-----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, UQ2kywiUqvxF35Hh0a1zfdZe3aTJWrNGpzuQNmI212BNgMRxWkUUXw1Qo1pW/Q4o yeTW0F34lo0YjLipd1e+xg== 0000950115-96-000008.txt : 19960105 0000950115-96-000008.hdr.sgml : 19960105 ACCESSION NUMBER: 0000950115-96-000008 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19951031 FILED AS OF DATE: 19960103 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: 1838 INVESTMENT ADVISORS FUNDS CENTRAL INDEX KEY: 0000933996 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 232794406 STATE OF INCORPORATION: DE FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 033-87298 FILM NUMBER: 96500733 BUSINESS ADDRESS: STREET 1: FIVE RADNOR CORPORATE CENTER SUITE 320 STREET 2: 100 MATSONFORD ROAD CITY: RADNOR STATE: PA ZIP: 19087 BUSINESS PHONE: 6102934300 MAIL ADDRESS: STREET 1: FIVE RADNOR CORPORATE CENTER SUITE 320 STREET 2: 100 MATSONFORD ROAD CITY: RADNOR STATE: PA ZIP: 19087 N-30D 1 SHAREHOLDER INFORMATION November 22, 1995 To the Shareholder: The net asset value of your Fund as of October 31, 1995 was $9.61 per share. This represents a 3.9% decrease from $10.00 per share at the start of the Funds operations on August 3 of this year. During this same period, the number of shares outstanding in the Fund rose to 1,745,264. The international equity markets as measured by the Morgan Stanley Capital International Index for Europe, Australia and the Far East (the EAFE index) were down 4.5% for this period. Good performance in local currency terms in most markets that the Fund invests in turned into negative results with the strengthening of the dollar. This development was particularly pronounced in the largest international equity market, Japan, which rose 5.5% in Yen, but fell 5.4% in dollars during this period. The Fund managers investment philosophy is to concentrate on creating a well diversified high quality stock portfolio in the major economic regions in the world. In the managers opinion, these stocks show good growth characteristics, strong balance sheets and market leadership. At the end of October 1995, almost 95% of the Funds assets were invested in 103 companies in Japan, the other major economies in the Far East, Europe and Latin America. The world economic outlook, according to the latest International Monetary Fund report, is quite positive, with real Gross Domestic Product output growing at 2.8% in the European Union, recovering to 2.2% in 1996 in Japan and remaining at a very high level of around 8% in Asia outside of Japan. Meanwhile, according to the International Monetary Funds October 1995 World Economic Outlook, inflation in the industrialized world is expected to be only 2.5% for consumer prices in 1995 and 1996, even lower than we previously thought. This creates a favorable environment for corporate earnings, and hopefully, stock markets around the world. We would like to thank you for your support as we began managing the 1838 International Equity Fund and we are confident that your Fund is well positioned to benefit from future worldwide economic improvement. Sincerely, /s/Hans van den Berg Hans van den Berg Vice President & Portfolio Manager Past performance is not predictive of future results. Investment returns and principal values may fluctuate, so that, when redeemed, shares may be worth more or less than their original cost. 1
SCHEDULE OF NET ASSETS OCTOBER 31, 1995 Principal Amount (000s) or Number Value Sector of Shares (Note 2) ______ _____________ _______ COMMON STOCK (92.6%) AUSTRALIA (1.2%) Broken Hill Propriety Co. Metals -- Diversified 8,000 $107,905 News Corp. Ltd. Publishing 18,000 90,396 _________ 198,301 BRAZIL (1.1%) Telecomunicacoes Brasileiras Sponsor ADR Telecommunications 4,400 177,276 _________ CHILE (0.9%) Compania Telecomunicacion Chile ADR Telecommunications 2,000 144,000 _________ FRANCE (4.8%) Accor Lodging 1,300 154,256 Alcatel Alsthom Telecommunications, Energy & Electricity 1,700 144,988 Carrefour Supermarche Retail Grocery 300 175,966 Cetelem Financial Services 900 143,371 LVMH (Moet-Hennessy) Wines & Spirits 900 178,846 _________ 797,427 _________ GERMANY (5.3%) Allianz AG Holding Insurance 90 165,156 Bayer AG Chemical 630 166,177 Bayerische Motoren Werke AG Automobile Manufacturer 250 133,394 Deutsche Bank AG Banking 3,400 153,088 Hochtief AG Construction 300 117,422 Viag AG Metal Manufacturer, Energy 400 161,668 _________ 896,905 _________ HONG KONG (4.3%) Cheung Kong Holdings, Ltd. Real Estate 22,000 124,061 China Light & Power Co., Ltd. Utility 20,000 106,574 HSBC Holdings Financial Services 10,000 145,505 Hutchinson Whampoa Real Estate, Transportation and Telecomm. 22,000 121,215 Sun Hung Kai Properties Real Estate 15,000 119,799 Swire Pacific, Ltd. (A Shares) General Trading and Air Transportation 14,000 105,022 _________ 722,176 _________ ITALY (1.0%) Assicurazioni Generali SPA Insurance 7,000 162,885 _________ JAPAN (34.0%) All Nippon Airways Air Transportation. 17,000 164,877 Asahi Bank, Ltd. Banking 15,000 150,040 Asahi Glass Co., Ltd. Glass Manufacturer 15,000 147,098 Dai-Ichi Kangyo Bank Banking 9,000 152,688 Daiwa House Industries House Manufacturer 11,000 165,044 Fuji Bank, Ltd. Banking 10,000 186,324 Hitachi, Ltd. Electronics 17,000 175,047 _________
See accompanying notes to financial statements. 2
SCHEDULE OF NET ASSETS - continued OCTOBER 31, 1995 Principal Amount (000s) or Number Value Sector of Shares (Note 2) ______ ___________ _______ JAPAN -- CONTINUED Hoya Corp. Glass Manufacturer 6,000 $176,517 Industrial Bank of Japan Banking 7,000 191,521 Kinki Nippon Railway Railroad Transportation 21,000 162,690 Kirin Brewery Co. Ltd. Brewery 16,000 161,612 Konica Corp. Photography Equipment 25,000 167,937 Kyocera Corp. Bioceramics Manufacturer 2,000 164,357 Marubeni Corp. Miscellaneous Distributor 35,000 170,928 Mitsubishi Estate Co. Ltd. Real Estate 14,000 149,648 Mitsubishi Oil Co. Oil Distributor 17,000 135,369 Mitsubishi Materials Corp. Metals Diversified 35,000 158,572 Mitsubishi Trust & Banking Banking 10,000 140,233 Nippon Meat Packers, Inc. Food Processor 12,000 163,573 Nippon Paper Industries Co. Paper Manufacturer 25,000 172,350 Nippon Steel Corp. Steel Manufacturer 52,000 172,869 Nippon Television Network Broadcasting 800 191,423 Nippondenso Co. Ltd. Electronics 9,000 165,044 Nomura Securities, Co., Ltd. Securities Dealer 9,000 165,044 Obayashi Corp. Construction 23,000 171,644 Ricoh Company, Ltd. Office Equipment 18,000 194,169 Seven-Eleven Retail Grocery 2,000 133,760 Sharp Corp. Electronics 11,000 153,178 Sumitomo Bank Banking 8,000 141,999 Sumitomo Trust & Banking Banking 13,000 150,432 Takeda Chemicals Industries Pharmaceuticals 13,000 183,578 Tokio Marine & Fire Insurance 15,000 154,453 Tokyo Electric Power Electric Utility 6,060 159,266 Toyota Motor Corp. Automobile Manufacturer 8,000 149,059 Wacoal Corp. Textile Manufacturer 14,000 166,123 _________ 5,708,466 _________ MALAYSIA (1.7%) Genting Berhad Resorts -- Plantation 11,000 94,638 Maylayan Banking Banking 13,000 104,695 United Engineers, Ltd. Engineering & Construction 15,000 93,105 _________ 292,438 MEXICO (0.9%) CIFRA SA ADR Retail 150,000 157,031 _________ NETHERLANDS (5.6%) Akzo N.V. Chemicals 1,250 142,087 Heineken N.V. Brewery 1,200 212,537 International Nederlanden Groep Financial Services 2,961 176,248 Nedlloyd Groep N.V., Koninklijke Transportation 4,300 109,070 Philips Electronics N.V. Electronics 3,300 127,333 Unilever N.V. Food, Detergents 1,300 169,973 _________ 937,248
See accompanying notes to financial statements. 3
SCHEDULE OF NET ASSETS - continued OCTOBER 31, 1995 Principal Amount (000s) or Number Value Sector of Shares (Note 2) ______ _____________ _______ REPUBLIC OF KOREA (1.8%) Pohang Iron & Steel Company, Ltd. ADR Steel Manufacturer 5,500 $141,625 Samsung Electronics GDR* Electronics 2,500 166,875 _________ 308,500 _________ SINGAPORE (3.2%) DBS Land Real Estate 35,000 103,327 IPC Corp. Computer Manufacturer 160,000 109,047 Keppel Corp. Shipbuilding, Real Estate 12,000 98,312 Singapore Press Holdings Publishing 8,000 124,868 United O/S Bank Banking 11,000 96,334 _________ 531,888 _________ SPAIN (1.8%) Empresa Nacional DE Electricidad SA Utility 3,000 148,880 Repsol SA Oil and Gas Exploration 5,000 149,005 _________ 297,885 _________ SWEDEN (3.0%) Aga AB (A Shares) Industrial Gas Production 12,000 160,662 Astra AB (A Shares) Pharmaceuticals 5,000 183,528 Hennes & Mauritz AB (B Shares) Retail Clothing 2,500 163,219 _________ 507,409 _________ SWITZERLAND (4.4%) BBC Brown Boveri Group Ptg. Certificate Electrical Engineering 160 184,988 Credit Suisse Holding AG Banking 2,000 203,670 Holderbank Finan Glaris (B Shares) Building Materials 200 160,126 Roche Holding AG - Genusshein Pharmaceuticals 25 181,064 _________ 729,848 TAIWAN (0.9%) China Steel Corp.* Steel Manufacturer 8,000 145,440 _________ THAILAND (2.1%) Land & House Co. Ltd. Real Estate 6,000 96,839 Telecomasia Corp.* Telephone Utility 30,000 88,849 Thai Farmers Bank Co. Banking 11,000 90,956 The Siam Cement Co., Ltd. Building Materials 1,500 81,812 _________ 358,456 _________ UNITED KINGDOM (14.6%) Arjo Wiggins Appleton Ord. plc Paper Manufacturer 39,000 143,875 British Petroleum Co. plc Oil & Gas Exploration and Distribution 23,000 168,792 BTR plc Miscellaneous Manufacturing 33,000 174,807 Cable & Wireless plc Telecommunications 25,000 163,172 Great Universe Stores plc Retail Clothing 17,000 152,901 Lloyds Bank plc Banking 16,197 198,792 Powergen plc Electric Utility 20,000 179,095 Prudential Corp. plc Insurance 32,000 199,527 Reed International plc Publishing 11,300 171,379 Shell Transport and Trading Co. plc Oil & Gas Exploration and Distribution 14,000 163,440
See accompanying notes to financial statements. 4
SCHEDULE OF NET ASSETS - continued OCTOBER 31, 1995 Principal Amount (000s) or Number Value Sector of Shares (Note 2) ______ _____________ _______ UNITED KINGDOM -- CONTINUED Siebe plc Machinery Manufacturer 16,000 $189,816 Smithkline Beecham (A Shares) Pharmaceuticals 19,000 197,848 Tesco plc Retail Grocery 34,000 160,807 TI Group plc Miscellaneous Manufacturing 26,262 179,483 _________ 2,443,734 _________ TOTAL COMMON STOCK (COST $16,196,718) 15,517,313 COMMERCIAL PAPER (5.4%) Ford Motor Credit Corp., 5.76%, 11/01/95 Finance $913 912,665 (COST $912,665) CORPORATE BONDS (0.9%) United Micro Electron, Convertible, Electronics 100 149,880 1.25%, 06/08/04 (COST $150,000) TOTAL INVESTMENTS (COST $17,259,383) (98.9%) $16,579,858 OTHER ASSETS AND LIABILITIES, NET (1.1%) 183,884 NET ASSETS (100.0%) $16,763,742 ____________
______________________________ * Non-income producing security. Also the cost for Federal income tax purposes. The aggregate gross unrealized appreciation in which there was an excess of market value over tax cost was $637,586, and aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over market value was $1,317,111. ADR American Depository Receipt GDR Global Depository Receipt See accompanying notes to financial statements. 5
FINANCIAL STATEMENTS STATEMENT OF ASSETS AND LIABILITIES October 31, 1995 ASSETS: Investments, at market (identified cost $17,259,383) (Note 2) $16,579,858 Cash 632,431 Receivables: Fund shares sold 25,000 Dividends and interest 55,900 Foreign taxes recoverable 1,312 Forward foreign currency exchange contracts sold (Note 6) 2,848 Deferred organizational costs (Note 2) 122,895 Other assets 1,497 ---------- Total Assets 17,421,741 LIABILITIES: Payables: Investment securities purchased $632,431 Accrued expenses (Note 4) 22,721 Foreign currencies to deliver (Note 6) 2,847 ------- Total Liabilities 657,999 ------- NET ASSETS $16,763,742 =========== NET ASSETS CONSIST OF: Common stock $1,745 Additional capital paid in 17,387,849 Undistributed net investment income 40,266 Accumulated net realized gain (loss) on: Investments (23,539) Foreign currency transactions 36,990 Net unrealized depreciation on: Investments (679,525) Translation of assets and liabilities in foreign currencies (44) Net Assets, for 1,745,264 shares outstanding $16,763,742 --------- Asset Value offering price and redemption price per share ($16,763,742 1,745,264 outstanding shares of common stock, $0.001 par value) $ 9.61 ======
See accompanying notes to financial statements. 6
STATEMENT OF OPERATIONS FOR THE PERIOD AUGUST 3, 1995 (COMMENCEMENT OF OPERATIONS) THROUGH OCTOBER 31, 1995 INVESTMENT INCOME: Dividends $73,417 Interest 24,750 ------ 98,167 Less foreign taxes withheld (8,629) ------ 89,538 EXPENSES: Investment advisory fee (Note 4) $29,563 Administration fee (Note 4) 12,329 Accounting fee (Note 4) 14,794 Custodian fees 5,000 Amortization of organizational expenses (Note 2) 6,375 Legal 8,190 Audit 3,200 Registration fees 7,956 Directors fees and expenses (Note 4) 4,500 Transfer agency fees 5,881 Other 4,541 ----- Total expenses before fee waivers 102,329 Advisory fee waived (Note 4) (29,563) Administration fee waived (Note 4) (9,247) Accounting fee waived (Note 4) (11,096) Transfer agency fee waived (Note 4) (3,151) ------ Total Expenses, net 49,272 ------ Net Investment Income 40,266 ------ REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS AND FOREIGN CURRENCY: Net realized gain (loss) from: Investments (23,539) Foreign currency transactions 36,990 Net unrealized depreciation during the period on: Investments (679,525) Translation of assets and liabilities in foreign currencies (44) ------- Net realized and unrealized loss from investments and foreign currency (666,118) NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(625,852) =========
See accompanying notes to financial statements. 7
STATEMENT OF CHANGES IN NET ASSETS FOR THE PERIOD AUGUST 3, 1995 (COMMENCEMENT OF OPERATIONS) THROUGH OCTOBER 31, 1995 INCREASE (DECREASE) IN NET ASSETS: Operations: Net investment income $40,266 Net realized gain (loss) on: Investments (23,539) Foreign currency transactions 36,990 Net unrealized depreciation during the period on: Investments (679,525) Translation of assets and liabilities in foreign currencies (44) --------- Net decrease in net assets resulting from operations (625,852) --------- Increase in net assets from Fund share transactions (Note 5) 17,289,594 Increase in net assets 16,663,742 NET ASSETS: Beginning of period 100,000 ------- End of period (including undistributed net investment income of $40,266) $16,763,742 ===========
See accompanying notes to financial statements. 8
FINANCIAL HIGHLIGHTS THE FOLLOWING TABLE INCLUDES SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD FROM AUGUST 3, 1995 (COMMENCEMENT OF OPERATIONS) THROUGH OCTOBER 31, 1995. NET ASSET VALUE BEGINNING OF PERIOD $10.00 ------ INVESTMENT OPERATIONS: Net investment income 0.02 Net realized and unrealized loss on investment and foreign currency transactions (0.41) ----- Total from investment operations (0.39) ----- NET ASSET VALUE - END OF PERIOD $9.61 ===== TOTAL RETURN (3.90)% Ratios (to average net assets)/Supplemental Data: Expenses1 1.25%* Net investment income 1.02%* Portfolio turnover rate 42.21%* Net assets at end of period (000 omitted) 16,764 1 Without waivers the annualized ratio of expenses to average daily net assets would have been 2.60% for the period.
* Annualized. See accompanying notes to financial statements. 9 NOTES TO FINANCIAL STATEMENTS NOTE 1. DESCRIPTION OF THE FUND - The 1838 Investment Advisors Funds (the Trust), a diversified, open-end management investment company, was established as a series Delaware business trust on December 9, 1994, and is registered under the Investment Company Act of 1940, as amended (the 1940 Act). The Trusts Agreement and Declaration of Trust permits the Trustees to issue an unlimited number of shares of beneficial interest. The Trust has established two series: the 1838 International Equity Fund and the 1838 Small Cap Equity Fund. The 1838 International Equity Fund (the Fund), the only series currently offered by the Trust, commenced operations on August 3, 1995. NOTE 2. SIGNIFICANT ACCOUNTING POLICIES. SECURITY VALUATION - The Funds securities, except investments with remaining maturities of 60 days or less, are valued at the last quoted sales price on the securitys principal exchange on that day. If there are no sales of the relevant security on such day, the security will be valued at the mean between the closing bid and asked price on that day, if any. Debt securities having a maturity of 60 days or less are valued at amortized cost. Securities for which market quotations are not readily available and all other assets will be valued at their respective fair market value as determined in good faith by, or under procedures established by, the Board of Trustees. FEDERAL INCOME TAXES - The Fund intends to qualify annually and elect to be treated as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986 and to distribute all of its taxable income to its shareholders. Therefore, no federal income or excise tax provision is required. At October 31, 1995, the Fund had a net tax basis capital loss carryforward available to offset future capital gains of approximately $24,000, which will expire on October 31, 2003. DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS - Distributions of net investment income and net realized gains are determined in accordance with income tax regulations which may differ from generally accepted accounting principles. These differences are primarily due to differing treatments for foreign currency transactions. These distributions will be made annually in December. Additional distributions may be made to the extent necessary to avoid the payment of a 4% excise tax. DEFERRED ORGANIZATIONAL COSTS - Costs incurred by the Fund in connection with the initial registration and public offering of shares have been deferred and are being amortized on a straight-line basis over a five-year period beginning on the date that the Fund commenced operations. FOREIGN CURRENCY TRANSLATIONS - The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on the following basis: (i) market value of investment securities, assets and liabilities at the daily rates of exchange, and (ii) purchases and sales of investment securities, dividend and interest income and certain expenses at the rates of exchange prevailing on the respective dates of such transactions. The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments. 10 NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED Reported net realized foreign exchange gains or losses arise from sales and maturities of short-term securities, sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Funds books, and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities other than investments in securities at the end of the fiscal period, resulting from changes in exchange rates. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS - In connection with portfolio purchases and sales of securities denominated in a foreign currency, the Fund may enter into forward foreign currency exchange contracts. Additionally, the Fund may enter into these contracts to hedge certain foreign currency assets. Foreign currency exchange contracts are recorded at market value. Certain risks may arise upon entering into these contracts from the potential inability of counterparties to meet the terms of their contracts. Realized gains or losses arising from such transactions are included in net realized gain (loss) from foreign currency transactions. OTHER - Investment security transactions are accounted for on a trade date basis. The Fund uses the specific identification method for determining realized gain or loss on investments for both financial and federal income tax reporting purposes. Dividend income and distributions to shareholders are recorded on the ex-dividend date. Interest income is recorded on an accrual basis. NOTE 3. PURCHASES AND SALES OF INVESTMENT SECURITIES - Purchases and sales of investment securities (excluding short-term investments) for the period ended October 31, 1995 were $17,988,756 and $1,618,499, respectively. NOTE 4. ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES - The Trust, on behalf of the Fund, employs 1838 Investment Advisors, L.P. (the Investment Adviser), a Delaware limited partnership and registered investment adviser under the 1940 Act, to furnish investment advisory services to the Fund pursuant to an Investment Advisory Agreement with the Trust. The Investment Adviser supervises the investments of the assets of the Fund in accordance with its objective, policies and restrictions. The Funds assets are managed by MeesPierson 1838 Investment Advisors (the Sub-Adviser) pursuant to a Sub-Investment Advisory Agreement between the Investment Adviser and the Sub-Adviser. The Sub-Adviser is compensated by the Investment Adviser for the services it provides. The Fund pays the Investment Adviser a monthly fee at the annual rate of 0.75% of the average daily net assets of the Fund. The Investment Adviser has voluntarily agreed to waive its advisory fee or reimburse the Fund monthly to the extent that the Funds total operating expenses will exceed 1.25% of the average daily net assets of the Fund. This undertaking may be rescinded at any time in the future. The advisory fee for the period ended October 31, 1995 amounted to $29,563, all of which was waived. Rodney Square Management Corporation (RSMC), a wholly owned subsidiary of Wilmington Trust Company (WTC), serves as Administrator to the Fund pursuant to an Administration Agreement with the Trust. As Administrator, RSMC is responsible for services such as financial reporting, compliance monitoring and corporate management. For the services provided, RSMC receives a monthly administration fee from the Trust at the annual rate of 0.15% of the average daily net assets of the Trust on the first $50 million; 0.10% of such assets in excess of $50 million to $100 million; 0.07% of such assets in excess of $100 million to $200 million; and 0.05% of such assets in excess of $200 million. Each series pays its pro-rata portion based upon total Trust assets. Such fees are subject to a minimum fee of $50,000 per year for one series and $15,000 minimum per year for each additional series. 11 NOTE 4. ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED RSMC has agreed to waive a portion of its fees. For the period ended October 31, 1995, RSMCs administration fees amounted to $12,329, of which $9,247 was waived. At October 31, 1995 Administration fees payable to RSMC amounted to $3,082. Rodney Square Distributors, Inc. (RSD), a wholly owned subsidiary of WTC, has been engaged pursuant to a Distribution Agreement with the Trust to assist in securing purchasers for shares of the Fund. RSD also directly, or through its affiliates, provides investor support services. RSD receives no compensation for distribution of shares of the Fund, except for reimbursement of out-of-pocket expenses. RSMC serves as Accounting Agent to the Fund. As Accounting Agent, RSMC determines the Funds net asset value per share and provides accounting services to the Fund pursuant to an Accounting Services Agreement with the Trust. At October 31, 1995, Accounting fees payable to RSMC amounted to $3,698. RSMC also serves as the Funds transfer agent pursuant to a Transfer Agency Agreement with the Trust. For these services, RSMC receives a monthly fee computed on the basis of the number of shareholder accounts that the Transfer Agent maintains for the Fund during the month, and is reimbursed for out-of- pocket expenses. At October 31, 1995, Transfer Agent fees payable to RSMC amounted to $2,730. The Trustees of the Trust who are interested persons of the Trust, the Investment Adviser or its affiliates and all personnel of the Trust or the Investment Adviser performing services related to research, statistical and investment activities are paid by the Investment Adviser or its affiliates. The fees and expenses payable to the non-interested Trustees amounted to $4,500 on October 31, 1995. NOTE 5. FUND SHARE TRANSACTIONS - At October 31, 1995, there were an unlimited number of shares of beneficial interest with a $0.001 par value, authorized. Transactions in shares of the Fund for the period from August 3, 1995 (commencement of operations) through October 31, 1995 were as follows: SHARES AMOUNT ------ ------ Shares sold 1,742,436 $17,357,801 Shares redeemed (7,172) (68,207) --------- ----------- Net increase 1,735,264 $17,289,594 =========== Shares outstanding: Beginning of period 10,000 --------- End of period 1,745,264 =========
NOTE 6. COMMITMENTS - As of October 31, 1995, the Fund had entered into a forward foreign currency exchange contract which contractually obligates the Fund to deliver currencies at specified future dates. The open contract is as follows: NET UNREALIZED APPRECIATION CONTRACTS TO DELIVER IN EXCHANGE FOR SETTLEMENT DATE U.S. $ -------------------- --------------- --------------- ------ British Pound 1,806 U.S. $2,848 11/02/95 1
12 REPORT OF INDEPENDENT ACCOUNTANTS TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF THE 1838 INVESTMENT ADVISORS FUNDS We have audited the accompanying statement of assets and liabilities, including the schedule of net assets of the 1838 Investment Advisors Funds, comprised of the 1838 International Equity Fund, as of October 31, 1995 and the related statements of operations, changes in net assets and the financial highlights for the period August 3, 1995 (commencement of operations) through October 31, 1995. These financial statements and financial highlights are the responsibility of the Funds management. Our responsibility is to express an opinion on these financial statements and financial highlights based upon on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 1995, by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the 1838 International Equity Fund as of October 31, 1995, the results of its operations, the changes in its net assets and its financial highlights for the period August 3, 1995 (commencement of operations) through October 31, 1995 in conformity with generally accepted accounting principles. COOPERS & LYBRAND L.L.P. 2400 Eleven Penn Center Philadelphia, Pennsylvania November 30, 1995 13 TAX INFORMATION During the period ended October 31, 1995, the Fund recognized $36,568 of foreign source income. In January 1996, shareholders will receive federal income tax information on all distributions paid to their accounts in the calendar year 1995. Please consult a tax advisor if you have any questions about federal or state income tax laws, or how to prepare your tax return. 14 TRUSTEES W. THACHER BROWN CHARLES D. DICKEY, JR. FRANK B. FOSTER, III GEORGE W. GEPHART, JR. ROBERT P. HAUPTFUHRER OFFICERS W. THACHER BROWN President GEORGE W. GEPHART, JR. Vice President JOHANNES B. van den BERG Vice President ANNA M. BENCROWSKY Vice President, Treasurer and Assistant Secretary JOSEPH V. DEL RASO, ESQ. Secretary JOHN J. KELLEY Assistant Treasurer LAURIE V. BROOKS Assistant Secretary INVESTMENT ADVISOR 1838 INVESTMENT ADVISORS, L.P. FIVE RADNOR CORPORATE CENTER SUITE 320 100 MATSONFORD ROAD RADNOR, PA 19087 SUB-ADVISOR MEESPIERSON 1838 INVESTMENT ADVISORS FIVE RADNOR CORPORATE CENTER SUITE 320 100 MATSONFORD ROAD RADNOR, PA 19087 CUSTODIAN BANKERS TRUST COMPANY 280 PARK AVENUE NEW YORK, NY 10017 COUNSEL STRADLEY, RONON, STEVENS & YOUNG 2600 ONE COMMERCE SQUARE PHILADELPHIA, PA 19103 AUDITORS COOPERS & LYBRAND L.L.P. 2400 ELEVEN PENN CENTER PHILADELPHIA, PA 19103 1838 INTERNATIONAL EQUITY FUND FIVE RADNOR CORPORATE CENTER, SUITE 320 100 MATSONFORD ROAD RADNOR, PA 19087 Annual Report October 31, 1995 -----END PRIVACY-ENHANCED MESSAGE-----