-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GXH9saKBmFqiZdUqnzcE4Uvrt2C9FgOw2PbwYZYXshLTQzGwzK0ImSy5f0NCAUQz cKXfk8kMt9JT4CdeQ2yDCw== 0000912057-96-019435.txt : 19960904 0000912057-96-019435.hdr.sgml : 19960904 ACCESSION NUMBER: 0000912057-96-019435 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960903 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: PALLADIAN TRUST CENTRAL INDEX KEY: 0000917323 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 061358430 STATE OF INCORPORATION: MA FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 812-09096 FILM NUMBER: 96625050 BUSINESS ADDRESS: STREET 1: 4225 EXECUTIVE SQUARE STREET 2: SUITE 325 CITY: LAJOLLA STATE: CA ZIP: 92037 BUSINESS PHONE: 6196775917 N-30D 1 N-30D THE PALLADIAN TRUST STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED) FROM THE PERIOD FROM FEBRUARY 1, 1996 (COMMENCEMENT OF OPERATIONS) TO JUNE 30, 1996
Global Global International Strategic Interactive / Value Growth Growth Income Telecomm Portfolio Portfolio Portfolio Portfolio Portfolio Total - ----------------------------------------------------------------------------------------------------------------------- ASSETS Investments: At identified cost . . . . . $709,090 $31,224 $42,607 $821,819 $527,213 $2,131,953 --------- -------- ---------- ----------- --------- ---------- --------- -------- ---------- ----------- --------- ---------- At value . . . . . . . . . . $787,246 $33,600 $45,321 $783,730 $533,216 $2,183,113 Cash . . . . . . . . . . . . . 0 51,023 19,442 307,619 40,481 418,565 Receivables: Interest and dividends . . . 601 117 60 29,138 1,014 30,930 Investments sold . . . . . . 0 4,228 0 0 0 4,228 Forward foreign exchange contracts to buy . . . . . . ---- ---- ---- 302,204 ---- 302,204 Shares of beneficial interest sold. . . . . . . . 0 0 0 0 0 0 Expense reimbursements . . . 26,972 18,803 17,317 32,983 24,205 120,280 Unamortized organization costs 21,858 21,858 22,493 21,857 21,857 109,923 Prepaid Insurance. . . . . . . 2,209 2,208 2,202 2,210 2,210 11,039 --------- -------- ---------- ----------- --------- ---------- Total Assets . . . . . . . . $838,886 $131,837 $106,835 $1,479,741 $622,983 $3,180,282 --------- -------- ---------- ----------- --------- ---------- LIABILITIES Payables: Investments purchased. . . . $0 $0 $0 $101,166 $0 $101,166 Due Custodian. . . . . . . . 47,987 ---- ---- ---- ---- 47,987 Forward foreign exchange contracts to buy. . . . . . ---- ---- ---- 300,810 ---- 300,810 Shares of beneficial interest purchased. . . . . 0 0 0 0 0 0 Accrued expenses . . . . . . 39,453 38,628 37,602 42,308 39,014 197,005 --------- -------- ---------- ----------- --------- ---------- Total Liabilities. . . . . . $87,440 $38,628 $37,602 $444,284 $39,014 $646,968 --------- -------- ---------- ----------- --------- ---------- NET ASSETS . . . . . . . . . . $751,446 $93,209 $69,233 $1,035,457 $583,969 $2,533,314 --------- -------- ---------- ----------- --------- ---------- --------- -------- ---------- ----------- --------- ---------- NET ASSETS Consist of: Undistributed net investment income / (loss). . $370 $9 $314 $13,253 ($462) $13,484 Unrealized appreciation (depreciation) of investments. . . . . . . . . 78,155 2,377 2,715 (42,527) 6,003 46,723 Accumulated net realized gain / (loss). . . . . . . . 1,376 3,056 630 (1,161) 2,736 6,637 Capital shares at par value. . 671,545 87,767 65,574 1,065,892 575,692 2,466,470 --------- -------- ---------- ----------- --------- ---------- Total Net Assets . . . . . . $751,446 $93,209 $69,233 $1,035,457 $583,969 $2,533,314 --------- -------- ---------- ----------- --------- ---------- --------- -------- ---------- ----------- --------- ---------- Shares of beneficial interest outstanding. . . . 66,564 8,022 6,397 106,555 57,479 --------- -------- ---------- ----------- --------- --------- -------- ---------- ----------- --------- NET ASSET VALUE, offering price and redemption price per share of beneficial interest outstanding. . . . . $11.29 $11.62 $10.82 $9.72 $10.16 --------- -------- ---------- ----------- --------- --------- -------- ---------- ----------- ---------
The accompanying notes are an integral part of these financial statements. 1 THE PALLADIAN TRUST STATEMENTS OF OPERATIONS (UNAUDITED) FROM THE PERIOD FROM FEBRUARY 1, 1996 (COMMENCEMENT OF OPERATIONS) TO JUNE 30, 1996
Global Global International Strategic Interactive / Value Growth Growth Income Telecomm Portfolio Portfolio Portfolio Portfolio Portfolio Total -------------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME Dividends (Net of foreign withholding taxes of $11,$59 and $139 for the Value, International Growth and Global $2,552 $13 $336 $0 $2,300 $5,201 Interactive / Telecomm) portfolio..................... Interest ............................................... 1,707 437 246 21,982 1,678 26,050 ------- -------- --------- ------- --------- ------- Total Investment Income .............................. $4,259 $450 $582 $21,982 $3,978 $31,251 ------- -------- --------- ------- --------- ------- EXPENSES Amortization of organization costs...................... $1,780 $1,780 $1,145 $1,780 $1,780 $8,265 Auditing fees .......................................... 4,977 302 271 8,170 4,167 17,887 Custodian fees ......................................... 2,385 3,422 2,451 4,454 2,304 15,016 Insurance .............................................. 1,797 1,800 1,806 1,797 1,797 8,997 Legal fees ............................................. 3,321 204 181 5,454 2,779 11,939 Management & advisory fees (Note 5)..................... 1,983 112 90 3,379 1,722 7,286 Other .................................................. 21 1 1 34 17 74 Portfolio accounting fees .............................. 11,404 11,425 11,467 11,404 11,404 57,104 Registration & filing fees ............................. 689 43 37 1,130 577 2,476 Shareholders' expenses ................................. 125 8 7 205 105 450 Trustees' fees and expenses............................. 2,379 147 129 3,905 1,993 8,553 ------- -------- --------- ------- --------- ------- Total Expenses ....................................... $30,861 $19,244 $17,585 $41,712 $28,645 $138,047 Less expense reimbursements (Note 5).................... $26,972 $18,803 $17,317 $32,983 $24,205 $120,280 ------- -------- --------- ------- --------- ------- Net Expenses ......................................... 3,889 441 268 8,729 4,440 17,767 ------- -------- --------- ------- --------- ------- NET INVESTMENT INCOME .................................. $370 $9 $314 $13,253 ($462) $13,484 ------- -------- --------- ------- --------- ------- REALIZED and UNREALIZED GAIN / (LOSS) on INVESTMENTS: Net realized gain / (loss) from: Security transactions ................................ $1,376 $3,056 $0 ($615) $2,658 $6,475 Forward foreign exchange contracts ................... ---- ---- (210) (1,299) ---- (1,509) Forward currency transactions ........................ ---- ---- 840 754 77 1,671 Net change in unrealized appreciation / (depreciation) on: Security transactions ................................ $78,155 $2,377 $2,715 ($38,089) $6,003 $51,161 Forward foreign exchange contracts ................... 0 0 0 (5,274) 0 (5,274) Forward currency transactions ........................ 0 0 0 837 0 837 Net realized and unrealized gain / (loss) on investments $79,531 $5,433 $3,345 ($43,686) $8,738 $53,361 ------- -------- --------- ------- --------- -------- NET INCREASE / (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ........................ $79,901 $5,442 $3,659 ($30,433) $8,276 $66,845 ------- -------- --------- ------- --------- --------
The accompanying notes are an integral part of these financial statements. 2
THE PALLADIAN TRUST STATEMENTS OF CHANGE IN NET ASSETS (UNAUDITED) FROM THE PERIOD FROM FEBRUARY 1, 1996 (COMMENCEMENT OF OPERATIONS) TO JUNE 30, 1996 GLOBAL GLOBAL INTERNATIONAL STRATEGIC INTERACTIVE / VALUE GROWTH GROWTH INCOME TELECOMM PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO - --------------------------------------------------------------------------------------------------------------------------- OPERATIONS: Net investment income/ (loss). . . . . . . . $370 $9 $314 $13,253 ($462) Net realized gain / (loss) on securities, forward foreign exchange contracts and foreign currency transactions. . . . . . . 1,376 3,056 630 (1,160) 2,735 Net unrealized gain / (loss) on securities, forward foreign exchange contracts and other assets and liabilities denominated in foreign currencies. . . . . . . . . . . 78,155 2,377 2,715 (42,526) 6,003 -------- ------- ------- ---------- -------- Net increase / (decrease) in net assets resulting from operations. . . . . . . . . $79,901 $5,442 $3,659 ($30,433) $8,276 DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income. . . . . . . . . . . $0 $0 $0 $0 $0 Net realized gains on investments. . . . . 0 0 0 0 0 NET INCREASE/ (DECREASE) IN NET ASSETS FROM SHARES OF BENEFICIAL INTEREST TRANSACTIONS. . . . . . . . . . . $671,545 $87,767 $65,574 $1,065,892 $575,692 -------- ------- ------- ---------- -------- Net increase / (decrease) in net assets. . . 751,446 93,209 69,233 1,035,459 583,968 NET ASSETS: Beginning of period. . . . . . . . . . . . . 0 0 0 0 0 -------- ------- ------- ---------- -------- End of period. . . . . . . . . . . . . . . . $751,446 $93,209 $69,233 $1,035,457 $583,969 -------- ------- ------- ---------- -------- -------- ------- ------- ---------- --------
The accompanying notes are an integral part of these financial statements. 3
THE PALLADIAN TRUST FINANCIAL HIGHLIGHTS (UNAUDITED) FROM THE PERIOD FROM FEBRUARY 1, 1996 (COMMENCEMENT OF OPERATIONS) TO JUNE 30, 1996 Global Global International Strategic Interactive/ Value Growth Growth Income Telecomm Portfolio Portfolio Portfolio Portfolio Portfolio - -------------------------------------------------------------------------------------------------------- Net asset value, commencement of operations ........................ $10.00 $10.00 $10.00 $10.00 $10.00 -------- -------- -------- -------- -------- INCOME / (LOSS) FROM INVESTMENT OPERATIONS: Net investment income .................. 0.01 0.00 0.06 0.12 (0.01) Net realized and unrealized gain / (loss) on investments .................. 1.28 1.62 0.76 (0.41) 0.17 -------- -------- -------- -------- -------- Total from investment operations ....... 1.29 1.62 0.82 (0.28) 0.16 -------- -------- -------- -------- -------- LESS DISTRIBUTIONS: Dividends from net investment income ............................... 0.00 0.00 0.00 0.00 0.00 Distributions from capital gains ....... 0.00 0.00 0.00 0.00 0.00 -------- -------- -------- -------- -------- Total distributions .................... 0.00 0.00 0.00 0.00 0.00 -------- -------- -------- -------- -------- Net asset value, end of year ........... $11.29 $11.62 $10.82 $9.72 $10.16 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Total Return ........................... 12.89% 16.19% 8.23% -2.82% 1.60% -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- RATIOS TO AVERAGE NET ASSETS / SUPPLEMENTAL DATA: Net assets, end of reporting period .... $751,984 $93,692 $69,545 $1,036,183 $584,444 Ratio of operating expenses to average net assets ................... 1.53% 2.25% 1.77% 2.23% 2.10% Ratio of net investment income to average net assets ................ 0.15% 0.05% 1.59% 3.39% -0.22% Portfolio turnover rate ................ 23.15% 490.77% 0.00% 76.14% 23.55%
The accompanying notes are an integral part of these financial statements. 4 THE VALUE PORTFOLIO PORTFOLIO OF INVESTMENTS JUNE 30, 1996
VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- COMMON STOCKS - 104.8% Advertising - 3.6% 1,000 Ackerly Communications, Inc........................... 27,250 -------- AEROSPACE & DEFENSE - 6.3% 300 Boeing Company......................................... 26,138 500 Precision Castparts Corp.. ............................ 21,500 -------- 47,638 -------- AUTOMOTIVE EQUIPMENT & SUPPLIES - 9.2% 600 Echlin Inc............................................. 22,725 1,000 Kollmorgen ............................................ 14,750 1,000 Standard Motor Products ............................... 17,875 500 Wynn's International, Inc. ............................ 14,125 -------- 69,475 BEVERAGES - 5.0% 1,000 Celestial Seasonings, Inc. ............................ 20,500 500 Seagrams. ............................................. 16,812 -------- 37,312 -------- BROADCASTING & CABLE - 11.9% 2,000 Citicasters, Inc. ..................................... 62,500 309 Chris-Craft Industries, Inc. .......................... 13,596 500 Liberty Media Group .................................. 13,250 -------- 89,346 -------- COMMUNICATION SERVICES - 5.4% 500 Comsat Corp. .......................................... 13,000 2,000 Loral Space & Communications........................... 27,250 -------- 40,250 -------- DEPARTMENT STORES - 3.6% 1,000 Nieman Marcus Group, Inc. ............................. 27,000 -------- DIVERSIFIED - 1.6% 500 Rollins, Inc. ......................................... 11,750 -------- ELECTRICAL EQUIPMENT & SUPPLIES - 4.9% 500 Westinghouse Electric ................................. 9,375 500 Moog Inc. ............................................. 12,250 1,000 Katy Industries, Inc. ................................. 15,000 -------- 36,625 -------- FOOD - 5.3% 600 Quaker Oats Co. ....................................... 20,475 1,000 Archer Daniels Midland ............................... 19,125 -------- 39,600 -------- GROCERY STORES - 8.5% 1,000 Giant Food Inc. ....................................... 35,875 2,000 Bruno's Inc. . ........................................ 27,750 -------- 63,625 -------- INDUSTRIAL INORGANIC CHEMICALS - 2.8% 1,000 Church & Dwight Co., Inc. ............................. 20,875 -------- INDUSTRIAL EQUIPMENT & SUPPLIES - 8.5% 2,000 AMPCO - Pittsburgh Corp. .............................. 23,250 1,000 Goulds Pumps .......................................... 25,625 300 Sequa Corp. ........................................... 15,000 -------- 63,875 -------- LABORATORY APPARATUS - 2.9% 1,000 Ametek Inc. ........................................... 21,750 -------- NEWSPAPERS / PUBLISHING - 10.8% 500 Lee Enterprises, Inc. ................................. 11,812 500 Media General Inc. .................................... 18,625 500 Meredith Corp. ........................................ 20,875 500 Pulitzer Publishing .................................. 29,625 -------- 80,937 -------- NON-DURABLE GOODS - 4.0% 500 Culbro Corporation .................................... 29,813 -------- OIL & GAS - 1.5% 1,000 RPC Inc................................................ 11,500 -------- PAPER & PLASTIC PRODUCTS - 3.9% 500 Ferro Corp ............................................ 13,250 500 Grief Bros. Corp ...................................... 16,000 -------- 29,250 -------- TELECOMMUNICATIONS - 5.2% 1,000 Centennial Cellular Corp. ............................ 16,875 500 Telephone & Data Systems .............................. 22,500 -------- 39,375 -------- TOTAL INVESTMENTS (Cost $709,090) 104.8% 787,246 - -------------------------------------------------------------------------------- OTHER ASSETS AND LIABILITIES (Net) -4.8% (35,800) - -------------------------------------------------------------------------------- NET ASSETS 100.0% 751,446 - --------------------------------------------------------------------------------
The Growth Portfolio Portfolio of Investments June 30, 1996 Value Shares (Note 1) - ------------------------------------------------------------------------- COMMON STOCKS - 36.0% Automotive Services - 1.2% 50 Olympic Financial,Inc............................. 1,151 -------- Banks & Financial Services - 1.8% 25 Bank of New York - Warrants ...................... 1,035 50 Mercury Financial Co.............................. 637 -------- 1,672 -------- Building Residential & Commercial - 0.5% 20 Contl. Homes Holding Corp. ....................... 430 -------- Business Services - 1.3% 50 Personnel Group of America, Inc. ................. 1,232 -------- Communication Services - 1.2% 50 Brite Voice Systems, Inc. ........................ 1,075 -------- Computers & Data Processing - 3.0% 10 Hewlett Packard Company .......................... 996 50 PC Docs Group Intl., Inc. ........................ 993 100 Sunriver Corporation ............................ 787 -------- 2,776 -------- Entertainment - 1.2% 110 Quintel Entertainment, Inc. ...................... 1,156 -------- Environmental Scvs.& Waste Disposal - 2.7% 40 USA Waste Services, Inc. ......................... 1,185 40 United Waste Systems, Inc. ....................... 1,291 -------- 2,476 -------- Health Services - 1.0% 100 Neurocrine Biosciences, Inc. .................... 887 -------- Industrial Equipment - 1.8% 50 Platinum Technology, Inc. ........................ 756 100 Starsight Telecast, Inc. ......................... 912 -------- 1,668 -------- Machinery - 1.5% 100 Figgie International ............................. 1,425 Medical Supplies - 3.6% 40 Safeskin Corp. .................................. 1,661 50 Ameridata Technologies,Inc. ..................... 794 50 Bacou USA, Inc.................................... 887 -------- 3,342 -------- Miscellaneous - 0.6% 100 Geographics, Inc. ............................... 568 -------- Oil & Gas Services - 0.4% 25 Digicon, Inc....................................... 418 -------- Restaurants - 7.4% 50 CKE Restaurants ................................... 1,275 100 Cooker Restaurant Corp............................. 1,337 30 Lone Star Steakhouse & Saloon...................... 1,132 40 Manhattan Bagel Company ........................... 590 50 Landry's Seafood Restaurants ...................... 1,237 50 Dave & Buster's, Inc............................... 1,337 -------- 6,908 -------- Restaurant Equipment - 1.6% 100 Turbochef, Inc. .................................. 1,476 -------- Retail - 3.4% 40 Friedman's Inc. ................................... 1,020 50 Renters Choice .................................... 1,276 10 Fila Holdings Spa, ADR ............................ 862 -------- 3,158 Semiconductor Capital Equipment - 0.7% 50 Advanced Technology Material ...................... 675 -------- Telecommunications - 1.2% 20 Worldcom, Inc. ................................... 1,107 -------- TOTAL INVESTMENTS (Cost $31,224) 36.0% 33,600 - ------------------------------------------------------------------------ OTHER ASSETS AND LIABILITIES (Net) 64.0% 59,609 - ------------------------------------------------------------------------ NET ASSETS 100.0% 93,209 - ------------------------------------------------------------------------ THE INTERNATIONAL GROWTH PORTFOLIO - -------------------------------------------------------------------- PORTFOLIO OF INVESTMENTS JUNE 30, 1996 - --------------------------------------------------------------------
VALUE SHARES (NOTE 1) - ---------------------------------------------------------------------- COMMON STOCKS - 65.5% SWITZERLAND - 14.0% 10 Stratec Holding . . . . . . . . . . . . . . . . 9,713 -------- FINLAND - 11.9% 500 Benefon . . . . . . . . . . . . . . . . . . . . 8,261 -------- FRANCE - 15.2% 75 Axime (Ex Segin). . . . . . . . . . . . . . . . 10,504 -------- HONG KONG - 10.9% 22,500 Joyce Boutique . . . . . . . . . . . . . . . . 7,556 -------- SWEDEN - 13.4% 500 Nobel Biocare . . . . . . . . . . . . . . . . 9,287 -------- TOTAL INVESTMENTS (Cost $42,607) 65.5% 45,321 - ---------------------------------------------------------------------- OTHER ASSETS AND LIABILITIES (Net) 34.5% 23,912 - ---------------------------------------------------------------------- NET ASSETS 100.0% 69,233 - ---------------------------------------------------------------------- - ----------------------------------------------------------------------
THE GLOBAL STRATEGIC INCOME PORTFOLIO PORTFOLIO OF INVESTMENTS JUNE 30, 1996 Value Face Value (Note 1) - -------------------------------------------------------------------------------- UNITED STATES DOLLAR BOND - 41.5% 450,000 U.S. Treasury Note 429,609 5.250% due 1/31/01 GERMAN DEUTSCHE MARK BOND - 24.4% 350,000 Deutschland Republic 8.000% due 7/22/02 $253,094 JAPANESE YEN BOND - 9.8% 11,400,000 JAPAN - 184 (10 Year Issue) 2.900% due 12/20/05 101,026 TOTAL INVESTMENTS (Cost $821,819) 75.7% 783,729 - -------------------------------------------------------------------------------- OTHER ASSETS AND LIABILITIES (Net) 24.3% 251,728 - -------------------------------------------------------------------------------- NET ASSETS 100.0% 1,035,457 - -------------------------------------------------------------------------------- SCHEDULE OF FORWARD FOREIGN EXCHANGE CONTRACTS Contract Market Value Value Date (Note 1) - -------------------------------------------------------------------------------- FORWARD FOREIGN EXCHANGE CONTRACTS TO BUY 121,456 German Deutsche Mark....... 07/22/96 $79,982 15,499,998 Japanese Yen............... 07/22/96 142,298 3,800,000 Spanish Peseta............. 07/22/96 29,646 77,199,998 Italian Lira .............. 07/22/96 50,278 - -------------------------------------------------------------------------------- TOTAL FORWARD FOREIGN EXCHANGE CONTRACTS TO BUY (Contract amount $300,810) $302,204 - -------------------------------------------------------------------------------- THE GLOBAL INTERACTIVE / TELECOMM PORTFOLIO - -------------------------------------------------------------------------------- Portfolio of Investments June 30, 1996 - -------------------------------------------------------------------------------- Value Shares (Note 1) - -------------------------------------------------------------------------------- COMMON STOCKS - 91.3% Canada - 1.7% 500 British Columbia Telecomm...................................... 9,725 Great Britain - 2.7% 2,000 Flextech PLC................................................... 15,779 ------- Foreign - 7.0% 1,000 Grupo Televisa, GDS............................................ 30,750 500 Havas S.A. Spons, ADR.......................................... 10,222 ------- 40,972 ------- UNITED STATES - 79.9% BROADCASTING, MEDIA & RADIO - 12.6% 1,000 Multi-Market Radio, Class A.................................... 10,937 500 The News Corporation, Ltd., ADR................................ 11,750 500 Time Warner, Inc............................................... 19,626 1,000 Citicasters, Inc., Class A..................................... 31,250 ------- 73,563 ------- Computer Software - 2.1% 100 Microsoft Corporation ......................................... 12,012 CABLE - 12.3% 500 Cablevision Systems Corp....................................... 23,125 1,000 Home Shopping Network.......................................... 12,000 1,000 Tele-Communications, Inc....................................... 18,125 1,000 Comcast Corp, Class A.......................................... 18,375 ------- 71,625 ------- COMMUNICATION SERVICES - 6.2% 500 Comsat Corp. .................................................. 13,000 1,000 Loral Space & Communications .................................. 13,625 1,000 Rogers Communications, Class B................................. 9,376 ------- 36,001 ------- DIVERSIFIED - 11.7% 1,000 Westinghouse Electric.......................................... 18,750 300 Sony Corp., ADR................................................ 19,838 1,050 Gaylord Entertainment.......................................... 29,662 ------- 68,250 ------- ENTERTAINMENT - 3.2% 1,000 Intl. Family Entertainment..................................... 18,500 MISCELLANEOUS - 5.2% 700 Santa Anita Realty Entertainment............................... 8,837 1,000 United International Holding, Class A.......................... 13,751 300 Liberty Media Group, Class A................................... 7,950 ------- 30,538 ------- Telecommunications - 26.8% 500 Airtouch Communications, Inc................................... 14,125 500 BCE, Inc....................................................... 19,750 300 Bell Atlantic.............................. ................... 19,125 500 Cable & Wireless, plc., ADR.................................... 9,876 500 Century Telephone Enterprises.................................. 15,937 1,000 New World Communications Group................................. 14,625 300 NYNEX Corp..................................................... 14,250 1,500 Rogers Cantel Mobile, Class B.................................. 35,062 300 Telephone Data Systems......................................... 13,501 ------- 156,251 ------- TOTAL INVESTMENTS (Cost $527,213) 91.3% 533,216 OTHER ASSETS AND LIABILITIES (Net) 8.7% 50,753 NET ASSETS 100.0% 583,969 - -------------------------------------------------------------------------------- The Palladian Trust Notes to Financial Statements 1. ORGANIZATION The Palladian Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended, (the "Act") as an open-end management investment company organized as a Massachusetts business trust. As of the date of this report the Trust offered six managed investment Portfolios: Value Portfolio, Growth Portfolio, Balanced Portfolio, International Growth Portfolio, Global Strategic Income Portfolio and Global Interactive / Telecomm Portfolio. The Trust is intended to serve as an investment medium for (i) variable life insurance policies and variable annuity contracts offered by insurance companies, (ii) certain qualified pension and retirement plans, as permitted by Treasury Regulations; and (iii) and advisers to the Portfolios and their affiliates. 2. SIGNIFICANT ACCOUNTING POLICIES The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts and disclosures in financial statements. Actual results could differ from those estimates. The following is a summary of significant accounting policies consistently followed by the Portfolios in the preparation of their financial statements. PORTFOLIO VALUATION: Domestic and foreign portfolio securities, except as noted below, for which market quotations are readily available are stated at market value. Market value is determined on the basis of the last reported sales price in the principal market where such securities are traded or, if no sales are reported, the mean between representative bid and asked quotations obtained from a quotation reporting system or from established market makers. Long-term debt securities, including those to be purchased under firm commitment agreements, are normally valued on the basis of quotes obtained from brokers and dealers or pricing services, which take into account appropriate factors such as institutional-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics, and other market data. Under certain circumstances, long-term debt securities having a maturity of sixty days or less may be valued at amortized cost. Debt securities with a maturity date at time of purchase of 60 days or less are valued at amortized cost which approximates fair value. Securities for which market quotations are not readily available are valued at fair market value as determined in good faith by, or under the direction of the Board of Trustees. FOREIGN CURRENCY. The books and records of the Portfolios are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars at the exchange rates prevailing at the end of the period, and purchases and sales of investment securities, income and expenses are translated on the respective dates of such transactions. It is not practicable to isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the portion that arises from in market prices of investment during the period. Accordingly, all such changes have been reflected as net gain/(loss) on security transactions in the Statement of Operations. Unrealized gains and losses, not relating to securities, which result from changes in foreign currency exchange rates have been included in unrealized appreciation/(depreciation) of foreign currency transactions. Unrealized gains and losses of securities, which result from changes in forward currency exchange rates as well as changes in market prices of securities, have been included in unrealized appreciation / (depreciation) of securities. Net realized foreign currency gains and losses resulting from changes in exchange rates include foreign currency gains and losses between trade date and settlement date on investment securities transactions, gains and losses on foreign currency transactions and the difference between the amounts of interest and dividends recorded on the books of the Portfolios and the amount actually received. The portion of foreign currency gains and losses related to fluctuations in exchange rates between the initial purchase trade date and subsequent sale trade is included in realized gain/(loss) from investment securities sold. FORWARD FOREIGN CURRENCY CONTRACTS. All portfolios may enter into forward foreign currency contracts. Foreign currency contracts are agreements to exchange one currency for another at a future date and at a specified price. The Portfolios may use forward foreign currency contracts to facilitate transactions in foreign securities and to manage the Portfolios' foreign currency exposure. The U.S. dollar market value, contract value and the foreign currencies the Portfolios have committed to buy or sell are shown in the Portfolio of Investments under the caption "Schedule of Forward Foreign Currency Contracts." These amounts represent the aggregate exposure to each foreign currency the Portfolios have acquired or hedged through currency contracts at June 30, 1996. Forward foreign currency contracts that have been offset with different counterparties are reflected as both a forward foreign currency contract to buy and a forward foreign currency contract to sell. Forward foreign currency contracts to buy generally are used to acquire exposure to foreign currencies, while forward foreign currency contracts to sell are used to hedge the Portfolios' investments against currency fluctuations. Also, a forward foreign currency contract to buy or sell can offset a previously acquired opposite forward foreign currency contract. Forward foreign currency contracts are marked-to-market daily using foreign currency exchange rates supplied by an independent pricing service. The change in a contract's market value is recorded by the Portfolios as an unrealized gain or loss. When the contract is closed or delivery is taken, the Portfolios record 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 use of forward foreign currency contracts does not eliminate fluctuations in the underlying prices of the Portfolio's securities, but it does establish a rate of exchange that can be achieved in the future. Although forward foreign currency contracts used for hedging purposes limit the risk of loss due to a decline in the value of the hedged currency, they also limit any potential gain that might result should the value of the currency increase. In addition, the Portfolios could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts. FEDERAL INCOME TAXES. Each Portfolio of the Trust is a separate entity for Federal income tax purposes. No provision for Federal income taxes has been made since each Portfolio of the Trust has complied and intends to continue to comply with provisions of the Internal Revenue Code available to regulated investment companies and to distribute its taxable income to shareholders sufficient to relieve it from all or substantially all federal income taxes. SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Investment transactions are recorded on trade date. Dividend income and distributions to shareholders are recorded on the ex-dividend date. Interest income (including amortization of premium and discount on securities) and expenses are accrued daily. Realized gains and losses from investment transactions are recorded on an identified cost basis which is the same basis the Trust uses for Federal income tax purposes. Purchases of securities under agreements to resell are carried at cost, and the related accrued interest is included in interest receivable. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends from net investment income are declared and paid quarterly for all portfolios. Net realized capital gains, if any, are distributed at least annually. Income and capital gain distributions are determined in accordance with 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 to paid in capital. Undistributed net investment income may include temporary book and tax basis differences which will reverse in a subsequent period. EXPENSES. The Trust accounts separately for the assets, liabilities and operations of each Portfolio. Expenses directly attributable to a Portfolio are charged to a Portfolio, while expenses which are attributable to more than one Portfolio of the Trust are allocated among the respective Portfolios based upon the relative net assets of each Portfolio. ORGANIZATION EXPENSE. Organization expense were deferred and are being amortized by each Portfolio on a straight-line basis over a five-year period from commencement of operations. Each Portfolio's organizational fees payable includes fees and expenses payable to Palladian Advisors, Inc. ("PAI") of $141,828.00. The amount paid by the Trust on any redemption by PAI or, any other then-current holder of the organizational seed capital shares ("Initial Shares") of the Portfolio, will be reduced by a portion of any unamortized organization expenses of the Portfolio determined by the proportion of the number of the Initial Shares of the Portfolio redeemed to the number of the Initial Shares of the Portfolio outstanding after into account any prior redemptions of the Initial Shares of the Portfolio. TRUSTEES. Each Trustee who is not an "interested person" (as defined in the Act) of the Trust, receives $1,500 per meeting attended, as well as reimbursement for reasonable out-of-pocket expenses, from the Trust. For the quarter ending June 30, 1996 the Trust incurred $9,000 in Trustee fees, which was prorated to each portfolio. 3. MANAGER, PORTFOLIO ADVISOR, PORTFOLIO MANAGERS, ADMINISTRATION FEES AND OTHER TRANSACTIONS. Palladian Advisors, Inc. ("PAI") serves as overall Manager of the Trust and is responsible for general investment supervisory services to the Portfolios. PAI evaluates and recommends to the Trust registered investment advisors to be retained by the Trust on behalf of each of the Portfolios as Portfolio Managers and monitors and assesses their performance and makes periodic reports to the Trust. In performing these responsibilities, the Manager will rely on the services of Tremont Partners, Inc., which has been retained as Portfolio Advisor. As Portfolio Advisor, Tremont provides research concerning registered investment advisors to be retained by the Trust as Portfolio Managers, monitors and assists PAI with the periodic reevaluation of existing Portfolio Managers and makes periodic reports to PAI and the Trust. PAI, not the Trust, pays the fees of the Portfolio Advisor. The Trust and PAI have entered into portfolio management agreements with various Portfolio Managers. The Portfolio Managers for the Portfolios are as follows: GAMCO Investors, Inc. serves as the Portfolio Manager for The Value Portfolio and The Global Interactive/Telecomm Portfolio; Stonehill Capital Management, Inc. serves as the Portfolio Managers of The Growth Portfolio; Bee & Associates Incorporated serves as the Portfolio Managers of The International Growth Portfolio and Fischer Francis Trees & Watts serves as the Portfolio Manager of The Global Strategic Income Portfolio. Each Portfolio pays an overall management fee, computed and accrued daily and paid monthly, based on its average daily net assets. For the first twelve months of operations, the management fee is .80% of average net assets. After that time, the base fee will be 2.0%, but may vary between 0% and 4% depending on the performance of a Portfolio compared to that of an appropriate benchmark. Each Portfolio Manager will receive 80% of the fee, and PAI will receive the remaining 20%. PAI is responsible for paying the fee of Tremont, which equals 32.5% of the fee received by PAI. On August 8, 1996, under the terms approved by the Board of Trustees of the Portfolios, Palladian Advisors, Inc. (PAI) agreed for a one year period, effective at the commencement of operations, to limit the expenses for each Portfolio and reimburse expenses to the extent that each Portfolios aggregate expenses (excluding management fees) exceed the expense limitation for that Portfolio. The Portfolios will not pay PAI its advisory fee while a receivable is due to the Portfolios as a result of the expense limitations, except that the portion of the advisory fee that PAI is obligated to pay Tremont Partners, Inc. will be paid. The expense limitations for each of the Portfolio's as a percentage of average daily net assets are as follows: Portfolio Limitations/other expenses Value 0.70% Growth 0.70% International Growth 1.20% Global Strategic Income 1.20% Global Interactive / Telecomm 1.20% PAI, if agreed to by the Board, may continue the voluntary expense limitation past February 1, 1997. Thereafter, each Portfolio is required to reimburse PAI for any fees it waived or expenses it reimbursed pursuant to the expense limitations, provided that such reimbursement would not cause the Portfolios expense ratio to exceed the expense limitations set forth above. The amount of the fees waived or expenses reimbursed are reflected in the financial statements as a receivable from PAI with a credit reflected as a contra-expense account. As of and for the period ended June 30, 1996, the total expenses waived and reimbursed by PAI for each Portfolio were as follows: Portfolio Amount Value $27,509.90 Growth $19,286.35 International Growth $17,628.90 Global Strategic Income $33,709.15 Global Telecomm / Interactive $24,679.66 PAI has acknowledged that, upon termination of the Investment Management Agreement between PAI and the Portfolios, the Portfolios would not be liable to PAI for any waived or reimbursed fees which have not been reimbursed. Under the terms of the Agreement, the Board of Trustees or the Portfolios' shareholders may terminate the Agreement at any time upon 60 days notice. Since the amounts due PAI are dependent upon future events and the Agreement is terminable, the amount of the total obligation cannot be reasonably estimated. The repayment to PAI will be recorded in future years as an expense and a liability at each net asset value determination date to the extent that such repayment does not cause the Portfolio to exceed the expense limitation. As of June 30, 1996 the maximum potential liability would be limited to the total amount of the expenses waived and reimbursed above. Investors Bank & Trust Company provides transfer agency, portfolio accounting and custody services for the Trust. The transfer agency and portfolio accounting fees are the greater of $40,000 or .05% of net assets for the first $600 million and .03% of the net assets in excess of $600 million. Custody fees are separated between domestic and global. Western Capital Financial Group (the "Distributor") serves as the principle underwriter and distributor of the shares of the Trust. The Distributor has voluntarily waived any fees associated with servicing the Trust. Certain officers of the Trust are also officers of PAI and the Distributor. An individual, together with certain affiliated entities, owns a majority interest in the parent company of Tremont. The individual is also an officer of GAMCO Investors, Inc. selected by Tremont to provide investment advisory services to two Portfolios of the Trust. An officer of the Distributor is also an officer of PAI, and a trustee and officer of the Trust. An officer of PAI is also a trustee and officer of the Trust. 4. PURCHASES AND SALES OF SECURITIES. The aggregate cost of purchases and proceeds from sales of securities, excluding U.S. Government and short-term investments, for the quarter ending June 30, 1996 were as follows: Purchases Sales Value $832,199 $123,109 Growth $141,823 $102,964 International Growth $32,910 ----- Global Strategic Income $860,611 $489,214 Global Telecomm / Interactive $625,940 $98,727 The aggregate cost of purchases and proceeds from sales of long-term U.S. Government Securities, excluding short-term investments, for the quarter ending June 30, 1996 were as follows: Purchases Sales Global Strategic Income $451,688 ----- 5. SHARES OF BENEFICIAL INTEREST. Each Portfolio of the Trust may issue an unlimited number of shares of beneficial interest without par value. MONTH ENDED 6/30/96 ---------------------- SHARES AMOUNT - ------------------------------------------------------------------------ VALUE PORTFOLIO: Sold....................................... 65,599 $671,930 Issued as reinvestment of dividends........ 0 0 Redeemed................................... (35) (385) -------- -------- Net increase............................... 66,564 $671,545 -------- -------- -------- -------- MONTH ENDED 6/30/96 ------------------------ SHARES AMOUNT - ------------------------------------------------------------------------- GROWTH PORTFOLIO: Sold....................................... 8,029 $87,857 Issued as reinvestment of dividends........ 0 0 Redeemed................................... (7) (90) -------- -------- Net increase............................... 8,022 $87,767 -------- -------- -------- -------- MONTH ENDED 6/30/96 ------------------------ SHARES AMOUNT - ------------------------------------------------------------------------- INTERNATIONAL GROWTH PORTFOLIO: Sold...................................... 6,397 $ 65,574 Issued as reinvestment of dividends....... 0 0 Redeemed.................................. 0 0 -------- -------- Net increase.............................. 6,397 $ 65,574 -------- -------- -------- -------- MONTH ENDED 6/30/96 ----------------------- SHARES AMOUNT - ------------------------------------------------------------------------- GLOBAL STRATEGIC INCOME PORTFOLIO: Sold...................................... 141,138 $1,399,125 Issued as reinvestment of dividends....... 0 0 Redeemed.................................. (34,583) (333,233) --------- ------------ Net increase.............................. 106,555 $1,065,892 --------- ------------ --------- ------------ MONTH ENDED 6/30/96 ------------------------- SHARES AMOUNT - ------------------------------------------------------------------------- GLOBAL INTERACTIVE / TELECOMM PORTFOLIO: Sold...................................... 106,555 $575,692 Issued as reinvestment of dividends....... 0 0 Redeemed.................................. 0 0 -------- -------- Net increase................................ 106,555 $575,692 -------- -------- -------- -------- -----END PRIVACY-ENHANCED MESSAGE-----