all WPG 130/30 Large Cap Core Fund shares and liquidation of the WPG 130/30 Large Cap Core Fund. The results of the voting were as follows:
NUMBER OF NUMBER OF VOTES VOTES NUMBER OF FOR THE AGAINST THE VOTES ROBECO WPG 130/30 LARGE CAP CORE FUND RESOLUTION RESOLUTION ABSTAINED ---------- ----------- --------- Approval of the Plan of Reorganization 444,183 57,969 13,161
Accordingly, the Plan of Reorganization was Approved. 52 | SEMI-ANNUAL REPORT 2009 ROBECO INVESTMENT FUNDS -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- OTHER INFORMATION (unaudited) -------------------------------------------------------------------------------- PROXY VOTING Policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities as well as information regarding how the Funds voted proxies relating to portfolio securities for the most recent 12-month period ended June 30 are available without charge, upon request, by calling (800) 261-4073 and on the Securities and Exchange Commission's ("SEC") website at http://www.sec.gov. QUARTERLY PORTFOLIO SCHEDULE The Company files a complete schedule of portfolio holdings with the SEC for the first and third fiscal quarters of each fiscal year (quarters ended November 30 and May 31) on Form N-Q. The Company's Form N-Q will be available on the SEC website at http://www.sec.gov and may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. Information on the operation of the SEC Public Reference Room may be obtained by calling (202) 551-8090. SEMI-ANNUAL REPORT 2009 | 53 INVESTMENT ADVISERS --------------------------------- Robeco Investment Management Inc. 909 Third Avenue New York, NY 10022 or Sustainable Asset Management USA, Inc. 909 Third Avenue, 32nd Floor New York, NY 10022 and Josefstrasse 218 CH-8005 Zurich, Switzerland ADMINISTRATOR ------------------ PNC Global Investment Servicing (U.S.), Inc. 301 Bellevue Parkway Wilmington, DE 19809 TRANSFER AGENT ----------------------- PNC Global Investment Servicing (U.S.), Inc. 101 Sabin Street Pawtucket, RI 02860 PRINCIPAL UNDERWRITER -------------------------- PFPC Distributors, Inc. 760 Moore Road King of Prussia, PA 19406 CUSTODIAN ----------------------- PFPC Trust Company 8800 Tinicum Blvd. Suite 200 Philadelphia, PA 19153 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM -------------------------------------- Ernst & Young LLP Two Commerce Square 2001 Market Street, Suite 4000 Philadelphia, PA 19103 COUNSEL ---------------------------- Drinker Biddle & Reath LLP One Logan Square 18th and Cherry Streets Philadelphia, PA 19103-6996 THE SCHNEIDER FUNDS OF THE RBB FUND, INC. SCHNEIDER VALUE FUND SCHNEIDER SMALL CAP VALUE FUND SEMI-ANNUAL REPORT February 28, 2009 (Unaudited) [LOGO OMITTED] This report is submitted for the general information of the shareholders of the Funds. It is not authorized for distribution unless preceded or accompanied by a current prospectus for the Funds. THE SCHNEIDER FUNDS SEMI-ANNUAL INVESTMENT ADVISER'S REPORT FEBRUARY 28, 2009 (UNAUDITED) Fellow Shareholder: The semi-annual report for the Schneider Funds covers the six months ended February 28, 2009. The historic decline in U.S. equities accelerated during the period as the broad market Russell 3000 Index fell a stunning 43%. You have to look back to the 1930's to find a similar plunge in only a six-month time span. Lehman Brothers' chaotic and disorderly collapse in mid-September was a watershed event that marked the beginning of a severe global recession and contributed to massive selling pressure on stocks. A huge negative feedback loop fueled a sell-off in both the equity and bond markets that exhibited signs at times of panicky, almost indiscriminate behavior. In response, the Fed and Treasury lent unprecedented support to stabilize the financial system and help damaged credit markets function properly again. Like you, we were dissatisfied with the decline in both Funds. Since our deep-value investment discipline was wholly out of step with this environment, it does not surprise us greatly to look back and find that there was little that worked in our favor in either the economic sector weightings or stock selection. We continue to commit ourselves to the task of improving the return potential of both portfolios. Our deep-value style guides us towards companies with profits that are temporarily under pressure and earnings that are less predictable. This approach limited our ability during the period to flee to the highest quality stocks in defensive-oriented sectors, which outperformed the market during the period. However, we did migrate where possible to stronger companies within our favored industries. During the period we also uncovered some very promising investment opportunities, including slices of the energy and technology sectors where we expect fundamentals to improve even without a strong upturn in the economy. April marked the 17th month of the U.S. recession, making it the lengthiest slump since the 1930's. The positive impact from massive global monetary easing, the global fiscal stimulus programs in those countries where it was properly conceived and financed (Germany and China, for example), the U.S. economy's ability to self correct some previous excesses (the savings rate is now 4.2%, up from zero, but needs to go higher), creative Federal Reserve liquidity programs and the passage of time should offer evidence of global stabilization later this year. However, the unique circumstances of this country's asset deflation and excess debt make the timing and strength of our recovery uncertain. We believe the Funds are well positioned for an eventual upturn that we do not expect to be robust, while the Funds should also be able to weather the economic and financial stresses that should persist for some time. This fear-driven market has largely overlooked the long-term earnings power of our companies and overly penalized them for their near-term, below-trend profits and any debt on their balance sheets. Is deep value investing "dead?" Although deep value strategies are prone to both winning and losing streaks, we remain convinced that our discipline is based on a solid foundation with an excellent chance to be successful in the future. We believe the recent panicky markets, inconceivable move in credit spreads and collapse in equity prices present us with the most attractive valuations we have seen in decades. Our stock selection criteria is going to remain as consistent as ever. We appreciate your support during this tough spell. /s/ Arnold C. Schneider --------------------------------------- Arnold C. Schneider III, CFA Portfolio Manager Schneider Capital Management 1 THE SCHNEIDER FUNDS SEMI-ANNUAL INVESTMENT ADVISER'S REPORT (CONCLUDED) FEBRUARY 28, 2009 (UNAUDITED) We were pleased that the Schneider Small Cap Value Fund ranked #1 out of 105 Funds in the Lipper's Small-Cap Value Funds Classification for the Ten Year Period Ended December 31, 2008. LIPPER'S PERFORMANCE ACHIEVEMENT CERTIFICATES (PAC) Lipper's Performance Achievement Certificate was awarded to the Fund for returns that topped it's Lipper category (based on cumulative total return) for the 10 year period ended 12/31/08. Certificates are awarded for all Lipper Classifications and for the overall fund universe. Open-end funds, closed-end funds and variable insurance products are considered for awards. Past performance is not indicative of future results. LIPPER and the LIPPER Corporate Marks are the proprietary trademarks of Lipper, a Thomson Reuters Company. (C) 2009 THOMSON REUTERS. All rights reserved. Any copying, republication or redistribution of Lipper Content is expressly prohibited without prior written consent of Lipper. 2 THE SCHNEIDER FUNDS SCHNEIDER VALUE FUND PERFORMANCE DATA FEBRUARY 28, 2009 (UNAUDITED) -------------------------------------------------------------------------------- Total Returns for the Periods Ended February 28, 2009 AVERAGE ANNUAL ----------------------- SINCE SIX MONTHS ONE YEAR FIVE YEARS INCEPTION* -------------- ---------- ----------- ---------- SCHNEIDER VALUE -53.45% -62.81% -11.82% 0.14% RUSSELL 1000(R) VALUE INDEX -44.71% -47.35% -6.65% 0.71% * Inception date: 9/30/02 -------------------------------------------------------------------------------- The performance data quoted represents past performance. Past performance is not indicative of future results. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher. Schneider Capital Management contractually agreed to waive a portion of its advisory fee and reimburse a portion of the Fund's operating expenses, as necessary, to maintain the expense limitation, as set forth in the notes to the financial statements. Total returns shown include fee waivers and expense reimbursements, if any; total returns would have been lower had there been no waiver or reimbursement of fees and expenses in excess of expense limitations. Returns shown include the reinvestment of all dividends and other distributions and do not reflect taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares. For performance data current to the most recent month-end, please call 1-888-520-3277. The Fund's gross annual operating expenses, as stated in the current prospectus, are 1.11%. Shares of the Fund not purchased through reinvested dividends or capital gains and held less than 90 days are subject to a 1.00% redemption fee. The Fund's aggregate total return since inception is based on a decrease in net asset value from $10.00 per share on September 30, 2002 (inception) to $7.25 per share on February 28, 2009, adjusted for dividends and distributions totaling $6.17 per share paid from net investment income and realized gains. Portfolio composition is subject to change. 3 THE SCHNEIDER FUNDS SCHNEIDER SMALL CAP VALUE FUND PERFORMANCE DATA FEBRUARY 28, 2009 (UNAUDITED) -------------------------------------------------------------------------------- Total Returns for the Periods Ended February 28, 2009
AVERAGE ANNUAL ----------------------- SINCE SIX MONTHS ONE YEAR FIVE YEARS TEN YEARS INCEPTION* ------------ ---------- ---------- ---------- ---------- SCHNEIDER SMALL CAP VALUE -54.07% -60.13% -12.27% 7.02% 9.00% RUSSELL 2000(R) VALUE INDEX -47.16% -43.03% -6.64% 3.90% 3.91% * Inception date: 9/2/98
-------------------------------------------------------------------------------- The performance data quoted represents past performance. Past performance is not indicative of future results. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher. Schneider Capital Management contractually agreed to waive a portion of its advisory fee and reimburse a portion of the Fund's operating expenses, as necessary, to maintain the expense limitation, as set forth in the notes to the financial statements. Total returns shown include fee waivers and expense reimbursements, if any; total returns would have been lower had there been no waiver or reimbursement of fees and expenses in excess of expense limitations. Returns shown include the reinvestment of all dividends and other distributions and do not reflect taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares. For performance data current to the most recent month-end, please call 1-888-520-3277. The Fund's gross annual operating expenses, as stated in the current prospectus, are 1.51%. Shares of the Fund not purchased through reinvested dividends or capital gains and held less than one year are subject to a 1.75% redemption fee. The Fund's annualized total return since inception is based on a decrease in net asset value from $10.00 per share on September 2, 1998 (inception) to $6.53 per share on February 28, 2009, adjusted for dividends and distributions totaling $29.48 per share paid from net investment income and realized gains. Small company stocks are generally riskier than large company stocks due to greater volatility and less liquidity. Portfolio composition is subject to change. 4 THE SCHNEIDER FUNDS FUND EXPENSE EXAMPLES (UNAUDITED) As a shareholder of the Fund(s), you incur two types of costs: (1) transaction costs, including redemption fees; and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund(s) and to compare these costs with the ongoing costs of investing in other mutual funds. These examples are based on an investment of $1,000 invested at the beginning of the six-month period from September 1, 2008 through February 28, 2009, and held for the entire period. ACTUAL EXPENSES The first line of the accompanying tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second line of the accompanying tables provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not your Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare these 5% hypothetical examples with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that the expenses shown in the accompanying tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees. Therefore, the second line of the accompanying tables is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
SCHNEIDER VALUE FUND --------------------------------------------------------------------------------- BEGINNING ACCOUNT VALUE ENDING ACCOUNT VALUE EXPENSES PAID SEPTEMBER 1, 2008 FEBRUARY 28, 2009 DURING PERIOD* ----------------------- -------------------- -------------- Actual $1,000.00 $ 465.50 $3.12 Hypothetical (5% return before expenses) 1,000.00 1,020.48 4.32
SCHNEIDER SMALL CAP VALUE FUND --------------------------------------------------------------------------------- BEGINNING ACCOUNT VALUE ENDING ACCOUNT VALUE EXPENSES PAID SEPTEMBER 1, 2008 FEBRUARY 28, 2009 DURING PERIOD* ----------------------- -------------------- -------------- Actual $1,000.00 $ 459.30 $4.05 Hypothetical (5% return before expenses) 1,000.00 1,019.17 5.62
* Expenses are equal to an annualized six-month expense ratio of 0.86% for the Schneider Value Fund and 1.12% for the Schneider Small Cap Value Fund, which includes waived fees or reimbursed expenses, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year (181), then divided by 365 to reflect the one-half year period. The Fund's ending account values on the first line in each table are based on the actual six-month total return for each Fund of (53.45%) for the Schneider Value Fund and (54.07%) for the Schneider Small Cap Value Fund. 5 THE SCHNEIDER FUNDS SCHNEIDER VALUE FUND PORTFOLIO HOLDINGS SUMMARY TABLE FEBRUARY 28, 2009 (UNAUDITED) % OF NET ASSETS VALUE -------- -------------- Domestic Common Stocks: Real Estate Investment Trusts ............ 11.2% $ 8,763,073 Semiconductors ........................... 10.2 8,006,333 Oil & Gas ................................ 10.2 7,979,894 Insurance ................................ 10.0 7,833,712 Coal ..................................... 8.5 6,655,919 Home Builders ............................ 6.1 4,818,255 Electric ................................. 5.3 4,151,749 Banks .................................... 5.1 3,981,069 Retail ................................... 4.9 3,813,954 Computers ................................ 4.2 3,312,864 Electronics .............................. 3.9 3,098,238 Automobile Manufactureres ................ 3.5 2,735,400 Food ..................................... 2.9 2,258,785 Automobile Parts & Equipment ............. 2.3 1,822,501 Pharmaceuticals .......................... 2.1 1,615,439 Aerospace & Defense ...................... 1.7 1,353,492 Leisure Time ............................. 1.1 844,014 Health Care - Products ................... 1.0 770,972 Health Care - Services ................... 0.8 609,933 Telecommunications ....................... 0.7 584,408 Mining ................................... 0.7 558,633 Media .................................... 0.4 320,386 Chemicals ................................ 0.3 237,545 Exchange Traded Fund ........................ 1.5 1,198,390 Preferred Stock ............................. 0.7 524,547 Corporate Bonds ............................. 0.2 127,581 Other Assets In Excess Of Liabilities ....... 0.5 397,369 ----- ----------- NET ASSETS .................................. 100.0% $78,374,455 ===== =========== ------------ Portfolio holdings are subject to change at any time. The accompanying notes are an integral part of the financial statements. 6 THE SCHNEIDER FUNDS SCHNEIDER SMALL CAP VALUE FUND PORTFOLIO HOLDINGS SUMMARY TABLE FEBRUARY 28, 2009 (UNAUDITED) % OF NET ASSETS VALUE -------- -------------- Domestic Common Stocks: Real Estate Investment Trusts ............ 12.6% $ 8,498,309 Semiconductors ........................... 8.3 5,558,450 Coal ..................................... 6.8 4,600,810 Commercial Services ...................... 6.8 4,599,774 Aerospace & Defense ...................... 6.3 4,199,769 Oil & Gas ................................ 5.9 3,953,988 Banks .................................... 5.4 3,616,038 Internet ................................. 5.1 3,445,716 Home Builders ............................ 4.7 3,167,941 Insurance ................................ 3.5 2,375,123 Computers ................................ 3.5 2,336,548 Electronics .............................. 3.2 2,144,970 Electric ................................. 3.1 2,069,233 Healthcare - Products .................... 2.5 1,656,930 Automobile Manufacturers ................. 1.9 1,276,762 Retail ................................... 1.7 1,170,084 Airlines ................................. 1.6 1,098,152 Apparel .................................. 1.3 872,617 Software ................................. 1.3 859,636 Savings & Loans .......................... 1.3 847,416 Automobile Parts & Equipment ............. 1.1 724,226 Healthcare - Services .................... 1.0 683,101 Mining ................................... 1.0 638,067 Telecommunications ....................... 0.9 588,689 Building Materials ....................... 0.8 557,013 Real Estate .............................. 0.8 548,072 Food ..................................... 0.6 423,186 Biotechnology ............................ 0.5 342,799 Transportation ........................... 0.4 286,078 Distribution/Wholesale ................... 0.2 164,162 Chemicals ................................ 0.2 138,032 Leisure Time ............................. 0.1 54,848 Miscellaneous Manfacturing ............... 0.1 43,955 Exchange Traded Fund ........................ 4.2 2,827,837 Temporary Investment ........................ 1.2 830,777 Corporate Bonds ............................. 0.1 54,650 Liabilities In Excess Of Other Assets ....... 0.0 (24,450) ----- ------------ NET ASSETS .................................. 100.0% $ 67,229,308 ===== ============ ------------ Portfolio holdings are subject to change at any time. The accompanying notes are an integral part of the financial statements. 7 THE SCHNEIDER FUNDS SCHNEIDER VALUE FUND PORTFOLIO OF INVESTMENTS FEBRUARY 28, 2009 (UNAUDITED) SHARES VALUE --------- ------------ DOMESTIC COMMON STOCKS -- 97.1% Aerospace & Defense -- 1.7% Boeing Co. (The) ................................. 43,050 $ 1,353,492 ------------ AUTOMOBILE MANUFACTURERES -- 3.5% Navistar International Corp.* .................... 97,000 2,735,400 ------------ AUTOMOBILE PARTS & EQUIPMENT -- 2.3% Magna International, Inc., Class A ............... 71,025 1,822,501 ------------ BANKS -- 5.1% Bank of America Corp. ............................ 386,000 1,524,700 Capital One Financial Corp. ...................... 139,375 1,679,469 JPMorgan Chase & Co. ............................. 34,000 776,900 ------------ 3,981,069 ------------ CHEMICALS -- 0.3% Cytec Industries, Inc. ........................... 15,425 237,545 ------------ COAL -- 8.5% Arch Coal, Inc. .................................. 315,000 4,378,500 CONSOL Energy, Inc. .............................. 83,575 2,277,419 ------------ 6,655,919 ------------ COMPUTERS -- 4.2% Dell, Inc.* ...................................... 388,378 3,312,864 ------------ ELECTRIC -- 5.3% Allegheny Energy, Inc. ........................... 62,200 1,470,408 Reliant Energy, Inc.* ............................ 774,954 2,681,341 ------------ 4,151,749 ------------ ELECTRONICS -- 3.9% Avnet, Inc.* ..................................... 179,400 3,098,238 ------------ FOOD -- 2.9% Tyson Foods, Inc., Class A ....................... 267,946 2,258,785 ------------ HEALTH CARE - PRODUCTS -- 1.0% Boston Scientific Corp.* ......................... 109,825 770,972 ------------ HEALTH CARE - SERVICES -- 0.8% Brookdale Senior Living, Inc. .................... 167,105 609,933 ------------ SHARES VALUE --------- ------------ HOME BUILDERS -- 6.1% Centex Corp. ..................................... 276,785 $ 1,718,835 NVR, Inc.* ....................................... 9,314 3,099,420 ------------ 4,818,255 ------------ INSURANCE -- 10.0% Brown & Brown, Inc. .............................. 124,300 2,096,941 Fidelity National Financial, Inc., Class A ................................. 173,921 2,881,871 Genworth Financial, Inc., Class A ................ 325,686 394,080 Hartford Financial Services Group, Inc. .......... 21,950 133,895 RenaissanceRe Holdings, Ltd. ..................... 51,675 2,326,925 ------------ 7,833,712 ------------ LEISURE TIME -- 1.1% Carnival Corp. ................................... 43,150 844,014 ------------ MEDIA -- 0.4% Liberty Media Corp., Series A* ................... 62,332 320,386 ------------ MINING -- 0.7% Cameco Corp. ..................................... 38,315 558,633 ------------ OIL & GAS -- 10.2% Chesapeake Energy Corp. .......................... 382,056 5,975,356 EQT Corp. ........................................ 38,350 1,179,262 Forest Oil Corp.* ................................ 58,200 825,276 ------------ 7,979,894 ------------ PHARMACEUTICALS -- 2.1% Omnicare, Inc. ................................... 62,300 1,615,439 ------------ REAL ESTATE INVESTMENT TRUSTS -- 11.2% Annaly Capital Management, Inc. .................. 520,138 7,229,918 Redwood Trust, Inc. .............................. 113,567 1,533,155 ------------ 8,763,073 ------------ RETAIL -- 4.9% Best Buy Co, Inc. ................................ 51,625 1,487,832 Chico's Fas, Inc.* ............................... 124,960 566,069 J.C. Penney Co., Inc. ............................ 114,811 1,760,053 ------------ 3,813,954 ------------ The accompanying notes are an integral part of the financial statements. 8 THE SCHNEIDER FUNDS SCHNEIDER VALUE FUND PORTFOLIO OF INVESTMENTS (CONCLUDED) FEBRUARY 28, 2009 (UNAUDITED) SHARES VALUE --------- ------------ SEMICONDUCTORS -- 10.2% ASML Holding N.V. ................................ 187,475 $ 2,836,497 International Rectifier Corp.* ................... 312,113 3,917,018 Lam Research Corp.* .............................. 64,050 1,252,818 ------------ 8,006,333 ------------ TELECOMMUNICATIONS -- 0.7% Motorola, Inc. ................................... 166,025 584,408 ------------ TOTAL DOMESTIC COMMON STOCKS (Cost $123,992,287) ......................... 76,126,568 ------------ PREFERRED STOCK -- 0.7% Automobile Manufactureres -- 0.7% General Motors Corp., Series C ................... 212,367 524,547 ------------ TOTAL PREFERRED STOCK (Cost $3,268,718) .......................... 524,547 ------------ EXCHANGE TRADED FUND -- 1.5% Finance -- 1.5% iShares Russell 1000 Value Index Fund ............ 31,520 1,198,390 ------------ TOTAL EXCHANGE TRADED FUND (Cost $1,406,948) ........................... 1,198,390 ------------ PAR (000) VALUE --------- ------------ CORPORATE BONDS -- 0.2% Continental Airlines, Inc. - CONV 5.00%, 06/15/23 ............................... $ 40 $ 33,550 Qimonda Finance LLC - CONV 6.75%, 03/22/13 ............................... 1,475 94,031 ------------ TOTAL CORPORATE BONDS (Cost $1,511,013) ............................. 127,581 ------------ TOTAL INVESTMENTS -- 99.5% (Cost $130,178,966) ........................... 77,977,086 ------------ OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.5% .... 397,369 ------------ NET ASSETS -- 100.0% ............................. $ 78,374,455 ============ * Non-income producing. CONV -- Convertible SFAS 157 DISCLOSURE -------------------------------------------------------------------------------- The following is a summary of the inputs used, as of February 28, 2009, in valuing the Fund's assets carried at fair value: INVESTMENTS IN VALUATION INPUTS SECURITIES ------------------- --------------- Level 1 - Quoted Prices ............................... $77,849,505 Level 2 - Other Significant Observable Inputs ......... 127,581 Level 3 - Significant Unobservable Inputs ............. -- ----------- Total ................................................. $77,977,086 =========== The accompanying notes are an integral part of the financial statements. 9 THE SCHNEIDER FUNDS SCHNEIDER SMALL CAP VALUE FUND PORTFOLIO OF INVESTMENTS FEBRUARY 28, 2009 (UNAUDITED) SHARES VALUE --------- ------------ DOMESTIC COMMON STOCKS -- 94.5% AEROSPACE & DEFENSE -- 6.3% AAR Corp.* ....................................... 200,995 $ 2,657,154 BE Aerospace, Inc.* .............................. 64,750 483,035 Triumph Group, Inc. .............................. 29,335 1,059,580 ------------ 4,199,769 ------------ AIRLINES -- 1.6% AirTran Holdings, Inc.* .......................... 367,275 1,098,152 ------------ APPAREL -- 1.3% Barry (R.G.) Corp.* .............................. 141,889 872,617 ------------ AUTOMOBILE MANUFACTURERS -- 1.9% Navistar International Corp.* .................... 34,425 970,785 Wabash National Corp. ............................ 149,257 305,977 ------------ 1,276,762 ------------ AUTOMOBILE PARTS & EQUIPMENT -- 1.1% American Axle & Manufacturing Holdings, Inc. ..... 273,125 254,006 Magna International, Inc., Class A ............... 18,325 470,220 ------------ 724,226 ------------ BANKS -- 5.4% Citizens Republic Bancorp, Inc.* ................. 1,575,653 1,181,740 First BanCorp. ................................... 406,375 1,690,520 Huntington Bancshares, Inc. ...................... 263,149 384,197 Sterling Financial Corp. ......................... 262,468 359,581 ------------ 3,616,038 ------------ BIOTECHNOLOGY -- 0.5% Human Genome Sciences, Inc.* ..................... 181,375 342,799 ------------ BUILDING MATERIALS -- 0.8% Builders FirstSource, Inc.* ...................... 188,165 361,277 Louisiana-Pacific Corp. .......................... 120,825 195,736 ------------ 557,013 ------------ CHEMICALS -- 0.2% Cytec Industries, Inc. ........................... 4,450 68,530 Spartech Corp. ................................... 28,025 69,502 ------------ 138,032 ------------ SHARES VALUE --------- ------------ COAL -- 6.8% Foundation Coal Holdings, Inc. ................... 286,120 $ 4,600,810 ------------ COMMERCIAL SERVICES -- 6.8% Administaff, Inc. ................................ 106,000 2,062,760 Aegean Marine Petroleum Network, Inc. ............ 104,525 1,714,210 Alliance Semiconductor Corp. ..................... 656,125 162,325 Hudson Highland Group, Inc.* ..................... 569,378 660,479 ------------ 4,599,774 ------------ COMPUTERS -- 3.5% Insight Enterprises, Inc.* ....................... 154,685 406,822 Ness Technologies, Inc.* ......................... 149,456 437,906 Silicon Storage Technology, Inc.* ................ 453,350 661,891 Xyratex Ltd.* .................................... 364,004 829,929 ------------ 2,336,548 ------------ DISTRIBUTION/WHOLESALE -- 0.2% Building Materials Holding Corp.* ................ 547,208 164,162 ------------ ELECTRIC -- 3.1% Allegheny Energy, Inc. ........................... 40,600 959,784 Reliant Energy, Inc.* ............................ 320,650 1,109,449 ------------ 2,069,233 ------------ ELECTRONICS -- 3.2% Avnet, Inc.* ..................................... 88,950 1,536,166 FARO Technologies, Inc.* ......................... 51,203 608,804 ------------ 2,144,970 ------------ FOOD -- 0.6% Tyson Foods, Inc., Class A ....................... 50,200 423,186 ------------ HEALTHCARE - PRODUCTS -- 2.5% American Medical Systems Holdings, Inc.* ......... 48,975 506,891 Orthofix International N.V.* ..................... 72,375 1,150,039 ------------ 1,656,930 ------------ HEALTHCARE - SERVICES -- 1.0% Emeritus Corp.* .................................. 101,652 683,101 ------------ The accompanying notes are an integral part of the financial statements. 10 THE SCHNEIDER FUNDS SCHNEIDER SMALL CAP VALUE FUND PORTFOLIO OF INVESTMENTS (CONTINUED) FEBRUARY 28, 2009 (UNAUDITED) SHARES VALUE --------- ------------ HOME BUILDERS -- 4.7% NVR, Inc.* ....................................... 8,590 $ 2,858,494 Ryland Group, Inc. ............................... 21,900 309,447 ------------ 3,167,941 ------------ INSURANCE -- 3.5% Brown & Brown, Inc. .............................. 64,550 1,088,958 Fidelity National Financial, Inc., Class A ....... 8,025 132,974 Genworth Financial, Inc., Class A ................ 178,050 215,441 RenaissanceRe Holdings, Ltd. ..................... 20,825 937,750 ------------ 2,375,123 ------------ INTERNET -- 5.1% Internet Capital Group, Inc.* .................... 340,000 1,377,000 ModusLink Global Solutions, Inc.* ................ 403,515 766,679 Openwave Systems, Inc.* .......................... 1,587,850 1,302,037 ------------ 3,445,716 ------------ LEISURE TIME -- 0.1% Brunswick Corp. .................................. 17,750 54,848 ------------ MINING -- 1.0% Golden Star Resources Ltd.* ...................... 417,037 638,067 ------------ MISCELLANEOUS MANUFACTURING -- 0.1% FreightCar America, Inc. ......................... 2,690 43,955 ------------ OIL & GAS -- 5.9% Goodrich Petroleum Corp.* ........................ 17,200 341,248 SandRidge Energy, Inc.* .......................... 534,429 3,612,740 ------------ 3,953,988 ------------ REAL ESTATE -- 0.8% MI Developments, Inc., Class A ................... 54,325 239,030 Thomas Properties Group, Inc. .................... 207,411 309,042 ------------ 548,072 ------------ REAL ESTATE INVESTMENT TRUSTS -- 12.6% Anworth Mortgage Asset Corp. ..................... 952,706 5,744,817 Arbor Realty Trust, Inc. ......................... 34,538 20,032 Chimera Investment Corp. ......................... 39,625 118,479 Redwood Trust, Inc. .............................. 139,600 1,884,600 Winthrop Realty Trust ............................ 98,567 730,381 ------------ 8,498,309 ------------ SHARES VALUE --------- ------------ RETAIL -- 1.7% AC Moore Arts & Crafts, Inc.* .................... 392,730 $ 530,185 Chico's Fas, Inc.* ............................... 89,350 404,756 MarineMax, Inc.* ................................. 163,294 235,143 ------------ 1,170,084 ------------ SAVINGS & LOANS -- 1.3% Washington Federal, Inc. ......................... 74,400 847,416 ------------ SEMICONDUCTORS -- 8.3% ASM International N.V.* .......................... 106,633 704,844 Axcelis Technologies, Inc.* ...................... 227,255 72,267 BE Semiconductor Industries N.V.* ................ 457,168 841,921 Entegris, Inc.* .................................. 1,533,038 935,153 International Rectifier Corp.* ................... 110,550 1,387,403 Lam Research Corp.* .............................. 54,200 1,060,152 ZiLog, Inc.* ..................................... 253,050 556,710 ------------ 5,558,450 ------------ SOFTWARE -- 1.3% Take-Two Interactive Software, Inc. .............. 138,875 859,636 ------------ TELECOMMUNICATIONS -- 0.9% NETGEAR, Inc.* ................................... 53,275 588,689 ------------ TRANSPORTATION -- 0.4% Alexander & Baldwin, Inc. ........................ 15,225 286,078 ------------ TOTAL DOMESTIC COMMON STOCKS (Cost $113,394,609) ............................ 63,540,494 ------------ EXCHANGE TRADED FUND -- 4.2% FINANCE -- 4.2% iShares Russell 2000 Value Index Fund ............ 77,475 2,827,837 ------------ TOTAL EXCHANGE TRADED FUND (Cost $3,608,955) .............................. 2,827,837 ------------ The accompanying notes are an integral part of the financial statements. 11 THE SCHNEIDER FUNDS SCHNEIDER SMALL CAP VALUE FUND PORTFOLIO OF INVESTMENTS (CONCLUDED) FEBRUARY 28, 2009 (UNAUDITED) PAR (000) VALUE --------- ------------ CORPORATE BONDS -- 0.1% LandAmerica Financial Group, Inc. - CONV ^+3.25%, 05/15/34 .................. $ 168 $ 25,963 Qimonda Finance LLC - CONV 6.75%, 03/22/13 ................................ 450 28,687 ------------ TOTAL CORPORATE BONDS (Cost $472,361) .............................. 54,650 ------------ SHARES --------- TEMPORARY INVESTMENT -- 1.2% PNC Bank Money Market Account 0.05%, 03/02/09 ................................ 831 830,777 ------------ TOTAL TEMPORARY INVESTMENT (Cost $830,777) .............................. 830,777 ------------ TOTAL INVESTMENTS -- 100.0% (Cost $118,306,702) ............................ 67,253,758 ------------ LIABILITIES IN EXCESS OF OTHER ASSETS -- 0.0% ................................. (24,450) ------------ NET ASSETS -- 100.0% ............................. $ 67,229,308 ============ * Non-income producing. + Security in default. ^ -- Security was purchased pursuant to Rule 144A under Securities Act of 1933 and may not be resold subject to that rule except to qualified institutional buyers. As of February 28, 2009, this security amounted to 0.04% of net assets. CONV -- Convertible SFAS 157 DISCLOSURE -------------------------------------------------------------------------------- The following is a summary of the inputs used, as of February 28, 2009, in valuing the Fund's assets carried at fair value: INVESTMENTS IN VALUATION INPUTS SECURITIES ------------------ --------------- Level 1 - Quoted Prices ............................... $67,199,108 Level 2 - Other Significant Observable Inputs ......... 54,650 Level 3 - Significant Unobservable Inputs ............. -- ----------- Total ................................................. $67,253,758 =========== The accompanying notes are an integral part of the financial statements. 12 THE SCHNEIDER FUNDS STATEMENTS OF ASSETS & LIABILITIES FEBRUARY 28, 2009 (UNAUDITED)
SCHNEIDER SCHNEIDER SMALL CAP VALUE FUND VALUE FUND ------------- ------------- ASSETS Investments, at value+ ....................... $ 77,977,086 $ 67,253,758 Receivables Investments sold ....................... 1,303,296 757,697 Capital shares sold .................... 143,296 59,750 Dividends and interest ................. 112,188 37,086 Prepaid expenses and other assets ............ 27,540 25,529 ------------- ------------ Total assets ......................... 79,563,406 68,133,820 ------------- ------------ LIABILITIES Cash overdraft ............................... 273,578 -- Payables Investments purchased .................. 527,517 382,224 Capital shares redeemed ................ 264,283 417,026 Investment adviser ..................... 5,978 41,443 Professional fees ...................... 29,217 13,434 Custodian fees ......................... 15,462 16,899 Director's and officers' fees .......... 23,284 8,820 Administration and accounting fees ..... 21,497 10,520 Transfer agent fees .................... 27,068 2,676 Other accrued expenses and liabilities . 1,067 11,470 ------------- ------------ Total liabilities .................... 1,188,951 904,512 ------------- ------------ Net Assets ................................... $ 78,374,455 $ 67,229,308 ============= ============ NET ASSETS CONSIST OF Paid-in capital .............................. 272,389,484 150,959,322 Undistributed net investment income .......... 2,073,787 379,923 Accumulated net realized loss from investments .......................... (143,886,936) (33,056,993) Net unrealized depreciation on investments ... (52,201,880) (51,052,944) ------------- ------------ Net Assets ................................... $ 78,374,455 $ 67,229,308 ============= ============ Shares outstanding ($0.001 par value, 100,000,000 shares authorized) ............ 10,817,699 10,295,321 ------------- ------------ Net asset value, offering and redemption price per share ........................... $ 7.25 $ 6.53 ============= ============ +Investment in securities, at cost ............. $ 130,178,966 $118,306,702 ============= ============
The accompanying notes are an integral part of the financial statements. 13 THE SCHNEIDER FUNDS STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED FEBRUARY 28, 2009 (UNAUDITED)
SCHNEIDER SCHNEIDER SMALL CAP VALUE FUND VALUE FUND ------------- ------------- INVESTMENT INCOME Dividends+ .................................. $ 2,558,153 $ 1,032,820 Interest .................................... 51,030 28,140 ------------- ------------ Total investment income ............. 2,609,183 1,060,960 ------------- ------------ EXPENSES Advisory fees ............................... 434,732 360,944 Administration and accounting fees .......... 97,689 62,732 Transfer agent fees ......................... 45,485 15,472 Directors' and officers' fees ............... 44,816 19,047 Custodian fees .............................. 39,898 30,956 Professional fees ........................... 34,712 21,819 Insurance fees .............................. 21,917 6,034 Printing and shareholder reporting fees ..... 20,836 1,488 Registration and filing fees ................ 9,917 9,917 Other expenses .............................. 1,488 1,587 ------------- ------------ Total expenses before waivers and reimbursements .................. 751,490 529,996 Less: waivers and reimbursements ...... (216,131) (126,386) ------------- ------------ Net expenses after waivers and reimbursements ...................... 535,359 403,610 ------------- ------------ Net investment income ....................... 2,073,824 657,350 ------------- ------------ NET REALIZED AND UNREALIZED GAIN/(LOSS) FROM INVESTMENTS NET REALIZED GAIN/(LOSS) FROM: Investments ........................... (87,484,536) (22,383,161) NET CHANGE IN UNREALIZED APPRECIATION/ (DEPRECIATION) ON: Investments ........................... (25,019,620) (36,054,587) ------------- ------------ Net realized and unrealized loss from investments ......................... (112,504,156) (58,437,748) ------------- ------------ NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ............................. $(110,430,332) $(57,780,398) ============= ============ +Net of foreign withholding taxes of .. $ (3,372) $ (5,958) ============= ============
The accompanying notes are an integral part of the financial statements. 14 THE SCHNEIDER FUNDS SCHNEIDER VALUE FUND STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED FOR THE YEAR FEBRUARY 28, 2009 ENDED (UNAUDITED) AUGUST 31, 2008 ----------------- ------------------ FROM OPERATIONS: Net investment income ........................................ $ 2,073,824 $ 4,850,664 Net realized loss from investments ........................... (87,484,536) (51,673,779) Net change in unrealized depreciation from investments ....... (25,019,620) 35,066,247) ------------- ------------ Net decrease in net assets resulting from operations ........... (110,430,332) (81,889,362) ------------- ------------ DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income ........................................ (4,861,935) (1,905,299) Net realized capital gains ................................... -- (15,318,154) ------------- ------------ Net decrease in net assets from dividends and distributions to shareholders .............................................. (4,861,935) (17,223,453) ------------- ------------ CAPITAL SHARE TRANSACTIONS Proceeds from shares sold (1,019,831 and 3,604,263 shares, respectively) ...................................... 10,171,306 75,564,084 Reinvestment of distributions (456,600 and 758,511 shares, respectively) .............................................. 3,890,231 15,913,569 Redemption fees* ............................................. 15,090 47,008 Shares redeemed (4,402,049 and 6,388,948 shares, respectively) (45,446,214) (132,168,321) ------------- ------------ Net decrease in net assets from capital share transactions ..... (31,369,587) (40,643,660) ------------- ------------ Total decrease in net assets ................................... (146,661,854) (139,756,475) NET ASSETS Beginning of period .......................................... 225,036,309 364,792,784 ------------- ------------ End of period ................................................ $ 78,374,455 $225,036,309 ============= ============ Undistributed net investment income, end of period ............. $ 2,073,787 $ 4,861,898 ============= ============
* There is a 1.00% redemption fee on shares redeemed which have been held less than 90 days in the Schneider Value Fund. The redemption fees are retained by the Fund for the benefit of the remaining shareholders and recorded as paid-in capital. The accompanying notes are an integral part of the financial statements. 15 THE SCHNEIDER FUNDS SCHNEIDER SMALL CAP VALUE FUND STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED FOR THE YEAR FEBRUARY 28, 2009 ENDED (UNAUDITED) AUGUST 31, 2008 ----------------- ------------------ FROM OPERATIONS: Net investment income ........................................ $ 657,350 $ 838,861 Net realized loss from investments ........................... (22,383,161) (4,740,332) Net change in unrealized depreciation from investments ....... (36,054,587) (17,482,692) ------------- ------------ Net decrease in net assets resulting from operations ........... (57,780,398) (21,384,163) ------------- ------------ DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income ........................................ (1,113,054) (1,553,403) Net realized capital gains ................................... (12,861) (2,671,636) ------------- ------------ Net decrease in net assets from dividends and distributions to shareholders .............................................. (1,125,915) (4,225,039) ------------- ------------ CAPITAL SHARE TRANSACTIONS Proceeds from shares sold (4,683,936 and 1,898,558 shares, respectively) ..................................... 40,772,434 30,787,178 Reinvestment of distributions (125,207 and 232,816 shares, respectively) ..................................... 979,117 3,932,266 Redemption fees* ............................................. 55,962 36,164 Shares redeemed (818,227 and 1,129,651 shares, respectively) . (7,362,795) (18,507,502) ------------- ------------ Net increase in net assets from capital share transactions ..... 34,444,718 16,248,106 ------------- ------------ Total decrease in net assets ................................... (24,461,595) (9,361,096) NET ASSETS Beginning of period .......................................... 91,690,903 101,051,999 ------------- ------------ End of period ................................................ $ 67,229,308 $ 91,690,903 ============= ============ Undistributed net investment income, end of period ............. $ 379,923 $ 835,627 ============= ============
* There is a 1.75% redemption fee on shares redeemed which have been held less than one year in the Schneider Small Cap Value Fund. The redemption fees are retained by the Fund for the benefit of the remaining shareholders and recorded as paid-in capital. The accompanying notes are an integral part of the financial statements. 16 THE SCHNEIDER FUNDS SCHNEIDER VALUE FUND FINANCIAL HIGHLIGHTS -------------------------------------------------------------------------------- Contained below is per share operating performance data for a share outstanding during each period, 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. --------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEARS ENDED AUGUST 31, FEBRUARY 28, 2009 ---------------------------------------------------------------- (UNAUDITED) 2008 2007 2006 2005 2004 ---------------- -------- ---------- -------- ------- ------- PER SHARE OPERATING PERFORMANCE* Net asset value, beginning of period ........ $ 16.37 $ 23.13 $ 21.16 $ 20.55 $ 18.22 $ 14.81 ------- -------- -------- -------- ------- ------- Net investment income ....................... 0.27 0.37 0.14 0.10 0.07 0.04 Net realized and unrealized gain/(loss) from investments and foreign currency transactions .............................. (8.96) (5.89) 2.99 1.99 3.40 4.05 ------- -------- -------- -------- ------- ------- Net increase/(decrease) in net assets resulting from operations ................. (8.69) (5.52) 3.13 2.09 3.47 4.09 ------- -------- -------- -------- ------- ------- Dividends and distributions to shareholders from: Net investment income ....................... (0.43) (0.14) (0.08) (0.08) (0.05) (0.06) Net realized capital gains .................. -- (1.10) (1.08) (1.40) (1.09) (0.62) ------- -------- -------- -------- ------- ------- Total dividends and distributions to shareholders .............................. (0.43) (1.24) (1.16) (1.48) (1.14) (0.68) ------- -------- -------- -------- ------- ------- Redemption fees (Note 4)+ ................... -- -- -- -- -- -- ------- -------- -------- -------- ------- ------- Net asset value, end of period .............. $ 7.25 $ 16.37 $ 23.13 $ 21.16 $ 20.55 $ 18.22 ======= ======== ======== ======== ======= ======= Total investment return(1) .................. (53.45)%(4) (25.05)% 14.88% 10.85% 19.37% 28.21% ======= ======== ======== ======== ======= ======= RATIO/SUPPLEMENTAL DATA Net assets, end of period (000's omitted) ... $78,374 $225,036 $364,793 $139,288 $61,146 $38,406 Ratio of expenses to average net assets(2) .. 0.86%(3) 0.85% 0.85% 0.85% 0.85% 0.85% Ratio of expenses to average net assets without waivers and expense reimbursements ............................ 1.21%(3) 1.09% 1.12% 1.27% 1.38% 1.96% Ratio of net investment income to average net assets(2) ............................. 3.34%(3) 1.61% 0.77% 0.69% 0.41% 0.35% Portfolio turnover rate ..................... 73.06%(4) 101.98% 131.75% 104.92% 76.66% 116.60%
------------------ * Calculated based on shares outstanding on the first and last day of the respective period, except for dividends and distributions, if any, which are based on actual shares outstanding on the dates of distributions. + Amount is less than $0.005 per share. (1) Total investment return is calculated by 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. (2) Reflects waivers and reimbursements. (3) Annualized. (4) Not annualized. The accompanying notes are an integral part of the financial statements. 17 THE SCHNEIDER FUNDS SCHNEIDER SMALL CAP VALUE FUND FINANCIAL HIGHLIGHTS -------------------------------------------------------------------------------- Contained below is per share operating performance data for a share outstanding during each period, 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. --------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEARS ENDED AUGUST 31, FEBRUARY 28, 2009 ---------------------------------------------------------------- (UNAUDITED) 2008 2007 2006 2005 2004 ---------------- -------- ---------- -------- ------- ------- PER SHARE OPERATING PERFORMANCE* Net asset value, beginning of period ........ $ 14.54 $ 19.06 $ 21.96 $ 24.94 $ 29.09 $ 22.52 ------- -------- -------- -------- ------- ------- Net investment income/(loss) ................ 0.08 0.16 0.43 0.05 (0.10) (0.13) Net realized and unrealized gain/(loss) on investments and foreign currency transactions .............................. (7.91) (3.81) 0.15 1.66 8.01 8.50 ------- -------- -------- -------- ------- ------- Net increase/(decrease) in net assets resulting from operations ................. (7.83) (3.65) 0.58 1.71 7.91 8.37 ------- -------- -------- -------- ------- ------- Dividends and distributions to shareholders from: Net investment income ....................... (0.18) (0.32) (0.20) -- -- (0.11) Net realized capital gains .................. -- + (0.55) (3.28) (4.69) (12.06) (1.69) ------- -------- -------- -------- ------- ------- Total dividends and distributions to shareholders ........................... (0.18) (0.87) (3.48) (4.69) (12.06) (1.80) ------- -------- -------- -------- ------- ------- Redemption fees (Note 4)+ ................... -- -- -- -- -- -- ------- -------- -------- -------- ------- ------- Net asset value, end of period .............. $ 6.53 $ 14.54 $ 19.06 $ 21.96 $ 24.94 $ 29.09 ======= ======== ======== ======== ======= ======= Total investment return(1) .................. (54.07)%(4) (19.78)% 0.72% 7.79% 31.57% 37.99% ======= ======== ======== ======== ======= ======= RATIO/SUPPLEMENTAL DATA Net assets, end of period (000's omitted) ... $67,229 $91,691 $101,052 $105,092 $55,163 $48,845 Ratio of expenses to average net assets(2) .. 1.12%(3) 1.10% 1.10% 1.10% 1.10% 1.10% Ratio of expenses to average net assets without waivers and expense reimbursements ........ 1.47%(3) 1.49% 1.50% 1.56% 1.71% 1.74% Ratio of net investment income to average net assets(2) ............................. 1.82%(3) 0.92% 1.81% 0.29% (0.41)% (0.49)% Portfolio turnover rate ..................... 43.37%(4) 116.34% 75.21% 91.45% 68.87% 110.69%
------------------ * Calculated based on shares outstanding on the first and last day of the respective period, except for dividends and distributions, if any, which are based on actual shares outstanding on the dates of distributions. + Amount is less than $0.005 per share. (1) Total investment return is calculated by 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. (2) Reflects waivers and reimbursements. (3) Annualized. (4) Not annualized. The accompanying notes are an integral part of the financial statements. 18 THE SCHNEIDER FUNDS NOTES TO FINANCIAL STATEMENTS FEBRUARY 28, 2009 (UNAUDITED) 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES The RBB Fund, Inc. ("RBB" or the "Company") 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 "1940 Act"), as an open-end management investment company. RBB is a "series fund," which is a mutual fund divided into separate portfolios. Each portfolio is treated as a separate entity for certain matters under the 1940 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 eighteen active investment portfolios, including the Schneider Value Fund (the "Value Fund") and the Schneider Small Cap Value Fund (the "Small Cap Value Fund") (each a "Fund," collectively the "Funds"), which commenced investment operations on September 2, 1998 and September 30, 2002, respectively. As of the date hereof, each Fund offers Institutional Class shares. RBB has authorized capital of one hundred billion shares of common stock of which 78.773 billion shares are currently classified into one hundred and twenty-seven classes of Common Stock. Each class represents an interest in an active or inactive RBB investment portfolio. The active classes have been grouped into nine separate "families." PORTFOLIO VALUATION -- Each Fund's net asset value ("NAV") is calculated once daily at the close of regular trading hours on the New York Stock Exchange ("NYSE") (generally 4:00 p.m. Eastern time) on each day the NYSE is open. Securities held by the Funds are valued using the closing price or the last sale price on a national securities exchange or the National Association of Securities Dealers Automatic Quotation System ("NASDAQ") market system where they are primarily traded. Equity securities traded in the over-the-counter market are valued at their closing prices. If there were no transactions on that day, securities traded principally on an exchange or on NASDAQ will be valued at the mean of the last bid and ask prices prior to the market close. Fixed Income securities having a remaining maturity of greater than 60 days are valued using an independent pricing service. Fixed Income securities having a remaining maturity of 60 days or less are amortized to maturity based on their cost. Foreign securities are valued based on prices from the primary market in which they are traded, and are translated from the local currency into U.S. dollars using current exchange rates. Investments in other open-end investment companies are valued based on the NAV of the investment companies (which may use Fair Value Pricing as discussed in their prospectuses). If market quotations are unavailable or deemed unreliable, securities will be valued in accordance with procedures adopted by the Board of Directors. Relying on prices supplied by pricing services or dealers or using fair valuation may result in values that are higher or lower than the values used by other investment companies and investors to price the same investments. Effective September 1, 2008, the Fund adopted Financial Accounting Standards Board ("FASB") Statement of Financial Accounting Standards No. 157 ("SFAS 157"). This standard clarifies the definition of fair value for financial reporting, establishes a framework for measuring fair value and requires additional disclosures about the use of fair value measurements. The three levels of the fair value hierarchy under SFAS 157 are described below: o Level 1 -- quoted prices in active markets for identical securities o Level 2 -- other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) o Level 3 -- significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments) 19 THE SCHNEIDER FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2009 (UNAUDITED) The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. A summary of the inputs used to value the Funds' investments as of February 28, 2009 is included with each Fund's Schedule of Investments. 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 liabilities 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. INVESTMENT TRANSACTIONS, INVESTMENT INCOME, AND EXPENSES -- Transactions 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 accrued as earned. Dividend income is recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Each fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. 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 fund families (such as director or professional fees) are charged to all funds in proportion to their average net assets of the RBB funds, or in such other manner as the Board of Directors deems fair or equitable. 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 Funds. FOREIGN CURRENCY TRANSLATION -- Foreign securities and other foreign assets and liabilities are valued using the foreign currency exchange rate effective at the end of the reporting period. The books and records of the Funds are maintained in U.S. dollars. Cost of investments is translated at the currency exchange rate effective at the trade date. The gain or loss resulting from a change in currency exchange rates between the trade and settlement dates of a portfolio transaction is treated as a gain or loss on foreign currency. Likewise, the gain or loss resulting from a change in currency exchange rates, between the date income is accrued and paid, is treated as a gain or loss on foreign currency. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net investment income and distributions from net realized capital gains, if any, are declared, recorded on ex-date and paid at least annually to shareholders. Income dividends and capital gain distributions are determined in accordance with U.S. federal income tax regulations, which may differ from generally accepted accounting principles. Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications within the components of net assets. U.S. TAX STATUS -- No provision is made for U.S. income taxes as it is each 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. income and excise taxes. OTHER -- In the normal course of business, the Funds may enter into contracts that provide general indemnifications. The Funds' maximum exposure under these arrangements is dependent on claims that may be made against the Funds in the future, and, therefore, cannot be estimated; however, based on experience, the risk of material loss for such claims is considered remote. 20 THE SCHNEIDER FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2009 (UNAUDITED) 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES Schneider Capital Management Company ("SCM"or the "Adviser") serves as each Fund's investment adviser. For its advisory services, SCM is entitled to receive 0.70% of the Value Fund's average daily net assets and 1.00% of the Small Cap Value Fund's average daily net assets, computed daily and payable monthly. From September 1, 2008 until December 31, 2008, the Adviser contractually agreed to limit the Value Fund's and the Small Cap Value Fund's total operating expenses to the extent that such expenses exceed 0.85% and 1.10%, respectively, of the Fund's average daily net assets. Effective January 1, 2009 until December 31, 2009, the Adviser has contractually agreed to raise these limits to 0.90% and 1.15% for the Value Fund and Small Cap Value Fund, respectively. As necessary, this limitation is effected in waivers of advisory fees and reimbursements of other Fund expenses. For the six months ended February 28, 2009, investment advisory fees and waivers of expenses were as follows: GROSS ADVISORY FEES WAIVERS NET ADVISORY FEES --------------------- ----------- ------------- Schneider Value Fund $434,732 $(216,131) $218,601 Schneider Small Cap Value Fund 360,944 (122,886) 238,058 The Funds will not pay SCM at a later time for any amounts it may waive or any amounts that SCM has assumed. PNC Global Investment Servicing (U.S.), Inc. ("PNC"), a member of The PNC Financial Services Group, Inc., serves as administrator for the Funds. For providing administration and accounting services, PNC is entitled to receive a monthly fee equal to an annual rate of 0.125% of each Fund's average daily net assets, subject to a minimum monthly fee of $8,333 per Fund plus out-of-pocket expenses. PNC voluntarily agreed to waive $7,000 annually of its administration and accounting services fees for the Small Cap Value Fund. Included in the administration and accounting services fees and expenses, shown above, are fees for providing regulatory administration services to RBB. For providing these services, PNC is entitled to receive compensation as agreed to by the Company and PNC. This fee is allocated to each portfolio of the Company in proportion to its net assets of the RBB funds. In addition, PNC serves as the Funds' transfer and dividend disbursing agent. For providing transfer agent services, PNC is entitled to receive a monthly fee, subject to a minimum monthly fee of $2,000 per Fund, plus out-of-pocket expenses. For providing custodian services to the Funds, PFPC Trust Company, an affiliate of PNC, is entitled to receive a monthly fee equal to an annual rate of 0.015% of each Fund's average daily gross assets, subject to a minimum monthly fee of $1,000 per Fund, excluding transaction changes and out-of-pocket expenses. PFPC Distributors, Inc., an affiliate of PNC, serves as the principal underwriter and distributor of the Funds' shares pursuant to a Distribution Agreement with RBB. 21 THE SCHNEIDER FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2009 (UNAUDITED) 3. INVESTMENT IN SECURITIES For the six months ended February 28, 2009, aggregate purchases and sales of investment securities (excluding short-term investments) were as follows: PURCHASES SALES ------------ -------------- Schneider Value Fund $93,950,094 $115,968,349 Schneider Small Cap Value Fund 70,076,060 32,299,158 4. CAPITAL SHARE TRANSACTIONS As of February 28, 2009, the following shareholders held 10% or more of the outstanding shares of the Fund. These shareholders may be omnibus accounts which are comprised of many individual shareholders. Schneider Small Cap Value Fund (2 shareholders) 23% 5. FEDERAL INCOME TAX INFORMATION FASB Interpretation No. 48 ("FIN 48"), Accounting for Uncertainty in Income Taxes, sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has analyzed each Fund's tax positions and has concluded that no provision for income tax is required in the Funds' financial statements. The Funds are not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. However, management's conclusions regarding the adoption of FIN 48 may be subject to review and adjustment at a later date based on factors including, but not limited to, further implementation guidance from the FASB, new tax laws, regulations and administrative interpretations (including court decisions). The Funds' federal tax returns for each of the prior three fiscal years remain subject to examination by the Internal Revenue Service. At February 28, 2009, federal tax cost, aggregate gross unrealized appreciation and depreciation of securities held by the Funds were as follows:
NET UNREALIZED FEDERAL TAX UNREALIZED UNREALIZED APPRECIATION/ COST APPRECIATION DEPRECIATION DEPRECIATION -------------- ------------ ---------------- ---------------- Schneider Value Fund $149,367,151 $1,652,917 $(73,042,982) $(71,390,065) Schneider Small Cap Value Fund 123,858,826 765,661 (57,370,729) (56,605,068)
At August 31, 2008, the Schneider Value Fund had a capital loss carryforward of $11,810,397 available to offset future capital gains. If not utilized against future capital gains, this capital loss carryforward will expire in 2016. Under federal tax law, foreign currency and capital losses realized after October 31 may be deferred and treated as having arisen on the first day of the following fiscal year. For the year ended August 31, 2008, the Schneider Value Fund and the Schneider Small Cap Value Fund incurred post-October capital losses of $30,533,114 and $7,644,454, respectively. 22 THE SCHNEIDER FUNDS NOTES TO FINANCIAL STATEMENTS (CONCLUDED) FEBRUARY 28, 2009 (UNAUDITED) The tax character of dividends and distributions paid during the last fiscal year were as follows:
ORDINARY INCOME LONG-TERM GAINS TOTAL ------------------ ----------------- ----------- Schneider Value Fund 2008 $11,583,307 $ 5,640,146 $17,223,453 Schneider Small Cap Value Fund 2008 $ 1,553,403 $ 2,671,636 $ 4,225,039
Dividends from net investment income and short-term capital gains are treated as ordinary income dividends for federal tax purposes. 23 THE SCHNEIDER FUNDS OTHER INFORMATION (UNAUDITED) PROXY VOTING Policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities as well as information regarding how the Funds voted proxies relating to portfolio securities for the most recent 12-month period ended June 30 are available without charge, upon request, by calling (888) 520-3277 and on the Securities and Exchange Commission's ("SEC") website at http://www.sec.gov. QUARTERLY PORTFOLIO SCHEDULES The Company will file a complete schedule of portfolio holdings with the SEC for the first and third fiscal quarters of each fiscal year (quarters ended November 30 and May 31) on Form N-Q. The Company's Form N-Q will be available on the SEC website at http://www.sec.gov and may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. Information on the operation of the SEC Public Reference Room may be obtained by calling (202) 551-8090. 24 [THIS PAGE INTENTIONALLY LEFT BLANK.] [THIS PAGE INTENTIONALLY LEFT BLANK.] [THIS PAGE INTENTIONALLY LEFT BLANK.] INVESTMENT ADVISER Schneider Capital Management 460 E. Swedesford Road Suite 1080 Wayne, PA 19087 ADMINISTRATOR PNC Global Investment Servicing (U.S.), Inc. 301 Bellevue Parkway Wilmington, DE 19809 TRANSFER AGENT PNC Global Investment Servicing (U.S.), Inc. 101 Sabin Street Pawtucket, RI 02860 PRINCIPAL UNDERWRITER PFPC Distributors, Inc. 760 Moore Road King of Prussia, PA 19406 CUSTODIAN PFPC Trust Company 8800 Tinicum Blvd. Suite 200 Philadelphia, PA 19153 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM PricewaterhouseCoopers LLP Two Commerce Square, Suite 1700 2001 Market Street Philadelphia, PA 19103-7042 COUNSEL Drinker Biddle & Reath LLP One Logan Square 18th and Cherry Streets Philadelphia, PA 19103-6996 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND OF THE RBB FUND, INC. SEMIANNUAL REPORT FEBRUARY 28, 2009 (UNAUDITED) This report is submitted for the general information of the shareholders of the Fund. It is not authorized for distribution unless preceded or accompanied by a current prospectus for the Fund. BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND SEMIANNUAL REPORT FOR THE SIX-MONTH PERIOD ENDED FEBRUARY 28, 2009 -------------------------------------------------------------------------------- Fellow Shareholder: U.S. market indices lost roughly half of their value from September 2008 through February 2009, the worst six-month period for U.S. equities that we have seen since we started managing money more than 20 years ago. During this period, the Bogle Small Cap Growth Fund (the "Fund") Investor shares declined -50.18% and Institutional shares fell -50.14%, underperforming the Russell 2000(R) benchmark decline of -46.91% by -3.27% (Investor class) and -3.23% (Institutional class). The last six months have been marked by major bank failures and bailouts, a breakdown in the global financial system and the free flow of capital, unprecedented government intervention, a severe economic contraction, an increase in unemployment, and widespread fear among investors leading to extreme risk aversion. This backdrop is discussed in more detail in the market environment section of this letter. The Fund lagged its benchmark largely due to losses in September, when fear turned to panic and the liquidation and unwinding of equity positions and exposures was most aggressive. The Fund's performance relative to its benchmark began to stabilize in late November and the Fund [GRAPHIC OMITTED] INVESTMENT PERFORMANCE -- PERIODS ENDING FEBRUARY 28, 2009 BOGLE FUND VS. RUSSELL 2000(R) BENCHMARK
BOGLE RUSSELL INVESTOR CLASS BOGLE INSTITUTIONAL 2000(R) NET VALUE INVESTOR CLASS CLASS INDEX ADDED -------------- ------------- ------- -------------- Semiannual Period (9/1/08 - 2/28/09) -50.18 -50.14 -46.91 -3.27 One-Year Period (3/1/08 - 2/28/09) -52.05 -51.97 -42.39 -9.66 Three-Year Period (3/1/06 - 2/28/09) -25.34 -25.24 -17.86 -7.48 Five-Year Period (3/1/04 - 2/28/09) -10.89 -10.78 -6.68 -4.21 Since Inception (10/1/99 - 2/28/09) 3.3 3.39 0.28 3.01
---------------- ALL FUND RETURNS ARE PRESENTED NET OF FEES AND INCLUDE THE REINVESTMENT OF ALL DIVIDENDS AND OTHER EARNINGS. MULTI-YEAR PERIOD RETURNS ARE ANNUALIZED. RETURNS SHOWN REPRESENT PAST PERFORMANCE AND DO NOT GUARANTEE FUTURE RESULTS. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE RETURNS SHOWN ABOVE. 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 THEIR ORIGINAL COST. RETURNS CURRENT TO THE MOST RECENT MONTH-END MAY BE OBTAINED AT 1-877-264-5346. THE TABLE DOES NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. THE PERFORMANCE QUOTED REFLECTS FEE WAIVERS IN EFFECT AND WOULD HAVE BEEN LESS IN THEIR ABSENCE. THE FUND'S ANNUAL OPERATING EXPENSES, AS STATED IN THE CURRENT PROSPECTUS, ARE 1.44% FOR THE INSTITUTIONAL CLASS AND 1.54% FOR THE INVESTOR CLASS, PRIOR TO FEE WAIVERS. 1 gained ground on the benchmark in each of the last three months of the reporting period. Semiannual performance is discussed further on pages 2-4, where we look at performance attribution and explain the results generated by our investment models during the period, including a few stock-specific examples. We then present key fundamental characteristics of the Fund and benchmark, highlighting how our risk controls impact the Fund's characteristics as compared to the Russell 2000(R). Finally, we close with an update on developments at Bogle Investment Management, L.P. MARKET ENVIRONMENT. The latest semiannual period was the most negative six-month stretch for Russell(R) Index returns in the history of the Russell data, which generally go back thirty years to December 31, 1978. Starting on September 7th with the government bailout of Fannie Mae and Freddie Mac, the period was marked by the worst financial crisis most investors have ever seen. The Fannie/Freddie bailout was followed a week later by the failure of Lehman Brothers, the sale of Merrill Lynch, and a government rescue of insurance company AIG. The failure of Lehman and its impact on its prime brokerage clients and derivatives counterparties caused panic in the hedge fund industry where counterparty exposures are significant and assets can be wiped out, or at least tied up, in bankruptcy proceedings. By mid-September, market liquidity in general was freezing up, as banks became reluctant to provide short-term financing. The crisis in short-term markets included fears about the safety of bank accounts and money market funds. Meanwhile, hedge funds, struggling to assess and diversify counterparty risk, were also faced with sweeping government interventions. On September 19th, the Securities and Exchange Commission announced restrictions on short selling and additional short sale regulations, giving rise to aggressive short covering (on top of the liquidation-driven covering already underway). These conditions led to a massive and broad-based unwinding and deleveraging of investment positions across asset classes and across the globe. According to our investment models the selling was indiscriminate and was not based on stock-specific fundamentals. Unprecedented and drastic government actions, including the introduction of an historic bailout package for financial institutions, failed to calm investors, and equity markets plummeted further through October. Losses continued through November 20th, as investor worries were exacerbated by the near bankruptcy of U.S. auto companies and troubles at Citigroup, which required its own government rescue. U.S. equity markets bounced back from November 21st through the first few days of January, but selling pressure resumed on fears about fourth quarter and future earnings, rising unemployment rates, and continued weakness in the financial sector (including the possible nationalization of major U.S. financial institutions). The pressure did not abate in February and by the end of the month most U.S. equity market indices were flirting with their November lows. Against this backdrop, all U.S. equity market segments posted horrific performance for the six months ended February 28, 2009. In this environment, small cap stocks underperformed large cap stocks as the Russell 2000(R) Index fell -46.91% for the six-month period, compared with a return of -42.25% for the larger cap Russell 1000(R). The smallest of the small cap stocks were relatively worse performers, and the equal-weighted Russell 2000(R) fell -47.56%. Within small capitalization stocks, the growth and value benchmarks posted similar results, with growth edging out value by +0.46% (the Russell 2000(R) Growth lost -46.70%, while the Russell 2000(R) Value dropped -47.16%). Within small cap stocks, energy, industrial and basic industry were the poorest performing sectors, while the consumer growth and utilities sectors had the least negative performance. PERFORMANCE ATTRIBUTION. As you know, it is our policy to remain close to fully invested and exposed to the small cap market, as we do not believe that we can consistently forecast market direction. We also maintain exposures that are very similar to those of our benchmark, such that the significant majority of our relative returns have historically been attributed to stock selection. This was again the case for the semiannual period, as the combination of our small cap investment models produced negative stock selection explaining most of the period's underperformance. All of the Fund's underperformance came in the first three months 2 of the semiannual period, after which the Fund outperformed the benchmark for the last three months. Over the nearly ten years we have been managing the Fund, our general approach to stock picking has remained consistent, although the details that go into the process have evolved over time. The general attributes that our three primary models seek to identify are: 1) stocks that have demonstrated an ability to produce unexpectedly better earnings growth (the earnings expectations model); 2) companies that do not have to "manufacture" earnings growth through aggressive accounting (financial quality model); and 3) stocks that trade at attractive valuations relative to their most similar peers (relative valuation model). In other words, our composite model considers earnings in the context of quality (which should reduce earnings uncertainty) and valuation (which should reduce downside when we are wrong about earnings). For the latest semiannual period, on a standalone basis, the earnings expectations model produced modestly positive returns, primarily by helping us to avoid the worst performing stocks. Financial quality results were positive for the period, as the accounting-based signals produced robust returns. The short interest component of the financial quality model, whereby we favor stocks with low levels of shares held short, dragged down overall financial quality performance. This component's results were particularly hurt by hedge fund unwinding in September and throughout the fall. As hedge funds were forced to close out of (buy/cover) short positions, this extreme buying pressure had a greater positive influence on benchmark performance than on the Fund's performance (because the Fund has a smaller percentage of heavily shorted names than the benchmark). The relative valuation model produced sharply negative results from September through November, as panicked selling penalized recent poor performers more than the average stock. The model bounced back strongly in December and January, but fell back into negative territory in February. At the end of the semiannual period, the Fund held 160 stocks and the largest holding represented 1.6% of portfolio assets. This diversification minimizes the impact any single stock can have on total Fund performance. In the stock-specific examples that follow, we will illustrate three situations where stocks underperformed the benchmark and two where our investments paid off. We first purchased DARLING INTERNATIONAL, a company that collects and recycles food service waste, in late 2007 due to its favorable changes to analysts' earnings forecasts and conservative accounting (quality) signals. These signals remained strong entering the semiannual period, but analysts began to cut estimates late last year, the company's earnings expectations score turned slightly negative, and the stock price dropped sharply. The company continues to look attractive according to our financial quality signal, and we maintain the position based on our belief that the company's strong balance sheet will support future earnings growth. CENTER FINANCIAL CORP., which provides financial services for small to medium sized business owners, entered our portfolio in early September 2008 with a strong relative valuation signal and a positive financial quality score, which reflected a relatively low level of shares held by short sellers. As it has underperformed its peers, the stock has become more attractive on a valuation basis, and short sellers continue to avoid the stock, providing some indication that other investors do not see significant further downside. We began to build a position in TENNECO, INC., a supplier to the automotive industry, in August of 2008. This stock looked attractive according to both our financial quality and relative valuation models, although earnings expectations were modestly negative. The stock maintains strong valuation and quality rankings and has also seen a sharp drop in the percentage of its shares held short. Although its near-term earnings prospects are weak, the conservative nature of the company's financial accounting could bode well for future earnings once the economy stabilizes. Turning to our successes, one of our best performers, cancer screening company MYRIAD GENETICS, had a strong financial quality ranking at the beginning of the semiannual period, and with its earnings expectations signal looking increasingly attractive as the period progressed the stock appreciated significantly. We often find that strong financial quality predicts future earnings strength; indeed, this reasoning supported our decisions to hold onto the three 3 underperforming stocks mentioned above. Finally, we began in November 2008 to purchase COINSTAR INC., which offers coin counting and e-payment services (and has an interest in DVD rental kiosks), after the stock price had dropped by about 35%. At the time of purchase, both its financial quality and relative valuation signals looked attractive. The financial quality signal remains strong, and, despite a share price rebound of about 23% since our initial purchase and through the end of the semiannual period, the relative valuation ranking also remains attractive. INVESTMENT POSITIONING. Fund characteristics remain in line with the benchmark. Note that small deviations from the benchmark reflected in both sector exposures and the fundamental characteristics of the Fund arise purely from the bottom up stock selection process and do not reflect attempts to actively time the overall market, style preferences, or sector rotation. As of the end of February, the Fund's median market capitalization was right in line with the benchmark. The Fund continued to have a higher analysts' expected long-term earnings growth rate (at the median) versus the benchmark. This relative exposure has increased recently as the benchmark's expected growth rate has declined more than the Fund's. The portfolio maintains its price sensitivity; price-to-earnings and price-to-sales ratios are currently below the benchmark. These ratios are at all time lows for the Fund, as market prices have been falling faster, at least so far, than earnings and revenues. Other fundamental characteristics for the portfolio and benchmark, including selected risk statistics, are shown in the table. ---------------------------------------------------------- FUNDAMENTAL CHARACTERISTICS FEBRUARY 28, 2009 RUSSELL 2000(R) MEDIAN BOGLX INDEX -------- ------- -------- Market Cap. (mil.) $647 $621 Estimated Long-Term Earnings Growth Rate 15.3% 14.3% Price/Historical Earnings 10.1x 12.5x Price/Forward Earnings 10.8x 12.3x Price/Sales 0.7x 1.0x RISK STATISTICS* -- SEMIANNUAL PERIOD ------------------------------------- Annualized Standard Dev. 61.0% 63.4% Annualized Active Risk 13.3% Beta with Russell 2000(R) 0.94 Cash 0.7% *STANDARD DEVIATION IS A STATISTICAL MEASURE OF THE RANGE OF PERFORMANCE. BETA IS A MEASURE OF A PORTFOLIO'S SENSITIVITY TO MARKET MOVEMENTS. ---------------------------------------------------------- PROGRESS AT BOGLE INVESTMENT MANAGEMENT, L.P. Our team did not change during the semiannual period, remaining at thirteen full-time professionals, five dedicated to portfolio management and research and eight focused on client service, compliance, and operations. At the end of February 2009, assets in the Fund were a little over $59 million and the Fund remains closed to new investors. As a reminder, information about the 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. 4 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) ---------- THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND DOES NOT GUARANTEE FUTURE RESULTS. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER. PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END MAY BE OBTAINED AT 1-877-264-5346. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THE PERFORMANCE QUOTED REFLECTS FEE WAIVERS IN EFFECT AND WOULD HAVE BEEN LESS IN THEIR ABSENCE. THE FUND'S ANNUAL OPERATING EXPENSE RATIO, AS STATED IN THE CURRENT PROSPECTUS, IS 1.44% FOR THE INSTITUTIONAL CLASS AND 1.54% FOR THE INVESTOR CLASS, PRIOR TO FEE WAIVERS. THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS. THE RUSSELL 2000(R) IS AN INDEX OF STOCKS 1001 THROUGH 3000 IN THE RUSSELL 3000(R) 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 AVAILABLE INFORMATION THAN INVESTING IN LARGE COMPANIES. 5 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND FUND EXPENSE EXAMPLES (UNAUDITED) As a shareholder of the Fund, you incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees, shareholder servicing fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. These examples are based on an investment of $1,000 invested at the beginning of the six-month period from September 1, 2008 through February 28, 2009, and held for the entire period. ACTUAL EXPENSES The first line of the accompanying tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second line of the accompanying tables provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare these 5% hypothetical examples with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that the expenses shown in the accompanying tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees. Therefore, the second line of the accompanying tables is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
INSTITUTIONAL CLASS -------------------------------------------------------------------------------- BEGINNING ACCOUNT VALUE ENDING ACCOUNT VALUE EXPENSES PAID DURING SEPTEMBER 1, 2008 FEBRUARY 28, 2009 PERIOD* ----------------------- -------------------- -------------------- Actual $1,000.00 $ 498.60 $4.64 Hypothetical (5% return before expenses) 1,000.00 1,018.52 6.28
6 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND FUND EXPENSE EXAMPLES (CONCLUDED) (UNAUDITED)
INVESTOR CLASS -------------------------------------------------------------------------------- BEGINNING ACCOUNT VALUE ENDING ACCOUNT VALUE EXPENSES PAID DURING SEPTEMBER 1, 2008 FEBRUARY 28, 2009 PERIOD* ----------------------- -------------------- -------------------- Actual $1,000.00 $ 498.20 $5.01 Hypothetical (5% return before expenses) 1,000.00 1,018.02 6.78
---------- * Expenses are equal to the Fund's annualized six-month expense ratio of 1.25% for the Institutional Class and 1.35% for the Investor Class, which includes waived fees or reimbursed expenses, multiplied by the average account value over the period, multiplied by the number of days (181) in the most recent fiscal half-year, then divided by 365 to reflect the one-half year period. The Fund's ending account values on the first line in each table are based on the actual six-month total return for each class of (50.14)% for the Institutional Class and (50.18)% for the Investor Class. 7 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND PORTFOLIO HOLDINGS SUMMARY TABLE FEBRUARY 28, 2009 (UNAUDITED) % OF NET SECURITY TYPE & SECTOR CLASSIFICATION ASSETS VALUE -------------------------------------------------------------------------------- COMMON STOCKS: Technology 25.5% $15,052,710 Consumer Growth 22.3 13,170,621 Financial 18.6 11,000,842 Industrial 18.2 10,768,622 Consumer Cyclical 8.9 5,231,381 Energy 3.1 1,837,347 Basic Industry 3.0 1,800,810 SHORT-TERM INVESTMENTS 1.1 638,771 LIABILITIES IN EXCESS OF OTHER ASSETS (0.7) (385,456) ------ ----------- NET ASSETS 100.0% $59,115,648 ===== =========== ---------- Portfolio holdings are subject to change at any time. The accompanying notes are an integral part of the financial statements. 8 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND PORTFOLIO OF INVESTMENTS FEBRUARY 28, 2009 (UNAUDITED) NUMBER OF SHARES VALUE --------- ----------- COMMON STOCKS--99.6% BASIC INDUSTRY--3.0% Brush Engineered Materials, Inc.* ....................................... 14,300 $ 177,320 Carpenter Technology Corp. .................... 21,700 297,290 Chemtura Corp. ................................ 173,900 59,126 Innophos Holdings, Inc. ....................... 33,200 352,584 Schulman (A.), Inc. ........................... 34,700 495,863 Trex Co, Inc.* ................................ 34,600 311,746 Xerium Technologies, Inc.*..................... 154,900 106,881 ----------- 1,800,810 ----------- CONSUMER CYCLICAL--8.9% Avis Budget Group, Inc.* ...................... 190,600 76,240 Carter's, Inc.* ............................... 44,100 719,271 Centex Corp. .................................. 47,300 293,733 Discovery Communications, Inc., Class A* .............................. 43,600 676,236 Harman International Industries, Inc. ............................ 38,800 412,056 Interstate Hotels & Resorts, Inc.* ....................................... 172,800 65,664 Lions Gate Entertainment Corp.* ...................................... 104,600 529,276 Modine Manufacturing Co. ...................... 52,300 59,099 Pantry, Inc., (The)* .......................... 48,400 748,264 Tenneco, Inc.* ................................ 137,300 186,728 Timberland Co., (The), Class A* .................................... 6,641 74,711 Town Sports International Holdings, Inc.* ............................. 80,100 154,593 WMS Industries, Inc.* ......................... 29,500 534,835 Wolverine World Wide, Inc. .................... 11,200 169,792 World Fuel Services Corp. ..................... 18,300 530,883 ----------- 5,231,381 ----------- CONSUMER GROWTH--22.3% Alkermes, Inc.* ............................... 8,300 83,664 American Italian Pasta Co., Class A* .................................... 19,800 607,662 Arbitron, Inc. ................................ 31,100 402,434 NUMBER OF SHARES VALUE --------- ----------- CONSUMER GROWTH--(CONTINUED) BioScrip, Inc.* ............................... 300,415 $ 447,618 Cantel Medical Corp.* ......................... 38,800 484,224 Cardiac Science Corp.* ........................ 11,400 41,496 Catalyst Health Solutions, Inc.* ....................................... 26,800 564,944 Centene Corp.* ................................ 27,000 458,460 Chemed Corp. .................................. 11,000 437,910 CRA International, Inc.* ...................... 27,300 596,505 Depomed, Inc.* ................................ 219,300 383,775 Emergency Medical Services Corp., Class A* ............................. 14,800 453,176 Emergent Biosolutions, Inc.* .................. 14,100 272,271 Hanger Orthopedic Group, Inc.* ....................................... 25,900 344,470 ICON PLC - ADR* ............................... 24,100 494,532 Invacare Corp. ................................ 14,300 229,372 Lancaster Colony Corp. ........................ 10,800 419,904 LHC Group, Inc.* .............................. 19,400 386,642 Lincare Holdings, Inc.* ....................... 20,800 438,256 Lincoln Educational Services Corp.* ...................................... 32,000 458,880 Martek Bioscience Corp. ....................... 20,500 383,965 Myriad Genetics, Inc.* ........................ 2,200 173,470 NBTY, Inc.* ................................... 14,000 208,180 Noven Pharmaceuticals, Inc.* ....................................... 55,600 452,028 Owens & Minor, Inc. ........................... 2,800 94,388 PDL BioPharma, Inc. ........................... 79,100 464,317 PerkinElmer, Inc. ............................. 46,800 602,784 Questcor Pharmaceuticals, Inc.* ....................................... 80,100 389,286 STERIS Corp. .................................. 21,200 488,872 SXC Health Solutions Corp.*.................... 32,700 634,053 Tyson Foods, Inc., Class A..................... 53,400 450,162 Viropharma, Inc.* ............................. 42,400 175,960 Vivus, Inc.* .................................. 63,000 253,890 WellCare Health Plans, Inc.* .................. 3,800 34,314 Winn-Dixie Stores, Inc.* ...................... 37,100 358,757 ----------- 13,170,621 ----------- The accompanying notes are an integral part of the financial statements. 9 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND PORTFOLIO OF INVESTMENTS (CONTINUED) FEBRUARY 28, 2009 (UNAUDITED) NUMBER OF SHARES VALUE --------- ----------- ENERGY--3.1% Dresser-Rand Group, Inc.* ..................... 31,800 $ 668,118 Mariner Energy, Inc.* ......................... 36,400 336,700 Rosetta Resources, Inc.* ...................... 76,600 389,894 Superior Well Services, Inc.* ................. 45,200 259,900 W&T Offshore, Inc. ............................ 22,700 182,735 ----------- 1,837,347 ----------- FINANCIAL--18.6% Allied World Assurance Co. Holdings Ltd. ............................... 20,800 798,928 American Financial Group, Inc. ........................................ 19,500 303,420 AmTrust Financial Services, Inc. ........................................ 45,700 382,966 Arch Capital Group Ltd.* ...................... 11,600 626,400 Assurant, Inc. ................................ 29,600 603,840 Astoria Financial Corp. ....................... 16,400 117,260 Calamos Asset Management, Inc., Class A ............................... 86,800 299,460 Center Financial Corp. ........................ 96,600 284,970 Coinstar, Inc.* ............................... 25,900 677,026 Conseco, Inc.* ................................ 212,400 257,004 Federated Investors, Inc., Class B ..................................... 29,400 554,484 First Mercury Financial Corp.* ...................................... 16,200 192,942 Hanover Insurance Group, Inc., (The) ................................. 14,800 520,516 Imperial Capital Bancorp, Inc. ........................................ 95,500 36,290 Interactive Brokers Group, Inc., Class A* .............................. 29,400 413,070 Janus Capital Group, Inc. ..................... 49,900 220,059 Knight Capital Group, Inc., Class A* .................................... 38,000 668,420 LaBranche & Co., Inc.* ........................ 81,500 471,070 Lender Processing Services, Inc. ........................................ 21,000 549,990 NUMBER OF SHARES VALUE --------- ----------- FINANCIAL--(CONTINUED) Maiden Holdings Ltd. .......................... 111,800 $ 498,628 Nelnet, Inc., Class A* ........................ 42,200 215,220 Penson Worldwide, Inc.* ....................... 83,298 399,830 StanCorp Financial Group, Inc. ........................................ 13,000 233,870 Unitrin, Inc. ................................. 20,000 215,600 Validus Holdings Ltd. ......................... 11,700 280,098 Waddell & Reed Financial, Inc., Class A ............................... 46,100 650,932 White Mountains Insurance Group Ltd. .................................. 2,100 415,821 Wright Express Corp.* ......................... 7,700 112,728 ----------- 11,000,842 ----------- INDUSTRIAL--18.2% AerCap Holdings N.V.* ......................... 73,600 237,728 AGCO Corp.* ................................... 24,100 413,074 AZZ, Inc.* .................................... 15,500 313,720 Brink's Co., (The) ............................ 24,700 589,589 Chart Industries, Inc.* ....................... 27,200 174,624 CIRCOR International, Inc. .................... 8,600 191,178 Consolidated Graphics, Inc.* .................. 6,200 83,638 Crane Co. ..................................... 18,000 271,440 Darling International, Inc.* .................. 61,700 267,161 Diebold, Inc. ................................. 24,700 546,364 Dycom Industries, Inc.* ....................... 58,700 271,194 DynCorp International, Inc., Class A* .................................... 23,800 290,122 Elbit Systems Ltd. ............................ 10,900 471,970 Fuel Systems Solutions, Inc.* ................. 14,900 295,169 Gardner Denver, Inc.* ......................... 10,700 202,444 Horizon Lines, Inc., Class A .................. 29,700 100,980 Ingram Micro, Inc., Class A* .................. 38,100 414,909 Intermec, Inc.* ............................... 6,900 69,621 Knoll, Inc. ................................... 50,300 331,980 Manpower, Inc. ................................ 16,000 446,080 Michael Baker Corp.* .......................... 18,800 601,788 MYR Group, Inc.* .............................. 11,700 157,014 The accompanying notes are an integral part of the financial statements. 10 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND PORTFOLIO OF INVESTMENTS (CONTINUED) FEBRUARY 28, 2009 (UNAUDITED) NUMBER OF SHARES VALUE --------- ----------- INDUSTRIAL--(CONTINUED) Navistar International Corp.* ...................................... 22,800 $ 642,960 NN, Inc. ...................................... 52,900 50,255 OceanFreight, Inc. ............................ 106,900 107,969 Powell Industries, Inc.* ...................... 14,200 425,148 RiskMetrics Group, Inc.* ...................... 18,300 201,117 Robbins & Myers, Inc. ......................... 11,000 177,430 SPX Corp. ..................................... 10,000 442,800 Timken Co. .................................... 36,400 443,352 Tredegar Corp. ................................ 23,100 385,770 Triumph Group, Inc. ........................... 2,200 79,464 Ultralife Corp.* .............................. 51,000 375,870 UniFirst Corp. ................................ 2,800 67,088 WABCO Holdings, Inc. .......................... 36,100 365,332 WESCO International, Inc.*.. .................. 15,800 262,280 ----------- 10,768,622 ----------- TECHNOLOGY--25.5% Acme Packet, Inc.* ............................ 15,200 66,728 Advent Software, Inc.* ........................ 5,800 157,992 Alvarion Ltd.* ................................ 96,250 297,413 Applied Micro Circuits Corp.* ...................................... 62,100 224,181 Applied Signal Technology, Inc. ........................................ 800 15,296 Avocent Corp.* ................................ 36,000 431,280 BigBand Networks, Inc.* ....................... 97,000 527,680 Brocade Communications Systems, Inc.* .............................. 105,300 292,734 ClickSoftware Technologies Ltd.* ....................................... 54,150 160,284 Coherent, Inc.* ............................... 12,000 183,600 Conexant Systems, Inc.* ....................... 136,800 60,438 EarthLink, Inc.* .............................. 29,300 184,590 GigaMedia Ltd.* ............................... 75,600 442,260 Himax Technologies, Inc. ADR ......................................... 122,800 202,620 i2 Technologies, Inc.* ........................ 89,000 666,610 NUMBER OF SHARES VALUE --------- ----------- TECHNOLOGY--(CONTINUED) Integrated Device Technology, Inc.* ........................... 88,000 $ 394,240 InterDigital, Inc.* ........................... 23,000 675,740 JDS Uniphase Corp.* ........................... 153,600 423,936 Magma Design Automation, Inc.* ....................................... 53,000 58,300 MicroStrategy, Inc., Class A* ................. 11,000 401,830 NCR Corp.* .................................... 62,300 493,416 Net Servicos de Comunicacao SA - ADR* ....................... 45,100 280,973 Novatel Wireless, Inc.* ....................... 9,700 52,962 NTELOS Holdings Corp. ......................... 26,400 506,088 Orbital Sciences Corp.* ....................... 16,500 233,475 OSI Systems, Inc.* ............................ 26,000 410,800 Pegasystems, Inc. ............................. 8,200 117,506 Photronics, Inc.* ............................. 91,700 84,364 QLogic Corp.* ................................. 36,700 338,374 RadiSys Corp.* ................................ 82,300 502,030 RealNetworks, Inc.* ........................... 159,700 367,310 S1 Corp.* ..................................... 117,000 666,900 Sapient Corp.* ................................ 62,900 240,907 Shanda Interactive Entertainment Ltd. - ADR* ................... 26,600 873,012 Sierra Wireless, Inc.* ........................ 11,700 45,630 Soapstone Networks, Inc.* ..................... 141,200 464,548 Sohu.com, Inc.* ............................... 11,500 568,100 Synopsys, Inc.* ............................... 30,900 575,667 Take-Two Interactive Software, Inc. .............................. 66,900 414,111 TeleCommunication Systems, Inc. Class A* ...................... 96,200 793,650 Teradyne, Inc.* ............................... 107,100 442,323 TIBCO Software, Inc.* ......................... 90,200 435,666 TradeStation Group, Inc.* ..................... 51,900 277,146 ----------- 15,052,710 ----------- TOTAL COMMON STOCKS (Cost $93,503,728)..................................... 58,862,333 ----------- The accompanying notes are an integral part of the financial statements. 11 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND PORTFOLIO OF INVESTMENTS (CONCLUDED) FEBRUARY 28, 2009 (UNAUDITED) NUMBER OF SHARES VALUE --------- ----------- SHORT-TERM INVESTMENTS--1.1% Columbia Prime Reserves Fund.................. 638,771 $ 638,771 ----------- TOTAL SHORT-TERM INVESTMENTS (Cost $638,771)........................................ 638,771 ----------- TOTAL INVESTMENTS--100.7% (Cost $94,142,499)......................................... 59,501,104 ----------- LIABILITIES IN EXCESS OF OTHER ASSETS--(0.7)%....................................... (385,456) ----------- NET ASSETS--100.0%............................................ $59,115,648 =========== ---------- ADR -- American Depository Receipt. * Non-income producing. SFAS 157 DISCLOSURE -------------------------------------------------------------------------------- The following is a summary of the inputs used, as of February 28, 2009, in valuing the Fund's assets carried at fair value: INVESTMENTS IN VALUATION INPUTS SECURITIES ---------------------------------- ----------- Level 1 - Quoted Prices ...................................... $59,501,104 Level 2 - Other Significant Observable Inputs ................ -- Level 3 - Significant Unobservable Inputs .................... -- ----------- Total ........................................................ $59,501,104 =========== The accompanying notes are an integral part of the financial statements. 12 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND STATEMENT OF ASSETS AND LIABILITIES FEBRUARY 28, 2009 (UNAUDITED) ASSETS Investments, at value (Cost $94,142,499) ........................... $ 59,501,104 Receivables Investments sold ................................................. 1,484,439 Capital shares sold .............................................. 50,345 Dividends and interest ........................................... 48,874 Prepaid expenses and other assets ................................ 16,252 ------------ Total assets ................................................... 61,101,014 ------------ LIABILITIES Payables Investments purchased ............................................ 1,710,834 Capital shares redeemed .......................................... 120,843 Directors' and officers' fees .................................... 27,723 Investment adviser and shareholder servicing fees ................ 26,111 Other accrued expenses and liabilities ........................... 99,855 ------------ Total liabilities .............................................. 1,985,366 ------------ Net assets ......................................................... $ 59,115,648 ============ NET ASSETS Paid-in capital .................................................... 167,721,418 Accumulated net investment loss .................................... (186,422) Accumulated net realized loss from investments ..................... (73,777,953) Net unrealized depreciation on investments ......................... (34,641,395) ------------ Net assets ......................................................... $ 59,115,648 ============ INSTITUTIONAL CLASS Net assets ......................................................... $ 24,119,852 ------------ Shares outstanding ($0.001 par value, 100,000,000 shares authorized) 2,789,187 ------------ Net asset value, offering and redemption price per share ........... $ 8.65 ============ INVESTOR CLASS Net assets ......................................................... $ 34,995,796 ------------ Shares outstanding ($0.001 par value, 100,000,000 shares authorized) 4,096,323 ------------ Net asset value, offering and redemption price per share ........... $ 8.54 ============
The accompanying notes are an integral part of the financial statements. 13 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED FEBRUARY 28, 2009 (UNAUDITED) INVESTMENT INCOME Dividends (Net of foreign witholding taxes of $1,083) ................ $ 423,770 ------------ Total investment income ........................................... 423,770 ------------ EXPENSES Advisory fees ........................................................ 468,409 Administration and accounting fees ................................... 93,245 Transfer agent fees .................................................. 69,721 Directors' and officers' fees ........................................ 36,355 Professional fees .................................................... 29,975 Shareholder servicing fees ........................................... 24,681 Printing and shareholder reporting fees .............................. 19,852 Registration and filing fees ......................................... 17,356 Custodian fees ....................................................... 17,302 Other expenses ....................................................... 14,776 ------------ Total expenses before waivers ..................................... 791,672 Less: waivers ..................................................... (181,480) ------------ Net expenses after waivers ........................................... 610,192 ------------ Net investment loss .................................................. (186,422) ------------ NET REALIZED AND UNREALIZED GAIN/(LOSS) FROM INVESTMENTS Net realized loss from investments ................................ (45,722,414) Net change in unrealized appreciation/(depreciation) on investments (30,771,227) ------------ Net realized and unrealized loss from investments .................... (76,493,641) ------------ NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS .................... $(76,680,063) ============
The accompanying notes are an integral part of the financial statements. 14 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED FOR THE YEAR FEBRUARY 28, 2009 ENDED (UNAUDITED) AUGUST 31, 2008 ------------------- --------------- INCREASE/(DECREASE) IN NET ASSETS FROM OPERATIONS: Net investment loss....................................................... $ (186,422) $ (1,640,130) Net realized loss from investments........................................ (45,722,414) (25,550,402) Net change in unrealized depreciation from investments........................................................ (30,771,227) (28,210,112) ------------- ------------ Net decrease in net assets resulting from operations......................... (76,680,063) (55,400,644) ------------- ------------ DISTRIBUTIONS TO SHAREHOLDERS FROM: Net realized capital gains Institutional Class..................................................... -- (24,591,377) Investor Class.......................................................... -- (16,794,653) ------------- ------------ Net decrease in net assets from distributions to shareholders................ -- (41,386,030) ------------- ------------ CAPITAL SHARE TRANSACTIONS(1) Decrease in net assets from share transactions Institutional Class..................................................... (23,250,992) (56,500,835) Investor Class.......................................................... (7,976,053) (12,856,585) ------------- ------------ Net decrease in net assets from capital share transactions................... (31,227,045) (69,357,420) ------------- ------------ Total decrease in net assets................................................. (107,907,108) (166,144,094) NET ASSETS Beginning of period....................................................... 167,022,756 333,166,850 ------------- ------------ End of period............................................................. $ 59,115,648 $167,022,756 ============= ============ Undistributed net investment loss, end of period............................. $ (186,422) $ -- ============= ============
---------- (1) See note 4 in the Notes to Financial Statements The accompanying notes are an integral part of the financial statements. 15 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 years. This information has been derived from information provided in the financial statements. --------------------------------------------------------------------------------
INSTITUTIONAL CLASS ---------------------------------------------------------------------------------- FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE SIX MONTHS YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED ENDED 2/28/09 8/31/08 8/31/07 8/31/06 8/31/05 8/31/04 ---------- ------- -------- -------- -------- -------- (UNAUDITED) PER SHARE OPERATING PERFORMANCE Net asset value, beginning of period....... $ 17.35 $ 24.61 $ 27.74 $ 28.78 $ 24.99 $ 22.71 ------- ------- -------- -------- -------- -------- Net investment loss........................ (0.02)* (0.13)* (0.08)* (0.16)* (0.22) (0.16)* Net realized and unrealized gain/(loss) from investments........................ (8.68) (3.99) 2.74 3.08 6.49 2.44 ------- ------- -------- -------- -------- -------- Net increase/(decrease) in net assets resulting from operations............... (8.70) (4.12) 2.66 2.92 6.27 2.28 ------- ------- -------- -------- -------- -------- Distributions to shareholders from: Net realized capital gains................. -- (3.14) (5.79) (3.96) (2.48) -- ------- ------- -------- -------- -------- -------- Net asset value, end of period............. $ 8.65 $ 17.35 $ 24.61 $ 27.74 $ 28.78 $ 24.99 ======= ======= ======== ======== ======== ======== Total investment return(1)................. (50.14)% (19.33)% 10.29% 12.46% 27.34% 10.04% ======= ======= ======== ======== ======== ======== RATIOS/SUPPLEMENTAL DATA Net assets, end of period (000's omitted).. $24,120 $84,546 $197,415 $189,920 $177,359 $175,642 Ratio of expenses to average net assets with waivers and reimbursements......... 1.25%(2) 1.25% 1.25% 1.25% 1.25% 1.25% Ratio of expenses to average net assets without waivers and reimbursements...... 1.63%(2) 1.44% 1.43% 1.43% 1.46% 1.44% Ratio of net investment loss to average net assets.............................. (0.33)%(2) (0.64)% (0.30)% (0.55)% (0.73)% (0.61)% Portfolio turnover rate.................... 82.86% 162.10% 142.45% 126.64% 129.18% 129.18%
* Calculated based on average shares outstanding for the period. (1) 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. (2) Annualized. The accompanying notes are an integral part of the financial statements. 16 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 years. This information has been derived from information provided in the financial statements. --------------------------------------------------------------------------------
INVESTOR CLASS ---------------------------------------------------------------------------------- FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE SIX MONTHS YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED ENDED 2/28/09 8/31/08 8/31/07 8/31/06 8/31/05 8/31/04 ---------- ------- -------- -------- -------- -------- (UNAUDITED) PER SHARE OPERATING PERFORMANCE Net asset value, beginning of period ...... $ 17.14 $ 24.38 $ 27.56 $ 28.65 $ 24.91 $ 22.65 ------- ------- -------- -------- -------- -------- Net investment loss........................ (0.03)* (0.14)* (0.10)* (0.18)* (0.23) (0.18)* Net realized and unrealized gain/(loss) from investments........................ (8.57) (3.96) 2.71 3.05 6.45 2.44 ------- ------- -------- -------- -------- -------- Net increase/(decrease) in net assets resulting from operations............... (8.60) (4.10) 2.61 2.87 6.22 2.26 ------- ------- -------- -------- -------- -------- Distributions to shareholders from: Net realized capital gains................. -- (3.14) (5.79) (3.96) (2.48) -- ------- ------- -------- -------- -------- -------- Net asset value, end of period............. $ 8.54 $ 17.14 $ 24.38 $ 27.56 $ 28.65 $ 24.91 ======= ======= ======== ======== ======== ======== Total investment return(1)................. (50.18)% (19.45)% 10.15% 12.33% 27.22% 9.98% ======= ======= ======== ======== ======== ======== RATIOS/SUPPLEMENTAL DATA Net assets, end of period (000's omitted).. $34,996 $82,477 $135,752 $147,471 $134,054 $124,031 Ratio of expenses to average net assets with waivers and reimbursements......... 1.35%(2) 1.35% 1.35% 1.35% 1.35% 1.35% Ratio of expenses to average net assets without waivers and reimbursements...... 1.75%(2) 1.54% 1.53% 1.53% 1.56% 1.54% Ratio of net investment loss to average net assets.............................. (0.45)%(2) (0.74)% (0.40)% (0.65)% (0.83)% (0.70)% Portfolio turnover rate.................... 82.86% 162.10% 142.45% 126.64% 129.18% 129.18%
* Calculated based on average shares outstanding for the period. (1) 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. (2) Annualized. The accompanying notes are an integral part of the financial statements. 17 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND NOTES TO FINANCIAL STATEMENTS (UNAUDITED) 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES The RBB Fund, Inc. ("RBB" or the "Company") 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. Each 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 eighteen active 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 one hundred billion shares of common stock of which 78.773 billion shares are currently classified into one hundred and twenty-seven classes of common stock. Each class represents an interest in an active or inactive RBB investment portfolio. The active classes have been grouped into nine separate "families." PORTFOLIO VALUATION -- The Fund's net asset value ("NAV") is calculated once daily at the close of regular trading hours on the New York Stock Exchange ("NYSE") (generally 4:00 p.m. Eastern time) on each day the NYSE is open. Securities held by the Fund are valued using the closing price or the last sale price on a national securities exchange or the National Association of Securities Dealers Automatic Quotation System ("NASDAQ") market system where they are primarily traded. Equity securities traded in the over-the-counter market are valued at their closing prices. If there were no transactions on that day, securities traded principally on an exchange or on NASDAQ will be valued at the mean of the last bid and ask prices prior to the market close. Fixed income securities having a remaining maturity of greater than 60 days are valued using an independent pricing service. Fixed income securities having a remaining maturity of 60 days or less are amortized to maturity based on their cost. Investments in other open-end investment companies are valued based on the NAV of those investment companies (which may use fair value pricing as discussed in their prospectuses). If market quotations are unavailable or deemed unreliable, securities will be valued in accordance with procedures adopted by the Board of Directors. Relying on prices supplied by pricing services or dealers or using fair valuation may result in values that are higher or lower than the values used by other investment companies and investors to price the same investments. Effective September 1, 2008, the Fund adopted Financial Accounting Standards Board ("FASB") Statement of Financial Accounting Standards No. 157 ("SFAS 157"). This standard clarifies the definition of fair value for financial reporting, establishes a framework for measuring fair value and requires additional disclosures about the use of fair value measurements. The three levels of the fair value hierarchy under SFAS 157 are described below: o Level 1 -- quoted prices in active markets for identical securities 18 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) o Level 2 -- other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) o Level 3 -- significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments) The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. A summary of the inputs used to value the Fund's investments as of February 28, 2009 is included with the Fund's Portfolio of Investments. 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 liabilities 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. INVESTMENT TRANSACTIONS, INVESTMENT INCOME AND EXPENSES -- The Fund records security transactions based on 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 accrued when earned. 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. 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 fund families (such as director or professional fees) are charged to all funds in proportion to their net assets of the RBB funds, or in such other manner as the Board of Directors deems fair or equitable. Expenses and fees, including investment advisory and administration fees, are accrued daily for the purpose of determining the net asset value of the Fund. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net investment income and distributions from net realized capital gains, if any, will be declared and paid at least annually to shareholders and recorded on ex-date. Income dividends 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. Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications within the components of net assets. U.S. TAX STATUS -- No provision is made for U.S. 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. income and excise taxes. 19 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) OTHER -- In the normal course of business, the Fund may enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is dependent on claims that may be made against the Fund in the future, and, therefore, cannot be estimated; however, based on experience, the risk of material loss for such claims is considered remote. 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES Bogle Investment Management, L.P. (the "Adviser" or "Bogle") 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 contractually 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 average daily net assets of the Fund's Institutional Class and 1.35% of the average daily net assets of the Fund's Investor Class. As necessary, this limitation is effected in waivers of advisory fees and reimbursements of expenses exceeding the advisory fee. The contractual fee waiver does not provide for recoupment of fees that were waived or expenses that were reimbursed. For the six-month period ended February 28, 2009, investment advisory fees and waivers of the Fund were as follows: GROSS NET ADVISORY FEES WAIVERS ADVISORY FEES ------------- ---------- ------------- $468,409 $(175,625) $292,784 The Fund will not pay the Adviser at a later time for any amounts waived or any amounts assumed. In addition to serving as the Fund's investment adviser, Bogle provides certain shareholder services to the Investor Class of the Fund. As compensation for such services, the Adviser receives a monthly fee equal to an annual rate of 0.10% of the average daily net assets of the Fund's Investor Class. PNC Global Investment Servicing (U.S.), Inc. ("PNC"), a member of the PNC Financial Services Group, Inc., serves as administrator for the Fund. For providing administrative and accounting services, PNC is entitled to receive a monthly fee equal to an annual rate of 0.115% of the Fund's average daily net assets, subject to a minimum of $6,250 per month. The Fund also pays a monthly multiple class fee of $1,875 per additional class. In addition, PNC serves as the Fund's transfer and dividend disbursing agent. 20 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) PNC has voluntarily agreed to waive a portion of its administration and accounting services fees for the Fund. For the six-month period ended February 28, 2009, administration and accounting services fees and waivers of the Fund were as follows: GROSS ADMINISTRATION NET ADMINISTRATION AND ACCOUNTING AND ACCOUNTING SERVICES FEES WAIVERS SERVICES FEES -------------------- --------- ------------------ $93,245 $(5,855) $87,390 Included in the administration and accounting services fees and expenses, shown above, are fees for providing regulatory administration services to RBB. For providing these services, PNC is entitled to receive compensation as agreed to by the Company and PNC. This fee is allocated to each portfolio in proportion to its net assets of the RBB Funds. In addition, PNC serves as the Fund's transfer and dividend disbursing agent. For providing transfer agent services, PNC is entitled to receive a monthly fee subject to a minimum monthly fee of $6,000 plus out of pocket expenses. For providing custodial services to the Fund, PFPC Trust Company, an affiliate of PNC, is entitled to receive a monthly fee equal to an annual rate of 0.03% of the Fund's average daily net assets subject to a minimum monthly fee of $1,500. PFPC Distributors, Inc., an affiliate of PNC, serves as the principal underwriter and distributor of the Fund's shares pursuant to a Distribution Agreement with RBB. The Fund will not pay PNC or PNC's affiliates at a later time for any amounts waived or any amounts assumed. 3. INVESTMENT IN SECURITIES For the six-month period ended February 28, 2009, aggregate purchases and sales of investment securities (excluding short-term investments) of the Fund were as follows: INVESTMENT SECURITIES ------------------------------- PURCHASES SALES ----------- ------------ $81,447,254 $111,522,499 21 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) 4. CAPITAL SHARE TRANSACTIONS As of February 28, 2009, 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. Transactions in capital shares were as follows:
INSTITUTIONAL CLASS ----------------------------------------------------------------- FOR THE SIX MONTHS ENDED FOR THE FEBRUARY 28, 2009 YEAR ENDED (UNAUDITED) AUGUST 31, 2008 ------------------------------ ---------------------------- SHARES VALUE SHARES VALUE ---------- ------------ ---------- ------------ Sales.......................................... 189,891 $ 2,156,753 753,671 $ 14,498,333 Reinvestments.................................. -- -- 1,096,153 23,830,362 Redemptions.................................... (2,275,070) (25,407,745) (4,997,050) (94,829,530) ---------- ------------ ---------- ------------ Net Decrease................................... (2,085,179) $(23,250,992) (3,147,226) $(56,500,835) ========== ============ ========== ============ INVESTOR CLASS ----------------------------------------------------------------- FOR THE SIX MONTHS ENDED FOR THE FEBRUARY 28, 2009 YEAR ENDED (UNAUDITED) AUGUST 31, 2008 ------------------------------ ---------------------------- SHARES VALUE SHARES VALUE ---------- ------------ ---------- ------------ Sales.......................................... 157,597 $ 1,654,279 190,305 $ 3,624,195 Reinvestments.................................. -- -- 745,852 16,043,279 Redemptions.................................... (872,874) (9,630,332) (1,691,787) (32,524,059) ---------- ------------ ---------- ------------ Net Decrease................................... (715,277) $ (7,976,053) (755,630) $(12,856,585) ========== ============ ========== ============
As of February 28, 2009, the Fund had three shareholder accounts and/or omnibus accounts (comprised of a group of individual shareholders) that amounted to 34% of the total shares outstanding of the Fund. 22 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND NOTES TO FINANCIAL STATEMENTS (CONCLUDED) (UNAUDITED) 5. FEDERAL INCOME TAX INFORMATION Financial Accounting Standards Board ("FASB") Interpretation No. 48 ("FIN 48"), Accounting for Uncertainty in Income Taxes, sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has analyzed the Fund's tax positions and has concluded that no provision for income tax is required in the Fund's financial statements. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. However, management's conclusions regarding the adoption of FIN 48 may be subject to review and adjustment at a later date based on factors including, but not limited to, further implementation guidance from the FASB, new tax laws, regulations and administrative interpretations (including court decisions). Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. At February 28, 2009, federal tax cost, aggregate gross unrealized appreciation and depreciation of securities held by the Fund were as follows: FEDERAL TAX UNREALIZED UNREALIZED NET UNREALIZED COST APPRECIATION DEPRECIATION DEPRECIATION ----------- ------------ ------------ --------------- $94,142,497 $2,104,406 $(36,745,799) $(34,641,393) On August 31, 2008, the Fund had $2,386,627 of capital loss carryforwards available to offset future capital gains. This capital loss carryforward will expire on August 31, 2016. Under federal tax law, foreign currency and capital losses realized after October 31 may be deferred and treated as having arisen on the first day of the following fiscal year. For the year ended August 31, 2008, the Fund deferred post-October capital losses of $22,208,358. The differences between the book and tax basis components of distributable earnings relate principally to the timing of recognition of income and gains for federal income tax purposes. Short-term and foreign currency gains are reported as ordinary income for federal tax purposes. 23 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND OTHER INFORMATION (UNAUDITED) PROXY VOTING Policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities as well as information regarding how the Fund voted proxies relating to portfolio securities for the most recent 12-month period ended June 30 are available without charge, upon request, by calling (877) 264-5346 and on the Securities and Exchange Commission's ("SEC") website at http://www.sec.gov. QUARTERLY PORTFOLIO SCHEDULES The Company will file its complete schedule of portfolio holdings with the SEC for the first and third fiscal quarters of each fiscal year (quarters ended November 30 and May 31) on Form N-Q. The Company's Form N-Q will be available on the SEC website at http://www.sec.gov and may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. Information on the operation of the SEC Public Reference Room may be obtained by calling (202) 551-8090. 24 [THIS PAGE INTENTIONALLY LEFT BLANK] [THIS PAGE INTENTIONALLY LEFT BLANK] [THIS PAGE INTENTIONALLY LEFT BLANK] INVESTMENT ADVISER Bogle Investment Management, L.P. 2310 Washington Street Suite 310 Newton Lower Falls, MA 02462 ADMINISTRATOR PNC Global Investment Servicing (U.S.), Inc. 301 Bellevue Parkway Wilmington, DE 19809 TRANSFER AGENT PNC Global Investment Servicing (U.S.), Inc. 101 Sabin Street Pawtucket, RI 02860 PRINCIPAL UNDERWRITER PFPC Distributors, Inc. 760 Moore Road King of Prussia, PA 19406 CUSTODIAN PFPC Trust Company 8800 Tinicum Blvd. Suite 200 Philadelphia, PA 19153 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 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 [LOGO OMITTED] BEAR STEARNS [GRAPHIC OMITTED] BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO OF THE RBB FUND, INC. SEMI-ANNUAL REPORT February 28, 2009 (Unaudited) This report is submitted for the general information of the shareholders of the Portfolio. It is not authorized for distribution unless preceded or accompanied by a current prospectus for the Portfolio. BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO SEMI-ANNUAL REPORT FOR THE PERIOD ENDED FEBRUARY 28, 2009 -------------------------------------------------------------------------------- Dear Shareholder, We are pleased to present the Bear Stearns CUFS MLP Mortgage Portfolio ("the Portfolio") semi-annual report covering the six-month period ended February 28, 2009. Portfolio performance information, market commentary and our outlook for the period ended February 28, 2009 follows. We encourage you to carefully review the enclosed information to stay informed. PORTFOLIO PERFORMANCE AND MARKET REVIEW: From September 1, 2008 through February 28, 2009 the Portfolio generated a periodic total return of -20.13% net of expenses. The Portfolio's primary benchmark, the Barclays Capital 1- to 3-month U.S. Treasury Bill Index returned 0.40% during the same period, while an index tracking 1-month LIBOR returned 1.04%. The 30-day yield of the Portfolio at the end of the period was 8.56%, compared to a yield of 0.26% for the Portfolio's benchmark and 0.50% for the 1-month LIBOR. Over the past six months, the size and scope of the damage caused by the immobilization of credit markets grew to historic proportions and took an enormous toll on the financial markets and the global economy. The failure of Lehman Brothers and the government takeovers of Fannie Mae, Freddie Mac and AIG precipitated significant declines in equity markets and numerous global policy actions to attempt to stabilize the financial system and markets. Most meaningful for the Portfolio has been the Federal Reserve's efforts to cut its target rate to between 0% and 0.25% and to purchase up to $500 billion in agency mortgages and $100 billion in agency debt by mid-2009. Volatility in mortgage-backed securities has therefore been highly elevated as it has swung between the paralyzing illiquidity of significant financial deleveraging and investors' response to government policies targeted at the mortgage markets. Agency mortgage spreads hit all-time highs in November, and agency mortgages underperformed duration-matched Treasuries by -201 basis points (bps) from August 31 to November 30, 2008. However, mortgage spreads began to recover in the first months of 2009, and agency mortgages only underperformed duration-matched Treasuries by a net -35 bps from August 31, 2008 to February 28, 2009. Most important to the performance of the Portfolio, prime and Alt-A non-agency mortgage markets saw some of their most dramatic selling of the credit crisis, driven by market participants in need of delevering. While price declines leveled off in October and January on investor hopes for relief from the government's Troubled Asset Recovery Program and expectations around a new federal administration, they plummeted in November and February to new lows representing significant housing distress. Pricing has also been aggravated as the rating agencies have taken sweeping actions, with thousands of downgrades in February alone. While these downgrades don't have any direct impact on the cashflows of these assets, they do reflect the rating agencies' view on possible impairment and have put technical pressure on pricing as holders who are sensitive to certain ratings levels are forced to liquidate positions. PORTFOLIO POSITIONING AND MARKET OUTLOOK: The focus of the Portfolio continues to be a combination of agency-backed and private label mortgage securities. More so than in the past, positioning is increasingly being influenced by anticipated government policy actions. In particular, the Obama administration's Homeowner Affordability and Stability Program has confirmed investor fears that the government would do as much as it could to facilitate refinancing by agency mortgage borrowers. Given the increased risk to prepayment forecasts and hedging activities, we have sold higher coupon mortgage holdings to buy lower coupon mortgage securities. We have also sold generic interest-only positions to buy smaller-balance inverse interest-only positions to help to mitigate our exposure to prepayments by higher credit quality borrowers. Fundamentally, the non-agency sector remains challenged as a result of continued weakening in housing and the growing pipeline of delinquencies and foreclosures. We will continue to monitor the Obama administration's homeowner relief program will have sufficient impact to help restore the non-agency mortgage sector. We believe, however, that pricing levels in most parts of the non-agency market sufficiently compensate investors for uncertainty regarding the timing and amount of eventual cashflows. 1 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO SEMI-ANNUAL REPORT FOR THE PERIOD ENDED FEBRUARY 28, 2009 (CONCLUDED) We believe the Portfolio is poised to benefit from an economic recovery, in which stimulus will play a crucial part. With regard to monetary policy, the efficacy of the Fed's focus on both balance sheet expansion and a change in the composition of the balance sheet toward risky assets will determine how quickly financial conditions can ease. Fiscal stimulus is also vital to recovery, and the package enacted is quite front-loaded and may boost near-term growth. However, there remains much downside risk. In particular, some recovery in confidence is necessary for fiscal and monetary policy to work. Right now the economy is stuck in a vicious cycle of low confidence resulting in decreased business and consumer activity which results in still lower confidence. This impacts hiring and capital spending by businesses and household spending by individuals and families. This cycle has to be broken in order for a recovery to take hold. With all of the concerns stated above in mind, we appreciate the trust you have placed in us and remain focused on achieving the Portfolio's long term investment goals. Best regards, Wade Charles Barnett Andrew Headley, CFA Senior Managing Director, CUFS(R) Managing Director Bear Stearns, a Division of JP Morgan Bear Stearns, a Division of JP Morgan PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RETURNS. RETURNS INCLUDE THE REINVESTMENT OF INCOME. 2 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO PERFORMANCE DATA FEBRUARY 28, 2009 (UNAUDITED)
------------------------------------------------------------------------------------------------------------------ TOTAL RETURNS AS OF FEBRUARY 28, 2009 Average Annual Total Returns Six-Month 1 Year Since Inception* --------- -------- ---------------- Bear Stearns CUFS(R) MLP Mortgage Portfolio(1) -20.13% -25.46% -10.49% Barclay's Capital 1 to 3 Month U.S. Treasury Bill Index(2) 0.40% 1.27% 4.02% 1 Month LIBOR(3) 0.99% 2.35% 3.06% ------------------------------------------------------------------------------------------------------------------
PERFORMANCE QUOTED IS PAST PERFORMANCE AND DOES NOT GUARANTEE FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE RETURNS QUOTED ABOVE. CALL CUFS(R) AT 1-800-519-CUFS (2837) FOR RETURNS CURRENT TO THE MOST RECENT MONTH-END. THE PORTFOLIO'S GROSS ANNUAL OPERATING EXPENSES, AS STATED IN THE CURRENT PROSPECTUS, IS 0.80%. THE PERFORMANCE DATA REFLECTS FEE WAIVERS AND EXPENSE REIMBURSEMENTS. THE RETURNS COULD HAVE BEEN LOWER IF THESE WAIVERS AND EXPENSE REIMBURSEMENTS WERE NOT IN EFFECT. PORTFOLIO COMPOSITION IS SUBJECT TO CHANGE. -------------------- * The inception date of the Portfolio was December 19, 2006. (1) Net of fees and expenses. (2) The Barclay's Capital 1-3 Month U.S. Treasury Bill Index is the 1-3 Month component of the Barclay's Capital U.S. Treasury Bills Index. The Barclay's Capital U.S. Treasury Bill Index includes U.S. Treasury Bills with a remaining maturity from 1 month up to (but not including) 12 months. It excludes zero coupon strips. (3) The 1-Month LIBOR is a constant maturity index of the London Interbank Offering Rate established to reflect the total return of the 1-Month LIBOR rate. Source: Merrill Lynch. 3 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO FUND EXPENSE EXAMPLE (UNAUDITED) As a shareholder of the Portfolio, you incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees and other Portfolio expenses. The example is intended to help you understand your ongoing costs (in dollars) of investing in the Portfolio and to compare these costs with the ongoing costs of investing in other mutual funds. These examples are based on an investment of $1,000 invested at the beginning of the period from September 1, 2008 through February 28, 2009, and held for the entire period. ACTUAL EXPENSES The first line of the accompanying tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second line of the accompanying tables provides information about hypothetical account values and hypothetical expenses based on the Portfolio's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare these 5% hypothetical examples with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that the expenses shown in the accompanying tables are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the second line of the accompanying tables is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if any transactional costs were included, your costs would have been higher.
------------------------------------------------------------------------- BEGINNING ACCOUNT VALUE ENDING ACCOUNT VALUE EXPENSES PAID DURING SEPTEMBER 1, 2008 FEBRUARY 28, 2009 PERIOD* ----------------------- -------------------- -------------------- Actual $1,000.00 $ 798.70 $2.68 Hypothetical (5% return before expenses) 1,000.00 1,021.78 3.01 -------------------- *Expenses are equal to the Portfolio's annualized six-month expense ratio of 0.60%, which includes waived fees or reimbursed expenses, multiplied by the number of days (181) in the most recent fiscal half-year, then divided by 365 to reflect the one-half year period. The Portfolio's ending account value on the first line is based on the actual six-month total return of (20.13%).
4 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO PORTFOLIO HOLDINGS SUMMARY TABLE FEBRUARY 28, 2009 (UNAUDITED)
% OF NET SECURITY TYPE/INDUSTRY CLASSIFICATION ASSETS VALUE ----------------------------------------------------------------------------------------------------------- GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES 57.1% $ 57,846,250 COLLATERALIZED MORTGAGE OBLIGATIONS 48.6 49,251,201 MORTGAGE DERIVATIVES 15.1 15,311,949 U.S. TREASURY OBLIGATIONS 0.4 403,625 LIABILITIES IN EXCESS OF OTHER ASSETS (21.2) (21,543,349) ------ ------------ NET ASSETS 100.0% $101,269,676 ====== ============ ---------------- Portfolio holdings are subject to change at any time.
The accompanying notes are an integral part of the financial statements. 5 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO PORTFOLIO OF INVESTMENTS FEBRUARY 28, 2009 (UNAUDITED) MOODY'S/ PAR FAIR S&P (b) (000'S) VALUE -------- ------- ------------ GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES--57.1% FEDERAL HOME LOAN MORTGAGE CORPORATION--16.9% 5.923% 08/01/36 (a) Aaa/AAA $ 5,623 $ 5,859,293 5.969% 09/01/36 (a) Aaa/AAA 3,633 3,758,306 5.871% 11/01/36 (a) Aaa/AAA 2,899 3,016,395 5.807% 08/01/37 (a) Aaa/AAA 4,413 4,586,846 ------------ 17,220,840 ------------ FEDERAL NATIONAL MORTGAGE ASSOCIATION--40.1% 6.030% 10/01/36 (a) Aaa/AAA 2,764 2,861,985 6.091% 10/01/36 (a) Aaa/AAA 1,547 1,602,714 5.500% 12/01/36 Aaa/AAA 573 588,195 5.865% 12/01/36 (a) Aaa/AAA 1,862 1,930,478 5.500% 03/01/37 TBA Aaa/AAA 15,000 15,365,625 5.560% 09/01/37 (a) Aaa/AAA 2,651 2,747,350 4.500% 03/01/39 TBA Aaa/AAA 15,500 15,529,063 ------------ 40,625,410 ------------ TOTAL GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES (Cost $56,931,076) .................................... 57,846,250 ------------ MORTGAGE DERIVATIVES--15.1% FANNIE MAE (IO)--8.9% 4.500% 12/01/18 Aaa/AAA 6,872 756,916 4.500% 01/01/19 Aaa/AAA 6,843 752,142 4.500% 03/01/20 Aaa/AAA 2,510 273,581 4.500% 03/01/20 Aaa/AAA 2,599 286,171 5.500% 05/25/23 Aaa/AAA 1,640 255,529 5.500% 07/25/28 Aaa/AAA 18,336 597,860 5.000% 10/01/33 Aaa/AAA 9,757 1,279,303 5.000% 12/01/33 (a) Aaa/AAA 1,770 177,141 5.000% 12/01/33 Aaa/AAA 3,033 337,388 5.000% 08/01/34 Aaa/AAA 3,125 458,860 5.500% 04/01/36 Aaa/AAA 7,446 753,093 5.500% 04/01/36 Aaa/AAA 12,444 1,394,371 6.826% 08/25/36 (a) Aaa/AAA 5,878 562,480 5.000% 10/01/36 Aaa/AAA 8,203 1,173,466 ------------ 9,058,301 ------------ FANNIE MAE (PO)--1.1% 5.500% 06/25/36 Aaa/AAA 1,329 1,086,286 ------------ FREDDIE MAC (IO)--2.0% 5.500% 07/15/16 Aaa/AAA 1,144 81,604 5.000% 07/15/23 Aaa/AAA 1,525 4,228 5.500% 05/15/24 Aaa/AAA 1,870 22,952 5.500% 12/15/24 Aaa/AAA 1,464 21,374 6.676% 02/25/32 (a) Aaa/AAA 6,625 598,959 6.030% 06/15/36 (a) Aaa/AAA 3,279 271,899 6.125% 09/15/36 (a) Aaa/AAA 6,190 467,856 6.195% 11/15/36 (a) Aaa/AAA 6,109 512,519 ------------ 1,981,391 ------------ MOODY'S/ PAR FAIR S&P (b) (000'S) VALUE -------- ------- ------------ MORTGAGE DERIVATIVES--(CONTINUED) FREDDIE MAC (PO)--2.0% 4.000% 09/15/35 Aaa/AAA $ 1,190 $ 998,866 5.896% 09/15/36 Aaa/AAA 1,198 1,049,161 ------------ 2,048,027 ------------ NON-AGENCY (IO)--1.1% CWALT Series 2006-43CB IO 6.000% 02/25/37 Aaa/AAA 5,112 1,137,944 ------------ TOTAL MORTGAGE DERIVATIVES (Cost $20,690,000) .................................... 15,311,949 ------------ COLLATERALIZED MORTGAGE OBLIGATIONS--48.6% Banc of America Mortgage Securities, Inc. Series 2005-H (a) 4.803% 09/25/35 Aaa/AAA 2,000 998,438 Banc of America Mortgage Securities, Inc. Series 2006-B (a) 6.153% 10/20/46 Aaa/BB 4,096 1,875,905 Banc of America Mortgage Securities, Inc. Series 2007-3 6.000% 09/25/37 Aaa/AAA 4,468 3,452,671 Citigroup Mortgage Loan Trust, Inc. Series 2007-AR8 (a) 5.913% 07/25/37 Baa3/BB 4,056 2,199,452 Countrywide Asset-Backed Certificates Series 2004-AB2 (a) 1.074% 05/25/36 Aa3/AA 500 148,446 Countrywide Home Loan Mortgage Pass-Through Trust Series 2003-3 (a) 0.974% 04/25/18 Aaa/AAA 1,082 1,073,207 Countrywide Home Loan Mortgage Pass-Through Trust Series 2007-HY1 (a) 5.678% 04/25/37 Aaa/AAA 2,318 626,182 CWALT Series 2006-43CB 6.000% 02/25/37 Aaa/BBB- 1,226 710,144 CWALT Series 2006-HY13 (a) 5.894% 02/25/37 Aaa/A 10,798 2,745,330 CWALT Series 2006-J2 6.000% 04/25/36 Aa3/AAA 7,198 4,582,178 CWALT Series 2007-2CB 5.750% 03/25/37 Aa1/AAA 4,947 1,100,954 CWALT Series 2007-J2 6.000% 07/25/37 Aa2/AAA 1,750 932,344 Fannie Mae REMICS Series 2002-77 5.500% 11/25/27 Aaa/AAA 2,065 2,066,122 Fannie Mae REMICS Series 2003-1 5.500% 04/25/28 Aaa/AAA 9,228 9,304,766 Fannie Mae REMICS Series 2005-25 (a) 0.824% 04/25/35 Aaa/AAA 2,135 1,974,720 First Horizon Asset Securities, Inc. Series 2006-AR1 (a) 5.865% 05/25/36 Aaa/BBB 3,583 1,100,281 The accompanying notes are an integral part of the financial statements. 6 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) FEBRUARY 28, 2009 (UNAUDITED) MOODY'S/ PAR FAIR S&P (b) (000'S) VALUE -------- ------- ------------ COLLATERALIZED MORTGAGE OBLIGATIONS--(CONTINUED) Freddie Mac REMIC Series 2995 (a) 0.855% 06/15/35 Aaa/AAA $ 1,787 $ 1,765,745 JPMorgan Mortgage Trust Series 2005-A4 (a) 5.167% 07/25/35 Aaa/AAA 1,187 897,295 JPMorgan Mortgage Trust Series 2005-A6 (a) 4.972% 08/25/35 Aaa/AAA 772 467,559 Residential Asset Securitiation Trust Series 2007-A5 6.000% 05/25/37 Aaa/AAA 1,565 909,097 Residential Funding Mortgage Securities I Series 2006-SA4 (a) 6.123% 11/25/36 A2/A 6,709 3,554,862 Residential Funding Mortgage Securities I Series 2007-SA2 (a) 5.663% 04/25/37 B3/B 4,103 1,614,520 Washington Mutual, Inc. Series 2007-HY3 (a) 5.338% 03/25/37 Aaa/BBB 1,647 577,948 Washington Mutual, Inc. Series 2007-HY4 (a) 5.491% 04/25/37 Aaa/BBB 3,891 1,858,251 MOODY'S/ PAR FAIR S&P (b) (000'S) VALUE -------- ------- ------------ COLLATERALIZED MORTGAGE OBLIGATIONS--(CONTINUED) Wells Fargo Mortgage Backed Securities Trust Series 2007-10 6.250% 07/25/37 A2/AAA $ 3,928 $ 2,714,784 ------------ TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $86,908,447) .................................... 49,251,201 ------------ U.S. TREASURY OBLIGATIONS--0.4% U.S. TREASURY NOTE--0.4% U.S. Treasury Notes 1.500% 10/31/10 400 403,625 ------------ TOTAL U.S. TREASURY OBLIGATIONS (Cost $402,334) ....................................... 403,625 ------------ TOTAL INVESTMENTS--121.2% (Cost $164,931,857) ................................... 122,813,025 LIABILITIES IN EXCESS OF OTHER ASSETS (c)--(21.2)% ................................... (21,543,349) ------------ NET ASSETS--100.0% ...................................... $101,269,676 ============ ----------------------- IO Interest Only PO Principal Only TBA To Be Announced (a) Adjustable rate security. Interest rate varies due to interest rate fluctuations, or, in the case of certain asset-backed securities, interest payment shortfalls. (b) Where S&P rating is not available, Fitch rating is substituted, if available. (c) Liabilities in excess of other assets include interest rate swaps as follows:
NOTIONAL TERMINATION AMOUNT FIXED FLOATING UNREALIZED COUNTERPARTY DATE (000) RATE RATE (DEPRECIATION) ------------ ----------- -------- ------ ------------- -------------- Deutsche Bank* 09/17/2013 $20,000 4.520% 3 MONTH LIBOR $(2,057,279) ===========
* Portfolio pays the fixed rate and receives the floating rate. (d) All or a portion of the security was held as collateral for the following Futures contracts open at February 28, 2009:
NUMBER VALUE VALUE UNREALIZED OF EXPIRATION AT TRADE AT APPRECIATION CONTRACTS TYPE MONTH DATE 02/28/09 (DEPRECIATION) --------- --------------------------- ---------- ------------ ----------- -------------- Long Positions: 50 90 Day Euro 03/2009 $12,229,639 $12,339,063 $ 109,424 25 90 Day Euro 03/2010 6,127,580 6,145,625 18,045 115 U.S. Treasury 10 Year Note 06/2009 13,980,010 13,803,594 (176,416) Short Positions: 51 U.S. Treasury 2 Year Note 06/2009 11,000,592 11,047,078 (46,486) 57 U.S. Treasury 5 Year Note 06/2009 6,670,105 6,645,398 24,707 --------- $ (70,726) =========
The accompanying notes are an integral part of the financial statements. 7 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO PORTFOLIO OF INVESTMENTS (CONCLUDED) FEBRUARY 28, 2009 (UNAUDITED) SFAS 157 DISCLOSURE -------------------------------------------------------------------------------- The following is a summary of the inputs used, as of February 28, 2009, in valuing the Portfolio's assets carried at fair value: INVESTMENTS OTHER IN FINANCIAL VALUATION INPUTS SECURITIES INSTRUMENTS ---------------- ------------ ----------- Level 1 -- Quoted Prices ........................ $ -- $ -- Level 2 -- Other Significant Observable Inputs .. 122,813,025 (2,128,005) Level 3 -- Significant Unobservable Inputs ...... -- -- ------------ ----------- Total ........................................... $122,813,025 $(2,128,005) ============ =========== The accompanying notes are an integral part of the financial statements. 8 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES FEBRUARY 28, 2009 (UNAUDITED) ASSETS Investments, at value (Cost $164,931,857) ...................... $122,813,025 Cash ........................................................... 10,696,246 Receivables Investments sold ............................................ 27,689,031 Dividends and interest ...................................... 925,456 Prepaid expenses and other assets .............................. 29,601 ------------ Total assets............................................... 162,153,359 ------------ LIABILITIES Payables Investments purchased ....................................... 58,207,402 Unrealized depreciation on swap agreements .................. 2,057,279 Distributions to shareholders ............................... 495,701 Variation margin due to broker .............................. 32,766 Investment Adviser .......................................... 11,211 Other accrued expenses and liabilities ...................... 79,324 ------------ Total liabilities.......................................... 60,883,683 ------------ Net Assets ..................................................... $101,269,676 ============ NET ASSETS CONSIST OF: Paid-in capital ................................................ 147,965,719 Distributions in excess of net investment income ............... (193,247) Accumulated net realized loss from investments, futures transactions and swap agreements ............................ (2,255,959) Net unrealized depreciation on investments, futures transactions and swap agreements ............................ (44,246,837) ------------ Net Assets ..................................................... $101,269,676 ============ Shares outstanding ($0.001 par value, 100,000,000 shares authorized) .......................................... 14,771,815 ------------ Net asset value, offering and redemption price per share ....... $ 6.86 ============ The accompanying notes are an integral part of the financial statements. 9 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED FEBRUARY 28, 2009 (UNAUDITED) INVESTMENT INCOME Interest ....................................................... $ 4,407,386 ------------ Total investment income ..................................... 4,407,386 ------------ EXPENSES Advisory fees .................................................. 267,378 Administration and accounting fees ............................. 92,088 Professional fees .............................................. 37,894 Directors' and officers' fees .................................. 27,288 Transfer agent fees ............................................ 22,119 Custodian fees ................................................. 20,456 Printing and shareholder reporting fees ........................ 9,917 Registration and filing fees ................................... 9,917 Other expenses ................................................. 5,823 ------------ Total expenses before waivers ............................... 492,880 Less: waivers................................................ (158,658) ------------ Net expenses after waivers .................................. 334,222 ------------ Net investment income........................................... 4,073,164 ------------ NET REALIZED AND UNREALIZED GAIN/(LOSS) FROM INVESTMENTS, FUTURES TRANSACTIONS, SWAP AGREEMENTS & OPTIONS NET REALIZED GAIN/(LOSS) FROM: Investments ................................................. 570,690 Futures ..................................................... (1,272,584) Swap agreements ............................................. 142,377 Options ..................................................... (87,438) ------------ Total net realized loss from investments, futures transactions and options ................................................. (646,955) ------------ NET CHANGE IN UNREALIZED APPRECIATION/(DEPRECIATION) ON: Investments.................................................. (27,799,943) Futures...................................................... (58,388) Swap agreements.............................................. (1,625,998) ------------ Total net change in unrealized appreciation/(depreciation) on investments, futures transactions and swap agreements........ (29,484,329) ------------ Net realized and unrealized loss from investments, futures transactions, swap agreements and options.................... (30,131,284) ------------ NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ............. $(26,058,120) ============ The accompanying notes are an integral part of the financial statements. 10 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED FOR THE YEAR FEBRUARY 28, 2009 ENDED (UNAUDITED) AUGUST 31, 2008 ------------------ --------------- INCREASE/(DECREASE) IN NET ASSETS FROM OPERATIONS: Net investment income ................................................... $ 4,073,164 $ 8,332,359 Net realized loss from investments, futures transactions, short sales, swap agreements and options................................ (646,955) (923,672) Net change in unrealized appreciation/(depreciation) on investments, futures transactions, short sales, swap agreements and options.................................................. (29,484,329) (13,711,608) ------------ ------------ Net decrease in net assets resulting from operations....................... (26,058,120) (6,302,921) ------------ ------------ DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income ................................................... (4,263,224) (8,440,223) ------------ ------------ Net decrease in net assets from dividends and distributions to shareholders.......................................................... (4,263,224) (8,440,223) ------------ ------------ CAPITAL SHARE TRANSACTIONS Reinvestment of distributions (227,135 and 413,514 shares, respectively)........................................................... 1,703,129 4,001,676 Shares redeemed (0 and 2,119,938 shares, respectively) .................. -- (20,648,191) ------------ ------------ Net increase/(decrease) in net assets from capital share transactions............................................................. 1,703,129 (16,646,515) ------------ ------------ Total decrease in net assets............................................... (28,618,215) (31,389,659) NET ASSETS Beginning of period ..................................................... 129,887,891 161,277,550 ------------ ------------ End of period ........................................................... $101,269,676 $129,887,891 ============ ============ Distributions in excess of net investment income, end of period............ $ (193,247) $ (3,187) ============ ============
The accompanying notes are an integral part of the financial statements. 11 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO FINANCIAL HIGHLIGHTS -------------------------------------------------------------------------------- Contained below is per share operating performance data for a share outstanding during each period, 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. --------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR FOR THE PERIOD FEBRUARY 28, 2009 ENDED DECEMBER 19, 2006* TO (UNAUDITED) AUGUST 31, 2008 AUGUST 31, 2007 ------------------ --------------- --------------------- PER SHARE OPERATING PERFORMANCE+ Net asset value, beginning of period.................... $ 8.93 $ 9.92 $ 10.00 -------- -------- -------- Net investment income .................................. 0.28 0.54 0.38 Net realized and unrealized gain/(loss) on investments, futures transactions, short sales, swap agreements and options ......................... (2.06) (0.98) (0.08) -------- -------- -------- Net increase/(decrease) in net assets resulting from operations ..................................... (1.78) (0.44) 0.30 -------- -------- -------- Dividends to shareholders from: Net investment income .................................. (0.29) (0.55) (0.38) Net realized capital gains ............................. -- -- -- -------- -------- -------- Net asset value, end of period ......................... $ 6.86 $ 8.93 $ 9.92 ======== ======== ======== Total investment return(1).............................. (20.13)% (4.76)% 3.10% ======== ======== ======== RATIOS/SUPPLEMENTAL DATA Net assets, end of period (000's omitted)............... $101,270 $129,888 $161,278 Ratio of expenses to average net assets with waivers and expense reimbursements (excluding interest expense)......................... 0.60%(2) 0.60% 0.60%(2) Ratio of expenses to average net assets with waivers and expense reimbursements (including interest expense)......................... 0.60%(2) 0.60% 0.78%(2) Ratio of expenses to average net assets without waivers and expense reimbursements (including interest expense)......................... 0.88%(2) 0.80% 0.95%(2) Ratio of net investment income to average net assets........................................... 7.31%(2) 5.56% 5.58%(2) Portfolio turnover rate(3).............................. 189.69% 190.88% 259.47%
-------------------- * Commencement of operations. + Calculated based on shares outstanding on the first and last day of the respective period, except for dividends and distributions, if any, which are based on actual shares outstanding on the dates of distributions. (1) Total investment return is calculated by 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. (2) Annualized. (3) The portfolio turnover rate excluding TBA transactions (see Note 1 in Notes to the Financial Statements) is 10.39% for the six months ended February 28, 2009, 32.83% for the year ended August 31, 2008 and 125.15% for the period December 19, 2006 to August 31, 2007, respectively. The accompanying notes are an integral part of the financial statements. 12 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO NOTES TO FINANCIAL STATEMENTS FEBRUARY 28, 2009 (UNAUDITED) 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES The RBB Fund, Inc. ("RBB" or the "Company") 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. Each 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 eighteen active investment portfolios, including the Bear Stearns CUFS(R) MLP Mortgage Portfolio (the "Portfolio"), which commenced investment operations on December 19, 2006. RBB has authorized capital of one hundred billion shares of common stock of which 78.773 billion shares are currently classified into one hundred and twenty-seven classes of common stock. Each class represents an interest in an active or inactive RBB investment portfolio. The active classes have been grouped into nine separate "families." PORTFOLIO VALUATION -- The Portfolio's net asset value ("NAV") is calculated once daily at the close of regular trading hours on the New York Stock Exchange ("NYSE") (generally 4:00 p.m. Eastern time) on each day the NYSE is open. Fixed income securities having a remaining maturity of greater than 60 days are valued using an independent pricing service. These fixed income securities are valued by pricing services approved by the Board of Directors based upon market transactions for normal, institutional-size trading units of similar securities. The services may use various pricing techniques which take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as broker quotes. Debt securities for which quotations are readily available are valued at an over-the-counter or exchange bid quotation. Certain debt securities, which tend to be more thinly traded and of lesser quality, are priced based on fundamental analysis of the financial condition of the issuer and the estimated value of any collateral. Valuations developed through pricing techniques may materially vary from the actual amounts realized upon sale of the securities, and the potential material variation may be greater for those securities valued using fundamental analysis. Fixed income securities having a remaining maturity of 60 days or less are valued at amortized cost, which approximates market value. Investments in other open-end investment companies, if held, are valued based on the NAV of the investment companies (which may use fair value pricing as discussed in their prospectuses). If price quotes are unavailable or deemed unreliable, securities will be fair valued in accordance with procedures adopted by the Company's Board of Directors. Relying on prices supplied by pricing services or dealers or using fair valuation may result in values that are higher or lower than the values used by other investment companies and investors to price the same investments. Effective September 1, 2008, the Portfolio adopted Financial Accounting Standards Board ("FASB") Statement of Financial Accounting Standards No. 157 ("SFAS 157"). This standard clarifies the definition of fair value for financial reporting, establishes a framework for measuring fair value and requires additional disclosures about the use of fair value measurements. The three levels of the fair value hierarchy under SFAS 157 are described below: o Level 1 -- quoted prices in active markets for identical securities o Level 2 -- other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) o Level 3 -- significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments) The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. A summary of the inputs used to value the Portfolio's investments as of February 28, 2009 is included with the Portfolio of Investments. 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 liabilities 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. INVESTMENT TRANSACTIONS, INVESTMENT INCOME AND EXPENSES -- The Portfolio records security transactions based on 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 accrued when earned. Paydown gains and losses on mortgage and asset-backed securities are presented as an adjustment to interest income. Dividend income is recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or 13 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2009 (UNAUDITED) capital gains are recorded as a reduction of cost of investments and/or as a realized gain. The Portfolio estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. The Portfolio's investment income, expenses and unrealized and realized gains and losses are allocated daily. Expenses incurred for all of the RBB fund families (such as director or professional fees) are charged to all funds in proportion to their net assets of the RBB Funds, or in such other manner as the Board of Directors deems fair or equitable. 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 Portfolio. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net investment income are declared daily and paid monthly. Distributions from net realized capital gains, if any, are declared and paid at least annually to shareholders and recorded on ex-date for the Portfolio. Income dividends and capital gain distributions are determined in accordance with U.S. federal income tax regulations which may differ from generally accepted accounting principles in the United States of America. Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications within the components of net assets. U.S. TAX STATUS -- No provision is made for U.S. income taxes as it is the Portfolio'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. income and excise taxes. OTHER -- In the normal course of business, the Portfolio may enter into contracts that provide general indemnifications. The Portfolio's maximum exposure under these arrangements is dependent on claims that may be made against the Portfolio in the future, and, therefore, cannot be estimated; however, based on experience, the risk of material loss from such claims is considered remote. MORTGAGE-RELATED SECURITIES -- The Portfolio may invest in mortgage pass-through securities and multiple-class pass-through securities, such as collateralized mortgage obligations ("CMOs") and Real Estate Mortgage Investment Conduit ("REMIC") pass-through or participation certificates as well as other securities collateralized by or representing a direct or indirect interest in mortgage-related securities or mortgage loans. The Portfolio may also invest in certain stripped mortgage-backed securities. Some of these securities may contain "embedded leverage" which can make them more sensitive to small movements in interest rates. The types of mortgage-related securities in which the Portfolio may invest include: mortgage pass-through securities, including CMOs and REMICs, which may or may not be U.S. Government guaranteed, privately issued mortgage-related securities, stripped mortgage-backed securities, including interest only ("IO") or principal only ("PO") class securities, and floating rate and inverse floating rate securities. Stripped mortgage-backed securities represent a participation in, or are secured by and payable from, mortgage loans on real property, and may be structured in classes with rights to receive varying proportions of principal and interest. Payments received for IOs and POs are used to reduce the cost of the security. Payments in excess of cost are recognized as interest income on the Statement of Operations based on a security's yield to maturity. If the underlying mortgage assets experience greater then anticipated payments of principal, the Portfolio may fail to recoup some or all of its initial investment in IO securities. For PO securities, accelerated payments of principal will cause a faster than anticipated return of the initial investment resulting in an increased yield to maturity for the security. The market value of these securities is highly sensitive to changes in interest rates. The Portfolio is subject to risks associated with securities with contractual cash flows including mortgage related securities such as collateralized mortgage obligations, mortgage pass through securities and commercial mortgage backed securities, including some securities that are backed by sub-prime mortgages. The value, liquidity and related income of these securities are sensitive to changes in economic conditions, including real estate value, pre-payments, delinquencies and/or defaults, and may be adversely affected by shifts in the market's perception of the issuers and changes in interest rates. A significant portion of the Portfolio's investments are comprised of mortgage related securities, including some securities that are backed by sub-prime mortgages. TBAS -- The Portfolio may purchase securities on a to-be-announced ("TBA") basis, with payment and delivery scheduled for a future date. These transactions are subject to market fluctuations and are subject to the risk that their value at delivery may be more or less than the trade date purchase price. Although the Portfolio may purchase securities on a when-issued or forward commitment basis with the intention of acquiring the securities for its portfolio, the Portfolio may dispose of when-issued securities or forward commitments prior to settlement if the Adviser deems it appropriate. 14 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2009 (UNAUDITED) FINANCIAL FUTURES CONTRACTS -- The Portfolio may enter into futures contracts to hedge against changes in interest rates and securities prices, or to otherwise manage its term structure, sector selections and duration. Upon entering into a futures contract, the Portfolio is required to deposit with the broker an amount of cash or cash equivalents equal to a certain percentage of the contract amount. This is known as the "initial margin." Subsequent payments ("variation margin") are made or received by the Portfolio each day, depending on the daily fluctuation of the value of the contract. The daily changes in the contract are recorded as unrealized gain or loss. The Portfolio recognizes a realized gain or loss when the contract is closed. The risks associated with entering into financial futures contracts include the possibility that a change in the value of the contract may not correlate with the changes in the value of the underlying instruments. In addition, investing in financial futures contracts involves the risk that the Fund could lose more than the original margin deposit and subsequent payments required for a futures transaction. Risks may also arise upon entering into these contracts from the potential inability of the counterparties to meet the terms of their contracts. OPTIONS CONTRACTS -- The Portfolio may write covered call and put options on futures, or securities it owns or in which it may invest. Writing put options tends to increase the Portfolio's exposure to the underlying instrument. When the Portfolio writes a call or put option, an amount equal to the premium received is recorded as a liability and subsequently marked to market to reflect the current value of the option written. These liabilities are reflected as written options outstanding in the Statement of Assets and Liabilities. Payments received or made, if any, from writing options with premiums to be determined on a future date are reflected as such on the Statement of Assets and Liabilities. Premiums received from writing options that expire are treated as realized gains. Premiums received from writing options that are exercised or closed are added to the proceeds or offset against amounts paid on the underlying future or security transaction to determine the realized gain or loss. The Portfolio, as a writer of an option, has no control over whether the underlying future or security may be sold (call) or purchased (put), and as a result bears the market risk of an unfavorable change in the price of the future or security underlying the written option. The Portfolio may not be able to enter into a closing transaction because of an illiquid market. The Portfolio may also purchase put and call options. Purchasing call options tends to increase the Portfolio's exposure to the underlying instrument. Purchasing put options tends to decrease the Portfolio's exposure to the underlying instrument. The Portfolio pays a premium which is included in the Portfolio's Statement of Assets and Liabilities as an investment and subsequently marked to market to reflect the current value of the option. Premiums paid for purchasing options that expire are treated as realized losses. The risk associated with purchasing put and call options is limited to the premium paid. Premiums paid for purchasing options that are exercised or closed are added to the amounts paid or offset against the proceeds on the underlying future or security transaction to determine the realized gain or loss. SWAP AGREEMENTS -- The Portfolio may invest in swap agreements for the purpose of hedging against changes in interest rates. Swap agreements involve the exchange by the Portfolio with another party of their respective commitments to pay or receive interest with respect to a notional amount of principal. Swaps are marked to market daily based upon quotations from independent market makers and the change, if any, is recorded as unrealized gain or loss in the statement of operations. Net payments of interest are recorded as realized gain or loss. The Portfolio is also subject to counterparty credit risk, which is the risk that a counterparty fails to perform on agreements with the Portfolio such as swap contracts, option contracts, and TBA securities. The Portfolio is party to various derivative contracts governed by International Swaps and Derivatives Association Master Agreements (ISDA agreements). The Portfolio's ISDA agreements, which are separately negotiated with each dealer counterparty, typically contain provisions allowing, absent other considerations, a counterparty to exercise rights, to the extent not otherwise waived, against the Portfolio in the event the Portfolio's net assets decline over time by a pre-determined percentage or fall below a pre-determined floor. Such rights often include the ability to terminate (i.e., close out) open contracts at prices which may favor the counterparty, which could have an adverse impact on the Portfolio. SHORT SALES -- The Portfolio may engage in short sales of securities. A short sale is a sale by the Portfolio of a security which has been borrowed from a third party on the expectation that the market price will decline. If the price of the security drops, the Portfolio will make a profit by purchasing the security in the market at a lower price than the price at which it sold the security. If the price of the security rises, the Portfolio may have to cover its short position at a higher price than the short sale price, resulting in a loss to the Portfolio. Possible losses from short sales may be unlimited, whereas losses from purchases cannot exceed the total amount invested. 15 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2009 (UNAUDITED) REPURCHASE AGREEMENTS -- Money market instruments may be purchased subject to the seller's agreement to repurchase them at an agreed-upon date and price. The seller will be required on a daily basis to maintain the value of the securities as collateral, subject to the agreement at not less than the repurchase price plus accrued interest. If the value of the collateral falls below this amount, the Portfolio will require the seller to deposit additional collateral by the next Portfolio business day. In the event that the seller under the agreement defaults on its repurchase obligation or fails to deposit sufficient collateral, the Portfolio has the contractual right, subject to the requirements of applicable bankruptcy and insolvency laws, to sell the underlying securities and may claim any resulting loss from the seller. The agreements are conditioned upon the collateral being deposited under the Federal Reserve Book Entry System or with the Portfolio's custodian or a third party sub-custodian. REVERSE REPURCHASE AGREEMENTS -- The Portfolio may borrow money by entering into transactions called reverse repurchase agreements. Under these arrangements, the Portfolio will sell portfolio securities to dealers in U.S. Government securities or members of the Federal Reserve System, with an agreement to repurchase the security on an agreed date, price and interest payment. Reverse repurchase agreements involve the possible risk that the value of portfolio securities the Portfolio relinquishes may decline below the price the Portfolio must pay when the transaction closes. Borrowings may magnify the potential for gain or loss on amounts invested resulting in an increase in the speculative character of the Portfolio's outstanding shares. 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES Bear Stearns Asset Management Inc. ("BSAM" or the "Adviser"), an indirect wholly-owned subsidiary of JPMorgan Chase & Co., serves as investment adviser to the Portfolio pursuant to an investment advisory agreement with the Company (the "Advisory Agreement"). For its services, the Adviser is paid a monthly fee at the annual rate of 0.48% of the Portfolio's average daily net assets. BSAM is voluntarily waiving a portion of its advisory fee and reimbursing certain expenses in order to limit the Portfolio's total annual portfolio operating expenses excluding interest expense to 0.60% of the Portfolio's average daily net assets. The fee waiver and expense reimbursement are not contractual, and can be terminated at any time. For the six months ended February 28, 2009, investment advisory fees were $267,378, of which $(158,658) was waived by the Adviser. PNC Global Investment Servicing (U.S.), Inc. ("PNC"), a member of The PNC Financial Services Group, Inc., serves as administrator for the Portfolio. For providing administration and accounting services, PNC is entitled to receive a monthly fee equal to an annual rate of 0.08% of the Portfolio's first $250 million of average daily net assets; 0.06% of the next $250 million of average daily net assets; and 0.04% of the average daily net assets in excess of $500 million. Included in the administration and accounting fees, shown above, are fees for providing regulatory administration services to RBB. For providing these services, PNC is entitled to receive compensation as agreed to by the Company and PNC. This fee is allocated to each portfolio in proportion to its net assets of the RBB Funds. In addition, PNC serves as the Portfolio's transfer and dividend disbursing agent. For providing transfer agent services, PNC is entitled to receive an annual fee of $25,000, paid monthly, plus out-of-pocket expenses. For providing custodial services to the Portfolio, PFPC Trust Company, an affiliate of PNC, is entitled to receive a monthly fee equal to an annual rate of 0.01% of the first $250 million of the Portfolio's average daily gross assets; 0.0075% of the next $250 million of the Portfolio's average daily gross assets; and 0.005% of the Portfolio's average daily gross assets over $500 million. There is a minimum monthly fee of $1,200 for the Portfolio, exclusive of transaction charges and out-of-pocket expenses charged to the Portfolio. PFPC Distributors, Inc. ("PFPC Distributors"), an affiliate of PNC, serves as the principal underwriter and distributor of the Portfolio's shares pursuant to a Distribution Agreement with RBB. The Portfolio will not pay PNC or PNC's affiliates at a later time for any amounts waived or any amounts assumed. 3. INVESTMENT IN SECURITIES For the six months ended February 28, 2009, aggregate purchases and sales of investment securities (excluding short-term investments and including TBA securities) of the Portfolio were as follows: PURCHASES SALES ------------ ------------ Investment Securities............. $272,094,954 $254,772,667 16 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2009 (UNAUDITED) 4. CAPITAL STOCK TRANSACTIONS As of February 28, 2009, the Portfolio had 100,000,000 shares of $0.001 par value common stock authorized. Transactions in capital shares for the respective periods were as follows:
FOR THE FOR THE SIX MONTHS ENDED YEAR ENDED FEBRUARY 28, 2009 AUGUST 31, 2008 ---------------------------- ----------------------------- SHARES VALUE SHARES VALUE ---------- ---------- ---------- ------------ Sales................................................. -- $ -- -- $ -- Reinvestments......................................... 227,135 1,703,129 413,514 4,001,676 Redemptions........................................... -- -- (2,119,938) (20,648,191) ------- ---------- ---------- ------------ Net Increase (Decrease)............................... 227,135 $1,703,129 (1,706,424) $(16,646,515) ======= ========== ========== ============
As of February 28, 2009, the Portfolio had individual shareholder accounts, which individually amounted to more than 10% of the total shares outstanding of the Portfolio as detailed below. % OF SHARES NUMBER OF OUTSTANDING ACCOUNTS ----------- --------- 100% 5 Significant shareholder transactions, if any, may impact the Portfolio's performance. 5. FEDERAL INCOME TAX INFORMATION FASB Interpretation No. 48 ("FIN 48"), Accounting for Uncertainty in Income Taxes, sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has analyzed the Portfolio's tax positions and has concluded that no provision for income tax is required in the Portfolio's financial statements. The Portfolio is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. However, management's conclusions regarding the adoption of FIN 48 may be subject to review and adjustment at a later date based on factors including, but not limited to, further implementation guidance from the FASB, new tax laws, regulations and administrative interpretations (including court decisions). Each of the Portfolio's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. At February 28, 2009, federal tax cost, aggregate gross unrealized appreciation and depreciation of securities held by the Portfolio were as follows: FEDERAL TAX UNREALIZED UNREALIZED NET UNREALIZED COST APPRECIATION DEPRECIATION DEPRECIATION ------------ ------------ ------------- -------------- $164,931,857 $1,379,352 $(43,498,184) $(42,118,832) As of August 31, 2008, the components of distributable earnings on a tax basis were as follows: UNDISTRIBUTED UNDISTRIBUTED ORDINARY INCOME LONG-TERM GAINS --------------- --------------- $321,936 $-- As of August 31, 2008, the Portfolio had capital loss carryforwards of $1,518,099 available to offset future capital gains. The capital loss carryforwards will expire in 2015 ($685,873) and 2016 ($832,226) if they are not utilized by future capital gains. Under federal tax law, foreign currency and capital losses realized after October 31 may be deferred and treated as having arisen on the first day of the following fiscal year. For the year ended August 31, 2008, the Fund incurred no post-October capital losses. 17 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO NOTES TO FINANCIAL STATEMENTS (CONCLUDED) FEBRUARY 28, 2009 (UNAUDITED) The differences between the book and tax basis components of distributable earnings relate principally to the timing of recognition of income and gains for federal income tax purposes. Short-term and foreign currency gains are reported as ordinary income for Federal tax purposes. 6. NEW ACCOUNTING PRONOUNCEMENTS In March 2008, FASB released Statement of Financial Accounting Standards No. 161, "Disclosures about Derivative Instruments and Hedging Activities" ("SFAS 161"). SFAS 161 requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. The application of SFAS 161 is required for fiscal years beginning after November 15, 2008 and interim periods within those fiscal years. At this time, the Adviser is evaluating the implications of SFAS 161 and its impact on the financial statements has not yet been determined. 18 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO OTHER INFORMATION (UNAUDITED) PROXY VOTING Policies and procedures that the Portfolio uses to determine how to vote proxies relating to portfolio securities as well as information regarding how the Portfolio voted proxies relating to portfolio securities for the most recent 12-month period ended June 30 are available without charge, upon request, by calling Bear Stearns CUFS(R) MLP Mortgage Portfolio at (800) 519-CUFS (2837) and on the Securities and Exchange Commission's ("SEC") website at http://www.sec.gov. QUARTERLY PORTFOLIO SCHEDULES The Company will file its complete schedule of portfolio holdings with the SEC for the first and third fiscal quarters of each fiscal year (quarters ended November 30 and May 31) on Form N-Q. The Company's Form N-Q will be available on the SEC website at http://www.sec.gov and may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. Information on the operation of the SEC Public Reference Room may be obtained by calling (202) 551-8090. 19 [THIS PAGE INTENTIONALLY LEFT BLANK] [THIS PAGE INTENTIONALLY LEFT BLANK] [THIS PAGE INTENTIONALLY LEFT BLANK] BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO INVESTMENT ADVISER ------------------ Bear Stearns Asset Management c/o JP Morgan Asset Management 245 Park Avenue New York, NY 10167 ADMINISTRATOR ------------- PNC Global Investment Servicing (U.S.), Inc. 301 Bellevue Parkway Wilmington, DE 19809 TRANSFER AGENT -------------- PNC Global Investment Servicing (U.S.), Inc. 101 Sabin Street Pawtucket, RI 02860 PRINCIPAL UNDERWRITER --------------------- PFPC Distributors, Inc. 760 Moore Road King of Prussia, PA 19406 CUSTODIAN --------- PFPC Trust Company 8800 Tinicum Blvd. Suite 200 Philadelphia, PA 19153 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM --------------------------------------------- PricewaterhouseCoopers LLP Two Commerce Square, Suite 1700 2001 Market Street Philadelphia, PA 19103 LEGAL COUNSEL ------------- Drinker Biddle & Reath LLP One Logan Square 18th and Cherry Streets Philadelphia, PA 19103 [GRAPHIC OMITTED] MARVIN & PALMER(R) ASSOCIATES, INC. GLOBAL EQUITY MANAGEMENT [GRAPHIC OMITTED] MARVIN & PALMER LARGE CAP GROWTH FUND OF THE RBB FUND, INC. SEMI-ANNUAL REPORT FEBRUARY 28, 2009 (UNAUDITED) THIS REPORT IS SUBMITTED FOR THE GENERAL INFORMATION OF THE SHAREHOLDERS OF THE FUND. IT IS NOT AUTHORIZED FOR DISTRIBUTION UNLESS PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS FOR THE FUND. SHARES OF THE FUND ARE DISTRIBUTED BY PFPC DISTRIBUTORS, INC., 760 MOORE ROAD, KING OF PRUSSIA, PA 19406. MARVIN & PALMER LARGE CAP GROWTH FUND SEMI-ANNUAL INVESTMENT ADVISER'S REPORT FEBRUARY 28, 2009 (UNAUDITED) Dear Fellow Shareholder: Enclosed is the Fund's semi-annual report for the six-month period from September 1, 2008 through February 28, 2009. The Fund declined 42.9% during this period. It underperformed the Russell 1000(R) Growth Index, which was down 39.9%. INVESTMENT CLIMATE AND OUTLOOK During this period, equity markets experienced a collapse of historic proportions as the credit crisis continued to play itself out. Following the Lehman Brothers bankruptcy, financial activity essentially stopped due to the lack of faith in all financial institutions. Central banks cut interest rates to unprecedented levels, led by the U.S. Federal Reserve, though corporate yields remained high. Economic data continued to deteriorate with both consumer and business sentiment hitting new lows and unemployment rising. Authorities around the world scrambled to avert deflation by instituting massive fiscal and monetary stimulus measures. De facto nationalization of many financial institutions also occurred in an attempt to restore confidence in the financial system. Companies were lining up to receive their portion of bailout money to avoid further job losses. This was reminiscent of Japan in the 1990's when they kept "zombie" companies alive. These were companies that should have failed but were kept alive artificially. Lastly, the criminals began to emerge as they always do in a crisis. Bernard Madoff's hedge funds turned out to be a pyramid scheme which lost $50 billion. Also, a major company in India, Satyam Computer Services, had its chairman admit to fraudulent accounting. Markets remain in a tug of war between a massive deleveraging cycle, which has fueled a global recession, and unprecedented stimulative policy. The magnitude of the decline in equities is probably close to its low point, but the duration of the downturn may take some time due to the lag required for the stimulus measures to take effect. The other critical issue will be whether the massive stimuli enacted to fight deflation will eventually result in another inflation cycle some time in the future. This credit crisis will undoubtedly impact the future of the global economy. Larger budget deficits, greater regulation, and more socialistic policies due to extremely large government intervention will have repercussions for years to come. Looking forward, we believe that current policies and actions should be sufficient to get the credit markets working again but that the time frame will be critical. Most of the major world economies are in a severe downturn that is accentuated by a sharp inventory correction. In the normal course of an inventory correction, production should decline for six to nine months before excess inventories are completely reduced. Since this inventory correction started in September and given its severity, it is more likely that inventories will not be fully reduced until closer to June of 2009. By that point, production should begin to increase back to more normal levels reflecting end-product demand. If a second half economic recovery occurs, that would suggest that the markets are close to their bottom. If the economic downturn extends to 2010, we will have further to go. INVESTMENT REVIEW AND PORTFOLIO STRATEGY The Marvin & Palmer Large Cap Growth Fund underperformed the Russell 1000(R) Growth Index and the broader S&P 500(R) Index during the six months ended February 28, 2009. The Fund's underperformance was driven primarily by stock selection, though sector allocation was also negative. Stock selection was particularly weak in the industrials and information technology sectors. The Fund's weighting in the financials sector also hurt performance but was somewhat offset by good stock selection. The Fund's worst performing stocks for the period were Lowe's, Celgene and Oracle. The best contributing stocks were Apple Computer, Intel and Schlumberger. On a sector basis, we anticipate that the Fund will remain overweight in health care, materials and consumer discretionary. The Fund's primary underweights are in the consumer staples, industrials and information technology sectors. We remain somewhat cautious on the outlook for the U.S. market. The Fund is focused on earnings visibility and sectors with defensive characteristics while deemphasizing economically sensitive areas. We are hopeful that continued government actions in the U.S. and Europe will alleviate a portion of the financial strains which we have been encountering since the bankruptcy of Lehman Brothers. As these financial strains ease, the equity market will discount the eventual recovery in the economy and corporate earnings. We appreciate your support and confidence in our firm's investment philosophy, process and people. Please let us know if there is any way we can improve your experience with us. David F. Marvin, CFA Chairman Marvin & Palmer Associates, Inc. 1 MARVIN & PALMER LARGE CAP GROWTH FUND SEMI-ANNUAL REPORT FEBRUARY 28, 2009 (UNAUDITED) -------------------------------------------------------------------------------- Total Return for the Periods Ended February 28, 2009 Average Annual -------------- Six Since Months One Year Inception* -------- -------- ---------- LARGE CAP GROWTH FUND -42.93% -45.62% -31.50% RUSSELL 1000(R) GROWTH INDEX -39.90% -40.03% -29.37% * INCEPTION DATE JUNE 29, 2007. -------------------------------------------------------------------------------- THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND DOES NOT GUARANTEE FUTURE RESULTS. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER. PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH-END MAY BE OBTAINED BY CALLING 1-877-821-2117. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THE TABLE DOES NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. THE PERFORMANCE QUOTED REFLECTS FEE WAIVERS IN EFFECT AND WOULD HAVE BEEN LESS IN THEIR ABSENCE. THE FUND'S GROSS ANNUAL OPERATING EXPENSE RATIO, AS STATED IN THE CURRENT PROSPECTUS, IS 2.10% AND THE FUND'S NET OPERATING EXPENSE RATIO IS 0.81%. THE EXPENSE RATIO IS CONTRACTUALLY CAPPED AT 0.80% THROUGH DECEMBER 31, 2009, WITHOUT WHICH PERFORMANCE WOULD HAVE BEEN LESS. THIS CAP CAN BE DISCONTINUED AT ANY TIME AFTER DECEMBER 31, 2009. THE FUND'S TOTAL RETURNS SINCE INCEPTION ARE BASED ON A CHANGE IN NET ASSET VALUE FROM $10.00 PER SHARE ON JUNE 29, 2007 (INCEPTION) TO $5.30 PER SHARE ON FEBRUARY 28, 2009. PORTFOLIO COMPOSITION IS SUBJECT TO CHANGE. 2 MARVIN & PALMER LARGE CAP GROWTH FUND FUND EXPENSE DISCLOSURE FEBRUARY 28, 2009 (UNAUDITED) As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including redemption fees; and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. This example is based on an investment of $1,000 invested at the beginning of the six-month period from September 1, 2008 through February 28, 2009, and held for the entire period. ACTUAL EXPENSES The first line of the accompanying tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second line of the accompanying tables provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not your Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare these 5% hypothetical examples with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that the expenses shown in the accompanying tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees. Therefore, the second line of the accompanying tables is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
LARGE CAP GROWTH FUND ----------------------------------------------------------------------- BEGINNING ACCOUNT VALUE ENDING ACCOUNT VALUE EXPENSES PAID SEPTEMBER 1, 2008 FEBRUARY 28, 2009 DURING PERIOD* ----------------------- ------------------- -------------- Actual $1,000.00 $ 570.70 $3.12 Hypothetical (5% return before expenses) 1,000.00 1,020.78 4.02
---------------------------------- * Expenses are equal to an annualized six-month expense ratio of 0.80% for the Fund which includes waived fees or reimbursed expenses, multiplied by the average account value over the period, multiplied by the number of days in the most recent period (181), then divided by 365 to reflect the one-half year period. The Fund's ending account values on the first line in each table are based on the actual six-month total return for the Fund of (42.93)%. 3 MARVIN & PALMER LARGE CAP GROWTH FUND PORTFOLIO HOLDINGS SUMMARY TABLE FEBRUARY 28, 2009 (UNAUDITED) % of Net Assets Value -------- ----------- Domestic Common Stocks: Pharmaceuticals, Biotechnology & Life Sciences ................... 19.2% $ 2,595,892 Technology Hardware & Equipment .... 11.7 1,585,101 Software & Services ................ 10.8 1,454,609 Energy ............................. 9.4 1,265,270 Materials .......................... 8.8 1,186,702 Retailing .......................... 7.7 1,040,982 Consumer Services .................. 4.6 620,959 Diversified Financials ............. 4.1 561,738 Capital Goods ...................... 4.1 552,524 Health Care Equipment & Services ... 3.4 465,794 Telecommunications ................. 2.9 392,808 Food & Staples Retailing ........... 2.8 378,260 Utilities .......................... 2.5 344,334 Media .............................. 1.3 177,466 Food, Beverages & Tobacco .......... 1.2 167,936 Transportation ..................... 1.0 131,776 Semiconductors & Semiconductors Equipment ....................... 0.8 104,384 Short-Term Investments ............... 2.9 397,020 Other Assets In Excess Of Liabilities 0.8 102,086 ------ ----------- NET ASSETS ........................... 100.0% $13,525,641 ====== =========== ------------------ Portfolio holdings are subject to change at any time. The accompanying notes are an integral part of the financial statements. 4 MARVIN & PALMER LARGE CAP GROWTH FUND PORTFOLIO OF INVESTMENTS FEBRUARY 28, 2009 (UNAUDITED) Shares Value -------- ----------- DOMESTIC COMMON STOCKS -- 96.3% CAPITAL GOODS -- 4.1% ITT Corp. ................................... 2,700 $ 100,845 L-3 Communications Holdings, Inc. ........... 1,700 115,005 Lockheed Martin Corp. ....................... 2,200 138,842 Rockwell Collins, Inc. ...................... 3,200 99,840 United Technologies Corp. ................... 2,400 97,992 ----------- 552,524 ----------- CONSUMER SERVICES -- 4.6% Apollo Group, Inc., Class A* ................ 1,300 94,250 McDonald's Corp. ............................ 4,900 256,025 Yum! Brands, Inc. ........................... 10,300 270,684 ----------- 620,959 ----------- DIVERSIFIED FINANCIALS -- 4.1% Goldman Sachs Group, Inc. ................... 3,400 309,672 Morgan Stanley .............................. 12,900 252,066 ----------- 561,738 ----------- ENERGY -- 9.4% Apache Corp. ................................ 1,700 100,453 Chevron Corp. ............................... 2,200 133,562 Exxon Mobil Corp. ........................... 6,600 448,140 National Oilwell Varco, Inc.* ............... 3,900 104,247 Southwestern Energy Co.* .................... 5,200 149,604 XTO Energy, Inc. ............................ 10,400 329,264 ----------- 1,265,270 ----------- FOOD & STAPLES RETAILING -- 2.8% CVS Caremark Corp. .......................... 8,000 205,920 Wal-Mart Stores, Inc. ....................... 3,500 172,340 ----------- 378,260 ----------- FOOD, BEVERAGES & TOBACCO -- 1.2% General Mills, Inc. ......................... 3,200 167,936 ----------- HEALTH CARE EQUIPMENT & SERVICES -- 3.4% Cardinal Health, Inc. ....................... 4,600 149,270 Medco Health Solutions, Inc.* ............... 7,800 316,524 ----------- 465,794 ----------- MATERIALS -- 8.8% Monsanto Co. ................................ 6,900 526,263 Mosaic Co., (The) ........................... 2,900 124,845 Newmont Mining Corp. ........................ 2,700 112,401 Nucor Corp. ................................. 7,900 265,835 Vulcan Materials Co. ........................ 3,800 157,358 ----------- 1,186,702 ----------- MEDIA -- 1.3% DIRECTV Group, Inc., (The)* ................. 8,900 177,466 ----------- Shares Value -------- ----------- PHARMACEUTICALS, BIOTECHNOLOGY & LIFE SCIENCES -- 19.2% Abbott Laboratories ......................... 5,000 $ 236,700 Amgen, Inc.* ................................ 5,600 274,008 Celgene Corp.* .............................. 10,600 474,138 Genzyme Corp.* .............................. 7,500 456,975 Gilead Sciences, Inc.* ...................... 13,440 602,112 Johnson & Johnson ........................... 5,300 265,000 Merck & Co., Inc. ........................... 4,600 111,320 Schering-Plough Corp. ....................... 10,100 175,639 ----------- 2,595,892 ----------- RETAILING -- 7.7% Amazon.com, Inc.* ........................... 3,200 207,328 Autozone, Inc.* ............................. 1,000 142,230 Home Depot, Inc. ............................ 9,200 192,188 Kohl's Corp.* ............................... 4,200 147,588 Lowe's Cos., Inc. ........................... 22,200 351,648 ----------- 1,040,982 ----------- SEMICONDUCTORS & SEMICONDUCTORS EQUIPMENT -- 0.8% Analog Devices, Inc. ........................ 5,600 104,384 ----------- SOFTWARE & SERVICES -- 10.8% Cognizant Technology Solutions Corp.* ....... 14,300 263,120 Google, Inc., Class A* ...................... 1,140 385,309 Oracle Corp.* ............................... 40,200 624,708 Visa, Inc., Class A ......................... 3,200 181,472 ----------- 1,454,609 ----------- TECHNOLOGY HARDWARE & EQUIPMENT -- 11.7% Cisco Systems, Inc.* ........................ 9,500 138,415 EMC Corp.* .................................. 27,600 289,800 Hewlett-Packard Co. ......................... 8,400 243,852 International Business Machines Corp. ....... 3,300 303,699 NetApp, Inc.* ............................... 23,200 311,808 QUALCOMM, Inc. .............................. 8,900 297,527 ----------- 1,585,101 ----------- TELECOMMUNICATIONS -- 2.9% American Tower Corp.* ....................... 3,300 96,096 Verizon Communications, Inc. ................ 10,400 296,712 ----------- 392,808 ----------- TRANSPORTATION -- 1.0% United Parcel Service, Inc., Class B ........ 3,200 131,776 ----------- UTILITIES -- 2.5% Dominion Resources, Inc. .................... 3,700 111,666 Exelon Corp. ................................ 2,500 118,050 Public Service Enterprise Group, Inc. ....... 4,200 114,618 ----------- 344,334 ----------- TOTAL DOMESTIC COMMON STOCKS (Cost $15,093,616) ..................... 13,026,535 ----------- The accompanying notes are an integral part of the financial statements. 5 MARVIN & PALMER LARGE CAP GROWTH FUND PORTFOLIO OF INVESTMENTS (CONCLUDED) FEBRUARY 28, 2009 (UNAUDITED) Shares Value -------- ----------- SHORT-TERM INVESTMENTS -- 2.9% PNC Bank Money Market Account ............... 397,020 $ 397,020 ----------- TOTAL SHORT-TERM INVESTMENTS (Cost $397,020) ........................ 397,020 ----------- TOTAL INVESTMENTS -- 99.2% (Cost $15,490,636) .......................... 13,423,555 OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.8% ...................... 102,086 ----------- NET ASSETS -- 100.0% ........................ $13,525,641 =========== ------------------ * Non-income producing. SFAS 157 DISCLOSURE -------------------------------------------------------------------------------- The following is a summary of the inputs used, as of February 28, 2009, in valuing the Fund's assets carried at fair value: INVESTMENTS IN VALUATION INPUTS SECURITIES ---------------- ----------- Level 1 - Quoted Prices...................................... $13,423,555 Level 2 - Other Significant Observable Inputs................ -- Level 3 - Significant Unobservable Inputs.................... -- ----------- Total........................................................ $13,423,555 =========== The accompanying notes are an integral part of the financial statements. 6 MARVIN & PALMER LARGE CAP GROWTH FUND STATEMENT OF ASSETS AND LIABILITIES FEBRUARY 28, 2009 (UNAUDITED) ASSETS Investments, at value (Cost $15,490,636) .................. $ 13,423,555 Receivables Investments sold ....................................... 265,577 Investment adviser ..................................... 31,355 Dividends and interest ................................. 29,818 Prepaid expenses and other assets ......................... 11,961 ------------ Total assets ........................................ 13,762,266 ------------ LIABILITIES Payables Investments purchased .................................. 180,345 Other accrued expenses and liabilities ................. 56,280 ------------ Total liabilities ................................... 236,625 ------------ Net Assets ................................................ $ 13,525,641 ============ NET ASSETS CONSIST OF Paid-in capital ........................................... 28,576,027 Undistributed net investment income ....................... 21,656 Accumulated net realized loss from investments ............ (13,004,961) Net unrealized depreciation on investments ................ (2,067,081) ------------ Net Assets ................................................ $ 13,525,641 ============ Shares outstanding ($0.001 par value, 100,000,000 shares authorized) ..................................... 2,554,271 ------------ Net asset value, offering and redemption price per share .. $ 5.30 ============ The accompanying notes are an integral part of the financial statements. 7 MARVIN & PALMER LARGE CAP GROWTH FUND STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED FEBRUARY 28, 2009 (UNAUDITED) INVESTMENT INCOME Dividends ................................................. $ 136,153 ------------ Total investment income ............................. 136,153 ------------ EXPENSES Administration and accounting fees ........................ 75,024 Advisory fees ............................................. 64,281 Transfer agent fees ....................................... 26,373 Professional fees ......................................... 18,208 Printing and shareholder reporting fees ................... 13,780 Directors' and officers' fees ............................. 9,933 Registration and filing fees .............................. 9,917 Custodian fees ............................................ 3,472 Other expenses ............................................ 2,609 ------------ Total expenses before waivers and reimbursements .... 223,597 Less: waivers and reimbursements .................... (144,482) ------------ Net expenses after waivers and reimbursements ....... 79,115 ------------ Net investment income ..................................... 57,038 ------------ NET REALIZED AND UNREALIZED GAIN/(LOSS) FROM INVESTMENTS NET REALIZED GAIN/(LOSS) FROM: Investments ......................................... (8,873,414) NET CHANGE IN UNREALIZED APPRECIATION/(DEPRECIATION) ON: Investments ......................................... (3,100,914) ------------ Net realized and unrealized loss from investments ......... (11,974,328) ------------ NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ......... $(11,917,290) ============ The accompanying notes are an integral part of the financial statements. 8 MARVIN & PALMER LARGE CAP GROWTH FUND STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED FOR THE YEAR FEBRUARY 28, 2009 ENDED (UNAUDITED) AUGUST 31, 2008 ------------------ --------------- INCREASE/(DECREASE) IN NET ASSETS FROM OPERATIONS: Net investment income ............................................................ $ 57,038 $ 27,731 Net realized loss from investments ............................................... (8,873,414) (3,802,964) Net change in unrealized appreciation/(depreciation) from investments ............ (3,100,914) 335,586 ------------ ------------ Net decrease in net assets resulting from operations ................................ (11,917,290) (3,439,647) ------------ ------------ DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income ............................................................ (63,113) (3,604) ------------ ------------ Net decrease in net assets from dividends and distributions to shareholders ......... (63,113) (3,604) ------------ ------------ CAPITAL SHARE TRANSACTIONS Proceeds from shares sold (68,114 and 2,133,206 shares, respectively) ............ 429,000 22,756,642 Reinvestment of distributions (10,323 and 309 shares, respectively) .............. 62,459 3,604 Shares redeemed (610,685 and 544,841 shares, respectively) ....................... (3,765,642) (5,820,152) ------------ ------------ Net increase/(decrease) in net assets from capital share transactions ............... (3,274,183) 16,940,094 ------------ ------------ Total increase/(decrease) in net assets ............................................. (15,254,586) 13,496,843 NET ASSETS Beginning of period .............................................................. 28,780,227 15,283,384 ------------ ------------ End of period .................................................................... $ 13,525,641 $ 28,780,227 ============ ============ Undistributed net investment income, end of period .................................. $ 21,656 $ 27,731 ============ ============
The accompanying notes are an integral part of the financial statements. 9 MARVIN & PALMER LARGE CAP GROWTH FUND FINANCIAL HIGHLIGHTS -------------------------------------------------------------------------------- Contained below is per share operating performance data for each share 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. --------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR FOR THE PERIOD FEBRUARY 28, 2009 ENDED JUNE 29, 2007* (UNAUDITED) AUGUST 31, 2008 TO AUGUST 31, 2007 ------------------ --------------- ------------------ PER SHARE OPERATING PERFORMANCE(4) Net asset value, beginning of period................................... $ 9.32 $ 10.20 $ 10.00 ------- -------- -------- Net investment income.................................................. 0.02 0.01 --(2) Net realized and unrealized gain/(loss) on investments................. (4.02) (0.89) 0.20 ------- -------- -------- Net increase/(decrease) in net assets resulting from operations........ (4.00) (0.88) 0.20 ------- -------- -------- DIVIDENDS TO SHAREHOLDERS FROM: Net investment income.................................................. (0.02) --(2) -- ------- -------- -------- Net asset value, end of period......................................... $ 5.30 $ 9.32 $ 10.20 ======= ======== ======== Total investment return(1)............................................. (42.93)% (8.61)% 2.00% RATIO/SUPPLEMENTAL DATA Net assets, end of period (000's omitted).............................. $13,526 $ 28,780 $ 15,283 Ratio of expenses to average net assets................................ 0.80%(3) 0.80% 0.80%(3) Ratio of expenses to average net assets without waivers and expense reimbursements.............................................. 2.26%(3) 2.09% 3.93%(3) Ratio of net investment income to average net assets................... 0.58%(3) 0.12% 0.21%(3) Portfolio turnover rate................................................ 131.98% 252.37% 28.70%
-------------------- * Commencement of Operations. (1) Total investment return is calculated by 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. (2) Less than $0.005 per share. (3) Annualized. (4) Calculated based on shares outstanding on the first and last day of the respective period, except for dividends and distributions, if any, which are based on actual shares outstanding on the dates of distributions. The accompanying notes are an integral part of the financial statements. 10 MARVIN & PALMER LARGE CAP GROWTH FUND NOTES TO FINANCIAL STATEMENTS FEBRUARY 28, 2009 (UNAUDITED) 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES The RBB Fund, Inc. ("RBB" or the "Company") 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. Each 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 eighteen active investment portfolios, including the Marvin & Palmer Large Cap Growth Fund (the "Fund"), which commenced investment operations on June 29, 2007. RBB has authorized capital of one hundred billion shares of common stock of which 78.773 billion are currently classified into one hundred and twenty-seven classes of common stock. Each class represents an interest in an active or inactive RBB investment portfolio. The active classes have been grouped into nine separate "families." PORTFOLIO VALUATION -- The Fund's net asset value ("NAV") is calculated once daily at the close of regular trading hours on the New York Stock Exchange ("NYSE") (generally 4:00 p.m. Eastern time) on each day the NYSE is open. Securities held by the Fund are valued using the closing price or the last sale price on a national securities exchange or the National Association of Securities Dealers Automatic Quotation System ("NASDAQ") market system where they are primarily traded. Equity securities traded in the over-the-counter market are valued at their closing prices. If there were no transactions on that day, securities traded principally on an exchange or on NASDAQ will be valued at the mean of the last bid and ask prices prior to the market close. Fixed income securities having a remaining maturity of greater than 60 days are valued using an independent pricing service. Fixed income securities having a remaining maturity of 60 days or less are amortized to maturity based on their cost. Foreign securities are valued based on prices from the primary market in which they are traded, and are translated from the local currency into U.S. dollars using current exchange rates. Investments in other open-end investment companies are valued based on the NAV of the investment companies (which may use fair value pricing as discussed in their prospectuses). If market quotations are unavailable or deemed unreliable, securities will be valued in accordance with procedures adopted by the Company's Board of Directors. Relying on prices supplied by pricing services or dealers or using fair valuation may result in values that are higher or lower than the values used by other investment companies and investors to price the same investments. Effective September 1, 2008, the Fund adopted Financial Accounting Standards Board ("FASB") Statement of Financial Accounting Standards No. 157 ("SFAS 157"). This standard clarifies the definition of fair value for financial reporting, establishes a framework for measuring fair value and requires additional disclosures about the use of fair value measurements. The three levels of the fair value hierarchy under SFAS 157 are described below: o Level 1 -- quoted prices in active markets for identical securities o Level 2 -- other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) o Level 3 -- significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments) The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. A summary of the inputs used to value the Fund's investments as of February 28, 2009 is included with the Fund's Schedule of Investments. 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 liabilities 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. INVESTMENT TRANSACTIONS, INVESTMENT INCOME AND EXPENSES -- The Fund records security transactions based on 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 accrued when earned. Dividend income is recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gains are recorded as a reduction 11 MARVIN & PALMER LARGE CAP GROWTH FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2009 (UNAUDITED) of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. The Fund's investment income, expenses and unrealized and realized gains and losses are allocated daily. 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 the RBB fund families (such as director or professional fees) are charged to all funds in proportion to their average net assets of the RBB funds, or in such other manner as the Board of Directors deems fair or equitable. 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. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net investment income and distributions from net realized capital gains, if any, are declared, recorded on ex-date and paid at least annually to shareholders. Income dividends and capital gain distributions are determined in accordance with U.S. federal income tax regulations, which may differ from generally accepted accounting principles. Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications within the components of net assets. U.S. TAX STATUS -- No provision is made for U.S. 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. income and excise taxes. OTHER -- In the normal course of business, the Fund may enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is dependent on claims that may be made against the Fund in the future, and, therefore, cannot be estimated; however, based on experience, the risk of material loss for such claims is considered remote. 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES Marvin & Palmer Associates, Inc. ("Marvin & Palmer" or the "Adviser") serves as investment adviser to the Fund pursuant to an investment advisory agreement with the Company (the "Advisory Agreement"). For its services, the Adviser is paid a monthly fee at the annual rate of 0.65% of the Fund's average daily net assets. The Adviser has agreed to limit through December 31, 2009 the Fund's total operating expenses to the extent that such expenses exceed 0.80% of the Fund's average daily net assets. This limitation is effected in waivers of advisory fees and reimbursement of expenses exceeding the advisory fee as necessary. If at any time during the first three years the Advisory Agreement is in effect the Fund's total annual operating expenses are less than 0.80% of the Fund's average daily net assets, the Adviser is entitled to reimbursement by the Fund of the advisory fees waived and other payments remitted by the Adviser to the Fund. For the period ended February 28, 2009, investment advisory fees accrued and waived were $64,281 and expenses reimbursed or to be reimbursed by the Adviser were $80,201. PNC Global Investment Servicing (U.S.), Inc. ("PNC"), a member of The PNC Financial Services Group, Inc., serves as administrator for the Fund. Administration and accounting fees accrued also include certain Transfer Agent and dividend disbursing agent fees and certain custodian fees. For providing administrative and accounting services, PNC is entitled to receive a monthly fee equal to an annual rate of 0.14% of the Fund's first $250 million of average daily net assets; 0.11% of the Fund's next $250 million of average daily net assets; 0.0925% of the Fund's next $250 million of average daily net assets; 0.0725% of the Fund's next $750 million of average daily net assets; and 0.06% of the Fund's average daily net assets in excess of $1,500 million. There is a minimum monthly fee of $11,250, exclusive of multiple class fees, transaction charges, account fees (if applicable) and out-of-pocket expenses. Included in the administration and accounting fees, shown above, are fees for providing regulatory administration services to RBB. For providing these services, PNC is entitled to receive compensation as agreed to by the Company and PNC. This fee is allocated to each portfolio in proportion to its net assets of the RBB Funds. In addition, PNC serves as the Fund's transfer and dividend disbursing agent. For providing transfer agent services, PNC is entitled to receive out of pocket expenses. 12 MARVIN & PALMER LARGE CAP GROWTH FUND NOTES TO FINANCIAL STATEMENTS (CONCLUDED) FEBRUARY 28, 2009 (UNAUDITED) For providing custodial services to the Fund, PFPC Trust Company, an affiliate of PNC, is entitled to receive out of pocket expenses. PFPC Distributors, Inc., an affiliate of PNC, serves as the principal underwriter and distributor of the Fund's shares pursuant to a Distribution Agreement wih RBB. 3. INVESTMENT IN SECURITIES For the period ended February 28, 2009, aggregate purchases and sales of investment securities (excluding short-term investments) of the Fund were as follows: PURCHASES SALES ----------- ----------- Investment Securities................... $25,767,016 $28,507,554 4. SIGNIFICANT SHAREHOLDERS As of February 28, 2009, the Fund had 3 shareholder accounts and/or omnibus accounts (comprised of a group of individual shareholders) that amounted to 73% of the total shares outstanding of the Fund. 5. FEDERAL TAX INFORMATION FASB Interpretation No. 48 ("FIN 48"), Accounting for Uncertainty in Income Taxes, sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has analyzed the Fund's tax positions and has concluded that no provision for income tax is required in the Fund's financial statements. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. However, management's conclusions regarding the adoption of FIN 48 may be subject to review and adjustment at a later date based on factors including, but not limited to, further implementation of guidance from the FASB, new tax laws, regulations and administrative interpretations (including court decisions). Each of the Fund's federal tax returns for the fiscal year ended August 31, 2008 and period ended August 31, 2007 remains subject to examination by the Internal Revenue Service. At February 28, 2009, Federal tax cost, aggregate gross unrealized appreciation and depreciation of securities held by the Fund were as follows: FEDERAL TAX UNREALIZED UNREALIZED NET UNREALIZED COST APPRECIATION DEPRECIATION APPRECIATION ----------- ------------ ------------ -------------- $15,681,816 $165,081 $(2,423,342) $(2,258,261) At August 31, 2008, the Fund had $328,738 of capital loss carryforwards expiring on August 31, 2016 to offset future capital gains. During the year ended August 31, 2008, the Fund did not utilize any capital loss carryforwards. Under federal tax law, foreign currency and capital losses realized after October 31 may be deferred and treated as having arisen on the first day of the following fiscal year. For the year ended August 31, 2008, the Fund expects to elect to treat post-October capital losses of $3,687,608 incurred in the period June 29, 2008 through August 31, 2008 as having been incurred in the following fiscal year. The differences between the book and tax basis components of distributable earnings relate principally to the timing of recognition of income and gains for federal income tax purposes. Short-term and foreign currency gains are reported as ordinary income for Federal tax purposes. 6. NEW ACCOUNTING PRONOUNCEMENTS In March 2008, Statement of Financial Accounting Standards No. 161, "Disclosures about Derivative Instruments and Hedging Activities" ("SFAS 161") was issued and is effective for fiscal years and interim periods beginning after November 15, 2008. SFAS 161 is intended to improve financial reporting for derivative instruments by requiring enhanced disclosure that enables investors to understand how and why a fund uses derivatives, how derivatives and hedging activities are accounted for, and how derivative instruments and related hedging activities affect a fund's financial performance and financial position. Management is currently evaluating the impact of SFAS 161 on the Fund's financial statement disclosures, if any. 13 MARVIN & PALMER LARGE CAP GROWTH FUND OTHER INFORMATION (UNAUDITED) PROXY VOTING Policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities as well as information regarding how the Fund voted proxies relating to portfolio securities for the most recent 12-month period ended June 30 are available without charge, upon request, by calling Marvin and Palmer at (877) 821-2117 and on the Securities and Exchange Commission's ("SEC") website at http://www.sec.gov. QUARTERLY PORTFOLIO SCHEDULES The Company will file a complete schedule of portfolio holdings with the SEC for the first and third fiscal quarters of each fiscal year (quarters ended November 30 and May 31) on Form N-Q. The Company's Form N-Q will be available on the SEC website at http://www.sec.gov and may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. Information on the operation of the SEC Public Reference Room may be obtained by calling (202) 551-8090. 14 [THIS PAGE INTENTIONALLY LEFT BLANK.] [THIS PAGE INTENTIONALLY LEFT BLANK.] [THIS PAGE INTENTIONALLY LEFT BLANK.] Investment Adviser Marvin & Palmer Associates, Inc. 1201 N. Market Street Suite 2300 Wilmington, DE 19801-1165 Administrator PNC Global Investment Servicing (U.S.), Inc. 301 Bellevue Parkway Wilmington, DE 19809 Transfer Agent PNC Global Investment Servicing (U.S.), Inc. 101 Sabin Street Pawtucket, RI 02860 Principal Underwriter PFPC Distributors, Inc. 760 Moore Road King of Prussia, PA 19406 Custodian PFPC Trust Company 8800 Tinicum Blvd. Suite 200 Philadelphia, PA 19153 Independent Registered Public Accounting Firm PricewaterhouseCoopers LLP Two Commerce Square, Suite 1700 2001 Market Street Philadelphia, PA 19103-7042 Counsel Drinker Biddle & Reath LLP One Logan Square 18th and Cherry Streets Philadelphia, PA 19103-6996 FREE MARKET U.S. EQUITY FUND FREE MARKET INTERNATIONAL EQUITY FUND FREE MARKET FIXED INCOME FUND OF THE RBB FUND, INC. SEMI-ANNUAL REPORT February 28, 2009 (Unaudited) This report is submitted for the general information of the shareholders of the Funds. It is not authorized for distribution unless preceded or accompanied by a current prospectus for the Funds. Shares of the Free Market Funds are distributed by PFPC Distributors, Inc., 760 Moore Road, King of Prussia, PA 19406. [THIS PAGE INTENTIONALLY LEFT BLANK.] FREE MARKET FUNDS SEMI-ANNUAL INVESTMENT ADVISER'S REPORT FEBRUARY 28, 2009 (UNAUDITED) Dear Fellow Shareholder, This has been a challenging six months for investors. Markets like this test investors' resolve. It is difficult to stick with a long-term investment plan when one sees the dramatic effects of high market volatility on a portfolio's value. But investors who have based their approach on a sensible risk/return framework and have a financial coach tend to be in better shape than those who have not. Nobody knows when the capital markets will recover, but over time we can expect them to again offer a premium to investors who are willing to invest in relatively risky assets such as stocks. When the markets and the economy are soaring it can be tempting to mistake risk as simply another abstract concept. When the markets tumble, as they have, it becomes more obvious that risk is not just theory. Real life risk can affect carefully laid plans. Often, the reaction to risk is to speculate whether things have changed. This is when an investor must remember: o Markets Work. The market is currently offering a lower price for stocks, so we believe this is a great time to buy, not sell. o Risk and Return Are Related: To think that stocks will have a diminished return in the future implies that investors believe stocks are less risky. Yet the markets over the last months or even days demonstrate otherwise. And since investors have experienced this risk, shouldn't they stick around for the return? Abundance Technologies, Inc. ("Abundance") strives to deliver the performance of capital markets and add value through Free Market Investment strategies and Structured Market Portfolios. Grounded in the conviction that Free Markets work, Abundance avoids the cost-generating activity of stock picking and market timing. Instead, we focus on the dimensions of capital markets that we believe reward investors as intelligently and effectively as possible. Our disciplined approach to life-long investing provides both the individual investor and the financial professional with the academic foundation upon which to help achieve investment goals. Sound economic and financial research has documented that, over the long term, small cap stocks outperform large cap stocks, and value stocks outperform growth stocks. These returns seem to be compensation for risk. In fixed income, risk is well described by bond maturity and credit quality. Abundance's vehicles deliberately target specific risk and return trade offs. The Funds are broadly diversified and designed to work together in your total investment plan. We invite you to contact your financial professional or explore our website, www.MyMatrix.cc, to learn more about the concepts and strategies of Abundance's investing. We appreciate your support and confidence in our firm's investment philosophy, process and people. /s/ Daniel J. List Daniel J. List Director of Portfolio Management Abundance Technologies, Inc. 1 FREE MARKET FUNDS PERFORMANCE DATA (UNAUDITED) FREE MARKET U.S. EQUITY FUND ---------------------------------------------------------------------- -------------------------------------------------------------------------------- Total Returns for the Periods Ended February 28, 2009 AVERAGE ANNUAL ------------ SIX ONE SINCE MONTHS YEAR INCEPTION(1) ------ ---- ------------ FREE MARKET U.S. EQUITY FUND -48.03% -47.83% -41.65% RUSSELL 2500(R) INDEX -46.09% -43.81% -43.56% COMPOSITE INDEX -45.15% -44.02% -43.82% -------------------------------------------------------------------------------- (1) Inception date: 12/31/07 THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER. RETURNS SHOWN INCLUDE THE REINVESTMENT OF ALL DIVIDENDS AND OTHER DISTRIBUTIONS AND DO NOT REFLECT TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR ON THE REDEMPTION OF FUND SHARES. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH-END, PLEASE CALL 1-866-780-0357 EXT. 3863. THE FUND'S GROSS ANNUAL OPERATING EXPENSES, AS STATED IN THE CURRENT PROSPECTUS, ARE 1.21%. The Fund's aggregate total return since inception is based on a decrease in net asset value from $10.00 per share on December 31, 2007 (commencement of operations) to $5.28 per share on February 28, 2009. Portfolio composition is subject to change. The Free Market U.S. Equity Fund seeks to invest at least 80% of its assets in small-cap and micro-cap stocks, large-cap or other equity securities. In addition to the ordinary risks of equity investing, small companies entail special risk. Small companies tend to have more risk than large companies. An investor in the Fund will incur the expenses of the underlying funds in addition to the Fund expenses. FREE MARKET INTERNATIONAL EQUITY FUND ---------------------------------------------------------------------- -------------------------------------------------------------------------------- Total Returns for the Periods Ended February 28, 2009 AVERAGE ANNUAL ------------ SIX ONE SINCE MONTHS YEAR INCEPTION(1) ------ ---- ------------ FREE MARKET INTERNATIONAL EQUITY FUND -45.91% -52.42% -46.97% MSCI WORLD (EXCLUDING U.S.) INDEX -45.02% -50.34% -48.61% COMPOSITE INDEX -45.66% -52.50% -50.50% -------------------------------------------------------------------------------- (1) Inception date: 12/31/07 THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER. RETURNS SHOWN INCLUDE THE REINVESTMENT OF ALL DIVIDENDS AND OTHER DISTRIBUTIONS AND DO NOT REFLECT TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR ON THE REDEMPTION OF FUND SHARES. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH-END, PLEASE CALL 1-866-780-0357 EXT. 3863. THE FUND'S GROSS ANNUAL OPERATING EXPENSES, AS STATED IN THE CURRENT PROSPECTUS, ARE 1.49%. The Fund's aggregate total return since inception is based on a decrease in net asset value from $10.00 per share on December 31, 2007 (commencement of operations) to $4.70 per share on February 28, 2009. 2 FREE MARKET FUNDS PERFORMANCE DATA (UNAUDITED) Portfolio composition is subject to change. The Free Market International Equity Fund seeks to invest at least 80% of its assets in investment companies that invest 80% of their assets in common stock, preferred stock, securities convertible into stocks and other equity securities issued by foreign companies. In addition to the ordinary risks of equity investing, foreign and small companies entail special risk. The return on foreign equities may be adversely affected by currency fluctuations. Emerging markets may be subject to social instability and lack of market liquidity. Small companies tend to have more risk than large companies. An investor in the Fund will incur the expenses of the underlying funds in addition to the Fund expenses. FREE MARKET FIXED INCOME FUND ---------------------------------------------------------------------- -------------------------------------------------------------------------------- Total Returns for the Periods Ended February 28, 2009 AVERAGE ANNUAL ------------ SIX ONE SINCE MONTHS YEAR INCEPTION(1) ------ ---- ------------ FREE MARKET FIXED INCOME FUND 2.70% 2.92% 2.86% CITIGROUP WORLD GOVT. BOND 1-5 YEAR CURRENCY HEDGED U.S. DOLLAR INDEX 4.49% 4.60% 5.63% COMPOSITE INDEX 2.88% 2.65% 4.15% -------------------------------------------------------------------------------- (1) Inception date: 12/31/07 THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER. RETURNS SHOWN INCLUDE THE REINVESTMENT OF ALL DIVIDENDS AND OTHER DISTRIBUTIONS AND DO NOT REFLECT TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR ON THE REDEMPTION OF FUND SHARES. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH-END, PLEASE CALL 1-866-780-0357 EXT. 3863. THE FUND'S GROSS ANNUAL OPERATING EXPENSES, AS STATED IN THE CURRENT PROSPECTUS, ARE 1.19%. The Fund's aggregate total return since inception is based on an increase in net asset value from $10.00 per share on December 31, 2007 (commencement of operations) to $10.18 per share on February 28, 2009. Portfolio composition is subject to change. The Free Market Fixed Income Fund seeks to invest at least 80% of its assets in other funds that emphasize investments in fixed income securities. The Fund may invest their assets in bonds and other debt securities issued by domestic and foreign governments and companies. Debt instruments involve the risk that their prices will fall when interest rates rise, and they are subject to the risk that the borrower may default. In addition, the return on foreign debt securities may be adversely affected by currency fluctuations. An investor in the Fund will incur the expenses of the underlying funds in addition to the Fund expenses. 3 FREE MARKET FUNDS FUND EXPENSE EXAMPLES (UNAUDITED) As a shareholder of the Fund(s), you incur two types of costs: (1) transaction costs, including redemption fees; and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund(s) and to compare these costs with the ongoing costs of investing in other mutual funds. These examples are based on an investment of $1,000 invested at the beginning of the six-month period from September 1, 2008 through February 28, 2009, and held for the entire period. ACTUAL EXPENSES The first line of the accompanying tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second line of the accompanying tables provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not your Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare these 5% hypothetical examples with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that the expenses shown in the accompanying tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees. Therefore, the second line of the accompanying tables is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. 4 FREE MARKET FUNDS FUND EXPENSE EXAMPLES (CONCLUDED) (UNAUDITED)
FREE MARKET U.S. EQUITY FUND ---------------------------------------------------------------------------- BEGINNING ACCOUNT VALUE ENDING ACCOUNT VALUE EXPENSES PAID SEPTEMBER 1, 2008 FEBRUARY 28, 2009 DURING PERIOD* ----------------------- -------------------- -------------- Actual $1,000.00 $ 519.70 $2.75 Hypothetical (5% return before expenses) 1,000.00 1,021.13 3.66 FREE MARKET INTERNATIONAL EQUITY FUND ---------------------------------------------------------------------------- BEGINNING ACCOUNT VALUE ENDING ACCOUNT VALUE EXPENSES PAID SEPTEMBER 1, 2008 FEBRUARY 28, 2009 DURING PERIOD* ----------------------- -------------------- -------------- Actual $1,000.00 $ 540.90 $2.90 Hypothetical (5% return before expenses) 1,000.00 1,020.98 3.82 FREE MARKET FIXED INCOME FUND ---------------------------------------------------------------------------- BEGINNING ACCOUNT VALUE ENDING ACCOUNT VALUE EXPENSES PAID SEPTEMBER 1, 2008 FEBRUARY 28, 2009 DURING PERIOD* ----------------------- -------------------- -------------- Actual $1,000.00 $1,027.00 $3.87 Hypothetical (5% return before expenses) 1,000.00 1,020.93 3.87
* Expenses are equal to an annualized six-month expense ratio of 0.73% for the Free Market U.S. Equity Fund, 0.76% for the Free Market International Equity Fund and 0.77% for the Free Market Fixed Income Fund, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year (181), then divided by 365 to reflect the one-half year period. The annualized expense ratios do not reflect fees and expenses associated with the underlying funds. If such fees and expenses had been included, the expenses would have been higher. The range of weighted expense ratios of the underlying funds held by the Funds, as stated in the current prospectus, were as follows:
FREE MARKET U.S. FREE MARKET INTERNATIONAL FREE MARKET FIXED EQUITY FUND EQUITY FUND INCOME FUND ---------------- ------------------------- ----------------- 0.02%-0.13% 0.01%-0.28% 0.01%-0.07%
Each Fund's ending account values on the first line in each table are based on the actual six-month total return for each Fund of (48.03)% for the Free Market U.S. Equity Fund, (45.91)% for the Free Market International Equity Fund and 2.70% for the Free Market Fixed Income Fund. 5 FREE MARKET FUNDS FREE MARKET U.S. EQUITY FUND PORTFOLIO OF INVESTMENTS FEBRUARY 28, 2009 (UNAUDITED) NUMBER OF SHARES VALUE --------- ------------ EQUITY FUNDS -- 99.8% U.S. Large Cap Value Portfolio III(a) ..... 6,092,585 $ 47,400,309 U.S. Large Company Institutional Index Portfolio ........................ 4,082,192 23,676,713 U.S. Micro Cap Portfolio .................. 3,714,848 23,626,434 U.S. Small Cap Portfolio .................. 2,463,501 23,501,804 U.S. Small Cap Value Portfolio(a).......... 3,563,795 39,415,568 ------------ TOTAL EQUITY FUNDS (Cost $273,366,891)................... 157,620,828 ------------ TEMPORARY INVESTMENT -- 0.2% PNC Bank Money Market Account 0.050%, 03/02/09 ....................... 242,934 242,934 ------------ TOTAL TEMPORARY INVESTMENT (Cost $242,934)....................... 242,934 ------------ TOTAL INVESTMENTS -- 100.0% (Cost $273,609,825)................... 157,863,762 ------------ LIABILITIES IN EXCESS OF OTHER ASSETS -- 0.0%.......................... (6,158) ------------ NET ASSETS -- 100.0%....................... $157,857,604 ============ PORTFOLIO HOLDINGS SUMMARY TABLE % OF NET ASSETS VALUE --------- ------------ Equity Funds............................... 99.8% $157,620,828 Temporary Investment....................... 0.2% 242,934 Liabilities in Excess of Other Assets .......................... 0.0% (6,158) ----- ------------ NET ASSETS................................. 100.0% $157,857,604 ===== ============ ---------- Portfolio holdings are subject to change at any time. (a) Shareholders may obtain the latest financial statements for these investments from the Portfolio's Adviser's website at http:/www.dimensional.com or the Securities and Exchange Commission's website at http:/www.sec.gov. SFAS 157 DISCLOSURE -------------------------------------------------------------------------------- The following is a summary of the inputs used, as of February 28, 2009, in valuing the Fund's assets carried at fair value: INVESTMENTS IN VALUATION INPUTS SECURITIES -------------------------- ------------ Level 1 - Quoted Prices.................................... $157,863,762 Level 2 - Other Significant Observable Inputs.............. -- Level 3 - Significant Unobservable Inputs.................. -- ------------ Total...................................................... $157,863,762 ============ The accompanying notes are an integral part of the financial statements. 6 FREE MARKET FUNDS FREE MARKET INTERNATIONAL EQUITY FUND PORTFOLIO OF INVESTMENTS FEBRUARY 28, 2009 (UNAUDITED) NUMBER OF SHARES VALUE --------- ------------ INTERNATIONAL EQUITY FUNDS -- 99.8% Asia Pacific Small Company Portfolio ...... 271,952 $ 2,567,225 Continental Small Company Portfolio ....... 541,622 4,782,525 DFA International Small Cap Value Portfolio(a) ........................... 5,561,246 49,995,606 DFA International Value Portfolio III(a) .. 4,216,571 37,485,315 Emerging Markets Portfolio ................ 474,575 6,696,256 Emerging Markets Small Cap Portfolio ...... 728,288 6,234,148 Emerging Markets Value Portfolio........... 427,516 6,032,246 Japanese Small Company Portfolio........... 239,353 2,596,980 Large Cap International Portfolio.......... 524,282 6,186,523 United Kingdom Small Company Portfolio .............................. 221,522 2,656,049 ------------ TOTAL INTERNATIONAL EQUITY FUNDS (Cost $219,533,407)................... 125,232,873 ------------ TEMPORARY INVESTMENT -- 0.2% PNC Bank Money Market Account 0.050%, 03/02/09 ....................... 250,558 250,558 ------------ TOTAL TEMPORARY INVESTMENT (Cost $250,558)....................... 250,558 ------------ TOTAL INVESTMENTS -- 100.0% (Cost $219,783,965)................... 125,483,431 ------------ LIABILITIES IN EXCESS OF OTHER ASSETS -- 0.0%.......................... (53,677) ------------ NET ASSETS -- 100.0%....................... $125,429,754 ============ PORTFOLIO HOLDINGS SUMMARY TABLE % OF NET ASSETS VALUE --------- ------------ International Equity Funds................. 99.8% $125,232,873 Temporary Investment....................... 0.2% 250,558 Liabilities in Excess of Other Assets............................ 0.0% (53,677) ----- ------------ NET ASSETS................................. 100.0% $125,429,754 ===== ============ ---------- Portfolio holdings are subject to change at any time. (a) Shareholders may obtain the latest financial statements for these investments from the Portfolio's Adviser's website at http:/www.dimensional.com or the Securities and Exchange Commission's website at http:/www.sec.gov. SFAS 157 DISCLOSURE -------------------------------------------------------------------------------- The following is a summary of the inputs used, as of February 28, 2009, in valuing the Fund's assets carried at fair value: INVESTMENTS IN VALUATION INPUTS SECURITIES -------------------------- ------------ Level 1 - Quoted Prices.................................... $125,483,431 Level 2 - Other Significant Observable Inputs.............. -- Level 3 - Significant Unobservable Inputs.................. -- ------------ Total...................................................... $125,483,431 ============ The accompanying notes are an integral part of the financial statements. 7 FREE MARKET FUNDS FREE MARKET FIXED INCOME FUND PORTFOLIO OF INVESTMENTS FEBRUARY 28, 2009 (UNAUDITED) NUMBER OF SHARES VALUE --------- ------------ FIXED INCOME FUNDS -- 99.9% DFA Five-Year Global Fixed Income Portfolio(a) .................... 3,534,517 $ 38,632,267 DFA Five-Year Government Portfolio ........ 2,508,197 27,063,444 DFA Intermediate Government Fixed Income Portfolio ................. 914,211 11,199,089 DFA One-Year Fixed Income Series(a)(b) .... 38,284,306 DFA Two-Year Global Fixed Income Series(a)(b) .................... 38,507,092 ------------ TOTAL FIXED INCOME FUNDS (Cost $151,161,582)................... 153,686,198 ------------ TEMPORARY INVESTMENT -- 0.1% PNC Bank Money Market Account 0.050%, 03/02/09 ....................... 229,561 229,561 ------------ TOTAL TEMPORARY INVESTMENT (Cost $229,561)....................... 229,561 ------------ TOTAL INVESTMENTS -- 100.0% (Cost $151,391,143)................... 153,915,759 ------------ LIABILITIES IN EXCESS OF OTHER ASSETS -- 0.0%.......................... (69,959) ------------ NET ASSETS -- 100.0%....................... $153,845,800 ============ PORTFOLIO HOLDINGS SUMMARY TABLE % OF NET ASSETS VALUE --------- ------------ Fixed Income Funds ........................ 99.9% $153,686,198 Temporary Investment ...................... 0.1% 229,561 Liabilities in Excess of Other Assets ........................... 0.0% (69,959) ----- ------------ NET ASSETS -- 100.0% ...................... 100.0% $153,845,800 ===== ============ ---------- Portfolio holdings are subject to change at any time. (a) Shareholders may obtain the latest financial statements for this investment from the Portfolio's Adviser's website at http:/www.dimensional.com or the Securities and Exchange Commission's website at http:/www.sec.gov. (b) On November 1, 2008, The DFA One-Year Fixed Income Series and The DFA Two-Year Global Fixed Income Series, each a master fund in a RIC/RIC master feeder structure, had each elected with the consent of their respective Holder(s) to change their U.S. federal income tax classification from that of an association taxable as a corporation to a partnership pursuant to Treasury Regulation ss. 301.7701-3. In addition, each Series intends to maintain its books and records and present its financial statements in accordance with generally accepted accounting principles for investment partnerships. SFAS 157 DISCLOSURE -------------------------------------------------------------------------------- The following is a summary of the inputs used, as of February 28, 2009, in valuing the Fund's assets carried at fair value: INVESTMENTS IN VALUATION INPUTS SECURITIES -------------------------- ------------ Level 1 - Quoted Prices.................................... $153,915,759 Level 2 - Other Significant Observable Inputs.............. -- Level 3 - Significant Unobservable Inputs.................. -- ------------ Total...................................................... $153,915,759 ============ The accompanying notes are an integral part of the financial statements. 8 FREE MARKET FUNDS STATEMENTS OF ASSETS AND LIABILITIES FEBRUARY 28, 2009 (UNAUDITED)
FREE MARKET FREE MARKET FREE MARKET U.S. EQUITY INTERNATIONAL FIXED INCOME FUND EQUITY FUND FUND ------------ ------------ ------------ ASSETS Investments in non-affiliated funds, at value+.......... $157,863,762 $125,483,431 $153,915,759 Cash.................................................... 300,001 200,000 85,001 Receivables Capital shares sold................................... 101,381 66,489 114,511 Dividends and interest................................ 328 181 11 Prepaid expenses and other assets....................... 32,315 23,282 25,838 ------------ ------------ ------------ Total assets..................................... 158,297,787 125,773,383 154,141,120 ------------ ------------ ------------ LIABILITIES Payables Investments purchased................................. 300,000 200,000 85,000 Capital shares redeemed............................... 26,171 44,661 95,807 Investment adviser.................................... 66,629 51,697 58,937 Professional fees..................................... 20,094 23,138 23,159 Administration and accounting fees.................... 11,107 10,545 11,151 Director's and officers' fees......................... 9,006 3,876 2,777 Custodian fees........................................ 1,630 1,283 1,154 Transfer agent fees................................... 904 1,364 1,644 Other accrued expenses and liabilities................ 4,642 7,065 15,691 ------------ ------------ ------------ Total liabilities................................ 440,183 343,629 295,320 ------------ ------------ ------------ Net Assets.............................................. $157,857,604 $125,429,754 $153,845,800 ============ ============ ============ NET ASSETS CONSIST OF Paid-in capital......................................... 274,363,291 219,038,592 151,528,752 Undistributed (distributions in excess of) net investment income..................................... (233,162) (232,529) (507,513) Accumulated net realized gain (loss) from investments... (526,462) 924,225 299,945 Net unrealized appreciation (depreciation) on investments........................................... (115,746,063) (94,300,534) 2,524,616 ------------ ------------ ------------ Net Assets.............................................. $157,857,604 $125,429,754 $153,845,800 ============ ============ ============ Shares outstanding ($0.001 par value, 100,000,000 shares authorized).................................... 29,923,842 26,695,915 15,107,558 ------------ ------------ ------------ Net asset value, offering and redemption price per share $ 5.28 $ 4.70 $ 10.18 ============ ============ ============ + Investment in non-affiliated funds, at cost........... $273,609,825 $219,783,965 $151,391,143 ============ ============ ============
The accompanying notes are an integral part of the financial statements. 9 FREE MARKET FUNDS STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED FEBRUARY 28, 2009 (UNAUDITED)
FREE MARKET FREE MARKET FREE MARKET U.S. EQUITY INTERNATIONAL FIXED FUND EQUITY FUND INCOME FUND ------------- ------------- ----------- INVESTMENT INCOME Dividends from non-affiliated investment companies...... $ 2,772,233 $ 1,649,311 $1,868,175 ------------- ------------ ---------- Total investment income............................... 2,772,233 1,649,311 1,868,175 ------------- ------------ ---------- EXPENSES Advisory fees........................................... 432,362 318,349 348,894 Administration and accounting fees...................... 108,106 81,752 91,141 Professional fees....................................... 27,273 27,273 27,273 Directors' and officers' fees........................... 31,278 20,517 19,873 Registration and filing fees............................ 10,909 9,917 9,917 Printing and shareholder reporting fees................. 6,447 6,447 6,447 Transfer agent fees..................................... 5,059 5,059 5,059 Insurance fees.......................................... 1,994 1,442 1,522 Custodian fees.......................................... 1,191 1,191 1,191 Other expenses.......................................... 9,589 9,272 26,597 ------------- ------------ ---------- Total expenses........................................ 634,208 481,219 537,914 ------------- ------------ ---------- Net investment income................................... 2,138,025 1,168,092 1,330,261 ------------- ------------ ---------- NET REALIZED AND UNREALIZED GAIN/(LOSS) FROM INVESTMENTS NET REALIZED GAIN/(LOSS) FROM: Non-affiliated investment companies.................. (526,462) 924,225 299,945 NET CHANGE IN UNREALIZED APPRECIATION/(DEPRECIATION) ON: Non-affiliated investment companies.................. (115,330,669) (79,288,190) 1,968,258 ------------- ------------ ---------- Net realized and unrealized gain/(loss) from investments........................................... (115,857,131) (78,363,965) 2,268,203 ------------- ------------ ---------- NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS............................................ $(113,719,106) $(77,195,873) $3,598,464 ============= ============ ==========
The accompanying notes are an integral part of the financial statements. 10 FREE MARKET U.S. EQUITY FUND STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS FOR THE PERIOD ENDED DECEMBER 31, 2007* FEBRUARY 28, 2009 THROUGH (UNAUDITED) AUGUST 31, 2008 ------------------ ------------------ FROM OPERATIONS: Net investment income..................................................... $ 2,138,025 $ 13,167 Net realized loss from investments........................................ (526,462) -- Net change in unrealized depreciation from investments.................... (115,330,669) (415,394) ------------- ------------ Net decrease in net assets resulting from operations......................... (113,719,106) (402,227) ------------- ------------ DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income..................................................... (2,401,803) -- ------------- ------------ Net decrease in net assets from dividends and distributions to shareholders.. (2,401,803) -- ------------- ------------ CAPITAL SHARE TRANSACTIONS Proceeds from shares sold (12,992,421 and 18,789,368 shares, respectively)........................................................... 95,564,238 193,722,496 Reinvestment of distributions (350,038 and 0 shares, respectively)........ 2,401,259 -- Shares redeemed (1,599,800 and 608,185 shares, respectively).............. (11,026,078) (6,281,175) ------------- ------------ Net increase in net assets from capital share transactions................... 86,939,419 187,441,321 ------------- ------------ Total increase/(decrease) in net assets...................................... (29,181,490) 187,039,094 NET ASSETS Beginning of period....................................................... 187,039,094 -- ------------- ------------ End of period............................................................. $ 157,857,604 $187,039,094 ============= ============ Undistributed (distributions in excess of) net investment income, end of period................................................................. $ (233,162) $ 30,616 ============= ============
*Commencement of operations. The accompanying notes are an integral part of the financial statements. 11 FREE MARKET INTERNATIONAL EQUITY FUND STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS FOR THE PERIOD ENDED DECEMBER 31, 2007* FEBRUARY 28, 2009 THROUGH (UNAUDITED) AUGUST 31, 2008 ------------------ ------------------ FROM OPERATIONS: Net investment income..................................................... $ 1,168,092 $ 1,191,237 Net realized gain from investments........................................ 924,225 -- Net change in unrealized depreciation from investments.................... (79,288,190) (15,012,344) ------------ ------------ Net decrease in net assets resulting from operations......................... (77,195,873) (13,821,107) ------------ ------------ DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income..................................................... (2,609,280) -- ------------ ------------ Net decrease in net assets from dividends and distributions to shareholders.. (2,609,280) -- ------------ ------------ CAPITAL SHARE TRANSACTIONS Proceeds from shares sold (12,828,051 and 15,252,957 shares, respectively)........................................................... 79,615,185 149,183,025 Reinvestment of distributions (446,696 and 0 shares, respectively)........ 2,608,705 -- Shares redeemed (1,368,047 and 463,742 shares, respectively).............. (7,809,662) (4,541,239) ------------ ------------ Net increase in net assets from capital share transactions................... 74,414,228 144,641,786 ------------ ------------ Total increase/(decrease) in net assets...................................... (5,390,925) 130,820,679 NET ASSETS Beginning of period....................................................... 130,820,679 -- ------------ ------------ End of period............................................................. $125,429,754 $130,820,679 ============ ============ Undistributed (distributions in excess of) net investment income, end of period................................................................. $ (232,529) $ 1,208,659 ============ ============
*Commencement of operations. The accompanying notes are an integral part of the financial statements. 12 FREE MARKET FIXED INCOME FUND STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS FOR THE PERIOD ENDED DECEMBER 31, 2007* FEBRUARY 28, 2009 THROUGH (UNAUDITED) AUGUST 31, 2008 ------------------ ------------------ FROM OPERATIONS: Net investment income..................................................... $ 1,330,261 $ 97,312 Net realized gain from investments........................................ 299,945 -- Net change in unrealized appreciation from investments.................... 1,968,258 556,358 ------------ ------------ Net increase in net assets resulting from operations......................... 3,598,464 653,670 ------------ ------------ DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income..................................................... (1,837,774) (114,734) Tax return of capital..................................................... -- (46,628) ------------ ------------ Net decrease in net assets from dividends and distributions to shareholders.. (1,837,774) (161,362) ------------ ------------ CAPITAL SHARE TRANSACTIONS Proceeds from shares sold (6,278,617 and 13,330,026 shares, respectively)........................................................... 63,496,525 133,282,079 Reinvestment of distributions (182,335 and 16,180 shares, respectively)... 1,837,344 161,361 Shares redeemed (4,203,842 and 495,758 shares, respectively).............. (42,231,137) (4,953,370) ------------ ------------ Net increase in net assets from capital share transactions................... 23,102,732 128,490,070 ------------ ------------ Total increase in net assets................................................. 24,863,422 128,982,378 NET ASSETS Beginning of period....................................................... 128,982,378 -- ------------ ------------ End of period............................................................. $153,845,800 $128,982,378 ============ ============ Distributions in excess of net investment income, end of period.............. $ (507,513) $ -- ============ ============
*Commencement of operations. The accompanying notes are an integral part of the financial statements. 13 FREE MARKET FUNDS FREE MARKET U.S. EQUITY FUND FINANCIAL HIGHLIGHTS -------------------------------------------------------------------------------- Contained below is per share operating performance data for each share 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. --------------------------------------------------------------------------------
FOR THE FOR THE PERIOD SIX MONTHS ENDED DECEMBER 31, 2007* FEBRUARY 28, 2009 THROUGH (UNAUDITED) AUGUST 31, 2008 ------------------- ------------------- PER SHARE OPERATING PERFORMANCE** Net asset value, beginning of period......................................... $ 10.29 $ 10.00 -------- -------- Net investment income........................................................ 0.08 --+ Net realized and unrealized gain/(loss) on investments ...................... (5.00) 0.29 -------- -------- Net increase/(decrease) in net assets resulting from operations.............. (4.92) 0.29 -------- -------- Dividends and distributions to shareholders from: Net investment income........................................................ (0.09) -- Net realized capital gains................................................... -- -- -------- -------- Total dividends and distributions to shareholders ........................... (0.09) -- -------- -------- Net asset value, end of period............................................... $ 5.28 $ 10.29 ======== ======== Total investment return(1)................................................... (48.03)%(2) 2.90%(2) ======== ======== RATIO/SUPPLEMENTAL DATA Net assets, end of period (000's omitted).................................... $157,858 $187,039 Ratio of expenses to average net assets(3)................................... 0.73%(4) 0.84%(4) Ratio of expenses to average net assets without waivers and expense reimbursements(3)................................................. 0.73%(4) 0.84%(4) Ratio of net investment income to average net assets(3)...................... 2.47%(4) 0.02%(4) Portfolio turnover rate...................................................... 0.52%(2) 0%(2)
---------- * Commencement of operations. ** Calculated based on shares outstanding on the first and last day of the respective period, except for dividends and distributions, if any, which are based on actual shares outstanding on the dates of distributions. + Amount less than $0.005 per share. (1) Total investment return is calculated by 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. (2) Not annualized. (3) The Fund also will indirectly bear its prorated share of expenses of the underlying funds. Such expenses are not included in the calculation of this ratio. (4) Annualized. The accompanying notes are an integral part of the financial statements. 14 FREE MARKET FUNDS FREE MARKET INTERNATIONAL EQUITY FUND FINANCIAL HIGHLIGHTS -------------------------------------------------------------------------------- Contained below is per share operating performance data for each share 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. --------------------------------------------------------------------------------
FOR THE FOR THE PERIOD SIX MONTHS ENDED DECEMBER 31, 2007* FEBRUARY 28, 2009 THROUGH (UNAUDITED) AUGUST 31, 2008 ----------------- ------------------ PER SHARE OPERATING PERFORMANCE** Net asset value, beginning of period......................................... $ 8.85 $ 10.00 -------- -------- Net investment income........................................................ 0.02 0.08 Net realized and unrealized loss on investments ............................. (4.06) (1.23) -------- -------- Net decrease in net assets resulting from operations......................... (4.04) (1.15) -------- -------- Dividends and distributions to shareholders from: Net investment income........................................................ (0.11) -- Net realized capital gains................................................... -- -- -------- -------- Total dividends and distributions to shareholders ........................... (0.11) -- -------- -------- Net asset value, end of period............................................... $ 4.70 $ 8.85 ======== ======== Total investment return(1)................................................... (45.91)%(2) (11.50)%(2) ======== ======== RATIO/SUPPLEMENTAL DATA Net assets, end of period (000's omitted).................................... $125,430 $130,821 Ratio of expenses to average net assets(3)................................... 0.76%(4) 0.92%(4) Ratio of expenses to average net assets without waivers and expense reimbursements(3)................................................. 0.76%(4) 0.92%(4) Ratio of net investment income to average net assets(3)...................... 1.83%(4) 2.94%(4) Portfolio turnover rate...................................................... 0.66%(2) 0%(2)
---------- * Commencement of operations. ** Calculated based on shares outstanding on the first and last day of the respective period, except for dividends and distributions, if any, which are based on actual shares outstanding on the dates of distributions. (1) Total investment return is calculated by 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. (2) Not annualized. (3) The Fund also will indirectly bear its prorated share of expenses of the underlying funds. Such expenses are not included in the calculation of this ratio. (4) Annualized. The accompanying notes are an integral part of the financial statements. 15 FREE MARKET FUNDS FREE MARKET FIXED INCOME FUND FINANCIAL HIGHLIGHTS -------------------------------------------------------------------------------- Contained below is per share operating performance data for each share 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. --------------------------------------------------------------------------------
FOR THE FOR THE PERIOD SIX MONTHS ENDED DECEMBER 31, 2007* FEBRUARY 28, 2009 THROUGH (UNAUDITED) AUGUST 31, 2008 ----------------- ------------------ PER SHARE OPERATING PERFORMANCE** Net asset value, beginning of period......................................... $ 10.04 $ 10.00 -------- -------- Net investment income........................................................ 0.10 0.02 Net realized and unrealized gain on investments ............................. 0.17 0.04 -------- -------- Net increase in net assets resulting from operations......................... 0.27 0.06 -------- -------- Dividends and distributions to shareholders from: Net investment income........................................................ (0.13) (0.02) Tax return of capital........................................................ -- --+ Net realized capital gains................................................... -- -- -------- -------- Total dividends and distributions to shareholders ........................... (0.13) (0.02) -------- -------- Net asset value, end of period............................................... $ 10.18 $ 10.04 ======== ======== Total investment return(1)................................................... 2.70%(2) 0.61%(2) ======== ======== RATIO/SUPPLEMENTAL DATA Net assets, end of period (000's omitted).................................... $153,846 $128,982 Ratio of expenses to average net assets(3)................................... 0.77%(4) 0.97%(4) Ratio of expenses to average net assets without waivers and expense reimbursements(3)................................................. 0.77%(4) 0.97%(4) Ratio of net investment income to average net assets(3)...................... 1.91%(4) 0.26%(4) Portfolio turnover rate...................................................... 30.65%(2) 0%(2)
---------- * Commencement of operations. ** Calculated based on shares outstanding on the first and last day of the respective period, except for dividends and distributions, if any, which are based on actual shares outstanding on the dates of distributions. + Amount less than $0.005 per share. (1) Total investment return is calculated by 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. (2) Not annualized. (3) The Fund also will indirectly bear its prorated share of expenses of the underlying funds. Such expenses are not included in the calculation of this ratio. (4) Annualized. The accompanying notes are an integral part of the financial statements. 16 FREE MARKET FUNDS NOTES TO FINANCIAL STATEMENTS FEBRUARY 28, 2009 (UNAUDITED) 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES The RBB Fund, Inc. ("RBB" or the "Company") 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 "1940 Act"), as an open-end management investment company. RBB is a "series fund," which is a mutual fund divided into separate portfolios. Each portfolio is treated as a separate entity for certain matters under the 1940 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 eighteen active investment portfolios, including the Free Market U.S. Equity Fund, Free Market International Equity Fund, and the Free Market Fixed Income Fund (each a "Fund," collectively the "Funds"). Each Fund operates as a "Fund of Funds" and commenced investment operations on December 31, 2007. RBB has authorized capital of one hundred billion shares of common stock of which 78.773 billion shares are currently classified into one hundred and twenty-seven classes of common stock. Each class represents an interest in an active or inactive RBB investment portfolio. The active classes have been grouped into nine separate "families." PORTFOLIO VALUATION -- Investments in the underlying funds are valued at each fund's net asset value determined as of the close of business on the New York Stock Exchange (generally 4:00 p.m. Eastern time). As required, some securities and assets may be valued at fair value as determined in good faith by the Company's Board of Directors. Direct investments in fixed income securities having a remaining maturity of 60 days or less are valued at amortized cost, which approximates market value. The Funds have adopted Financial Accounting Standards Board ("FASB") Statement of Financial Accounting Standards No. 157 ("SFAS 157"). This standard clarifies the definition of fair value for financial reporting, establishes a framework for measuring fair value and requires additional disclosures about the use of fair value measurements. The three levels of the fair value hierarchy under SFAS 157 are described below: o Level 1 - quoted prices in active markets for identical securities o Level 2 - other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) o Level 3 - significant unobservable inputs (including the Funds' own assumptions in determining the fair value of investments) The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. A summary of the inputs used to value the Funds' net assets as of February 28, 2009 is included with each Fund's Schedule of Investments. 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 liabilities 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. 17 FREE MARKET FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2009 (UNAUDITED) INVESTMENT TRANSACTIONS, INVESTMENT INCOME AND EXPENSES -- Transactions 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 accrued when earned. Dividend income is recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Funds estimate the components of distributions received that may be considered return of capital distributions or capital gain distributions. Each Fund's investment income, expenses and unrealized and realized gains and losses are allocated daily. 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 fund families (such as director or professional fees) are charged to all funds in proportion to their average net assets of the RBB funds, or in such other manner as the Board of Directors deems fair or equitable. 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 Funds. In addition to the net annual operating expenses that the Funds bear directly, the shareholders indirectly bear the Fund's pro-rata expenses of the underlying mutual funds in which each Fund invests. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net investment income and distributions from net realized capital gains, if any, are declared and paid at least annually to shareholders and recorded on ex-dividend date for all Funds with the exception of the Free Market Fixed Income Fund which declares and pays quarterly dividends from net investment income. Income dividends and capital gain distributions are determined in accordance with U.S. federal income tax regulations which may differ from U.S. generally accepted accounting principles. Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications within the components of net assets. U.S. TAX STATUS -- No provision is made for U.S. income taxes as it is each 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. income and excise taxes. OTHER -- In the normal course of business, the Funds may enter into contracts that provide general indemnifications. The Funds' maximum exposure under these arrangements is dependent on claims that may be made against the Funds in the future, and, therefore, cannot be estimated; however, based on experience, the risk of material loss for such claims is considered remote. 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES Abundance Technologies, Inc. ("Abundance" or the "Adviser"), serves as each Fund's investment adviser. For its advisory services, Abundance is entitled to receive 0.50% of each Fund's average daily net assets, computed daily and payable monthly. The Adviser has voluntarily agreed to waive its advisory fee and/or reimburse certain expenses in order to limit total annual fund operating expenses of Free Market U.S. Equity Fund, Free Market International Equity Fund and the Free Market Fixed Income Fund to 1.13%, 1.35% and 1.00%, respectively, of the particular Fund's average daily net assets. 18 FREE MARKET FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2009 (UNAUDITED) The expense limitations include expenses incurred as a result of investing in other investment companies. The Adviser may discontinue these arrangements at any time. For the six months ended February 28, 2009, investment advisory fees were: GROSS ADVISORY FEES ------------------- Free Market U.S. Equity Fund $432,362 Free Market International Equity Fund 318,349 Free Market Fixed Income Fund 348,894 The Funds will not pay Abundance at a later time for any amounts they may waive or any amounts that Abundance has assumed. PNC Global Investment Servicing (U.S.), Inc. ("PNC"), a member of The PNC Financial Services Group, Inc., serves as administrator for the Funds. Administration and accounting fees accrued also include transfer agent and dividend disbursing agent fees, custodian fees and administrative service fees. For providing administrative and accounting services, PNC is entitled to receive a monthly fee equal to an annual rate of 0.11% of the Fund's first $250 million of average daily net assets; 0.0925% of the next $250 million of average daily net assets; 0.0725% of the next $200 million of average daily net assets; and 0.055% of the average daily net assets in excess of $700 million, subject to a minimum monthly fee of $9,375 per Fund plus out of pocket expenses. For providing transfer agent services, PNC is entitled to receive out of pocket expenses. For providing custodian services to the Funds, PFPC Trust Company, an affiliate of PNC, is entitled to receive out of pocket expenses. PFPC Distributors, Inc., an affiliate of PNC, serves as the principal underwriter and distributor of the Funds' shares pursuant to a Distribution Agreement with RBB. 3. INVESTMENT IN SECURITIES For the six months ended February 28, 2009, aggregate purchases and sales of investment securities (excluding short-term investments) of the Funds were as follows: PURCHASES SALES ----------- ----------- Free Market U.S. Equity Fund $91,621,917 $ 909,883 Free Market International Equity Fund 78,297,035 853,108 Free Market Fixed Income Fund 68,484,444 42,940,758 19 FREE MARKET FUNDS NOTES TO FINANCIAL STATEMENTS (CONCLUDED) FEBRUARY 28, 2009 (UNAUDITED) 4. CAPITAL SHARE TRANSACTIONS As of February 28, 2009, the following shareholders held 10% or more of the outstanding shares of the Fund. These shareholders may be omnibus accounts which are comprised of many individual shareholders. Free Market U.S. Equity Fund (2 shareholders) 99% Free Market International Equity Fund (2 shareholders) 99% Free Market Fixed Income Fund (2 shareholders) 99% 5. FEDERAL INCOME TAX INFORMATION FASB Interpretation No. 48 ("FIN 48"), Accounting for Uncertainty in Income Taxes, sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has analyzed each Fund's tax positions and has concluded that no provision for income tax is required in the Funds' financial statements. The Funds are not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. However, management's conclusions regarding the adoption of FIN 48 may be subject to review and adjustment at a later date based on factors including, but not limited to, further implementation of guidance from the FASB, new tax laws, regulations and administrative interpretations (including court decisions). Due to commencement of operations being December 31, 2007, the Funds have no prior federal tax returns that would be subject to examination by Internal Revenue Service. At February 28, 2009, federal tax cost, aggregate gross unrealized appreciation and depreciation of securities held by each Fund were as follows:
FEDERAL TAX UNREALIZED UNREALIZED NET UNREALIZED COST APPRECIATION DEPRECIATION APPRECIATION/DEPRECIATION ------------ ------------ -------------- ------------------------- Free Market U.S. Equity Fund $274,151,707 $ -- $(116,287,945) $(116,287,945) Free Market International Equity Fund 220,250,128 -- (94,766,697) (94,766,697) Free Market Fixed Income Fund 151,575,566 2,660,527 (320,334) 2,340,193
At August 31, 2008, the Funds had no capital loss carryforwards available to offset future capital gains. The federal income tax character of distributions paid during the fiscal period ended August 31, 2008 were as follows:
ORDINARY LONG-TERM RETURN OF INCOME GAINS CAPITAL TOTAL --------- --------- --------- -------- Free Market U.S. Equity Fund $ -- $ -- $ -- $ -- Free Market International Equity Fund -- -- -- -- Free Market Fixed Income Fund 114,734 -- 46,628 161,362
Dividends from net investment income and short-term capital gains are treated as ordinary income dividends for federal tax purposes. 20 FREE MARKET FUNDS OTHER INFORMATION (UNAUDITED) PROXY VOTING Policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities as well as information regarding how the Funds voted proxies relating to portfolio securities for the most recent 12-month period ended June 30 are available without charge, upon request, by calling Free Market Funds at (866) 780-0357 ext. 3863 and on the Securities and Exchange Commission's ("SEC") website at http://www.sec.gov. QUARTERLY PORTFOLIO SCHEDULES The Company will file a complete schedule of portfolio holdings with the SEC for the first and third fiscal quarters of each fiscal year (quarters ended November 30 and May 31) on Form N-Q. The Company's Form N-Q will be available on the SEC website at http://www.sec.gov and may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. Information on the operation of the SEC Public Reference Room may be obtained by calling (202) 551-8090. 21 [THIS PAGE INTENTIONALLY LEFT BLANK.] INVESTMENT ADVISER ABUNDANCE TECHNOLOGIES, INC. 5955 Deerfield Blvd. Mason, OH 45040 ADMINISTRATOR PNC Global Investment Servicing (U.S.), Inc. 301 Bellevue Parkway Wilmington, DE 19809 TRANSFER AGENT PNC Global Investment Servicing (U.S.), Inc. 101 Sabin Street Pawtucket, RI 02860 PRINCIPAL UNDERWRITER PFPC Distributors, Inc. 760 Moore Road King of Prussia, PA 19406 CUSTODIAN PFPC Trust Company 8800 Tinicum Blvd. Suite 200 Philadelphia, PA 19153 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM PricewaterhouseCoopers LLP Two Commerce Square, Suite 1700 2001 Market Street Philadelphia, PA 19103-7042 COUNSEL Drinker Biddle & Reath LLP One Logan Square 18th and Cherry Streets Philadelphia, PA 19103-6996 ITEM 2. CODE OF ETHICS. Not applicable. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. ITEM 6. INVESTMENTS. (a) Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the report to shareholders filed under Item 1 of this Form. (b) Not applicable. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. There have been no material changes to the procedures by which the shareholders may recommend nominees to the registrant's board of directors, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)), or this Item. ITEM 11. CONTROLS AND PROCEDURES. (a) The registrant's principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the "1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)). (b) There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the registrant's second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS. (a)(1) Not applicable. (a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto. (a)(3) Not applicable. (b) Certifications pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) The RBB Fund, Inc. -------------------------------------------------------------------- By (Signature and Title)* /s/ Edward J. Roach ------------------------------------------------------- Edward J. Roach, President & Treasurer (principal executive officer) Date April 23, 2009 ---------------------------------------------------------------------------- Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title)* /s/ Edward J. Roach ------------------------------------------------------- Edward J. Roach, President & Treasurer (principal executive officer & principal financial officer) Date April 23, 2009 ---------------------------------------------------------------------------- * Print the name and title of each signing officer under his or her signature.