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 811-05549
Reynolds Funds, Inc.
(Exact name of registrant as specified in charter)
615 East Michigan Street
Milwaukee, WI 53202
(Address of principal executive offices) (Zip code)
Frederick L. Reynolds
Reynolds Capital Management
2580 Kekaa Drive #115
Lahaina, Hawaii 96761
(Name and address of agent for service)
414-765-4124
Registrant's telephone number, including area code:
Date of fiscal year end: September 30
Date of reporting period: March 31, 2010
Item 1. Reports to Stockholders.
SEMIANNUAL REPORT
March 31, 2010
| REYNOLDS |
| BLUE CHIP |
| GROWTH FUND |
| Seeking Long-Term Capital Appreciation |
A No-Load Mutual Fund
1-800-773-9665
www.reynoldsfunds.com
REYNOLDS BLUE CHIP GROWTH FUND
May 14, 2010
Dear Fellow Shareholders:
Performance highlights (March 31, 2010)
The performance of the Reynolds Blue Chip Growth Fund in the six months ended March 31, 2010 was +12.78%. The performance of the Standard & Poor’s 500(1) Index during that same period was +11.75%. The average total returns of the Reynolds Blue Chip Growth Fund for the one year and annualized 3-year, 5-year and 10-year periods through March 31, 2010 were 50.81%, 16.36%, 11.18% and -4.71%, respectively. The average total returns for the Fund’s benchmark, the Standard & Poor’s 500, for the one year and annualized 3-year, 5-year and 10-year periods through March 31, 2010 were 49.77%, -4.17%, 1.92% and -0.65%, respectively.
| (1) | The Standard & Poor’s 500 Index consists of 500 selected common stocks, most of which are listed on the New York Stock Exchange. The Standard & Poor’s Ratings Group designates the stocks to be included in the Index on a statistical basis. A particular stock’s weighting in the Index is based on its relative total market value (i.e. its market price per share times the number of shares outstanding.) Stocks may be added or deleted from the Index from time to time. |
The performance of the Reynolds Blue Chip Growth Fund during the three months ended March 31, 2010 was +7.44%. The performance of the Standard & Poor’s 500 Index during that same period was +5.39%.
Portfolio Strategy
Ideally I would always invest in stocks for the long-term and have low turnover. However, it is very important to closely analyze intermediate-term potential economic cycles and resulting stock market problems or positives. Two and one half years ago in October 2007, I became increasingly concerned regarding several potential economic problems. I believed that one of these potential problems was high housing prices, and the increasingly speculative financial instruments that had evolved in this segment of the economy. As a result, I began implementing a strong “defensive investment strategy” for the Reynolds Blue Chip Growth Fund by selling equities held in the Fund and raising the cash position. The beginning of the implementation of this defensive investment strategy coincided within a few days of the intermediate top of the stock market in October 2007. I began purchasing equities for the Blue Chip Fund in March 2009, as I believed that the prices of many high quality equities had declined to attractive long-term buying ranges and the massive amount of stimulus that was being implemented worldwide would be a positive. The beginning of the implementation of this more “normal investment strategy” also coincided within a few days of the intermediate bottom of the stock market.
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The U.S. Economy
The U.S. economic recovery that started in mid-2009 has continued so far in 2010. U.S. Gross Domestic Product (GDP), helped by various stimulus measures, expanded at a 3.2% annual rate in the quarter ended March 31, 2010. U.S. GDP increased at a 5.6% rate in the quarter ended December 31, 2009 and increased at a 2.2% rate in the quarter ended September 30, 2009 after decreasing in each of the previous four quarters.
There are some current and potential economic and investment negatives at the present time including: (1) more than 8.4 million jobs have been lost since the recession started in December 2007 and unemployment is above 9%; (2) construction will continue to lag, as past overbuilding negatively affects rents and valuations, making it difficult for buyers and investors to obtain financing; (3) mortgage rates are low, but mortgage credit is still somewhat tight; (4) risk aversion among lenders continues at high levels; (5) interest rates may be increasing in the future; (6) the oil spill in the Gulf of Mexico; (7) economic problems with some individual Euro-zone countries such as Greece, Spain, Portugal and Ireland which may spread to other countries; and (8) debt problems in Europe may negatively affect U.S. economic growth. I n addition, now that global government stimulus programs of more than $2 trillion have occurred, eventually central banks will need to withdraw some of the stimulus and guard against inflation. However, compared with pouring money into the economy, draining money from the economy is a much tougher job for central banks. The near term policy focus is to balance the need to maintain stable and relatively fast growth, the need to adjust the economic structure and the need to manage inflationary expectations.
There are many current and potential economic and investment positives: (1) payrolls increased 230,000 in March and 290,000 in April, and manufacturing employment increased for the fourth straight month, further indicating that a recovery has taken hold; (2) the housing market has shown some signs of bottoming and stabilizing; (3) manufacturing is playing a larger role in the economy, as firms begin to rebuild inventories after a long two year reduction; (4) growth in the service sector is gaining momentum and broadening, although it is not as strong as the manufacturing sector; (5) apparent stability in home prices have given a boost to consumer spending in 2010; (6) businesses have been able to use the credit markets to strengthen their balance sheets; (7) business equipment investment has continued to pick up; (8) inflat ion remains at moderate levels; (9) interest rates remain low; (10) many companies recently reported better than expected quarterly earnings; (11) many companies reported revenue growth, not just earnings growth from cutting expenses in the most recent quarters; and (12) recent productivity gains have been quite strong.
The U.S. economic recovery is being affected by a number of secular factors that are altering the pace and composition of growth. The economy in 2010 is being affected by greater prudence and less speculation in lending, the importance of exports and jobs and less leverage for consumer spending. GDP decreased 2.4% in calendar 2009, after increasing 0.4% in calendar 2008, 2.1% in 2007, 2.8% in 2006, 3.1% in 2005, 3.9% in 2004, 2.7% in 2003, 1.9% in 2002, 0.8% in 2001 and 3.7% in 2000. GDP is forecast to increase 3.0% in 2010.
U.S. inflation numbers have been helped in the last few years by such factors as: (1) global competition; (2) advances in technology resulting in increasing productivity; and (3) technology innovations that are helping to lower production and distribution costs. Inflation, as measured by the Consumer Price Index, decreased 0.3% in 2009, after increasing 3.8% in 2008, 2.9% in 2007, 3.2% in 2006, 3.4% in 2005, 2.7% in 2004, 2.3% in 2003, 1.6% in 2002, 2.8% in 2001 and 3.4% in 2000. U.S. inflation is forecast to increase 2.0% in 2010.
The World Economy
The global economic recovery that started in mid-2009 has continued so far in 2010. Recovery is strongest in Asia with China having the strongest growth. Other Asian countries are having strong growth rates as well. Recovery is also occurring in Latin America and Brazil. Economic growth has also returned to Western Europe, although at a slower pace than other regions. The biggest risk to Euro-zone economic growth is related to the government debt crisis that has appeared recently, particularly in Greece. Europe will need significant fiscal retrenchment in the next few years which will slow their economic growth. Some developing countries in the world have been growing faster than the U.S. in the last few years. Their economies continued to grow faster than the U.S. during the most recent worldwide econ omic slowdown and their economies are forecast to grow faster than the U.S. in 2010.
The World Economy decreased 0.8% in 2009 and is forecast to increase 4.2% in 2010. Among “advanced economies”: (1) Japan decreased 5.2% in 2009 and is forecast to increase 2.5% in 2010; (2) the Euro-zone decreased 4.0% in 2009 and is forecast to increase 1.1% in 2010; (3) the United Kingdom decreased 4.9% in 2009 and is forecast to increase 1.1% in 2010; (4) Canada decreased 2.6% in 2009 and is forecast to increase 3.2% in 2010; and (5) Korea increased 0.2% in 2009 and is forecast to increase 5.3% in 2010.
The biggest developing economies are many times referred to as the “BRIC” economies, which is short for Brazil, Russia, India, and China. China’s population is approximately 20% of the world’s total population of approximately 6.8 billion. It is the third largest economy in the world after the U.S. and Japan and it is the world’s fastest-growing major economy. Many economists believe that China has a
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particularly good long-term outlook. It should soon overtake Japan and become the world’s second largest economy. China was one of the first countries to show a pickup in growth last year and it helped to lead the world out of recession. The acceleration in China’s growth is resulting in policy makers beginning to withdraw record fiscal and monetary stimulus. For example, bank lending has recently been tightened. GDP increased 8.5% in 2009 and is forecast to increase 10.0% in 2010.
Brazil is Latin America’s biggest economy. Brazil emerged from its first recession since 2003 in the second quarter of 2009. GDP decreased 0.2% in 2009 and is forecast to increase 4.9% in 2010.
India’s population is approximately 17% of the world’s population. It is the world’s second fastest growing economy. India’s economy increased 6.8% in 2009 and is forecast to increase 8.0% in 2010. Russia’s economy decreased 7.9% in 2009 and is forecast to increase 3.6% in 2010.
Many worldwide larger multinational companies should be well positioned to benefit long-term from worldwide growth. To the extent that some of these companies’ U.S. earnings are growing slower, this could be somewhat offset by their possible stronger foreign earnings. The long-term strategy of the Reynolds Blue Chip Growth Fund is to be structured to benefit from this worldwide growth by investing in many of these leading multinational growth companies.
The Blue Chip Fund is positioned to participate in long-term worldwide growth trends through investments in multinational U.S. headquartered companies. In addition, the Fund has investments in leading foreign headquartered companies, whose stocks or American Depositary Receipts (ADRs) trade in the United States. These ADR’s are denominated in dollars and they must use GAAP (Generally Accepted Accounting Principles) accounting to qualify as an ADR. The Blue Chip Fund may hold up to 35% of its assets in ADR’s.
Opportunistic Investing in Companies of Various Sizes
The Reynolds Blue Chip Growth Fund usually invests in companies of various sizes as classified by their market capitalizations. A company’s market capitalization is calculated by taking the number of shares the company has outstanding multiplied by its current market price. Other considerations in selecting companies for the Fund include revenue growth rates, product innovations, financial strength, management’s knowledge and experience plus the overall economic and geopolitical environments and interest rates.
Portfolio as of March 31, 2010
Source: Morningstar web site and Morningstar Market Cap Breakpoints
Morningstar separates stock portfolio holdings into five market-capitalization groups: Giant, Large, Mid, Small and Micro. Of the 5,000 largest domestic stocks in the equities database, the top 1% are categorized as Giant, the next 4% are Large, the next 15% are Mid, the next 30% are Small, and the remaining 50% are Micro. Stocks outside of the largest 5,000 are also classified as Micro.
Market caps are the minimum in each cap group; therefore, the minimum large market cap is the large-mid breakpoint and mid is the mid-small breakpoint, etc. As of March 31, 2010 the minimums in each cap group are as follows:
| (in millions) | |||||
| Giant | $ | 42,515.80 | |||
| Large | $ | 9,587.26 | |||
| Mid | $ | 2,072.66 | |||
| Small | $ | 579.29 | |||
| Micro | < | $ | 579.29 | ||
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The long-term strategy of the Reynolds Blue Chip Growth Fund is to emphasize investment in “blue chip” growth companies. In the long-term these companies build value as their earnings grow. This growth in value should ultimately be recognized in higher stock prices for these companies.
Low Long-Term Interest Rates by Historical Standards are a Significant Positive for Stock Valuations
Long-term interest rates remain near historically low levels. Low long-term interest rates usually result in higher stock valuations for many reasons including:
| (1) | Long-term borrowing costs of corporations are lower resulting in higher business confidence and profits. |
| (2) | Long-term borrowing costs of individuals are lower which increases consumer confidence and spending. |
| (3) | A company’s stock is usually valued by placing a present value on that company’s future stream of earnings and dividends. The present value is higher when interest and inflation rates are low. |
Linked Money Market Fund
The First American Treasury Obligations Fund is a money market fund offered by an affiliate of our transfer agent, U.S. Bancorp Fund Services, LLC. This Fund is offered as a money market alternative to our shareholders. The First American Treasury Obligations Fund offers many free shareholder conveniences including automatic investment and withdrawal plans and check writing access to your funds and is linked to your holdings in the Reynolds Blue Chip Growth Fund. This Fund is also included on your quarterly statements.
Information about the Reynolds Blue Chip Growth Fund and the First American Treasury Obligations Fund
Reynoldsfunds.com website: You can access current information about your investment holdings via our website, reynoldsfunds.com. You must first request a personal identification number (PIN) by calling our shareholder service representatives at (800) 773-9665. You will be able to view your account list, account detail (including balances), transaction history, distributions, and the current Reynolds Blue Chip Growth Fund net asset value. Additional information available (PIN number not needed) includes quarterly updates of the returns of the Blue Chip Fund, top ten holdings and industry percentages. Also, detailed statistics and graphs of past performances from a link to Morningstar for the Blue Chip Fund.
For automatic current daily net asset values: Call 1-800-773-9665 (1-800-7REYNOLDS) twenty-four hours a day, seven days a week and press “any key” then “1”. The updated current net asset value for the Blue Chip Fund is usually available each business day after 5 P.M. (PST).
For the Reynolds Blue Chip Growth Fund shareholders to automatically access their current account information: Call 1-800-773-9665 (twenty-four hours a day, seven days a week), press “any key” then “2” and enter your 16 digit account number which appears at the top right of your statement.
To speak to a Fund representative regarding the current daily net asset value, current account information and any other questions: Call 1-800-773-9665 and press “0” from 6 A.M. to 5 P.M. (PST).
Shareholder statement frequency: Consolidated statements summarizing the Blue Chip Fund and First American Treasury Obligations Fund accounts held by a shareholder are sent quarterly. In addition, individual Blue Chip Fund statements are sent whenever a transaction occurs. These transactions are: (1) statements are sent for the Blue Chip Fund or First American Treasury Obligations Fund when a shareholder purchases or redeems shares; (2) Blue Chip Fund statements are sent twice a year if, and when, any ordinary income or capital gains are distributed.
Tax reporting: Individual 1099 forms, which summarize any dividend income and any long- or short-term capital gains, are sent annually to shareholders each January. The percentage of income earned from various government securities, if any, for the Blue Chip Fund and the First American Treasury Obligations Fund are also reported in January.
Minimum investment: $1,000 for regular and retirement accounts ($100 for additional investments for all accounts – except for the Automatic Investment Plan, which is $50 for regular and retirement plan accounts).
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Retirement plans: All types are offered including Traditional IRA, Roth IRA, Coverdell Education Savings Account, SIMPLE IRA Plan, and SEP IRA.
Automatic Investment Plan: There is no charge to automatically debit your checking account to invest in the Blue Chip Fund or the First American Treasury Obligations Fund ($50 minimum for either of these Funds) at periodic intervals to make automatic purchases in either of these Funds. This is useful for dollar cost averaging for the Blue Chip Fund.
Systematic Withdrawal Plan: For shareholders with a $10,000 minimum starting balance, there is no charge to automatically redeem shares ($100 minimum) in the Blue Chip Fund or the First American Treasury Obligations Fund as often as monthly and send a check to you or transfer funds to your bank account.
Free Check Writing: Free check writing ($100 minimum) is offered for accounts invested in the First American Treasury Obligations Fund.
Exchanges or regular redemptions between the Blue Chip Fund and the First American Treasury Obligations Fund: As often as desired – no charge.
NASDAQ symbols: Reynolds Blue Chip Growth Fund – RBCGX and First American Treasury Obligations Fund – FATXX.
Portfolio Manager: Frederick Reynolds is the portfolio manager of the Reynolds Blue Chip Growth Fund.
The Reynolds Blue Chip Growth Fund and the First American Treasury Obligations Fund are No-Load: No front-end sales commissions or deferred sales charges (“loads”) are charged. Over 40% of all mutual funds impose these marketing charges that are ultimately paid by the shareholder. These marketing charges are either: (1) a front-end fee or “load” in which up to 5% of a shareholder’s assets are deducted from the original investment (some funds even charge a fee when a shareholder reinvests capital gains or dividends); or (2) a back-end penalty fee or “load” which is typically deducted from a shareholder’s account if a shareholder redeems within five years of the original investment. These fees reduce a shareholder’s return. The Blue Chip Fund and First American Treasury Obligations Fund are No-Load as they do not have these extra charges.
We appreciate your continued confidence in the Reynolds Blue Chip Growth Fund and would like to welcome our new shareholders. We look forward to strong results in the future.
Sincerely,
Frederick L. Reynolds
President
This report is not authorized for use as an offer of sale or a solicitation of an offer to buy shares of the Reynolds Blue Chip Growth Fund unless accompanied or preceded by the Fund’s current prospectus. Performance data quoted represents past performance; past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by visiting www.reynoldsfunds.com.
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Reynolds Blue Chip Growth Fund
COST DISCUSSION (Unaudited)
As a shareholder of the Reynolds Blue Chip Growth Fund, you do not incur (except as described below) transaction costs, including sales charges (loads) on purchase payments, reinvested dividends, or other distributions; redemption fees; and exchange fees, but do incur ongoing costs, including management fees; distribution [and/or service] (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 period and held for the entire period from October 1, 2009 through March 31, 2010.
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.
In addition to the costs highlighted and described below, the only Fund transaction costs you might currently incur would be wire fees ($15 per wire), if you choose to have proceeds from a redemption wired to your bank account instead of receiving a check. Additionally, U.S. Bank charges an annual processing fee ($15) if you maintain an IRA account with the Fund. To determine your total costs of investing in the Fund, you would need to add any applicable wire or IRA processing fees you’ve incurred during the period to the costs provided in the example below.
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 this 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), redemption or exchange fees. 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 | Expenses Paid During | |
| Value 10/01/09 | Value 3/31/10 | Period* 10/01/09-3/31/10 | |
| Reynolds Blue Chip Growth Fund Actual | $1,000.00 | $1,127.50 | $10.56 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,015.00 | $10.00 |
| * | Expenses are equal to the Fund’s annualized expense ratio of 1.99% multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period between October 1, 2009 and March 31, 2010). |
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Reynolds Blue Chip Growth Fund
STATEMENT OF ASSETS AND LIABILITIES
March 31, 2010 (Unaudited)
| ASSETS: | ||||
| Investments in securities, at value (cost $66,147,990) | $ | 79,280,918 | ||
| Receivable from investments sold | 1,733,667 | |||
| Cash | 547,498 | |||
| Receivable from shareholders for purchases | 539,411 | |||
| Net dividends receivable | 65,680 | |||
| Total assets | $ | 82,167,174 | ||
| LIABILITIES: | ||||
| Payable to brokers for investments purchased | $ | 2,233,720 | ||
| Payable to shareholders for redemptions | 1,043 | |||
| Payable to adviser for management fees | 63,920 | |||
| Other liabilities | 48,310 | |||
| Total liabilities | 2,346,993 | |||
| NET ASSETS: | ||||
| Capital Stock, $0.01 par value; 40,000,000 shares authorized; 1,690,665 shares outstanding | 152,312,350 | |||
| Net unrealized appreciation on investments | 13,132,928 | |||
| Accumulated net realized loss on investments | (85,625,097 | ) | ||
| Net assets | 79,820,181 | |||
| Total liabilities and net assets | $ | 82,167,174 | ||
| CALCULATION OF NET ASSET VALUE PER SHARE: | ||||
| Net asset value, offering and redemption price per share ($79,820,181 ÷ 1,690,665 shares outstanding) | $ | 47.21 | ||
The accompanying notes to financial statements are an integral part of this statement.
SCHEDULE OF INVESTMENTS
March 31, 2010 (Unaudited)
| Shares | Value | ||||||
| LONG-TERM INVESTMENTS — 99.3% (a) | |||||||
| COMMON STOCKS — 99.3% (a) | |||||||
| Aerospace & Defense — 2.1% | |||||||
| 5,400 | BE Aerospace, Inc.* | $ | 164,430 | ||||
| 3,100 | The Boeing Co. | 225,091 | |||||
| 2,100 | General Dynamics Corp. | 162,120 | |||||
| 2,800 | Goodrich Corp. | 197,456 | |||||
| 1,700 | Hexcel Corp.* | 24,548 | |||||
| 2,700 | Honeywell International Inc. | 122,229 | |||||
| 1,000 | L-3 Communications Holdings, Inc. | 91,630 | |||||
| 1,300 | Lockheed Martin Corp. | 108,186 | |||||
| 2,600 | Northrop Grumman Corp. | 170,482 | |||||
| 2,300 | Raytheon Co. | 131,376 | |||||
| 1,800 | Rockwell Collins, Inc. | 112,662 | |||||
| 2,000 | United Technologies Corp. | 147,220 | |||||
| 1,657,430 | |||||||
| Air Freight & Logistics — 0.4% | |||||||
| 800 | Expeditors International | ||||||
| of Washington, Inc. | 29,536 | ||||||
| 1,000 | FedEx Corp. | 93,400 | |||||
| 2,500 | United Parcel Service, Inc. Cl B | 161,025 | |||||
| 283,961 | |||||||
| Airlines — 2.2% | |||||||
| 1,200 | Alaska Air Group, Inc.* | 49,476 | |||||
| 2,600 | Allegiant Travel Co.* | 150,436 | |||||
| 18,000 | AMR Corp.* | 163,980 | |||||
The accompanying notes to financial statements are an integral part of this schedule.
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Reynolds Blue Chip Growth Fund
SCHEDULE OF INVESTMENTS (Continued)
March 31, 2010 (Unaudited)
| Shares | Value | ||||||
| LONG-TERM INVESTMENTS — 99.3% (a) (Continued) | |||||||
| COMMON STOCKS — 99.3% (a) (Continued) | |||||||
| Airlines — 2.2% (Continued) | |||||||
| 3,000 | China Southern Airlines Company | ||||||
| Ltd. - SP-ADR* | $ | 67,050 | |||||
| 7,500 | Continental Airlines, Inc. Cl B* | 164,775 | |||||
| 12,800 | Delta Air Lines, Inc.* | 186,752 | |||||
| 7,800 | GOL Intelligent Airlines Inc. - SP-ADR | 96,642 | |||||
| 8,000 | Hawaiian Holdings, Inc.* | 58,960 | |||||
| 6,000 | JetBlue Airways Corp.* | 33,480 | |||||
| 1,700 | Ryanair Holdings PLC - SP-ADR* | 46,189 | |||||
| 27,200 | Southwest Airlines Co. | 359,584 | |||||
| 2,900 | Tam SA - SP-ADR | 49,184 | |||||
| 9,000 | UAL Corp.* | 175,950 | |||||
| 16,900 | US Airways Group, Inc.* | 124,215 | |||||
| 1,726,673 | |||||||
| Auto Components — 0.4% | |||||||
| 7,200 | China Automotive Systems, Inc.* | 166,392 | |||||
| 3,000 | The Goodyear Tire & Rubber Co.* | 37,920 | |||||
| 3,500 | Johnson Controls, Inc. | 115,465 | |||||
| 319,777 | |||||||
| Automobiles — 0.9% | |||||||
| 27,700 | Ford Motor Co.* | 348,189 | |||||
| 2,000 | Harley-Davidson, Inc. | 56,140 | |||||
| 2,000 | Honda Motor Co., Ltd. - SP-ADR | 70,580 | |||||
| 13,500 | Tata Motors Ltd. - SP-ADR | 249,210 | |||||
| 400 | Toyota Motor Corp. - SP-ADR | 32,168 | |||||
| 756,287 | |||||||
| Beverages — 1.6% | |||||||
| 400 | Anheuser-Busch InBev N.V. - SP-ADR | 20,180 | |||||
| 1,300 | The Boston Beer Company, Inc.* | 67,938 | |||||
| 3,800 | The Coca-Cola Co. | 209,000 | |||||
| 1,100 | Coca-Cola Femsa, S.A.B. | ||||||
| de C.V. - SP-ADR | 73,095 | ||||||
| 26,000 | Cott Corp.* | 201,500 | |||||
| 1,700 | Diageo PLC - SP-ADR | 114,665 | |||||
| 2,900 | Dr Pepper Snapple Group, Inc. | 101,993 | |||||
| 1,000 | Fomento Económico Mexicano, | ||||||
| S.A.B. de C.V. - SP-ADR | 47,530 | ||||||
| 2,500 | Hansen Natural Corp.* | 108,450 | |||||
| 4,600 | PepsiCo, Inc. | 304,336 | |||||
| 1,248,687 | |||||||
| Biotechnology — 1.4% | |||||||
| 2,600 | Alkermes, Inc.* | 33,722 | |||||
| 1,000 | Amgen Inc.* | 59,760 | |||||
| 4,600 | Amylin Pharmaceuticals, Inc.* | 103,454 | |||||
| 1,500 | Biogen Idec Inc.* | 86,040 | |||||
| 1,000 | BioMarin Pharmaceutical Inc.* | 23,370 | |||||
| 3,500 | Celera Corp.* | 24,850 | |||||
| 800 | Celgene Corp.* | 49,568 | |||||
| 24,000 | Cell Therapeutics, Inc.* | 12,977 | |||||
| 700 | Cephalon, Inc.* | 47,446 | |||||
| 4,500 | Dendreon Corp.* | 164,115 | |||||
| 5 | Genta, Inc.* | 0 | |||||
| 700 | Genzyme Corp.* | 36,281 | |||||
| 1,400 | Gilead Sciences, Inc.* | 63,672 | |||||
| 4,400 | Human Genome Sciences, Inc.* | 132,880 | |||||
| 15,200 | Incyte Corp.* | 212,192 | |||||
| 4,000 | SciClone Pharmaceuticals, Inc.* | 14,120 | |||||
| 500 | Vertex Pharmaceuticals Inc.* | 20,435 | |||||
| 4,000 | Vical Inc.* | 13,440 | |||||
| 1,098,322 | |||||||
| Building Products — 0.2% | |||||||
| 11,000 | Masco Corp. | 170,720 | |||||
| Capital Markets — 1.4% | |||||||
| 600 | Affiliated Managers Group, Inc.* | 47,400 | |||||
| 1,400 | Bank Of New York Mellon Corp. | 43,232 | |||||
| 300 | BlackRock, Inc. | 65,328 | |||||
| 44,300 | E*TRADE Financial Corp.* | 73,095 | |||||
| 2,700 | The Goldman Sachs Group, Inc. | 460,701 | |||||
| 1,200 | Jefferies Group, Inc. | 28,404 | |||||
| 1,200 | Legg Mason, Inc. | 34,404 | |||||
| 1,000 | Morgan Stanley | 29,290 | |||||
| 1,200 | Piper Jaffray Companies, Inc.* | 48,360 | |||||
| 1,000 | T. Rowe Price Group Inc. | 54,930 | |||||
| 1,400 | Raymond James Financial, Inc. | 37,436 | |||||
| 3,000 | Charles Schwab Corp. | 56,070 | |||||
| 1,500 | State Street Corp. | 67,710 | |||||
| 1,500 | TD Ameritrade Holding Corp.* | 28,590 | |||||
| 1,074,950 | |||||||
The accompanying notes to financial statements are an integral part of this schedule.
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Reynolds Blue Chip Growth Fund
SCHEDULE OF INVESTMENTS (Continued)
March 31, 2010 (Unaudited)
| Shares | Value | ||||||
| LONG-TERM INVESTMENTS — 99.3% (a) (Continued) | |||||||
| COMMON STOCKS — 99.3% (a) (Continued) | |||||||
| Chemicals — 1.8% | |||||||
| 2,700 | Agrium Inc. | $ | 190,701 | ||||
| 600 | Air Products and Chemicals, Inc. | 44,370 | |||||
| 1,500 | Cytec Industries Inc. | 70,110 | |||||
| 4,000 | The Dow Chemical Co. | 118,280 | |||||
| 4,000 | E.I. du Pont de Nemours and Co. | 148,960 | |||||
| 700 | Eastman Chemical Co. | 44,576 | |||||
| 3,700 | W.R. Grace & Co.* | 102,712 | |||||
| 2,800 | International Flavors | ||||||
| & Fragrances Inc. | 133,476 | ||||||
| 600 | The Lubrizol Corp. | 55,032 | |||||
| 2,800 | Monsanto Co. | 199,976 | |||||
| 1,400 | The Mosaic Co. | 85,078 | |||||
| 1,000 | Nalco Holding Co. | 24,330 | |||||
| 4,700 | Olin Corp. | 92,214 | |||||
| 800 | Potash Corporation of | ||||||
| Saskatchewan Inc. | 95,480 | ||||||
| 900 | Sigma-Aldrich Corp. | 48,294 | |||||
| 1,453,589 | |||||||
| Commercial Banks — 1.3% | |||||||
| 1,000 | BB&T Corp. | 32,390 | |||||
| 10,600 | Fifth Third Bancorp | 144,054 | |||||
| 1,500 | Hudson City Bancorp, Inc. | 21,240 | |||||
| 17,000 | Huntington Bancshares Inc. | 91,290 | |||||
| 12,200 | KeyCorp | 94,550 | |||||
| 1,400 | PNC Financial Services Group, Inc. | 83,580 | |||||
| 9,000 | Regions Financial Corp. | 70,650 | |||||
| 5,600 | SunTrust Banks, Inc. | 150,024 | |||||
| 9,000 | Synovus Financial Corp. | 29,610 | |||||
| 1,500 | The Toronto-Dominion Bank | 111,870 | |||||
| 1,700 | U.S. Bancorp | 43,996 | |||||
| 2,000 | Wells Fargo & Co. | 62,240 | |||||
| 4,500 | Zions Bancorporation | 98,190 | |||||
| 1,033,684 | |||||||
| Commercial Services & Supplies — 0.6% | |||||||
| 2,500 | Avery Dennison Corp. | 91,025 | |||||
| 1,000 | Consolidated Graphics, Inc.* | 41,410 | |||||
| 600 | Corrections Corporation of America* | 11,916 | |||||
| 1,200 | Herman Miller, Inc. | 21,672 | |||||
| 2,200 | RINO International Corp.* | 52,206 | |||||
| 2,500 | Rollins, Inc. | 54,200 | |||||
| 25,600 | The Standard Register Co. | 136,960 | |||||
| 1,000 | Sykes Enterprises, Inc.* | 22,840 | |||||
| 1,000 | Waste Management, Inc. | 34,430 | |||||
| 466,659 | |||||||
| Communications Equipment — 3.6% | |||||||
| 7,000 | Brocade Communications | ||||||
| Systems, Inc.* | 39,970 | ||||||
| 13,400 | Ciena Corp.* | 204,216 | |||||
| 13,900 | Cisco Systems, Inc.* | 361,817 | |||||
| 1,100 | F5 Networks, Inc.* | 67,661 | |||||
| 30,875 | Finisar Corp.* | 485,046 | |||||
| 1,000 | Harris Corp. | 47,490 | |||||
| 7,500 | Ituran Location and Control Ltd. | 119,400 | |||||
| 31,000 | JDS Uniphase Corp.* | 388,430 | |||||
| 6,000 | Juniper Networks, Inc.* | 184,080 | |||||
| 8,500 | Motorola, Inc.* | 59,670 | |||||
| 2,500 | NETGEAR, Inc.* | 65,250 | |||||
| 7,400 | Nokia Corp. - SP-ADR | 114,996 | |||||
| 1,200 | Plantronics, Inc. | 37,536 | |||||
| 1,000 | QUALCOMM Inc. | 41,990 | |||||
| 5,300 | Research In Motion Ltd.* | 391,935 | |||||
| 19,500 | Sierra Wireless Inc.* | 164,385 | |||||
| 15,500 | Tellabs, Inc. | 117,335 | |||||
| 2,891,207 | |||||||
| Communications Equipment | |||||||
| Manufacturing — 0.0% | |||||||
| 3,000 | Ericsson L M Tel Co. SP-ADR | 31,320 | |||||
| Computers & Peripherals — 5.0% | |||||||
| 10,150 | Apple Inc.* | 2,384,539 | |||||
| 8,000 | Dell Inc.* | 120,080 | |||||
| 7,000 | EMC Corp.* | 126,280 | |||||
| 2,900 | Hewlett-Packard Co. | 154,135 | |||||
| 4,000 | Hutchinson Technology Inc.* | 24,960 | |||||
| 2,800 | International Business | ||||||
| Machines Corp. | 359,100 | ||||||
| 3,000 | Lexmark International, Inc.* | 108,240 | |||||
| 4,500 | NetApp, Inc.* | 146,520 | |||||
| 2,300 | QLogic Corp.* | 46,690 | |||||
| 4,700 | SanDisk Corp.* | 162,761 | |||||
The accompanying notes to financial statements are an integral part of this schedule.
- 9 -
Reynolds Blue Chip Growth Fund
SCHEDULE OF INVESTMENTS (Continued)
March 31, 2010 (Unaudited)
| Shares | Value | ||||||
| LONG-TERM INVESTMENTS — 99.3% (a) (Continued) | |||||||
| COMMON STOCKS — 99.3% (a) (Continued) | |||||||
| Computers & Peripherals — 5.0% (Continued) | |||||||
| 9,500 | Seagate Technology* | $ | 173,470 | ||||
| 5,100 | Western Digital Corp.* | 198,849 | |||||
| 4,005,624 | |||||||
| Construction & Engineering — 0.4% | |||||||
| 3,700 | Fluor Corp. | 172,087 | |||||
| 2,500 | Foster Wheeler AG* | 67,850 | |||||
| 1,200 | Jacobs Engineering Group Inc.* | 54,228 | |||||
| 294,165 | |||||||
| Consumer Electronics — 0.1% | |||||||
| 2,300 | Garmin Ltd. | 88,504 | |||||
| Consumer Finance — 0.3% | |||||||
| 4,000 | American Express Co. | 165,040 | |||||
| 800 | Capital One Financial Corp. | 33,128 | |||||
| 5,000 | Discover Financial Services | 74,500 | |||||
| 272,668 | |||||||
| Consumer Services-Diversified — 0.1% | |||||||
| 800 | Grand Canyon Education, Inc.* | 20,912 | |||||
| 500 | New Oriental Education & | ||||||
| Technology Group, Inc. - SP-ADR* | 42,755 | ||||||
| 63,667 | |||||||
| Containers & Packaging — 0.3% | |||||||
| 700 | Ball Corp. | 37,366 | |||||
| 15,500 | Boise, Inc.* | 95,015 | |||||
| 2,500 | Owens-Illinois, Inc.* | 88,850 | |||||
| 1,800 | Sealed Air Corp. | 37,944 | |||||
| 259,175 | |||||||
| Distributors — 0.1% | |||||||
| 1,200 | Genuine Parts Co. | 50,688 | |||||
| Electrical Equipment — 0.6% | |||||||
| 1,800 | Baldor Electric Co. | 67,320 | |||||
| 18,000 | Capstone Turbine Corp.* | 22,860 | |||||
| 3,300 | Emerson Electric Co. | 166,122 | |||||
| 1,700 | Rockwell Automation, Inc. | 95,812 | |||||
| 1,000 | A.O. Smith Corp. | 52,570 | |||||
| 1,900 | Thomas & Betts Corp.* | 74,556 | |||||
| 479,240 | |||||||
| Electronic Equipment, Instruments | |||||||
| & Components — 1.4% | |||||||
| 1,500 | Agilent Technologies, Inc.* | 51,585 | |||||
| 4,500 | Brightpoint, Inc.* | 33,885 | |||||
| 800 | Coherent, Inc.* | 25,568 | |||||
| 6,200 | Corning Inc. | 125,302 | |||||
| 1,000 | Dolby Laboratories Inc.* | 58,670 | |||||
| 18,500 | Flextronics International Ltd.* | 145,040 | |||||
| 600 | Itron, Inc.* | 43,542 | |||||
| 3,800 | Jabil Circuit, Inc. | 61,522 | |||||
| 2,000 | Molex Inc. | 41,720 | |||||
| 15,600 | Sanmina-SCI Corp.* | 257,400 | |||||
| 1,200 | Tech Data Corp.* | 50,280 | |||||
| 1,200 | Trimble Navigation Ltd.* | 34,464 | |||||
| 15,100 | Vishay Intertechnology, Inc.* | 154,473 | |||||
| 1,083,451 | |||||||
| Energy Equipment & Services — 3.0% | |||||||
| 1,200 | Atwood Oceanics, Inc.* | 41,556 | |||||
| 2,500 | Baker Hughes Inc. | 117,100 | |||||
| 5,500 | Cameron International Corp.* | 235,730 | |||||
| 11,100 | CGG-Veritas - SP-ADR* | 314,352 | |||||
| 2,300 | Diamond Offshore Drilling, Inc. | 204,263 | |||||
| 3,000 | Halliburton Co. | 90,390 | |||||
| 1,600 | Helmerich & Payne, Inc. | 60,928 | |||||
| 800 | Nabors Industries Ltd.* | 15,704 | |||||
| 800 | National-Oilwell Varco Inc. | 32,464 | |||||
| 1,600 | Noble Corp. | 66,912 | |||||
| 6,800 | Parker Drilling Co.* | 33,524 | |||||
| 9,000 | Rowan Companies, Inc.* | 261,990 | |||||
| 5,000 | Schlumberger Ltd. | 317,300 | |||||
| 3,000 | Smith International, Inc. | 128,460 | |||||
| 1,000 | Tenaris S.A. - SP-ADR | 42,940 | |||||
| 4,200 | Transocean Ltd.* | 362,796 | |||||
| 2,200 | Weatherford | ||||||
| International Ltd.* | 34,892 | ||||||
| 2,361,301 | |||||||
| Financial Services-Diversified — 0.6% | |||||||
| 4,100 | Bank of America Corp. | 73,185 | |||||
| 34,700 | Citigroup Inc.* | 140,535 | |||||
| 2,900 | JPMorgan Chase & Co. | 129,775 | |||||
| 1,500 | The NASDAQ OMX Group, Inc.* | 31,680 | |||||
| 11,500 | NewStar Financial, Inc.* | 73,370 | |||||
The accompanying notes to financial statements are an integral part of this schedule.
- 10 -
Reynolds Blue Chip Growth Fund
SCHEDULE OF INVESTMENTS (Continued)
March 31, 2010 (Unaudited)
| Shares | Value | ||||||
| LONG-TERM INVESTMENTS — 99.3% (a) (Continued) | |||||||
| COMMON STOCKS — 99.3% (a) (Continued) | |||||||
| Financial Services-Diversified — 0.6% (Continued) | |||||||
| 1,600 | NYSE Euronext | $ | 47,376 | ||||
| 495,921 | |||||||
| Food & Staples Retailing — 1.7% | |||||||
| 1,000 | BJ’s Wholesale Club, Inc.* | 36,990 | |||||
| 1,500 | Casey’s General Stores, Inc. | 47,100 | |||||
| 5,700 | Costco Wholesale Corp. | 340,347 | |||||
| 4,000 | CVS Caremark Corp. | 146,240 | |||||
| 12,200 | The Great Atlantic & Pacific | ||||||
| Tea Company, Inc.* | 93,574 | ||||||
| 5,500 | Rite Aid Corp.* | 8,250 | |||||
| 1,600 | Safeway Inc. | 39,776 | |||||
| 1,500 | SUPERVALU Inc. | 25,020 | |||||
| 1,500 | Sysco Corp. | 44,250 | |||||
| 3,900 | Wal-Mart Stores, Inc. | 216,840 | |||||
| 2,200 | Walgreen Co. | 81,598 | |||||
| 5,500 | Whole Foods Market, Inc.* | 198,825 | |||||
| 5,500 | Winn-Dixie Stores, Inc.* | 68,695 | |||||
| 1,347,505 | |||||||
| Food Products — 1.0% | |||||||
| 900 | Campbell Soup Co. | 31,815 | |||||
| 2,400 | ConAgra Foods, Inc. | 60,168 | |||||
| 2,500 | General Mills, Inc. | 176,975 | |||||
| 2,300 | H.J. Heinz Co. | 104,903 | |||||
| 3,000 | The Hershey Co. | 128,430 | |||||
| 700 | Kellogg Co. | 37,401 | |||||
| 1,000 | Kraft Foods Inc. | 30,240 | |||||
| 1,200 | Ralcorp Holdings, Inc.* | 81,336 | |||||
| 8,800 | Sara Lee Corp. | 122,584 | |||||
| 700 | The J.M. Smucker Co. | 42,182 | |||||
| 816,034 | |||||||
| Health Care Equipment & Supplies — 1.3% | |||||||
| 700 | C.R. Bard, Inc. | 60,634 | |||||
| 1,200 | Baxter International Inc. | 69,840 | |||||
| 1,000 | Becton, Dickinson & Co. | 78,730 | |||||
| 1,000 | Edwards Lifesciences Corp.* | 98,880 | |||||
| 2,300 | Hospira, Inc.* | 130,295 | |||||
| 700 | IDEXX Laboratories, Inc.* | 40,285 | |||||
| 1,800 | Kinetic Concepts, Inc.* | 86,058 | |||||
| 1,200 | Medtronic, Inc. | 54,036 | |||||
| 1,300 | ResMed Inc.* | 82,745 | |||||
| 800 | Sirona Dental Systems, Inc.* | 30,424 | |||||
| 500 | St. Jude Medical, Inc.* | 20,525 | |||||
| 2,100 | Stryker Corp. | 120,162 | |||||
| 3,500 | Varian Medical Systems, Inc.* | 193,655 | |||||
| 1,066,269 | |||||||
| Health Care Providers & Services — 2.1% | |||||||
| 1,500 | Aetna Inc. | 52,665 | |||||
| 4,800 | AmerisourceBergen Corp. | 138,816 | |||||
| 1,200 | Brookdale Senior Living Inc.* | 24,996 | |||||
| 3,500 | Cardinal Health, Inc. | 126,105 | |||||
| 1,200 | CIGNA Corp. | 43,896 | |||||
| 2,100 | Community Health Systems Inc.* | 77,553 | |||||
| 1,200 | Coventry Health Care, Inc.* | 29,664 | |||||
| 1,100 | Express Scripts, Inc.* | 111,936 | |||||
| 13,000 | Health Management Associates, Inc.* | 111,800 | |||||
| 1,500 | HEALTHSOUTH Corp.* | 28,050 | |||||
| 1,500 | Humana Inc.* | 70,155 | |||||
| 1,600 | Lincare Holdings Inc.* | 71,808 | |||||
| 800 | Magellan Health Services, Inc.* | 34,784 | |||||
| 1,000 | McKesson Corp. | 65,720 | |||||
| 1,800 | Medco Health Solutions, Inc.* | 116,208 | |||||
| 1,000 | Patterson Companies Inc. | 31,050 | |||||
| 1,200 | PSS World Medical, Inc.* | 28,212 | |||||
| 700 | Quest Diagnostics Inc. | 40,803 | |||||
| 24,500 | Tenet Healthcare Corp.* | 140,140 | |||||
| 2,500 | UnitedHealth Group Inc. | 81,675 | |||||
| 800 | Universal Health Services, Inc. | 28,072 | |||||
| 2,400 | WellCare Health Plans Inc.* | 71,520 | |||||
| 1,800 | WellPoint Inc.* | 115,884 | |||||
| 1,641,512 | |||||||
| Health Care Technology — 0.2% | |||||||
| 1,200 | Cerner Corp.* | 102,072 | |||||
| 800 | Computer Programs & Systems, Inc. | 31,264 | |||||
| 2,100 | Omnicell, Inc.* | 29,463 | |||||
| 162,799 | |||||||
| Home Building — 1.0% | |||||||
| 2,000 | Beazer Homes USA, Inc.* | 9,080 | |||||
| 8,700 | D.R. Horton, Inc. | 109,620 | |||||
| 2,400 | Gafisa S.A. - SP-ADR | 32,976 | |||||
The accompanying notes to financial statements are an integral part of this schedule.
- 11 -
Reynolds Blue Chip Growth Fund
SCHEDULE OF INVESTMENTS (Continued)
March 31, 2010 (Unaudited)
| Shares | Value | ||||||
| LONG-TERM INVESTMENTS — 99.3% (a) (Continued) | |||||||
| COMMON STOCKS — 99.3% (a) (Continued) | |||||||
| Home Building — 1.0% (Continued) | |||||||
| 18,500 | Hovnanian Enterprises, Inc.* | $ | 80,475 | ||||
| 4,900 | KB Home | 82,075 | |||||
| 7,400 | Lennar Corp. | 127,354 | |||||
| 1,800 | Meritage Homes Corp.* | 37,800 | |||||
| 8,875 | Pulte Group Inc.* | 99,844 | |||||
| 3,700 | The Ryland Group, Inc. | 83,028 | |||||
| 7,000 | Standard Pacific Corp.* | 31,640 | |||||
| 3,200 | Toll Brothers, Inc.* | 66,560 | |||||
| 760,452 | |||||||
| Hotels, Restaurants & Leisure — 5.9% | |||||||
| 3,000 | Brinker International, Inc. | 57,840 | |||||
| 500 | Buffalo Wild Wings Inc.* | 24,055 | |||||
| 1,500 | Burger King Holdings Inc. | 31,890 | |||||
| 4,500 | California Pizza Kitchen, Inc.* | 75,555 | |||||
| 5,000 | Caribou Coffee Company, Inc.* | 33,100 | |||||
| 1,200 | Carnival Corp. | 46,656 | |||||
| 2,400 | The Cheesecake Factory Inc.* | 64,944 | |||||
| 1,100 | Chipotle Mexican Grill, Inc.* | 123,937 | |||||
| 2,100 | Choice Hotels International, Inc. | 73,101 | |||||
| 2,100 | Cracker Barrel Old Country Store, Inc. | 97,398 | |||||
| 5,400 | Ctrip.com | ||||||
| International, Ltd. - SP-ADR* | 211,680 | ||||||
| 3,100 | Darden Restaurants, Inc. | 138,074 | |||||
| 8,200 | Denny’s Corp.* | 31,488 | |||||
| 700 | DineEquity, Inc.* | 27,671 | |||||
| 8,700 | Domino’s Pizza, Inc.* | 118,668 | |||||
| 1,100 | Home Inns & Hotels | ||||||
| Management, Inc. - SP-ADR* | 36,014 | ||||||
| 2,500 | Hyatt Hotels Corp.* | 97,400 | |||||
| 6,200 | International Game Technology | 114,390 | |||||
| 49,000 | Jamba, Inc.* | 133,280 | |||||
| 23,700 | Las Vegas Sands Corp.* | 501,255 | |||||
| 3,821 | Marriott International, Inc. | 120,438 | |||||
| 6,800 | McDonald’s Corp. | 453,696 | |||||
| 17,500 | MGM MIRAGE* | 210,000 | |||||
| 4,700 | P.F. Chang’s China Bistro, Inc.* | 207,411 | |||||
| 2,300 | Panera Bread Co.* | 175,927 | |||||
| 1,500 | Papa John’s International, Inc.* | 38,565 | |||||
| 1,100 | Peet’s Coffee & Tea Inc.* | 43,615 | |||||
| 4,600 | Royal Caribbean Cruises Ltd.* | 151,754 | |||||
| 26,490 | Ruth’s Hospitality Group Inc.* | 140,397 | |||||
| 16,800 | Starbucks Corp. | 407,736 | |||||
| 4,700 | Starwood Hotels & Resorts | ||||||
| Worldwide, Inc. | 219,208 | ||||||
| 5,500 | Wyndham Worldwide Corp. | 141,515 | |||||
| 3,450 | Wynn Resorts Ltd. | 261,614 | |||||
| 3,000 | Yum! Brands, Inc. | 114,990 | |||||
| 4,725,262 | |||||||
| Household Durables — 1.2% | |||||||
| 1,200 | Helen of Troy Ltd.* | 31,272 | |||||
| 19,400 | La-Z-Boy Inc.* | 243,276 | |||||
| 600 | Mohawk Industries, Inc.* | 32,628 | |||||
| 4,000 | Newell Rubbermaid Inc. | 60,800 | |||||
| 2,200 | Sony Corp. - SP-ADR | 84,304 | |||||
| 2,830 | Stanley Black & Decker Inc. | 162,470 | |||||
| 3,000 | Tempur-Pedic International Inc.* | 90,480 | |||||
| 2,700 | Tupperware Brands Corp. | 130,194 | |||||
| 1,400 | Whirlpool Corp. | 122,150 | |||||
| 957,574 | |||||||
| Household Products — 0.6% | |||||||
| 1,600 | The Clorox Co. | 102,624 | |||||
| 1,900 | Colgate-Palmolive Co. | 161,994 | |||||
| 2,700 | Kimberly-Clark Corp. | 169,776 | |||||
| 1,300 | The Procter & Gamble Co. | 82,251 | |||||
| 516,645 | |||||||
| Industrial Conglomerates — 0.7% | |||||||
| 1,700 | 3M Co. | 142,069 | |||||
| 11,200 | General Electric Co. | 203,840 | |||||
| 4,700 | McDermott International, Inc.* | 126,524 | |||||
| 4,600 | Textron Inc. | 97,658 | |||||
| 570,091 | |||||||
| Insurance — 1.1% | |||||||
| 1,000 | Aflac, Inc. | 54,290 | |||||
| 300 | American International Group, Inc.* | 10,242 | |||||
| 500 | Berkshire Hathaway Inc. Cl B* | 40,635 | |||||
| 1,400 | China Life Insurance | ||||||
| Company, Ltd. - SP-ADR | 100,856 | ||||||
| 10,900 | Genworth Financial Inc.* | 199,906 | |||||
| 1,500 | Hartford Financial Services | ||||||
| Group, Inc. | 42,630 | ||||||
The accompanying notes to financial statements are an integral part of this schedule.
- 12 -
Reynolds Blue Chip Growth Fund
SCHEDULE OF INVESTMENTS (Continued)
March 31, 2010 (Unaudited)
| Shares | Value | ||||||
| LONG-TERM INVESTMENTS — 99.3% (a) (Continued) | |||||||
| COMMON STOCKS — 99.3% (a) (Continued) | |||||||
| Insurance — 1.1% (Continued) | |||||||
| 1,400 | Lincoln National Corp. | $ | 42,980 | ||||
| 2,500 | MetLife, Inc. | 108,350 | |||||
| 1,200 | Prudential Financial, Inc. | 72,600 | |||||
| 1,000 | Torchmark Corp. | 53,510 | |||||
| 2,300 | The Travelers Companies, Inc. | 124,062 | |||||
| 850,061 | |||||||
| Internet & Catalog Retail — 2.2% | |||||||
| 4,700 | Amazon.com, Inc.* | 637,931 | |||||
| 9,400 | Expedia, Inc. | 234,624 | |||||
| 1,400 | Netflix Inc.* | 103,236 | |||||
| 2,500 | Overstock.com, Inc.* | 40,625 | |||||
| 1,200 | PetMed Express, Inc. | 26,604 | |||||
| 2,800 | Priceline.com Inc.* | 714,000 | |||||
| 1,757,020 | |||||||
| Internet Software & Services — 3.7% | |||||||
| 9,700 | Akamai Technologies, Inc.* | 304,677 | |||||
| 12,500 | Art Technology Group, Inc.* | 55,125 | |||||
| 1,350 | Baidu, Inc. - SP-ADR* | 805,950 | |||||
| 12,700 | eBay Inc.* | 342,265 | |||||
| 1,350 | Google Inc.* | 765,464 | |||||
| 3,800 | IAC/InterActiveCorp* | 86,412 | |||||
| 2,500 | NetEase.com Inc. - SP-ADR* | 88,675 | |||||
| 4,500 | SAVVIS, Inc.* | 74,250 | |||||
| 2,200 | SINA Corp.* | 82,918 | |||||
| 2,500 | Sohu.com Inc.* | 136,500 | |||||
| 4,200 | ValueClick, Inc.* | 42,588 | |||||
| 2,600 | VeriSign, Inc.* | 67,626 | |||||
| 1,000 | WebMD Health Corp.* | 46,380 | |||||
| 4,500 | Yahoo! Inc.* | 74,385 | |||||
| 2,973,215 | |||||||
| IT Services — 2.1% | |||||||
| 4,100 | Acxiom Corp.* | 73,554 | |||||
| 800 | Automatic Data Processing, Inc. | 35,576 | |||||
| 4,700 | Cognizant Technology | ||||||
| Solutions Corp.* | 239,606 | ||||||
| 1,200 | Computer Sciences Corp.* | 65,388 | |||||
| 1,500 | Fiserv, Inc.* | 76,140 | |||||
| 5,300 | Infosys Technologies Ltd. - SP-ADR | 311,905 | |||||
| 400 | Mastercard, Inc. | 101,600 | |||||
| 2,200 | Paychex, Inc. | 67,540 | |||||
| 9,800 | Satyam Computer Services | ||||||
| Ltd. - SP-ADR* | 51,156 | ||||||
| 1,400 | TeleTech Holdings, Inc.* | 23,912 | |||||
| 1,200 | Unisys Corp.* | 41,868 | |||||
| 14,900 | VeriFone Holdings, Inc.* | 301,129 | |||||
| 2,900 | Visa Inc. | 263,987 | |||||
| 1,653,361 | |||||||
| Leisure Equipment & Products — 0.1% | |||||||
| 10,500 | Eastman Kodak Co.* | 60,795 | |||||
| 1,200 | Mattel, Inc. | 27,288 | |||||
| 88,083 | |||||||
| Life Sciences Tools & Services — 0.4% | |||||||
| 5,100 | Affymetrix, Inc.* | 37,434 | |||||
| 300 | Dionex Corp.* | 22,434 | |||||
| 1,200 | PerkinElmer, Inc. | 28,680 | |||||
| 5,900 | Sequenom Inc.* | 37,229 | |||||
| 700 | Thermo Fisher Scientific, Inc.* | 36,008 | |||||
| 1,800 | Waters Corp.* | 121,572 | |||||
| 283,357 | |||||||
| Machinery — 3.1% | |||||||
| 2,900 | Bucyrus International, Inc. | 191,371 | |||||
| 7,000 | Caterpillar Inc. | 439,950 | |||||
| 1,200 | Cummins Inc. | 74,340 | |||||
| 600 | Danaher Corp. | 47,946 | |||||
| 6,500 | Deere & Co. | 386,490 | |||||
| 2,300 | Eaton Corp. | 174,271 | |||||
| 2,800 | Gardner Denver Inc. | 123,312 | |||||
| 2,500 | Illinois Tool Works Inc. | 118,400 | |||||
| 2,500 | Ingersoll-Rand PLC | 87,175 | |||||
| 7,200 | Joy Global Inc. | 407,520 | |||||
| 600 | Oshkosh Corp.* | 24,204 | |||||
| 800 | PACCAR Inc. | 34,672 | |||||
| 2,700 | Pall Corp. | 109,323 | |||||
| 2,500 | Parker Hannifin Corp. | 161,850 | |||||
| 5,700 | Terex Corp.* | 129,447 | |||||
| 2,510,271 | |||||||
| Media — 3.4% | |||||||
| 13,900 | Belo Corp. | 94,798 | |||||
| 11,900 | CBS Corp. Cl B Non-Voting | 165,886 | |||||
The accompanying notes to financial statements are an integral part of this schedule.
- 13 -
Reynolds Blue Chip Growth Fund
SCHEDULE OF INVESTMENTS (Continued)
March 31, 2010 (Unaudited)
| Shares | Value | ||||||
| LONG-TERM INVESTMENTS — 99.3% (a) (Continued) | |||||||
| COMMON STOCKS — 99.3% (a) (Continued) | |||||||
| Media — 3.4% (Continued) | |||||||
| 3,800 | DIRECTV* | $ | 128,478 | ||||
| 13,600 | The Walt Disney Co. | 474,776 | |||||
| 800 | DreamWorks Animation SKG, Inc.* | 31,512 | |||||
| 14,600 | Entercom Communications Corp.* | 173,594 | |||||
| 28,000 | Gannett Co., Inc. | 462,560 | |||||
| 1,500 | Grupo Televisa S.A. - SP-ADR | 31,530 | |||||
| 9,400 | IMAX Corp.* | 169,106 | |||||
| 3,500 | Lee Enterprises, Inc.* | 11,865 | |||||
| 2,000 | Live Nation Entertainment, Inc.* | 29,000 | |||||
| 4,000 | Martha Stewart Living | ||||||
| Omnimedia, Inc.* | 22,320 | ||||||
| 12,000 | The McClatchy Co.* | 58,920 | |||||
| 9,900 | The New York Times Co.* | 110,187 | |||||
| 8,000 | News Corp. Cl B | 136,080 | |||||
| 103,000 | Sirius XM Radio Inc.* | 89,661 | |||||
| 3,000 | Time Warner Cable Inc. | 159,930 | |||||
| 1,500 | Time Warner Inc. | 46,905 | |||||
| 7,500 | Viacom, Inc. Cl B* | 257,850 | |||||
| 3,900 | Virgin Media Inc. | 67,314 | |||||
| 2,722,272 | |||||||
| Metals & Mining — 5.9% | |||||||
| 600 | Agnico-Eagle Mines Ltd. | 33,402 | |||||
| 3,600 | AK Steel Holding Corp. | 82,296 | |||||
| 4,300 | Alcoa Inc. | 61,232 | |||||
| 2,500 | Allegheny Technologies, Inc. | 134,975 | |||||
| 3,700 | Aluminum Corporation | ||||||
| of China Ltd. - SP-ADR | 95,238 | ||||||
| 800 | AngloGold Ashanti Ltd. - SP-ADR | 30,360 | |||||
| 2,500 | ArcelorMittal NYS | 109,775 | |||||
| 2,000 | Barrick Gold Corp. | 76,680 | |||||
| 1,800 | BHP Billiton Ltd. - SP-ADR | 144,576 | |||||
| 18,000 | China Precision Steel, Inc.* | 37,800 | |||||
| 3,000 | Cliffs Natural Resources Inc. | 212,850 | |||||
| 5,000 | Coeur d’ Alene Mines Corp.* | 74,900 | |||||
| 10,000 | Commercial Metals Co. | 150,600 | |||||
| 1,200 | Companhia Siderurgica | ||||||
| Nacional S.A. - SP-ADR | 47,916 | ||||||
| 3,500 | Eldorado Gold Corp.* | 42,280 | |||||
| 3,700 | Freeport-McMoRan | ||||||
| Copper & Gold Inc. | 309,098 | ||||||
| 5,700 | Gerdau S.A. - SP-ADR | 92,910 | |||||
| 6,500 | Gold Fields Ltd. - SP-ADR | 82,030 | |||||
| 1,500 | Goldcorp, Inc. | 55,830 | |||||
| 14,000 | Golden Star Resources Ltd.* | 54,180 | |||||
| 6,000 | Harmony Gold Mining | ||||||
| Company Ltd. - SP-ADR | 56,880 | ||||||
| 12,000 | Hecla Mining Co.* | 65,640 | |||||
| 3,500 | IAMGOLD Corp. | 46,270 | |||||
| 2,200 | Ivanhoe Mines Ltd.* | 38,302 | |||||
| 5,600 | Kinross Gold Corp. | 95,704 | |||||
| 3,100 | Mechel - SP-ADR | 88,102 | |||||
| 2,000 | Newmont Mining Corp. | 101,860 | |||||
| 42,000 | Northgate Minerals Corp.* | 126,000 | |||||
| 3,000 | Nucor Corp. | 136,140 | |||||
| 2,500 | Pan American Silver Corp. | 57,875 | |||||
| 700 | Randgold Resources Ltd. | 53,781 | |||||
| 400 | Rio Tinto PLC - SP-ADR | 94,692 | |||||
| 5,500 | RTI International Metals, Inc.* | 166,815 | |||||
| 3,000 | Silver Standard Resources Inc.* | 53,370 | |||||
| 9,000 | Silver Wheaton Corp.* | 141,120 | |||||
| 6,500 | Southern Copper Corp. | 205,855 | |||||
| 1,600 | Steel Dynamics, Inc. | 27,952 | |||||
| 17,000 | Taseko Mines Ltd.* | 88,060 | |||||
| 2,400 | Teck Resources Ltd. Cl B* | 104,544 | |||||
| 2,300 | Ternium S.A. - SP-ADR* | 94,369 | |||||
| 15,600 | Titanium Metals Corp.* | 258,804 | |||||
| 4,200 | United States Steel Corp. | 266,784 | |||||
| 9,600 | Vale S.A. - SP-ADR | 309,024 | |||||
| 7,000 | Yamana Gold Inc. | 68,950 | |||||
| 4,675,821 | |||||||
| Multiline Retail — 2.1% | |||||||
| 4,300 | 99 Cents Only Stores* | 70,090 | |||||
| 1,600 | Big Lots, Inc.* | 58,272 | |||||
| 8,600 | Dillard’s, Inc. | 202,960 | |||||
| 1,300 | Dollar Tree, Inc.* | 76,986 | |||||
| 1,000 | Family Dollar Stores, Inc. | 36,610 | |||||
| 2,000 | Kohl’s Corp.* | 109,560 | |||||
| 8,000 | Macy’s, Inc. | 174,160 | |||||
| 9,400 | Nordstrom, Inc. | 383,990 | |||||
The accompanying notes to financial statements are an integral part of this schedule.
- 14 -
Reynolds Blue Chip Growth Fund
SCHEDULE OF INVESTMENTS (Continued)
March 31, 2010 (Unaudited)
| Shares | Value | ||||||
| LONG-TERM INVESTMENTS — 99.3% (a) (Continued) | |||||||
| COMMON STOCKS — 99.3% (a) (Continued) | |||||||
| Multiline Retail — 2.1% (Continued) | |||||||
| 5,700 | J.C. Penney Company, Inc. | $ | 183,369 | ||||
| 18,900 | Saks, Inc.* | 162,540 | |||||
| 3,900 | Target Corp. | 205,140 | |||||
| 1,663,677 | |||||||
| Office Electronics — 0.2% | |||||||
| 16,467 | Xerox Corp. | 160,553 | |||||
| Oil, Gas & Consumable Fuels — 5.1% | |||||||
| 1,400 | Anadarko Petroleum Corp. | 101,962 | |||||
| 1,600 | Apache Corp. | 162,400 | |||||
| 1,200 | Arch Coal, Inc. | 27,420 | |||||
| 1,500 | BP- PLC - SP-ADR | 85,605 | |||||
| 28,300 | Brigham Exploration Co.* | 451,385 | |||||
| 5,000 | Cabot Oil & Gas Corp. | 184,000 | |||||
| 2,700 | Cenovus Energy Inc. | 70,767 | |||||
| 3,250 | Chesapeake Energy Corp. | 76,830 | |||||
| 300 | Chevron Corp. | 22,749 | |||||
| 1,000 | Concho Resources Inc.* | 50,360 | |||||
| 1,300 | ConocoPhillips | 66,521 | |||||
| 3,000 | Devon Energy Corp. | 193,290 | |||||
| 9,000 | El Paso Corp. | 97,560 | |||||
| 1,000 | Enbridge Inc. | 47,750 | |||||
| 4,500 | EnCana Corp. | 139,635 | |||||
| 1,500 | EOG Resources, Inc. | 139,410 | |||||
| 300 | Exxon Mobil Corp. | 20,094 | |||||
| 800 | Hess Corp. | 50,040 | |||||
| 1,000 | Holly Corp. | 27,910 | |||||
| 25,500 | Ivanhoe Energy, Inc.* | 84,915 | |||||
| 8,000 | Massey Energy Co. | 418,320 | |||||
| 1,000 | Murphy Oil Corp. | 56,190 | |||||
| 1,600 | Newfield Exploration Co.* | 83,280 | |||||
| 2,300 | Noble Energy, Inc. | 167,900 | |||||
| 1,000 | Occidental Petroleum Corp. | 84,540 | |||||
| 5,500 | Peabody Energy Corp. | 251,350 | |||||
| 3,500 | Petroleo Brasileiro S.A. - SP-ADR | 155,715 | |||||
| 800 | Range Resources Corp. | 37,496 | |||||
| 1,500 | Southwestern Energy Co.* | 61,080 | |||||
| 2,500 | Suncor Energy, Inc. | 81,350 | |||||
| 2,000 | Tesoro Corp. | 27,800 | |||||
| 800 | Valero Energy Corp. | 15,760 | |||||
| 4,500 | Whiting Petroleum Corp.* | 363,780 | |||||
| 3,500 | The Williams Companies, Inc. | 80,850 | |||||
| 1,500 | Clayton Williams Energy, Inc.* | 52,470 | |||||
| 600 | XTO Energy, Inc. | 28,308 | |||||
| 4,066,792 | |||||||
| Paper & Forest Products — 0.3% | |||||||
| 5,500 | International Paper Co. | 135,355 | |||||
| 3,100 | Weyerhaeuser Co. | 140,337 | |||||
| 275,692 | |||||||
| Personal Products — 0.6% | |||||||
| 700 | Avon Products, Inc. | 23,709 | |||||
| 1,500 | China Sky One Medical, Inc.* | 23,565 | |||||
| 3,800 | Elizabeth Arden, Inc.* | 68,400 | |||||
| 1,600 | Herbalife Ltd. | 73,792 | |||||
| 2,500 | Estee Lauder Companies, Inc. | 162,175 | |||||
| 3,800 | Medifast, Inc.* | 95,494 | |||||
| 800 | Nutri System, Inc. | 14,248 | |||||
| 500 | Weight Watchers International, Inc. | 12,765 | |||||
| 474,148 | |||||||
| Pharmaceuticals — 2.9% | |||||||
| 1,400 | Abbott Laboratories | 73,752 | |||||
| 900 | Allergan, Inc. | 58,788 | |||||
| 3,200 | Bristol-Myers Squibb Co. | 85,440 | |||||
| 4,800 | Dr. Reddy’s Laboratories | ||||||
| Ltd. - SP-ADR | 135,504 | ||||||
| 3,000 | Elan Corp. PLC - SP-ADR* | 22,740 | |||||
| 1,200 | Forest Laboratories, Inc.* | 37,632 | |||||
| 31,000 | Generex Biotechnology Corp.* | 16,700 | |||||
| 10,900 | Jazz Pharmaceuticals, Inc.* | 118,810 | |||||
| 6,900 | Johnson & Johnson | 449,880 | |||||
| 2,600 | Eli Lilly and Co. | 94,172 | |||||
| 2,400 | Medicis Pharmaceutical Corp. | 60,384 | |||||
| 3,000 | Merck & Co., Inc. | 112,050 | |||||
| 6,900 | Mylan, Inc.* | 156,699 | |||||
| 1,100 | Novo Nordisk A/S - SP-ADR | 84,832 | |||||
| 6,800 | Perrigo Co. | 399,296 | |||||
| 4,000 | Pfizer Inc. | 68,600 | |||||
| 2,700 | Questcor Pharmaceuticals, Inc.* | 22,221 | |||||
| 1,600 | Salix Pharmaceuticals, Ltd.* | 59,600 | |||||
| 1,800 | Teva Pharmaceutical Industries Ltd. | 113,544 | |||||
The accompanying notes to financial statements are an integral part of this schedule.
- 15 -
Reynolds Blue Chip Growth Fund
SCHEDULE OF INVESTMENTS (Continued)
March 31, 2010 (Unaudited)
| Shares | Value | ||||||
| LONG-TERM INVESTMENTS — 99.3% (a) (Continued) | |||||||
| COMMON STOCKS — 99.3% (a) (Continued) | |||||||
| Pharmaceuticals — 2.9% (Continued) | |||||||
| 7,900 | ViroPharma Inc.* | $ | 107,677 | ||||
| 1,200 | VIVUS Inc.* | 10,464 | |||||
| 1,500 | Watson Pharmaceuticals, Inc.* | 62,655 | |||||
| 2,351,440 | |||||||
| Professional Services — 0.2% | |||||||
| 1,600 | Manpower Inc. | 91,392 | |||||
| 13,500 | On Assignment, Inc.* | 96,255 | |||||
| 187,647 | |||||||
| Road & Rail — 0.9% | |||||||
| 3,100 | CSX Corp. | 157,790 | |||||
| 2,500 | Dollar Thrifty Automotive | ||||||
| Group, Inc.* | 80,325 | ||||||
| 8,000 | Hertz Global Holdings, Inc.* | 79,920 | |||||
| 3,100 | Norfolk Southern Corp. | 173,259 | |||||
| 1,500 | Ryder Systems, Inc. | 58,140 | |||||
| 2,400 | Union Pacific Corp. | 175,920 | |||||
| 20,000 | YRC Worldwide, Inc.* | 10,876 | |||||
| 736,230 | |||||||
| Sawmills and Wood Preservation — 0.1% | |||||||
| 3,500 | Louisiana-Pacific Corp.* | 31,675 | |||||
| Semiconductors & Semiconductor | |||||||
| Equipment — 4.9% | |||||||
| 17,700 | Advanced Micro Devices, Inc.* | 164,079 | |||||
| 5,400 | Altera Corp. | 131,274 | |||||
| 2,500 | Analog Devices, Inc. | 72,050 | |||||
| 10,800 | Applied Materials, Inc. | 145,584 | |||||
| 5,100 | ASML Holding N.V. NYS | 180,540 | |||||
| 4,000 | Atmel Corp.* | 20,120 | |||||
| 4,800 | Broadcom Corp. | 159,264 | |||||
| 21,900 | Conexant Systems, Inc.* | 74,460 | |||||
| 2,000 | Cree, Inc.* | 140,440 | |||||
| 4,800 | Cypress Semiconductor Corp.* | 55,200 | |||||
| 3,500 | Entegris Inc.* | 17,640 | |||||
| 6,000 | Integrated Device Technology, Inc.* | 36,780 | |||||
| 11,400 | Intel Corp. | 253,764 | |||||
| 4,000 | KLA-Tencor Corp. | 123,680 | |||||
| 12,100 | Kulicke and Soffa Industries, Inc.* | 87,725 | |||||
| 2,500 | Lam Research Corp.* | 93,300 | |||||
| 9,900 | Lattice Semiconductor Corp.* | 36,333 | |||||
| 10,500 | LSI Corp.* | 64,260 | |||||
| 13,500 | LTX-Credence Corp.* | 40,905 | |||||
| 3,500 | Marvell Technology Group Ltd.* | 71,330 | |||||
| 9,000 | Mattson Technology, Inc.* | 41,580 | |||||
| 3,000 | MEMC Electronic Materials, Inc.* | 45,990 | |||||
| 2,700 | Microchip Technology Inc. | 76,032 | |||||
| 14,000 | Micron Technology, Inc.* | 145,460 | |||||
| 12,400 | Mindspeed Technologies Inc.* | 99,324 | |||||
| 3,700 | Novellus Systems, Inc.* | 92,500 | |||||
| 7,200 | NVIDIA Corp.* | 125,136 | |||||
| 16,500 | ON Semiconductor Corp.* | 132,000 | |||||
| 8,500 | PMC-Sierra, Inc.* | 75,820 | |||||
| 900 | Rambus Inc.* | 19,665 | |||||
| 9,000 | RF Micro Devices, Inc.* | 44,820 | |||||
| 9,100 | Skyworks Solutions, Inc.* | 141,960 | |||||
| 2,500 | Standard Microsystems Corp.* | 58,200 | |||||
| 16,000 | Teradyne, Inc.* | 178,720 | |||||
| 7,000 | Texas Instruments Inc. | 171,290 | |||||
| 19,600 | TriQuint Semiconductor, Inc.* | 137,200 | |||||
| 5,300 | Veeco Instruments Inc.* | 230,550 | |||||
| 5,400 | Xilinx, Inc. | 137,700 | |||||
| 3,922,675 | |||||||
| Software — 3.7% | |||||||
| 2,100 | Adobe Systems Inc.* | 74,277 | |||||
| 1,000 | Advent Software, Inc.* | 44,750 | |||||
| 7,400 | Ariba Inc.* | 95,090 | |||||
| 2,700 | AsiaInfo Holdings, Inc.* | 71,496 | |||||
| 2,700 | Autodesk, Inc.* | 79,434 | |||||
| 1,800 | BMC Software, Inc.* | 68,400 | |||||
| 1,700 | Check Point Software | ||||||
| Technologies Ltd.* | 59,602 | ||||||
| 4,900 | Citrix Systems, Inc.* | 232,603 | |||||
| 3,500 | Compuware Corp.* | 29,400 | |||||
| 1,200 | Fair Isaac Corp. | 30,408 | |||||
| 2,500 | Informatica Corp.* | 67,150 | |||||
| 2,000 | Intuit Inc.* | 68,680 | |||||
| 2,584 | JDA Software Group, Inc.* | 71,887 | |||||
| 2,000 | McAfee Inc.* | 80,260 | |||||
| 7,600 | Microsoft Corp. | 222,452 | |||||
The accompanying notes to financial statements are an integral part of this schedule.
- 16 -
Reynolds Blue Chip Growth Fund
SCHEDULE OF INVESTMENTS (Continued)
March 31, 2010 (Unaudited)
| Shares | Value | ||||||
| LONG-TERM INVESTMENTS — 99.3% (a) (Continued) | |||||||
| COMMON STOCKS — 99.3% (a) (Continued) | |||||||
| Software — 3.7% (Continued) | |||||||
| 13,400 | Oracle Corp. | $ | 344,246 | ||||
| 6,000 | Parametric Technology Corp.* | 108,300 | |||||
| 3,000 | Quest Software, Inc.* | 53,370 | |||||
| 3,000 | Red Hat, Inc.* | 87,810 | |||||
| 1,000 | Rosetta Stone, Inc.* | 23,780 | |||||
| 3,000 | Salesforce.com, Inc.* | 223,350 | |||||
| 1,700 | SAP AG - SP-ADR | 81,889 | |||||
| 1,300 | Solarwinds, Inc.* | 28,158 | |||||
| 2,000 | SonicWALL, Inc.* | 17,380 | |||||
| 2,400 | Sybase, Inc.* | 111,888 | |||||
| 1,800 | Symantec Corp.* | 30,456 | |||||
| 7,000 | TIBCO Software Inc.* | 75,530 | |||||
| 5,700 | VMware Inc.* | 303,810 | |||||
| 18,500 | Wave Systems Corp.* | 74,000 | |||||
| 4,200 | Websense, Inc.* | 95,634 | |||||
| 2,955,490 | |||||||
| Solar — 0.5% | |||||||
| 9,000 | Evergreen Solar, Inc.* | 10,170 | |||||
| 600 | First Solar, Inc.* | 73,590 | |||||
| 11,500 | JA Solar Holdings Co., | ||||||
| Ltd. - SP-ADR* | 64,515 | ||||||
| 3,500 | LDK Solar Co. Ltd. - SP-ADR* | 22,960 | |||||
| 5,000 | Suntech Power Holdings | ||||||
| Co., Ltd. - SP-ADR* | 70,100 | ||||||
| 3,400 | Trina Solar Ltd.* | 82,994 | |||||
| 7,500 | Yingli Green Energy Holding | ||||||
| Company Ltd. - SP-ADR* | 95,550 | ||||||
| 419,879 | |||||||
| Specialty Retail — 6.9% | |||||||
| 2,000 | Abercrombie & Fitch Co. | 91,280 | |||||
| 7,100 | Aeropostale, Inc.* | 204,693 | |||||
| 3,200 | American Eagle Outfitters, Inc. | 59,264 | |||||
| 10,000 | AnnTaylor Stores Corp.* | 207,000 | |||||
| 500 | AutoNation, Inc.* | 9,040 | |||||
| 200 | AutoZone, Inc.* | 34,618 | |||||
| 4,300 | Bed Bath & Beyond Inc.* | 188,168 | |||||
| 9,400 | Best Buy Co., Inc. | 399,876 | |||||
| 24,000 | Blockbuster Inc.* | 6,060 | |||||
| 29,000 | Borders Group, Inc.* | 49,880 | |||||
| 2,000 | The Buckle, Inc. | 73,520 | |||||
| 5,200 | CarMax, Inc.* | 130,624 | |||||
| 7,000 | Chico’s FAS, Inc. | 100,940 | |||||
| 1,500 | The Children’s Place Retail | ||||||
| Stores, Inc.* | 66,825 | ||||||
| 4,000 | Coldwater Creek Inc.* | 27,760 | |||||
| 4,000 | Dick’s Sporting Goods, Inc.* | 104,440 | |||||
| 1,500 | The Dress Barn, Inc.* | 39,240 | |||||
| 2,000 | GameStop Corp.* | 43,820 | |||||
| 2,000 | The Gap, Inc. | 46,220 | |||||
| 1,500 | Guess?, Inc. | 70,470 | |||||
| 800 | The Gymboree Corp.* | 41,304 | |||||
| 12,600 | The Home Depot, Inc. | 407,610 | |||||
| 3,000 | J. Crew Group, Inc.* | 137,700 | |||||
| 800 | Jo-Ann Stores, Inc.* | 33,584 | |||||
| 14,500 | Limited Brands, Inc. | 356,990 | |||||
| 8,700 | Lowe’s Companies, Inc. | 210,888 | |||||
| 44,000 | Office Depot, Inc.* | 351,120 | |||||
| 36,400 | OfficeMax Inc.* | 597,688 | |||||
| 1,000 | O’Reilly Automotive, Inc.* | 41,710 | |||||
| 4,000 | Pacific Sunwear of California, Inc.* | 21,240 | |||||
| 2,500 | PetSmart, Inc. | 79,900 | |||||
| 40,500 | Pier 1 Imports, Inc.* | 257,985 | |||||
| 1,200 | RadioShack Corp. | 27,156 | |||||
| 1,100 | REX Stores Corp.* | 17,820 | |||||
| 3,400 | Ross Stores, Inc. | 181,798 | |||||
| 1,200 | The Sherwin-Williams Co. | 81,216 | |||||
| 2,500 | Staples, Inc. | 58,475 | |||||
| 4,500 | Stein Mart, Inc.* | 40,635 | |||||
| 4,500 | Talbots, Inc.* | 58,320 | |||||
| 1,700 | Tiffany & Co. | 80,733 | |||||
| 2,600 | The TJX Companies, Inc. | 110,552 | |||||
| 7,200 | Ulta Salon, Cosmetics & | ||||||
| Fragrance, Inc.* | 162,864 | ||||||
| 4,100 | Urban Outfitters, Inc.* | 155,923 | |||||
| 2,300 | Williams-Sonoma, Inc. | 60,467 | |||||
| 5,527,416 | |||||||
| Telecommunication Services-Diversified — 0.9% | |||||||
| 1,000 | BT Group PLC - SP-ADR | 18,710 | |||||
| 3,000 | China Unicom (Hong Kong) | ||||||
| Ltd. - SP-ADR | 33,450 | ||||||
The accompanying notes to financial statements are an integral part of this schedule.
- 17 -
Reynolds Blue Chip Growth Fund
SCHEDULE OF INVESTMENTS (Continued)
March 31, 2010 (Unaudited)
| Shares | Value | ||||||
| LONG-TERM INVESTMENTS — 99.3% (a) (Continued) | |||||||
| COMMON STOCKS — 99.3% (a) (Continued) | |||||||
| Telecommunication Services- | |||||||
| Diversified — 0.9% (Continued) | |||||||
| 4,400 | City Telecom (H. K.) Ltd. - SP-ADR | $ | 70,708 | ||||
| 16,500 | Qwest Communications | ||||||
| International Inc. | 86,130 | ||||||
| 9,300 | tw telecom inc.* | 168,795 | |||||
| 2,700 | Verizon Communications Inc. | 83,754 | |||||
| 14,200 | Vimpel-Communications - SP-ADR | 261,422 | |||||
| 722,969 | |||||||
| Telecommunication Services-Wireless — 0.7% | |||||||
| 700 | American Tower Corp.* | 29,827 | |||||
| 1,200 | China Mobile Ltd. - SP-ADR | 57,744 | |||||
| 1,000 | Crown Castle International Corp.* | 38,230 | |||||
| 1,500 | Leap Wireless International, Inc.* | 24,540 | |||||
| 500 | Millicom International Cellular S.A. | 44,575 | |||||
| 5,000 | Mobile TeleSystems - SP-ADR | 277,500 | |||||
| 18,100 | Sprint Nextel Corp.* | 68,780 | |||||
| 1,500 | Turkcell Iletisim Hizmetleri | ||||||
| AS - SP-ADR | 22,590 | ||||||
| 1,000 | Vivo Participacoes S.A. - SP-ADR | 27,110 | |||||
| 590,896 | |||||||
| Textiles, Apparel & Luxury Goods — 1.6% | |||||||
| 2,200 | Coach, Inc. | 86,944 | |||||
| 600 | Kenneth Cole Productions, Inc.* | 7,686 | |||||
| 27,000 | Crocs, Inc.* | 236,790 | |||||
| 900 | Deckers Outdoor Corp.* | 124,200 | |||||
| 1,500 | Gildan Activewear Inc.* | 39,435 | |||||
| 600 | Hanesbrands, Inc.* | 16,692 | |||||
| 17,500 | Joe’s Jeans, Inc.* | 46,025 | |||||
| 12,700 | Liz Claiborne, Inc.* | 94,361 | |||||
| 2,200 | Lululemon Athletica Inc.* | 91,300 | |||||
| 1,500 | NIKE, Inc. Cl B | 110,250 | |||||
| 1,600 | Phillips-Van Heusen Corp. | 91,776 | |||||
| 2,000 | Polo Ralph Lauren Corp. | 170,080 | |||||
| 800 | Skechers U.S.A., Inc.* | 29,056 | |||||
| 1,500 | True Religion Apparel, Inc.* | 45,540 | |||||
| 1,500 | Under Armour, Inc.* | 44,115 | |||||
| 700 | VF Corp. | 56,105 | |||||
| 1,290,355 | |||||||
| Trading Companies & Distributors — 0.2% | |||||||
| 1,500 | Fastenal Co. | 71,985 | |||||
| 700 | W.W. Grainger, Inc. | 75,684 | |||||
| 147,669 | |||||||
| Water Utilities — 0.0% | |||||||
| 1,000 | Southwest Water Co. | 10,440 | |||||
| Total common stocks | |||||||
| (cost $66,147,990) | 79,280,917 | ||||||
| WARRANTS — 0.0% (a) | |||||||
| 70 | Krispy Kreme Doughnuts, Inc.,* | ||||||
| Expiration Date — 03/02/12, | |||||||
| Exercise Price — $12.21 | 1 | ||||||
Total investments — 99.3% | |||||||
| (cost $66,147,990) | 79,280,918 | ||||||
| Cash and receivables, | |||||||
less liabilities — 0.7% (a) | 539,263 | ||||||
| TOTAL NET | |||||||
| ASSETS — 100.0% | $ | 79,820,181 | |||||
| * | Non-income producing security. |
| (a) | Percentages for the various classifications relate to net assets. |
N.V. – Netherlands Antilles Limited Liability Corp.
NYS – New York Registered Shares
SP-ADR – Sponsored American Depositary Receipts
The accompanying notes to financial statements are an integral part of this schedule.
- 18 -
Reynolds Blue Chip Growth Fund
STATEMENT OF OPERATIONS
For the Six Months Ending March 31, 2010 (Unaudited)
| INCOME: | ||||
| Dividends (net of foreign withholding tax of $6,651) | $ | 314,390 | ||
| Total income | 314,390 | |||
| EXPENSES: | ||||
| Management fees | 305,229 | |||
| Transfer agent fees | 56,000 | |||
| Administrative and accounting services | 47,477 | |||
| Insurance expense | 34,390 | |||
| Professional fees | 33,330 | |||
| Custodian fees | 28,690 | |||
| Registration fees | 26,160 | |||
| Printing and postage expense | 24,110 | |||
| Distribution fees | 22,772 | |||
| Board of Directors fees | 10,000 | |||
| Chief Compliance Officers fees | 10,000 | |||
| Other expenses | 10,418 | |||
| Net expenses | 608,576 | |||
| NET INVESTMENT LOSS | (294,186 | ) | ||
| NET REALIZED GAIN ON INVESTMENTS | 3,561,662 | |||
| NET INCREASE IN UNREALIZED APPRECIATION ON INVESTMENTS | 4,531,760 | |||
| NET GAIN ON INVESTMENTS | 8,093,422 | |||
| NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 7,799,236 | ||
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ending March 31, 2010 (Unaudited) and For the Year Ended September 30, 2009
| 2010 | 2009 | |||||||
| OPERATIONS: | ||||||||
| Net investment loss | $ | (294,186 | ) | $ | (352,303 | ) | ||
| Net realized gain on investments | 3,561,662 | 1,479,604 | ||||||
| Net increase in unrealized appreciation on investments | 4,531,760 | 8,520,213 | ||||||
| Net increase in net assets resulting from operations | 7,799,236 | 9,647,514 | ||||||
| FUND SHARE ACTIVITIES: | ||||||||
| Proceeds from shares issued (755,989 and 626,906 shares, respectively) | 33,181,691 | 22,414,869 | ||||||
| Cost of shares redeemed (225,035 and 162,666 shares, respectively) | (9,713,778 | ) | (5,660,176 | ) | ||||
| Net increase in net assets derived from Fund share activities | 23,467,913 | 16,754,693 | ||||||
| TOTAL INCREASE | 31,267,149 | 26,402,207 | ||||||
| NET ASSETS AT THE BEGINNING OF THE PERIOD | 48,553,032 | 22,150,825 | ||||||
| NET ASSETS AT THE END OF THE PERIOD (Includes undistributed | ||||||||
| net investment income of $0 and $0, respectively) | $ | 79,820,181 | $ | 48,553,032 | ||||
The accompanying notes to financial statements are an integral part of these statements.
- 19 -
Reynolds Blue Chip Growth Fund
FINANCIAL HIGHLIGHTS
(Selected data for each share of the Fund outstanding throughout each period)
| (Unaudited) | ||||||||||||||||||||||||
| For the Six | ||||||||||||||||||||||||
| Months Ending | Years Ended September 30, | |||||||||||||||||||||||
| March 31, 2010 | 2009 | 2008 | 2007 | 2006 | 2005 | |||||||||||||||||||
| PER SHARE OPERATING PERFORMANCE: | ||||||||||||||||||||||||
| Net asset value, beginning of period | $ | 41.87 | $ | 31.85 | $ | 32.05 | $ | 28.98 | $ | 29.48 | $ | 26.98 | ||||||||||||
| Income from investment operations: | ||||||||||||||||||||||||
| Net investment (loss) income (a) | (0.21 | ) | (0.42 | ) | (0.01 | ) | 0.17 | (0.17 | ) | (0.34 | ) | |||||||||||||
| Net realized and unrealized gains (losses) | ||||||||||||||||||||||||
| on investments | 5.55 | 10.44 | 0.02 | 2.90 | (0.33 | ) | 2.84 | |||||||||||||||||
| Total from investment operations | 5.34 | 10.02 | 0.01 | 3.07 | (0.50 | ) | 2.50 | |||||||||||||||||
| Less distributions: | ||||||||||||||||||||||||
| Distributions from net investment income | — | — | (0.21 | ) | — | — | — | |||||||||||||||||
| Distributions from net realized gains | — | — | — | — | — | — | ||||||||||||||||||
| Total from distributions | — | — | (0.21 | ) | — | — | — | |||||||||||||||||
| Net asset value, end of period | $ | 47.21 | $ | 41.87 | $ | 31.85 | $ | 32.05 | $ | 28.98 | $ | 29.48 | ||||||||||||
| TOTAL RETURN | 12.75 | %(1) | 31.46 | % | (0.00 | %) | 10.59 | % | (1.70 | %) | 9.27 | % | ||||||||||||
| RATIOS/SUPPLEMENTAL DATA: | ||||||||||||||||||||||||
| Net assets, end of period (in 000’s $) | 79,820 | 48,553 | 22,151 | 26,670 | 38,288 | 54,441 | ||||||||||||||||||
| Ratio of expenses (after reimbursement) | ||||||||||||||||||||||||
| to average net assets* | 1.99 | %(2) | 2.00 | % | 2.00 | % | 2.02 | % | 2.01 | % | 1.80 | % | ||||||||||||
| Ratio of net investment (loss) income | ||||||||||||||||||||||||
| to average net assets** | (0.96 | %)(2) | (1.24 | %) | (0.03 | %) | 0.55 | % | (0.55 | %) | (1.18 | %) | ||||||||||||
| Portfolio turnover rate | 53 | % | 527 | % | 364 | % | 313 | % | 281 | % | 168 | % | ||||||||||||
| (1) | Not annualized. |
| (2) | Annualized. |
| (a) | Amount calculated based on average shares outstanding throughout the period. |
| * | Computed after giving effect to adviser’s expense limitation undertaking. If the Fund had paid all of its expenses for the years ended September 30, 2009, 2008 and 2007, the ratios would have been 2.51%, 2.67% and 2.25%, respectively. |
| ** | If the Fund had paid all of its expenses for the years ended September 30, 2009, 2008 and 2007, the ratios would have been (1.75%), (0.70%) and 0.32%, respectively. |
The accompanying notes to financial statements are an integral part of this statement.
March 31, 2010 (Unaudited)
(1)Summary of Significant Accounting Policies —
The following is a summary of significant accounting policies of the Reynolds Funds, Inc. (the “Company”), which is registered as a diversified, open-end management investment company under the Investment Company Act of 1940 (the “Act”), as amended. This Company consists of one fund: the Reynolds Blue Chip Growth Fund (the “Fund”). The Company was incorporated under the laws of Maryland on April 28,1988.
The investment objective of the Fund is to produce long-term growth of capital by investing in a diversified portfolio of common stocks issued by well-established growth companies commonly referred to as “blue chip” companies.
(a) Each security, excluding short-term investments, is valued at the last sale price reported by the principal security exchange on which the issue is traded, or if no sale is reported, the latest bid price. Securities which are traded on the Nasdaq National Markets are valued at the Nasdaq Official Closing Price, or if no sale is reported, the latest bid price. Short-term investments with maturities of 60 days or less are valued at amortized cost which approximates
- 20 -
Reynolds Blue Chip Growth Fund
NOTES TO FINANCIAL STATEMENTS (Continued)
March 31, 2010 (Unaudited)
(1)Summary of Significant Accounting Policies — (Continued)
value. Securities for which quotations are not readily available are valued at fair value as determined by the investment adviser under the supervision of the Board of Directors. The fair value of a security is the amount which the Fund might receive upon a current sale. The fair value of a security may differ from the last quoted price and the Fund may not be able to sell a security at the fair value. Market quotations may not be available, for example, if trading in particular securities was halted during the day and not resumed prior to the close of trading on the New York Stock Exchange. Variable rate demand notes are recorded at par value which approximates fair value.
The Fund adopted the provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification “Fair Value Measurements and Disclosures” Topic 820 (“ASC 820”), effective October 1, 2008. Under ASC 820, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date.
In determining fair value, the Fund uses various valuation approaches. ASC 820 establishes a fair value hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by generally requiring that the most observable inputs be used when available. Observable inputs are those that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Fund. Unobservable inputs reflect the Fund's assumptions about the inputs market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The inputs or methodologies used for valuing securities are not necessarily an indication of the risks associated with investing in those securities.
The fair value hierarchy is categorized into three levels based on the inputs as follows:
Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets.
Level 2—Valuations based on quoted prices for similar securities or in markets that are not active or for which all significant inputs are observable, either directly or indirectly.
Level 3—Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
The following table summarizes the Fund’s investments as of March 31, 2010, based on the inputs used to value them:
| Valuation Inputs | Investments in Securities | ||||
| Level 1—Common Stocks and Warrants* | $ | 79,280,918 | |||
| Level 2— | — | ||||
| Level 3— | — | ||||
| Total | $ | 79,280,918 | |||
* Please refer to the Schedule of Investments to view common stocks segregated by industry type.
(b) Investment transactions are accounted for on a trade date basis for financial reporting purposes. Net realized gains and losses on sales of securities are computed on the identified cost basis.
(c) The Fund records dividend income on the ex-dividend date and interest income on an accrual basis. Withholding taxes on foreign dividends have been provided for in accordance with the Fund’s understanding of the applicable country’s tax rules and regulations.
(d) The Fund may have investments in short-term variable rate demand notes, which are unsecured instruments. The Fund may be susceptible to credit risk with respect to these notes to the extent the issuer defaults on its payment obligation. The Fund’s policy is to monitor the creditworthiness of the issuer and nonperformance by these issuers is not anticipated.
(e) Accounting principles generally accepted in the United States of America (“GAAP”) require that permanent differences between income for financial reporting and tax purposes be reclassified in the capital accounts. For the six months ending March 31, 2010, the Fund reclassified $294,186 of net investment loss to capital stock.
(f) The preparation of financial statements in conformity with GAAP 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 reporting period. Actual results could differ from these estimates.
(g) No provision has been made for Federal income taxes since the Fund has elected to be taxed as a “regulated investment company” and intends to distribute substantially all net investment company taxable income and net capital gains to shareholders and otherwise comply with the provisions of the Internal Revenue Code applicable to regulated investment companies.
(h) The Fund has reviewed all open tax years and major jurisdictions, which include Federal and the state of Maryland, and concluded that there are no significant uncertain tax positions that would require recognition in the financial statements. Open tax years are those that are open for exam by taxing
- 21 -
Reynolds Blue Chip Growth Fund
NOTES TO FINANCIAL STATEMENTS (Continued)
March 31, 2010 (Unaudited)
(1)Summary of Significant Accounting Policies — (Continued)
authorities and, as of March 31, 2010, open Federal tax years include the tax years ended September 30, 2006 through 2009. The Fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Fund’s Statement of Operations. During the six months ending March 31, 2010, the Fund did not incur any interest or penalties. The Fund has no examinations in progress and is also 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.
(2)Investment Adviser and Management Agreement and Transactions With Related Parties —
The Fund has a management agreement with Reynolds Capital Management (“RCM”), to serve as investment adviser and manager. Mr. Frederick L. Reynolds, the sole proprietor of RCM, is also an officer and interested director of the Fund. Under the terms of the agreement, the Fund will pay RCM a monthly management fee at the annual rate of 1% of the daily net assets.
The agreement further stipulates that RCM will reimburse the Fund for all expenses exceeding 2% of its daily average net assets (excluding interest, taxes, brokerage commissions and extraordinary items). The Fund is not obligated to reimburse RCM for any expenses reimbursed in previous fiscal years. For the six months ending March 31, 2010 there were no reimbursements required.
The Fund has adopted a Service and Distribution Plan (the “Plan”) pursuant to Rule 12b-1 under the Act. The Plan provides that the Fund may incur certain costs which may not exceed a maximum amount equal to 0.25% per annum of the Fund’s average daily net assets. Payments made pursuant to the Plan may only be used to pay distribution expenses incurred in the current year.
Under the Fund’s organizational documents, each director, officer, employee or other agent of the Fund (including the Fund’s investment manager) is indemnified, to the extent permitted by the Act, against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. However, the Fund has not had prior claims or losses pursuant to these contracts and believes the risk of loss to be remote.
(3)Distributions to Shareholders —
Net investment income and net realized gains, if any, for the Fund are distributed to shareholders at least annually and are recorded on the ex-dividend date.
(4)Investment Transactions —
For the six months ending March 31, 2010, purchases and proceeds of sales of investment securities (excluding short-term securities) were $54,877,801 and $31,460,603, respectively.
(5)Income Tax Information —
The following information for the Fund is presented on an income tax basis as of September 30, 2009:
| Gross | Gross | Net Unrealized | Distributable | Distributable | |
| Cost of | Unrealized | Unrealized | Appreciation | Ordinary | Long-Term |
| Investments | Appreciation | Depreciation | on Investments | Income | Capital Gains |
| $40,110,985 | $8,388,573 | ($592,507) | $7,796,066 | $ — | $ — |
The difference, if any, between the cost amount for financial statement and federal income tax purposes is due primarily to timing differences in recognizing certain gains and losses in security transactions.
The tax components of dividends paid during the year ended September 30, 2009, capital loss carryovers, which may be used to offset future capital gains, subject to Internal Revenue Code limitations ($72,749,181 of which expires on September 30, 2010, $4,248,056 expiring on September 30, 2011 and $11,370,315 expiring on September 30, 2013), as of September 30, 2009, and tax basis post-October losses as of September 30, 2009, which are not recognized for tax purposes until the first day of the following fiscal year are:
| September 30, 2009 | September 30, 2008 | ||||
| Ordinary | Long-Term | Net Capital | Ordinary | Long-Term | |
| Income | Capital Gains | Loss | Post-October | Income | Capital Gains |
| Distributions | Distributions | Carryovers | Losses | Distributions | Distributions |
| $— | $— | $88,367,552 | $— | $171,260 | $— |
- 22 -
Reynolds Blue Chip Growth Fund
NOTES TO FINANCIAL STATEMENTS (Continued)
March 31, 2010 (Unaudited)
(5)Income Tax Information — (Continued)
The Fund has utilized $2,298,811 of its capital loss carryovers during the year ended September 30, 2009.
Since there were no ordinary distributions paid for the year ended September 30, 2009, there were no distributions designated as qualifying for the dividends received deduction for corporate shareholders nor as qualified dividend income under the Jobs and Growth Tax Relief Act of 2003.
(6)Subsequent Events
Management has evaluated related events and transactions that occurred subsequent to March 31, 2010 through the date of issuance of the Fund’s financial statements. There were no events or transactions that occurred during this period that materially impacted the amounts or disclosures in the Fund’s financial statements.
ADVISORY AGREEMENT
On November 19, 2009, the Board of Directors (“Directors”) of Reynolds Funds, Inc. approved the continuation of the Reynolds Blue Chip Growth Fund’s investment advisory agreement with Reynolds Capital Management. Prior to approving the continuation of the advisory agreement, the Directors considered:
| • | the nature, extent and quality of the services provided by Reynolds Capital Management |
| • | the investment performance of the Fund |
| • | the costs of the services to be provided and profits to be realized by Reynolds Capital Management from its relationship with the Fund |
| • | the extent to which economies of scale would be realized as the Fund grew and whether fee levels reflect any economies of scale |
| • | the expense ratio of the Fund |
In considering the nature, extent and quality of the services provided by Reynolds Capital Management, the Directors reviewed a report describing the portfolio management, shareholder communication and servicing services provided by Reynolds Capital Management to the Fund. The Directors concluded that Reynolds Capital Management was providing essential services to the Fund as well as services that were in addition to services typically provided non-mutual fund clients.
The Directors compared the performance of the Fund to benchmark indices over various periods of time and concluded that the overall performance of the Fund warranted the continuation of the advisory agreement.
In concluding that the advisory fees payable by the Fund were reasonable, the Directors reviewed reports of the costs of services provided, and the profits realized, by Reynolds Capital Management, from its relationship with the Fund and concluded that such profits were reasonable and not excessive. The Directors also reviewed reports comparing the expense ratio of, and the advisory fees paid by, the Fund, to those of, and paid by, other comparable mutual funds and concluded that the advisory fees paid by the Fund and the expense ratio of the Fund was comparable to those of comparable mutual funds.
For additional information about the Directors and Officers or for a description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities, please call (800) 773-9665 and request a Statement of Additional Information. One will be mailed to you free of charge. The Statement of Additional Information is also available on the website of the Securities and Exchange Commission (the “Commission”) at http://www.sec.gov. Information on how the Fund voted proxies relating to portfolio securities is available on the Fund’s website at http://www.reynoldsfunds.com or the website of the Commission no later than August 31 for the prior 12 months e nding June 30. The Fund files its complete schedule of portfolio holdings with the Commission for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Form N-Q is available on the Commission’s website. The Fund’s Form N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C., and that information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
- 23 -
REYNOLDS BLUE CHIP GROWTH FUND
c/o U.S. BANCORP FUND SERVICES, LLC
615 East Michigan Street
Milwaukee, Wisconsin 53202
www.reynoldsfunds.com
Board of Directors
DENNIS N. MOSER
FREDERICK L. REYNOLDS
ROBERT E. STAUDER
Investment Adviser
REYNOLDS CAPITAL MANAGEMENT
2580 Kekaa Drive, #115
Lahaina, Hawaii 96761
Transfer Agent,
Dividend Disbursing Agent,
Administrator and Accountant
U.S. BANCORP FUND SERVICES, LLC
615 East Michigan Street
Milwaukee, Wisconsin 53202
1-800-773-9665
or 1-800-7REYNOLDS
1-414-765-4124
Custodian
U.S. Bank, N.A.
1555 North RiverCenter Drive, Suite 302
Milwaukee, Wisconsin 53212
Independent Registered Public Accounting Firm
COHEN FUND AUDIT SERVICES, LTD.
800 Westpoint Parkway, Suite 1100
Westlake, Ohio 44145
Legal Counsel
FOLEY & LARDNER LLP
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
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. Schedule of Investments.
| (a) | The Schedule of Investments in securities of unaffiliated issuers 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.
None.
Item 11. Controls and Procedures.
| (a) | The disclosure controls and procedures of the Reynolds Funds, Inc. are periodically evaluated. As of May 19, 2010, the date of the last evaluation, we concluded that our disclosure controls and procedures are adequate. |
| (b) | The internal controls of the Reynolds Funds, Inc. are periodically evaluated. There were no changes to Reynolds Funds’ internal control over financial reporting that occurred during the first fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, such controls. |
Item 12. Exhibits.
| (a) | (1) Any code of ethics or amendment thereto. Not applicable. |
(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith.
(3) Any written solicitation to purchase securities under Rule 23c-1 under the Act sent or given during the period covered by the report by or on behalf of the Registrant to 10 or more persons. Not Applicable.
| (b) | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Furnished herewith. |
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.
Reynolds Funds, Inc.
Registrant
By /s/Frederick L. Reynolds
Frederick L. Reynolds, Principal Executive Officer
Date May 21, 2010
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.
Reynolds Funds, Inc.
Registrant
By /s/Frederick L. Reynolds
Frederick L. Reynolds, Principal Financial Officer
Date May 21, 2010