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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR/A
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company
Act file number: 811-21475
Tamarack Funds Trust
90 South Seventh Street, Minneapolis, MN 55402
BISYS Fund Services, 3435 Stelzer Road, Columbus, OH 43219
(Name and address of agent for service)
Registrant's telephone number, including area code: (614) 470-8000
Date of fiscal year end: 4/30/04
Date of reporting period: 4/30/04
Form N-CSR is to be used by management investment companies to file reports
with the Commission not later than 10 days after the transmission to
stockholders of any report that is required to be transmitted to stockholders
under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1).
The Commission may use the information provided on Form N-CSR in its regulatory,
disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form
N-CSR, and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
Include a copy of the report transmitted to stockholders pursuant to Rule
30e-1 under the Act (17 CFR 270.30e-1).
TAMARACK FUNDS
Annual Report April 30, 2004
[PHOTO]
GOVERNMENT INCOME FUND
QUALITY FIXED INCOME FUND
NORTH CAROLINA TAX-FREE BOND FUND
[LOGO] TAMARACK FUNDS
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Tamarack Funds
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ABOUT YOUR ANNUAL REPORT
This annual report includes detailed information regarding your Funds'
performance. This report is provided to help answer your questions as a
shareholder. Among these questions may be: How has my Fund performed against its
benchmark both in the last year and over the last ten years (or since inception
if less than ten years)? What are the annual expenses of my Fund? What are the
significant accounting policies and procedures followed by my Fund?
The Tamarack Funds compare their performance against widely used market indices,
depending on the market sector or investment style of the particular fund. These
indices include the S&P 500, Russell 2000 and S&P MidCap 400.
We hope the financial information presented as well as the discussion and
analysis from your portfolio manager(s) will help you evaluate your investment
in the Tamarack Funds. We also encourage you to read your Fund's prospectus for
further detail as to your Fund's investment policies and risk profile. Tamarack
Funds prospectuses and performance information subsequent to the date of this
report are available on our website at www.tamarackfunds.com.
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TABLE OF CONTENTS
Shareholder Letter .......................................................... 1
Letter from the CIO of Fixed Income ......................................... 2
Performance Summary ......................................................... 4
Government Income Fund
- Management Discussion and Analysis ...................................... 6
Quality Fixed Income Fund
- Management Discussion and Analysis ...................................... 8
North Carolina Tax-Free Fund
- Management Discussion and Analysis ...................................... 10
Financial Statements
- Statement of Assets and Liabilities ..................................... 12
- Statement of Operations ................................................. 14
- Statement of Changes in Net Assets ...................................... 15
Financial Highlights (all Funds) ............................................ 18
Notes to Financial Statements ............................................... 24
Schedule of Investments ..................................................... 35
Auditors' Opinion ........................................................... 44
Management .................................................................. 45
Share Class Information ..................................................... 48
Supplemental Information .................................................... 49
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SHAREHOLDER LETTER
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To Our Shareholders
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On April 16th, 2004 the reorganization into the new Tamarack Funds Trust of the
Quality Fixed Income, Government Income and North Carolina Tax-Free Bond Funds
(formerly known as the RBC Funds) was completed after being approved by
shareholders. The new Tamarack Funds, which include 17 separate portfolios
(fixed income, equity and money market)* also have a new year-end of September
30th. You may, therefore, be wondering why we are sending you a report with
information including only these three former RBC Funds, with financial
statements audited as of the former RBC Funds year-end of April 30th. We do not
want to let 17 months pass between the annual audited financial statements we
make available to you our shareholders. Therefore, we are providing to you an
annual report one final time as of the former RBC Funds' April 30th year-end.
You will also receive another report in approximately five months including all
of the fixed income portfolios in the Tamarack Funds as of the new September
30th year-end. In the future you may then expect to receive regularly scheduled
semi-annual and annual reports dated March 31 and September 30 for the Tamarack
Funds.
The past year has clearly been a time of significant change for your Funds. For
example, as part of the reorganization, shareholders of the former Portfolio S
and Portfolio L of D. L. Babson Bond Trust approved the combination of their
funds into the Quality Fixed Income Fund, contributing to an increase in fund
assets from $48 million on April 30th, 2003 to $129 million on April 30th, 2004.
However, our commitment providing the best portfolio management services to you
and all of our investors remains the same.
While our first priority is managing your investment in the Tamarack Funds to
maintain an appropriate balance between portfolio returns and risk (we won't
seek the absolutely highest return if we deem the credit or market risk too
great) we have also begun marketing our expanded fund family offerings to new
investors. As part of this effort we have created a new website,
www.tamarackfunds.com. We invite you to visit this site for information
regarding both your fund(s) and other funds within the Tamarack family.
We know that no matter what the dollar balance in your Tamarack Funds
shareholder account, these assets are an important part of your overall
investments. We appreciate and value the trust you have placed in us and will
continue our efforts to provide you with solid risk-balanced returns.
Sincerely,
/s/ Jennifer Lammers
Jennifer Lammers
President, Tamarack Funds
*TO REDUCE THE SIZE AND COMPLEXITY OF EACH ANNUAL REPORT, AND HOPEFULLY MAKE
THEM EASIER FOR YOU AS A SHAREHOLDER TO USE, WE HAVE DIVIDED THE TAMARACK FUNDS
INTO THREE GROUPS (FIXED INCOME, EQUITY, AND MONEY MARKET) FOR ANNUAL AND
SEMI-ANNUAL REPORTING AS WELL AS PROSPECTUSES. THE FORMER RBC EQUITY FUNDS
REPORT AS WELL AS THOSE OF THE OTHER TAMARACK FUNDS WILL BE AVAILABLE ON OUR
WEBSITE.
1
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LETTER FROM THE CIO OF FIXED INCOME
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Bonds should be an important part of the portfolio of investors seeking a
balanced investment strategy. Bonds generate higher income than stocks, and
their market value fluctuations are less volatile. In addition, the changes in
bond prices are not closely linked to changes in stock prices, so a portfolio
with a mix of stocks and bonds can be expected to experience less overall
volatility than one with only equities or fixed income securities.
Just what are bonds? Bonds (also known as fixed income securities) are debt
securities issued by borrowers who promise to pay a fixed rate of interest twice
a year and to repay the loan on a specific date. There is a huge variety of
bonds available in the market. Among the largest issuers of bonds are the U.S
Treasury, government agencies, corporations, municipalities, and pools of home
mortgage bonds backed by government agencies. Maturities of these bonds range
from overnight to 30 years or more. There is also a very wide range in the
credit quality of borrowers who issue bonds. Although the concept of a bond is
very simple, the wide variety of bonds available makes the bond market quite
complex.
The two main risks of bonds to investors are interest rate risk and credit risk.
Bond prices move in the opposite direction of interest rates, so when interest
rates rise the price of bonds declines, and vice versa. The longer the maturity
of a bond, the greater the price volatility. Credit risk is the chance that a
bond will not be repaid because the borrower cannot financially make the
payment. Generally bondholders can earn higher interest rates for accepting
higher risks of either type.
Investors can add bond investments to their portfolio either by buying bonds
directly or by buying bond mutual funds. Bond funds, such as the Tamarack Funds,
are professionally managed portfolios of bonds. Funds are the most convenient
way to add fixed income exposure to your portfolio. Funds can provide a
portfolio that is diversified by issuers and maturities. Professional managers
can utilize credit research and make informed judgments as to the most
attractive bonds to add to the fund. Bond funds also offer good liquidity.
Investors can sell their holdings at any time at the current fund value, which
is available daily, unlike individual bonds for which it is often difficult to
know the fair market value on any given day. In contrast to individual fixed
income securities, however, bond funds do not mature on a fixed date and
shareholders pay expenses for the management of the fund portfolio.
The managers of the Tamarack bond funds strive to provide investors with funds
that can meet various needs for the fixed income portion of their portfolios.
The Tamarack Quality Fixed Income Fund invests in a wide variety of taxable
bonds. The Tamarack Government Income Fund invests primarily in U.S. Treasury,
government agency, and government agency mortgage-backed bonds. The Tamarack
North Carolina Tax-Free Bond Fund invests primarily in municipal bonds that are
exempt from federal and North Carolina income taxes. Our portfolio management
team manages these various funds to meet the diverse fixed income needs and
preferences of our investors.
2
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FIXED INCOME PORTFOLIO MANAGERS
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Voyageur Asset Management employs a team approach to the management of each of
the Fixed Income Funds. Each Fund's management team has access to Voyageur's
investment research and other money management resources. The members of
Voyageur's fixed income funds team are:
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RAYE C. KANZENBACH, CFA
SENIOR MANAGING DIRECTOR, SENIOR PORTFOLIO MANAGER
Raye Kanzenbach is the Senior Portfolio Manager for portfolios which invest in
tax-exempt securities. He is also the Chief Investment Officer, Fixed Income
Products for the Tamarack Funds. Raye has been with Voyageur and its predecessor
firm, Insight Investment Management, since 1983. He has been in the investment
industry since 1973. Raye received his MBA from the University of Michigan, his
BA from Lawrence University and is a CFA charterholder.
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JAMES A. NORUNGOLO, CFA
VICE PRESIDENT, SENIOR PORTFOLIO MANAGER
James Norungolo's management emphasis is on core duration portfolios. He
specializes in the corporate bond sector, and also lends the Voyageur taxable
fixed income team his strength in asset-backed securities (ABS). James has been
with Voyageur since 1993 and has been in the investment industry since 1987.
James received his BA from the University of Virginia and is a CFA
charterholder.
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SCOTT CABALKA
VICE PRESIDENT, SENIOR PORTFOLIO MANAGER
Scott Cabalka is responsible for all trading in the taxable portfolios of the
Tamarack Money Market Funds. In addition, he oversees the approved issuer list
for the Tamarack Funds. Scott has been with Voyageur and its predecessor firm,
Insight Investment Management, since 1993. He has been in the investment
industry since 1980. Scott received his MBA and BS from the University of
Minnesota.
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RANDAL W. HARRISON, CFA
VICE PRESIDENT, SENIOR PORTFOLIO MANAGER
Randy Harrison's areas of expertise are the mortgage-backed and commercial
mortgage-backed securities markets. Randy has been with Voyageur since 1993 and
has been in the investment industry since 1990. Randy received his MBA from the
University of Iowa, his BS from Miami University (Ohio) and is a CFA
charterholder.
3
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PERFORMANCE SUMMARY
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Total Returns as of April 30, 2004
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TAMARACK GOVERNMENT INCOME FUND
Since
1 Year 3 Year 5 Year 10 Year Inception
------ ------ ------ ------- ---------
Class A (a)
- - Including Maximum Sales
Charge of 3.75% -3.79% 3.68% 4.72% 5.33% 5.55%
- - At Net Asset Value -0.05% 5.03% 5.53% 5.73% 5.85%
Class C (b)
- - Including Contingent Deferred
Sales Charge of 1.00% -1.03% 5.02% 5.52% 5.73% 5.85%
- - At Net Asset Value 0.07% 5.02% 5.52% 5.73% 5.85%
Class I (a) 0.20% 5.29% 5.79% 6.01% 6.18%
Class R (b) -0.06% 5.03% 5.52% 5.73% 5.85%
Class S (b) 0.10% 5.26% 5.77% 6.00% 6.17%
LB Intermediate Gov't. Index* 0.99% 5.77% 6.17% 6.58% 6.58%
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TAMARACK QUALITY INCOME FUND
Since
1 Year 3 Year 5 Year 10 Year Inception
------ ------ ------ ------- ---------
Class A (a)
- - Including Maximum Sales
Charge of 3.75% -2.41% 3.35% N/A N/A 4.44%
- - At Net Asset Value 1.39% 4.67% N/A N/A 5.25%
Class C (b)
- - Including Contingent Deferred
Sales Charge of 1.00% 0.32% 4.62% N/A N/A 5.22%
- - At Net Asset Value 1.26% 4.62% N/A N/A 5.22%
Class I (a) 1.54% 4.88% N/A N/A 5.47%
Class R (b) 1.28% 4.63% N/A N/A 5.23%
Class S (b) 1.64% 4.92% N/A N/A 5.49%
LB U.S. Aggregate Bond Index* 1.82% 6.65% N/A N/A 6.66%
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TAMARACK NORTH CAROLINA TAX-FREE BOND FUND
Since
1 Year 3 Year 5 Year 10 Year Inception
------ ------ ------ ------- ---------
Class A (a)
- - Including Maximum Sales
Charge of 3.75% -3.49% 2.94% 3.09% 4.31% 4.37%
- - At Net Asset Value 0.30% 4.26% 3.89% 4.71% 4.67%
Class I (a) 0.55% 4.52% 4.15% 4.99% 5.00%
LB 5-Yr. Muni-Bond Index* 1.72% 5.46% 5.13% 5.58% 5.58%
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Performance data quoted represents past performance. Past performance is no
guarantee of future results. 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 may be lower or
higher than performance quoted.
*Each of the comparative indices is a widely recognized market value weighted
measure of the return on securi- ties. Index returns are calculated on a monthly
basis, and include reinvestment of dividends and distributions, but do not
include sales fees or operating expenses. You cannot invest directly in the
indices.
(a) The performance in the table reflects the performance of the former RBC
Funds, the predecessors to the Tamarack Funds. The quoted performance of
the Government Income Fund and the North Carolina Tax- Free Bond Fund
includes the performance of a common trust fund ("CTF") account advised by
the Adviser (including its predecessor) and managed the same as the Fund in
all material respects, for periods dating prior to the Government Income
Fund's and the North Carolina Tax-Free Fund's commencement of opera- tions
on June 1, 1994, as adjusted to reflect the full contractual rate of
expenses associated with the Fund at its inception. The CTF account was not
registered with the SEC under the 1940 Act and therefore was not subject to
the investment restrictions imposed by law on registered mutual funds. If
the CTF account had been registered, the CTF account's performance may have
been adversely affected. Fund performance reflects applicable fee
waiver/expense reimbursements (which, if excluded, would cause performance
to be lower).
(b) Performance returns are annualized as classes represent new shares for the
first time beginning April 19, 2004.
4
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This Page Intentionally Left Blank
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5
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MANAGEMENT DISCUSSION AND ANALYSIS
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Government Income Fund
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MARKET COMMENTARY
Bond prices and yields were quite volatile during the Fund's fiscal year, which
ended April 30, 2004. In June 2003 bond yields dipped to their lowest levels in
over 40 years. This was due to the sluggish economy and fear of possible
deflation that caused the Federal Reserve to lower the overnight fed funds rate
(the rate at which banks lend each other money overnight) to 1.00%. But during
the summer interest rates rose abruptly, and bond prices fell. The yield on the
10-year maturity Treasury Note rose from 3.10% to 4.60% in just six weeks. Rates
drifted lower for the next nine months, primarily because job growth was so
sluggish and the Fed promised to keep short-term interest rates low for a
considerable period. But in the last six weeks of the Fund's fiscal year, job
growth began to accelerate, and interest rates rose again. Over the entire
period the prices of Treasury securities fell and yields rose by about 0.5% to
1.0%, with the shortest maturities experiencing the largest yield rise.
Mortgage-backed bonds performed less well than Treasuries and regular government
agency securities because the market was concerned about heavy redemptions of
these securities as homeowners refinanced the underlying mortgages.
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PERFORMANCE
Class A shares of the Fund had a total return of -0.05% compared with the Fund's
benchmark, the Lehman Brothers Intermediate Government Index, which had a total
return of 0.99%. The Fund has been positioned for a rising interest rate
environment by maintaining its duration (or interest rate risk) lower than the
benchmark in order to reduce the price decline caused by rising interest rates.
The Fund's income yield also was kept slightly higher than that of the benchmark
in order to enhance returns. Nonetheless, the general rise in bond yields for
the fiscal year eroded the market value of the Fund, which mostly offset the
interest earned.
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OUTLOOK
The bond market is quickly adjusting to an economic cycle that appears
sustainable, and the increased likelihood of the Federal Reserve adopting a new,
tighter monetary policy in the coming months. We expect that shorter term yields
will rise faster than longer term yields as the Fed adjusts its target rate
upward from its current level of 1.00%. As such, our strat- egy is to increase
the reinvestment opportunities for the fund in order to capture what we believe
will be higher market yields in the coming year.
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INVESTMENT OBJECTIVE
Relatively high current income consistent with relative stability of principal
and safety.
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BENCHMARK
Lehman Brothers Intermediate Government Index
6
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MANAGEMENT DISCUSSION AND ANALYSIS
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Government Income Fund
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TOP TEN HOLDINGS
(AS OF 4/30/04)
FHLMC 5.75%, 04/15/08 8.41%
FHLB 2.750%, 03/14/08 6.18%
FNMA 4.50%, 10/01/13 5.17%
FHLMC 5.00%, 12/01/17 5.04%
FNMA 6.00%, 05/15/08 4.90%
GNMA 5.28%, 11/16/15 4.68%
FNMA 7.125%, 03/15/07 4.56%
FNMA 5.75%, 02/15/08 4.41%
FHLB 5.75%, 05/15/12 4.34%
FHLB 5.275%, 01/15/06 4.33%
*A listing of all portfolio holdings can be found on page 35.
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ASSET ALLOCATION
(% OF FUND'S NET ASSETS)
U.S. Government Investment Companies
Agency Obligations 0.2%
98.9% [PIE CHART] Other Assets
0.9%
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GROWTH OF $10,000 INITIAL
INVESTMENT OVER 10 YEARS
[FLOW CHART]
----------------------------------------------------
LEHMAN BROTHERS
CLASS INTERMEDIATE
DATE A GOVERNMENT INDEX
----------------------------------------------------
05/01/1994 9,625 10,000.00
----------------------------------------------------
10/31/1994 9,676 10,088.10
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04/30/1995 10,098 10,616.51
----------------------------------------------------
10/31/1995 10,676 11,277.93
----------------------------------------------------
04/30/1996 10,722 11,416.52
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10/31/1996 11,128 11,917.28
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04/30/1997 11,265 12,128.59
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10/31/1997 11,845 12,790.16
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04/30/1998 12,190 13,180.76
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10/31/1998 12,806 14,007.80
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04/30/1999 12,846 14,018.67
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10/31/1999 12,906 14,122.15
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04/30/2000 13,068 14,312.33
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10/31/2000 13,683 15,072.09
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04/30/2001 14,508 15,979.61
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10/31/2001 15,534 17,159.66
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04/30/2002 15,419 17,143.34
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10/31/2002 16,419 18,308.47
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04/30/2003 16,817 18,723.16
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10/31/2003 16,754 18,774.74
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04/30/2004 16,809 18,907.74
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The graph reflects an initial investment of $10,000 over a 10 year period and is
based on Class A shares at net asset value. The Fund's maximum sales charge is
3.75%. The Fund's total return includes reinvested dividends and capital gains.
The Fund's total return also includes operating expenses that reduce return,
while the total return of the index does not. The graph does not reflect the
deduction of taxes that a shareholder would pay on fund distributions or
redemption of fund shares. Performance data quoted represents past performance.
Past performance is no guarantee of future results. 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 may be lower or higher than performance quoted. Performance of other
classes will vary due to differences in fee structures.
7
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MANAGEMENT DISCUSSION AND ANALYSIS
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Quality Fixed Income Fund
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MARKET COMMENTARY
Bond prices and yields were quite volatile during the Fund's fiscal year, which
ended April 30, 2004. In June 2003 bond yields dipped to their lowest levels in
over 40 years. This was due to the sluggish economy and fear of possible
deflation that caused the Federal Reserve to lower the overnight fed funds rate
(the rate at which banks lend each other money overnight) to 1.00%. But during
the summer interest rates rose abruptly, and bond prices fell. The yield on the
10-year maturity Treasury note rose from 3.10% to 4.60% in just six weeks. Rates
drifted lower for the next nine months, primarily because job growth was so
sluggish and the Fed promised to keep short-term interest rates low for a
considerable period. But in the last six weeks of the Fund's fiscal year, job
growth began to accelerate, and interest rates rose again. Over the entire
period bond prices fell and yields rose by about 0.5% to 1.0%, with the shortest
maturities experiencing the largest yield rise. Corporate bonds significantly
outperformed Treasury bonds during the year.
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PERFORMANCE
Class A shares of the Fund had a return of 1.39% compared with the Fund's
benchmark, the Lehman Brothers U.S. Aggregate Bond Index, which had a total
return of 1.82%. The Fund's performance was helped by our maintaining its
duration (or interest rate risk) below that of the benchmark as we anticipated
rising rates as the economy recovered. Performance was also aided by the strong
recovery of corporate bonds, but was hurt by mortgage-backed bonds, which
underperformed the general market.
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OUTLOOK
The economy is finally showing some real strength as jobs have grown strongly
since March. The Federal Reserve is expected to begin raising short-term
interest rates soon. This is likely to push longer-term interest rates somewhat
higher, although this may be mitigated by the higher yields that are already
available on longer maturity bonds. In this environment we expect to keep the
average maturity of the portfolio below that of the benchmark in order to reduce
the risk of price declines. We expect corporate bond prices to move in lock-step
with Treasuries and their yield spreads over Treasuries to remain fairly stable.
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INVESTMENT OBJECTIVE
Current income and capital appreciation.
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BENCHMARK
Lehman Brothers U.S. Aggregate Bond Index
8
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MANAGEMENT DISCUSSION AND ANALYSIS
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Quality Fixed Income Fund
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TOP TEN HOLDINGS
(AS OF 4/30/04)
GNMA 5.00%, 01/15/34 4.50%
Wells Fargo Prime Investment Money Market Fund, Investor Class 3.55%
Wells Fargo Government Institutional Money Market Fund,
Investor Class 3.96%
U.S. Treasury Bond 8.125%, 01/15/21 2.72%
FNMA 4.50%, 12/01/17 2.61%
FNCI 5.00%, 07/01/18 1.90%
FNMA 5.00%, 09/01/33 1.74%
JP Morgan Commercial Finance Corp. 6.51%, 10/15/35 1.48%
BP Capital Markets PLC 2.75%, 12/29/06 1.29%
Toyota Motor Credit Corp. 4.35%, 12/15/10 1.27%
*A listing of all portfolio holdings can be found on page 36.
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ASSET ALLOCATION
(% OF FUND'S NET ASSETS)
U.S. Government U.S. Treasury Bonds: 4.4%
Agency Obligations
31.6% U.S. Treasury Notes: 1.3%
Investment Companies: 7.5%
[PIE CHART]
Asset Backed Securities: 2.3%
Collateralized Mortgage Obligations: 4.6%
Commercial Mortgage Backs: 7.2%
Common Stocks: 0.2%
Corporate Bonds
43.3%
- --------------------------------------------------------------------------------
GROWTH OF $10,000
INITIAL INVESTMENT SINCE
INCEPTION (5/11/99)
[FLOW CHART]
------------------------------------------------
LEHMAN
BROTHERS
U.S.
CLASS AGGREGATE
A BOND INDEX
------------------------------------------------
05/11/1999 9,625 10,000.00
------------------------------------------------
10/31/1999 9,598 9,984.63
------------------------------------------------
04/30/2000 9,628 10,125.96
------------------------------------------------
10/31/2000 10,223 10,713.71
------------------------------------------------
04/30/2001 10,827 11,380.10
------------------------------------------------
10/31/2001 11,665 12,273.52
------------------------------------------------
04/30/2002 11,225 12,272.09
------------------------------------------------
10/31/2002 11,763 12,995.93
------------------------------------------------
04/30/2003 12,245 13,556.38
------------------------------------------------
10/31/2003 12,310 13,633.36
------------------------------------------------
04/30/2004 12,416 13,803.42
------------------------------------------------
The graph reflects an initial investment of $10,000 since inception of 5/11/1999
and is based on Class A shares at net asset value. The Fund's maximum sales
charge is 3.75%. The Fund's total return includes reinvested divi- dends and
capital gains. The Fund's total return also includes operating expenses that
reduce return, while the total return of the index does not. The graph does not
reflect the deduction of taxes that a shareholder would pay on fund
distributions or redemption of fund shares. Performance data quoted represents
past performance. Past performance is no guarantee of future results. 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 may be lower or higher than performance quoted. Performance
of other classes will vary due to differences in fee structures.
9
================================================================================
MANAGEMENT DISCUSSION AND ANALYSIS
================================================================================
North Carolina Tax-Free Bond Fund
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MARKET COMMENTARY
The bond market was quite volatile during the Fund's fiscal year, which ended
April 30, 2004. In June of 2003 the Bond Buyer Index (BBI), which represents
yields on investment grade 20-year maturity municipal bonds, dropped to 4.21%,
its lowest level since 1968. This was due to the sluggish economy and fear of
possible deflation that caused the Federal Reserve to lower the overnight fed
funds rate (the rate at which banks lend each other money overnight) to 1.00%.
But during the summer interest rates rose abruptly, and the BBI rose to 5.18%.
Rates drifted lower for the next nine months, primarily because job growth was
so sluggish and the Fed promised to keep short-term interest rates low for a
considerable period. But in the last six weeks of the Fund's fiscal year, job
growth began to accelerate, and interest rates rose again. Despite the
volatility, the BBI had a rather small net rise from 4.58% to 4.95%, and bond
prices declined modestly.
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PERFORMANCE
The Class A Fund had a total return of 0.30% compared with the Fund's benchmark,
the Lehman Brothers Five-Year Municipal Bond Index, which had a total return of
1.72%. The income component of the Fund is slightly less than the benchmark
because of its holdings of relatively low-yielding North Carolina bonds. The
Fund has been positioned for a rising interest rate environment by maintaining
its duration (or interest rate risk) near the low end of its allowable range.
Nevertheless, the rising yields caused a decline in the principal value of the
bonds, which mostly offset the interest earned.
- --------------------------------------------------------------------------------
OUTLOOK
The economy finally appears to be gaining real strength, especially since jobs
began to grow in earnest in March. The Federal Reserve is expected to start
raising short-term interest rates from their exceptionally low levels. This is
likely to push longer-term interest rates somewhat higher, although this may be
mitigated by the higher yields that are already available on longer maturity
bonds. We expect to keep the duration of the portfolio rather short in order to
protect against rising yields.
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
High current income that is free from federal income tax and North Carolina
personal income tax, together with relative safety of principal.
- --------------------------------------------------------------------------------
BENCHMARK
Lehman Brothers Five-Year Municipal Bond Index
10
================================================================================
MANAGEMENT DISCUSSION AND ANALYSIS
================================================================================
North Carolina Tax-Free Bond Fund
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS
(AS OF 4/30/04)
Centennial Authority Hotel Tax Revenue, 4.65%, 9/1/06 5.74%
Fayetteville Public Works Commission Revenue, Series A, 5.25%, 03/01/08 5.69%
Cumberland County CP, Series A, 6.20%, 12/01/07 5.68%
Pitt County Public Facilities CP, Series A, 5.35%, 04/01/07 3.67%
Wells Fargo National Tax-Free Money Market Fund, Investor Class 3.40%
University of No. Carolina Greensboro Revenue, Series A, 4.63%, 04/01/13 3.09%
North Carolina Medical Care Community Hospital Revenue, 5.75%, 06/01/13 3.08%
North Carolina Municipal Power Agency, 5.25%, 01/01/09 2.97%
Cumberland County Hospital Facilities Revenue, 5.25%, 10/01/10 2.96%
Union County Enterprise System Revenue, 5.35%, 06/01/09 2.95%
*A listing of all portfolio holdings can be found on page 38.
- --------------------------------------------------------------------------------
ASSET ALLOCATION
(% OF FUND'S NET ASSETS)
North Carolina Investment Companies
Municipal Obligations [PIE CHART] 3.4%
96.0% Other Assets
0.6%
- --------------------------------------------------------------------------------
GROWTH OF $10,000 INITIAL
INVESTMENT OVER 10 YEARS
[FLOW CHART]
------------------------------------------------
LEHMAN
BROTHERS
5 YR.
CLASS MUNI BOND
A INDEX
------------------------------------------------
05/01/1994 9,625 10,000.00
------------------------------------------------
10/31/1994 9,517 10075.32
------------------------------------------------
04/30/1995 10,008 10546.70
------------------------------------------------
10/31/1995 10,535 11,112.85
------------------------------------------------
04/30/1996 10,557 11,270.40
------------------------------------------------
10/31/1996 10,857 11,619.38
------------------------------------------------
04/30/1997 11,054 11,795.13
------------------------------------------------
10/31/1997 11,652 12,352.50
------------------------------------------------
04/30/1998 11,896 12,588.50
------------------------------------------------
10/31/1998 12,493 13,157.80
------------------------------------------------
04/30/1999 12,604 13,403.84
------------------------------------------------
10/31/1999 12,297 13,289.60
------------------------------------------------
04/30/2000 12,459 13,452.80
------------------------------------------------
10/31/2000 13,016 14,062.89
------------------------------------------------
04/30/2001 13,461 14,676.12
------------------------------------------------
10/31/2001 14,136 15,439.99
------------------------------------------------
04/30/2002 14,219 15,684.78
------------------------------------------------
10/31/2002 14,799 16,347.60
------------------------------------------------
04/30/2003 15,209 16,921.29
------------------------------------------------
10/31/2003 15,304 17,206.87
------------------------------------------------
04/30/2004 15,255 17,213.15
------------------------------------------------
The graph reflects an initial investment of $10,000 over a 10 year period and is
based on Class A shares at net asset value. The Fund's maximum sales charge is
3.75%. The Fund's total return includes reinvested dividends and capital gains.
The Fund's total return also includes operating expenses that reduce return,
while the total return of the index does not. The graph does not reflect the
deduction of taxes that a shareholder would pay on fund distributions or
redemption of fund shares. Performance data quoted represents past performance.
Past performance is no guarantee of future results. Investment return and
principal value of an investment will fluc- tuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost. Current
performance may be lower or higher than performance quoted. Performance of other
classes will vary due to differences in fee structures.
11
================================================================================
FINANCIAL STATEMENTS
================================================================================
Statement of Assets and Liabilities
- --------------------------------------------------------------------------------
APRIL 30, 2004
TAMARACK GOVERNMENT TAMARACK QUALITY TAMARACK NORTH CAROLINA
INCOME FUND FIXED INCOME FUND TAX-FREE BOND FUND
------------- ------------- -------------
ASSETS:
Investments, at value $ 24,176,843 $ 132,505,682 $ 18,352,437
(cost $24,569,048;
$130,696,039; and
$17,578,652, respectively)
Cash 14,146 -- --
Interest and dividends receivable 246,987 1,201,041 220,254
Receivable for capital shares issued 52,172 3,683 --
Receivable for investments sold -- 267,322 --
------------- ------------- -------------
Total Assets 24,490,148 133,977,728 18,572,691
------------- ------------- -------------
LIABILITIES:
Payable to custodian -- 17,199 201
Distributions payable 49,818 270,225 49,793
Payable for capital shares redeemed 16,688 83,004 54,206
Payable for investments purchased -- 4,100,129 --
Investment advisory fees 2,082 110,514 4,600
Administration fees 2,714 11,860 1,714
Distribution fees 1,240 258 1,042
Other 24,014 22,589 5,150
------------- ------------- -------------
Total Liabilities 96,556 4,615,778 116,706
------------- ------------- -------------
Net Assets $ 24,393,592 $ 129,361,950 $ 18,455,985
============= ============= =============
NET ASSETS CONSIST OF:
Capital 24,639,256 132,175,362 17,286,502
Distributions in excess of -- (108,656) (19,969)
net investment income
Accumulated net realized 146,541 (4,514,399) 415,667
gains (losses) from
investment transactions
Net unrealized appreciation (392,205) 1,809,643 773,785
(depreciation) on investments ------------- ------------- -------------
Net Assets $ 24,393,592 $ 129,361,950 $ 18,455,985
============= ============= =============
NET ASSETS:
Class A $ 6,063,209 $ 1,127,784 $ 5,065,506
Class I 18,320,651 30,990,300 13,390,479
Class C 3,244 3,247 --
Class R 3,244 3,247 --
Class S 3,244 97,237,372 --
------------- ------------- -------------
Total $ 24,393,592 $ 129,361,950 $ 18,455,985
SHARES OUTSTANDING:
Class A 586,984 116,881 497,200
Class I 1,774,093 3,212,483 1,314,484
Class C 314 337 --
Class R 314 337 --
Class S 314 10,078,226 --
------------- ------------- -------------
Total 2,362,019 13,408,264 1,811,684
============= ============= =============
NET ASSET VALUES:
Class A(a) $ 10.33 $ 9.65 $ 10.19
============= ============= =============
Class I $ 10.33 $ 9.65 $ 10.19
============= ============= =============
Class C(b) $ 10.33 $ 9.65 --
============= ============= =============
Class R $ 10.33 $ 9.65 --
============= ============= =============
Class S $ 10.32 $ 9.65 --
============= ============= =============
12
================================================================================
FINANCIAL STATEMENTS
================================================================================
Statement of Assets and Liabilities (cont.)
- --------------------------------------------------------------------------------
TAMARACK GOVERNMENT TAMARACK QUALITY TAMARACK NORTH CAROLINA
INCOME FUND FIXED INCOME FUND TAX-FREE BOND FUND
----------- ----------------- ------------------
MAXIMUM OFFERING PRICE PER SHARE:
(100%/100%-maximum sales charge of net
asset value adjusted to the nearest cent):
Class A $10.73 $10.03 $10.59
====== ====== ======
Maximum Sales Charge - Class A 3.75% 3.75% 3.75%
====== ====== ======
(a) For Class A shares, the redemption price per share is reduced by 1.00% for
sales of shares within 12 months of purchase (only applicable on purchases
of $1 million or more).
(b) For Class C shares, the redemption price per share is reduced by 1.00% for
sales of shares within 12 months of purchase.
SEE NOTES TO FINANCIAL STATEMENTS.
13
================================================================================
FINANCIAL STATEMENTS
================================================================================
Statement of Operations
- --------------------------------------------------------------------------------
FOR THE YEAR ENDED
APRIL 30, 2004
TAMARACK GOVERNMENT TAMARACK QUALITY TAMARACK NORTH CAROLINA
INCOME FUND FIXED INCOME FUND TAX-FREE BOND FUND
------------- ------------- -------------
INVESTMENT INCOME:
Interest income $ 882,810 $ 2,153,719 $ 992,150
Dividend income 3,090 4,931 6,517
----------- ----------- -----------
Total Investment Income 885,900 2,158,650 998,667
----------- ----------- -----------
EXPENSES:
Investment advisory fees 78,642 277,687 79,857
Administration Fees 38,912 62,570 33,917
Distribution fees - Class A 29,966 3,917 23,223
Distribution fees - Class B 4,638 1,081 2,815
Distribution fees - Class C 1 1 --
Accounting fees 34,108 43,191 34,890
Custodian fees 1,603 2,818 1,530
Insurance fees 3,547 5,858 2,914
Legal and Audit fees 28,226 38,159 26,752
Registration and filing fees 28,859 25,034 10,668
Shareholder reports 6,706 4,725 5,221
Transfer agent fees 31,582 30,971 21,274
Directors' fees 2,073 2,082 1,527
Other fees 5,540 7,026 5,141
----------- ----------- -----------
Total expenses before 294,403 505,120 249,729
voluntary fee reductions
Expenses voluntarily reduced by:
Advisor (7,464) (8,407) (6,505)
Distributor (16,143) (2,228) (12,315)
----------- ----------- -----------
Net Expenses 270,796 494,485 230,909
----------- ----------- -----------
NET INVESTMENT INCOME 615,104 1,664,165 767,758
----------- ----------- -----------
REALIZED/UNREALIZED GAINS
(LOSSES) FROM INVESTMENTS:
Net realized gains from 1,567,509 (260,959) 675,415
investment transactions
Change in unrealized (2,171,469) (1,540,439) (1,239,107)
depreciation on investments ----------- ----------- -----------
Net realized/unrealized (603,960) (1,801,398) (563,692)
losses from investments ----------- ----------- -----------
Change in net assets resulting $ 11,144 $ (137,233) $ 204,066
from operations =========== =========== ===========
SEE NOTES TO FINANCIAL STATEMENTS.
14
================================================================================
FINANCIAL STATEMENTS
================================================================================
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
TAMARACK GOVERNMENT
INCOME FUND
FOR THE YEAR ENDED FOR THE YEAR ENDED
APRIL 30, 2004 APRIL 30, 2003
FROM INVESTMENT ACTIVITIES:
Operations:
Net investment income $ 615,104 $ 1,225,319
Net realized gains (losses) from investment 1,567,509 1,061,545
transactions and other dispositions
Net change in unrealized appreciation (2,171,469) 569,204
(depreciation) on investment transactions ------------ ------------
Change in net assets from operations 11,144 2,856,068
------------ ------------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income (130,831) (204,394)
From net realized gains from investment transactions (127,056) --
DISTRIBUTIONS TO CLASS B SHAREHOLDERS:
From net investment income (7,830) (16,464)
From net realized gains from investment transactions (10,833) --
DISTRIBUTIONS TO CLASS I SHAREHOLDERS:
From net investment income (482,857) (1,004,461)
From net realized gains from investment transactions (350,792) --
DISTRIBUTIONS TO CLASS C SHAREHOLDERS:
From net investment income (1) --
DISTRIBUTIONS TO CLASS R SHAREHOLDERS:
From net investment income (2) --
DISTRIBUTIONS TO CLASS S SHAREHOLDERS:
From net investment income (2) --
------------ ------------
Change in net assets from shareholder distributions (1,110,204) (1,225,319)
------------ ------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued 13,366,595 18,519,228
Proceeds from shares exchanged from Class B 414,882 --
Proceeds from shares issued in connection -- --
with merger
Dividends reinvested 858,032 640,450
Cost of shares redeemed (19,928,660) (19,436,211)
Cost of shares exchanged to Class A (414,882) --
------------ ------------
Change in net assets from capital transactions (5,704,033) (276,533)
------------ ------------
Net increase (decrease) in net assets (6,803,093) 1,354,216
NET ASSETS:
Beginning of year 31,196,685 29,842,469
------------ ------------
End of year $ 24,393,592 $ 31,196,685
============ ============
SHARE TRANSACTIONS:
Issued 1,265,266 1,749,231
Issued in connection with exchange from Class B 38,956 --
Issued in connection with merger -- --
Reinvested 81,267 60,389
Redeemed (1,872,481) (1,829,882)
Cost of shares exchanged to Class A (38,956) --
------------ ------------
Change in shares transactions (525,948) (20,262)
============ ============
SEE NOTES TO FINANCIAL STATEMENTS.
15
================================================================================
FINANCIAL STATEMENTS
================================================================================
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
TAMARACK QUALITY FIXED
INCOME FUND
FOR THE YEAR ENDED FOR THE YEAR ENDED
APRIL 30, 2004 APRIL 30, 2003
-------------- --------------
FROM INVESTMENT ACTIVITIES:
Operations:
Net investment income $ 1,664,165 $ 2,325,888
Net realized gains (losses) from investment (260,959) 916,167
transactions and other dispositions
Net change in unrealized appreciation (1,540,439) 1,645,732
(depreciation) on investment transactions ------------- -------------
Change in net assets from operations (137,233) 4,887,787
------------- -------------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income (32,451) (21,149)
From net realized gains from investment (32,077) (517)
transactions
DISTRIBUTIONS TO CLASS B SHAREHOLDERS:
From net investment income (3,859) (4,338)
From net realized gains from investment (4,231) (128)
transactions
DISTRIBUTIONS TO CLASS I SHAREHOLDERS:
From net investment income (1,686,514) (2,445,484)
From net realized gains from investment transactions (1,176,613) (61,931)
DISTRIBUTIONS TO CLASS C SHAREHOLDERS:
From net investment income (3) --
DISTRIBUTIONS TO CLASS R SHAREHOLDERS:
From net investment income (4) --
DISTRIBUTIONS TO CLASS S SHAREHOLDERS:
From net investment income (140,849) --
------------- -------------
Change in net assets from shareholder distributions (3,076,601) (2,533,547)
------------- -------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued 12,337,231 14,829,282
Proceeds from shares exchanged from Class B 122,283 --
Proceeds from shares issued in connection 99,512,062 --
with merger
Dividends reinvested 1,468,997 802,986
Cost of shares redeemed (29,015,385) (35,226,442)
Cost of shares exchanged to Class A (122,283) --
------------- -------------
Change in net assets from capital transactions 84,302,905 (19,594,174)
------------- -------------
Net increase (decrease) in net assets 81,089,071 (17,239,934)
NET ASSETS:
Beginning of year 48,272,879 65,512,813
------------- -------------
End of year $ 129,361,950 $ 48,272,879
============= =============
SHARE TRANSACTIONS:
Issued 1,230,858 1,475,219
Issued in connection with exchange from Class B 12,253 --
Issued in connection with merger 10,207,207 --
Reinvested 147,778 79,935
Redeemed (2,877,062) (3,512,536)
Cost of shares exchanged to Class A (12,253) --
------------- -------------
Change in shares transactions 8,708,781 (1,957,382)
============= =============
SEE NOTES TO FINANCIAL STATEMENTS.
16
================================================================================
FINANCIAL STATEMENTS
================================================================================
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
TAMARACK NORTH CAROLINA
TAX-FREE BOND FUND
FOR THE YEAR ENDED FOR THE YEAR ENDED
APRIL 30, 2004 APRIL 30, 2003
-------------- --------------
FROM INVESTMENT ACTIVITIES:
Operations:
Net investment income $ 767,758 $ 1,012,731
Net realized gains (losses) from investment 675,415 276,307
transactions and other dispositions
Net change in unrealized appreciation (1,239,107) 662,001
(depreciation) on investment transactions ------------ ------------
Change in net assets from operations 204,066 1,951,039
------------ ------------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income (146,821) (152,357)
From net realized gains from investment transactions (100,609) (17,628)
DISTRIBUTIONS TO CLASS B SHAREHOLDERS:
From net investment income (7,557) (12,581)
From net realized gains from investment transactions (5,786) (1,713)
DISTRIBUTIONS TO CLASS I SHAREHOLDERS:
From net investment income (613,380) (847,793)
From net realized gains from investment transactions (342,026) (91,581)
DISTRIBUTIONS TO CLASS C SHAREHOLDERS:
From net investment income -- --
DISTRIBUTIONS TO CLASS R SHAREHOLDERS:
From net investment income -- --
DISTRIBUTIONS TO CLASS S SHAREHOLDERS:
From net investment income -- --
------------ ------------
Change in net assets from shareholder distributions (1,216,179) (1,123,653)
------------ ------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued 3,577,313 3,005,523
Proceeds from shares exchanged from Class B 279,994 --
Proceeds from shares issued in connection with merger -- --
Dividends reinvested 493,419 279,172
Cost of shares redeemed (10,597,289) (9,055,257)
Cost of shares exchanged to Class A (279,994) --
------------ ------------
Change in net assets from capital transactions (6,526,557) (5,770,562)
------------ ------------
Net increase (decrease) in net assets (7,538,670) (4,943,176)
NET ASSETS:
Beginning of year 29,994,655 30,937,831
------------ ------------
End of year $ 18,455,985 $ 25,994,655
============ ============
SHARE TRANSACTIONS:
Issued 339,762 283,408
Issued in connection with exchange from Class B 26,768 --
Issued in connection with merger -- --
Reinvested 47,068 26,293
Redeemed (1,005,051) (856,700)
Cost of shares exchanged to Class A (26,742) --
------------ ------------
Change in shares transactions (618,195) (546,999)
============ ============
SEE NOTES TO FINANCIAL STATEMENTS.
17
================================================================================
FINANCIAL HIGHLIGHTS
================================================================================
Tamarack Government Income Fund
- --------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED APRIL 30
(EXCEPT AS NOTED)
CLASS A 2004 2003 2002 2001 2000
- ------- ---- ---- ---- ---- ----
Net Asset Value, Beginning of Period $ 10.80 $ 10.26 $ 10.14 $ 9.66 $ 10.03
INVESTMENT ACTIVITIES:
Net Investment Income 0.23 0.38 0.51 0.56 0.50
Net Realized and Unrealized Gains/(Losses) (0.24) 0.54 0.12 0.48 (0.33)
---------- ---------- ---------- ---------- ----------
Total From Investment Operations (0.01) 0.92 0.63 1.04 0.17
DISTRIBUTIONS:
Net Investment Income (0.23) (0.38) (0.51) (0.56) (0.50)
Net Realized Gain (0.23) -- -- -- (0.04)
---------- ---------- ---------- ---------- ----------
Total Distributions (0.46) (0.38) (0.51) (0.56) (0.54)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period $ 10.33 $ 10.80 $ 10.26 $ 10.14 $ 9.66
Total Return* (0.05%) 9.07% 6.28% 11.01% 1.73%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 6,063 $ 6,233 $ 5,113 $ 5,139 $ 4,493
Ratio of Expenses to Average Net Assets 1.22% 1.08% 1.04% 0.93% 0.88%
Ratio of Net Investment Income to 2.16% 3.55% 4.93% 5.61% 5.13%
Average Net Assets
Ratio of Expenses to Average Net Assets** 1.50% 1.33% 1.29% 1.18% 1.13%
Portfolio Turnover*** 77% 67% 35% 103% 60%
CLASS I 2004 2003 2002 2001 2000
- ------- ---- ---- ---- ---- ----
Net Asset Value, Beginning of Period $ 10.80 $ 10.26 $ 10.14 $ 9.66 $ 10.03
INVESTMENT ACTIVITIES:
Net Investment Income 0.26 0.40 0.53 0.58 0.53
Net Realized and Unrealized Gains/(Losses) (0.24) 0.54 0.12 0.48 (0.33)
---------- ---------- ---------- ---------- ----------
Total From Investment Operations 0.02 0.94 0.65 1.06 0.20
DISTRIBUTIONS:
Net Investment Income (0.26) (0.40) (0.53) (0.58) (0.53)
Net Realized Gain (0.23) -- -- -- (0.04)
---------- ---------- ---------- ---------- ----------
Total Distributions (0.49) (0.40) (0.53) (0.58) (0.57)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period $ 10.33 $ 10.80 $ 10.26 $ 10.14 $ 9.66
Total Return 0.20% 9.34% 6.55% 11.29% 1.99%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 18,321 $ 24,375 $ 24,308 $ 33,859 $ 43,486
Ratio of Expenses to Average Net Assets 0.96% 0.83% 0.79% 0.68% 0.63%
Ratio of Net Investment Income to 2.42% 3.82% 5.19% 5.87% 5.31%
Average Net Assets
Ratio of Expenses to Average Net Assets** 0.99% (c) (c) (c) (c)
Portfolio Turnover*** 77% 67% 35% 103% 60%
* Excludes sales charge.
** During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratio would have been as indicated.
*** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Not annualized.
(b) Annualized.
(c) There were no waivers or reimbursements during the period.
(d) For the period from April 19, 2004 (commencement of operations) to April 30,
2004.
SEE NOTES TO FINANCIAL STATEMENTS.
18
================================================================================
FINANCIAL HIGHLIGHTS
================================================================================
CLASS C(d) 2004 * Excludes sales charge.
- ---------- ---- ** During the period, certain fees were voluntarily reduced. If
Net Asset Value, Beginning of Period $ 10.43 such voluntary fee reductions had not occurred, the ratio
INVESTMENT ACTIVITIES: would have been as indicated.
Net Investment Income -- *** Portfolio turnover is calculated on the basis of the fund as
Net Realized and Unrealized Gains/(Losses) (0.10) a whole without distinguishing between the classes of shares
Total From Investment Operations (0.10) issued.
DISTRIBUTIONS: (a) Not annualized.
Net Investment Income -- (b) Annualized.
Net Realized Gain -- (c) There were no waivers or reimbursements during the period.
Total Distributions -- (d) For the period from April 19, 2004 (commencement of
Net Asset Value, End of Period $ 10.33 operations) to April 30,2004.
Total Return* (0.92%)(a)
RATIOS/SUPPLEMENTAL DATA: SEE NOTES TO FINANCIAL STATEMENTS.
Net Assets, End of Period (000's) $ 3
Ratio of Expenses to Average Net Assets 2.02%(b)
Ratio of Net Investment Income to 1.23%(b)
Average Net Assets
Ratio of Expenses to Average Net Assets** 2.25%(b)
Portfolio Turnover*** 77%
CLASS R(d) 2004
- ---------- ----
Net Asset Value, Beginning of Period $ 10.43
INVESTMENT ACTIVITIES:
Net Investment Income 0.01
Net Realized and Unrealized Gains/(Losses) (0.10)
Total From Investment Operations (0.09)
DISTRIBUTIONS:
Net Investment Income (0.01)
Net Realized Gain --
Total Distributions (0.01)
Net Asset Value, End of Period $ 10.33
Total Return (0.90%)(a)
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 3
Ratio of Expenses to Average Net Assets 1.46%(b)
Ratio of Net Investment Income to 1.75%(b)
Average Net Assets
Ratio of Expenses to Average Net Assets** 1.61%(b)
Portfolio Turnover*** 77%
CLASS S(d) 2004
- ---------- ----
Net Asset Value, Beginning of Period $ 10.42
INVESTMENT ACTIVITIES:
Net Investment Income 0.01
Net Realized and Unrealized Gains/(Losses) (0.10)
Total From Investment Operations (0.09)
DISTRIBUTIONS:
Net Investment Income (0.01)
Net Realized Gain --
Total Distributions (0.01)
Net Asset Value, End of Period $ 10.32
Total Return (0.89%)(a)
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 3
Ratio of Expenses to Average Net Assets 1.01%(b)
Ratio of Net Investment Income to 2.17%(b)
Average Net Assets
Ratio of Expenses to Average Net Assets** 1.23%(b)
Portfolio Turnover*** 77%
19
================================================================================
FINANCIAL HIGHLIGHTS
================================================================================
Tamarack Quality Fixed Income Fund
- --------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED APRIL 30
(EXCEPT AS NOTED)
CLASS A 2004 2003 2002 2001 2000(a)
- ------- ---- ---- ---- ---- -------
Net Asset Value, Beginning of Period $ 10.27 $ 9.84 $ 10.06 $ 9.50 $ 10.00
INVESTMENT ACTIVITIES:
Net Investment Income 0.38 0.41 0.51 0.58 0.50
Net Realized and Unrealized Gains/(Losses) (0.25) 0.47 (0.15) 0.58 (0.50)
---------- ---------- ---------- ---------- ----------
Total From Investment Operations 0.13 0.88 0.36 1.16 --
DISTRIBUTIONS:
Net Investment Income (0.41) (0.44) (0.52) (0.58) (0.50)
Net Realized Gain (0.34) (0.01) (0.06) (0.02) --
---------- ---------- ---------- ---------- ----------
Total Distributions (0.75) (0.45) (0.58) (0.60) (0.50)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period $ 9.65 $ 10.27 $ 9.84 $ 10.06 $ 9.50
Total Return* 1.39% 9.09% 3.67% 12.46% 0.03%(b)
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 1,128 $ 501 $ 493 $ 324 $ 240
Ratio of Expenses to Average Net Assets 1.42% 1.31% 1.22% 1.16% 1.34%(c)
Ratio of Net Investment Income to 3.56% 4.03% 5.03% 5.88% 5.50%(c)
Average Net Assets
Ratio of Expenses to Average Net Assets** 1.68% 1.56% 1.47% 1.41% 1.59%(c)
Portfolio Turnover*** 87% 79% 88% 130% 314%
CLASS I 2004 2003 2002 2001 2000(a)
- ------- ---- ---- ---- ---- -------
Net Asset Value, Beginning of Period $ 10.27 $ 9.84 $ 10.06 $ 9.50 $ 10.00
INVESTMENT ACTIVITIES:
Net Investment Income 0.37 0.42 0.54 0.60 0.52
Net Realized and Unrealized Gains/(Losses) (0.21) 0.48 (0.15) 0.58 (0.50)
---------- ---------- ---------- ---------- ----------
Total From Investment Operations 0.16 0.90 0.39 1.18 0.02
DISTRIBUTIONS:
Net Investment Income (0.44) (0.46) (0.55) (0.60) (0.52)
Net Realized Gain (0.34) (0.01) (0.06) (0.02) --
---------- ---------- ---------- ---------- ----------
Total Distributions (0.78) (0.47) (0.61) (0.62) (0.52)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period $ 9.65 $ 10.27 $ 9.84 $ 10.06 $ 9.50
Total Return 1.54% 9.33% 3.93% 12.74% 0.20%(c)
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 30,990 $ 47,658 $ 64,912 $ 77,808 $ 69,558
Ratio of Expenses to Average Net Assets 1.18% 1.06% 0.97% 0.91% 1.09%(c)
Ratio of Net Investment Income to 3.83% 4.30% 5.34% 6.10% 5.65%(c)
Average Net Assets
Ratio of Expenses to Average Net Assets** (d) (d) (d) (d) 1.11%(c)
Portfolio Turnover*** 87% 79% 88% 130% 314%
* Excludes sales charge.
** During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratio would have been as indicated.
*** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) For the period from May 11, 1999 (commencement of operations) to April 30,
2000.
(b) Not annualized.
(c) Annualized.
(d) There were no waivers or reimbursements during the period.
(e) For the period from April 19, 2004 (commencement of operations) to April 30,
2004.
SEE NOTES TO FINANCIAL STATEMENTS.
20
================================================================================
FINANCIAL HIGHLIGHTS
================================================================================
CLASS C(e) 2004 * Excludes sales charge.
- ---------- ---- ** During the period, certain fees were voluntarily reduced. If
Net Asset Value, Beginning of Period $ 9.73 such voluntary fee reductions had not occurred, the ratio
INVESTMENT ACTIVITIES: would have been as indicated.
Net Investment Income 0.01 *** Portfolio turnover is calculated on the basis of the fund as a
Net Realized and Unrealized Gains/(Losses) (0.08) whole without distinguishing between the classes of shares
Total From Investment Operations (0.07) issued.
(a) For the period from May 11, 1999 (commencement of operations)
DISTRIBUTIONS: to April 30, 2000.(b) Not annualized.
Net Investment Income (0.01) (c) Annualized.
Net Realized Gain -- (d) There were no waivers or reimbursements during the period.
Total Distributions (0.01) (e) For the period from April 19, 2004 (commencement of
Net Asset Value, End of Period $ 9.65 operations) to April 30, 2004.
Total Return* (0.72%)(b)
RATIOS/SUPPLEMENTAL DATA: SEE NOTES TO FINANCIAL STATEMENTS.
Net Assets, End of Period (000's) $ 3
Ratio of Expenses to Average Net Assets 1.69%(c)
Ratio of Net Investment Income to 3.03%(c)
Average Net Assets
Ratio of Expenses to Average Net Assets** (d)
Portfolio Turnover*** 87%
CLASS R(e) 2004
- ---------- ----
Net Asset Value, Beginning of Period $ 9.73
INVESTMENT ACTIVITIES:
Net Investment Income 0.01
Net Realized and Unrealized Gains/(Losses) (0.08)
Total From Investment Operations (0.07)
DISTRIBUTIONS:
Net Investment Income (0.01)
Net Realized Gain --
Total Distributions (0.01)
Net Asset Value, End of Period $ 9.65
Total Return (0.71%)(b)
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 3
Ratio of Expenses to Average Net Assets 1.13%(c)
Ratio of Net Investment Income to 3.54%(c)
Average Net Assets
Ratio of Expenses to Average Net Assets** (d)
Portfolio Turnover*** 87%
CLASS S(e) 2004
- ---------- ----
Net Asset Value, Beginning of Period $ 9.73
INVESTMENT ACTIVITIES:
Net Investment Income 0.01
Net Realized and Unrealized Gains/(Losses) (0.08)
Total From Investment Operations (0.07)
DISTRIBUTIONS:
Net Investment Income (0.01)
Net Realized Gain --
Total Distributions (0.01)
Net Asset Value, End of Period $ 9.65
Total Return (0.58%)(b)
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 97,237
Ratio of Expenses to Average Net Assets 0.68%(c)
Ratio of Net Investment Income to 4.37%(c)
Average Net Assets
Ratio of Expenses to Average Net Assets** (d)
Portfolio Turnover*** 87%
21
================================================================================
FINANCIAL HIGHLIGHTS
================================================================================
Tamarack North Carolina Tax-Free Bond Fund
- --------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED APRIL 30
(EXCEPT AS NOTED)
CLASS A 2004 2003 2002 2001 2000
- ------- ---- ---- ---- ---- ----
Net Asset Value, Beginning of Period $ 10.70 $ 10.39 $ 10.30 $ 9.91 $ 10.45
INVESTMENT ACTIVITIES:
Net Investment Income 0.33 0.36 0.38 0.40 0.38
Net Realized and Unrealized Gains/(Losses) (0.30) 0.35 0.19 0.39 (0.51)
---------- ---------- ---------- ---------- ----------
Total From Investment Operations 0.03 0.71 0.57 0.79 (0.13)
DISTRIBUTIONS:
Net Investment Income (0.33) (0.36) (0.38) (0.40) (0.39)
Net Realized Gain (0.21) (0.04) (0.10) -- (0.02)
---------- ---------- ---------- ---------- ----------
Total Distributions (0.54) (0.40) (0.48) (0.40) (0.41)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period $ 10.19 $ 10.70 $ 10.39 $ 10.30 $ 9.91
Total Return* 0.30% 6.96% 5.64% 8.04% (1.15%)
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 5,066 $ 4,301 $ 4,507 $ 4,225 $ 4,554
Ratio of Expenses to Average Net Assets 1.20% 1.12% 1.10% 1.00% 0.98%
Ratio of Net Investment Income to 3.16% 3.41% 3.61% 3.88% 3.85%
Average Net Assets
Ratio of Expenses to Average Net Assets** 1.48% 1.39% 1.37% 1.28% 1.26%
Portfolio Turnover*** 9% 2% 7% 13% 14%
CLASS I 2004 2003 2002 2001 2000
- ------- ---- ---- ---- ---- ----
Net Asset Value, Beginning of Period $ 10.70 $ 10.39 $ 10.30 $ 9.91 $ 10.45
INVESTMENT ACTIVITIES:
Net Investment Income 0.36 0.39 0.40 0.42 0.41
Net Realized and Unrealized Gains/(Losses) (0.30) 0.35 0.19 0.39 (0.51)
---------- ---------- ---------- ---------- ----------
Total From Investment Operations 0.06 0.74 0.59 0.81 (0.10)
DISTRIBUTIONS:
Net Investment Income (0.36) (0.39) (0.40) (0.42) (0.42)
Net Realized Gain (0.21) (0.04) (0.10) -- (0.02)
---------- ---------- ---------- ---------- ----------
Total Distributions (0.57) (0.43) (0.50) (0.42) (0.44)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period $ 10.19 $ 10.70 $ 10.39 $ 10.30 $ 9.91
Total Return 0.55% 7.23% 5.90% 8.31% (0.90%)
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 13,390 $ 21,251 $ 26,006 $ 29,223 $ 32,461
Ratio of Expenses to Average Net Assets 0.95% 0.87% 0.85% 0.75% 0.73%
Ratio of Net Investment Income to 3.43% 3.66% 3.86% 4.13% 4.09%
Average Net Assets
Ratio of Expenses to Average Net Assets** 0.98% 0.89% 0.87% 0.77% 0.76%
Portfolio Turnover*** 9% 2% 7% 13% 14%
* Excludes sales charge.
** During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratio would have been as indicated.
*** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
SEE NOTES TO FINANCIAL STATEMENTS.
22
================================================================================
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This Page Intentionally Left Blank
- --------------------------------------------------------------------------------
23
================================================================================
NOTES TO FINANCIAL STATEMENTS
================================================================================
April 30, 2004
- --------------------------------------------------------------------------------
1. ORGANIZATION
Tamarack Funds Trust ("Tamarack") is registered under the Investment Company Act
of 1940 as an open-end management investment company. Tamarack was organized as
a Delaware statutory trust on December 16, 2003. Effective April 16, 2004, and
based on the approval of shareholders, seventeen separate investment portfolios
were reorganized as separate investment portfolios of Tamarack. This annual
report includes the following three investment portfolios ("Funds"):
- - Tamarack Government Income Fund ("Government Income Fund") (formerly RBC
Government Income Fund)
- - Tamarack Quality Fixed Income Fund ("Quality Fixed Income Fund") (formerly
RBC Quality Income Fund)
- - Tamarack North Carolina Tax-Free Bond Fund ("North Carolina Tax-Free Bond
Fund") (formerly RBC North Carolina Tax-Free Bond Fund)
Each of the Funds offers five share classes: Class A, Class C, Class R, Class I
and Class S shares. Class A shares are offered with a 3.75% maximum front-end
sales charge. Class C shares are offered at net asset value (i.e., no front-end
sales charge) but are subject to a contingent deferred sales charge ("CDSC") of
1.00% for redemptions within 12 months of purchase. Class R shares are not
subject to either a front-end sales charge or CDSC. Class S and Class I shares
are closed to new investors.
Voyageur Asset Management Inc. ("Voyageur") acts as the investment advisor for
the Tamarack Funds. The officers of the Tamarack Funds ("Fund Management") are
also employees of Voyageur.
- --------------------------------------------------------------------------------
2. SIGNIFICANT ACCOUNTING POLICIES
Summarized below are the significant accounting policies of the Funds. These
policies conform to accounting principles generally accepted in the United
States of America ("GAAP"). Fund management follows these policies when
preparing financial statements. Management may also be required to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
income and expenses for the period. Actual results could differ from those
estimates.
SECURITY VALUATION:
Bonds and other fixed income securities (other than short-term obligations, but
including listed issues) are valued on the basis of valuations furnished by
pricing services approved by Tamarack's Board of Trustees (the "Board"). The
pricing services utilize both dealer- supplied valuations and electronic data
processing techniques that take into account appropriate factors such as
institutional-size trading in similar groups of securities, yield, quality,
coupon rate, maturity, type of issue and trading characteristics other than
market data and without exclusive reliance upon quoted prices or exchanges or
over-the-counter prices, since such valuations are believed to reflect more
accurately the fair value of such securities. Short-term debt obligations are
valued at amortized cost, which approximates market value, unless Tamarack's
Pricing Committee determines that amortized cost no longer approximates market
value due to credit or other impairments of the issuer. In cases where a
security price is unavailable from a pricing service or Tamarack's fund
accounting agent believes that a price provided by a pricing service does not
represent fair current market value, Tamarack has established procedures to
estimate a security's fair value.
24
================================================================================
NOTES TO FINANCIAL STATEMENTS
================================================================================
INVESTMENT TRANSACTIONS:
Security transactions are accounted for on the date the security is bought or
sold ("trade date"). Long-term investment transactions are recorded on a trade
date plus one basis, except for on the last day of the annual or semi-annual
financial reporting period, when they are recorded on trade date. Dividend
income is recorded on the ex-dividend date. Securities gains and losses are
calculated based on the costs of the specific security (also known as identified
cost basis). Interest income is recognized on the accrual basis and includes,
where applicable, the amortization of premium or discount. Paydown gains and
losses on mortgage and asset-backed securities are included in the financial
statements as interest income.
FUND EXPENSES:
Each Fund pays the expenses that are directly related to its operations, such as
trading costs or portfolio management fees. Expenses incurred by Tamarack on
behalf of multiple Funds, such as audit or legal fees, are allocated
proportionately among each of the Funds based either on the Funds' net assets or
on another reasonable basis such as equally across all Funds, depending on the
nature of the expense. Individual share classes within a Fund are charged
expenses specific to that class, such as sales and distribution fees.
FINANCIAL INSTRUMENTS:
FUTURES CONTRACTS - The Funds may enter into futures contracts in an effort to
hedge against market risks. A futures contract on a securities index is an
agreement obligating either party to pay, and entitling the other party to
receive, during the term of the contract, cash payments based on the level of a
specified securities index. Put and call options on futures contracts would give
the Fund the right (but not the obligation) to sell or to purchase for a
specified price the underlying futures contract at any time during the option
period. Futures transactions involve brokerage costs and require the Fund to
segregate assets to cover contracts that would require it to purchase securities
or currencies. A Fund may lose the expected benefit of futures transactions if
interest rates, exchange rates or securities prices change in an unanticipated
manner. However, such unanticipated changes may also result in lower overall
performance than if the Fund had not entered into any futures transactions.
Upon entering into a futures contract, a Fund is required to pledge to the
broker an amount of cash, U.S. government securities, or other assets, equal to
a certain percentage of the contract amount. Subsequent payments are made or
received by the Fund each day, depending on the daily fluctuations in fair value
of the underlying index. The Funds recognize a gain or loss each day equal to
the income received or paid. The Funds did not enter into futures contracts
during the fiscal year ended April 30, 2004.
WHEN-ISSUED TRANSACTIONS - The Funds may engage in when-issued (to be announced)
transactions. A Fund would record when-issued securities on the actual trade
date and maintain sufficient liquidity so that cash will be available to make
payment for the securities purchased. Securities purchased on a when-issued or
delayed delivery basis are valued daily and begin earning interest on the
settlement date.
HIGH-YIELD AND EMERGING MARKET SECURITIES - The investment objectives of the
Quality Fixed Income Fund allow the Fund to invest up to 15% of the Fund's total
assets in high-yield obligations and/or obligations of emerging market
countries. High-yield obligations are debt securities which have a lower than
investment-grade credit rating, but also pay a
25
================================================================================
NOTES TO FINANCIAL STATEMENTS
================================================================================
higher rate of return due to the potentially higher risk of default. Fund
management has determined that the Fund will not invest in any high-yield
obligation with a credit rating lower than B as determined by the national
rating agencies and that no more than 5% of the Fund's assets will be invested
in securities with a B rating. Also, although the Fund may invest in obligations
of emerging markets, Fund management does not want to expose Fund shareholders
to currency fluctuation risk and therefore such emerging market obligations must
be U.S. dollar-denominated.
DISTRIBUTIONS TO SHAREHOLDERS:
Each of the Funds pays out any income that it receives, less expenses, in the
form of dividends to its shareholders. Income dividends and capital gains on
each Fund are declared and paid at least annually. Distributions to shareholders
are recorded on the ex-dividend date. The amount of dividends and distributions
are calculated based on federal income tax regulations, which may differ from
GAAP. These "book/tax" differences may be either temporary or permanent in
nature. To the extent these differences are permanent in nature, they are
reclassified within a Fund's capital accounts based on their federal tax basis
treatment.
- --------------------------------------------------------------------------------
3. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
Tamarack, on behalf of Government Income Fund, Quality Fixed Income Fund, and
North Carolina Tax-Free Bond Fund, has entered into an investment advisory
agreement with Voyageur, under which Voyageur manages each Fund's assets and
furnishes related office facilities, equipment, research and personnel. The
agreement requires each of Government Income Fund, Quality Fixed Income Fund,
and North Carolina Tax-Free Bond Fund to pay Voyageur a monthly fee based upon
average daily net assets. Under the terms of the advi- sory contracts Voyageur
is entitled to receive fees based on a percentage of the average daily net
assets of each of the Funds as follows:
Annual Rate
-----------
Government Income Fund 0.30%
Quality Fixed Income Fund 0.60%
North Carolina Tax-Free Bond Fund 0.35%
Voyageur has contractually agreed to waive fees and/or to make payments in order
to keep total operating expenses of the Class S shares of Quality Fixed Income
Fund to 0.68%. This expense limitation agreement is in place until May 1, 2005.
Voyageur may voluntarily waive and/or reimburse operating expenses of any Fund
from time to time. Any such voluntary program may be changed or eliminated at
any time without notice.
Voyageur serves as administrator to the Funds and BISYS Fund Services Limited
Partnership ("BISYS") serves as sub-administrator and fund accounting agent.
Services provided under the administrative services contract include providing
day-to-day administration of matters related to the corporate existence of the
Fund, maintenance of its records and the preparation of reports. Effective April
16, 2004 and under the terms of the administrative services contract, Voyageur
receives from each Fund a fee, payable monthly, at the annual rate of 0.10% of
each Fund's average daily net assets. For its services as sub-administrator,
BISYS receives a fee payable by Voyageur out of Voyageur's own resources. Prior
to April 16, 2004 the Funds paid BISYS an administrative fee equal to an annual
rate of 0.15%.
26
================================================================================
NOTES TO FINANCIAL STATEMENTS
================================================================================
- --------------------------------------------------------------------------------
4. FUND DISTRIBUTION
Each of the Funds has adopted a Master Distribution 12b-1 Plan (the "Plan") in
which Tamarack Distributors Inc. (the "Distributor") acts as the Funds'
distributor. The Distributor is an affiliate of Voyageur. The Plan permits each
Fund to make payments for, or to reimburse the Distributor monthly for,
distribution-related costs and expenses of marketing shares of each share class
covered under the Plan. The following chart shows the maximum Plan fee rate for
each class.
Class A Class C Class R
------- ------- -------
12b-1 Plan Fee 0.50%* 1.00% 0.50%
Plan fees are based on average annual daily net assets of the applicable class.
The Distributor, subject to applicable legal requirements, may waive a Plan fee
voluntarily, in whole or in part.
*The Distributor is currently voluntarily waiving 0.25% of the Plan fee for
Class A. These voluntary waivers will continue until at least March 31, 2005.
On March 24, 2004, all Class B shares of the predecessor funds to Government
Income Fund, Quality Fixed Income Fund, and North Carolina Tax-Free Bond Fund
were converted into Class A shares of the predecessor funds. During the fiscal
year ended April 30, 2004, the distributor of the predecessor funds (Centura
Funds Distributor, Inc., an affiliate of BISYS) received the proceeds of any
CDSC imposed on redemptions of Class B shares of the predecessor funds. The
following is a summary of the dealer commissions paid to Centura Funds
Distributor, Inc. and reallocated to RBC Centura Securities, Inc. and RBC Dain
Rauscher Inc. (both affiliates of Voyageur) for Class B shares of the
predecessor funds for the year ended April 30, 2004.
RBC Centura RBC Dain
Distributor Securities, Inc. Rauscher Inc.
----------- ---------------- -------------
Government Income Fund $ -- $133 $385
Quality Fixed Income Fund -- -- 1
North Carolina Tax-Free Bond Fund -- -- --
- --------------------------------------------------------------------------------
5. CONCENTRATION OF CREDIT RISK
The Tamarack North Carolina Tax-Free Bond Fund invests substantially all of its
assets in a portfolio of tax-exempt debt obligations issued by the state of
North Carolina and its authorities and agencies. The issuers' abilities to meet
their obligations may be affected by economic or political developments in the
state of North Carolina.
- --------------------------------------------------------------------------------
6. SECURITIES TRANSACTIONS
The cost of securities purchased and proceeds from securities sold (excluding
short-term securities) for the year ended April 30, 2004 were as follows:
Purchases (Excl. Sales Purchases of Sales of
U.S. Govt.) (Excl. U.S. Govt.) U.S. Govt. U.S. Govt.
----------- ------------------ ---------- ----------
Government Income Fund $19,813,433 $25,629,606
Quality Fixed Income Fund $23,553,148 $39,578,826 $17,523,770 $20,068,017
North Carolina Tax-Free Bond Fund $ 1,949,881 $ 8,249,563
27
================================================================================
NOTES TO FINANCIAL STATEMENTS
================================================================================
7. CAPITAL SHARE TRANSACTIONS
Tamarack is authorized to issue an unlimited number of shares of beneficial
interest without par value. Transactions in shares of Government Income Fund,
Quality Fixed Income Fund, and North Carolina Tax-Free Bond Fund are summarized
below:
TAMARACK GOVERNMENT INCOME FUND
FOR THE YEAR ENDED FOR THE YEAR ENDED
APRIL 30, 2004 APRIL 30, 2003
-------------- --------------
CAPITAL TRANSACTIONS:
CLASS A
Proceeds from shares issued $ 2,942,652 $ 3,854,740
Proceeds from shares exchanged from Class B 414,882 --
Dividends reinvested 256,506 198,234
Cost of shares redeemed (3,522,320) (3,207,198)
------------ ------------
Change in Class A $ 91,720 $ 845,776
------------ ------------
CLASS B
Proceeds from shares issued $- $ 291,402
Dividends reinvested 15,092 11,104
Cost of shares redeemed (180,998) (160,401)
Cost of shares exchanged to Class A (414,882) --
------------ ------------
Change in Class B $ (580,788) $ 142,105
------------ ------------
CLASS I
Proceeds from shares issued $ 10,414,118 $ 14,373,086
Dividends reinvested 586,434 431,112
Cost of shares redeemed (16,225,342) (16,068,612)
------------ ------------
Change in Class I $ (5,224,790) $ (1,264,414)
------------ ------------
CLASS C
Proceeds from shares issued $ 3,275 $ --
Dividends reinvested -- --
Cost of shares redeemed -- --
------------ ------------
Change in Class C $ 3,275 $ --
------------ ------------
CLASS R
Proceeds from shares issued $ 3,275 $ --
Dividends reinvested -- --
Cost of shares redeemed -- --
------------ ------------
Change in Class R $ 3,275 $ --
------------ ------------
CLASS S
Proceeds from shares issued $ 3,275 $ --
Proceeds from shares issued in connection with merger -- --
Dividends reinvested -- --
Cost of shares redeemed -- --
------------ ------------
Change in Class S $ 3,275 $ --
------------ ------------
Net change from capital transactions $ (5,704,033) $ (276,533)
============ ============
SHARE TRANSACTIONS:
CLASS A
Issued 277,034 362,476
Issued in connection with exchange from Class B 38,956 --
Reinvested 24,275 18,678
Redeemed (330,203) (302,503)
------------ ------------
Change in Class A 10,062 78,651
------------ ------------
CLASS B
Issued -- 27,471
Reinvested 1,432 1,046
Redeemed (17,061) (15,032)
Cost of shares exchanged to Class A (38,956) --
------------ ------------
Change in Class B (54,585) 13,485
------------ ------------
28
================================================================================
NOTES TO FINANCIAL STATEMENTS
================================================================================
FOR THE YEAR ENDED FOR THE YEAR ENDED
APRIL 30, 2004 APRIL 30, 2003
-------------- --------------
CLASS I
Issued 987,290 1,359,284
Reinvested 55,560 40,665
Redeemed (1,525,217) (1,512,347)
------------ -------------
Change in Class I (482,367) (112,398)
------------ -------------
CLASS C
Issued 314 --
Reinvested -- --
Redeemed -- --
------------ -------------
Change in Class C 314 --
------------ -------------
CLASS R
Issued 314 --
Reinvested -- --
Redeemed -- --
------------ -------------
Change in Class R 314 --
------------ -------------
CLASS S
Issued 314 --
Issued in connection with merger -- --
Reinvested -- --
Redeemed -- --
------------ -------------
Change in Class S 314 --
------------ -------------
Net change from share transactions (525,948) (20,262)
============ =============
TAMARACK QUALITY FIXED INCOME FUND
FOR THE YEAR ENDED FOR THE YEAR ENDED
APRIL 30, 2004 APRIL 30, 2003
-------------- --------------
CAPITAL TRANSACTIONS:
CLASS A
Proceeds from shares issued $ 1,355,528 $ 263,717
Proceeds from shares exchanged from Class B 122,283 --
Dividends reinvested 48,264 21,580
Cost of shares redeemed (840,755) (297,858)
------------ -------------
Change in Class A $ 685,320 $ (12,561)
------------ -------------
CLASS B
Proceeds from shares issued $ 10,548 $ 3,599
Dividends reinvested 8,118 4,513
Cost of shares redeemed (6,903) (6,601)
Cost of shares exchanged to Class A (122,283) --
------------ -------------
Change in Class B $ (110,520) $ 1,511
------------ -------------
CLASS I
Proceeds from shares issued $ 10,946,331 $ 14,561,966
Dividends reinvested 1,412,615 776,893
Cost of shares redeemed (26,875,366) (34,921,983)
------------ -------------
Change in Class I $(14,516,420) $(19,583,124)
------------ -------------
CLASS C
Proceeds from shares issued $ 3,275 $ --
Dividends reinvested -- --
Cost of shares redeemed -- --
------------ -------------
Change in Class C $ 3,275 $ --
------------ -------------
CLASS R
Proceeds from shares issued $ 3,275 $ --
Dividends reinvested -- --
Cost of shares redeemed -- --
------------ -------------
Change in Class R $ 3,275 $ --
------------ -------------
29
================================================================================
NOTES TO FINANCIAL STATEMENTS
================================================================================
FOR THE YEAR ENDED FOR THE YEAR ENDED
APRIL 30, 2004 APRIL 30, 2003
-------------- --------------
CLASS S
Proceeds from shares issued $ 18,274 $ --
Proceeds from shares issued in connection with merger 99,512,062 --
Dividends reinvested -- --
Cost of shares redeemed (1,292,361) --
------------ ------------
Change in Class S $ 98,237,975 $ --
------------ ------------
Net change from capital transactions $ 84,302,905 $(19,594,174)
============ ============
SHARE TRANSACTIONS:
CLASS A
Issued 134,882 26,116
Issued in connection with exchange from Class B 12,253 --
Reinvested 4,842 2,146
Redeemed (83,824) (29,621)
------------ ------------
Change in Class A 68,153 (1,359)
------------ ------------
CLASS B
Issued 1,033 354
Reinvested 814 449
Redeemed (694) (644)
Cost of shares exchanged to Class A (12,253) --
------------ ------------
Change in Class B (11,100) 159
------------ ------------
CLASS I
Issued 1,091,060 1,448,749
Reinvested 142,122 77,340
Redeemed (2,660,354) (3,482,271)
------------ ------------
Change in Class I (1,427,172) (1,956,182)
------------ ------------
CLASS C
Issued 337 --
Reinvested -- --
Redeemed -- --
------------ ------------
Change in Class C 337 --
------------ ------------
CLASS R
Issued 337 --
Reinvested -- --
Redeemed -- --
------------ ------------
Change in Class R 337 --
------------ ------------
CLASS S
Issued 3,209 --
Issued in connection with merger 10,207,207 --
Reinvested -- --
Redeemed (132,190) --
------------ ------------
Change in Class S 10,078,226 --
------------ ------------
Net change from share transactions (8,708,781) (1,957,382)
============ ============
TAMARACK NORTH CAROLINA TAX-FREE BOND FUND
FOR THE YEAR ENDED FOR THE YEAR ENDED
APRIL 30, 2004 APRIL 30, 2003
-------------- --------------
CAPITAL TRANSACTIONS:
CLASS A
Proceeds from shares issued $ 1,098,258 $ 54,693
Proceeds from shares exchanged from Class B 279,994 --
Dividends reinvested 219,859 157,897
Cost of shares redeemed (593,557) (551,453)
------------ ------------
Change in Class A $1,004,554 $(338,863)
------------ ------------
30
================================================================================
NOTES TO FINANCIAL STATEMENTS
================================================================================
FOR THE YEAR ENDED FOR THE YEAR ENDED
APRIL 30, 2004 APRIL 30, 2003
-------------- --------------
CLASS B
Proceeds from shares issued $ -- $ 31,404
Dividends reinvested 11,412 11,314
Cost of shares redeemed (168,615) (36,614)
Cost of shares exchanged to Class A (279,994) --
------------ ------------
Change in Class B $ (437,197) $ 6,104
------------ ------------
CLASS I
Proceeds from shares issued $ 2,479,055 $ 2,919,426
Dividends reinvested 262,148 109,961
Cost of shares redeemed (9,835,117) (8,457,190)
------------ ------------
Change in Class I $ (7,093,914) $ (5,437,803)
------------ ------------
Net change from capital transactions $ (6,526,557) $ (5,770,562)
============ ============
SHARE TRANSACTIONS:
CLASS A
Issued 104,369 5,152
Issued in connection with exchange from Class B 26,768 --
Reinvested 20,912 14,895
Redeemed (56,864) (51,739)
------------ ------------
Change in Class A 95,185 (31,692)
------------ ------------
CLASS B
Issued -- 2,908
Reinvested 1,059 1,067
Redeemed (15,665) (3,482)
Cost of shares exchanged to Class A (26,742) --
------------ ------------
Change in Class B (41,348) 493
------------ ------------
CLASS I
Issued 235,393 275,348
Reinvested 25,097 10,331
Redeemed (932,522) (801,479)
------------ ------------
Change in Class I (672,032) (515,800)
------------ ------------
Net change from share transactions (618,195) (546,999)
============ ============
Class C, R, and S shares of the North Carolina Tax-Free Bond Fund were not
offered during the periods stated above.
31
================================================================================
NOTES TO FINANCIAL STATEMENTS
================================================================================
- --------------------------------------------------------------------------------
8. FUND COMBINATIONS
At a special meeting of shareholders on April 8, 2004, the shareholders of each
of Portfolio S and Portfolio L of D.L. Babson Bond Trust approved agreements and
plans of reorganization regarding the combination of Portfolio S and Portfolio L
into RBC Quality Income Fund. Effective April 16, 2004, through a tax-free
reorganization, Portfolio S and Portfolio L transferred all of their assets to
RBC Quality Income Fund, which assumed all of the liabilities of Portfolio S and
Portfolio L. Voyageur paid the costs associated with the reorganization. The
shareholders of Portfolio S and Portfolio L received 2,733,144 and 7,474,063
Class S shares, respectively, ($9.75 per share) of the RBC Quality Income Fund,
which had a total value of $99,512,062, in exchange for their shares of
Portfolio S and Portfolio L ($9.60 and $1.53 per share, respectively), which
also had a total value of $99,512,062. Portfolio S and Portfolio L shareholders
received 0.985 and 0.157 Quality Income Fund Class S shares, respectively, for
every 1.000 shares owned of Portfolio S or Portfolio L.
- --------------------------------------------------------------------------------
9. REORGANIZATION OF RBC FUNDS, INC.
On December 2, 2003, the Board of Directors of RBC Funds, Inc. approved an
agreement and plan of reorganization regarding the reorganization of each series
of RBC Funds, Inc. (including RBC Government Income Fund, RBC Quality Income
Fund and RBC North Carolina Tax-Free Bond Fund) as a series of Tamarack. At a
special meeting of shareholders on April 8, 2004, the shareholders of each of
RBC Government Income Fund, RBC Quality Income Fund and RBC North Carolina
Tax-Free Bond Fund approved the agreement and plan of reorganization with
respect to each fund. Effective April 16, 2004, pursuant to that agreement and
plan of reorganization, RBC Government Income Fund, RBC Quality Income Fund and
RBC North Carolina Tax-Free Bond Fund were reorganized, through a tax-free
reorganization, as separate series of Tamarack (Government Income Fund, Quality
Fixed Income Fund and North Carolina Tax-Free Bond Fund, respectively).
- --------------------------------------------------------------------------------
10. FEDERAL INCOME TAXES
It is the policy of each Fund to qualify as a regulated investment company by
complying with the provisions available to certain investment companies, as
defined under Subchapter M of the Internal Revenue Code, and to distribute
substantially all of its net investment income and net realized capital gain.
Therefore, no federal tax liability is recorded in the financial statements of
each Fund.
32
================================================================================
NOTES TO FINANCIAL STATEMENTS
================================================================================
The tax cost of securities differ from financial reporting cost by the amount of
losses recognized for financial reporting purposes in excess of federal income
tax purposes. As of April 30, 2004, the tax cost of securities and the breakdown
of unrealized appreciation (depreciation) for each Fund were as follows:
Net Unrealized
Tax Cost Unrealized Unrealized Appreciation
of Securities Appreciation Depreciation (Depreciation)
------------- ------------ ------------ --------------
Government Income Fund $ 24,569,048 $ 71,785 $ (463,990) $ (392,205)
Quality Fixed Income Fund 131,319,185 4,173,347 (2,363,704) 1,809,643
North Carolina Tax-Free Bond Fund 17,578,652 829,888 (56,103) 773,785
The tax character of distributions during the fiscal year ended April 30, 2004
was as follows (amounts in thousands):
Distribution Paid From:
Net Inv. Net Long Term Total Taxable Tax-Exempt Total Dist.
Income Capital Gains Distributions Distributions Paid
------ ------------- ------------- ------------- ----
Government Income Fund $ 645,785 $ 488,681 $ 1,143,466 $ -- $ 1,143,466
Quality Fixed Income Fund 2,037,101 941,576 2,978,677 -- 2,978,677
North Carolina Tax-Free Bond Fund 2,307 448,421 450,728 792,233 1,242,961
*Total distributions paid differ from Statement of Changes in Net Assets because
for tax purposes dividends are recognized when actually paid.
As of April 30, 2004 the components of accumulated earnings/(deficit) on a tax
basis was as follows (amounts in thousands):
Government Quality Fixed North Carolina
Income Fund Income Fund Tax-Free Bond Fund
----------- ----------- ------------------
Undistributed Ordinary Income $ 49,817 $ 160,484 $ --
Undistributed Tax-Exempt Income -- -- 29,823
Undistributed Long-Term Capital 146,541 -- 415,667
Accumulated Earnings 196,358 160,484 445,490
Distribution Payable (49,818) (269,138) (49,792)
Accumulated Capital and Other Losses -- (4,184,246) --
Unrealized Appreciation (Depreciation) (392,205) 1,479,487 773,785
Total Accumulated Earnings (Deficit) (245,665) (2.813,413) 1,169,483
As of the latest tax year end of April 30, 2004, the Quality Fixed Income Fund
had additional net capital loss carryforwards, subject to certain limitations on
availability, to offset future net capital gains, if any, as the successor of a
merger. To the extent that these carryovers used to offset future capital gains,
it is probable that the gains so offset will not be distributed to shareholders:
Capital Loss
Quality Fixed Income Fund Carryforward Expires
------------ -------
$ 115,326 2009
482,219 2010
1,358,311 2011
1,229,732 2012
33
================================================================================
NOTES TO FINANCIAL STATEMENTS
================================================================================
- --------------------------------------------------------------------------------
11. DIVIDEND RECEIVED DEDUCTION
For corporate shareholders no percentage of the total ordinary income
distributions paid during the tax year ended April 30, 2004, qualified for the
corporate dividend received deduction for the Funds.
- --------------------------------------------------------------------------------
12. CHANGE IN AUDITORS
On December 2, 2003, the Board of Directors of RBC Funds, Inc. selected Deloitte
& Touche ("Deloitte") as independent auditors of the RBC Funds for the fiscal
year ending April 30, 2004. On March 11, 2004, the Tamarack Board of Trustees
selected Deloitte as independent auditors of the Funds. Deloitte has confirmed
to the Audit Committee of the Board of Trustees ("Audit Committee") that they
are independent auditors with respect to the Funds.
PricewaterhouseCoopers LLP ("PwC") served as independent auditors of the RBC
Funds for the fiscal year ended April 30, 2003. In July and August 2003, a PwC
affiliate in Canada provided certain prohibited non-audit services for the
benefit of a Canadian subsidiary of Royal Bank of Canada, the ultimate parent
company of Voyageur. As a result of the PwC affiliate in Canada's provision of
these services, PwC resigned as the independent auditors of the RBC Funds
effective October 8, 2003. During the RBC Funds' fiscal year ended April 30,
2003, PwC's audit reports concerning the RBC Funds contained no adverse opinion
or disclaimer of opinion; nor were its reports qualified or modified as to
uncertainty, audit scope, or accounting principles. Further, in connection with
its audits for the fiscal year ended April 30, 2003, and through October 8,
2003, there were no disagreements between the RBC Funds and PwC on any matter of
accounting principles or practices, financial statement disclosure or auditing
scope or procedure, which if not resolved to the satisfaction of PwC would have
caused it to make reference to the disagreements in its report on the financial
statements for such periods.
- --------------------------------------------------------------------------------
13. MARKET TIMING
Tamarack discourages attempts at market timing by Fund shareholders. Each Fund
charges a redemption fee of 2% of the value of the shares redeemed or exchanged
within 30 days of purchase. When assessed, the redemption fee is retained by the
Fund, not by Fund management. This redemption fee is not charged in cases where
the redemption results from an automatic reinvestment or asset re-allocation not
specifically directed by the shareholder. Tamarack also reserves the right to
reject any Fund purchase order made by persons deemed to be market timers. The
Funds' prospectus contains a full description of Tamarack's policies on market
timing and excessive trading.
- --------------------------------------------------------------------------------
14. SOFT DOLLARS
The term soft dollars generally refers to arrangements in which services other
than trade execution (such as research and brokerage services) are received from
a broker-dealer. The federal securities laws permit a fund adviser to cause the
Fund to pay higher commission charges if the adviser believes the charges are
reasonable in relation to the brokerage and research services provided to the
adviser or to the Fund. Voyageur has a fiduciary duty to the shareholders of the
Funds to seek the best execution for all of the Funds' securities transactions.
Fund management believes that using soft dollars to purchase brokerage and
research services may, in certain circumstances, be in the Funds' best interest.
34
================================================================================
SCHEDULE OF INVESTMENTS
================================================================================
Government Income Fund
- --------------------------------------------------------------------------------
APRIL 30, 2004
SHARES VALUE
- -------------------------------------------------
U.S. GOVERNMENT AGENCY
OBLIGATIONS - 98.9% (a) See notes to financial statements for tax basis unrealized appreciation
FANNIE MAE - 45.2% (depreciation) of securities.
75,000 3.88%, 3/15/05 $ 76,525
910,000 5.25%, 6/15/06 958,944 SEE NOTES TO FINANCIAL STATEMENTS.
650,000 2.63%, 11/15/06 646,363
1,000,000 5.00%, 1/15/07 1,051,933
1,000,000 7.13%, 3/15/07 1,111,991
500,000 4.25%, 7/15/07 514,950
500,000 6.63%, 10/15/07 553,126
1,000,000 5.75%, 2/15/08 1,076,549
1,100,000 6.00%, 5/15/08 1,194,283
500,000 3.38%, 12/15/08 489,109
700,000 5.38%, 11/15/11 731,544
400,000 6.13%, 3/15/12 435,594
1,256,005 4.50%, 10/1/13 1,261,805
930,725 4.50%, 5/1/33 932,535
-----------
11,035,251
-----------
FEDERAL HOME LOAN BANK - 25.5%
475,000 5.13%, 3/6/06 498,383
1,000,000 2.50%, 3/15/06 1,002,426
1,000,000 5.38%, 5/15/06 1,056,688
650,000 4.13%, 11/15/06 670,090
1,550,000 2.75%, 3/14/08 1,506,731
1,000,000 5.75%, 5/15/12 1,057,629
250,000 4.50%, 11/15/12 244,205
200,000 3.88%, 6/14/13 185,090
-----------
6,221,242
-----------
FREDDIE MAC - 19.5%
1,000,000 4.88%, 3/15/07 1,050,731
1,900,000 5.75%, 4/15/08 2,050,612
1,217,969 5.00%, 12/1/17 1,228,361
429,165 4.50%, 5/1/18 423,377
-----------
4,753,081
-----------
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION - 8.7%
1,095,000 5.28%, 11/16/15 1,142,838
986,418 4.36%, 2/16/30 978,008
-----------
2,120,846
-----------
TOTAL U.S. GOVERNMENT AGENCY 24,130,420
OBLIGATIONS -----------
(Cost $24,522,625)
INVESTMENT COMPANIES - 0.2%
46,423 Wells Fargo 100% Treasury 46,423
Money Market Fund, -----------
Investor Class
TOTAL INVESTMENT COMPANIES 46,423
(Cost $46,423) -----------
TOTAL INVESTMENTS 24,176,843
(Cost $24,569,048)(a) - 99.1%
Other assets in excess of
liabilities - 0.9% 216,749
-----------
NET ASSETS - 100.0% $24,393,592
===========
35
================================================================================
SCHEDULE OF INVESTMENTS
================================================================================
Quality Fixed Income Fund
- --------------------------------------------------------------------------------
APRIL 30, 2004
SHARES VALUE SHARES VALUE
- ------------------------------------------------------- -------------------------------------------------------------
ASSET BACKED SECURITIES - 2.3% 314,710 Vendee Mortgage Trust, Series 334,339
AUTOMOTIVE - 0.8% 1992-1, Class 2Z, 7.75%, 5/15/22
440,000 Capital Auto Receivables $ 442,320 1,085,334 Washington Mutual, Inc., 1,072,087
Asset Trust, Series 2003-1, Series 2003-S11, Class 1A, ----------
Class A2A, 2.27%, 1/17/06 5.00%, 11/25/33
344,432 Ford Credit Auto Owner Trust, 347,749
Series 2002-B, Class A3A, TOTAL COLLATERALIZED MORTGAGE 6,046,593
4.14%, 12/15/05 OBLIGATIONS ----------
125,000 Ford Credit Auto Owner Trust, 125,511 (Cost $6,041,650)
Series 2003-A, Class A3A,
2.20%, 7/17/06 COMMERCIAL MORTGAGE BACKED
129,945 MMCA Automobile Trust, 130,621 SECURITIES - 7.2%
Series 2002-3, Class A3, ---------- BANKING & FINANCIAL SERVICES - 7.2%
2.97%, 3/15/07 617,036 ABN Amro Mortgage Corp., 596,189
1,046,201 Series 2003-12, Class 1A,
---------- 5.00%, 12/25/33
BANKING & FINANCIAL SERVICES - 1.1% 404,156 Banc of America Commercial 419,054
650,000 MBNA Master Credit Card Trust, 703,360 Mortgage, Inc., Series 2001-PB1,
Series 1999-B, Class A, Class A1, 4.91%, 5/11/35
.90%, 8/15/11 642,305 Chase Commercial Mortgage 671,991
129,986 New Century Home Equity Loan 132,589 Securities Corp., Series 1996-1,
rust, Series 1997-NC5, Class A6, Class A2, 7.60%, 3/18/06
6.70%, 10/25/28 867,960 Chase Mortgage Finance Corp., 848,587
550,000 Vanderbilt Mortgage Finance, 557,421 Series 2003-S11, Class 1A1,
Series 2002-C, Class A2, ---------- 5.00%, 10/25/33
4.23%, 2/7/15 1,515,368 CS First Boston Mortgage 1,573,711
1,393,370 Securites Corp., Series 1997-C2,
---------- Class A2, 6.52%, 1/17/35
UTILITIES - 0.4% 755,293 GE Capital Commercial 783,323
500,000 Peco Energy Transition Trust, 555,017 Mortgage Corp., Series 2002-1A,
Series 2001-A, Class A1, ---------- Class A1, 5.03%, 12/10/35
6.52%, 12/31/10 453,204 GMAC Commercial Mortgage 468,679
Securities, Inc., Series 1998-C1,
TOTAL ASSET BACKED SECURITIES 2,994,588 Class A1, 6.41%, 5/15/30
(Cost $2,888,323) ---------- 290,197 GMAC Mortgage Corp. Loan 289,923
Trust, Series 2001-J5, Class A7,
COLLATERALIZED MORTGAGE 6.75%, 11/25/31
OBLIGATIONS - 4.6% 70,860 GSR Mortgage Loan Trust, 72,134
BANKING & FINANCIAL SERVICES - 4.6% Series 2002-8F, Class 3AA1,
370,000 Bank of America Mortgage 378,094 6.50%, 9/25/32
Securities, Series 2004-4, 1,750,000 JP Morgan Commercial 1,916,329
Class 3A1, 5.00%, 5/25/19 Mortgage Finance Corp.,
2,140,000 Countrywide Alternative Loan 2,162,069 Series 1999-C7, Class A2,
Trust, Series 2004-12CB, 6.51%, 10/15/35
Class 1A-1, 5.00%, 7/25/19 500,000 LB-UBS Commercial Mortgage 469,064
75,048 Residential Accredit Loans, Inc., 74,951 Trust, Series 2004-C2, Class A4,
Series 2000-QS8, Class A4, 4.37%, 3/1/36
8.00%, 7/25/30 176,546 Master Asset Securitization 180,680
152,318 Residential Accredit Loans, Inc., 155,037 Trust, Series 2002-6, Class 6A1,
Series 2002-QS9, Class A3, 6.50%, 10/25/32
6.50%, 7/25/32 976,674 Master Asset Securitization 943,455
732,343 Structured Adjustable Rate 756,030 Trust, Series 2003-12, Class 6A1,
Mortgage Loan Trust, Series 5.00%, 12/25/33
2004-2, Class 2A, 5.09%, 3/25/34 70,331 Morgan Stanley Mortgage Loan 72,078
327,791 Structured Asset Securities Corp., 338,604 Trust, Series 2004-2AR, Class 1A, ----------
Series 2002-11A, Class 2A1, 5.25%, 2/25/34
5.60%, 6/25/32
786,291 Structured Asset Securties Corp., 775,382 TOTAL COMMERCIAL MORTGAGE BACKED 9,305,197
Series 2003-30, Class 1A1, SECURITIES ----------
.50%, 10/25/33 (Cost $9,166,524)
36
================================================================================
SCHEDULE OF INVESTMENTS
================================================================================
Quality Fixed Income Fund (cont.)
- --------------------------------------------------------------------------------
SHARES VALUE SHARES VALUE
- ------------------------------------------------------- -------------------------------------------------------------
COMMON STOCKS - 0.2% 230,000 Ford Motor Credit Co., 5.63%, 234,503
TELECOMMUNICATIONS - 0.2% 10/1/08
15,668 MCI, Inc. 222,172 145,000 Ford Motor Credit Co., 5.80%, 147,685
---------- 1/12/09
TOTAL COMMON STOCKS 222,172 200,000 Ford Motor Credit Co., 7.38%, 213,865
(Cost $270,671) ---------- 2/1/11
240,000 Ford Motor Credit Co., 7.00%, 246,823
CORPORATE BONDS - 43.3% 10/1/13
AEROSPACE & DEFENSE - 0.3% 275,000 Franklin Resources, Inc., 3.70%, 271,424
365,000 Boeing Capital Corp., 7.10%, 388,675 4/15/08
9/27/05 ---------- 370,000 General Electric Capital Corp., 361,963
4.25%, 12/1/10
AIRLINES - 0.6% 500,000 General Motors Acceptance 519,718
500,000 American Airlines, Inc., Series 504,419 Corp., MTN, 8.38%, 2/22/05
1999-1, Class A-2, 7.02%, 700,000 General Motors Acceptance 769,909
10/15/09 Corp., 7.75%, 1/19/10
221,832 Atlas Air, Inc., Series 1999-1, 208,538 770,000 Goldman Sachs Capital I, 735,995
Class A1, 7.20%, 1/2/19 ---------- 6.35%, 2/15/34
712,957 470,000 Goldman Sachs Group, Inc., 469,963
---------- 2.85%, 10/27/06
AUTOMOTIVE - 1.7% 250,000 Goldman Sachs Group, Inc., 284,791
1,095,000 DaimlerChrysler NA Holdings, 1,075,582 MTN, 7.35%, 10/1/09
4.05%, 6/4/08 75,000 Household Finance Corp., 74,968
280,000 Ford Motor Co., 6.63%, 251,542 4.13%, 12/15/08
2/15/28 165,000 Household Finance Corp., 179,023
280,000 Ford Motor Co., 6.38%, 243,349 6.38%, 10/15/11
2/1/29 600,000 Household Finance Corp., 646,100
125,000 General Motors Corp., 7.13%, 131,121 6.38%, 11/27/12
7/15/13 300,000 Jefferies Group, Inc., 7.50%, 336,540
95,000 General Motors Corp., 7.70%, 102,072 8/15/07
4/15/16 290,000 John Deere Capital Corp., 305,062
160,000 General Motors Corp., 8.25%, 171,229 5.13%, 10/19/06
7/15/23 550,000 JP Morgan Chase & Co., 551,474
150,000 General Motors Corp., 8.38%, 162,228 3.13%, 12/11/06
7/15/33 ---------- 500,000 KeyCorp, 6.75%, 3/15/06 538,128
2,137,123 200,000 KFW International Finance, Inc., 210,057
---------- 4.75%, 1/24/07
BANKING & FINANCIAL SERVICES - 15.9% 300,000 Merrill Lynch & Co., 2.94%, 303,896
500,000 AIG SunAmerica, Inc., MTN, 531,257 1/30/06
5.75%, 2/16/09 500,000 Merrill Lynch & Co., 6.38%, 545,974
200,000 American Financial Group, 217,416 10/15/08
7.13%, 4/15/09 575,000 Merrill Lynch & Co., 4.13%, 573,676
275,000 American General Finance, 293,053 1/15/09
5.88%, 7/14/06 375,000 National Rural Utilities Corp., 370,719
230,000 Bank of America Corp., 224,072 4.38%, 10/1/10
3.25%, 8/15/08 160,000 National Rural Utilities Corp., 183,155
200,000 BankBoston NA, 7.38%, 221,305 7.25%, 3/1/12
9/15/06 25,000 National Rural Utilities Corp., 30,803
500,000 BB&T Corp., 6.38%, 6/30/05 523,410 8.00%, 3/1/32
150,000 Caterpillar Financial Service 149,246 1,030,000 NB Capital Trust IV, 8.25%, 1,146,505
Corp., 3.00%, 2/15/07 4/15/27
300,000 CIT Group, Inc., 4.13%, 2/21/06 307,589 310,000 North Fork Bancorp., 5.00%, 313,580
295,000 CIT Group, Inc., 7.38%, 4/2/07 327,374 8/15/12
195,000 CIT Group, Inc., 4.75%, 193,284 910,000 SLM Corp., 5.00%, 10/1/13 890,423
12/15/10 250,000 SunTrust Bank, Inc., 6.38%, 273,338
200,000 Countrywide Home Loan, 188,765 4/1/11
4.00%, 3/22/11 500,000 Synovus Financial Corp., 538,775
225,000 Fannie Mae, 6.63%, 11/15/30 249,977 7.25%, 12/15/05
500,000 Ford Motor Credit Co., 6.88%, 529,238 500,000 Textron Financial Corp., 494,308
2/1/06 2.69%,10/3/06
37
================================================================================
SCHEDULE OF INVESTMENTS
================================================================================
Quality Fixed Income Fund (cont.)
- --------------------------------------------------------------------------------
SHARES VALUE SHARES VALUE
- ------------------------------------------------------- -------------------------------------------------------------
1,650,000 Toyota Motor Credit Corp., 1,637,634 ELECTRIC (INTEGRATED) - 0.9%
4.35%, 12/15/10 135,000 American Electric Power Co., 143,568
500,000 Wachovia Corp., 7.45%, 530,398 Inc., 6.13%, 5/15/06
7/15/05 50,000 Carolina Power & Light, 5.13%, 49,901
840,000 Wachovia Corp., 3.63%, 823,495 9/15/13
2/17/09 150,000 Carolina Power & Light, 6.13%, 147,835
550,000 Washington Mutual, Inc., 549,945 9/15/33
2.40%, 11/3/05 450,000 Midamerican Energy Co., 450,090
200,000 Washington Mutual, Inc., 211,848 5.13%, 1/15/13
5.63%, 1/15/07 350,000 Transalta Corp., 5.75%, 345,636
240,000 Wells Fargo Financial, Inc., 256,994 12/15/13 -----------
7.00%, 11/1/05 ----------- 1,137,030
20,729,443 -----------
----------- ENERGY - 5.2%
BUILDING & CONSTRUCTION - 0.9% 1,675,000 BP Capital Markets PLC, 1,675,224
200,000 D.R. Horton, Inc., 6.88%, 209,000 2.75%, 12/29/06
5/1/13 100,000 Buckeye Partners, 4.63%,
770,000 Lennar Corp., 1.86%, 3/19/09 769,069 7/15/13 94,921
155,000 Masco Corp., 6.75%, 3/15/06 166,223 295,000 Consolidated Natural Gas, 318,734
----------- 6.25%, 11/1/11
1,144,292 155,000 Duke Energy Field Services, 179,182
CABLE - 1.9% ----------- 7.88%, 8/16/10
660,000 Comcast Cable Communications, 699,215 530,000 Enterprise Products Partners LP, 591,350
Inc., 6.38%, 1/30/06 7.50%, 2/1/11
135,000 Comcast Cable Communications, 149,617 590,000 Keyspan Gas East, 6.90%, 656,314
Inc., 7.13%, 6/15/13 1/15/08
250,000 Rogers Cable, Inc., 6.25%, 240,722 325,000 Kinder Morgan Energy 364,345
6/15/13 Partners LP, 7.13%, 3/15/12
250,000 Shaw Communications, Inc., 269,365 575,000 Kinder Morgan Energy 656,280
7.25%, 4/6/11 Partners LP, 7.75%, 3/15/32
825,000 TCI Communications, Inc., 881,311 250,000 NRG Energy, Inc.(c), 8.00%, 251,875
6.88%, 2/15/06 12/15/13
250,000 Videotron Ltee, 6.88%, 1/15/14 252,500 100,000 OAO Gazprom, 9.13%, 4/25/07 105,000
----------- 100,000 Pemex Project Funding Master 110,250
2,492,730 Trust, 7.88%, 2/1/09
----------- 200,000 Piedmont Natural Gas Co., 195,305
CHEMICALS - 0.6% 6.00%, 12/19/33
500,000 E.I. Du Pont de Nemours & Co., 561,224 750,000 Praxair, Inc., 6.50%, 3/1/08 822,979
8.25%, 9/15/06 800,000 Tosco Corp., 7.25%, 1/1/07 880,969
140,000 Ecolab, Inc., 6.88%, 2/1/11 153,889 -----------
----------- 6,902,728
715,113 -----------
----------- ENTERTAINMENT - 1.4%
COMMERCIAL SERVICES - 0.5% 250,000 Boyd Gaming Corp., 7.75%, 265,000
200,000 Aramark Services, Inc., 8.15%, 210,604 12/15/12
5/1/05 210,000 Harrah's Operating Co., Inc.(c), 204,232
225,000 Aramark Services, Inc., 7.00%, 245,958 5.38%, 12/15/13
5/1/07 200,000 Intrawest Corp., 7.50%, 204,500
130,000 PHH Corp., 7.13%, 3/1/13 144,203 10/15/13
----------- 535,000 Marriott International, 7.00%, 595,690
600,765 1/15/08
----------- 250,000 Park Place Entertainment, Inc., 261,250
COMPUTER INDUSTRY - 0.4% 7.00%, 4/15/13
250,000 IBM Corp., 4.88%, 10/1/06 262,039 250,000 Penn National Gaming, Inc. (c), 251,250
285,000 Interactive Corp., 7.00%, 310,093 6.88%, 12/1/11 -----------
1/15/13 ----------- 1,781,922
572,132 -----------
----------- FOOD & BEVERAGES - 0.9%
CONSUMER GOODS & SERVICES - 0.7% 500,000 Coca-Cola Enterprises, Inc., 528,471
715,000 First Brands Corp., 7.25%, 794,478 5.38%, 8/15/06
3/1/07 300,000 General Mills, Inc., 5.13%, 314,763
135,000 Newell Rubbermaid, Inc., 128,756 2/15/07
4.00%, 5/1/10 -----------
923,234
-----------
38
================================================================================
SCHEDULE OF INVESTMENTS
================================================================================
Quality Fixed Income Fund (cont.)
- --------------------------------------------------------------------------------
SHARES VALUE SHARES VALUE
- ------------------------------------------------------- -------------------------------------------------------------
295,000 Supervalu, Inc., 7.50%, 5/15/12 333,945 RESEARCH & DEVELOPMENT - 0.2%
---------- 245,000 Science Applications Int'l. Corp., 270,994
1,177,179 7.13%, 7/1/32 ----------
---------- RESTAURANTS - 0.4%
FOREIGN AGENCIES - 0.8% 500,000 Darden Restaurants, Inc., 537,658
100,000 Federal Republic of Brazil, 97,000 8.38%, 9/15/05 ----------
10.00%, 8/7/11
100,000 Federal Republic of Brazil, 93,000 RETAIL - 0.6%
11.00%, 8/17/40 600,000 Kroger Co., 7.45%, 3/1/08 674,995
250,000 Ontario Province, 5.50%, 266,413 40,000 Kroger Co., 6.75%, 4/15/12 43,930
10/1/08 ----------
100,000 Republic of Columbia, 9.75%, 108,500 718,925
4/23/09 TELECOMMUNICATIONS - 3.1% ----------
100,000 Republic of Panama, 9.38%, 113,000 100,000 British Telecom PLC, 8.38%, 119,029
7/23/12 12/15/10
100,000 Republic of Peru, 9.88%, 2/6/15 107,500 550,000 Deutsche Telekom International 649,867
50,000 Republic of Peru, 8.75%, 44,500 Finance, 8.50%, 6/15/10
11/21/33 50,000 France Telecom, 8.75%, 3/1/11 59,110
100,000 Republic of Philippines, 9.88%, 102,750 180,000 France Telecom, 9.50%, 3/1/31 230,841
1/15/19 121,000 MCI, Inc., 5.91%, 05/01/07, 119,639
100,000 United Mexican States, 9.88%, 122,650 121,000 MCI, Inc., 6.69%, 5/1/09 114,950
2/1/10 ---------- 103,000 MCI, Inc., 7.74%, 5/1/14 95,533
1,055,313 250,000 Nextel Communications, Inc., 259,688
---------- 7.38%, 8/1/15
HEALTH CARE - 0.6% 250,000 Rogers Wireless, Inc. (c), 235,000
155,000 Eli Lilly & Co., 5.50%, 7/15/06 164,448 6.38%, 3/1/14
425,000 Humana, Inc., 7.25%, 8/1/06 462,387 85,000 SBC Communications, Inc., 90,081
150,000 Unitedhealth Group, Inc., 157,776 7.00%, 8/15/05
5.20%, 1/17/07 ----------
784,611 250,000 SBC Communications, Inc., 261,572
---------- 5.88%, 2/1/12
70,000 Sprint Capital Corp., 7.13%, 75,091
MACHINERY & EQUIPMENT - 0.3% 1/30/06
50,000 Crane Co., 5.50%, 9/15/13 50,251 670,000 Sprint Capital Corp., 6.88%, 657,765
345,000 Hutchison Whampoa Int'l., Ltd. 338,647 11/15/28
(c), 6.25%, 1/24/14 ----------
388,898 660,000 US Cellular Corp., 6.70%, 644,835
---------- 12/15/33
150,000 Verizon New England, Inc., 162,542
MEDIA - 1.0% 6.50%, 9/15/11
565,000 News America Holdings, Inc., 644,334 200,000 Verizon Virginia, Inc., 4.63%, 189,307
7.70%, 10/30/25 3/15/13 ----------
400,000 Time Warner Communications, 441,510 3,964,850
Inc., 8.11%, 8/15/06 ----------
140,000 Time Warner Entertainment, 167,351 TEXTILES - 0.6%
Inc., 8.38%, 7/15/33 ----------
1,253,195 210,000 Mohawk Industries, Inc., 226,803
---------- 6.50%, 4/15/07
500,000 VF Corp., 8.10%, 10/1/05 539,316
PAPER & RELATED PRODUCTS - 1.2% ----------
600,000 Avery Dennison Corp., 6.76%, 625,609 766,119
4/15/05 TRANSPORTATION & SHIPPING - 1.0% ----------
250,000 Georgia Pacific Corp., 9.38%, 291,250 500,000 Burlington Northern Santa Fe 560,775
2/1/13 Corp., 9.25%, 10/1/06
550,000 Weyerhaeuser Co., 6.95%, 573,129 200,000 CHC Helicopter Corp.(c), 202,500
10/1/27 ---------- 7.38%, 5/1/14
1,489,988 454,019 Federal Express Corp., 7.50%, 500,942
---------- 1/15/18 ----------
REITS - 0.8% 1,264,217
650,000 Kimco Realty Corp., 7.86%, 738,816 ----------
11/1/07
245,000 Simon Property Group LP, 268,035
6.88%, 11/15/06 ----------
1,006,851
----------
39
================================================================================
SCHEDULE OF INVESTMENTS
================================================================================
Quality Fixed Income Fund (cont.)
- --------------------------------------------------------------------------------
SHARES VALUE SHARES VALUE
- ------------------------------------------------------- -----------------------------------------------------------
UTILITIES - 0.8% 92,081 6.00%, 2/1/18 96,206
500,000 Niagra Mohawk Power Co., 547,272 37,981 8.00%, 10/1/18 41,559
7.75%, 5/15/06 8,979 9.00%, 10/1/18 9,747
425,000 Republic Services, Inc., 6.75%, 468,095 520,000 5.20%, 3/5/19 500,772
8/15/11 ----------- 49,482 7.50%, 2/1/21 53,608
1,015,367 1,905 9.00%, 5/15/21 1,910
----------- 1,000,000 5.50%, 2/15/26 1,041,063
TOTAL CORPORATE BONDS 55,932,309 250,000 7.00%, 8/15/29 266,972
(Cost $54,636,603) ----------- 646,768 7.50%, 2/1/30 697,195
155,562 7.50%, 2/1/30 167,103
U.S. GOVERNMENT AGENCY 185,098 7.50%, 1/1/31 198,830
OBLIGATIONS - 31.6% 36,615 7.00%, 9/1/31 38,667
FANNIE MAE - 11.8% 88,519 5.50%, 11/1/31 88,466
54,089 7.00%, 12/1/07 56,604 969,732 6.00%, 11/1/32 992,533
280,599 6.42%, 11/1/08 305,342 1,098,981 5.50%, 6/1/33 1,098,263
24,650 8.25%, 1/1/09 25,959 483,382 5.00%, 8/1/33 469,010
14,426 8.00%, 2/1/09 15,353 341,032 6.00%, 9/1/33 349,021
6,364 8.50%, 7/1/13 6,393 ---------
64,115 5.50%, 3/1/17 65,854 6,274,676
5,944 5.50%, 3/1/17 6,105 ---------
110,789 5.50%, 5/1/17 113,794 GOVERNMENT NATIONAL MORTGAGE
325,184 5.00%, 8/1/17 327,642 ASSOCIATION - 14.4%
594,427 5.50%, 8/1/17 610,548 5,881 7.50%, 3/15/07 6,224
432,971 5.50%, 11/1/17 444,587 5,755 7.50%, 3/15/07 6,091
3,419,458 4.50%, 12/1/17 3,371,871 35,465 7.50%, 7/15/07 37,538
278,263 5.00%, 3/1/18 280,223 47,849 8.00%, 10/15/07 50,913
25,864 9.50%, 6/25/18 28,750 699,187 8.00%, 11/15/09 746,187
653,005 4.50%, 9/1/18 643,585 69,637 7.50%, 10/15/11 74,795
13,576 9.25%, 10/1/20 15,158 6,797 7.50%, 10/15/11 7,301
620,700 7.00%, 2/1/26 658,080 69,382 7.50%, 11/15/11 74,522
152,396 6.50%, 5/1/29 158,820 6,481 9.50%, 4/15/16 7,292
318,470 7.50%, 9/1/29 341,240 296,857 3.31%, 4/16/17 296,808
45,020 7.00%, 10/1/29 47,629 19,390 9.50%, 1/15/19 21,847
56,494 7.00%, 12/1/29 59,768 1,217 9.50%, 9/15/19 1,371
648 7.00%, 1/1/30 685 351,000 6.11%, 11/16/21 376,465
12,267 7.00%, 2/1/30 12,968 40,751 8.00%, 5/15/22 44,834
873 7.00%, 2/1/30 924 22,956 8.00%, 12/15/22 25,256
104,502 7.00%, 2/1/30 110,471 210,000 5.15%, 6/16/23 216,468
48,614 7.00%, 2/1/30 51,390 18,034 6.50%, 8/15/23 18,951
1,097 7.00%, 2/1/30 1,160 96,986 6.50%, 9/15/23 101,915
259,809 6.50%, 11/1/32 270,531 14,719 6.50%, 11/15/23 15,467
586,198 5.00%, 4/1/33 568,366 11,932 6.50%, 12/15/23 12,538
42,085 5.00%, 5/1/33 40,805 66,683 6.50%, 12/15/23 70,072
412,163 5.50%, 5/1/33 411,523 21,136 6.50%, 2/15/24 22,166
741,771 5.50%, 6/1/33 740,620 245,371 6.50%, 3/15/24 257,326
854,601 5.50%, 7/1/33 853,274 760,784 7.00%, 3/15/24 813,911
584,262 6.00%, 7/1/33 597,959 84,990 7.00%, 5/15/24 90,925
642,116 5.00%, 8/1/33 622,584 282,198 6.50%, 6/15/24 295,947
1,193,733 5.00%, 9/1/33 1,157,421 53,584 8.00%, 11/15/26 58,639
2,318,946 5.00%, 9/1/33 2,248,405 885,610 8.00%, 12/15/26 969,153
---------- 603,903 7.00%, 12/15/29 642,732
15,272,391 500,000 4.75%, 1/16/30 494,661
---------- 498,141 4.36%, 2/16/30 493,894
FREDDIE MAC - 4.9% 10,621 6.00%, 5/15/31 10,893
17,230 7.75%, 4/1/08 18,424 92,045 6.50%, 5/15/31 96,173
7 8.25%, 7/1/08 7 92,415 6.50%, 7/15/31 96,555
7,790 7.75%, 11/1/08 8,215 11,650 6.50%, 8/15/31 12,172
3,231 8.00%, 8/1/09 3,322 122,291 6.00%, 9/20/31 125,266
20,424 8.25%, 10/1/10 21,452 14,364 6.50%, 11/15/31 15,008
68,321 8.00%, 1/1/12 73,444 129,922 6.00%, 2/15/32 133,294
34,895 9.00%, 6/1/16 38,887 44,321 6.50%, 4/15/32 46,311
40
================================================================================
SCHEDULE OF INVESTMENTS
================================================================================
Quality Fixed Income Fund (cont.)
- --------------------------------------------------------------------------------
SHARES VALUE SHARES VALUE
- ------------------------------------------------------- -------------------------------------------------------------
TOTAL INVESTMENT CORPORATION 9,709,569
128,087 7.00%, 4/15/32 136,167 (Cost $9,709,569) ------------
219,817 6.00%, 6/15/32 225,523
39,887 7.00%, 7/15/32 42,403 TOTAL INVESTMENTS 132,505,682
250,071 7.50%, 7/15/32 268,603 (Cost $130,696,039)(a) - 102.4%
169,210 6.00%, 8/15/32 173,603 Liabilities in excess of other (3,143,732)
45,493 7.00%, 8/15/32 48,363 assets - (2.4)% ------------
157,006 6.50%, 9/15/32 164,055
336,887 6.00%, 10/20/32 345,211 NET ASSETS - 100.0% $129,361,950
593,383 6.00%, 1/15/33 608,382 ============
246,211 6.00%, 3/15/33 252,572
113,540 6.00%, 4/15/33 116,474 (a) See notes to financial statements for tax basis unrealized
238,367 5.00%, 8/15/33 231,924 appreciation (depreciation) of securities.
838,483 5.00%, 8/15/33 815,818 (c) Rule 144A, Section 4(2) or other security, which is restricted
945,335 5.00%, 8/15/33 919,782 as to resale to qualified purchasers.
248,596 5.00%, 8/15/33 241,876 MTN - Medium Term Note
237,852 5.00%, 8/15/33 231,423 PLC - Public Limited Co.
782,863 5.00%, 8/15/33 761,701
5,984,666 5.00%, 1/15/34 5,821,692 SEE NOTES TO FINANCIAL STATEMENTS.
305,000 4.93%, 11/16/44 311,100
------------
18,604,553
------------
NEW VALLEY GENERATION IV - 0.1%
97,478 4.69%, 1/15/22 93,917
------------
SMALL BUSINESS ADMINISTRATION - 0.0%
21,027 9.80%, 7/1/08 22,564
3,095 10.05%, 8/1/08 3,338
9,796 10.05%, 4/1/09 10,696
------------
36,598
------------
TENNESSEE VALLEY AUTHORITY - 0.4%
500,000 6.25%, 12/15/17, 543,028
Series E ------------
TOTAL U.S. GOVERNMENT AGENCY 40,825,163
OBLIGATIONS ------------
(Cost $40,672,435)
U.S. TREASURY BONDS - 4.4%
2,650,000 8.13%, 5/15/21 3,522,429
400,000 6.25%, 8/15/23 444,469
610,000 5.50%, 8/15/28 619,794
500,000 5.25%, 11/15/28 491,348
170,000 6.13%, 8/15/29 187,704
465,000 5.38%, 2/15/31 471,103
------------
TOTAL U.S. TREASURY BONDS 5,736,847
(Cost $5,539,359) ------------
U.S. TREASURY NOTES - 1.3%
440,000 3.00%, 7/15/12 492,526
1,290,000 3.88%, 2/15/13 1,240,718
------------
TOTAL U.S. TREASURY NOTES 1,733,244
(Cost $1,770,905) ------------
INVESTMENT COMPANIES - 7.5%
4,589,152 Wells Fargo Government 4,589,152
Institutional Money Market
Fund, Investor Class
5,120,418 Wells Fargo Prime Investment 5,120,417
Money Market Fund, ------------
Investor Class
41
================================================================================
SCHEDULE OF INVESTMENTS
================================================================================
North Carolina Tax-Free Bond Fund
- --------------------------------------------------------------------------------
APRIL 30, 2004
SHARES VALUE SHARES VALUE
- ------------------------------------------------------- -------------------------------------------------------------
NORTH CAROLINA MUNICIPAL 240,000 North Carolina Housing Finance 250,807
OBLIGATIONS - 96.0% Agency Home Ownership
500,000 Buncombe County CP, 5.00%, $528,445 Revenue, Series 4A, 4.45%,
10/1/15, Callable 10/1/13 @ 100, 7/1/07, AMT
(AMBAC Insured) 250,000 North Carolina Housing Finance 259,140
500,000 Cabarrus County CP, 5.50%, 543,325 Agency Home Ownership
4/1/15, Callable 4/1/11 @ 102 Revenue, Series 13A, 4.95%,
335,000 Cabarrus County GO, 5.30%, 363,810 7/1/14, Callable 7/1/11 @ 100, AMT
2/1/08, Callable 2/1/07 @ 100.5, 500,000 North Carolina Infrastructure CP, 541,295
(MBIA Insured) 5.00%, 2/1/11
500,000 Catawba County Memorial 532,170 525,000 North Carolina Medical Care 568,859
Hospital Project Revenue, 4.40%, Community Hospital Revenue,
10/1/08, (AMBAC Insured) Southeastern Regional Medical
1,000,000 Centennial Authority Hotel Tax 1,060,229 Center Project, 5.75%, 6/1/13,
Revenue, Arena Project, 4.65%, Callable 6/1/09 @ 102
9/1/06, (FSA Insured) 500,000 North Carolina Municipal Power 547,285
435,000 Charlotte GO, Series A, 4.75%, 462,631 Agency #1, Catawba Electric
2/1/10, Callable 2/1/08 @ 101 Revenue, 5.25%, 1/1/09,
250,000 Charlotte Water & Sewer System 256,778 (MBIA-IBC Insured)
Revenue, Series A, 4.38%, 7/1/15 250,000 North Carolina State GO, 259,993
500,000 Charlotte-Mecklenburg Health 528,360 Series A, 4.75%, 4/1/14,
Care Systems Revenue, Series A, Callable 4/1/08 @ 102
4.90%, 1/15/10, Callable 250,000 North Carolina State Public 262,238
1/15/07 @ 102 School Building GO, 4.60%,
1,000,000 Cumberland County CP, 1,048,889 4/1/13, Callable 4/1/09 @ 102
Series A, 6.20%, 12/1/07, 250,000 Pitt County Memorial Hospital 269,595
Prerefunded 12/1/04 @ 102, Revenue, 5.38%, 12/1/10,
(AMBAC Insured) Callable 12/1/05 @ 102,
500,000 Cumberland County Hospital 545,505 Escrowed to Maturity
Facilities Revenue, 5.25%, 625,000 Pitt County Public Facilities CP, 676,856
10/1/10, Callable 10/1/09 @ 101 Series A, 5.35%, 4/1/07,
500,000 Dare County CP, Series A, 500,047 (MBIA Insured)
4.50%, 5/1/04, (MBIA Insured) 500,000 Raleigh Durham Airport 543,805
500,000 Duplin County, 5.00%, 9/1/10, 543,365 Authority Revenue, Series A,
(AMBAC Insured) 5.25%, 11/1/12, Callable
1,000,000 Fayetteville Public Works 1,049,389 5/1/11 @ 101, (FGIC Insured)
Commission Revenue, Series A, 250,000 Stanly County GO, 4.60%, 260,900
5.25%, 3/1/08, Callable 2/1/14, Callable 2/1/11 @ 101.5
3/1/05 @ 102, (AMBAC Insured) (AMBAC Insured)
265,000 Gastonia GO, 3.40%, 4/1/11 264,025 500,000 Union County Enterprise System 544,940
250,000 High Point Water & Sewer 253,908 Revenue, 5.35%, 6/1/09,
System GO, 4.50%, 6/1/16, Callable 6/1/06 @ 102, (MBIA Insured)
Callable 6/1/12 @ 101, (MBIA Insured) 250,000 Union County GO School, 264,073
500,000 Iredell County Memorial 531,790 4.75%, 3/1/13, Callable 3/1/11 @ 101
Hospital Revenue, 5.10%, 545,000 University of North Carolina 570,283
10/1/11, Callable 10/1/07 @ 101, Greensboro Revenue, Series A,
(AMBAC Insured) 4.63%, 4/1/13, Callable 4/1/11 @ 101,
250,000 Lincoln County GO, 4.70%, 255,898 (FSA Insured)
6/1/17, Callable 6/1/12 @ 101, 500,000 Wake County GO, Series A, 528,320
(FGIC Insured) 4.75%, 2/1/14, Callable
500,000 North Carolina Educational 528,645 2/1/11 @ 101.5
Facilities Finance Agency 500,000 Winston-Salem CP, Series A, 540,560
Revenue, Wake Forest University 5.30%, 6/1/09, Callable
Project, 5.00%, 11/1/12, 6/1/06 @ 102
Callable 11/1/07 @ 102 500,000 Winston-Salem State University 529,080
500,000 North Carolina Housing Finance 508,780 Housing & Dining Systems -----------
Agency Home Ownership Revenue, Series B, 4.85%, 1/1/11,
Revenue, Series A1, 4.75%, Callable 1/1/09 @ 101, (MBIA Insured)
1/1/05, AMT 17,724,018
-----------
42
================================================================================
SCHEDULE OF INVESTMENTS
================================================================================
North Carolina Tax-Free Bond Fund (cont.)
- --------------------------------------------------------------------------------
SHARES VALUE
- -------------------------------------------------------
TOTAL NORTH CAROLINA MUNICIPAL 17,724,018
OBLIGATIONS -----------
(Cost $16,950,233)
INVESTMENT COMPANIES - 3.4%
628,419 Wells Fargo National Tax-Free 628,419
Money Market Fund, -----------
Investor Class
TOTAL INVESTMENT COMPANIES 628,419
(Cost $628,419) -----------
TOTAL INVESTMENTS 18,352,437
(Cost $17,578,652) (a) - 99.4%
Other assets in excess of liabilities - 0.6% 103,548
-----------
NET ASSETS - 100.0% $18,455,985
===========
(a) See notes to financial statements for tax basis
unrealized appreciation (depreciation) of securities.
AMBAC - AMBAC Indemnity Corp.
AMT - Alternative Minimum Tax
CP - Certificate of Participation
FGIC - Financial Guaranty Insurance Corp.
FSA - Financial Security Assurance
GO - General Obligation
MBIA - MBIA, Inc.
SEE NOTES TO FINANCIAL STATEMENTS.
43
================================================================================
AUDITORS' OPINION
================================================================================
Report of Independent Registered Public Accounting Firm
- --------------------------------------------------------------------------------
To the Board of Directors and Shareholders of Tamarack Funds Trust
We have audited the accompanying statements of assets and liabilities, including
the schedules of portfolios of investments, of the portfolios of Tamarack Funds
Trust, which include Quality Fixed Income Fund, North Carolina Tax-Free Bond
Fund and Government Income Fund (collectively the "Funds") as of April 30, 2004,
and the related statements of operations, statements of changes in net assets
and the financial highlights for the year then ended. These financial statements
and financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits. The statements of changes in net
assets and the financial highlights for the periods prior to April 30, 2004 were
audited by other auditors whose report, dated June 17, 2003, expressed an
unqualified opinion.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of April 30, 2004, by correspondence with the Funds'
custodian and brokers; where replies were not received from brokers, we
performed other auditing procedures. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the Funds as of April 30, 2004, the results of their operations, the changes
in their net assets, and the financial highlights for the year then ended, in
conformity with accounting principles generally accepted in the United States of
America.
DELOITTE & TOUCHE LLP
Chicago, Illinois
June 18, 2004
44
================================================================================
MANAGEMENT
================================================================================
Independent Trustees(1)
- --------------------------------------------------------------------------------
T. GERON BELL (62)
POSITION HELD WITH FUND: Trustee; Since January, 2004
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: President of Twins Sports, Inc.
(parent company of the Minnesota Twins and Victory Sports) (2002-present); prior
thereto President of the Minnesota Twins Baseball Club Incorporated (1987-2002);
Director, Great Hall Investment Funds, Inc. (1993-2004); Trustee, J&B Funds
(2003-2004); Director, Babson Funds (2003-2004).
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN: 17
- --------------------------------------------------------------------------------
LUCY HANCOCK BODE (51)
POSITION HELD WITH FUND: Trustee; Since January, 2004
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Healthcare consultant; Director,
RBC Funds (1994-2004).
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN: 17
- --------------------------------------------------------------------------------
LESLIE H. GARNER JR. (53)
POSITION HELD WITH FUND: Trustee; Since January, 2004
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: President, Cornell College;
Director, RBC Funds (1994-2004).
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN: 17
- --------------------------------------------------------------------------------
RONALD JAMES (52)
POSITION HELD WITH FUND: Trustee; Since January, 2004
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: President and Chief Executive
Officer, Center for Ethical Business Cultures (2000-present); Director, Great
Hall Investment Funds, Inc. (1993-2004); Trustee, J&B Funds (2003-2004);
Director, Babson Funds (2003-2004).
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN: 17
- --------------------------------------------------------------------------------
JOHN A. MACDONALD (54)
POSITION HELD WITH FUND: Trustee; Since January, 2004
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Chief Investment Officer, Hall
Family Foundation; Trustee, J&B Funds (2001-2004).
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN: 17
- --------------------------------------------------------------------------------
H. DAVID RYBOLT (61)
POSITION HELD WITH FUND: Trustee; Since January, 2004
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Consultant, HDR Associates
(management consulting); Director, Babson Funds (1992-2004).
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN: 17
(1) Unless otherwise specified, the address of each trustee/officer is 100 South
Fifth Street, Suite 2300, Minneapolis, Minnesota 55402.
- --------------------------------------------------------------------------------
45
================================================================================
MANAGEMENT
================================================================================
Independent Trustees(1)
- --------------------------------------------------------------------------------
JAMES R. SEWARD (51)
POSITION HELD WITH FUND: Trustee; Since January, 2004
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Private investor (2000-present);
Trustee, J&B Funds (2001-2004); Financial Consultant, Seward & Company, LLC
(1998-2000); CFA.
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN: 17
- --------------------------------------------------------------------------------
JAY H. WEIN (71)
POSITION HELD WITH FUND: Trustee; Since January, 2004
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Private investor (1989-present);
Director, Great Hall Investment Funds, Inc. (1993-2004); Trustee, J&B Funds
(2003-2004); Director, Babson Funds (2003-2004).
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN: 17
- --------------------------------------------------------------------------------
Interested Trustees(1)
- --------------------------------------------------------------------------------
MICHAEL T. LEE (41)
POSITION HELD WITH FUND: Trustee; Since January, 2004
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Chief Operating Officer and Senior
Vice President, Voyageur Asset Management Inc. (2003-present); Senior Portfolio
Manager, Voyageur Asset Management Inc., (2000-present); Vice President, Senior
Research Analyst and Equity Portfolio Manager, Voyageur Asset Management Inc.
(1999-2003).
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN: 17
- --------------------------------------------------------------------------------
Executive Officers(1)
- --------------------------------------------------------------------------------
JENNIFER D. LAMMERS (43)
POSITION HELD WITH FUND: President and Chief Executive Officer; Since January,
2004
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Managing Director, Voyageur Asset
Management (2000-present); Mutual Fund Services Director, Voyageur Asset
Management (2003-present); Chief Financial Officer, Great Hall Investment Funds,
Inc. (2001-2003); Compliance Officer, Great Hall Investment Funds, Inc.
(2000-2001); Director of Finance, Voyageur Asset Management (2000-2003); Vice
President and Manager, Financial Reporting, RBC Dain Rauscher (1998-2000);
President and Chief Executive Officer(2).
- --------------------------------------------------------------------------------
CHRISTOPHER J. TOMAS (34)
POSITION HELD WITH FUND: Treasurer, Chief Financial Officer, and Principal
Accounting Officer; Since January, 2004
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Vice President and Finance Manager,
RBC Dain Rauscher (2001-present); Compliance Officer, Great Hall Investment
Funds, Inc. (2001- 2003); Senior Financial Analyst, RBC Dain Rauscher
(1999-2001); Financial Analyst, RBC Dain Rauscher (1997-1999); Treasurer, Chief
Financial Officer and Principal Accounting Officer(2).
- --------------------------------------------------------------------------------
(1) Unless otherwise specified, the address of each trustee/officer is 100 South
Fifth Street, Suite 2300, Minneapolis, Minnesota 55402.
(2) Great Hall Investment Funds, Inc., J&B Funds, Babson Enterprise Fund, Inc.,
Babson Enterprise Fund II, Inc., Babson-Stewart Ivory International Fund,
Inc., Babson Value Fund, Inc., David L. Babson Growth Fund, Inc., D.L.
Babson Bond Trust, D.L. Babson Money Market Fund, Inc., D.L. Babson Tax-Free
Income Fund, Inc., Shadow Stock Fund, Inc., and Investors Mark Series Fund,
Inc.
46
================================================================================
MANAGEMENT
================================================================================
Executive Officers(1)
- --------------------------------------------------------------------------------
MARTIN A. CRAMER (54)
POSITION HELD WITH FUND: Vice President, Assistant Secretary, Chief Compliance
Officer, and AML Compliance Officer; Since January, 2004
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Vice President and Mutual Fund
Administration Manager, Voyageur Asset Management (2003-present); Legal and
Regulatory Affairs Vice President, Compliance Officer and Secretary, J&B (mutual
fund management and distribution company) (1993-2003); Vice President, Assistant
Secretary, Compliance Officer and AML Compliance Officer(2), and formerly, Vice
President, Compliance Officer and Secretary, Buffalo Fund Complex (1994-2003)
and Secretary, Gold Bank Funds(3) (2001-2003).
- --------------------------------------------------------------------------------
LAURA M. MORET (50)
POSITION HELD WITH FUND: Secretary and Chief Legal Officer; Since January, 2004
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Vice President and Senior Associate
Counsel, RBC Dain Rauscher (2002-present); Vice President and Group Counsel,
American Express Financial Advisors (1995-2002); Secretary(2).
- --------------------------------------------------------------------------------
RAYE C. KANZENBACH (55)
POSITION HELD WITH FUND: Chief Investment Officer, Fixed Income Products; Since
January, 2004
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Senior Managing Director and Chief
Investment Officer, Voyageur Asset Management; Chief Investment Officer, Great
Hall Investment Funds, Inc. (1997-2004).
- --------------------------------------------------------------------------------
(1) Unless otherwise specified, the address of each trustee/officer is 100 South
Fifth Street, Suite 2300, Minneapolis, Minnesota 55402.
(2) Great Hall Investment Funds, Inc., J&B Funds, Babson Enterprise Fund, Inc.,
Babson Enterprise Fund II, Inc., Babson-Stewart Ivory International Fund,
Inc., Babson Value Fund, Inc., David L. Babson Growth Fund, Inc., D.L.
Babson Bond Trust, D.L. Babson Money Market Fund, Inc., D.L. Babson Tax-Free
Income Fund, Inc., Shadow Stock Fund, Inc., and Investors Mark Series Fund,
Inc.
(3) The Buffalo Fund Complex consists of Buffalo Balanced Fund, Inc., Buffalo
Large Cap Fund, Inc., Buffalo High Yield Fund, Inc., Buffalo Small Cap Fund,
Inc., Buffalo USA Global Fund, Inc., and the Buffalo Funds, which is a
series fund consisting of Buffalo Science & Technology Fund and Buffalo Mid
Cap Fund. Gold Bank Funds is a series fund consisting of Gold Bank Equity
and Gold Bank Money Market Fund.
47
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SHARE CLASS INFORMATION
================================================================================
- --------------------------------------------------------------------------------
The Tamarack Funds offer five share classes, three of which are currently
authorized for sale to new investors. These three share classes are the A, C and
R classes.
- --------------------------------------------------------------------------------
A CLASS
A Class shares are available for purchase primarily through investment advisors,
broker- dealers, banks and other financial services intermediaries. A Class
shares of the Tamarack Fixed Income Funds are subject to a maximum up-front
sales charge of 3.75%. A Class shares include a 0.25% (25 bps) annual 12b-1
service and distribution fee. (The 12b-1 Plan allows for 50 bps, but the Funds'
distributor is currently voluntarily waiving 25 bps of the fee, and will
continue to do so until at least March 31, 2005.) A Class shares have a higher
up front sales charge (load) than C Class shares, but a lower annual expense
ratio.
- --------------------------------------------------------------------------------
C CLASS
C Class shares are also available for purchase primarily through investment
advisors, broker-dealers, banks and other financial services intermediaries. C
Class shares redeemed within 12 months of purchase are subject to a contingent
deferred sales charge (CDSC) of 1.00%. (No CDSC will be charged on shares
acquired through reinvestment of dividends or capital gains.) C Class shares
expenses include a 1.00% (100 bps) annual 12b-1 service and distribution fee. C
Class shares have a lower up-front sales charge (load) than A Class shares, but
due to the higher service and distribution fee, have higher annual expenses than
A Class shares.
- --------------------------------------------------------------------------------
R CLASS
R Class shares are available for purchase through employer-sponsored or 401k
retirement plans. R Class shares have no upfront sales charge (load), but are
subject to a 0.50% (50 bps) 12b-1 service and distribution fee. R Class shares
currently have annual expenses between A Class and C Class share expenses.
- --------------------------------------------------------------------------------
I CLASS
I Class shares and S class shares are currently closed to new investors. Neither
of these share classes charges a 12b-1 service and distribution fee.
- --------------------------------------------------------------------------------
For an investor purchasing Tamarack Funds shares through a financial services
intermediary, the question as to which share class, A or C, is the best choice
is dependent on many factors, including the amount to be invested and the length
of time an investor anticipates holding the shares. An investor should consult
with his or her financial advisor about his or her personal financial situation
to determine which share class is the best choice for his or her individual
situation.
48
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SUPPLEMENTAL INFORMATION
================================================================================
Shareholders Proxy Voting Results
- --------------------------------------------------------------------------------
APRIL 8, 2004
On April 8, 2004 a Special Meeting of the shareholders of the RBC North Carolina
Tax-Free Bond Fund, RBC Quality Income Fund and RBC Government Income Fund, each
a separate portfolio of the RBC Funds, Inc. was held. The matters considered at
the meeting, together with the actual vote tabulations realting to such matters
are as follows:
RBC Government Income Fund
1. To approve the election of the following individuals to the board of
directors of the Company:
% of % of
No. of Shares Outstanding Shares Shares Present
------------- ------------------ --------------
T. GERON BELL
Affirmative 1,775,818.080 73.284% 99.919%
Withhold 1,431.000 .059% .081%
TOTAL 1,777,249.080 73.343% 100.000%
LUCY HANCOCK BODE
Affirmative 1,775,818.080 73.284% 99.919%
Withhold 1,431.000 .059% .081%
TOTAL 1,777,249.080 73.343% 100.000%
LESLIE H. GARNER, JR.
Affirmative 1,775,818.080 73.284% 99.919%
Withhold 1,431.000 .059% .081%
TOTAL 1,777,249.080 73.343% 100.000%
RONALD JAMES
Affirmative 1,775,818.080 73.284% 99.919%
Withhold 1,431.000 .059% .081%
TOTAL 1,777,249.080 73.343% 100.000%
MICHAEL T. LEE
Affirmative 1,435,504.080 59.240% 80.771%
Withhold 341,745.000 14.103% 19.229%
TOTAL 1,777,249.080 73.343% 100.000%
JOHN A. MACDONALD
Affirmative 1,775,818.080 73.284% 99.919%
Withhold 1,431.000 .059% .081%
TOTAL 1,777,249.080 73.343% 100.000%
H. DAVID RYBOLT
Affirmative 1,775,818.080 73.284% 99.919%
Withhold 1,431.000 .059% .081%
TOTAL 1,777,249.080 73.343% 100.000%
JAMES R. SEWARD
Affirmative 1,775,818.080 73.284% 99.919%
Withhold 1,431.000 .059% .081%
TOTAL 1,777,249.080 73.343% 100.000%
JAY H. WEIN
Affirmative 1,775,818.080 73.284% 99.919%
Withhold 1,431.000 .059% .081%
TOTAL 1,777,249.080 73.343% 100.000%
2. To approve an Agreement and Plan of Reorganization, pursuant to which the
Fund would be reorganized as a separate portfolio of the Tamarack Funds
Trust, a newly-created Delaware statutory trust.
49
- --------------------------------------------------------------------------------
SUPPLEMENTAL INFORMATION
- --------------------------------------------------------------------------------
% of % of
No. of Shares Outstanding Shares Shares Present
------------- ------------------ --------------
Affirmative 1,578,549.080 65.144% 88.820%
Against .000 .000% .000%
Abstain 2,158.000 .089% .121%
Broker Non-votes 196,542.000 8.111% 11.059%
TOTAL 1,777,249.080 73.343% 100.000%
3. To approve the modification of the Funds' fundamental investment
policies/restrictions in order to update and standardize them and to
increase the Funds' investment flexibility to react to future developments.
3.A Diversification
Affirmative 1,578,549.080 65.144% 88.820%
Against .000 .000% .000%
Abstain 2,158.000 .089% .121%
Broker Non-votes 196,542.000 8.111% 11.059%
TOTAL 1,777,249.080 73.343% 100.000%
3.B Borrowing
Affirmative 1,578,549.080 65.144% 88.820%
Against .000 .000% .000%
Abstain 2,158.000 .089% .121%
Broker Non-votes 196,542.000 8.111% 11.059%
TOTAL 1,777,249.080 73.343% 100.000%
3.C Senior Securities
Affirmative 1,566,278.410 64.637% 88.129%
Against 12,270.670 .507% .691%
Abstain 2,158.000 .089% .121%
Broker Non-votes 196,542.000 8.111% 11.059%
TOTAL 1,777,249.080 73.343% 100.000%
3.D Underwriting Securities
Affirmative 1,578,549.080 65.144% 88.820%
Against .000 .000% .000%
Abstain 2,158.000 .089% .121%
Broker Non-votes 196,542.000 8.111% 11.059%
TOTAL 1,777,249.080 73.343% 100.000%
3.E Real Estate
Affirmative 1,578,549.080 65.144% 88.820%
Against .000 .000% .000%
Abstain 2,158.000 .089% .121%
Broker Non-votes 196,542.000 8.111% 11.059%
TOTAL 1,777,249.080 73.343% 100.000%
3.F Making Loans
Affirmative 1,578,549.080 65.144% 88.820%
Against .000 .000% .000%
Abstain 2,158.000 .089% .121%
Broker Non-votes 196,542.000 8.111% 11.059%
TOTAL 1,777,249.080 73.343% 100.000%
50
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SUPPLEMENTAL INFORMATION
================================================================================
3.G Concentration of Investments
% of % of
No. of Shares Outstanding Shares Shares Present
------------- ------------------ --------------
Affirmative 1,578,549.080 65.144% 88.820%
Against .000 .000% .000%
Abstain 2,158.000 .089% .121%
Broker Non-votes 196,542.000 8.111% 11.059%
TOTAL 1,777,249.080 73.343% 100.000%
3.H Commodities
Affirmative 1,578,549.080 65.144% 88.820%
Against .000 .000% .000%
Abstain 2,158.000 .089% .121%
Broker Non-votes 196,542.000 8.111% 11.059%
TOTAL 1,777,249.080 73.343% 100.000%
4. To ratify the selection of Deloitte & Touche LLP as the independent auditors
of the Fund for the current fiscal year.
Affirmative 1,775,091.080 73.254% 99.879%
Against .000 .000% .000%
Abstain 2,158.000 .089% .121%
TOTAL 1,777,249.080 73.343% 100.000%
** FUND TOTALS: SHARES
RECORD TOTAL 2,423,185.532
VOTED SHARES 1,777,249.080
PERCENT PRESENT 73.343%
- --------------------------------------------------------------------------------
RBC Quality Income Fund
1. To approve the election of the following individuals to the board of
directors of the Company:
% of % of
No. of Shares Outstanding Shares Shares Present
------------- ------------------ --------------
T. GERON BELL
Affirmative 2,946,352.040 79.945% 100.000%
Withhold .000 .000% .000%
TOTAL 2,946,352.040 79.945% 100.000%
LUCY HANCOCK BODE
Affirmative 2,946,352.040 79.945% 100.000%
Withhold .000 .000% .000%
TOTAL 2,946,352.040 79.945% 100.000%
LESLIE H. GARNER, JR.
Affirmative 2,946,352.040 79.945% 100.000%
Withhold .000 .000% .000%
TOTAL 2,946,352.040 79.945% 100.000%
RONALD JAMES
Affirmative 2,946,352.040 79.945% 100.000%
Withhold .000 .000% .000%
TOTAL 2,946,352.040 79.945% 100.000%
MICHAEL T. LEE
Affirmative 2,340,710.040 63.512% 79.444%
Withhold 605,642.000 16.433% 20.556%
TOTAL 2,946,352.040 79.945% 100.000%
51
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SUPPLEMENTAL INFORMATION
================================================================================
% of % of
No. of Shares Outstanding Shares Shares Present
------------- ------------------ --------------
JOHN A. MACDONALD
Affirmative 2,946,352.040 79.945% 100.000%
Withhold .000 .000% .000%
TOTAL 2,946,352.040 79.945% 100.000%
H. DAVID RYBOLT
Affirmative 2,946,352.040 79.945% 100.000%
Withhold .000 .000% .000%
TOTAL 2,946,352.040 79.945% 100.000%
JAMES R. SEWARD
Affirmative 2,946,352.040 79.945% 100.000%
Withhold .000 .000% .000%
TOTAL 2,946,352.040 79.945% 100.000%
JAY H. WEIN
Affirmative 2,946,352.040 79.945% 100.000%
Withhold .000 .000% .000%
TOTAL 2,946,352.040 79.945% 100.000%
2. To approve an Agreement and Plan of Reorganization, pursuant to which the
Fund would be reorganized as a separate portfolio of the Tamarack Funds
Trust, a newly-created Delaware statutory trust.
Affirmative 2,603,868.040 70.653% 88.376%
Against .000 .000% .000%
Abstain .000 .000% .000%
Broker Non-votes 342,484.000 9.293% 11.624%
TOTAL 2,946,352.040 79.945% 100.000%
3. To approve the modification of the Funds' fundamental investment
policies/restrictions in order to update and standardize them and to
increase the Funds' investment flexibility to react to future developments.
3.A Diversification
Affirmative 2,603,868.040 70.653% 88.376%
Against .000 .000% .000%
Abstain .000 .000% .000%
Broker Non-votes 342,484.000 9.293% 11.624%
TOTAL 2,946,352.040 79.945% 100.000%
3.B Borrowing
Affirmative 2,603,868.040 70.653% 88.376%
Against .000 .000% .000%
Abstain .000 .000% .000%
Broker Non-votes 342,484.000 9.293% 11.624%
TOTAL 2,946,352.040 79.945% 100.000%
3.C Senior Securities
Affirmative 2,569,125.993 69.710% 87.197%
Against 34,742.047 .943% 1.179%
Abstain .000 .000% .000%
Broker Non-votes 342,484.000 9.293% 11.624%
TOTAL 2,946,352.040 79.945% 100.000%
52
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SUPPLEMENTAL INFORMATION
================================================================================
3.D Underwriting Securities
% of % of
No. of Shares Outstanding Shares Shares Present
------------- ------------------ --------------
Affirmative 2,603,868.040 70.653% 88.376%
Against .000 .000% .000%
Abstain .000 .000% .000%
Broker Non-votes 342,484.000 9.293% 11.624%
TOTAL 2,946,352.040 79.945% 100.000%
3.E Real Estate
Affirmative 2,603,868.040 70.653% 88.376%
Against .000 .000% .000%
Abstain .000 .000% .000%
Broker Non-votes 342,484.000 9.293% 11.624%
TOTAL 2,946,352.040 79.945% 100.000%
3.F Making Loans
Affirmative 2,603,868.040 70.653% 88.376%
Against .000 .000% .000%
Abstain .000 .000% .000%
Broker Non-votes 342,484.000 9.293% 11.624%
TOTAL 2,946,352.040 79.945% 100.000%
3.G Concentration of Investments
Affirmative 2,603,868.040 70.653% 88.376%
Against .000 .000% .000%
Abstain .000 .000% .000%
Broker Non-votes 342,484.000 9.293% 11.624%
TOTAL 2,946,352.040 79.945% 100.000%
3.H Commodities
Affirmative 2,603,868.040 70.653% 88.376%
Against .000 .000% .000%
Abstain .000 .000% .000%
Broker Non-votes 342,484.000 9.293% 11.624%
TOTAL 2,946,352.040 79.945% 100.000%
4. To ratify the selection of Deloitte & Touche LLP as the independent auditors
of the Fund for the current fiscal year.
Affirmative 2,946,352.040 79.945% 100.000%
Against .000 .000% .000%
Abstain .000 .000% .000%
TOTAL 2,946,352.040 79.945% 100.000%
** FUND TOTALS: SHARES
RECORD TOTAL 3,685,452.214
VOTED SHARES 2,946,352.040
PERCENT PRESENT 79.945%
53
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SUPPLEMENTAL INFORMATION
================================================================================
RBC North Carolina Tax-Free Bond Fund
- --------------------------------------------------------------------------------
1. To approve the election of the following individuals to the board of
directors of the Company:
% of % of
No. of Shares Outstanding Shares Shares Present
------------- ------------------ --------------
T. GERON BELL
Affirmative 1,507,553.400 69.167% 100.000%
Withhold .000 .000% .000%
TOTAL 1,507,553.400 69.167% 100.000%
LUCY HANCOCK BODE
Affirmative 1,507,553.400 69.167% 100.000%
Withhold .000 .000% .000%
TOTAL 1,507,553.400 69.167% 100.000%
LESLIE H. GARNER, JR.
Affirmative 1,507,553.400 69.167% 100.000%
Withhold .000 .000% .000%
TOTAL 1,507,553.400 69.167% 100.000%
RONALD JAMES
Affirmative 1,507,553.400 69.167% 100.000%
Withhold .000 .000% .000%
TOTAL 1,507,553.400 69.167% 100.000%
MICHAEL T. LEE
Affirmative 1,470,116.400 67.449% 97.517%
Withhold 37,437.000 1.718% 2.483%
TOTAL 1,507,553.400 69.167% 100.000%
JOHN A. MACDONALD
Affirmative 1,507,553.400 69.167% 100.000%
Withhold .000 .000% .000%
TOTAL 1,507,553.400 69.167% 100.000%
H. DAVID RYBOLT
Affirmative 1,507,553.400 69.167% 100.000%
Withhold .000 .000% .000%
TOTAL 1,507,553.400 69.167% 100.000%
JAMES R. SEWARD
Affirmative 1,507,553.400 69.167% 100.000%
Withhold .000 .000% .000%
TOTAL 1,507,553.400 69.167% 100.000%
JAY H. WEIN
Affirmative 1,507,553.400 69.167% 100.000%
Withhold .000 .000% .000%
TOTAL 1,507,553.400 69.167% 100.000%
2. To approve an Agreement and Plan of Reorganization, pursuant to which the
Fund would be reorganized as a separate portfolio of the Tamarack Funds
Trust, a newly-created Delaware statutory trust.
Affirmative 1,110,589.960 50.954% 73.668%
Against .000 .000% .000%
Abstain 137.440 .006% .009%
Broker Non-votes 396,826.000 18.206% 26.323%
TOTAL 1,507,553.400 69.167% 100.000%
54
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SUPPLEMENTAL INFORMATION
================================================================================
3. To approve the modification of the Funds' fundamental investment
policies/restrictions in order to update and standardize them and to
increase the Funds' investment flexibility to react to future developments.
3.A Diversification
% of % of
No. of Shares Outstanding Shares Shares Present
------------- ------------------ --------------
Affirmative 1,109,602.960 50.909% 73.603%
Against 987.000 .045% .065%
Abstain 137.440 .006% .010%
Broker Non-votes 396,826.000 18.206% 26.323%
TOTAL 1,507,553.400 69.167% 100.000%
3.B Borrowing
Affirmative 1,109,602.960 50.909% 73.603%
Against 987.000 .045% .065%
Abstain 137.440 .006% .010%
Broker Non-votes 396,826.000 18.206% 26.323%
TOTAL 1,507,553.400 69.167% 100.000%
3.C Senior Securities
Affirmative 1,108,633.960 50.864% 73.539%
Against 1,956.000 .090% .129%
Abstain 137.440 .006% .010%
Broker Non-votes 396,826.000 18.206% 26.323%
TOTAL 1,507,553.400 69.167% 100.000%
3.D Underwriting Securities
Affirmative 1,109,602.960 50.909% 73.603%
Against 987.000 .045% .065%
Abstain 137.440 .006% .010%
Broker Non-votes 396,826.000 18.206% 26.323%
TOTAL 1,507,553.400 69.167% 100.000%
3.E Real Estate
Affirmative 1,109,602.960 50.909% 73.603%
Against 987.000 .045% .065%
Abstain 137.440 .006% .010%
Broker Non-votes 396,826.000 18.206% 26.323%
TOTAL 1,507,553.400 69.167% 100.000%
3.F Making Loans
Affirmative 1,108,633.960 50.864% 73.539%
Against 987.000 .045% .065%
Abstain 1,106.440 .051% .074%
Broker Non-votes 396,826.000 18.206% 26.323%
TOTAL 1,507,553.400 69.167% 100.000%
3.G Concentration of Investments
Affirmative 1,110,589.960 50.954% 73.668%
Against .000 .000% .000%
Abstain 137.440 .006% .009%
Broker Non-votes 396,826.000 18.206% 26.323%
TOTAL 1,507,553.400 69.167% 100.000%
55
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SUPPLEMENTAL INFORMATION
================================================================================
3.H Commodities
% of % of
No. of Shares Outstanding Shares Shares Present
------------- ------------------ --------------
Affirmative 1,109,602.960 50.909% 73.603%
Against 987.000 .045% .065%
Abstain 137.440 .006% .010%
Broker Non-votes 396,826.000 18.206% 26.323%
TOTAL 1,507,553.400 69.167% 100.000%
4. To ratify the selection of Deloitte & Touche LLP as the independent auditors
of the Fund for the current fiscal year.
Affirmative 1,506,584.400 69.122% 99.936%
Against 969.000 .045% .064%
Abstain .000 .000% .000%
TOTAL 1,507,553.400 69.167% 100.000%
** FUND TOTALS: SHARES
RECORD TOTAL 2,179,596.067
VOTED SHARES 1,507,553.400
PERCENT PRESENT 69.167%
56
[PHOTO]
---------------
Tamarack Funds | PRSRT STD |
P.O. Box 219757 | U.S. POSTAGE |
Kansas City, MO 64121-9757 | PAID |
| PERMIT NO. 2891 |
| KANSAS CITY MO. |
---------------
800-422-2766
WWW.TAMARACKFUNDS.COM
TF AR 6/04 Tamarack Distributors Inc.
530963 (6/04)
TAMARACK FUNDS
Annual Report April 30, 2004
[PHOTO]
LARGE CAP EQUITY
MID CAP EQUITY
SMALL CAP EQUITY
[LOGO] TAMARACK FUNDS
================================================================================
================================================================================
Tamarack Funds
- --------------------------------------------------------------------------------
ABOUT YOUR ANNUAL REPORT
This annual report includes detailed information regarding your Funds'
performance. This report is provided to help answer your questions as a
shareholder. Among these questions may be: How has my Fund performed against its
benchmark both in the last year and over the last ten years (or since inception
if less than ten years)? What are the annual expenses of my Fund? What are the
significant accounting policies and procedures followed by my Fund?
The Tamarack Funds compare their performance against widely used market indices,
depending on the market sector or investment style of the particular fund. These
indices include the S&P 500, Russell 2000 and S&P MidCap 400.
We hope the financial information presented as well as the discussion and
analysis from your portfolio manager(s) will help you evaluate your investment
in the Tamarack Funds. We also encourage you to read your Fund's prospectus for
further detail as to your Fund's investment policies and risk profile. Tamarack
Funds prospectuses and performance information subsequent to the date of this
report are available on our website at www.tamarackfunds.com.
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
Shareholder Letter .......................................................... 1
Letter from the CIO of Equities ............................................. 2
Performance Summary ......................................................... 4
Large Cap Equity Fund
- Management Discussion and Analysis ...................................... 6
Mid Cap Equity Fund
- Management Discussion and Analysis ...................................... 8
Small Cap Equity Fund
- Management Discussion and Analysis ...................................... 10
Financial Statements
- Statement of Assets and Liabilities ..................................... 12
- Statement of Operations ................................................. 14
- Statement of Changes in Net Assets ...................................... 15
Financial Highlights ........................................................ 18
Notes to Financial Statements ............................................... 24
Schedule of Investments ..................................................... 34
Auditors' Opinion ........................................................... 37
Management .................................................................. 38
Share Class Information ..................................................... 41
Supplemental Information .................................................... 42
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SHAREHOLDER LETTER
================================================================================
To Our Shareholders
- --------------------------------------------------------------------------------
On April 16th, 2004 the reorganization into the new Tamarack Funds Trust of the
Large Cap Equity, Mid Cap Equity and Small Cap Equity Funds (formerly known as
the RBC Funds) was completed after being approved by shareholders. The new
Tamarack Funds, which include 17 separate portfolios (fixed income, equity and
money market)* also have a new year-end of September 30th. You may, therefore,
be wondering why we are sending you a report with information including only
these three former RBC Funds, with financial statements audited as of the former
RBC Funds year-end of April 30th. We do not want to let 17 months pass between
the annual audited financial statements we make available to you our
shareholders. Therefore, we are providing to you an annual report one final time
as of the former RBC Funds' April 30th year-end. You will also receive another
report in approximately five months including all of the equity portfolios in
the Tamarack Funds as of the new September 30th year-end. In the future you may
then expect to receive regularly scheduled semi-annual and annual reports dated
March 31 and September 30 for the Tamarack Funds.
The past year has clearly been a time of significant change for your Funds. For
example, as part of the reorganization, shareholders of the former David L.
Babson Growth Fund, Inc. approved the combination of their fund into the Large
Cap Equity Fund, contributing to an increase in fund assets from $45 million on
April 30th, 2003 to $230 million on April 30th, 2004. However, our commitment to
providing the best portfolio management services to you and all of our investors
remains the same.
While our first priority is managing your investment in the Tamarack Funds to
maintain an appropriate balance between portfolio returns and risk (we won't
seek the absolutely highest return if we deem the credit or market risk too
great) we have also begun marketing our expanded fund family offerings to new
investors. As part of this effort we have created a new website,
www.tamarackfunds.com. We invite you to visit this site for information
regarding both your fund(s) and other funds within the Tamarack family.
We know that no matter what the dollar balance in your Tamarack Funds
shareholder account, these assets are an important part of your overall
investments. We appreciate and value the trust you have placed in us and will
continue our efforts to provide you with solid risk-balanced returns.
Sincerely,
/s/ Jennifer Lammers
Jennifer Lammers
President, Tamarack Funds
* TO REDUCE THE SIZE AND COMPLEXITY OF EACH ANNUAL REPORT, AND HOPEFULLY MAKE
THEM EASIER FOR YOU AS A SHAREHOLDER TO USE, WE HAVE DIVIDED THE TAMARACK FUNDS
INTO THREE GROUPS (FIXED INCOME, EQUITY, AND MONEY MARKET) FOR ANNUAL AND
SEMI-ANNUAL REPORTING AS WELL AS PROSPECTUSES. THE FORMER RBC FIXED INCOME FUNDS
REPORT AS WELL AS THOSE OF THE OTHER TAMARACK FUNDS WILL BE AVAILABLE ON OUR
WEBSITE.
1
================================================================================
LETTER FROM THE CIO OF EQUITIES
================================================================================
- --------------------------------------------------------------------------------
The past five years have been a challenging period for investors. It seems that
the only certainty of predicting the direction of markets is uncertainty. Before
2000, many investors had no idea it was possible to lose invested money; now
most investors understand the possibility. With this in mind, the most important
decision investors can make is their asset allocation mix. Diversification is
achieved when different categories in a portfolio do not react in the same
fashion during a market cycle. This phenomenon is known as low correlation.
Without it, combining investments may do little good, particularly in the long
run. The biggest challenge for investment managers is to provide a high return
while keeping risk within acceptable parameters. This is where building a
diversified portfolio becomes valuable.
In the last decade, we have seen a decline in the correlation between small and
large companies. From 1974-2002, the correlation between small cap stocks and
large cap stocks was 0.9. In other words, 90% of the time, small and large firms
performed similarly. However, from 1992-2003, the correlation dropped to 0.8,
which suggests that returns of small and large firms have become less
correlated. Therefore the volatility of a portfolio containing small, mid and
large cap equities is likely to be muted.
Small cap stocks have historically reaped higher rewards than mid and large cap
stocks, but they also tend to have greater losses during bear markets. Larger
cap equities have more tempered gains and losses. The power of diversification
allows investors to "smooth the ride" in their portfolios. By combining equity
funds that complement one another, the highs may not be as high, but the lows
are not as low. Furthermore, investors can profit from what small, intermediate
and large firms offer.
The Tamarack small, mid and large cap equity funds provide good diversification
across market cap ranges. In addition, growth stocks--such as those comprising
these funds--tend to perform well in times of economic recovery. For example,
from 1997-1999, growth stocks posted a 38.0% annualized return and dominated
other investments. But as the technology bubble burst from March 2000-September
2002, growth stocks posted an annualized loss of -25.4%. Now that the economy is
on the upswing, growth stocks are looking up.
The future looks promising. We are keeping an eye out for potential risks to
this growth, including higher energy costs, unexpected inflation, geopolitical
crises and higher interest rates. Because the U.S. has entered a period of
normalized returns, long-term investors may need to show patience. Our strategy
is to buy and hold equity in high quality firms that demonstrate financial
strength and consistent growth in earnings. Our goal is to balance acceptable
risk and financial returns.
2
================================================================================
EQUITY PORTFOLIO MANAGERS
================================================================================
- --------------------------------------------------------------------------------
Voyageur Asset Management employs a team approach to the management of Large Cap
Equity Fund, Mid Cap Equity Fund and Small Cap Equity Fund, with no individual
team member being solely responsible for investment decisions. The members of
Voyageur's equity funds team are:
- --------------------------------------------------------------------------------
DAVID J. COX, CFA
MANAGING DIRECTOR, DIRECTOR OF EQUITY INVESTMENTS, SENIOR PORTFOLIO MANAGER
David Cox has been in the investment industry since 1984. He received his MBA
from Indiana University, his BS from the University of Illinois and is a CFA
charterholder. David is a member of the Investment Analysts Society of Chicago
and the Association for Investment Management and Research.
- --------------------------------------------------------------------------------
NANCY M. SCINTO
MANAGING DIRECTOR, DIRECTOR OF RESEARCH, SENIOR PORTFOLIO MANAGER
Nancy Scinto leads the Voyageur growth equity research efforts as Director of
Research. She is also the Chief Investment Officer, Equity Products for the
Tamarack Funds. Nancy has been in the investment industry since 1984. She
received her MBA from DePaul University and her BA from Governors State
University. Nancy is a member of the Investment Analysts Society of Chicago.
- --------------------------------------------------------------------------------
STEVEN A. RUSNAK, CFA
VICE PRESIDENT, SENIOR PORTFOLIO MANAGER
Steven Rusnak provides the Voyageur growth equity team with his skills in
fundamental equity research over a diverse group of industries from financials
to health care. He has been in the investment industry since 1985. Steven
received his MBA and BA from the University of Michigan and is a CFA
charterholder. He is a member of the Investment Analysts Society of Chicago and
the Association for Investment Management and Research.
- --------------------------------------------------------------------------------
KENNETH A. TYSZKO, CPA, CFA
VICE PRESIDENT, SENIOR PORTFOLIO MANAGER
Kenneth Tyszko has been the portfolio manager for the small cap growth equity
product since its inception in 1995. He has been in the investment industry
since 1984. Kenneth received his BS from the University of Illinois and is both
a CFA charterholder and a Certified Public Accountant. He is a member of the
Illinois CPA Society, the Investment Analysts Society of Chicago and the
Association for Investment Management and Research.
- --------------------------------------------------------------------------------
FORBES L. WATSON
VICE PRESIDENT, PORTFOLIO MANAGER
Forbes Watson serves as a portfolio manager for Voyageur's small cap growth
equity strategy. He has been in the investment industry since 1981. Forbes
received his MBA from Millsaps College and his BA from the University of North
Texas. He is a member of the North Carolina Society for Financial Analysts and
the Association for Investment Management and Research.
3
================================================================================
PERFORMANCE SUMMARY
================================================================================
Total Returns as of April 30, 2004
- -----------------------------------------------------------------------------------------------------------------------------------
TAMARACK LARGE CAP EQUITY FUND Since
1 Year 3 Year 5 Year 10 Year Inception
------ ------ ------ ------- ---------
Class A (a)
- - Including Maximum Sales 13.35% -7.68% -5.68% 6.47% 7.64%
Charge of 5.75%
- - At Net Asset Value 20.29% -5.85% -4.56% 7.10% 8.11%
Class C (b)
- - Including Contingent Deferred 19.29% -5.85% -4.56% 7.10% 8.11%
Sales Charge of 1.00%
- - At Net Asset Value 20.29% -5.85% -4.56% 7.10% 8.11%
Class I (a) 20.64% -5.63% -4.32% 7.42% 8.50%
Class R (b) 20.29% -5.85% -4.56% 7.10% 8.11%
Class S (b) 20.64% -5.63% -4.32% 7.42% 8.50%
S&P 500 Index* 22.87% -2.36% -2.26% 11.36% 11.41%
Russell 1000 Growth Index* 21.65% -5.93% -6.37% 9.61% N/A
- -----------------------------------------------------------------------------------------------------------------------------------
TAMARACK MID CAP EQUITY FUND Since
1 Year 3 Year 5 Year 10 Year Inception
------ ------ ------ ------- ---------
Class A (a)
- - Including Maximum Sales 21.22% 1.53% 6.07% 12.60% 13.62%
Charge of 5.75%
- - At Net Asset Value 28.65% 3.55% 7.34% 13.27% 14.13%
Class C (b)
- - Including Contingent Deferred 27.54% 3.52% 7.32% 13.26% 14.12%
Sales Charge of 1.00%
- - At Net Asset Value 28.54% 3.52% 7.32% 13.26% 14.12%
Class I (a) 29.00% 3.80% 7.64% 13.56% 14.49%
Class R (b) 28.65% 3.55% 7.34% 13.27% 14.13%
Class S (b) 29.00% 3.80% 7.64% 13.56% 14.49%
S&P Midcap 400 Index* 34.45% 5.73% 9.34% 14.47% 14.47%
S&P Midcap 400/Barra Growth Index* 29.15% 2.18% 6.58% 13.75% 13.75%
- -----------------------------------------------------------------------------------------------------------------------------------
TAMARACK SMALL CAP EQUITY FUND Since
1 Year 3 Year 5 Year 10 Year Inception
------ ------ ------ ------- ---------
Class A (a)
- - Including Maximum Sales 22.93% 2.95% 5.46% N/A 11.26%
Charge of 5.75%
- - At Net Asset Value 30.46% 5.01% 6.71% N/A 11.96%
Class C (b)
- - Including Contingent Deferred 29.46% 5.01% 6.71% N/A 11.96%
Sales Charge of 1.00%
- - At Net Asset Value 30.46% 5.01% 6.71% N/A 11.96%
Class I (a) 30.73% 5.26% 6.96% N/A 12.28%
Class R (b) 30.46% 5.01% 6.71% N/A 11.96%
Class S (b) 30.73% 5.26% 6.96% N/A 12.28%
Russell 2000 Index* 42.01% 6.28% 6.67% N/A 10.50%
S&P Small Cap 600 Index* 39.94% 8.84% 10.92% N/A 13.21%
Russell 2000 Growth Index* 41.57% -0.31% -0.44% N/A 6.15%
- -----------------------------------------------------------------------------------------------------------------------------------
Performance data quoted represents past performance. Past performance is no
guarantee of future results. 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 may be lower or
higher than performance quoted.
*Each of the comparative indices is a widely recognized market value weighted
measure of the return on securities. Index returns are calculated on a monthly
basis, but do not include sales fees or operating expenses. You cannot invest
directly in the indices.
(a) The performance in the table reflects the performance of the former RBC
Funds, the predecessors to the Tamarack Funds. The quoted performance of
the Funds include the performance of a common trust fund ("CTF") account
advised by the Adviser (including its predecessor) and managed the same as
the Fund in all material respects, for periods dating prior to the Fund's
commencement of operations (October 1, 1996 for the LC Equity Fund, June 1,
1994 for the MC Equity Fund, and May 2, 1997 for the SC Equity Fund), as
adjusted to reflect the full contractual rate of expenses associated with
the Fund at its inception. The CTF account was not registered with the SEC
under the 1940 Act and therefore was not subject to the investment
restrictions imposed by law on registered mutual funds. If the CTF account
had been registered, the CTF account's performance may have been adversely
affected. Fund performance reflects applicable fee waivers/expense
reimbursements (which, if excluded, would cause performance to be lower).
(b) Performance returns are annualized as classes represent new shares for the
first time beginning April 19, 2004.
4
================================================================================
LETTER FROM THE CIO OF EQUITIES
================================================================================
This Page Intentionally Left Blank
- --------------------------------------------------------------------------------
5
================================================================================
MANAGEMENT DISCUSSION AND ANALYSIS
================================================================================
Large Cap Equity Fund
- --------------------------------------------------------------------------------
MARKET COMMENTARY
The last twelve months have certainly been eventful for equity markets. We saw
the bear market, which gripped equities for the past three years, come to an end
and the worst of the uncertainties surrounding the outlook for the U.S. economy
dissipate. The fall of Saddam Hussein's regime and a raft of positive economic
data soothed lingering investor concerns enabling markets to post sizeable gains
for the calendar year 2003. It was the technology group that led all others as
the market recovery gained momentum. Markets began 2004 by continuing to move to
the upside. However, by mid-February 2004 the markets peaked and through April,
a tug of war in equity markets has developed. On one side, strong corporate
earnings growth announcements tried to pull prices higher, and on the other,
fears of the Federal Reserve raising short-term interest rates together with
increases in actual long-term rates, rising energy prices and escalating
violence in the Middle East have pushed equity prices down. Smaller
capitalization companies have been dominant, which if this trend continues would
be for the sixth consecutive year. In addition, one of the key developments
throughout the year was the outperformance of lower quality high beta stocks,
which is very typical when emerging from a bear market environment. This trend
does appear to be ending and as the twelve-month period concluded, stocks
remained range bound.
- --------------------------------------------------------------------------------
PERFORMANCE
The Tamarack Large Cap Equity Fund's total return during the 12-month period
ending April 30, 2004 was +20.3% (Class A shares). That compares to a total
return of +22.9% for the S&P 500 Index and +21.7% for the Russell 1000 Growth
Index.
Our performance was helped by being overweight in the Consumer Discretionary and
Information Technology sectors with performance above that of the index. Our
holdings in Carnival Corp, Starbucks, Cisco, and Symantec were drivers of this
strong performance in these sectors. The Fund held the same weight in the
industrial sector as the index, but we had very strong performance from Apollo
Group, Danaher, and United Technologies. Somewhat offsetting this strong
performance in the Technology sector was weaker performance in the Financial
sector. While the Fund was underweight compared to its benchmark in the
Financial sector, our performance lagged in this sector as smaller
capitalization, lower quality bank stocks outperformed our higher quality,
higher capitalization holdings.
- --------------------------------------------------------------------------------
OUTLOOK
From a "big picture" point of view, the recent consolidation is not unusual and
could ultimately prove to be an overall positive for the market. A number of
potential risks remain, including economic slowdown as policy stimuli diminish,
a sharper than expected interest rate increase by the Federal Reserve and
disruptive geopolitical events. Still, we remain of the view that the cyclical
2003-2004 upward trend is the market's dominant feature and that the recent
pressures are occurring within that upward trend. Our view is that the U.S. is
entering a period of more normalized returns, so consequently long-term
investors may need to continue to show patience in the current market
environment. We believe that corporate profits are likely to decelerate in the
second half of the year; therefore investors must now apply greater discernment
in the stocks they own. We also feel we are re-entering a period when
fundamental investment factors, such as quality and consistent earnings growth
will once again be key to investment success. Given this backdrop, we remain
highly selective when making new additions to the portfolio. The Fund continues
to focus on high quality growth companies that offer the opportunity for
long-term capital appreciation.
6
================================================================================
MANAGEMENT DISCUSSION AND ANALYSIS
================================================================================
Large Cap Equity Fund
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
Long-term capital appreciation.
- --------------------------------------------------------------------------------
BENCHMARK
S&P 500 Index
- --------------------------------------------------------------------------------
ASSET ALLOCATION
(% OF FUND'S NET ASSETS)
& TOP FIVE INDUSTRIES
Common Stocks Investment Companies
98.9% 0.8%
[PIE CHART] Other Assets
0.3%
TOP FIVE INDUSTRIES
Health Care 21.4%
Banking & Financial Services 11.7%
Retail 10.8%
Computer Industry 9.7%
Insurance 7.9%
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS
(AS OF 4/30/04)
Stryker Corp. 4.84% PepsiCo, Inc. 3.20%
Symantec Corp. 4.16% Apollo Group, Inc. - Class A 3.18%
SYSCO Corp. 3.50% Medtronic, Inc. 3.16%
First Data Corp. 3.39% Cardinal Health 3.09%
Pfizer, Inc. 3.26% AFLAC, Inc. 3.01%
*A listing of all portfolio holdings can be found on page 34.
- --------------------------------------------------------------------------------
GROWTH OF $10,000 INITIAL
INVESTMENT OVER 10 YEARS
[FLOW CHART]
-----------------------------------------------
CLASS S&P 500
A INDEX
-----------------------------------------------
05/01/1994 9,425 10,000.00
-----------------------------------------------
10/31/1994 9,726 10,631.81
-----------------------------------------------
04/30/1995 10,493 11,743.62
-----------------------------------------------
10/31/1995 11,493 13,439.53
-----------------------------------------------
04/30/1996 12,959 15,288.32
-----------------------------------------------
10/31/1996 14,010 16,675.89
-----------------------------------------------
04/30/1997 15,163 19,129.08
-----------------------------------------------
10/31/1997 17,724 22,028.64
-----------------------------------------------
04/30/1998 19,767 26,984.36
-----------------------------------------------
10/31/1998 19,265 26,877.65
-----------------------------------------------
04/30/1999 23,638 32,874.59
-----------------------------------------------
10/31/1999 24,955 33,775.13
-----------------------------------------------
04/30/2000 27,097 36,201.70
-----------------------------------------------
10/31/2000 25,756 35,827.89
-----------------------------------------------
04/30/2001 22,426 31,507.95
-----------------------------------------------
10/31/2001 18,437 26,910.75
-----------------------------------------------
04/30/2002 18,418 27,532.87
-----------------------------------------------
10/31/2002 15,494 22,848.18
-----------------------------------------------
04/30/2003 15,559 23,869.83
-----------------------------------------------
10/31/2003 17,651 27,597.51
-----------------------------------------------
04/30/2004 18,715 29,327.89
-----------------------------------------------
The graph reflects an initial investment of $10,000 over a 10 year period and is
based on Class A shares at net asset value. The Fund's maximum sales charge is
5.75%. The Fund's total return includes reinvested dividends and capital gains.
The Fund's total return also includes operating expenses that reduce return,
while the total return of the index does not. The graph does not reflect the
deduction of taxes that a shareholder would pay on fund distributions or
redemption of fund shares. Performance data quoted represents past performance.
Past performance is no guarantee of future results. 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 may be lower or higher than performance quoted. Performance of other
classes will vary due to differences in fee structures.
7
================================================================================
MANAGEMENT DISCUSSION AND ANALYSIS
================================================================================
Mid Cap Equity Fund
- --------------------------------------------------------------------------------
MARKET COMMENTARY
The last twelve months have certainly been eventful for equity markets. We saw
the bear market, which gripped equities for the past three years, come to an end
and the worst of the uncertainties surrounding the outlook for the U.S. economy
dissipate. The fall of Saddam Hussein's regime and a raft of positive economic
data soothed lingering investor concerns enabling markets to post sizeable gains
for the calendar year 2003. It was the technology group that led all others as
the market recovery gained momentum. Markets began 2004 by continuing to move to
the upside. However, by mid-February 2004 the markets peaked and through April,
a tug of war in equity markets has developed. On one side, strong corporate
earnings growth announcements tried to pull prices higher, and on the other,
fears of the Federal Reserve raising short-term interest rates together with
increases in actual long-term rates, rising energy prices and escalating
violence in the Middle East have pushed equity prices down. Smaller
capitalization companies have been dominant, which if this trend continues would
be for the sixth consecutive year. In addition, one of the key developments
throughout the year was the outperformance of lower quality high beta stocks,
which is very typical when emerging from a bear market environment. This trend
does appear to be ending and as the twelve-month period concluded, stocks
remained range bound.
- --------------------------------------------------------------------------------
PERFORMANCE
The Tamarack Mid Cap Equity Fund's total return during the 12-month period
ending April 30, 2004 was +28.7% (Class A shares). That compares to a total
return of +34.5% for the S&P MidCap 400 Index.
With the market's focus on smaller, low quality company stocks, we were not able
to keep pace with market indices for this period. Our focus on strong
fundamentally driven, high quality stock selection allowed us to participate in
the markets strength this past year, but not overcome the market's short-term
bias. Our performance was helped by being overweight in the Health Care and
Information Technology sectors with performance above the index. Our holdings in
Varian Medical, Omnicare, and Symantec were drivers of this strong performance
in these sectors. Other strong performers for the fund included Apollo Group,
Whole Foods Market, and Plantronics. Offsetting this strong performance was the
Consumer Discretionary sector in the fund, where fears of higher interest rates
and gasoline prices have impacted these stocks.
- --------------------------------------------------------------------------------
OUTLOOK
From a "big picture" point of view, the recent consolidation is not unusual and
could ultimately prove to be an overall positive for the market. A number of
potential risks remain including economic slowdown as policy stimuli diminish, a
sharper than expected interest rate increase by the Federal Reserve and
disruptive geopolitical events. Still, we remain of the view that the cyclical
2003-2004 upward trend is the market's dominant feature and that the recent
pressures are occurring within that upward trend. Our view is that the U.S. is
entering a period of more normalized returns, so consequently long-term
investors may need to continue to show patience in the current market
environment. We believe that corporate profits are likely to decelerate in the
second half of the year; therefore investors must now apply greater discernment
in the stocks they own. We also feel we are re-entering a period when
fundamental investment factors, such as quality and consistent earnings growth
will once again be key to investment success. Given this backdrop, we remain
highly selective when making new additions to the portfolio. The Fund continues
to focus on high quality growth companies that offer the opportunity for
long-term capital appreciation.
8
================================================================================
MANAGEMENT DISCUSSION AND ANALYSIS
================================================================================
Mid Cap Equity Fund
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
Long-term capital appreciation.
- --------------------------------------------------------------------------------
BENCHMARK
S&P Mid Cap 400 Index
- --------------------------------------------------------------------------------
ASSET ALLOCATION
(% OF FUND'S NET ASSETS)
& TOP FIVE INDUSTRIES
Common Stocks Investment Companies
99.0% 0.8%
[PIE CHART] Other Assets
0.2%
TOP FIVE INDUSTRIES
Health Care 20.9%
Retail 17.7%
Computer Industry 8.6%
Banking & Financial Service 7.1%
Distribution/Wholesale 5.0%
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS
(AS OF 4/30/04)
Ross Stores, Inc. 3.26% Omnicare, Inc. 3.01%
Regis Corp. 3.25% Plantronics, Inc. 2.98%
Expeditors Int'l. of Washington, Inc. 3.10% CDW Corp. 2.89%
Varian Medical Systems, Inc. 3.08% Symantec Corp. 2.81%
Whole Foods Market, Inc. 3.06% Gentex Corp. 2.81%
*A listing of all portfolio holdings can be found on page 35.
GROWTH OF $10,000 INITIAL
INVESTMENT OVER 10 YEARS
[FLOW CHART]
------------------------------------------------
CLASS S&P MIDCAP
A 400 INDEX
------------------------------------------------
05/01/1994 9,425 10,000.00
------------------------------------------------
10/31/1994 9,232 10,323.37
------------------------------------------------
04/30/1995 10,321 10,978.83
------------------------------------------------
10/31/1995 11,528 12,513.06
------------------------------------------------
04/30/1996 13,903 14,251.35
------------------------------------------------
10/31/1996 13,899 14,684.10
------------------------------------------------
04/30/1997 15,509 15,694.35
------------------------------------------------
10/31/1997 18,408 19,480.77
------------------------------------------------
04/30/1998 21,177 23,214.93
------------------------------------------------
10/31/1998 19,753 20,787.71
------------------------------------------------
04/30/1999 22,995 24,707.53
------------------------------------------------
10/31/1999 23,100 25,167.98
------------------------------------------------
04/30/2000 27,858 30,519.69
------------------------------------------------
10/31/2000 30,595 33,133.59
------------------------------------------------
04/30/2001 29,508 32,669.24
------------------------------------------------
10/31/2001 26,715 29,008.84
------------------------------------------------
04/30/2002 31,276 34,816.91
------------------------------------------------
10/31/2002 24,451 27,622.79
------------------------------------------------
04/30/2003 25,466 28,721.39
------------------------------------------------
10/31/2003 31,039 36,111.79
------------------------------------------------
04/30/2004 32,762 38,614.55
------------------------------------------------
The graph reflects an initial investment of $10,000 over a 10 year period and is
based on Class A shares at net asset value. The Fund's maximum sales charge is
5.75%. The Fund's total return includes reinvested dividends and capital gains.
The Fund's total return also includes operating expenses that reduce return,
while the total return of the index does not. The graph does not reflect the
deduction of taxes that a shareholder would pay on fund distributions or
redemption of fund shares. Performance data quoted represents past performance.
Past performance is no guarantee of future results. 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 may be lower or higher than performance quoted. Performance of other
classes will vary due to differences in fee structures.
9
================================================================================
MANAGEMENT DISCUSSION AND ANALYSIS
================================================================================
Small Cap Equity Fund
- --------------------------------------------------------------------------------
MARKET COMMENTARY
The last twelve months have certainly been eventful for equity markets. We saw
the bear market, which gripped equities for the past three years, come to an end
and the worst of the uncertainties surrounding the outlook for the U.S. economy
dissipate. The fall of Saddam Hussein's regime and a raft of positive economic
data soothed lingering investor concerns enabling markets to post sizeable gains
for the calendar year 2003. It was the technology group that led all others as
the market recovery gained momentum. Markets began 2004 by continuing to move to
the upside. However, by mid-February 2004 the markets peaked and through April,
a tug of war in equity markets has developed. On one side, strong corporate
earnings growth announcements tried to pull prices higher, and on the other,
fears of the Federal Reserve raising short-term interest rates together with
increases in actual long-term rates, rising energy prices and escalating
violence in the Middle East have pushed equity prices down. Smaller
capitalization companies have been dominant, which if this trend continues would
be for the sixth consecutive year. In addition, one of the key developments
throughout the year was the outperformance of lower quality high beta stocks,
which is very typical when emerging from a bear market environment. This trend
does appear to be ending and as the twelve-month period concluded, stocks
remained range bound.
- --------------------------------------------------------------------------------
PERFORMANCE
The Tamarack Small Cap Equity Fund's total return during the 12-month period
ending April 30, 2004 was +30.5% (Class A shares). That compares to a total
return of +41.6% for the Russell 2000 Growth Index, +42.0% for the Russell 2000
Index, and +39.9% for the S&P SmallCap 600 Index.
During the year, small cap stocks handily outperformed larger cap stocks. This
was the fifth consecutive year that smaller capitalization stocks outperformed
their larger cap peers. However, within the small cap indices, there was a
significant performance difference between the higher quality small cap growth
stocks owned by the Fund, and lower quality small cap stocks. Somewhat
reminiscent of the stock market bubble of the late 1990's, investors once again
began bidding up the prices of smaller cap companies that had far riskier
financial characteristics than those that the Fund typically seeks to purchase.
As such, those companies that were higher-beta, financially weaker, and had no
profits, significantly outperformed the higher quality companies held by the
Fund. This was especially evident in the Industrials, Health Care and Technology
sectors. Scansource, Autodesk, Shuffle Master, Zebra Technologies and United
Natural Foods were among the Fund's best performing stocks.
- --------------------------------------------------------------------------------
OUTLOOK
From a "big picture" point of view, the recent consolidation is not unusual and
could ultimately prove to be an overall positive for the market. A number of
potential risks remain including economic slowdown as policy stimuli diminish, a
sharper than expected interest rate increase by the Federal Reserve and
disruptive geopolitical events. Still, we remain of the view that the cyclical
2003-2004 upward trend is the market's dominant feature and that the recent
pressures are occurring within that upward trend. Our view is that the U.S. is
entering a period of more normalized returns, so consequently long-term
investors may need to continue to show patience in the current market
environment. We believe that corporate profits are likely to decelerate in the
second half of the year; therefore investors must now apply greater discernment
in the stocks they own. We also feel we are re-entering a period when
fundamental investment factors, such as quality and consistent earnings growth
will once again be key to investment success. Given this backdrop, we remain
highly selective when making new additions to the portfolio. The Fund continues
to focus on high quality growth companies that offer the opportunity for
long-term capital appreciation.
10
================================================================================
MANAGEMENT DISCUSSION AND ANALYSIS
================================================================================
Small Cap Equity Fund
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
Long-term capital appreciation.
- --------------------------------------------------------------------------------
BENCHMARK
Russell 2000 Index
- --------------------------------------------------------------------------------
ASSET ALLOCATION
(% OF FUND'S NET ASSETS)
& TOP FIVE INDUSTRIES
Common Stocks Investment Companies
96.8% 3.2%
[PIE CHART]
TOP FIVE INDUSTRIES
Information Technology 24.9%
Health Care 23.8%
Consumer Discretionary 10.4%
Financials 10.0%
Industrials 8.6%
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS
(AS OF 4/30/04)
Wells Fargo Investment Money Market Fund, Investor Class 3.22%
KV Pharmaceutical Co. - Class A 3.22%
Zebra Technologies Corp. - Class A 3.16%
United Natural Foods, Inc. 2.87%
Cooper Cos., Inc. 2.85%
Expeditors International of Washington, Inc. 2.72%
Patterson Dental Co. 2.59%
Knight Transportation, Inc. 2.49%
RARE Hospitality International, Inc. 2.34%
Simpson Manufacturing Co., Inc. 2.34%
*A listing of all portfolio holdings can be found on page 36.
- --------------------------------------------------------------------------------
GROWTH OF $10,000 INITIAL
INVESTMENT OVER 10 YEARS
[FLOW CHART]
-------------------------------------------------
CLASS RUSSELL 2000
A INDEX
-------------------------------------------------
01/01/1995 9,425 10,000.00
-------------------------------------------------
04/30/1995 10,172 10,694.31
-------------------------------------------------
10/31/1995 10,767 12,010.28
-------------------------------------------------
04/30/1996 12,381 14,222.43
-------------------------------------------------
10/31/1996 12,910 14,004.59
-------------------------------------------------
04/30/1997 13,175 14,229.58
-------------------------------------------------
10/31/1997 18,015 18,112.32
-------------------------------------------------
04/30/1998 21,263 20,263.43
-------------------------------------------------
10/31/1998 17,334 15,967.64
-------------------------------------------------
04/30/1999 19,551 18,388.40
-------------------------------------------------
10/31/1999 20,183 18,341.65
-------------------------------------------------
04/30/2000 23,455 21,775.60
-------------------------------------------------
10/31/2000 24,431 21,534.37
-------------------------------------------------
04/30/2001 23,355 21,153.12
-------------------------------------------------
10/31/2001 21,193 18,799.49
-------------------------------------------------
04/30/2002 25,263 22,565.50
-------------------------------------------------
10/31/2002 19,911 16,624.68
-------------------------------------------------
04/30/2003 20,731 17,880.59
-------------------------------------------------
10/31/2003 25,919 23,833.98
-------------------------------------------------
04/30/2004 27,047 25,392.90
-------------------------------------------------
The graph reflects an initial investment of $10,000 over a 10 year period and is
based on Class A shares at net asset value. The Fund's maximum sales charge is
5.75%. The Fund's total return includes reinvested dividends and capital gains.
The Fund's total return also includes operating expenses that reduce return,
while the total return of the index does not. The graph does not reflect the
deduction of taxes that a shareholder would pay on fund distributions or
redemption of fund shares. Performance data quoted represents past performance.
Past performance is no guarantee of future results. 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 may be lower or higher than performance quoted. Performance of other
classes will vary due to differences in fee structures.
11
================================================================================
FINANCIAL STATEMENTS
================================================================================
Statement of Assets and Liabilities
- --------------------------------------------------------------------------------
APRIL 30, 2004
TAMARACK LARGE CAP TAMARACK MID CAP TAMARACK SMALL CAP
EQUITY FUND EQUITY FUND EQUITY FUND
----------- ----------- -----------
ASSETS:
Investments, at value $229,473,415 $139,953,647 $21,599,730
(cost $208,983,617;
$134,743,938; and
$17,219,802, respectively)
Cash -- -- 15,938
Interest and dividends receivable 66,283 9,644 490
Receivable for capital shares issued 12,572 41,715 23,230
Receivable for investments sold 3,300,249 4,979,069 --
------------ ------------ -----------
Total Assets 232,852,519 144,984,075 21,639,388
------------ ------------ -----------
LIABILITIES:
Payable for capital shares redeemed 268,394 209,146 1,052
Payable for investments purchased 2,253,423 4,392,863 --
Accrued expenses and other payables:
Investment advisory fees 202,783 77,695 13,042
Administration fees 20,593 15,675 2,427
Distribution fees 2,307 15,742 1,596
Other 42,994 73,667 27,855
------------ ------------ -----------
Total Liabilities 2,790,494 4,784,788 45,972
------------ ------------ -----------
Net Assets $230,062,025 $140,199,287 $21,593,416
============ ============ ===========
NET ASSETS CONSIST OF:
Capital 269,805,105 120,400,011 17,260,536
Undistributed net investment income -- -- --
Accumulated net realized gains (60,232,878) 14,589,567 (47,048)
(losses) from investment
transactions
Net unrealized appreciation on 20,489,798 5,209,709 4,379,928
investments ------------ ------------ -----------
Net Assets $230,062,025 $140,199,287 $21,593,416
============ ============ ===========
NET ASSETS:
Class A $ 10,864,390 $ 74,150,209 $ 7,487,692
Class I 28,454,280 66,038,917 14,094,266
Class C 3,193 2,941 3,169
Class R 3,193 2,942 5,119
Class S 190,736,969 4,278 3,170
------------ ------------ -----------
Total $230,062,025 $140,199,287 $21,593,416
============ ============ ===========
SHARES OUTSTANDING:
Class A 1,083,902 6,095,139 567,519
Class I 2,814,162 5,322,958 1,051,834
Class C 319 242 240
Class R 319 242 388
Class S 18,864,319 345 237
------------ ------------ -----------
Total 22,763,021 11,418,926 1,620,218
============ ============ ===========
NET ASSET VALUES:
Class A (a) $10.02 $12.17 $13.19
============ ============ ===========
Class I $10.11 $12.41 $13.40
============ ============ ===========
Class C (b) $10.02 $12.16 $13.19
============ ============ ===========
Class R $10.02 $12.17 $13.19
============ ============ ===========
Class S $10.11 $12.41 $13.40
============ ============ ===========
12
================================================================================
FINANCIAL STATEMENTS
================================================================================
Statement of Assets and Liabilities (cont.)
- --------------------------------------------------------------------------------
TAMARACK LARGE CAP TAMARACK MID CAP TAMARACK SMALL CAP
EQUITY FUND EQUITY FUND EQUITY FUND
----------- ----------- -----------
MAXIMUM OFFERING PRICE PER SHARE:
(100%/100%-maximum sales charge
of net asset value adjusted to the nearest cent):
Class A $10.63 $12.91 $13.99
============ ============ ===========
Maximum Sales Charge - Class A 5.75% 5.75% 5.75%
============ ============ ===========
(a) For Class A shares, the redemption price per share is reduced by 1.00% for
sales of shares within 12 months of purchase (only applicable on purchases
of $1 million or more).
(b) For Class C shares, the redemption price per share is reduced by 1.00% for
sales of shares within 12 months of purchase.
SEE NOTES TO FINANCIAL STATEMENTS.
13
================================================================================
FINANCIAL STATEMENTS
================================================================================
Statement of Operations
- --------------------------------------------------------------------------------
FOR THE YEAR ENDED
APRIL 30, 2004
TAMARACK LARGE CAP TAMARACK MID CAP TAMARACK SMALL CAP
EQUITY FUND EQUITY FUND EQUITY FUND
----------- ----------- -----------
INVESTMENT INCOME:
Dividend income $ 341,363 $ 991,701 $ 71,078
----------- ----------- ----------
Total Investment Income 341,363 991,701 71,078
----------- ----------- ----------
EXPENSES:
Investment advisory fees 405,878 1,105,965 154,577
Administration fees 71,143 234,616 32,756
Distribution fees - Class A 42,594 312,516 27,348
Distribution fees - Class B 19,644 61,859 21,759
Distribution fees - Class C 1 1 1
Distribution fees - Class R -- -- 1
Accounting fees 27,944 52,037 32,164
Custodian fees 4,081 11,562 7,848
Insurance fees 5,119 17,303 2,693
Legal and Audit fees 17,846 108,375 25,438
Registration and filing fees 23,447 41,378 30,526
Shareholder reports 2,785 34,796 6,665
Transfer agent fees 57,404 179,443 43,442
Directors' fees 1,258 9,925 1,337
Other fees 7,090 23,849 4,947
----------- ----------- ----------
Total expenses before 686,234 2,193,625 391,502
voluntary fee reductions
Expenses voluntarily reduced by:
Advisor (5,873) (14,066) --
Distributor (21,297) (156,257) (13,674)
----------- ----------- ----------
Net Expenses 659,064 2,023,302 377,828
----------- ----------- ----------
NET INVESTMENT LOSS (317,701) (1,031,601) (306,750)
----------- ----------- ----------
REALIZED/UNREALIZED GAINS (LOSSES) FROM INVESTMENTS:
Net realized gains (losses) from 39,611,296 27,704,759 3,625,637
investment transactions and
other dispositions
Change in unrealized appreciation (35,261,897) 14,143,726 2,579,437
(depreciation) on investments ----------- ----------- ----------
Net realized/unrealized gains 4,349,399 41,848,485 6,205,074
from investments ----------- ----------- ----------
Change in net assets resulting (4,031,698) $40,816,884 $5,898,324
from operations ========== =========== ==========
SEE NOTES TO FINANCIAL STATEMENTS.
14
================================================================================
FINANCIAL STATEMENTS
================================================================================
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
TAMARACK LARGE CAP
EQUITY FUND
FOR THE YEAR ENDED FOR THE YEAR ENDED
APRIL 30, 2004 APRIL 30, 2003
-------------- --------------
FROM INVESTMENT ACTIVITIES:
Operations:
Net investment income (loss) $ (317,701) $ 60,119
Net realized gains (losses) from investment transactions and 39,611,296 (27,566,941)
other dispositions
Net realized losses from futures contracts -- --
Change in unrealized appreciation (depreciation) on investments (35,261,897) 16,236,068
------------ ------------
Change in net assets from operations 4,031,698 (11,270,754)
------------ ------------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income -- (7,430)
From net realized gains from investment transactions and -- --
futures contracts
DISTRIBUTIONS TO CLASS B SHAREHOLDERS:
From net investment income -- (84)
From net realized gains from investment transactions and -- --
futures contracts
DISTRIBUTIONS TO CLASS I SHAREHOLDERS:
From net investment income -- (102,196)
From net realized gains from investment transactions and -- --
futures contracts ------------ ------------
Change in net assets from shareholder distributions -- (109,710)
------------ ------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued 15,996,157 11,064,718
Proceeds from shares exchanged from Class B 1,987,261 --
Proceeds from shares issued in connection with merger 196,009,945 --
Dividends reinvested -- 42,295
Cost of shares redeemed (31,125,993) (32,862,438)
Cost of shares exchanged to Class A (1,987,261) --
------------ ------------
Change in net assets from capital transactions 180,880,109 (21,755,425)
------------ ------------
Net increase (decrease) in net assets 184,911,807 (33,135,889)
NET ASSETS:
Beginning of year 45,150,218 78,286,107
------------ ------------
End of year $230,062,025 $ 45,150,218
============ ============
SHARE TRANSACTIONS:
Issued 1,673,420 1,337,028
Issued in connection with exchange from Class B 202,575 --
Issued in connection with merger 18,955,270 --
Reinvested -- 4,865
Redeemed (3,262,576) (3,849,492)
Cost of shares exchanged to Class A (211,862) --
------------ ------------
Change in shares transactions 17,356,827 (2,507,599)
============ ============
SEE NOTES TO FINANCIAL STATEMENTS.
15
================================================================================
FINANCIAL STATEMENTS
================================================================================
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
TAMARACK MID CAP
EQUITY FUND
FOR THE YEAR ENDED FOR THE YEAR ENDED
APRIL 30, 2004 APRIL 30, 2003
-------------- --------------
FROM INVESTMENT ACTIVITIES:
Operations:
Net investment income (loss) $ (1,031,601) $ (398,291)
Net realized gains (losses) from investment transactions and 27,704,759 (11,194,364)
other dispositions
Net realized losses from futures contracts -- (964,999)
Change in unrealized appreciation (depreciation) on investments 14,143,726 (22,484,146)
------------ ------------
Change in net assets from operations 40,816,884 (35,041,800)
------------ ------------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income -- --
From net realized gains from investment transactions and -- (431,775)
futures contracts
DISTRIBUTIONS TO CLASS B SHAREHOLDERS:
From net investment income -- --
From net realized gains from investment transactions and -- (91,773)
futures contracts
DISTRIBUTIONS TO CLASS I SHAREHOLDERS:
From net investment income -- --
From net realized gains from investment transactions and -- (911,429)
futures contracts ------------ ------------
Change in net assets from shareholder distributions -- (1,434,977)
------------ ------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued 45,286,486 61,900,000
Proceeds from shares exchanged from Class B 6,045,653 --
Proceeds from shares issued in connection with merger -- --
Dividends reinvested -- 1,432,835
Cost of shares redeemed (96,598,044) (60,955,952)
Cost of shares exchanged to Class A (6,045,653) --
------------ ------------
Change in net assets from capital transactions (51,311,558) 2,376,883
------------ ------------
Net increase (decrease) in net assets (10,494,674) (34,099,894)
NET ASSETS:
Beginning of year 150,693,961 184,793,855
------------ ------------
End of year $140,199,287 $150,693,961
============ ============
SHARE TRANSACTIONS:
Issued 4,024,702 6,443,976
Issued in connection with exchange from Class B 506,336 --
Issued in connection with merger -- --
Reinvested -- 153,085
Redeemed (8,386,869) (6,461,774)
Cost of shares exchanged to Class A (551,611) --
------------ ------------
Change in shares transactions (4,407,442) (135,287)
============ ============
SEE NOTES TO FINANCIAL STATEMENTS.
16
================================================================================
FINANCIAL STATEMENTS
================================================================================
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
TAMARACK MID CAP
EQUITY FUND
FOR THE YEAR ENDED FOR THE YEAR ENDED
APRIL 30, 2004 APRIL 30, 2003
-------------- --------------
FROM INVESTMENT ACTIVITIES:
Operations:
Net investment income (loss) $ (306,750) $ (243,477)
Net realized gains (losses) from investment transactions and 3,625,637 (3,444,713)
other dispositions
Net realized losses from futures contracts -- --
Change in unrealized appreciation (depreciation) on investments 2,579,437 (1,538,562)
------------ ------------
Change in net assets from operations 5,898,324 (5,226,752)
------------ ------------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income -- --
From net realized gains from investment transactions and -- --
futures contracts
DISTRIBUTIONS TO CLASS B SHAREHOLDERS:
From net investment income -- --
From net realized gains from investment transactions and -- --
futures contracts
DISTRIBUTIONS TO CLASS I SHAREHOLDERS:
From net investment income -- --
From net realized gains from investment transactions and -- --
futures contracts ------------ ------------
Change in net assets from shareholder distributions -- --
CAPITAL TRANSACTIONS:
Proceeds from shares issued 10,720,002 11,572,346
Proceeds from shares exchanged from Class B 2,202,168 --
Proceeds from shares issued in connection with merger -- --
Dividends reinvested -- --
Cost of shares redeemed (18,175,934) (11,858,931)
Cost of shares exchanged to Class A (2,202,168) --
------------ ------------
Change in net assets from capital transactions (7,455,932) (286,585)
------------ ------------
Net increase (decrease) in net assets (1,557,608) (5,513,337)
NET ASSETS:
Beginning of year 23,151,024 28,664,361
------------ ------------
End of year $ 21,593,416 $ 23,151,024
============ ============
SHARE TRANSACTIONS:
Issued 845,646 1,151,705
Issued in connection with exchange from Class B 170,843 --
Issued in connection with merger -- --
Reinvested -- --
Redeemed (1,494,087) (1,195,656)
Cost of shares exchanged to Class A (181,547) --
------------ ------------
Change in shares transactions (659,145) (43,951)
============ ============
SEE NOTES TO FINANCIAL STATEMENTS.
17
================================================================================
FINANCIAL HIGHLIGHTS
================================================================================
Tamarack Large Cap Equity Fund
- --------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED APRIL 30
(EXCEPT AS NOTED)
CLASS A 2004 2003 2002 2001 2000
- ------- ----------- ----------- ----------- ----------- -----------
Net Asset Value, Beginning of Period $ 8.33 $ 9.87 $ 12.02 $ 15.56 $ 13.81
INVESTMENT ACTIVITIES:
Net Investment Income/(Loss) (0.07) -- (0.02) (0.04) (0.02)
Net Realized and Unrealized Gains/(Losses) 1.76 (1.53) (2.13) (2.55) 2.03
----------- ----------- ----------- ----------- -----------
Total From Investment Activities 1.69 (1.53) (2.15) (2.59) 2.01
DISTRIBUTIONS:
Net Investment Income -- (0.01) (a) -- (0.01)
Return of Capital -- -- (a) -- --
Net Realized Gains -- -- -- (0.95) (0.25)
----------- ----------- ----------- ----------- -----------
Total Distributions -- (0.01) -- (0.95) (0.26)
----------- ----------- ----------- ----------- -----------
Net Asset Value, End of Period $ 10.02 $ 8.33 $ 9.87 $ 12.02 $ 15.56
Total Return* 20.29% (15.53%) (17.87%) (17.24%) 14.63%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 10,864 $ 7,686 $ 9,906 $ 14,126 $ 19,044
Ratio of Expenses to Average Net Assets 1.54% 1.46% 1.34% 1.25% 1.25%
Ratio of Net Investment Income to (0.85%) (0.07%) (0.14%) (0.28%) (0.22%)
Average Net Assets
Ratio of Expenses to Average Net Assets** 1.79% 1.71% 1.59% 1.50% 1.50%
Portfolio Turnover*** 264% 90% 33% 31% 63%
CLASS I 2004 2003 2002 2001 2000
- ------- ----------- ----------- ----------- ----------- -----------
Net Asset Value, Beginning of Period $ 8.38 $ 9.92 $ 12.07 $ 15.57 $ 13.80
INVESTMENT ACTIVITIES:
Net Investment Income/(Loss) (0.07) 0.03 0.02 -- 0.01
Net Realized and Unrealized Gains/(Losses) 1.80 (1.55) (2.15) (2.55) 2.03
----------- ----------- ----------- ----------- -----------
Total From Investment Activities 1.73 (1.52) (2.13) (2.55) 2.04
DISTRIBUTIONS:
Net Investment Income -- (0.02) (0.01) (a) (0.02)
Return of Capital -- -- (0.01) -- --
Net Realized Gains -- -- -- (0.95) (0.25)
----------- ----------- ----------- ----------- -----------
Total Distributions -- (0.02) (0.02) (0.95) (0.27)
----------- ----------- ----------- ----------- -----------
Net Asset Value, End of Period $ 10.11 $ 8.38 $ 9.92 $ 12.07 $ 15.57
Total Return 20.64% (15.34%) (17.71%) (16.96%) 14.88%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 28,454 $ 35,379 $ 64,516 $ 149,839 $ 194,157
Ratio of Expenses to Average Net Assets 1.29% 1.21% 1.09% 1.00% 1.00%
Ratio of Net Investment Income to (0.60%) 0.20% 0.11% (0.03%) 0.09%
Average Net Assets
Ratio of Expenses to Average Net Assets** 1.29% (d) (d) (d) (d)
Portfolio Turnover*** 264% 90% 33% 31% 63%
* Excludes sales charge.
** During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratio would have been as indicated.
*** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Less than $0.01 per share.
(b) Not annualized.
(c) Annualized.
(d) There were no waivers or reimbursements during the period.
(e) For the period from April 19, 2004 (commencement of operations) to April 30,
2004.
SEE NOTES TO FINANCIAL STATEMENTS.
18
================================================================================
FINANCIAL HIGHLIGHTS
================================================================================
CLASS C(e) 2004 * Excludes sales charge.
- ---------- ---- ** During the period, certain fees were voluntarily
Net Asset Value, Beginning of Period $ 10.28 reduced. If such voluntary fee reductions had not
INVESTMENT ACTIVITIES: occurred, the ratio would have been as indicated.
Net Investment Income/(Loss) -- *** Portfolio turnover is calculated on the basis
Net Realized and Unrealized Gains/(Losses) (0.26) of the fund as a whole without distinguishing
Total From Investment Operations (0.26) between the classes of shares issued.
DISTRIBUTIONS:
Net Investment Income -- (a) Less than $0.01 per share.
Return of Capital (b) Not annualized.
Net Realized Gain -- (c) Annualized.
Total Distributions -- (d) There were no waivers or reimbursements during the
Net Asset Value, End of Period $ 10.02 period.
Total Return* (2.53%)(b) (e) For the period from April 19, 2004 (commencement
RATIOS/SUPPLEMENTAL DATA: of operations) to April 30, 2004.
Net Assets, End of Period (000's) $ 3
Ratio of Expenses to Average Net Assets 1.88%(c)
Ratio of Net Investment Income to (1.15%)(c) SEE NOTES TO FINANCIAL STATEMENTS.
Average Net Assets
Ratio of Expenses to Average Net Assets** (d)
Portfolio Turnover*** 264%
CLASS R(e) 2004
- ----------- ----
Net Asset Value, Beginning of Period $ 10.28
INVESTMENT ACTIVITIES:
Net Investment Income/(Loss) --
Net Realized and Unrealized Gains/(Losses) (0.26)
Total From Investment Operations (0.26)
DISTRIBUTIONS:
Net Investment Income --
Return of Capital
Net Realized Gain --
Total Distributions --
Net Asset Value, End of Period $ 10.02
Total Return (2.53%)(b)
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 3
Ratio of Expenses to Average Net Assets 1.32%(c)
Ratio of Net Investment Income to (0.63%)(c)
Average Net Assets
Ratio of Expenses to Average Net Assets** (d)
Portfolio Turnover*** 264%
CLASS S(e) 2004
- ----------- ----
Net Asset Value, Beginning of Period $ 10.37
INVESTMENT ACTIVITIES:
Net Investment Income/(Loss) --
Net Realized and Unrealized Gains/(Losses) (0.26)
Total From Investment Operations (0.26)
DISTRIBUTIONS:
Net Investment Income --
Return of Capital
Net Realized Gain --
Total Distributions --
Net Asset Value, End of Period $ 10.11
Total Return (2.51%)(b)
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $190,737
Ratio of Expenses to Average Net Assets 0.85%(c)
Ratio of Net Investment Income to (0.27%)(c)
Average Net Assets
Ratio of Expenses to Average Net Assets** (d)
Portfolio Turnover*** 264%
19
================================================================================
FINANCIAL HIGHLIGHTS
================================================================================
Tamarack Mid Cap Equity Fund
- --------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED APRIL 30
(EXCEPT AS NOTED)
CLASS A 2004 2003 2002 2001 2000
- ------- ----------- ----------- ----------- ----------- -----------
Net Asset Value, Beginning of Period $ 9.46 $ 11.73 $ 11.99 $ 14.02 $ 15.33
INVESTMENT ACTIVITIES:
Net Investment Income/(Loss) (0.08) (0.03) (0.01) 0.01 (0.02)
Net Realized and Unrealized Gains/(Losses) 2.79 (2.15) 0.67 0.98 2.69
----------- ----------- ----------- ----------- -----------
Total From Investment Activities 2.71 (2.18) 0.66 0.99 2.67
DISTRIBUTIONS:
Net Investment Income -- -- (0.01) (0.01) --
Net Realized Gains -- (0.09) (0.91) (3.01) (3.98)
----------- ----------- ----------- ----------- -----------
Total Distributions -- (0.09) (0.92) (3.02) (3.98)
----------- ----------- ----------- ----------- -----------
Net Asset Value, End of Period $ 12.17 $ 9.46 $ 11.73 $ 11.99 $ 14.02
Total Return* 28.65% (18.58%) 5.99% 5.92% 21.15%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 74,150 $ 48,806 $ 55,143 $ 28,312 $ 30,374
Ratio of Expenses to Average Net Assets 1.38% 1.40% 1.37% 1.31% 1.31%
Ratio of Net Investment Income to (0.78%) (0.37%) (0.22%) 0.09% (0.17%)
Average Net Assets
Ratio of Expenses to Average Net Assets** 1.64% 1.65% 1.62% 1.56% 1.56%
Portfolio Turnover*** 93% 28% 19% 66% 61%
CLASS I 2004 2003 2002 2001 2000
- ------- ----------- ----------- ----------- ----------- -----------
Net Asset Value, Beginning of Period $ 9.62 $ 11.91 $ 12.13 $ 14.14 $ 15.37
INVESTMENT ACTIVITIES:
Net Investment Income/(Loss) (0.08) (0.01) 0.01 0.04 0.01
Net Realized and Unrealized Gains/(Losses) 2.87 (2.19) 0.69 0.99 2.74
----------- ----------- ----------- ----------- -----------
Total From Investment Activities 2.79 (2.20) 0.70 1.03 2.75
DISTRIBUTIONS:
Net Investment Income -- -- (0.01) (0.03) (a)
Net Realized Gains -- (0.09) (0.91) (3.01) (3.98)
----------- ----------- ----------- ----------- -----------
Total Distributions -- (0.09) (0.92) (3.04) (3.98)
----------- ----------- ----------- ----------- -----------
Net Asset Value, End of Period $ 12.41 $ 9.62 $ 11.91 $ 12.13 $ 14.14
Total Return 29.00% (18.46%) 6.34% 6.17% 21.67%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 66,039 $ 94,472 $ 115,032 $ 120,842 $ 84,905
Ratio of Expenses to Average Net Assets 1.15% 1.15% 1.12% 1.06% 1.06%
Ratio of Net Investment Income to (0.50%) (0.12%) 0.10% 0.35% 0.10%
Average Net Assets
Ratio of Expenses to Average Net Assets** 1.16% (d) (d) (d) (d)
Portfolio Turnover*** 93% 28% 19% 66% 61%
* Excludes sales charge.
** During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratio would have been as indicated.
*** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Less than $0.01 per share.
(b) Not annualized.
(c) Annualized.
(d) There were no waivers or reimbursements during the period.
(e) For the period from April 19, 2004 (commencement of operations) to April 30,
2004.
SEE NOTES TO FINANCIAL STATEMENTS.
20
================================================================================
FINANCIAL HIGHLIGHTS
================================================================================
CLASS C(e) 2004 * Excludes sales charge.
- ---------- ---- ** During the period, certain fees were voluntarily
Net Asset Value, Beginning of Period $ 12.51 reduced. If such voluntary fee reductions had not
INVESTMENT ACTIVITIES: occurred, the ratio would have been as indicated.
Net Investment Income/(Loss) -- *** Portfolio turnover is calculated on the basis
Net Realized and Unrealized Gains/(Losses) (0.35) of the fund as a whole without distinguishing
Total From Investment Operations (0.35) between the classes of shares issued.
DISTRIBUTIONS:
Net Investment Income --
Net Realized Gain -- (a) Less than $0.01 per share.
Total Distributions -- (b) Not annualized.
Net Asset Value, End of Period $ 12.16 (c) Annualized.
Total Return* (2.80%)(b) (d) There were no waivers or reimbursements during
RATIOS/SUPPLEMENTAL DATA: the period.
Net Assets, End of Period (000's) $ 3 (e) For the period from April 19, 2004 (commencement
Ratio of Expenses to Average Net Assets 1.28%(c) of operations) to April 30, 2004.
Ratio of Net Investment Income to (1.01%)(c)
Average Net Assets SEE NOTES TO FINANCIAL STATEMENTS.
Ratio of Expenses to Average Net Assets** (d)
Portfolio Turnover*** 93%
CLASS R(e) 2004
- ----------- ----
Net Asset Value, Beginning of Period $ 12.51
INVESTMENT ACTIVITIES:
Net Investment Income/(Loss) --
Net Realized and Unrealized Gains/(Losses) (0.34)
Total From Investment Operations (0.34)
DISTRIBUTIONS:
Net Investment Income --
Net Realized Gain --
Total Distributions --
Net Asset Value, End of Period $ 12.17
Total Return (2.72%)(b)
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 3
Ratio of Expenses to Average Net Assets 0.79%(c)
Ratio of Net Investment Income to (0.56%)(c)
Average Net Assets
Ratio of Expenses to Average Net Assets** (d)
Portfolio Turnover*** 93%
CLASS S(e) 2004
- ----------- ----
Net Asset Value, Beginning of Period $ 12.76
INVESTMENT ACTIVITIES:
Net Investment Income/(Loss) --
Net Realized and Unrealized Gains/(Losses) (0.35)
Total From Investment Operations (0.35)
DISTRIBUTIONS:
Net Investment Income --
Net Realized Gain --
Total Distributions --
Net Asset Value, End of Period $12.41
Total Return (2.74%)(b)
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 4
Ratio of Expenses to Average Net Assets 0.25%(c)
Ratio of Net Investment Income to (0.06%)(c)
Average Net Assets
Ratio of Expenses to Average Net Assets** (d)
Portfolio Turnover*** 93%
21
================================================================================
FINANCIAL HIGHLIGHTS
================================================================================
Tamarack Mid Cap Equity Fund
- --------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED APRIL 30
(EXCEPT AS NOTED)
CLASS A 2004 2003 2002 2001 2000
- ------- ----------- ----------- ----------- ----------- -----------
Net Asset Value, Beginning of Period $ 10.11 $ 12.32 $ 11.56 $ 12.50 $ 12.69
INVESTMENT ACTIVITIES:
Net Investment Income/(Loss) (0.15) (0.12) (0.11) (0.11) (0.09)
Net Realized and Unrealized Gains/(Losses) 3.23 (2.09) 1.04 0.08 2.31
Total From Investment Activities 3.08 (2.21) 0.93 (0.03) 2.22
DISTRIBUTIONS:
Net Investment Income -- -- -- -- --
Net Realized Gains -- -- (0.17) (0.91) (2.41)
----------- ----------- ----------- ----------- -----------
Total Distributions -- -- (0.17) (0.91) (2.41)
----------- ----------- ----------- ----------- -----------
Net Asset Value, End of Period $ 13.19 $ 10.11 $ 12.32 $ 11.56 $ 12.50
Total Return* 30.46% (17.94%) 8.17% (0.43%) 19.97%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 7,488 $ 4,359 $ 6,069 $ 5,870 $ 6,881
Ratio of Expenses to Average Net Assets 1.81% 1.70% 1.61% 1.49% 1.46%
Ratio of Net Investment Income to (1.52%) (1.12%) (0.99%) (0.85%) (0.80%)
Average Net Assets
Ratio of Expenses to Average Net Assets** 2.06% 1.95% 1.86% 1.74% 1.71%
Portfolio Turnover*** 40% 120% 31% 71% 258%
CLASS I 2004 2003 2002 2001 2000
- ------- ----------- ----------- ----------- ----------- -----------
Net Asset Value, Beginning of Period $ 10.25 $ 12.45 $ 11.66 $ 12.57 $ 12.72
INVESTMENT ACTIVITIES:
Net Investment Income/(Loss) (0.17) (0.09) (0.07) (0.06) (0.07)
Net Realized and Unrealized Gains/(Losses) 3.32 (2.11) 1.03 0.06 2.33
Total From Investment Activities 3.15 (2.20) 0.96 -- 2.26
DISTRIBUTIONS:
Net Investment Income -- -- -- -- --
Net Realized Gains -- -- (0.17) (0.91) (2.41)
----------- ----------- ----------- ----------- -----------
Total Distributions -- -- (0.17) (0.91) (2.41)
----------- ----------- ----------- ----------- -----------
Net Asset Value, End of Period $ 13.40 $ 10.25 $ 12.45 $ 11.66 $ 12.57
Total Return 30.73% (17.67%) 8.36% (0.17%) 20.24%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 14,094 $ 16,621 $ 19,113 $ 22,877 $ 20,645
Ratio of Expenses to Average Net Assets 1.55% 1.45% 1.36% 1.24% 1.21%
Ratio of Net Investment Income to (1.23%) (0.87%) (0.72%) (0.60%) (0.51%)
Average Net Assets
Ratio of Expenses to Average Net Assets** (c) (c) (c) (c) (c)
Portfolio Turnover*** 40% 120% 31% 71% 258%
* Excludes sales charge.
** During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratio would have been as indicated.
*** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Not annualized.
(b) Annualized.
(c) There were no waivers or reimbursements during the period.
(d) For the period from April 19, 2004 (commencement of operations) to April 30,
2004.
SEE NOTES TO FINANCIAL STATEMENTS.
22
================================================================================
FINANCIAL HIGHLIGHTS
================================================================================
CLASS C(d) 2004 * Excludes sales charge.
- ---------- ---- ** During the period, certain fees were voluntarily
Net Asset Value, Beginning of Period $ 13.63 reduced. If such voluntary fee reductions had not
INVESTMENT ACTIVITIES: occurred, the ratio would have been as indicated.
Net Investment Income/(Loss) (0.02) *** Portfolio turnover is calculated on the basis
Net Realized and Unrealized Gains/(Losses) (0.42) of the fund as a whole without distinguishing
Total From Investment Operations (0.44) between the classes of shares issued.
DISTRIBUTIONS:
Net Investment Income -- (a) Not annualized.
Net Realized Gain -- (b) Annualized.
Total Distributions -- (c) There were no waivers or reimbursements during
Net Asset Value, End of Period $ 13.19 the period.
Total Return* (3.23%)(a) (d) For the period from April 19, 2004 (commencement
RATIOS/SUPPLEMENTAL DATA: of operations) to April 30, 2004.
Net Assets, End of Period (000's) $ 3
Ratio of Expenses to Average Net Assets 2.49%(b) SEE NOTES TO FINANCIAL STATEMENTS.
Ratio of Net Investment Income to (5.27%)(b)
Average Net Assets
Ratio of Expenses to Average Net Assets** (c)
Portfolio Turnover*** 40%
CLASS R(d) 2004
- ---------- ----
Net Asset Value, Beginning of Period $ 13.63
INVESTMENT ACTIVITIES:
Net Investment Income/(Loss) (0.02)
Net Realized and Unrealized Gains/(Losses) (0.42)
Total From Investment Operations (0.44)
DISTRIBUTIONS:
Net Investment Income --
Net Realized Gain --
Total Distributions --
Net Asset Value, End of Period $ 13.19
Total Return (3.23%)(a)
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 5
Ratio of Expenses to Average Net Assets 1.94% (b)
Ratio of Net Investment Income to (5.14%) (b)
Average Net Assets
Ratio of Expenses to Average Net Assets** (c)
Portfolio Turnover*** 40%
CLASS S(d) 2004
- ---------- ----
Net Asset Value, Beginning of Period $ 13.84
INVESTMENT ACTIVITIES:
Net Investment Income/(Loss) (0.02)
Net Realized and Unrealized Gains/(Losses) (0.42)
Total From Investment Operations (0.44)
DISTRIBUTIONS:
Net Investment Income --
Net Realized Gain --
Total Distributions --
Net Asset Value, End of Period $ 13.40
Total Return (3.18%)(a)
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 3
Ratio of Expenses to Average Net Assets 1.47%(b)
Ratio of Net Investment Income to (4.34%)(b)
Average Net Assets
Ratio of Expenses to Average Net Assets** (c)
Portfolio Turnover*** 40%
23
================================================================================
NOTES TO FINANCIAL STATEMENTS
================================================================================
April 30, 2004
- --------------------------------------------------------------------------------
1. ORGANIZATION
Tamarack Funds Trust ("Tamarack") is registered under the Investment Company Act
of 1940 as an open-end management investment company. Tamarack was organized as
a Delaware statutory trust on December 16, 2003. Effective April 16, 2004, and
based on the approval of shareholders, seventeen separate investment portfolios
were reorganized as separate investment portfolios of Tamarack. This annual
report includes the following three investment portfolios ("Funds"):
- - Tamarack Large Cap Equity Fund ("Large Cap Equity Fund")
(formerly RBC Large Cap Equity Fund)
- - Tamarack Mid Cap Equity Fund ("Mid Cap Equity Fund")
(formerly RBC Mid Cap Equity Fund)
- - Tamarack Small Cap Equity Fund ("Small Cap Equity Fund")
(formerly RBC Small Cap Equity Fund)
Each of the Funds offers five share classes: Class A, Class C, Class R, Class I
and Class S shares. Class A shares are offered with a 5.75% maximum front-end
sales charge. Class C shares are offered at net asset value (i.e., no front-end
sales charge) but are subject to a contingent deferred sales charge ("CDSC") of
1.00% for redemptions within 12 months of purchase. Class R shares are not
subject to either a front-end sales charge or CDSC. Class S and Class I shares
are closed to new investors.
Voyageur Asset Management Inc. acts as the investment advisor for the Tamarack
Funds. The officers of the Tamarack Funds ("Fund Management") are also employees
of Voyageur.
- --------------------------------------------------------------------------------
2. SIGNIFICANT ACCOUNTING
Summarized below are the significant accounting policies of the Funds. These
policies POLICIES conform to accounting principles generally accepted in the
United States of America ("GAAP"). Fund management follows these policies when
preparing financial statements. Management may also be required to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
income and expenses for the period. Actual results could differ from those
estimates.
SECURITY VALUATION:
The value of an equity security traded on one or more U.S. exchanges shall be
valued at the last available quoted sale price on the primary trading exchange
for the security as of the Value Time on the Value Date. If there was no sale on
the primary exchange on the Value Date, the last sale on a secondary exchange
shall be used. In cases where neither bid prices or closing sale prices are
available, Tamarack has established procedures to estimate a security's fair
value. These procedures are also used to estimate the fair value of a security
if a significant event occurs that materially affects the value of the security
or prices quoted by the exchange do not accurately reflect the value of the
security due to pricing changes after the U.S. markets have closed. This report
presents information as of April 30, 2004.
INVESTMENT TRANSACTIONS:
Security transactions are accounted for on the date the security is bought or
sold ("trade date"). Long-term investment transactions are recorded on a trade
date plus one basis, except for on the last day of the annual or semi-annual
financial reporting period, when they
24
================================================================================
NOTES TO FINANCIAL STATEMENTS
================================================================================
are recorded on trade date. Dividend income is recorded on the ex-dividend date.
Securities gains and losses are calculated based on the costs of the specific
security (also known as identified cost basis).
FUND EXPENSES:
Each Fund pays the expenses that are directly related to its operations, such as
trading costs or portfolio management fees. Expenses incurred by Tamarack on
behalf of multiple Funds, such as audit or legal fees, are allocated
proportionately among each of the Funds based either on the Funds' net assets or
on another reasonable basis such as equally across all Funds, depending on the
nature of the expense. Individual share classes within a Fund are charged
expenses specific to that class, such as sales and distribution fees.
FINANCIAL INSTRUMENTS:
FUTURES CONTRACTS - The Funds may enter into futures contracts in an effort to
hedge against market risks. A futures contract on a securities index is an
agreement obligating either party to pay, and entitling the other party to
receive, during the term of the contract, cash payments based on the level of a
specified securities index. Put and call options on futures contracts would give
the Fund the right (but not the obligation) to sell or to purchase for a
specified price the underlying futures contract at any time during the option
period. Futures transactions involve brokerage costs and require the Fund to
segregate assets to cover contracts that would require it to purchase securities
or currencies. A Fund may lose the expected benefit of futures transactions if
interest rates, exchange rates or securities prices change in an unanticipated
manner. However, such unanticipated changes may also result in lower overall
performance than if the Fund had not entered into any futures transactions.
Upon entering into a futures contract, a Fund is required to pledge to the
broker an amount of cash, U.S. government securities, or other assets, equal to
a certain percentage of the contract amount. Subsequent payments are made or
received by the Fund each day, depending on the daily fluctuations in fair value
of the underlying index. The Funds recognize a gain or loss each day equal to
the income received or paid. The Funds did not enter into futures contracts
during the fiscal year ended April 30, 2004.
DISTRIBUTIONS TO SHAREHOLDERS:
Each of the Funds pays out any income that it receives, less expenses, in the
form of dividends to its shareholders. Income dividends and capital gains on
each Fund are declared and paid at least annually. Distributions to shareholders
are recorded on the ex-dividend date. The amount of dividends and distributions
are calculated based on federal income tax regulations, which may differ from
GAAP. These "book/tax" differences may be either temporary or permanent in
nature. To the extent these differences are permanent in nature, they are
reclassified within a Fund's capital accounts based on their federal tax basis
treatment.
- --------------------------------------------------------------------------------
3. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
Tamarack, on behalf of Large Cap Equity Fund, Mid Cap Equity Fund and Small Cap
Equity Fund, has entered into an investment advisory agreement with Voyageur
under which Voyageur manages each Fund's assets and furnishes related office
facilities, equipment, research and personnel. The agreement requires each Fund
to pay Voyageur a monthly fee based upon average daily net assets. Under the
terms of the advisory contracts, Voyageur is entitled to receive fees based on a
percentage of the average daily net assets of each of the Funds as follows:
25
================================================================================
NOTES TO FINANCIAL STATEMENTS
================================================================================
Annual Rate
-----------
Large Cap Equity Fund 0.70%
Mid Cap Equity Fund 0.70%
Small Cap Equity Fund 0.70%
Voyageur has contractually agreed to waive fees and/or make payments in order to
keep total operating expenses of the Class S shares of Large Cap Equity Fund to
0.85%. This expense limitation agreement is in place until May 1, 2005. Voyageur
may also voluntarily waive and/or reimburse operating expenses of any Fund from
time to time. Any such voluntary program may be changed or eliminated at any
time without notice.
Voyageur serves as administrator to the Funds and BISYS Fund Services Limited
Partnership ("BISYS") serves as sub-administrator and fund accounting agent.
Services provided under the administrative services contract include providing
day-to-day administration of matters related to the corporate existence of the
Fund, maintenance of its records and the preparation of reports. Effective April
16, 2004 and under the terms of the administrative services contract, Voyageur
receives from each Fund a fee, payable monthly, at the annual rate of 0.10% of
each Fund's average daily net assets. For its services as sub-administrator,
BISYS receives a fee payable by Voyageur out of Voyageur's own resources. Prior
to April 16, 2004 the Funds paid BISYS an administrative fee equal to an annual
rate of 0.15%.
- --------------------------------------------------------------------------------
4. FUND DISTRIBUTION
Each of the Funds has adopted a Master Distribution 12b-1 Plan (the "Plan") in
which Tamarack Distributors Inc. (the "Distributor") acts as the Funds'
distributor. The Distributor is an affiliate of Voyageur. The Plan permits each
Fund to make payments for, or to reimburse the Distributor monthly for,
distribution-related costs and expenses of marketing shares of each share class
covered under the Plan. The following chart shows the maximum Plan fee rate for
each class.
Class A Class C Class R
------- ------- -------
12b-1 Plan Fee 0.50%* 1.00% 0.50%
Plan fees are based on average annual daily net assets of the applicable class.
The Distributor, subject to applicable legal requirements, may waive a Plan fee
voluntarily, in whole or in part.
*The Distributor is currently voluntarily waiving 0.25% of the Plan fee for
Class A. These voluntary waivers will continue until at least March 31, 2005.
On March 24, 2004, all Class B shares of the predecessor funds to Large Cap
Equity Fund, Mid Cap Equity Fund, and Small Cap Equity Fund were converted into
Class A shares of the predecessor funds. During the fiscal year ended April 30,
2004, the distributor of the predecessor funds (Centura Funds Distributor, Inc.,
an affiliate of BISYS) received the proceeds of any CDSC imposed on redemptions
of Class B shares of the predecessor funds. The following is a summary of the
dealer commissions paid to Centura Funds Distributor, Inc. and reallocated to
RBC Centura Securities, Inc. and RBC Dain Rauscher Inc. (both affiliates of
Voyageur) for Class B shares of the predecessor funds for the year ended April
30, 2004.
RBC Centura RBC Dain
Distributor Securities, Inc. Rauscher Inc.
----------- ---------------- -------------
Large Cap Equity Fund $16 $1,063 $427
Mid Cap Equity Fund 19 1,044 1,297
26 Small Cap Equity Fund 62 382 155
26
================================================================================
NOTES TO FINANCIAL STATEMENTS
================================================================================
- --------------------------------------------------------------------------------
5. SECURITIES TRANSACTIONS
The cost of securities purchased and proceeds from securities sold (excluding
short-term securities) for the year ended April 30, 2004 were as follows:
Purchases Sales
--------- -----
Large Cap Equity Fund $149,503,332 $163,958,051
Mid Cap Equity Fund $139,093,094 $182,831,156
Small Cap Equity Fund $ 8,512,041 $ 15,942,850
- --------------------------------------------------------------------------------
6. CAPITAL SHARE TRANSACTIONS
Tamarack is authorized to issue an unlimited number of shares of beneficial
interest without par value. Transactions in shares of the Large Cap Equity Fund,
Mid Cap Equity Fund and Small Cap Equity Fund are summarized below:
TAMARACK LARGE CAP EQUITY FUND
FOR THE YEAR ENDED FOR THE YEAR ENDED
APRIL 30, 2004 APRIL 30, 2003
-------------- --------------
CAPITAL TRANSACTIONS:
CLASS A
Proceeds from shares issued $ 2,160,504 $ 1,538,621
Proceeds from shares exchanged from Class B 1,987,261 --
Dividends reinvested -- 7,313
Cost of shares redeemed (2,533,741) (2,281,945)
------------- -------------
Change in Class A $ 1,614,024 $ (736,011)
------------- -------------
CLASS B
Proceeds from shares issued $ 18,891 $ 9,035
Dividends reinvested -- 83
Cost of shares redeemed (463,535) (1,176,765)
Cost of shares exchanged to Class A (1,987,261) --
------------- -------------
Change in Class B $ (2,431,905) $ (1,167,647)
------------- -------------
CLASS I
Proceeds from shares issued $ 13,734,446 $ 9,517,062
Dividends reinvested -- 34,899
Cost of shares redeemed (27,086,490) (29,403,728)
------------- -------------
Change in Class I $ (13,352,044) $ (19,851,767)
------------- -------------
CLASS C
Proceeds from shares issued $ 3,275 $ --
Dividends reinvested -- --
Cost of shares redeemed -- --
------------- -------------
Change in Class C $ 3,275 $ --
------------- -------------
CLASS R
Proceeds from shares issued $ 3,275 $ --
Dividends reinvested -- --
Cost of shares redeemed -- --
------------- -------------
Change in Class R $ 3,275 $ --
------------- -------------
CLASS S
Proceeds from shares issued $ 75,766 $ --
Proceeds from shares issued in connection with merger 196,009,945 --
Dividends reinvested -- --
Cost of shares redeemed (1,042,227) --
------------- -------------
Change in Class S $ 195,043,484 $ --
------------- -------------
Net change from capital transactions $ 180,880,109 $ (21,755,425)
============= =============
SHARE TRANSACTIONS:
CLASS A
Issued 225,968 185,996
Issued in connection with exchange from Class B 202,575 --
27
================================================================================
NOTES TO FINANCIAL STATEMENTS
================================================================================
FOR THE YEAR ENDED FOR THE YEAR ENDED
APRIL 30, 2004 APRIL 30, 2003
-------------- --------------
Reinvested -- 840
Redeemed (267,598) (267,940)
------------- -------------
Change in Class A 160,945 (81,104)
------------- -------------
CLASS B
Issued 11,459 897
Reinvested -- 10
Redeemed (59,888) (144,837)
Cost of shares exchanged to Class A (211,862) --
------------- -------------
Change in Class B (260,291) (143,930)
------------- -------------
CLASS I
Issued 1,429,324 1,150,135
Reinvested -- 4,015
Redeemed (2,838,108) (3,436,715)
------------- -------------
Change in Class I (1,408,784) (2,282,565)
------------- -------------
CLASS C
Issued 319 --
Reinvested -- --
Redeemed -- --
------------- -------------
Change in Class C 319 --
------------- -------------
CLASS R
Issued 319 --
Reinvested -- --
Redeemed -- --
------------- -------------
Change in Class R 319 --
------------- -------------
CLASS S
Issued 6,031 --
Issued in connection with merger 18,955,270 --
Reinvested -- --
Redeemed (96,982) --
------------- -------------
Change in Class S 18,864,319 --
------------- -------------
Net change from share transactions 17,356,827 (2,507,599)
============= =============
TAMARACK MID CAP EQUITY FUND
FOR THE YEAR ENDED FOR THE YEAR ENDED
APRIL 30, 2004 APRIL 30, 2003
-------------- --------------
CAPITAL TRANSACTIONS:
CLASS A
Proceeds from shares issued $ 23,573,624 $ 16,476,708
Proceeds from shares exchanged from Class B 6,045,653 --
Dividends reinvested -- 431,044
Cost of shares redeemed (18,710,085) (12,374,155)
------------- -------------
Change in Class A $ 10,909,192 $ 4,533,597
------------- -------------
CLASS B
Proceeds from shares issued $ 20,658 $ 101,052
Dividends reinvested -- 90,507
Cost of shares redeemed (3,028,018) (4,386,652)
Cost of shares exchanged to Class A (6,045,653) --
------------- -------------
Change in Class B $ (9,053,013) $ (4,195,093)
------------- -------------
CLASS I
Proceeds from shares issued $ 21,681,784 $ 45,322,240
Dividends reinvested -- 911,284
Cost of shares redeemed (74,859,941) (44,195,145)
------------- -------------
Change in Class I $(53,178,157) $ 2,038,379
------------- -------------
28
================================================================================
NOTES TO FINANCIAL STATEMENTS
================================================================================
FOR THE YEAR ENDED FOR THE YEAR ENDED
APRIL 30, 2004 APRIL 30, 2003
-------------- --------------
CLASS C
Proceeds from shares issued $ 3,025 $ --
Dividends reinvested -- --
Cost of shares redeemed -- --
------------- -------------
Change in Class C $ 3,025 $ --
------------- -------------
CLASS R
Proceeds from shares issued $ 3,025 $ --
Dividends reinvested -- --
Cost of shares redeemed -- --
------------- -------------
Change in Class R $ 3,025 $ --
------------- -------------
CLASS S
Proceeds from shares issued $ 4,370 $ --
Proceeds from shares issued in connection with merger -- --
Dividends reinvested -- --
Cost of shares redeemed -- --
------------- -------------
Change in Class S $ 4,370 $ --
------------- -------------
Net change from capital transactions $(51,311,558) $ 2,376,883
============= =============
SHARE TRANSACTIONS:
CLASS A
Issued 2,096,445 1,732,854
Issued in connection with exchange from Class B 506,336 --
Reinvested -- 46,444
Redeemed (1,668,623) (1,317,376)
------------- -------------
Change in Class A 934,158 461,922
------------- -------------
CLASS B
Issued 47,063 10,344
Reinvested -- 10,494
Redeemed (343,358) (507,839)
Cost of shares exchanged to Class A (551,611) --
------------- -------------
Change in Class B (847,906) (487,001)
------------- -------------
CLASS I
Issued 1,880,365 4,700,778
Reinvested -- 96,147
Redeemed (6,374,888) (4,636,559)
------------- -------------
Change in Class I (4,494,523) 160,366
------------- -------------
CLASS C
Issued 242 --
Reinvested -- --
Redeemed -- --
------------- -------------
Change in Class C 242 --
------------- -------------
CLASS R
Issued 242 --
Reinvested -- --
Redeemed -- --
------------- -------------
Change in Class R 242 --
------------- -------------
CLASS S
Issued 345 --
Issued in connection with merger -- --
Reinvested -- --
Redeemed -- --
------------- -------------
Change in Class S 345 --
------------- -------------
Net change from share transactions (4,407,442) 135,287
============= =============
29
================================================================================
NOTES TO FINANCIAL STATEMENTS
================================================================================
TAMARACK SMALL CAP EQUITY FUND
FOR THE YEAR ENDED FOR THE YEAR ENDED
APRIL 30, 2004 APRIL 30, 2003
-------------- --------------
CAPITAL TRANSACTIONS:
CLASS A
Proceeds from shares issued $ 2,106,017 $ 1,636,622
Proceeds from shares exchanged from Class B 2,202,168 --
Dividends reinvested -- --
Cost of shares redeemed (2,597,589) (2,189,243)
------------ ------------
Change in Class A $ 1,710,596 $ (552,621)
------------ ------------
CLASS B
Proceeds from shares issued $ 3,067 $ 60,044
Dividends reinvested -- --
Cost of shares redeemed (540,799) (726,987)
Cost of shares exchanged to Class A (2,202,168) --
------------ ------------
Change in Class B $ (2,739,900) $ (666,943)
------------ ------------
CLASS I
Proceeds from shares issued $ 8,599,093 $ 9,875,680
Dividends reinvested -- --
Cost of shares redeemed (15,037,546) (8,942,701)
------------ ------------
Change in Class I $ (6,438,453) $ 932,979
------------ ------------
CLASS C
Proceeds from shares issued $ 3,275 $ --
Dividends reinvested -- --
Cost of shares redeemed -- --
------------ ------------
Change in Class C $ 3,275 $ --
------------ ------------
CLASS R
Proceeds from shares issued $ 5,275 $ --
Dividends reinvested -- --
Cost of shares redeemed -- --
------------ ------------
Change in Class R $ 5,275 $ --
------------ ------------
CLASS S
Proceeds from shares issued $ 3,275 $ --
Proceeds from shares issued in connection with merger -- --
Dividends reinvested -- --
Cost of shares redeemed -- --
Change in Class S $ 3,275 $ --
------------ ------------
Net change from capital transactions $ (7,455,932) $ (286,585)
============ ============
SHARE TRANSACTIONS:
CLASS A
Issued 169,571 161,020
Issued in connection with exchange from Class B 170,843 --
Reinvested -- --
Redeemed (203,991) (222,587)
------------ ------------
Change in Class A 136,423 (61,567)
------------ ------------
CLASS B
Issued 11,042 5,709
Reinvested -- --
Redeemed (55,956) (75,173)
Cost of shares exchanged to Class A (181,547) --
------------ ------------
Change in Class B (226,461) (69,464)
------------ ------------
CLASS I
Issued 664,168 984,976
Reinvested -- --
Redeemed (1,234,140) (897,896)
------------ ------------
Change in Class I (569,972) 87,080
------------ ------------
30
================================================================================
NOTES TO FINANCIAL STATEMENTS
================================================================================
FOR THE YEAR ENDED FOR THE YEAR ENDED
APRIL 30, 2004 APRIL 30, 2003
-------------- --------------
CLASS C
Issued 240 --
Reinvested -- --
Redeemed -- --
Change in Class C 240 --
CLASS R
Issued 388 --
Reinvested -- --
Redeemed -- --
Change in Class R 388 --
CLASS S
Issued 237 --
Issued in connection with merger -- --
Reinvested -- --
Redeemed -- --
Change in Class S 237 --
Net change from share transactions (659,145) (43,951)
- --------------------------------------------------------------------------------
7. FUND COMBINATIONS
At a special meeting of shareholders on April 8, 2004, the shareholders of the
David L. Babson Growth Fund, Inc. ("Babson Growth Fund") approved an agreement
and plan of reorganization regarding the combination of Babson Growth Fund into
RBC Large Cap Equity Fund. Effective April 16, 2004, through a tax-free
reorganization, the Babson Growth Fund transferred all of its assets to RBC
Large Cap Equity Fund, which also assumed all of Babson Growth Fund's
liabilities. Voyageur paid the costs associated with the reorganization. The
shareholders of Babson Growth Fund received 18,955,270 Class S shares ($10.34
per share) of RBC Large Cap Equity Fund, which had a total value of
$196,009,945, in exchange for their shares of Babson Growth Fund ($10.25 per
share), which also had a total value of $196,009,945. Babson Growth Fund
shareholders received 0.991 RBC Large Cap Equity Fund Class S shares for every
1.000 shares owned of Babson Growth Fund.
- --------------------------------------------------------------------------------
8. REORGANIZATION OF RBC FUNDS, INC.
On December 2, 2003, the Board of Directors of RBC Funds, Inc. approved an
agreement and plan of reorganization regarding the reorganization of each series
of RBC Funds, Inc. (including RBC Large Cap Equity Fund, RBC Mid Cap Equity Fund
and RBC Small Cap Equity Fund) as a series of Tamarack. At a special meeting of
shareholders on April 8, 2004, the shareholders of each of RBC Large Cap Equity
Fund, RBC Mid Cap Equity Fund and RBC Small Cap Equity Fund approved the
agreement and plan of reorganization with respect to each fund. Effective April
16, 2004, pursuant to that agreement and plan of reorganization, RBC Large Cap
Equity Fund, RBC Mid Cap Equity Fund and RBC Small Cap Equity Fund were
reorganized, through a tax-free reorganization, as separate series of Tamarack
(Large Cap Equity Fund, Mid Cap Equity Fund and Small Cap Equity Fund,
respectively).
- --------------------------------------------------------------------------------
9. FEDERAL INCOME TAXES
It is the policy of each Fund to qualify as a regulated investment company by
complying with the provisions available to certain investment companies, as
defined under Subchapter M of the Internal Revenue Code, and to distribute
substantially all of its net investment income and net realized capital gain.
Therefore, no federal tax liability is recorded in the financial statements of
each Fund.
31
================================================================================
NOTES TO FINANCIAL STATEMENTS
================================================================================
The tax cost of securities differ from financial reporting cost by the amount of
losses recognized for financial reporting purposes in excess of federal income
tax purposes. As of April 30, 2004, the tax cost of securities and the breakdown
of unrealized appreciation (depreciation) for each Fund were as follows:
Net Unrealized
Tax Cost Unrealized Unrealized Appreciation
of Securities Appreciation Depreciation (Depreciation)
------------- ------------ ------------- --------------
Large Cap Equity Fund $214,632,964 $ 24,271,257 ($3,781,459) $ 20,489,798
Mid Cap Equity Fund $134,743,938 $ 12,304,917 ($7,095,208) $ 5,209,709
Small Cap Equity Fund $ 17,313,745 $ 4,903,776 ($ 523,848) $ 4,379,928
As of April 30, 2004 the components of accumulated earnings/(deficit) on a tax
basis was as follows (amounts in thousands):
Large Cap Mid Cap Small Cap
Equity Fund Equity Fund Equity Fund
----------- ----------- -----------
Undistributed Ordinary Income $ -- $ -- $ --
Undistributed Long-Term Capital Gains -- 14,589,567 46,894
Accumulated Earnings -- 14,589,567 46,894
Distribution Payable -- -- --
Accumulated Capital and Other Losses (54,583,531) -- --
Unrealized Appreciation (Depreciation) 14,840,451 5,209,709 4,285,985
Total Accumulated Earnings (Deficit) (39,743,082) 19,799,276 4,332,879
As of April 30, 2004, the following Funds had net capital loss carryforwards and
deferred post-October losses to offset future net capital gains or net
investment income, if any:
Capital Loss Deferred Post-
Carryforward Expires October Losses
------------ ------- --------------
Large Cap Equity Fund $3,895,359 2011 $ --
As of the latest tax year end of April 30, 2004, the following fund had
additional net capital loss carryforwards, subject to certain limitations on
availability, to offset future net capital gains, if any, as the successor of a
merger. To the extent that these carryovers used to offset future capital gains,
it is probable that the gains so offset will not be distributed to shareholders:
Capital Loss
Carryforward Expires
------------ -------
Large Cap Equity Fund $36,107,652 2009
14,580,522 2010
- --------------------------------------------------------------------------------
10. DIVIDEND RECEIVED
DEDUCTION
For corporate shareholders no percentage of the total ordinary income
distributions paid during the tax year ended April 30, 2004, qualified for the
corporate dividend received deduction for the Funds.
- --------------------------------------------------------------------------------
11. CHANGE IN AUDITORS
On December 2, 2003, the Board of Directors of RBC Funds, Inc. selected Deloitte
& Touche ("Deloitte") as independent auditors of the RBC Funds for the fiscal
year ending April 30, 2004. On March 11, 2004, the Tamarack Boad of Trustees
selected Deloitte as independent auditors of the Funds. Deloitte has confirmed
to the Audit Committee of the Board of Trustees ("Audit Committee") that they
are independent auditors with respect to the Funds.
32
================================================================================
NOTES TO FINANCIAL STATEMENTS
================================================================================
PricewaterhouseCoopers LLP ("PwC") served as independent auditors of the RBC
Funds for the fiscal year ended April 30, 2003. In July and August 2003, a PwC
affiliate in Canada provided certain prohibited non-audit services for the
benefit of a Canadian subsidiary of Royal Bank of Canada, the ultimate parent
company of Voyageur. As a result of the PwC affiliate in Canada's provision of
these services, PwC resigned as the independent auditors of the RBC Funds
effective October 8, 2003. During the RBC Funds' fiscal year ended April 30,
2003, PwC's audit reports concerning the RBC Funds contained no adverse opinion
or disclaimer of opinion; nor were its reports qualified or modified as to
uncertainty, audit scope, or accounting principles. Further, in connection with
its audits for the fiscal year ended April 30, 2003, and through October 8,
2003, there were no disagreements between the RBC Funds and PwC on any matter of
accounting principles or practices, financial statement disclosure or auditing
scope or procedure, which if not resolved to the satisfaction of PwC would have
caused it to make reference to the disagreements in its report on the financial
statements for such periods.
- --------------------------------------------------------------------------------
12. MARKET TIMING
Tamarack discourages attempts at market timing by Fund shareholders. Each Fund
charges a redemption fee of 2% of the value of the shares redeemed or exchanged
within 30 days of purchase. When assessed, the redemption fee is retained by the
Fund, not by Fund management. This redemption fee is not charged in cases where
the redemption results from an automatic reinvestment or asset re-allocation not
specifically directed by the shareholder. Tamarack also reserves the right to
reject any Fund purchase order made by persons deemed to be market timers. The
Funds' prospectus contains a full description of Tamarack's policies on market
timing and excessive trading.
- --------------------------------------------------------------------------------
13. SOFT DOLLARS
The term soft dollars generally refers to arrangements in which services other
than trade execution (such as research and brokerage services) are received from
a broker-dealer. The federal securities laws permit a fund adviser to cause the
Fund to pay higher commission charges if the adviser believes the charges are
reasonable in relation to the brokerage and research services provided to the
adviser or to the Fund. Voyageur has a fiduciary duty to the shareholders of the
Funds to seek the best execution for all of the Funds' securities transactions.
Fund management believes that using soft dollars to purchase brokerage and
research services may, in certain circumstances, be in the Funds' best interest.
33
================================================================================
SCHEDULE OF INVESTMENTS
================================================================================
Large Cap Equity Fund
APRIL 30, 2004
- -----------------------------------------------------------------------------------------------------------------------------
SHARES VALUE SHARES VALUE
- -----------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - 98.9% RESTAURANTS - 2.5%
ADVERTISING - 1.5% 150,900 Starbucks Corp.(b) 5,863,974
43,200 Omnicom Group, Inc. $ 3,434,832 -------------
------------- RETAIL - 10.8%
BANKING & FINANCIAL SERVICES - 11.7% 79,600 Bed Bath & Beyond, Inc.(b) 2,954,752
86,000 Fifth Third Bancorp 4,614,760 76,700 eBay, Inc.(b) 6,122,194
172,000 First Data Corp. 7,807,080 90,300 Home Depot, Inc. 3,177,657
261,000 MBNA Corp. 6,363,180 97,200 Kohl's Corp.(b) 4,061,988
72,200 Northern Trust Corp. 3,052,616 135,100 Staples, Inc. 3,480,176
135,900 SLM Corp. 5,206,329 143,200 Walgreen Co. 4,937,536
------------- -------------
27,043,965 24,734,303
------------- -------------
COMMERCIAL SERVICES - 4.0% SOFTWARE - 3.8%
101,150 Fiserv, Inc.(b) 3,698,044 79,300 Intuit, Inc.(b) 3,367,871
146,400 Paychex, Inc. 5,457,792 204,800 Microsoft Corp. 5,318,656
------------- -------------
9,155,836 8,686,527
------------- -------------
COMPUTER INDUSTRY - 9.7% SPECIALTY CHEMICAL - 3.0%
284,400 Cisco Systems, Inc.(b) 5,935,428 230,000 Ecolab, Inc. 6,854,000
193,400 Dell, Inc.(b) 6,712,914 -------------
212,600 Symantec Corp.(b) 9,577,630 TOTAL COMMON STOCKS 227,616,160
------------- (Cost $207,126,362) -------------
22,225,972
-------------
DISTRIBUTION/WHOLESALE - 3.5% INVESTMENT COMPANIES - 0.8%
210,500 SYSCO Corp. 8,051,625 1,857,255 Wells Fargo Prime Investment 1,857,255
------------- Money Market Fund, -------------
Investor Class
DIVERSIFIED OPERATIONS - 4.9%
73,800 Danaher Corp. 6,827,976
52,200 United Technologies Corp. 4,502,772 TOTAL INVESTMENT COMPANIES 1,857,255
------------- (Cost $1,857,255) -------------
11,330,748
-------------
EDUCATION - 3.2% TOTAL INVESTMENTS 229,473,415
80,400 Apollo Group, Inc.-Class A(b) 7,306,752 (Cost $208,983,617)(a)-99.7%
------------- Other assets in excess of liabilities - 0.3% 588,610
-------------
ELECTRONIC COMPONENTS/INSTRUMENTS - 2.8%
242,400 Jabil Circuit, Inc.(b) 6,396,936 NET ASSETS - 100.0% $230,062,025
============= ============
FOOD & BEVERAGES - 3.2% (a) See notes to financial statements for tax basis unrealized
135,100 PepsiCo, Inc. 7,361,599 appreciation (depreciation) of securities.
------------- (b) Non-income producing security.
HEALTH CARE - 21.4%
SEE NOTES TO FINANCIAL STATEMENTS.
93,900 Amgen, Inc.(b) 5,283,753
96,900 Cardinal Health, Inc. 7,097,925
84,300 Express Scripts, Inc.(b) 6,519,762
86,500 Johnson & Johnson, Inc. 4,673,595
144,300 Medtronic, Inc. 7,281,378
209,800 Pfizer, Inc. 7,502,448
112,600 Stryker Corp. 11,139,518
-------------
49,498,379
-------------
INSURANCE - 7.9%
164,000 AFLAC, Inc. 6,925,720
82,400 Ambac Financial Group, Inc. 5,685,600
79,018 American Intl. Group, Inc. 5,661,640
-------------
18,272,960
-------------
LEISURE - 5.0%
125,600 Carnival Corp. 5,359,352
160,000 International Game Technology 6,038,400
-------------
11,397,752
-------------
34
================================================================================
SCHEDULE OF INVESTMENTS
================================================================================
Mid Cap Equity Fund
APRIL 30, 2004
- -----------------------------------------------------------------------------------------------------------------------------
SHARES VALUE SHARES VALUE
- -----------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - 99.0% 40,000 Express Scripts, Inc.(b) 3,093,600
BANKING & FINANCIAL SERVICES - 7.1% 130,000 Health Mgmt. Associates, Inc. 3,006,900
70,000 Arthur J. Gallagher & Co. $ 2,256,100 50,000 Invitrogen Corp.(b) 3,611,500
48,700 Commerce Bancorp, Inc. 2,776,387 101,800 Omnicare, Inc. 4,222,664
31,000 Legg Mason, Inc. 2,853,860 32,000 Patterson Dental Co.(b) 2,358,400
50,000 Northern Trust Corp. 2,114,000 34,100 Quest Diagnostics, Inc. 2,876,335
------------ 50,300 Varian Medical Systems, Inc.(b) 4,317,752
10,000,347 ------------
------------ 29,477,601
------------
BUSINESS EQUIPMENT & SERVICES - 3.3%
68,300 ChoicePoint, Inc.(b) 2,999,736 INDUSTRIALS - 3.5%
41,000 FactSet Research Systems, Inc. 1,630,160 60,000 Stericycle, Inc.(b) 2,869,200
------------ 122,200 Tetra Tech, Inc.(b) 2,029,742
4,629,896 4,898,942
------------
COMPUTER INDUSTRY - 8.6%
65,000 Cognos, Inc.(b) 2,049,450 RESTAURANTS - 4.2%
50,000 DST Systems, Inc.(b) 2,207,500 80,300 Brinker International, Inc.(b) 3,088,338
138,000 Microchip Technology, Inc. 3,866,760 67,300 Cheesecake Factory, Inc.(b) 2,850,155
87,400 Symantec Corp.(b) 3,937,370 5,938,493
------------ ------------
12,061,080
------------ RETAIL - 17.7%
CONSUMER DISCRETIONARY - 2.8% 38,000 Best Buy Co., Inc. 2,061,500
100,100 Gentex Corp. 3,936,933 112,400 Fred's, Inc. 2,087,268
------------ 169,000 Hot Topic, Inc.(b) 3,761,940
75,000 O'Reilly Automotive, Inc.(b) 3,366,750
CONSUMER GOODS & SERVICES - 2.8% 89,000 Petsmart, Inc. 2,465,300
71,100 Fastenal Co. 3,901,257 105,000 Regis Corp. 4,559,100
------------ 150,000 Ross Stores, Inc. 4,575,000
CONSUMER STAPLES - 3.1% 53,600 Tractor Supply Co.(b) 2,093,616
53,700 Whole Foods Market, Inc. 4,295,463 ------------
------------ 24,970,474
------------
DISTRIBUTION/WHOLESALE - 5.0% TELECOMMUNICATIONS EQUIPMENT - 3.0%
64,900 CDW Corp. 4,055,601 110,000 Plantronics, Inc.(b) 4,174,500
72,100 SCP Pool Corp.(b) 2,899,141 ------------
------------ TRANSPORTATION & SHIPPING - 3.1%
6,954,742 108,000 Expeditors International of 4,340,520
------------ Washington, Inc. ------------
DIVERSIFIED OPERATIONS - 3.5%
23,000 Danaher Corp. 2,127,960 TOTAL COMMON STOCKS 138,826,453
56,000 Roper Industries, Inc. 2,718,800 (Cost $133,616,744) ------------
------------
4,846,760 INVESTMENT COMPANIES - 0.8%
------------ 1,127,194 Wells Fargo Prime Investment 1,127,194
Money Market Fund, ------------
EDUCATION - 3.6% Investor Class
31,000 Apollo Group, Inc. - Class A(b) 2,817,280
75,000 DeVry, Inc.(b) 2,160,000 TOTAL INVESTMENT COMPANIES 1,127,194
------------ (Cost $1,127,194) ------------
4,977,280
------------ TOTAL INVESTMENTS 139,953,647
ELECTRONIC COMPONENTS/INSTRUMENTS - 4.0% (Cost $134,743,938)(a) - 99.8%
140,000 Jabil Circuit, Inc.(b) 3,694,600 Other assets in excess of liabilities - 0.2% 245,640
155,000 Symbol Technologies, Inc. 1,860,000 ------------
------------ NET ASSETS - 100.0% $140,199,287
5,554,600 ============
------------
99,500 Investors Financial Services 3,867,565
Corp. ------------ (a) See notes to financial statements for tax basis unrealized
appreciation (depreciation) of securities.
HEALTH CARE - 20.9% (b) Non-income producing security.
75,000 Apogent Technologies, Inc.(b) 2,431,500
90,100 Biomet, Inc. 3,558,950 SEE NOTES TO FINANCIAL STATEMENTS.
35
================================================================================
SCHEDULE OF INVESTMENTS
================================================================================
Small Cap Equity Fund
APRIL 30, 2004
- -----------------------------------------------------------------------------------------------------------------------------
SHARES VALUE SHARES VALUE
- -----------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - 96.81% INFORMATION TECHNOLOGY - 24.96%
CONSUMER DISCRETIONARY - 10.42% 7,000 Actel Corp.(b) 139,440
10,600 Catalina Marketing Corp.(b) $175,748,200 8,200 Acxiom Corp. 189,748
5,900 Chico's FAS, Inc.(b) 240,307 13,200 American Mgmt. Systems, Inc.(b) 254,892
12,000 Gentex Corp. 471,960 10,800 ANSYS, Inc.(b) 400,140
18,500 RARE Hospitality Int'l., Inc.(b) 506,345 11,100 Autodesk, Inc. 371,850
14,900 Shuffle Master, Inc.(b) 487,975 4,600 Black Box Corp. 234,370
11,400 Sonic Corp.(b) 367,878 8,200 Cymer, Inc.(b) 262,236
------------ 6,700 Global Payments, Inc. 321,466
2,250,213 7,900 Group 1 Software, Inc.(b) 179,804
------------ 11,000 Kronos, Inc.(b) 401,280
10,800 Open Text Corp.(b) 293,436
CONSUMER STAPLES - 5.20% 12,100 Photronics, Inc.(b) 180,169
24,700 United Natural Foods, Inc.(b) 618,735 8,200 ScanSource, Inc.(b) 452,886
6,300 Whole Foods Market, Inc. 503,937 11,300 Serena Software, Inc.(b) 200,801
------------ 14,400 TriQuint Semiconductor, Inc.(b) 79,056
1,122,672 33,300 Verisity Ltd.(b) 253,080
------------ 25,700 Verity, Inc.(b) 318,680
18,800 Wind River Systems, Inc.(b) 175,968
ENERGY - 3.56% 9,300 Zebra Technologies Corp. 681,596
8,400 Newfield Exploration Co.(b) 442,512 Class A(b) ------------
11,700 Patina Oil & Gas Corp. 325,260 5,390,898
------------ ------------
767,772 MATERIALS - 2.04%
------------ 9,700 Spartech Corp. 221,257
FINANCIALS - 10.00% 4,400 Valspar Corp. 218,460
10,400 HCC Insurance Holdings, Inc. 333,008 ------------
13,100 Hilb, Rogal & Hamilton Co. 469,635 439,717
6,500 Hudson United Bancorp 232,245 ------------
12,400 Investment Technology 177,692 RETAIL - 3.05%
Group, Inc.(b) 17,750 Fred's, Inc. 329,618
9,100 Investors Financial Services Corp. 353,717 14,800 Hot Topic, Inc.(b) 329,448
14,900 Raymond James Financial, Inc. 374,288 ------------
7,400 SEI Investments Co. 218,448 659,066
------------ ------------
2,159,033 TRANSPORTATION & SHIPPING - 5.21%
------------ 14,600 Expeditors International of 586,774
HEALTH CARE - 23.81% Washington, Inc.
6,750 Advanced Neuromodulation 183,938 20,900 Knight Transportation, Inc.(b) 538,384
Systems, Inc.(b) ------------
9,800 ArthroCare Corp.(b) 230,398 1,125,158
7,000 Biosite, Inc.(b) 277,340 ------------
11,400 Cooper Cos., Inc. (The) 615,600 TOTAL COMMON STOCKS 20,904,259
17,300 Exactech, Inc.(b) 358,283 (Cost $16,524,330) ------------
24,700 HealthExtras, Inc.(b) 314,184
7,000 IDEXX Laboratories, Inc.(b) 428,820 INVESTMENT COMPANIES - 3.22%
28,950 KV Pharmaceutical Co. 695,379 695,471 Wells Fargo Prime Investment 695,471
Class A(b) Money Market Fund, ------------
7,600 Patterson Dental Co.(b) 560,120 Investor Class
Ltd.(b)
7,300 Pharmaceutical Product 215,861 INVESTMENT COMPANIES 695,471
Development, Inc.(b) (Cost $695,471) ------------
5,100 Sunrise Senior Living, Inc.(b) 161,160
7,300 SurModics, Inc.(b) 163,374 TOTAL INVESTMENTS 21,599,730
7,900 Synovis Life Technologies, Inc.(b) 126,400 (Cost $17,219,801)(a) - 100.03%
5,300 Taro Pharmaceutical Industries 229,225 Liabilities in excess of other assets - (0.03%) (6,314)
Ltd.(b) ------------
8,400 Vistacare, Inc.(b) 211,596 NET ASSETS - 100.00% $ 21,593,416
10,600 Young Innovations, Inc. 369,940 ============
------------
5,141,618 (a) See notes to financial statements for tax basis unrealized
------------ appreciation (depreciation) of securities.
INDUSTRIALS - 8.56% (b) Non-income producing security.
11,400 DRS Technologies, Inc.(b) 322,050
9,700 Simpson Manufacturing Co., Inc. 505,952 SEE NOTES TO FINANCIAL STATEMENTS.
7,600 Stericycle, Inc.(b) 363,432
9,000 Teleflex, Inc. 410,850
14,800 Tetra Tech, Inc.(b) 245,828
------------
1,848,112
------------
36
================================================================================
AUDITORS' OPINION
================================================================================
Report of Independent Registered Public Accounting Firm
- --------------------------------------------------------------------------------
To the Board of Directors and Shareholders of Tamarack Funds Trust
We have audited the accompanying statements of assets and liabilities, including
the schedules of portfolios of investments, of the portfolios of Tamarack Funds
Trust, which include Large Cap Equity Fund, Mid Cap Equity Fund and Small Cap
Equity Fund (collectively the "Funds") as of April 30, 2004, and the related
statements of operations, statements of changes in net assets and the financial
highlights for the year then ended. These financial statements and financial
highlights are the responsibility of the Funds' management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits. The statements of changes in net assets and the financial
highlights for periods prior to April 30, 2004 were audited by other auditors
whose report, dated June 17, 2003, expressed an unqualified opinion.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of April 30, 2004, by correspondence with the Funds'
custodian and brokers; where replies were not received from brokers, we
performed other auditing procedures. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the Funds as of April 30, 2004, the results of their operations, the changes
in their net assets, and the financial highlights for the year then ended, in
conformity with accounting principles generally accepted in the United States of
America.
DELOITTE & TOUCHE LLP
Chicago, Illinois
June 18, 2004
37
================================================================================
MANAGEMENT
================================================================================
Independent Trustees(1)
- --------------------------------------------------------------------------------
T. GERON BELL (62)
POSITION HELD WITH FUND: Trustee; Since January, 2004
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: President of Twins Sports, Inc.
(parent company of the Minnesota Twins and Victory Sports) (2002-present); prior
thereto President of the Minnesota Twins Baseball Club Incorporated
(1987-present); Director, Great Hall Investment Funds, Inc. (1993-2004);
Trustee, J&B Funds (2003-2004); Director, Babson Funds (2003-2004).
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN: 17
- --------------------------------------------------------------------------------
LUCY HANCOCK BODE (51)
POSITION HELD WITH FUND: Trustee; Since January, 2004
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Healthcare consultant; Director,
RBC Funds (1994-2004).
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN: 17
- --------------------------------------------------------------------------------
LESLIE H. GARNER JR. (53)
POSITION HELD WITH FUND: Trustee; Since January, 2004
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: President, Cornell College;
Director, RBC Funds (1994-2004).
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN: 17
- --------------------------------------------------------------------------------
RONALD JAMES (52)
POSITION HELD WITH FUND: Trustee; Since January, 2004
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: President and Chief Executive
Officer, Center for Ethical Business Cultures (2000-present); Director, Great
Hall Investment Funds, Inc. (1993-2004); Trustee, J&B Funds (2003-2004);
Director, Babson Funds (2003-2004).
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN: 17
- --------------------------------------------------------------------------------
JOHN A. MACDONALD (54)
POSITION HELD WITH FUND: Trustee; Since January, 2004
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Chief Investment Officer, Hall
Family Foundation; Trustee, J&B Funds (2001-2004).
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN: 17
- --------------------------------------------------------------------------------
H. DAVID RYBOLT (61)
POSITION HELD WITH FUND: Trustee; Since January, 2004
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Consultant, HDR Associates
(management consulting); Director, Babson Funds (1992-2004).
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN: 17
- --------------------------------------------------------------------------------
(1) Unless otherwise specified, the address of each trustee/officer is 100 South
Fifth Street, Suite 2300, Minneapolis, Minnesota 55402.
38
================================================================================
MANAGEMENT
================================================================================
Independent Trustees(1)
- --------------------------------------------------------------------------------
JAMES R. SEWARD (51)
POSITION HELD WITH FUND: Trustee; Since January, 2004
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Private investor (2000-present);
Trustee, J&B Funds (2001-2004); Financial Consultant, Seward & Company, LLC
(1998-2000); CFA.
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN: 17
- --------------------------------------------------------------------------------
JAY H. WEIN (71)
POSITION HELD WITH FUND: Trustee; Since January, 2004
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Private investor (1989-present);
Director, Great Hall Investment Funds, Inc. (1993-2004); Trustee, J&B Funds
(2003-2004); Director, Babson Funds (2003-2004).
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN: 17
- --------------------------------------------------------------------------------
Interested Trustees(1)
- --------------------------------------------------------------------------------
MICHAEL T. LEE (41)
POSITION HELD WITH FUND: Trustee; Since January, 2004
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Chief Operating Officer and Senior
Vice President, Voyageur Asset Management Inc. (2003-present); Senior Portfolio
Manager, Voyageur Asset Management Inc., (2000-present); Vice President, Senior
Research Analyst and Equity Portfolio Manager, Voyageur Asset Management Inc.
(1999-2003).
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN: 17
- --------------------------------------------------------------------------------
Executive Officers(1)
- --------------------------------------------------------------------------------
JENNIFER D. LAMMERS (43)
POSITION HELD WITH FUND: President and Chief Executive Officer; Since January,
2004
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Managing Director, Voyageur Asset
Management (2000-present); Mutual Fund Services Director, Voyageur Asset
Management (2003-present); Chief Financial Officer, Great Hall Investment Funds,
Inc. (2001-2003); Compliance Officer, Great Hall Investment Funds, Inc.
(2000-2001); Director of Finance, Voyageur Asset Management (2000-2003); Vice
President and Manager, Financial Reporting, RBC Dain Rauscher (1998-2000);
President and Chief Executive Officer(2).
CHRISTOPHER J. TOMAS (34)
POSITION HELD WITH FUND: Treasurer, Chief Financial Officer, and Principal
Accounting Officer; Since January, 2004
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Vice President and Finance Manager,
RBC Dain Rauscher (2001-present); Compliance Officer, Great Hall Investment
Funds, Inc. (2001- 2003); Senior Financial Analyst, RBC Dain Rauscher
(1999-2001); Financial Analyst, RBC Dain Rauscher (1997-1999); Treasurer, Chief
Financial Officer and Principal Accounting Officer(2).
- --------------------------------------------------------------------------------
(1) Unless otherwise specified, the address of each trustee/officer is 100 South
Fifth Street, Suite 2300, Minneapolis, Minnesota 55402.
(2) Great Hall Investment Funds, Inc., J&B Funds, Babson Enterprise Fund, Inc.,
Babson Enterprise Fund II, Inc., Babson-Stewart Ivory International Fund,
Inc., Babson Value Fund, Inc., David L. Babson Growth Fund, Inc., D.L.
Babson Bond Trust, D.L. Babson Money Market Fund, Inc., D.L. Babson Tax-Free
Income Fund, Inc., Shadow Stock Fund, Inc., and Investors Mark Series Fund,
Inc.
39
================================================================================
MANAGEMENT
================================================================================
Executive Officers(1)
- --------------------------------------------------------------------------------
MARTIN A. CRAMER (54)
POSITION HELD WITH FUND: Vice President, Assistant Secretary, Chief Compliance
Officer, and AML Compliance Officer; Since January, 2004
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Vice President and Mutual Fund
Administration Manager, Voyageur Asset Management (2003-present); Legal and
Regulatory Affairs Vice President, Compliance Officer and Secretary, J&B (mutual
fund management and distribution company) (1993-2003); Vice President, Assistant
Secretary, Compliance Officer and AML Compliance Officer(2), and formerly, Vice
President, Compliance Officer and Secretary, Buffalo Fund Complex (1994-2003)
and Secretary, Gold Bank Funds(3) (2001- 2003).
- --------------------------------------------------------------------------------
LAURA M. MORET (50)
POSITION HELD WITH FUND: Secretary and Chief Legal Officer; Since January, 2004
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Vice President and Senior Associate
Counsel, RBC Dain Rauscher (2002-present); Vice President and Group Counsel,
American Express Financial Advisors (1995-2002); Secretary(2).
- --------------------------------------------------------------------------------
GORDON TELFER (38)
POSITION HELD WITH FUND: Portfolio Strategist; Since March, 2004 PRINCIPAL
OCCUPATION(S) DURING PAST 5 YEARS: Vice President and Portfolio Manager,
Voyageur Asset Management (2003-present); Senior Portfolio Manager, Alliance
Capital Management (2000-2003); Senior Vice President, Global Strategist,
Scudder Kemper Investments (1997-2000).
- --------------------------------------------------------------------------------
NANCY M. SCINTO (44)
POSITION HELD WITH FUND: Chief Investment Officer, Equity Products; Since
January, 2004
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Managing Director and Director of
Research, Voyageur Asset Management.
- --------------------------------------------------------------------------------
(1) Unless otherwise specified, the address of each trustee/officer is 100 South
Fifth Street, Suite 2300, Minneapolis, Minnesota 55402.
(2) Great Hall Investment Funds, Inc., J&B Funds, Babson Enterprise Fund, Inc.,
Babson Enterprise Fund II, Inc., Babson-Stewart Ivory International Fund,
Inc., Babson Value Fund, Inc., David L. Babson Growth Fund, Inc., D.L.
Babson Bond Trust, D.L. Babson Money Market Fund, Inc., D.L. Babson Tax-Free
Income Fund, Inc., Shadow Stock Fund, Inc., and Investors Mark Series Fund,
Inc.
(3) The Buffalo Fund Complex consists of Buffalo Balanced Fund, Inc., Buffalo
Large Cap Fund, Inc., Buffalo High Yield Fund, Inc., Buffalo Small Cap Fund,
Inc., Buffalo USA Global Fund, Inc., and the Buffalo Funds, which is a
series fund consisting of Buffalo Science & Technology Fund and Buffalo Mid
Cap Fund. Gold Bank Funds is a series fund consisting of Gold Bank Equity
and Gold Bank Money Market Fund.
40
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SHARE CLASS INFORMATION
================================================================================
- --------------------------------------------------------------------------------
The Tamarack Funds offer five share classes, three of which are currently
authorized for sale to new investors. These three share classes are the A, C and
R classes.
- --------------------------------------------------------------------------------
A CLASS
A Class shares are available for purchase primarily through investment advisors,
broker-dealers, banks and other financial services intermediaries. A Class
shares of the Tamarack Equity Funds are currently subject to a maximum up-front
sales charge of 5.75%. A Class shares currently include a 0.25% (25 bps) annual
12b-1 service and distribution fee. (The 12b-1 Plan allows for 50 bps, but the
Funds' distributor is currently voluntarily waiving 25 bps.) A Class shares have
a higher up front sales charge (load) than C Class shares, but a lower annual
expense ratio.
- --------------------------------------------------------------------------------
C CLASS
C Class shares are also available for purchase primarily through investment
advisors, broker-dealers, banks and other financial services intermediaries.
C Class shares redeemed within 12 months of purchase are subject to a contingent
deferred sales charge (CDSC) of 1.00%. (No CDSC will be charged on shares
acquired through reinvestment of dividends or capital gains.) C Class shares
expenses include a 1.00% (100 bps) annual 12b-1 service and distribution fee.
C Class shares have a lower up-front sales charge (load) than A Class shares,
but due to the higher service and distribution fee, have higher annual expenses
than A Class shares.
- --------------------------------------------------------------------------------
R CLASS
R Class shares are available for purchase through employer-sponsored or 401k
retirement plans. R Class shares have no upfront sales charge (load), but are
subject to a 0.50% (50 bps) 12b-1 service and distribution fee. R Class shares
currently have annual expenses between A Class and C Class share expenses.
- --------------------------------------------------------------------------------
I CLASS
I Class shares and S class shares are currently closed to new investors. Neither
of these share classes charges a 12b-1 service and distribution fee.
- --------------------------------------------------------------------------------
For an investor purchasing Tamarack Funds shares through a financial services
intermediary, the question as to which share class, A or C, is the best choice
is dependent on many factors, including the amount to be invested and the length
of time an investor anticipates holding the shares. An investor should consult
with his or her financial advisor about his or her personal financial situation
to determine which share class is the best choice for his or her individual
situation.
41
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SUPPLEMENTAL INFORMATION
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Shareholders Proxy Voting Results
- --------------------------------------------------------------------------------
APRIL 8, 2004
On April 8, 2004 a Special Meeting of the shareholders of the RBC Small Cap
Equity Fund, RBC Mid Cap Equity Fund and RBC Large Cap Equity Fund, each a
separate portfolio of the RBC Funds, Inc. was held. The matters considered at
the meeting, together with the actual vote tabulations realting to such matters
are as follows:
RBC Large Cap Equity Fund
1. To approve the election of the following individuals to the board of
directors of the Company:
% of % of
No. of Shares Outstanding Shares Shares Present
------------- ------------------ --------------
T. GERON BELL
Affirmative 3,663,952.639 82.323% 99.823%
Withhold 6,507.591 .147% .177%
TOTAL 3,670,460.230 82.470% 100.000%
LUCY HANCOCK BODE
Affirmative 3,663,952.639 82.323% 99.823%
Withhold 6,507.591 .147% .177%
TOTAL 3,670,460.230 82.470% 100.000%
LESLIE H. GARNER, JR.
Affirmative 3,663,952.639 82.323% 99.823%
Withhold 6,507.591 .147% .177%
TOTAL 3,670,460.230 82.470% 100.000%
RONALD JAMES
Affirmative 3,663,952.639 82.323% 99.823%
Withhold 6,507.591 .147% .177%
TOTAL 3,670,460.230 82.470% 100.000%
MICHAEL T. LEE
Affirmative 3,033,699.639 68.163% 82.652%
Withhold 636,760.591 14.307% 17.348%
TOTAL 3,670,460.230 82.470% 100.000%
JOHN A. MACDONALD
Affirmative 3,663,952.639 82.323% 99.823%
Withhold 6,507.591 .147% .177%
TOTAL 3,670,460.230 82.470% 100.000%
H. DAVID RYBOLT
Affirmative 3,663,952.639 82.323% 99.823%
Withhold 6,507.591 .147% .177%
TOTAL 3,670,460.230 82.470% 100.000%
JAMES R. SEWARD
Affirmative 3,663,952.639 82.323% 99.823%
Withhold 6,507.591 .147% .177%
TOTAL 3,670,460.230 82.470% 100.000%
JAY H. WEIN
Affirmative 3,663,952.639 82.323% 99.823%
Withhold 6,507.591 .147% .177%
TOTAL 3,670,460.230 82.470% 100.000%
2. To approve an Agreement and Plan of Reorganization, pursuant to which the
Fund would be reorganized as a separate portfolio of the Tamarack Funds
Trust, a newly-created Delaware statutory trust.
42
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SUPPLEMENTAL INFORMATION
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% of % of
No. of Shares Outstanding Shares Shares Present
------------- ------------------ --------------
Affirmative 2,850,530.993 64.047% 77.661%
Against 8,228.170 .185% .225%
Abstain 4,823.067 .108% .131%
Broker Non-votes 806,878.000 18.129% 21.983%
TOTAL 3,670,460.230 82.470% 100.000%
3. To approve the modification of the Funds' fundamental investment
policies/restrictions in order to update and standardize them and to
increase the Funds' investment flexibility to react to future developments.
3.A Diversification
Affirmative 2,851,878.404 64.077% 77.698%
Against 7,043.110 .159% .192%
Abstain 4,660.716 .104% .127%
Broker Non-votes 806,878.000 18.129% 21.983%
TOTAL 3,670,460.230 82.470% 100.000%
3.B Borrowing
Affirmative 2,851,361.738 64.066% 77.684%
Against 7,559.776 .170% .206%
Abstain 4,660.716 .104% .127%
Broker Non-votes 806,878.000 18.129% 21.983%
TOTAL 3,670,460.230 82.470% 100.000%
3.C Senior Securities
Affirmative 2,850,792.404 64.053% 77.669%
Against 8,129.110 .183% .221%
Abstain 4,660.716 .104% .127%
Broker Non-votes 806,878.000 18.129% 21.983%
TOTAL 3,670,460.230 82.470% 100.000%
3.D Underwriting Securities
Affirmative 2,851,878.404 64.077% 77.698%
Against 7,043.110 .159% .192%
Abstain 4,660.716 .104% .127%
Broker Non-votes 806,878.000 18.129% 21.983%
TOTAL 3,670,460.230 82.470% 100.000%
3.E Real Estate
Affirmative 2,850,792.404 64.053% 77.669%
Against 8,129.110 .183% .221%
Abstain 4,660.716 .104% .127%
Broker Non-votes 806,878.000 18.129% 21.983%
TOTAL 3,670,460.230 82.470% 100.000%
3.F Making Loans
Affirmative 2,850,792.404 64.053% 77.669%
Against 8,129.110 .183% .221%
Abstain 4,660.716 .104% .127%
Broker Non-votes 806,878.000 18.129% 21.983%
TOTAL 3,670,460.230 82.470% 100.000%
43
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SUPPLEMENTAL INFORMATION
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3.G Concentration of Investments
% of % of
No. of Shares Outstanding Shares Shares Present
------------- ------------------ --------------
Affirmative 2,851,878.404 64.077% 77.698%
Against 7,043.110 .159% .192%
Abstain 4,660.716 .104% .127%
Broker Non-votes 806,878.000 18.129% 21.983%
TOTAL 3,670,460.230 82.470% 100.000%
3.H Commodities
Affirmative 2,851,444.642 64.068% 77.686%
Against 7,275.145 .163% .199%
Abstain 4,862.443 .109% .132%
Broker Non-votes 806,878.000 18.129% 21.983%
TOTAL 3,670,460.230 82.470% 100.000%
4. To ratify the selection of Deloitte & Touche LLP as the independent auditors
of the Fund for the current fiscal year.
Affirmative 3,658,070.364 82.191% 99.662%
Against 11,635.423 .262% .317%
Abstain 754.443 .017% .021%
TOTAL 3,670,460.230 82.470% 100.000%
**FUND TOTALS: SHARES
RECORD TOTAL 4,450,680.926
VOTED SHARES 3,670,460.230
PERCENT PRESENT 82.470%
- --------------------------------------------------------------------------------
RBC Mid Cap Equity Fund
1. To approve the election of the following individuals to the board of
directors of the Company:
% of % of
No. of Shares Outstanding Shares Shares Present
------------- ------------------ --------------
T. GERON BELL
Affirmative 7,031,449.990 57.724% 99.470%
Withhold 37,478.298 .307% .530%
TOTAL 7,068,928.288 58.031% 100.000%
LUCY HANCOCK BODE
Affirmative 7,025,285.534 57.673% 99.383%
Withhold 43,642.754 .358% .617%
TOTAL 7,068,928.288 58.031% 100.000%
LESLIE H. GARNER, JR.
Affirmative 7,032,230.534 57.730% 99.481%
Withhold 36,697.754 .301% .519%
TOTAL 7,068,928.288 58.031% 100.000%
RONALD JAMES
Affirmative 7,032,230.534 57.730% 99.481%
Withhold 36,697.754 .301% .519%
TOTAL 7,068,928.288 58.031% 100.000%
MICHAEL T. LEE
Affirmative 6,029,674.611 49.500% 85.298%
Withhold 1,039,253.677 8.531% 14.702%
TOTAL 7,068,928.288 58.031% 100.000%
44
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SUPPLEMENTAL INFORMATION
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% of % of
No. of Shares Outstanding Shares Shares Present
------------- ------------------ --------------
JOHN A. MACDONALD
Affirmative 7,031,356.859 57.723% 99.468%
Withhold 37,571.429 .308% .532%
TOTAL 7,068,928.288 58.031% 100.000%
H. DAVID RYBOLT
Affirmative 7,032,749.611 57.734% 99.488%
Withhold 36,178.677 .297% .512%
TOTAL 7,068,928.288 58.031% 100.000%
JAMES R. SEWARD
Affirmative 7,032,102.175 57.729% 99.479%
Withhold 36,826.113 .302% .521%
TOTAL 7,068,928.288 58.031% 100.000%
JAY H. WEIN
Affirmative 7,032,622.503 57.733% 99.486%
Withhold 36,305.785 .298% .514%
TOTAL 7,068,928.288 58.031% 100.000%
2. To approve an Agreement and Plan of Reorganization, pursuant to which the
Fund would be reorganized as a separate portfolio of the Tamarack Funds
Trust, a newly-created Delaware statutory trust.
Affirmative 6,204,985.636 50.939% 87.778%
Against 18,130.499 .149% .257%
Abstain 34,862.153 .286% .493%
Broker Non-votes 810,950.000 6.657% 11.472%
TOTAL 7,068,928.288 58.031% 100.000%
3. To approve the modification of the Funds' fundamental investment
policies/restrictions in order to update and standardize them and to
increase the Funds' investment flexibility to react to future developments.
3.A Diversification
Affirmative 6,192,968.138 50.840% 87.608%
Against 14,424.381 .119% .204%
Abstain 50,585.769 .415% .716%
Broker Non-votes 810,950.000 6.657% 11.472%
TOTAL 7,068,928.288 58.031% 100.000%
3.B Borrowing
Affirmative 6,189,676.805 50.813% 87.562%
Against 19,029.714 .156% .269%
Abstain 49,271.769 .405% .697%
Broker Non-votes 810,950.000 6.657% 11.472%
TOTAL 7,068,928.288 58.031% 100.000%
3.C Senior Securities
Affirmative 6,176,108.803 50.702% 87.370%
Against 27,969.716 .229% .395%
Abstain 53,899.769 .443% .763%
Broker Non-votes 810,950.000 6.657% 11.472%
TOTAL 7,068,928.288 58.031% 100.000%
45
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SUPPLEMENTAL INFORMATION
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3.D Underwriting Securities
% of % of
No. of Shares Outstanding Shares Shares Present
------------- ------------------ --------------
Affirmative 6,188,689.455 50.805% 87.548%
Against 15,238.064 .125% .215%
Abstain 54,050.769 .444% .765%
Broker Non-votes 810,950.000 6.657% 11.472%
TOTAL 7,068,928.288 58.031% 100.000%
3.E Real Estate
Affirmative 6,193,881.805 50.848% 87.621%
Against 15,184.714 .124% .215%
Abstain 48,911.769 .402% .692%
Broker Non-votes 810,950.000 6.657% 11.472%
TOTAL 7,068,928.288 58.031% 100.000%
3.F Making Loans
Affirmative 6,190,500.981 50.820% 87.573%
Against 16,887.538 .139% .239%
Abstain 50,589.769 .415% .716%
Broker Non-votes 810,950.000 6.657% 11.472%
TOTAL 7,068,928.288 58.031% 100.000%
3.G Concentration of Investments
Affirmative 6,188,009.805 50.800% 87.538%
Against 15,929.714 .130% .226%
Abstain 54,038.769 .444% .764%
Broker Non-votes 810,950.000 6.657% 11.472%
TOTAL 7,068,928.288 58.031% 100.000%
3.H Commodities
Affirmative 6,190,535.805 50.820% 87.574%
Against 17,053.714 .140% .241%
Abstain 50,388.769 .414% .713%
Broker Non-votes 810,950.000 6.657% 11.472%
TOTAL 7,068,928.288 58.031% 100.000%
4. To ratify the selection of Deloitte & Touche LLP as the independent auditors
of the Fund for the current fiscal year.
Affirmative 7,017,609.993 57.610% 99.274%
Against 8,902.953 .073% .126%
Abstain 42,415.342 .348% .600%
TOTAL 7,068,928.288 58.031% 100.000%
** FUND TOTALS: SHARES
RECORD TOTAL 12,181,234.990
VOTED SHARES 7,068,928.288
PERCENT PRESENT 58.031%
46
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SUPPLEMENTAL INFORMATION
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RBC Small Cap Equity Fund
1. To approve the election of the following individuals to the board of
directors of the Company:
% of % of
No. of Shares Outstanding Shares Shares Present
------------- ------------------ --------------
T. GERON BELL
Affirmative 1,477,016.305 83.158% 99.891%
Withhold 1,612.000 .091% .109%
TOTAL 1,478,628.305 83.249% 100.000%
LUCY HANCOCK BODE
Affirmative 1,477,016.305 83.158% 99.891%
Withhold 1,612.000 .091% .109%
TOTAL 1,478,628.305 83.249% 100.000%
LESLIE H. GARNER, JR.
Affirmative 1,477,016.305 83.158% 99.891%
Withhold 1,612.000 .091% .109%
TOTAL 1,478,628.305 83.249% 100.000%
RONALD JAMES
Affirmative 1,477,016.305 83.158% 99.891%
Withhold 1,612.000 .091% .109%
TOTAL 1,478,628.305 83.249% 100.000%
MICHAEL T. LEE
Affirmative 1,297,589.305 73.056% 87.756%
Withhold 181,039.000 10.193% 12.244%
TOTAL 1,478,628.305 83.249% 100.000%
JOHN A. MACDONALD
Affirmative 1,477,016.305 83.158% 99.891%
Withhold 1,612.000 .091% .109%
TOTAL 1,478,628.305 83.249% 100.000%
H. DAVID RYBOLT
Affirmative 1,477,016.305 83.158% 99.891%
Withhold 1,612.000 .091% .109%
TOTAL 1,478,628.305 83.249% 100.000%
JAMES R. SEWARD
Affirmative 1,477,016.305 83.158% 99.891%
Withhold 1,612.000 .091% .109%
TOTAL 1,478,628.305 83.249% 100.000%
JAY H. WEIN
Affirmative 1,477,016.305 83.158% 99.891%
Withhold 1,612.000 .091% .109%
TOTAL 1,478,628.305 83.249% 100.000%
2. To approve an Agreement and Plan of Reorganization, pursuant to which the
Fund would be reorganized as a separate portfolio of the Tamarack Funds
Trust, a newly-created Delaware statutory trust.
Affirmative 1,044,676.537 58.817% 70.652%
Against 1,228.329 .069% .083%
Abstain 2,695.439 .152% .182%
Broker Non-votes 430,028.000 24.211% 29.083%
TOTAL 1,478,628.305 83.249% 100.000%
47
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SUPPLEMENTAL INFORMATION
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3. To approve the modification of the Funds' fundamental investment
policies/restrictions in order to update and standardize them and to
increase the Funds' investment flexibility to react to future developments.
3.A Diversification
% of % of
No. of Shares Outstanding Shares Shares Present
------------- ------------------ --------------
Affirmative 1,040,215.903 58.566% 70.350%
Against 915.000 .051% .062%
Abstain 7,469.402 .421% .505%
Broker Non-votes 430,028.000 24.211% 29.083%
TOTAL 1,478,628.305 83.249% 100.000%
3.B Borrowing
Affirmative 1,039,117.903 58.504% 70.276%
Against 2,013.000 .113% .136%
Abstain 7,469.402 .421% .505%
Broker Non-votes 430,028.000 24.211% 29.083%
TOTAL 1,478,628.305 83.249% 100.000%
3.C Senior Securities
Affirmative 1,040,215.903 58.566% 70.350%
Against 915.000 .051% .062%
Abstain 7,469.402 .421% .505%
Broker Non-votes 430,028.000 24.211% 29.083%
TOTAL 1,478,628.305 83.249% 100.000%
3.D Underwriting Securities
Affirmative 1,039,582.903 58.530% 70.307%
Against 1,548.000 .087% .105%
Against 7,469.402 .421% .505%
Broker Non-votes 430,028.000 24.211% 29.083%
TOTAL 1,478,628.305 83.249% 100.000%
3.E Real Estate
Affirmative 1,040,215.903 58.566% 70.350%
Against 915.000 .051% .062%
Abstain 7,469.402 .421% .505%
Broker Non-votes 430,028.000 24.211% 29.083%
TOTAL 1,478,628.305 83.249% 100.000%
3.F Making Loans
Affirmative 1,038,162.903 58.450% 70.211%
Against 2,968.000 .167% .201%
Abstain 7,469.402 .421% .505%
Broker Non-votes 430,028.000 24.211% 29.083%
TOTAL 1,478,628.305 83.249% 100.000%
3.G Concentration of Investments
Affirmative 1,040,215.903 58.566% 70.350%
Against 915.000 .051% .062%
Abstain 7,469.402 .421% .505%
Broker Non-votes 430,028.000 24.211% 29.083%
TOTAL 1,478,628.305 83.249% 100.000%
48
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% of % of
No. of Shares Outstanding Shares Shares Present
------------- ------------------ --------------
Affirmative 1,039,343.903 58.517% 70.291%
Against 1,787.000 .100% .121%
Abstain 7,469.402 .421% .505%
Broker Non-votes 430,028.000 24.211% 29.083%
TOTAL 1,478,628.305 83.249% 100.000%
4. To ratify the selection of Deloitte & Touche LLP as the independent auditors
of the Fund for the current fiscal year.
Affirmative 1,475,276.284 83.060% 99.773%
Against 90.000 .005% .006%
Abstain 3,262.021 .184% .221%
TOTAL 1,478,628.305 83.249% 100.000%
** FUND TOTALS: SHARES
RECORD TOTAL 1,776,152.906
VOTED SHARES 1,478,628.305
PERCENT PRESENT 83.249%
49
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[PHOTO]
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Tamarack Funds | PRSRT STD |
P.O. Box 219757 | U.S. POSTAGE |
Kansas City, MO 64121-9757 | PAID |
| PERMIT NO. 2891 |
| KANSAS CITY MO. |
---------------
TF AR 6/04 Tamarack Distributors Inc.
530972 (6/04)
ITEM 2. CODE OF ETHICS.
Disclose whether, as of the end of the period covered by the report, the
registrant has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar functions,
regardless of whether these individuals are employed by the registrant or a
third party. If the registrant has not adopted such a code of ethics,
explain why it has not done so. THE REGISTRANT HAS ADOPTED A CODE OF ETHICS
THAT APPLIES TO THE REGISTRANT'S PRINCIPAL EXECUTIVE OFFICER, PRINCIPAL
FINANCIAL OFFICER, PRINCIPAL ACCOUNTING OFFICER OR CONTROLLER, OR PERSONS
PERFORMING SIMILAR FUNCTIONS. THIS CODE OF ETHICS IS INCLUDED AS EXHIBIT 11
(A)(1).
The registrant must briefly describe the nature of any amendment, during
the period covered by the report, to a provision of its code of ethics that
applies to the registrant's principal executive officer, principal
financial officer, principal accounting officer or controller, or persons
performing similar functions, regardless of whether these individuals are
employed by the registrant or a third party, and that relates to any
element of the code of ethics definition enumerated in paragraph (b) of
this Item. The registrant must file a copy of any such amendment as an
exhibit pursuant to Item 11(a)(1), unless the registrant has elected to
satisfy paragraph (f) of this Item by posting its code of ethics on its
website pursuant to paragraph (f)(2) of this Item, or by undertaking to
provide its code of ethics to any person without charge, upon request,
pursuant to paragraph (f)(3) of this Item.
If the registrant has, during the period covered by the report, granted a
waiver, including an implicit waiver, from a provision of the code of
ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or controller, or
persons performing similar functions, regardless of whether these
individuals are employed by the registrant or a third party, that relates
to one or more items set forth in paragraph (b) of this Item, the
registrant must briefly describe the nature of the waiver, the name of the
person to whom the waiver was granted, and the date of the waiver.
DURING THE PERIOD COVERED BY THE REPORT, WITH RESPECT TO THE REGISTRANT'S
CODE OF ETHICS THAT APPLIES TO ITS PRINCIPAL EXECUTIVE OFFICER, PRINCIPAL
FINANCIAL OFFICER, PRINCIPAL ACCOUNTING OFFICER OR CONTROLLER, OR PERSONS
PERFORMING SIMILAR FUNCTIONS; THERE HAVE BEEN NO AMENDMENTS TO, NOR ANY
WAIVERS GRANTED FROM, A PROVISION THAT RELATES TO ANY ELEMENT OF THE CODE
OF ETHICS DEFINITION ENUMERATED IN PARAGRAPH (B) OF THIS ITEM 2.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a) (1) Disclose that the registrant's board of directors has determined
that the registrant either:
(i) Has at least one audit committee financial expert serving on
its audit committee; or
(ii) Does not have an audit committee financial expert serving on
its audit committee.
(2) If the registrant provides the disclosure required by paragraph
(a)(1)(i) of this Item, it must disclose the name of the audit
committee financial expert and whether that person is "independent."
In order to be considered "independent" for purposes of this Item, a
member of an audit committee may not, other than in his or her
capacity as a member of the audit committee, the board of directors,
or any other board committee:
(i) Accept directly or indirectly any consulting, advisory, or
other compensatory fee from the issuer; or
(ii) Be an "interested person" of the investment company as
defined in Section 2(a)(19) of the Act (15 U.S.C. 80a- 2(a)(19)).
(3) If the registrant provides the disclosure required by paragraph
(a)(1)(ii) of this Item, it must explain why it does not have an audit
committee financial expert.
3(a)(1) THE REGISTRANT'S BOARD OF DIRECTORS HAS DETERMINED THAT THE REGISTRANT
HAS AT LEAST ONE AUDIT COMMITTEE FINANCIAL EXPERT SERVING ON ITS AUDIT
COMMITTEE.
3(a)(2) THE AUDIT COMMITTEE FINANCIAL EXPERT IS JAY H. WEIN, WHO IS
"INDEPENDENT" FOR PURPOSES OF THIS ITEM 3 OF FORM N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Disclose, under the caption Audit Fees, the aggregate fees billed
for each of the last two fiscal years for professional services rendered by the
principal accountant for the audit of the registrant's annual financial
statements or services that are normally provided by the accountant in
connection with statutory and regulatory filings or engagements for those fiscal
years.
2003 $184,000
2004 $115,000
(b) Disclose, under the caption Audit-Related Fees, the aggregate fees
billed in each of the last two fiscal years for assurance and related services
by the principal accountant that are reasonably related to the performance of
the audit of the registrant's financial statements and are not reported under
paragraph (a) of this Item. Registrants shall describe the nature of the
services comprising the fees disclosed under this category.
2003 $6,654
2004 $6,000
Amount requiring approval of the registrant's audit committee is $0 and
$0, respectively.
(c) Disclose, under the caption Tax Fees, the aggregate fees billed in
each of the last two fiscal years for professional services rendered by the
principal accountant for tax compliance, tax advice, and tax planning.
Registrants shall describe the nature of the services comprising the fees
disclosed under this category.
2003 $0
2004 $0
Fees for both years relate to the review of the registrant's tax returns. Amount
requiring approval of the registrant's audit committee is $0 and $0,
respectively.
(d) Disclose, under the caption All Other Fees, the aggregate fees
billed in each of the last two fiscal years for products and services provided
by the principal accountant, other than the services reported in paragraphs (a)
through (c) of this Item. Registrants shall describe the nature of the services
comprising the fees disclosed under this category.
2002 $0
2003 $0
Amount requiring approval of the registrant's audit committee is $0 and
$0, respectively.
(e) (1) Disclose the audit committee's pre-approval policies and
procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
The Audit Committee ("Committee") shall review and approve in advance
any proposal (except as set forth in (1) through (3) below) that the
Funds employ their auditor to render "permissible non-audit services"
to the Funds. (A "permissible non-audit service" is defined as a
non-audit service that is not prohibited by Rule 2-01(c)(4) of
Regulation S-X or other applicable law or regulation.) The Committee
shall also review and approve in advance any proposal (except as set
forth in (1) through (3) below) that the Adviser, and any entity
controlling, controlled by, or under common control with the Adviser
that provides ongoing services to the Funds (an "Adviser-affiliated
service provider"), employ the Funds' auditor to render non-audit
services, if such engagement would relate directly to the operations
and financial reporting of the Funds. As a part of its review, the
Committee shall consider whether the provision of such services is
consistent with the auditor's independence. (See also "Delegation"
below.)
Pre-approval by the Committee of non-audit services is not required so long
as:
(1) (A) with respect to the Funds, the aggregate amount of all
such permissible non-audit services provided to the Funds
constitutes no more than 5% of the total amount of revenues
paid to the auditor by the Funds during the fiscal year in
which the services are provided;
(B) with respect to the Adviser and any Adviser-affiliated
service provider, the aggregate amount of all such non-audit
services provided constitutes no more than 5% of the total
amount of revenues (of the type that would have to be
pre-approved by the Committee) paid to the auditor by the
Funds, the Adviser and any Adviser-affiliated service
provider during the fiscal year in which the services are
provided;
(2) such services were not recognized by the Funds at the time
of the engagement to be non-audit services; and
(3) such services are promptly brought to the attention of the
Committee and approved prior to the completion of the audit
by the Committee or its Delegate(s) (as defined below).
(c) Delegation
The Committee may delegate to one or more of its members
("Delegates") authority to pre-approve the auditor's provision of
audit services or permissible non-audit services to the Funds, or
the provision of non-audit services to the Adviser or any
Adviser-affiliated service provider. Any pre-approval
determination made by a Delegate shall be presented to the full
Committee at its next meeting. The Committee shall communicate
any pre-approval made by it or a Delegate to the
Sub-Administrator, who will ensure that the appropriate
disclosure is made in the Funds' periodic reports and other
documents as required under the federal securities laws.
(2) Disclose the percentage of services described in each of
paragraphs (b) through (d) of this Item that were approved by the audit
committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
4 (b)
2003 100%
2004 100%
Amount requiring approval of the registrant's audit committee is 100%
and 100%, respectively.
4 (c)
2003 100%
2004 100%
Amount requiring approval of the registrant's audit committee is 100%
and 100%, respectively.
4 (d)
2003 100%
2004 100%
Amount requiring approval of the registrant's audit committee is 100%
and 100%, respectively.
(f) If greater than 50 percent, disclose the percentage of hours
expended on the principal accountant's engagement to audit the registrant's
financial statements for the most recent fiscal year that were attributed to
work performed by persons other than the principal accountant's full-time,
permanent employees. Not Applicable.
(g) Disclose the aggregate non-audit fees billed by the registrant's
accountant for services rendered to the registrant, and rendered to the
registrant's investment adviser (not including any sub-adviser whose role is
primarily portfolio management and is subcontracted with or overseen by another
investment adviser), and any entity controlling, controlled by, or under common
control with the adviser that provides ongoing services to the registrant for
each of the last two fiscal years of the registrant.
2003 $0
2004 $0
(h) Disclose whether the registrant's audit committee of the board of
directors has considered whether the provision of nonaudit services that were
rendered to the registrant's investment adviser (not including any subadviser
whose role is primarily portfolio management and is subcontracted with or
overseen by another investment adviser), and any entity controlling, controlled
by, or under common control with the investment adviser that provides ongoing
services to the registrant that were not pre-approved pursuant to paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the
principal accountant's independence. Not Applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
(a) If the registrant is a listed issuer as defined in Rule 10A-3 under
the Exchange Act (17CFR 240.10A-3), state whether or not the
registrant has a separately-designated standing audit committee
established in accordance with Section 3(a)(58)(A) of the Exchange Act
(15 U.S.C. 78c(a)(58)(A)). If the registrant has such a committee,
however designated, identify each committee member. If the entire
board of directors is acting as the registrant's audit committee as
specified in Section 3(a)(58)(B) of the Exchange Act (15 U.S.C.
78c(a)(58)(B)), so state.
(b) If applicable, provide the disclosure required by Rule 10A-3(d) under
the Exchange Act (17CFR 240.10A-3(d)) regarding an exemption from the
listing standards for all audit committees.
NOT APPLICABLE.
ITEM 6. SCHEDULE OF INVESTMENTS.
File Schedule I - Investments in securities of unaffiliated issuers as of the
close of the reporting period as set forth in ss. 210.12-12 of Regulation S-X,
unless the schedule is included as part of the report to shareholders filed
under Item 1 of this Form.
NOT APPLICABLE.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
A closed-end management investment company that is filing an annual report
on this Form N-CSR must, unless it invests exclusively in non-voting securities,
describe the policies and procedures that it uses to determine how to vote
proxies relating to portfolio securities, including the procedures that the
company uses when a vote presents a conflict between the interests of its
shareholders, on the one hand, and those of the company's investment adviser;
principal underwriter; or any affiliated person (as defined in Section 2(a)(3)
of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(3)) and the rules
thereunder) of the company, its investment adviser, or its principal
underwriter, on the other. Include any policies and procedures of the company's
investment adviser, or any other third party, that the company uses, or that are
used on the company's behalf, to determine how to vote proxies relating to
portfolio securities.
NOT APPLICABLE.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
If the registrant is a closed-end management investment company, provide the
information specified in paragraph (b) of this Item with respect to any purchase
made by or on behalf of the registrant or any "affiliated purchaser," as defined
in Rule 10b-18(a)(3) under the Exchange Act (17 CFR 240.10b-18(a)(3)), of shares
or other units of any class of the registrant's equity securities that is
registered by the registrant pursuant to Section 12 of the Exchange Act (15
U.S.C. 781).
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Describe any material changes to the procedures by which shareholders may
recommend nominees to the registrant's board of directors, where those changes
were implemented after the registrant last provided disclosure in response to
the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A (17 CFR 240.14a-101), or
this Item.
NOT APPLICABLE.
{NOTE - THIS IS REQUIRED BEGINNING WITH THE FIRST REPORTING PERIOD ENDING AFTER
JANUARY 1, 2004. FOR PURPOSES OF THIS ITEM, ADOPTION OF PROCEDURES BY WHICH
SHAREHOLDERS MAY RECOMMEND NOMINEES TO THE REGISTRANT'S BOARD OF DIRECTORS,
WHERE THE REGISTRANT'S MOST RECENT PROXY DISCLOSURE (IN RESPONSE TO THE
REQUIREMENTS OF ITEM 7(D)(2)(II)(G) OF SCHEDULE 14A (17 CFR 240.14A-101)), OR
THIS ITEM, INDICATED THAT THE REGISTRANT DID NOT HAVE IN PLACE SUCH PROCEDURES,
WILL CONSTITUTE A MATERIAL CHANGE.}
ITEM 10. CONTROLS AND PROCEDURES.
(a) Disclose the conclusions of the registrant's principal executive and
principal financial officers, or persons performing similar functions, regarding
the effectiveness of the registrant's disclosure controls and procedures (as
defined in Rule 30a-3(c) under the Act (17 CFR 270.30a-3(c))) as of a date
within 90 days of the filing date of the report that includes the disclosure
required by this paragraph, based on the evaluation of these controls and
procedures required by Rule 30a-3(b) under the Act (17 CFR 270.30a-3(b)) and
Rules 13a-15(b) or 15d-15(b) under the Exchange Act (17 CFR 240.13a-15(b) or
240.15d-15(b)).
THE REGISTRANT'S PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER
HAVE CONCLUDED, BASED ON THEIR EVALUATION OF THE REGISTRANT'S DISCLOSURE
CONTROLS AND PROCEDURES AS CONDUCTED WITHIN 90 DAYS OF THE FILING DATE OF THIS
REPORT, THAT THESE DISCLOSURE CONTROLS AND PROCEDURES ARE ADEQUATELY DESIGNED
AND ARE OPERATING EFFECTIVELY TO ENSURE THAT INFORMATION REQUIRED TO BE
DISCLOSED BY THE REGISTRANT ON FORM N-CSR IS (I) ACCUMULATED AND COMMUNICATED TO
THE INVESTMENT COMPANY'S MANAGEMENT, INCLUDING ITS CERTIFYING OFFICERS, TO ALLOW
TIMELY DECISIONS REGARDING REQUIRED DISCLOSURE; AND (II) RECORDED, PROCESSED,
SUMMARIZED AND REPORTED WITHIN THE TIME PERIODS SPECIFIED IN THE SECURITIES AND
EXCHANGE COMMISSION'S RULES AND FORMS.
(b) Disclose any change in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d)) that
occurred during the registrant's last fiscal half-year (the registrant's second
fiscal half-year in the case of an annual report) that has materially affected,
or is reasonably likely to materially affect, the registrant's internal control
over financial reporting.
THERE WERE NO CHANGES IN THE REGISTRANT'S INTERNAL CONTROL OVER FINANCIAL
REPORTING THAT OCCURRED DURING THE REGISTRANT'S MOST RECENT FISCAL HALF-YEAR
(THE REGISTRANT'S SECOND FISCAL HALF-YEAR IN THE CASE OF AN ANNUAL REPORT) THAT
HAVE MATERIALLY AFFECTED OR ARE REASONABLY LIKELY TO MATERIALLY AFFECT, THE
REGISTRANT'S INTERNAL CONTROL OVER FINANCIAL REPORTING.
ITEM 11. EXHIBITS.
(a) File the exhibits listed below as part of this Form. Letter or number
the exhibits in the sequence indicated.
(a)(1) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit.
THE CODE OF ETHICS THAT IS THE SUBJECT OF THE DISCLOSURE REQUIRED BY ITEM 2 IS
ATTACHED HERETO.
(a)(2) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2(a) under
the Act (17 CFR 270.30a-2).
CERTIFICATIONS PURSUANT TO RULE 30A-2(A) ARE ATTACHED HERETO.
(a)(3) Any written solicitation to purchase securities under Rule 23c-1
under the Act (17 CFR 270.23c-1) 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) If the report is filed under Section 13(a) or 15(d) of the Exchange
Act, provide the certifications required by rule 30a-2(b) under the Act as an
exhibit. A certification furnished pursuant to this paragraph will not be deemed
"filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to
the liability of that section. Such certification will not be deemed to be
incorporated by reference into any filing under the Securities Act of 1933 or
the Exchange Act, except to the extent that the registrant incorporates it by
reference.
CERTIFICATIONS PURSUANT TO RULE 30A-2(B) ARE 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.
(Registrant) Tamarack Funds, Inc.
By (Signature and Title)* /s/ Jennifer Lammers
--------------------------------------
Jennifer Lammers, President
Date 7/8/04
--------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Jennifer Lammers
--------------------------------------
Jennifer Lammers, President
Date 7/8/04
--------------------------
By (Signature and Title)* /s/ Chris Tomas
--------------------------------------
Chris Tomas, Treasurer
Date 7/8/04
--------------------------
* Print the name and title of each signing officer under his or her signature.