UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-21210
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ALPINE INCOME TRUST
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(Exact name of registrant as specified in charter)
615 EAST MICHIGAN STREET
3RD FLOOR
MILWAUKEE, WI 53202
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(Address of principal executive offices) (Zip code)
SAMUEL A. LIEBER
ALPINE MANAGEMENT & RESEARCH, LLC
2500 WESTCHESTER AVENUE, SUITE 215
PURCHASE, NY 10577
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(Name and address of agent for service)
1-888-785-5578
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Registrant's telephone number, including area code
Date of fiscal year end: OCTOBER 31, 2004
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Date of reporting period: APRIL 30, 2004
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ITEM 1. REPORT TO STOCKHOLDERS.
- ------------------------------
(ALPINE LOGO)
EQUITY AND INCOME FUNDS
DYNAMIC BALANCE FUND
DYNAMIC DIVIDEND FUND
MUNICIPAL MONEY MARKET FUND
TAX OPTIMIZED INCOME FUND
SEMI-ANNUAL REPORT
April 30, 2004
This material must be preceded or accompanied by a current prospectus.
TABLE OF CONTENTS
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PORTFOLIO MANAGER'S REPORT TO SHAREHOLDERS
PAGE 1
SCHEDULES OF PORTFOLIO INVESTMENTS
PAGE 15
STATEMENTS OF ASSETS AND LIABILITIES
PAGE 25
STATEMENTS OF OPERATIONS
PAGE 27
STATEMENTS OF CHANGES IN NET ASSETS
PAGE 29
NOTES TO FINANCIAL STATEMENTS
PAGE 33
FINANCIAL HIGHLIGHTS
PAGE 40
PORTFOLIO MANAGER'S REPORT TO SHAREHOLDERS ALPINE MUTUAL FUNDS
Dear Shareholders:
We are very pleased to report to our shareholders that all seven Alpine
Mutual Funds have outperformed their respective benchmarks during the fiscal six
month period ended April 30, 2004 (please see the ensuing pages of this report
for complete performance information). From October, 2003 through March, 2004
equity markets enjoyed a uniformly positive period which came to an abrupt
reversal on April 1st as a surprisingly strong job creation report forced many
leveraged and interest sensitive investors to adjust their portfolios. Many
interest sensitive stocks were actively sold down to levels not seen for almost
six months. Despite the high exposure of Alpine's equity portfolios to interest
sensitive stocks, four out of our five equity portfolios and both of our income
funds actually outperformed their benchmarks during this steep sell-off in
April. We believe Alpine's value oriented approach to investing may have
enhanced the defensive qualities of our portfolios during April.
Since management remains a significant long-term investor in our own Funds,
it is especially gratifying to note this review period's addition to the multi-
year pattern of positive returns for all of the Alpine Funds, as well as their
strong peer performance rankings as detailed in the individual fund discussion
sections. Please note that Alpine continues to separate the reports of our
three real estate funds from our 'Dynamic' series and income funds.
In the period under review, the capital markets began to transition from a
recovery phase to one focused on the possibility of renewed stable economic
growth. The uneven and protracted shift from the recession of 2001 to the
renewal of economic expansion in 2003 and 2004 was influenced by several factors
which have now added increased uncertainty to the stock market. Issues such as
the probable end to the accommodative stance of the Federal Reserve, Iraq,
terrorism and higher oil prices, plus the vacillating consumer confidence level,
and improvement in the previously weak employment numbers are main factors high
on the minds of investors. Despite these near-to-medium term uncertainties, the
probability that this stage of the business cycle equates to the third inning of
a nine-inning baseball game underpins the long-term investment decision process.
For the equity markets, the above mentioned economic factors of interest
rates, oil prices, consumer confidence and corporate employment growth are all
interrelated. While higher oil prices might become inflationary, its cost
burden could have a slowing effect on the economy and hence limit the upward
movement of interest rates. In a similar fashion a decrease in consumer
confidence tends to slow domestic consumption which in turn may well limit top
line revenue growth and restrain hiring. However, this too might limit interest
rates which could sustain strong housing demand. Such vacillation between
scenarios creates uncertainty, which is unsettling given the forward looking
nature of the equity markets. However, this is not unusual for a market in
transition. Many investors are now cautiously evaluating business prospects for
2005 and beyond. The critical issue will be how robust and sustainable that
growth is.
The prospects for further profitable growth in the industrial economy are
surely positive with the continuing stimulus of military related defense
expenditures. The armaments program is a sustaining force so long as American
troops remain under attack in Iraq and Afghanistan. The number of troops in
these theaters could most certainly be increased. As the war effort continues,
it remains a major contributor to industrial output, adding to the prospect for
improving employment, which in itself helps to sustain consumer demand.
Industries which became lean and mean with downsized operations after the 2001
recession, are beginning to spend for enhanced productive capacity and
employment. Major consumer expenditures, notably housing, remain near peak
levels notwithstanding the upward trend in mortgage rates. Only the escalating
price of gasoline and other fuels cast a pall over renewed consumer expenditures
and corporate efficiencies.
Given the Federal Reserves history and official comments, it is likely that
this era of super stimulation from low interest rates has ended. The market
yield on ten-year U.S. Treasury Bonds has already discounted increases in the
Fed Funds Rate by rising from 3.88% on April 1, to 4.51% on April 30 and
subsequently rising over 4.8% in June. This has occurred even though the Fed
has yet to act, and the Fed Fund Rate remains at 1%. A "neutral" Fed Funds Rate
of between 2.5% to 3.5% could be achieved in 18-24 months of "measured" rate
increases, which should produce a flatter yield curve with the 10-year Treasury
Bond yield between 5.5% to 6%. This scenario assumes that neither inflation
will re-emerge after almost fourteen-years of averaging roughly 2.5% per year,
nor would the economy slide back towards recession.
Given that a year has passed since the June bottom in long-term yields,
Alpine believes that the capital markets are well prepared for the scenario
which we outline. Equity investment opportunities in the months ahead will
increasingly be centered on those companies which can sustain earnings growth
through the latter part of this year and into 2005, despite a potentially less
robust economy. Alpine believes that this year's likely GDP growth of 4.5% will
moderate to approximately 3% in 2005. The emphasis on continued corporate
financial efficiency and sustaining top line revenue growth should be reflected
in an ever broader spectrum of mergers and acquisitions (M&A). We do not expect
such M&A to be in the spirit of prior decades where conglomeration of dispirit
businesses was designed primarily to generate scale. The deals ought likely be
aimed at providing supplemental and accelerated growth opportunities in closely
related businesses, especially if efficiencies and breadth of offerings can be
achieved. This should be particularly beneficial for smaller specialty
companies occupying dominant niche positions with product lines supplemental to
those of larger companies. For example, the recently announced General Electric
acquisition of BHA Group, a small cap producer of power plant air pollution
control equipment, demonstrates that even a giant company sees merit in rounding
out its business lines by offering a unique technology through the acquisition
of a vendor serving the same customers. This is a pattern we expect to see
recur. The financial industry, notably banks, should continue the long term
trend of mergers and acquisitions, especially where improved interest margins
can be obtained as interest rates rise and commercial loan demand concurrently
accelerates. We also expect to see consolidations in areas ranging from home
building, pharmaceuticals, retailing, to internet services and beyond.
Alpine believes that companies which can create higher levels of both top
line and bottom line growth will probably be favored by the equity markets over
the next 12 to 18 months. The bond markets on the other hand have become
increasingly risky for investors as the apparent bottoming of interest rates
suggests that the specter of possible principal losses may overhang the fixed
income markets for the next year or two. We believe that investments in
dividend paying stocks will continue to gain favor as a supplement or even
replacement for the income component of many portfolios. This significant shift
is reinforced by the 2003 tax legislation which favors equity dividend income.
Furthermore, we do not expect the potential for a Kerry victory in the Fall to
lead to any significant change in this established and increasingly popular tax
legislation.
In summary, we expect modest positive returns for the balance of this fiscal
year as the strengthening economy, with continued strong earnings growth from
corporate America, is tempered by caution over the extent of interest rate
hikes, as well as uncertainty over both geopolitical and domestic political
events. We anticipate that positive earnings growth will continue into next
year, although very likely not at the lofty pace of the first six months of
2004. While periods with conflicting crosscurrents such as this can create a
challenging investment environment, it also creates opportunities for long-term
investment. We believe that Alpine's value driven investment strategies,
opportunistic methods and fundamental depth of experience will assist us in
uncovering a large share of interesting and potentially profitable investments.
As always, we appreciate your interest and support. We look forward to
reporting to you on our progress in the next quarter.
Sincerely,
/s/Samuel A. Lieber
Samuel A. Lieber
President, Alpine Mutual Funds
This letter and those that follow represent the opinions of Alpine Funds
management and are subject to change, are not guaranteed and should not be
considered recommendations to buy or sell any security.
Must be preceded or accompanied by a prospectus. Please read it carefully
before you invest or send money. Mutual fund investing involves risk. Principal
loss is possible.
Quasar Distributors, LLC, Distributor. 06/04
ALPINE DYNAMIC BALANCE FUND
Value of a $10,000 Investment
Alpine Dynamic Moody's Equity Mutual
Date Balance Fund Fund Balanced Index S&P 500 Index
---- ------------ ------------------- -------------
6/7/2001 $10,000 $10,000 $10,000
6/30/2001 $9,960 $9,726 $9,593
7/31/2001 $10,100 $9,703 $9,499
8/31/2001 $10,180 $9,398 $8,904
9/30/2001 $9,993 $8,916 $8,185
10/31/2001 $10,164 $9,090 $8,341
11/30/2001 $10,325 $9,406 $8,981
12/31/2001 $10,481 $9,439 $9,060
1/31/2002 $10,461 $9,360 $8,928
2/28/2002 $10,613 $9,277 $8,755
3/31/2002 $10,738 $9,438 $9,085
4/30/2002 $10,707 $9,252 $8,534
5/31/2002 $10,615 $9,242 $8,471
6/30/2002 $10,309 $8,902 $7,868
7/31/2002 $9,991 $8,537 $7,254
8/31/2002 $10,145 $8,620 $7,302
9/30/2002 $9,378 $8,162 $6,508
10/31/2002 $9,471 $8,465 $7,081
11/30/2002 $9,822 $8,724 $7,497
12/31/2002 $9,614 $8,509 $7,057
1/31/2003 $9,468 $8,393 $6,872
2/28/2003 $9,353 $8,364 $6,769
3/31/2003 $9,434 $8,388 $6,835
4/30/2003 $10,228 $8,778 $7,397
5/31/2003 $10,939 $9,127 $7,787
6/30/2003 $10,892 $9,182 $7,886
7/31/2003 $10,797 $9,168 $8,025
8/31/2003 $10,923 $9,304 $8,181
9/30/2003 $11,179 $9,350 $8,095
10/31/2003 $11,696 $9,613 $8,552
11/30/2003 $11,940 $9,703 $8,628
12/31/2003 $12,377 $10,009 $9,080
1/31/2004 $12,525 $10,144 $9,246
2/29/2004 $12,981 $10,281 $9,375
3/31/2004 $13,151 $10,248 $9,233
4/30/2004 $12,363 $10,019 $9,089
This chart represents a comparison of a hypothetical $10,000 investment in the
Fund versus a similar investment in the Fund's benchmark. The graph and the
table do not reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption of Fund shares. Investment performance reflects
voluntary fee waivers in effect. Without the waiver of fees, total return would
have been lower.
Performance data quoted represents past performance and is not predictive of
future results. Investment return and principal value of the Fund fluctuate, so
that the shares, when redeemed, may be worth more or less than their original
cost. Performance current to the most recent month end may be lower or higher
than the performance quoted and may be obtained by calling 888-785-5578.
The Moody's Equity Mutual Fund Balanced Index tracks a group of similar funds
that typically correspond to standard classifications based on investment
objectives and fundamental policies. The index includes balanced funds, asset
allocation funds, and to a lesser extent, multiasset global funds. The S&P 500
Index is designed to measure performance of the broad domestic economy through
changes in the aggregate market value of 500 stocks representing all major
industries. The Moody's Equity Mutual Fund Balanced Index and S&P 500 Index are
unmanaged and do not reflect the deduction of fees associated with a mutual
fund, such as investment adviser fees. The performance for the Dynamic Balance
Fund reflects the deduction of fees for these value-added services. Investors
cannot directly invest in an index.
COMPARATIVE TOTAL RETURNS AS OF 4/30/04
SINCE INCEPTION
6 MONTHS(1)<F1> 1 YEAR (6/7/01)
--------------- ------ ---------------
Alpine Dynamic Balance Fund 5.70% 20.87% 7.60%
Moody's Equity Mutual Fund Balanced Index 4.23% 14.14% 0.07%
S&P 500 Index 6.27% 22.87% -3.24%
(1)<F1> Not annualized.
PORTFOLIO DISTRIBUTION*<F2>
US Treasury Obligation 11%
Cash/Cash Equivalents 8%
Government Agency Bonds 4%
Real Estate 13%
Financial-Banks 12%
Financial Services 11%
Construction-Homebuilder 10%
Consumer Products & Services 8%
Pharmaceuticals 7%
Utilities 6%
Energy 5%
Commercial Products & Services 3%
Automobiles 1%
Printing 1%
TOP 10 HOLDINGS*<F2>
1. U.S. Treasury Bond, 6.000%, 2/15/2026 9.42%
2. Federal National Mortgage Association,
6.250%, 5/15/2029 3.71%
3. Chelsea Property Group, Inc. 3.38%
4. Fannie Mae 2.63%
5. Pulte Homes, Inc. 2.57%
6. Kimberly-Clark Corporation 2.39%
7. ChevronTexaco Corporation 2.39%
8. Standard Pacific Corp. 2.20%
9. U.S. Treasury Bond, 7.250%, 5/15/2016 2.12%
10. Johnson & Johnson 2.07%
*<F2> Portfolio holdings, geographical distributions and/or sector
distributions are as of 4/30/04 and are subject to change. Portfolio
holdings are not recommendations to buy or sell any securities. Top 10
Holdings does not include short-term investments.
ALPINE DYNAMIC BALANCE FUND
We are pleased to report on the fiscal half-year of the Alpine Dynamic
Balance Fund, ended April 30, 2004. Performance data quoted represents past
performance and is not predictive 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. Performance
current to the most recent month end may be lower or higher than the performance
quoted and may be obtained by calling 888-785-5578.
The investment result for the fiscal half-year was a total return of 5.69%.
This compares with 4.23% for the Moody's Balanced Fund Average and 6.27% for the
Standard & Poor's 500 Average. For 12-month period ended April 30th, the Fund
returned 20.87%, comparing with 14.14% for the Moody's Balanced Fund Average and
22.87% for the Standard & Poor's 500 Average. Since inception on June 10, 2001,
the Fund has had a cumulative compounded return of 23.61%, comparing with 0.19%
for the Moody's Balanced Fund Average and -9.1% for the Standard & Poor's 500.
The Fund's out-performance trend was interrupted in April this year. In April,
when the markets were struck by broad scale apprehension over the trend of
interest rates, the Fund lost its leadership position because of pressure on its
interest sensitive holdings, particularly homebuilding and real estate
investment trusts, U.S. Treasury and Agency Bonds and related financial
companies. While shifting about 10% of the portfolio into cash equivalents, we
continued to hold our prior investment positions because fundamentals remain
strong. We believe that our interest sensitive investments generally are in
companies with dynamic growth opportunities and most often with comparative
undervaluation. Since the end of April, the Fund began to recover relative
position as the bond sell-off subsided, and its investment values rose. New
positions, added to take advantage of a selling wave, generated additional
return.
In reporting on the investment results for the Fund during the six months
ended April, we think it essential to note that there were three quite separate
market environments during this period. November and December marked a
continuation of the general recovery trend for equities which had begun in
March, 2003, and a beginning bond market recovery after a summer and early fall
decline. During this period, your Fund gained 5.81% versus 4.11% and 6.17%
respectively for the Moody's Equity Balanced Fund Index and the S&P 500 Index.
In January through March, there were limited further advances in both stock and
bond averages, yet the Dynamic Balance Fund added 6.26% compared with the S&P
500 Index rising 1.69% and the Moody's Balanced Fund Average rising 2.39%.
Finally, in the month of April, both stock and bond markets suffered reversals
when interest rates made a sharp upward move. But the Fund gave back some of
its prior outperformance, falling -5.99% while the respective indices declined
by -2.39% and -1.57%. May once again saw a reversion to the long-term trend of
relative outperformance for this Fund.
The most significant portfolio event of the six months was the proposed
acquisition of one of the Fund's largest holdings, FleetBoston Financial Corp.
by Bank of America. A gain of 41% was realized on the 40,000 shares sold during
this period. Another significant banking industry related acquisition gain was
in the shares of BSB Bank Corp. The Fund realized a 73% profit on that portion
of its holdings which were long term upon the announced BSB acquisition bid by
Partners Trust Financial Group. Other major percentage gains realized during
this period include 49% in shares of Taubman Centers Inc., 32% in shares of
Ethan Allen Interiors, Inc. and 25% in shares of State Street Corp. In
contrast, the major realized loss was in shares of TECO Energy Inc., 44% of
cost, as this electric utility encountered problems in its diversification
program. After FleetBoston, the largest individual portfolio sale was in the
shares of International Business Machines, a gain of 8%. We concluded that the
current valuation of IBM adequately discounted the prospective rate of growth as
the company continues to effect a transformation from primarily a hardware
company to primarily a services business. Further reductions were made in the
financial service industry, notably sales of Bank of New York with an 8% loss,
and State Street Corp. with a 35% gain.
Illustrative of the allocations of the Fund is a sampling of the top returns
among its equity positions in the six months through April 30th, they are:
% Return
--------
TXU Corp. 51.05%
Consolidated Energy Inc. 33.54%
Impac Mortgage Holdings 33.21%
Allegheny Energy Inc. 30.25%
Kimberly-Clark Corp. 25.44%
Chevron Texaco Corp. 25.37%
Avery Dennison Corp. 23.69%
BSB Bancorp. Inc. 23.12%
SJW Corp. 19.26%
American International Group 18.01%
Our goal in sustaining the dynamics of the portfolio was to invest in the
shares of companies where we believed growth potential is underestimated and
therefore risk limited. New commitments made during this half year included
shares in Allegheny Energy Inc., Colgate Palmolive Company, Consolidated Energy
Corp., Doral Financial, Golden West Financial, Kimberly-Clark Corp., Lincoln
National Corp., R.R. Donnelley & Sons Company, Simon Property Group Inc.,
Unitrin Corp. and Wyeth Corp. Our goal in this selection is to focus on
companies whose dynamic catalysts to growth are currently not being adequately
recognized or are believed likely to appear in the relatively near future.
In the fixed income segment of the portfolio, our major move was the sale of
U.S. Treasury Bonds due in 2028, aimed at reducing the overall bond commitment.
The remaining bonds continue to have longer dated maturities, ranging from 14 to
25 years. Our interest rate projection for the months ahead suggest that the
long-term bond market has adequately adjusted to prospective changes in the
interest rate structure, while there is still vulnerability on the shorter-end
of the yield curve.
Particular mention must be made of the continuing effort to participate in
the consolidation in the banking industry. We focused on smaller bank holding
companies whose strong geographical positioning add potential attractiveness to
acquirers. Among new holdings were those in Arrow Financial Corp. (Glens Falls
and Saratoga Springs, NY), Hudson United Bank Corp. (New York suburban and
exurban markets), Sovereign Bank Corp.(Delaware, north to Massachusetts,
excluding New York) and Susquehanna Bankshares (mid-Pennsylvania). We
anticipate enhanced earnings opportunities for these institutions as net
interest spreads may rise together with commercial loan demand. The role of
smaller banks and bankholding companies has been very positive for the Fund.
Gains from cost up to April 30th include 81% for Bancorp Rhode Island, 41% for
BSB Bancorp, 35.5% for Southside Bankshares, 25.9% for Taylor Capital Corp., and
23.7% for NorthFork Bancorp.
It is Alpine's belief that both the bond and equity markets have already
discounted much of the Federal Reserve's potential rate increases for the next
twelve to eighteen months. While our bond/equity weighting remains cautious, we
are positive about the portfolio's prospects. With sustained strength in the
economy, stimulated by military expenditures, we anticipate a continuing
environment in which the search for under-recognized corporate earnings
opportunities will prove rewarding. This should also provide defensive
characteristics in what may continue to be a volatile political and geopolitical
atmosphere.
We appreciate the continuing support of the Fund's investors.
Please refer to the schedule of portfolio investments for fund holdings
information. Fund holdings and sector allocations are subject to change and
should not be considered a recommendation to buy or sell any security.
INVESTING IN THIS FUND INVOLVES SPECIAL RISKS, INCLUDING BUT NOT LIMITED TO,
OPTIONS AND FUTURES TRANSACTIONS. PLEASE REFER TO THE PROSPECTUS FOR FURTHER
DETAILS.
ALPINE DYNAMIC DIVIDEND FUND
Value of a $10,000 Investment
Alpine Dynamic Moody's Equity Mutual
Date Dividend Fund Fund Growth Income Index S&P 500 Index
---- ------------- ------------------------ -------------
9/22/2003 $10,000 $10,000 $10,000
9/30/2003 $9,980 $9,753 $9,742
10/31/2003 $10,690 $10,258 $10,292
11/30/2003 $10,940 $10,350 $10,383
12/31/2003 $11,763 $10,804 $10,927
1/31/2004 $12,219 $10,973 $11,127
2/29/2004 $12,644 $11,110 $11,282
3/31/2004 $12,567 $10,960 $11,112
4/30/2004 $12,339 $10,761 $10,938
This chart represents a comparison of a hypothetical $10,000 investment in the
Fund versus a similar investment in the Fund's benchmark. The graph and the
table do not reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption of Fund shares. Investment performance reflects
voluntary fee waivers in effect. Without the waiver of fees, total return would
have been lower.
Performance data quoted represents past performance and is not predictive of
future results. Investment return and principal value of the Fund fluctuate, so
that the shares, when redeemed, may be worth more or less than their original
cost. Performance current to the most recent month end may be lower or higher
than the performance quoted and may be obtained by calling 888-785-5578.
The Moody's Equity Mutual Fund Growth Income Index tracks a group of similar
funds that typically correspond to standard classifications based on investment
objectives and fundamental policies. The S&P 500 Index is designed to measure
performance of the broad domestic economy through changes in the aggregate
market value of 500 stocks representing all major industries. The Moody's Equity
Mutual Fund Growth Income Index and S&P 500 Index are unmanaged and do not
reflect the deduction of fees associated with a mutual fund, such as investment
adviser fees. The performance for the Dynamic Dividend Fund reflects the
deduction of fees for these value-added services. Investors cannot directly
invest in an index.
COMPARATIVE TOTAL RETURNS AS OF 4/30/04
SINCE INCEPTION(1)<F3>
6 MONTHS(1)<F3> (9/22/03)
--------------- ----------------------
Alpine Dynamic Dividend Fund 15.42% 23.39%
Moody's Equity Mutual Fund Growth Income Index 4.91% 7.61%
S&P 500 Index 6.27% 9.38%
(1)<F3> Not annualized.
PORTFOLIO DISTRIBUTION*<F4>
Financial-Banks 12%
Manufacturing-Diversified 9%
Pharmaceuticals 9%
Retail 9%
Energy 8%
Transportation 6%
Food & Beverages 5%
Telecommunications 4%
Utilities 4%
Apparel 3%
Chemicals 3%
Communication & Media 3%
Consumer Products & Services 3%
Entertainment 3%
Medical Supplies 3%
Conglomerate 2%
Construction-Materials 2%
Printing 2%
Real Estate Investment Trusts 2%
Software 2%
Waste Disposal 2%
Automobiles 1%
Computers 1%
Lodging 1%
Cash/Cash Equivalents 1%
TOP 10 HOLDINGS*<F4>
1. Pfizer Inc. 2.57%
2. The Liberty Corporation 2.48%
3. Saks Incorporated 2.41%
4. Abbott Laboratories 2.27%
5. Equitable Resources, Inc. 2.25%
6. BP p.l.c. 2.10%
7. General Electric Company 2.10%
8. Ethan Allen Interiors Inc. 1.99%
9. Hubbell Incorporated - Class B 1.99%
10. Raven Industries, Inc. 1.98%
*<F4> Portfolio holdings, geographical distributions and/or sector
distributions are as of 4/30/04 and are subject to change. Portfolio
holdings are not recommendations to buy or sell any securities. Top 10
Holdings does not include short-term investments.
ALPINE DYNAMIC DIVIDEND FUND
We are pleased to report that the Alpine Dynamic Dividend Fund has generated
strong performance since its inception on September 22, 2003. During this review
period, the Fund outperformed both the broad market averages and its fund peers
while also distributing an attractive dividend yield. For the six-month period
ended April 30th, the Fund provided a total return of 15.42%, with 11.13% in
capital appreciation and 4.29% in dividend payments. This compares favorably
with a 6.27% total return for the S&P 500 Stock Index and a 4.91% total return
for the Moody's Equity Growth Income Index for the same time period. The Alpine
Dynamic Dividend Fund ended the period on April 30th with total net assets of
$26.91 million, an increase of 158% since inception.
The Alpine Dynamic Dividend Fund was designed specifically to maximize the
amount of distributed dividend income that is qualified for the new 15% tax
rate, while also employing a research driven approach to identifying companies
with the potential for dividend increases and capital appreciation. We believe
we have taken a unique and dynamic approach to maximizing both income and
capital appreciation by combining three different investment strategies with a
multi-cap focus. These strategies are reflected in both our top 10 holdings as
well as our top performing stocks for the six month period.
First, we run a portion of our portfolio with a dividend capture strategy,
----------------
where we invest in consistent, high yielding stocks or in special situations
where large cash balances are being returned to shareholders in the form of one-
time special dividends. These actions reflect strong corporate balance sheets
as well as management incentive to distribute excess cash in the form of
dividends due to the new lower tax rates. We enhance the return of our dividend
capture portfolio by selectively rotating our high yielding holdings after the
61-day ownership period required to obtain the 15% dividend tax rate. Four of
our top 10 holdings distributed attractive one-time dividends in 2004, including
Liberty Corp. ($4 special dividend), Ethan Allen Interiors ($3 special), Saks
Incorporated ($2 special), and Raven Industries ($1.25 special). Another top 10
holding, Equitable Resources, increased its dividend by 27%.
Second, we have identified core long-term growth and income stocks that have
---------------------------
attractive current dividend yields plus a catalyst for potential capital
appreciation and dividend increases. In our top 10 holdings, we would
categorize Pfizer, Abbott Laboratories, and General Electric in this group.
Our third strategy is what we call "value with a catalyst", where we look for
---------------------
under-valued or turnaround situations where there may exist or be potential for
high current dividend yields due to depressed earnings that we believe are
poised to recover. We would categorize two of our top 10 holdings, BP and
Hubbell in this group, where we believe there is a strong fundamental rebound in
earnings and cash flow over the next several years as well as attractive
valuations.
Capturing dividend increases is an important component of our research and
investment strategy. In the six month period ended April 30th, 52 stocks in our
portfolio raised their dividends by an average of 39% and 17 issued special
dividends ranging from $0.10 to $8, representing current yields of 1% to 38%.
Although several of our top 10 holdings are from the traditional higher
yield, large capitalization segments of the dividend-paying universe, we believe
a major factor of our out-performance has been our multi-cap strategy. Our top
five performers in the six month period ended April 30th were all small or mid-
cap stocks, with market capitalizations ranging from a low of $130 million at
International Aluminum to $3.5 billion at Eastman Chemical. Notably, among our
best performers were commodity or material stocks, with our top two gainers,
Tsakos Energy (up 67.1%) and Frontline (up 53.3%) which are engaged in the
business of transporting oil. The other standouts came from Sanderson Farms (up
49.1%), a poultry producer which is benefiting from the increase in demand for
chicken associated with the Atkins diet, Eastman Chemical (up 45.3%) and
International Aluminum (up 41.2%) benefited from a rebound in demand for
chemicals and building materials.
We would note that the Fund currently has a slightly more defensive posture
since our last reporting period. In October 2003, we had no holdings in
pharmaceuticals or medical supplies versus 12.3% of the value of the April 2004
portfolio now is held in this group in 7 different stock holdings. In addition,
we have scaled back on our interest rate sensitive holdings. In October 2003 we
held 19.8% of the portfolio in financials and 20.5% in utilities versus 12.2% of
the April 2004 portfolio now in financials and only 4.0% in utilities. At
present, we are taking a bit more of a defensive, bar bell approach, where we
have large holdings in the pharmaceutical and energy sectors while also
maintaining our significant exposure to the industrial and consumer
discretionary groups. The interest rate sensitive financials and utilities that
remain in the portfolio have catalysts for upside associated with a
restructuring and/or an under-appreciated growth opportunity.
As we look out to 2004, we believe that our portfolio of dividend paying
stocks with strong earnings potential and cash flow generation will continue to
garner more attention from the investing community, as valuations on many of the
lesser quality companies that have had strong runs in 2003 and early 2004 now
look over extended. In addition, we believe a large portion of dividend paying
stocks will be poised to benefit from the weaker dollar, continuing improvements
in global economic demand, improved balance sheets and operational leverage
following years of restructuring. In addition, managements have incentive to use
excess cash to reward shareholders with improved dividend payouts under the new
15% dividend tax rate. However, these positive fundamentals will be balanced
with the risks of rising interest rates and continued geopolitical
uncertainties.
Our approach for the remainder of 2004 is to remain broadly diversified
within the dividend paying universe while actively looking for undervalued
opportunities to provide outperformance on the upside. The selection of stocks
in our portfolio is based on our independent appraisal of each company's
potential for profits, dividend growth and market revaluation across a broad
spectrum of stock market capitalizations, industries, and international borders.
We believe we will continue to be able to distribute attractive dividend payouts
to our shareholders by capitalizing on our research driven approach to
identifying situations for dividend increases as well as through our active
management of the portfolio.
Thank you for your participation in what we believe is an excellent start in
2004 as we look forward to a prosperous year.
Please refer to the schedule of portfolio investments for fund holding
information. Fund holdings and sector allocations are subject to change and
should not be considered a recommendation to buy or sell any security.
Mutual fund investing involves risk. Principal loss is possible. Neither the
Fund nor any of its representatives may give tax advice. Investors should
consult their tax advisor for information concerning their particular situation.
ALPINE MUNICIPAL MONEY MARKET FUND
EQUIVALENT TAXABLE YIELDS
AS OF 4/30/04
YOUR TAX-EXEMPT
EFFECTIVE YIELD OF
MARGINAL 1.06% IS EQUIVALENT
JOINT RETURN SINGLE RETURN TAX RATE TO A TAXABLE YIELD OF:
------------ ------------- -------- ----------------------
$58,101-117,250 $29,051-70,350 25.0% 1.41%
$117,251-178,650 $70,351-146,750 28.0% 1.47%
$178,651-319,100 $146,751-319,100 33.0% 1.58%
Over $319,100 Over $319,100 35.0% 1.63%
The chart reflects projected 2004 marginal federal tax rates before limitations
and phaseouts. Individuals with adjusted gross income in excess of $139,500
should consult a tax professional to determine their actual 2004 marginal tax
rate.
ALPINE TAX OPTIMIZED INCOME FUND
Value of a $10,000 Investment
Alpine Tax Optimized Lipper Short Municipal
Date Income Fund Debt Funds Index
---- -------------------- ----------------------
12/6/2002 $10,000 $10,000
12/31/2002 $10,061 $10,057
1/31/2003 $10,091 $10,079
2/28/2003 $10,176 $10,130
3/31/2003 $10,168 $10,124
4/30/2003 $10,252 $10,146
5/31/2003 $10,357 $10,204
6/30/2003 $10,398 $10,213
7/31/2003 $10,317 $10,171
8/31/2003 $10,328 $10,195
9/30/2003 $10,441 $10,261
10/31/2003 $10,412 $10,256
11/30/2003 $10,433 $10,271
12/31/2003 $10,490 $10,285
1/31/2004 $10,514 $10,314
2/29/2004 $10,567 $10,353
3/31/2004 $10,594 $10,341
4/30/2004 $10,525 $10,287
This chart represents a comparison of a hypothetical $10,000 investment in the
indicated share class versus a similar investment in the Fund's benchmark. The
graph and the table do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares. The returns
set forth reflect the waiver of certain fees. Without the waiver of fees, total
return would have been lower.
Performance data quoted represents past performance and is not predictive of
future results. Investment return and principal value of the Fund fluctuate, so
that the shares, when redeemed, may be worth more or less than their original
cost. Performance current to the most recent month end may be lower or higher
than the performance quoted and may be obtained by calling 888-785-5578.
Lipper Short Municipal Debt Funds Index is an unmanaged index that tracks funds
that invest in municipal debt issues with dollar-weighted average maturities of
less than three years and does not reflect the deduction of fees associated with
a mutual fund, such as investment adviser fees.. The performance for the Tax
Optimized Income Fund reflects the deduction of fees for these value-added
services. Investors cannot directly invest in an index.
COMPARATIVE TOTAL RETURNS AS OF 4/30/04
6 MONTHS(1)<F5> 1 YEAR SINCE INCEPTION(2)<F6>
--------------- ------ ----------------------
Alpine Tax Optimized Income Fund - Investor Class 1.08% 2.66% 3.73%
Alpine Tax Optimized Income Fund - Adviser Class N/A N/A -0.62%
Lipper Short Municipal Debt Funds Index 0.30% 1.39% 2.05%
Lipper Short Municipal Debt Funds Average 0.21% 1.18% 1.88%
Lipper Short Municipal Debt Fund Rank - Investor Class N/A(1)<F5> 2/53 1/49
(1)<F5> Not Annualized. The NASD does not recognize rankings for less than
one year.
(2)<F6> Adviser Class shares commenced on March 30, 2004 and Investor Class
shares commenced on December 6, 2002.
ALPINE MUNICIPAL MONEY MARKET FUND / ALPINE TAX OPTIMIZED INCOME FUND
We are pleased to provide you with the semi-annual report for the Alpine
Income Trust for the period ending April 30, 2004. The Income Trust includes
both the Alpine Tax Optimized Income Fund and the Alpine Municipal Money Market
Fund.
We are very pleased to report that for the six-month period both funds
produced strong relative performance comparable to the performance returns of
last year. The total return for the Alpine Tax Optimized Income Fund was 1.08%
and it was .51% for the Alpine Municipal Money Market Fund. The Lipper peer
average for the period was .21% and .19% for the Short Municipal Debt and Tax
Exempt Money Market Fund peer groups, respectively.
Throughout the past six months, the focus of the financial markets was
clearly centered on labor market conditions. Having seen improvement in almost
every sector of the economy outside of the labor market, fixed income investors
turned their attention to employment statistics for information on the strength
and sustainability of the economic recovery. Moreover, because the Federal
Reserve had specifically mentioned job losses in past statements, investors
relied on labor market statistics to provide clues as to when the Fed might
increase its target Fed Funds rate.
For most of this reporting period, the market was hit with a series of
disappointing employment reports, prompting a bond market rally that rivaled the
one in July. The sharp increase in bond prices was further fueled by a large
number of bearish fixed income investors who scrambled to cover short positions
they had taken in the bond market before the release of each report.
In a striking turn of events, the markets were stunned in early April when
the Labor Department announced that non-farm payrolls in the US grew by 308,000
during the month of March. The gain in payrolls, which was the largest since
April 2000, was far higher then what the market was expecting. Amid speculation
that a recovery in the labor market might lead the Federal Reserve to raise the
Fed Funds rate earlier than previously expected, bonds sold off sharply. The
yield on the 10-Year Treasury note rose from a low of 3.65% on March 16th to
4.50% at the end of April. The money market yield curve steepened dramatically,
with the spread between one month and one year paper widening to 42 basis points
the day after the report.
Municipal and Treasury securities traded at similar spreads from the
beginning of our reporting period through mid-March. As rates continued to
fall, issuers decided to bring new issues to the market to take advantage of the
low rates, creating a huge inventory of new deals. With anemic inflows into the
bond funds coupled with sticker shock from the retail community, the new supply
had to be priced higher to attract investors. This chain of events pushed
secondary market yields higher. As ratios increased, municipals became more
attractive to crossover investors because after-tax yields significantly
exceeded yields from taxable investments.
ALPINE TAX OPTIMIZED INCOME FUND
The environment for all fixed income securities was fairly volatile through
much of the past six months. As a result, we continued to maintain our focus on
two areas of the market that we felt offered the best after-tax returns, while
at the same shortening the maturity structure of the portfolio. The average
maturity at the end of the period was 1.68 years which is about half of what our
normal target maturity would be.
The Fund continued to allocate a majority of its assets to municipal bonds as
they continued to trade at very high ratios relative to most taxable securities.
We had positioned this sector with an overweighting in one year or less
municipal securities to balance out our longer holdings in higher yielding
taxable bonds.
In the taxable sector, we continued our concentration mainly on corporate
bonds. As we mentioned in our previous report, we focused on this market as
this area continues to provide the Fund with attractive after-tax yields not
available in other sectors of the fixed income market. We were fortunate to
take advantage of the market during the last year and our corporate holdings
provide the Fund with an attractive income stream. Although the spreads on
corporate bonds has narrowed, we still feel that they offer some of the best
value relative to other sectors of the taxable market. We will continue to
focus on sectors of the market that still have some potential for improvement
and thus increased value.
Going forward, we will closely monitor the financial markets as we expect to
see the Fed tightening throughout the rest of the year. While we strive to
provide an attractive yield for our shareholders, our main goal will be to focus
on capital preservation. We will continue to adjust the average maturity as is
warranted and look to take advantage of higher rates in the future.
ALPINE MUNICIPAL MONEY MARKET FUND
With the increase in the Fed Funds Rate not expected until the second half of
the year at the earliest and the short-end of the money market yield curve
locked firmly in place, rates in the variable rate demand note market were
driven exclusively by supply and demand during the past six months. In typical
fashion, VRDN rates spiked towards the end of the year and then declined steeply
in early January as tax exempt money market funds saw huge cash inflows. As the
month progressed, rates began to stabilize and continued that way until late
April, where they then backed off again due to seasonal outflows from money
funds.
We essentially followed the same strategies and techniques we have employed
in previous periods. Our goal is to invest in securities that we believe
represent the best value in the market at any given time. The Fund avoids
buying bonds whose repayment is backed solely by income and sales tax revenue,
which are among the least predictable and most risky guarantees in the municipal
bond world. We try to find revenue streams other than taxes, such as essential
services like water or electricity or tolls, and we look for issues that are
credit-enhanced, either through insurance or with back-up revenue behind it.
The Fund continued to emphasize variable rate demand notes which typically
comprised about 75% of the portfolio. Variable rate securities typically pay
interest at a rate that is reset daily or weekly to reflect the current market
rate, and gives the holder the right to sell the bond at par upon a one-day or
seven-day notice. As a result, these securities can provide attractive yields
and offer the Fund flexibility to take advantage of the market when new
opportunities arise. In our opinion, one-year municipal money market securities
did not offer sufficient yield advantage over VRDN's to justify adding longer
securities to the portfolio, especially as the economy strengthened.
However, we did take advantage of a few select opportunities during the
latter part of this reporting period to extend the Fund's maturity. We
purchased a nine-month general market note and two insured bonds due in one-
year. Although these purchases extended the Fund's average maturity out to 56
days, we have since allowed the average maturity to shorten and will continue to
do so until further buying opportunities become available.
Thank you for you investment in the Alpine Income Funds.
An investment in these Funds are neither insured nor guaranteed by the Federal
Deposit Insurance Corporation or any other government agency. Although the
Funds seek to preserve the value of your investment at $1.00 per share, it is
possible to lose money by investing in the Funds.
INVESTING IN THESE FUNDS INVOLVES SPECIAL RISKS, INCLUDING BUT NOT LIMITED TO,
INVESTING IN MUNICIPAL OBLIGATIONS AND DERIVATIVE SECURITIES, MORTGAGE-RELATED
AND ASSET-BACKED INVESTMENTS. PLEASE REFER TO THE PROSPECTUS FOR FURTHER
DETAILS.
Please refer to the Schedule of Investments for fund holding information. Fund
holdings and sector allocations are subject to change and should not be
considered a recommendation to buy or sell any security.
Any tax or legal information provided is merely a summary of our understanding
and interpretation of the current income tax regulations and is not exhaustive.
Investors must consult their tax advisor or legal counsel for advice and
information concerning their particular situation. Neither the Fund nor any of
its representatives may give legal or tax advice.
The federal government guarantees interest payments from government securities,
such as U.S. Treasury bills, while dividend payments carry no such guarantee.
Government securities, if held to maturity, guarantee the timely payment of
principal and interest.
ALPINE MUTUAL FUNDS
DYNAMIC BALANCE FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
APRIL 30, 2004 (UNAUDITED)
SHARES/ SECURITY
PAR VALUE DESCRIPTION VALUE
- --------- ----------- -----
COMMON STOCKS -- 76.5%
Automobiles -- 0.7%
8,000 General Motors Corporation $ 379,360
-----------
Commercial Products & Services -- 2.2%
10,000 Deere & Company 680,400
2,443 Eagle Materials Inc. 160,505
6,390 Eagle Materials Inc. -- Class B 408,321
-----------
1,249,226
-----------
Construction -- Homebuilder -- 9.7%
1,000 Cavco Industries, Inc. (a)<F7> 39,880
20,000 Centex Corporation 959,000
18,000 D.R. Horton, Inc. 518,400
5,500 M.D.C. Holdings, Inc. 339,845
30,000 Pulte Homes, Inc. 1,475,100
12,500 The Ryland Group, Inc. 986,875
25,000 Standard Pacific Corp. 1,261,000
-----------
5,580,100
-----------
Consumer Products & Services -- 7.9%
10,000 Avery Dennison Corporation 642,300
20,000 Colgate-Palmolive Company 1,157,600
21,000 Kimberly-Clark Corporation 1,374,450
9,000 The Procter & Gamble Company 951,750
28,000 RPM International, Inc. 422,240
-----------
4,548,340
-----------
Energy -- 4.7%
15,000 ChevronTexaco Corporation 1,372,500
27,000 CONSOL Energy Inc. 773,010
8,000 Penn Virginia Corporation 526,160
-----------
2,671,670
-----------
Financial -- Banks -- 12.0%
12,000 Arrow Financial Corporation 345,000
13,000 Bancorp Rhode Island, Inc. 457,210
15,000 Banknorth Group, Inc. 459,450
2,000 BSB Bancorp, Inc. 75,000
11,000 Comerica Incorporated 567,930
21,000 Doral Financial Corp. (b)<F8> 688,590
5,000 Golden West Financial Corporation 525,550
10,000 Hudson United Bancorp 357,300
26,000 J.P. Morgan Chase & Co. 977,600
5,000 M&T Bank Corporation 425,000
17,000 North Fork Bancorporation, Inc. 631,040
11,000 PNC Financial Services Group 584,100
2,000 Rurban Financial Corp. (a)<F7> 26,416
5,324 Southside Bancshares, Inc. 98,015
13,000 Sovereign Bancorp, Inc. 259,740
15,000 Susquehanna Bancshares, Inc. 351,000
4,000 Taylor Capital Group, Inc. 83,080
-----------
6,912,021
-----------
Financial Services -- 11.6%
14,000 Ambac Financial Group, Inc. 966,000
13,000 American International Group, Inc. 931,450
14,000 The Chubb Corporation 966,000
22,000 Fannie Mae 1,511,840
12,000 Lincoln National Corporation 538,560
11,300 Marsh & McLennan Companies, Inc. 509,630
36,000 MBNA Corporation 877,680
5,000 The St. Paul Travelers
Companies, Inc. 203,350
4,000 Unitrin, Inc. 158,600
-----------
6,663,110
-----------
Pharmaceutical -- 6.7%
20,000 Bristol-Myers Squibb Company 502,000
22,000 Johnson & Johnson 1,188,660
15,000 Merck & Co. Inc. 705,000
25,000 Pfizer Inc. 894,000
15,000 Wyeth 571,050
-----------
3,860,710
-----------
Printing -- 1.2%
23,000 R.R. Donnelley & Sons Company 676,660
-----------
Real Estate Investment Trusts -- 13.4%
10,000 Boston Properties, Inc. 470,000
38,000 Chelsea Property Group, Inc. 1,938,000
10,000 Developers Diversified
Realty Corporation 327,500
20,000 General Growth Properties, Inc. 542,200
35,000 Impac Mortgage Holdings, Inc. 658,350
10,000 Mack-Cali Realty Corporation 373,500
15,000 Maguire Properties, Inc. 341,850
90,000 MeriStar Hospitality Corporation (a)<F7> 522,000
56,500 Prime Group Realty Trust (a)<F7> 312,445
15,000 Simon Property Group, Inc. 723,150
16,000 Taubman Centers, Inc. 312,000
7,000 Town & Country Trust 163,660
20,000 Vornado Realty Trust 1,009,000
-----------
7,693,655
-----------
Transportation -- 0.6%
10,000 Alexander & Baldwin, Inc. 315,900
-----------
Utilities -- 5.8%
80,000 Allegheny Energy, Inc. (a)<F7> 1,102,400
35,000 Aquila, Inc. (a)<F7> 148,750
10,000 Hawaiian Electric Industries, Inc. 497,600
12,000 NUI Corporation 199,920
15,600 SJW Corp. 540,540
10,000 TXU Corp. 341,400
30,550 Xcel Energy, Inc. 511,101
-----------
3,341,711
-----------
Total Common Stocks
(Cost $37,652,875) 43,892,463
-----------
BONDS AND NOTES -- 15.3%
U.S. Government Agencies -- 3.7%
$2,000,000 Federal National Mortgage
Association 6.250%, 5/15/2029 2,130,402
-----------
U.S. Government Obligations -- 11.6%
1,000,000 U.S. Treasury Bond,
7.250%, 5/15/2016 1,218,594
5,000,000 U.S. Treasury Bond,
6.000%, 2/15/2026 5,408,595
-----------
6,627,189
-----------
Total Bonds and Notes
(Cost $8,452,451) 8,757,591
-----------
SHORT-TERM INVESTMENTS -- 3.6%
1,800,000 Alpine Municipal
Money Market Fund 1,800,000
277,000 Federal Home Loan Bank Discount
Note, 0.650%, 5/03/2004 276,990
-----------
Total Short-Term Investments
(Cost $2,076,990) 2,076,990
-----------
Total Investments
(Cost $48,182,316) 95.4% 54,727,044
Other Assets less Liabilities 4.6% 2,669,964
-----------
Total Net Assets 100.0% $57,397,008
-----------
-----------
(a)<F7> Non-income producing securities.
(b)<F8> Foreign security.
See notes to financial statements.
ALPINE MUTUAL FUNDS
DYNAMIC DIVIDEND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
APRIL 30, 2004 (UNAUDITED)
SHARES/ SECURITY
PAR VALUE DESCRIPTION VALUE
- --------- ----------- -----
COMMON STOCKS -- 98.7%
Apparel -- 3.0%
5,000 Kellwood Company $ 197,250
8,000 Reebok International Ltd. 291,040
11,500 Saucony, Inc. -- Class B 240,350
5,000 Superior Uniform Group, Inc. 81,750
-----------
810,390
-----------
Automobiles -- 1.4%
8,000 General Motors Corporation 379,360
-----------
Chemicals -- 2.7%
10,000 BASF AG -- ADR 517,700
5,000 Eastman Chemical Company 212,850
-----------
730,550
-----------
Communication & Media -- 3.2%
15,000 The Liberty Corporation 673,500
8,000 The Walt Disney Company 184,240
-----------
857,740
-----------
Computers -- 1.2%
16,000 Hewlett-Packard Company 315,200
-----------
Conglomerate -- 2.1%
19,000 General Electric Company 569,050
-----------
Construction -- Materials -- 1.9%
6,500 Eagle Materials Inc. 427,050
3,100 International Aluminum Corporation 93,713
-----------
520,763
-----------
Consumer Products & Services -- 2.9%
13,400 Newell Rubbermaid Inc. 316,776
6,000 Nu Skin Enterprises, Inc. -- Class A 142,020
100,000 Rentokil Initial plc (b)<F10> 333,390
-----------
792,186
-----------
Energy -- 8.1%
10,800 BP p.l.c. -- ADR 571,320
2,000 ChevronTexaco Corporation 183,000
13,000 Equitable Resources, Inc. 610,870
2,000 Kinder Morgan, Inc. 120,420
10,000 Repsol YPF, S.A. -- ADR 208,800
12,000 Shell Transport & Trading
Company plc -- ADR 504,840
-----------
2,199,250
-----------
Entertainment -- 2.7%
8,000 Harrah's Entertainment, Inc. 425,440
14,000 Regal Entertainment
Group -- Class A 305,060
-----------
730,500
-----------
Financial -- Banks -- 12.2%
3,800 Citigroup Inc. 182,742
3,000 Comerica Incorporated 154,890
10,000 Danske Bank A/S -- ADR 224,717
5,000 First Horizon National Corporation 219,800
12,200 J.P. Morgan Chase & Co. 458,720
11,000 KeyCorp 326,700
12,000 Lloyds TSB Group plc -- ADR 366,960
2,500 M&T Bank Corporation 212,500
6,000 National City Corporation 208,020
6,600 PNC Financial Services Group 350,460
1,500 Wachovia Corporation 68,625
8,000 Washington Mutual, Inc. 315,120
4,000 Wells Fargo & Company 225,840
-----------
3,315,094
-----------
Food & Beverages -- 5.2%
4,000 The Coca-Cola Company 202,280
10,000 ConAgra Foods, Inc. 288,900
10,502 Ingles Markets,
Incorporated -- Class A 117,622
32,000 Lance, Inc. 483,520
32,575 Rocky Mountain
Chocolate Factory, Inc. 327,737
-----------
1,420,059
-----------
Forestry -- 0.4%
2,000 Weyerhaeuser Company 118,400
-----------
Lodging -- 1.2%
15,000 Accor SA -- ADR 315,752
-----------
Manufacturing -- Diversified -- 8.8%
4,500 Caterpillar Inc. 349,785
60,000 GKN plc -- ADR 243,660
16,500 Graco Inc. 465,300
12,000 Hubbell Incorporated -- Class B 539,280
16,500 Raven Industries, Inc. 536,250
12,300 Twin Disc, Incorporated 266,787
-----------
2,401,062
-----------
Medical Supplies -- 2.8%
40,500 Meridian Bioscience, Inc. 445,500
11,000 PolyMedica Corporation 306,240
-----------
751,740
-----------
Pharmaceutical -- 9.5%
14,000 Abbott Laboratories 616,280
18,000 Bristol-Myers Squibb Company 451,800
6,000 Johnson & Johnson 324,180
10,500 Merck & Co. Inc. 493,500
19,500 Pfizer Inc. 697,320
-----------
2,583,080
-----------
Printing -- 1.6%
14,500 R. R. Donnelley & Sons Company 426,590
-----------
Real Estate Investment Trusts -- 1.7%
4,000 General Growth Properties, Inc. 108,440
5,000 Keystone Property Trust 101,700
6,000 Senior Housing Properties Trust 89,700
3,000 Vornado Realty Trust 151,350
-----------
451,190
-----------
Retail -- 8.7%
26,000 Bassett Furniture
Industries, Incorporated 466,440
15,594 Deb Shops, Inc. 357,321
13,000 Ethan Allen Interiors Inc. 540,410
45,500 Saks Incorporated (a)<F9> 655,200
6,000 Wal-Mart Stores, Inc. 342,000
-----------
2,361,371
-----------
Software -- 2.1%
78,800 American Software, Inc. -- Class A 453,100
5,000 Microsoft Corporation 129,850
-----------
582,950
-----------
Telecommunications -- 3.7%
13,200 Atlantic Tele-Network, Inc. 417,780
11,000 Nokia Oyj -- ADR 154,110
5,000 SBC Communications Inc. 124,500
19,000 TDC A/S -- ADR 319,580
-----------
1,015,970
-----------
Transportation -- 5.9%
9,000 Alexander & Baldwin, Inc. 284,310
21,000 Frontline Limited (b)<F10> 534,450
5,000 Teekay Shipping Corporation (b)<F10> 304,000
20,000 Tsakos Energy Navigation Ltd. (b)<F10> 485,200
-----------
1,607,960
-----------
Utilities -- 4.0%
3,000 Ameren Corporation 131,160
17,000 Duke Energy Corporation 358,020
4,600 Hawaiian Electric Industries, Inc. 228,896
3,400 National Fuel Gas Company 83,266
5,000 OGE Energy Corp. 120,250
4,600 SJW Corp. 159,390
-----------
1,080,982
-----------
Waste Disposal -- 1.7%
16,000 Waste Management, Inc. 454,400
-----------
Total Common Stocks
(Cost $26,233,506) 26,791,589
-----------
SHORT-TERM INVESTMENTS -- 1.4%
U.S. Government Agencies -- 1.4%
369,000 Federal Home Loan Bank Discount
Note, 0.650%, 5/03/2004 368,987
-----------
Total Short-Term Investments
(Cost $368,987) 368,987
-----------
Total Investments
(Cost $26,602,493) 100.1% 27,160,576
Other Liabilities in
Excess of Assets (0.1%) (16,941)
-----------
Total Net Assets 100.0% $27,143,635
-----------
-----------
(a)<F9> Non-income producing securities.
(b)<F10> Foreign security.
ADR -- American Depository Receipt
See notes to financial statements.
ALPINE MUTUAL FUNDS
MUNICIPAL MONEY MARKET FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
APRIL 30, 2004 (UNAUDITED)
SHARES/ SECURITY
PAR VALUE DESCRIPTION VALUE
- --------- ----------- -----
MUNICIPAL BONDS -- 98.9%
Alabama -- 2.0%
Alabaster Alabama Sewer Revenue
Warrants (CS: MBIA)
$ 435,000 2.000%, 4/01/2005 $ 437,763
Dothan Houston County Alabama
Airport Authority Airport Revenue,
Pemco Aviation Group Project
(LOC: Southtrust Bank N.A.)
1,250,000 1.336%, 5/07/2004 (a)<F11> (b)<F12> 1,250,000
-----------
1,687,763
-----------
Arkansas -- 0.5%
Texarkana Arkansas Industrial
Development Revenue, Precision Roll
Grinders Inc. Project (CS: ADED GTD)
425,000 1.950%, 5/01/2004 425,000
-----------
California -- 7.1%
State of California Revenue Anticipation
Warrants -- Series A
1,000,000 2.000%, 6/16/2004 1,000,728
State of California Revenue Anticipation
Warrants -- Series B
4,000,000 2.000%, 6/16/2004 4,002,560
Stockton California Certificates of
Participation, United Christian Schools
(LOC: Pacific Capital Bank)
1,000,000 1.546%, 5/07/2004 (a)<F11> (b)<F12> 1,000,000
-----------
6,003,288
-----------
Colorado -- 15.9%
Bachelor Gulch Metropolitan
District General Obligation
(LOC: Compass Bank)
2,865,000 1.200%, 12/01/2004 (b)<F12> 2,865,000
Broomfield Colorado Village
Metropolitan District 2,
Colorado Special Obligation
Revenue (LOC: Compass Bank)
2,000,000 1.436%, 5/07/2004 (a)<F11> (b)<F12> 2,000,000
Cherry Creek Colorado South
Metropolitan District 1 -- Series B
(LOC: Compass Bank)
2,000,000 1.400%, 5/07/2004 (b)<F12> 2,000,000
Colorado Health Facilities Authority
Revenue, Longmont United Hospital
(CS: ACA)
250,000 2.000%, 12/01/2004 250,540
Fort Collins Colorado Economic
Development Revenue, Comridge
LLP Project, (LOC: Bank One
Colorado N.A.)
2,340,000 1.316%, 5/07/2004 (a)<F11> (b)<F12> 2,340,000
Triview Colorado Metropolitan
District REF & IMPT -- Series A
(LOC: Compass Bank)
1,000,000 1.375%, 4/30/2005 (b)<F12> $ 1,000,000
Vail Colorado Multifamily Housing
Revenue, Middle Creek Village
Apartments Project (LOC: California
Bank & Trust)
3,000,000 1.366%, 5/07/2004 (a)<F11> (b)<F12> 3,000,000
-----------
13,455,540
-----------
Florida -- 1.3%
Hillsborough County Florida
Industrial Development Authority
Industrial Development Revenue,
Ringhaver Equipment Co. Project
(LOC: Suntrust Bank)
500,000 1.396%, 5/07/2004 (a)<F11> (b)<F12> 500,000
Northern Palm Beach County
Improvement District Florida,
Water Control & Improvement
(CS: Radian)
565,000 1.500%, 11/01/2004 565,000
-----------
1,065,000
-----------
Georgia -- 8.7%
De Kalb County Development
Authority Industrial Development
Revenue, Noland Company Project
(LOC: Wachovia Bank N.A.)
1,500,000 1.336%, 5/07/2004 (a)<F11> (b)<F12> 1,500,000
Douglas County Development
Authority Industrial Development
Revenue, Denyse Signs Inc. Project
(LOC: Bank of North Georgia)
1,700,000 1.336%, 5/07/2004 (a)<F11> (b)<F12> 1,700,000
Fulton County Development
Authority Pollution Control Revenue,
General Motors Corporation Project
200,000 1.496%, 5/07/2004 (a)<F11> (b)<F12> 200,000
Macon-Bibb County Georgia
Industrial Authority Industrial
Revenue, IBC Partnership No. 1 Project
(LOC: Regions Bank)
65,000 2.084%, 5/07/2004 (a)<F11> (b)<F12> 65,000
Rockdale County Georgia
Development Authority Revenue,
Great Southern Wood Project
(LOC: Southtrust Bank, N.A.)
1,620,000 1.336%, 5/07/2004 (a)<F11> (b)<F12> 1,620,000
Walton County Georgia Industrial
Building Authority Industrial
Development Revenue, Leggett
& Platt Inc. Project
(LOC: Wachovia Bank N.A.)
2,300,000 1.316%, 5/07/2004 (a)<F11> (b)<F12> 2,300,000
-----------
7,385,000
-----------
Hawaii -- 1.1%
Hawaii State Housing Finance &
Development Corp., Hawaii Rental
Housing Systems -- Series A
(LOC: Industrial Bank of Japan)
300,000 3.830%, 5/07/2004 (a)<F11> (b)<F12> 300,000
Hawaii State Housing Finance &
Development Corp., Hawaii Rental
Housing Systems -- Series B
(LOC: Industrial Bank of Japan)
600,000 3.830%, 5/07/2004 (a)<F11> (b)<F12> 600,000
-----------
900,000
-----------
Illinois -- 9.5%
Chicago Illinois Industrial
Development Revenue, Bullen
Midwest Inc. Project
(LOC: LaSalle Bank N.A.)
1,330,000 1.296%, 5/07/2004 (a)<F11> (b)<F12> 1,330,000
Chicago Illinois Solid Waste Disposal
Facility Revenue, Groot Industries
Inc. Project (LOC: Bank One N.A.)
2,100,000 1.277%, 5/07/2004 (a)<F11> (b)<F12> 2,100,000
Coles Clark Etc Counties Community
College District No. 517, Lake Land
Community College
700,000 3.500%, 12/1/2004 708,248
Elk Grove Village Illinois Industrial
Development Revenue, Rainbow
Fish House Inc. Project
(LOC: American National B&T)
5,000 1.277%, 5/07/2004 (a)<F11> (b)<F12> 5,000
Harvard Illinois Healthcare Facility
Revenue, Harvard Memorial
Hospital Inc. Project
(LOC: M&I Bank)
1,430,000 1.366%, 5/07/2004 (a)<F11> (b)<F12> 1,430,000
Illinois Development Finance
Authority Industrial Development
Revenue, Alpha Beta Press Inc. Project,
(LOC: American National B&T)
660,000 1.277%, 5/07/2004 (a)<F11> (b)<F12> 660,000
Illinois Development Finance
Authority Limited Obligation
Revenue, Dynapace Corp. Project
(LOC: Bank One N.A.)
400,000 1.277%, 5/07/2004 (a)<F11> (b)<F12> 400,000
Illinois Development Finance
Authority Limited Obligation
Revenue, SWD Inc. Project
(LOC: LaSalle National Bank)
600,000 1.277%, 5/07/2004 (a)<F11> (b)<F12> 600,000
Illinois Development Finance
Authority Multifamily Revenue,
Butterfield Creek Project
(LOC: LaSalle Bank N.A.)
800,000 1.336%, 5/07/2004 (a)<F11> (b)<F12> 800,000
-----------
8,033,248
-----------
Indiana -- 3.5%
East Chicago Indiana Industrial
Economic Development Revenue,
Robinson Steel Inc. Project
(LOC: LaSalle Bank N.A.)
630,000 1.296%, 5/07/2004 (a)<F11> (b)<F12> 630,000
Elkhart County Industrial Economic
Development Revenue, Schult
Operating Co. Project
(LOC: Wells Fargo Bank N.A.)
765,000 1.277%, 5/07/2004 (a)<F11> (b)<F12> 765,000
Hammond Indiana Economic
Development Revenue, A.M. Castle
& Co. Project (LOC: Bank of
America N.A.)
400,000 1.277%, 5/07/2004 (a)<F11> (b)<F12> 400,000
Indianapolis Indiana Industrial
Development Revenue, Hoosier
Gasket Corp. Project (LOC: Bank
One Indianapolis)
195,000 1.950%, 5/07/2004 (a)<F11> (b)<F12> 195,000
Noblesville Indiana Building
Corporation, Bond Anticipation Notes
1,000,000 1.400%, 7/01/2004 1,000,000
-----------
2,990,000
-----------
Louisiana -- 2.4%
Ascension Parish Louisiana Solid Waste
Disposal, Allied Signal Inc. Project
2,000,000 1.436%, 5/07/2004 (a)<F11> (b)<F12> 2,000,000
-----------
Michigan -- 0.8%
Michigan State Job Development
Authority Revenue, Fisher Big Wheel
Inc. Project (LOC: Bayerische Hypo-
Und-Vereinsbank)
700,000 1.675%, 5/07/2004 (a)<F11> (b)<F12> 700,000
-----------
Minnesota -- 2.1%
Elk River Minnesota Multifamily
Housing Revenue, Elk River Estates
Project (LOC: Associated Bank)
800,000 1.386%, 5/07/2004 (a)<F11> (b)<F12> 800,000
St. Cloud Minnesota Housing &
Redevelopment Authority Industrial
Development Revenue. CMMB
LLP Project (LOC: Bremer Bank N.A.)
1,000,000 1.636%, 5/07/2004 (a)<F11> (b)<F12> 1,000,000
-----------
1,800,000
-----------
Missouri -- 1.0%
Springfield Center Missouri City
Development Corporation Bond
Anticipation Notes -- Series A
825,000 2.000%, 4/30/20005 826,126
-----------
New York -- 6.8%
Haverstraw Stony Point New York
Central School District Bond
Anticipation Notes (CS: State Aid
Withholding)
4,100,000 2.000%, 1/21/2005 4,120,363
Long Island Power Authority
New York Electric System
Revenue -- Series B
1,000,000 3.000%, 12/01/2004 1,009,282
Oswego County New York
Resource Recovery
580,000 6.500%, 6/01/2004 582,277
-----------
5,711,922
-----------
North Carolina -- 1.2%
Mecklenburg County Industrial
Facilities and Pollution Control
Financing Authority Industrial
Revenue, Okaya Shinnichi America
(LOC: Tokai Bank Ltd.)
1,000,000 2.400%, 5/07/2004 (a)<F11> (b)<F12> 1,000,000
-----------
Ohio -- 1.2%
Lorain County Ohio Hospital Revenue,
Catholic Healthcare Authority Project
1,000,000 5.000%, 10/01/2004 1,015,559
-----------
Oklahoma -- 3.6%
Grand River Dam Authority
Oklahoma Revenue
3,000,000 4.000%, 6/01/2004 3,006,303
-----------
Pennsylvania -- 2.4%
Philadelphia Pennsylvania
Redevelopment Authority Revenue
Cap Fund -- Series C (CS: FSA)
400,000 1.500%, 12/01/2004 400,000
Somerset County Pennsylvania
Hospital Authority Hospital Revenue,
Somerset Community Hospital
Project (SPA: PNC Bank N.A.)
1,615,000 1.300%, 3/01/2005 (b)<F12> 1,615,000
-----------
2,015,000
-----------
South Carolina -- 0.6%
South Carolina Jobs-Economic
Development Authority, Trimite
Powders Inc. Project (LOC:
Wachovia Bank of SC)
530,000 2.000%, 9/01/2004 (a)<F11> (b)<F12> 530,000
-----------
Tennessee -- 4.0%
Jackson Tennessee Health Educational
& Housing Facility Board Multifamily
Revenue, Creekside Apartments Project
(LOC: First Tennessee Bank)
330,000 2.000%, 5/07/2004 (a)<F11> (b)<F12> 330,000
Metropolitan Government Nashville
and Davidson County Industrial
Revenue, American Cancer Society
Project (LOC: Amsouth Bank)
2,500,000 1.237%, 5/07/2004 (a)<F11> (b)<F12> 2,500,000
Rutherford County Tennessee
Industrial Development Board
Industrial Building Revenue, Derby
Industries Inc. Project (LOC: Fifth
Third Bank)
585,000 1.277%, 5/07/2004 (a)<F11> (b)<F12> 585,000
-----------
3,415,000
-----------
Texas -- 4.3%
Montgomery County Texas Industrial
Development Corporation Industrial
Development Revenue, Medical
Manufacturing Partners Project
(LOC: Bank One Texas N.A.)
2,100,000 1.350%, 5/07/2004 (a)<F11> (b)<F12> 2,100,000
Port Corpus Christi Authority Texas
Nueces County Solid Waste Disposal,
Flint Hills Project
1,500,000 1.416%, 5/07/2004 (a)<F11> (b)<F12> 1,500,000
-----------
3,600,000
-----------
Virginia -- 2.4%
Orange County Virginia Industrial
Development Authority Revenue,
Zamma Corp. Project (LOC:
Southtrust Bank N.A.)
2,000,000 1.286%, 5/07/2004 (a)<F11> (b)<F12> 2,000,000
-----------
Washington -- 6.3%
Washington State Economic
Development Finance Authority
Economic Development Revenue,
B&H Dental Laboratory Project
(LOC: Washington Mutual Bank)
2,225,000 1.586%, 5/07/2004 (a)<F11> (b)<F12> 2,225,000
Washington State Economic
Development Finance Authority
Economic Development Revenue,
Belina Interiors Inc. -- Series F
(LOC: Keybank N.A.)
1,110,000 1.316%, 5/07/2004 (a)<F11> (b)<F12> 1,110,000
Washington State Economic
Development Finance Authority
Economic Development Revenue,
Hillstrom Ventures LLC Project
(LOC: Washington Mutual Bank)
2,000,000 1.586%, 5/07/2004 (a)<F11> (b)<F12> 2,000,000
-----------
5,335,000
-----------
Wisconsin -- 3.9%
Hillsboro Wisconsin Community
Development Authority Industrial
Development Revenue, Whitehall
Specialties Inc. Project (LOC: Bank
One N.A.)
615,000 1.277%, 5/07/2004 (a)<F11> (b)<F12> 615,000
Marshfield Wisconsin Industrial
Development Revenue, Beatrice
Cheese Project (LOC: Wachovia
Bank & Trust)
2,500,000 1.436%, 5/07/2004 (a)<F11> (b)<F12> 2,500,000
Sturgeon Bay Wisconsin Industrial
Development Revenue, Midwest
Wire Realty Project (LOC:
Associated Bank)
200,000 1.386%, 5/07/2004 (a)<F11> (b)<F12> 200,000
-----------
3,315,000
-----------
Multistate -- 6.3%
Class B Revenue Bond Certificates
Series Trust 2004-1
(CS: AIG Retirement Services, Inc.)
3,740,000 1.436%, 5/07/2004 (a)<F11> (b)<F12> 3,740,000
Pooled Multi-Family Puttable
Floating Option Tax-Exempt Receipts
1,600,000 1.286%, 5/07/2004 (a)<F11> (b)<F12> 1,600,000
-----------
5,340,000
-----------
Total Municipal Bonds
(cost $83,554,749) 83,554,749
-----------
Total Investments
(cost $83,554,749) 98.9% 83,554,749
Other Assets
less Liabilities 1.1% 950,438
-----------
Net Assets 100.0% $84,505,187
-----------
-----------
(a)<F11> Variable Rate Security -- The rate reported is the rate in effect as
of April 30, 2004. The date shown is the next reset date.
(b)<F12> Maturity date represents first available put date.
CS - Credit Support
LOC - Letter of Credit
SPA - Standby Purchase Agreement
See notes to financial statements.
ALPINE MUTUAL FUNDS
TAX OPTIMIZED INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
APRIL 30, 2004 (UNAUDITED)
SHARES/ SECURITY
PAR VALUE DESCRIPTION VALUE
- --------- ----------- -----
BONDS -- 99.1%
CORPORATE BONDS -- 38.0%
Bank of America Corporation
$1,000,000 3.250%, 8/15/2008 $ 974,228
Boeing Capital Corporation
1,800,000 5.750%, 2/15/2007 1,913,441
CIT Group Inc.
1,150,000 5.910%, 11/23/2005 1,204,724
500,000 4.000%, 5/08/2008 500,237
Daimler-Chrysler NA Holding Co.
2,000,000 4.750%, 1/15/2008 2,028,948
Ford Motor Credit Company
2,400,000 6.875%, 2/01/2006 2,540,342
General Motors Acceptance Corporation
1,200,000 6.125%, 8/28/2007 1,268,050
GMAC Commercial Holding Trust
2,500,000 2.320%, 7/27/2004 2,485,983
The Goldman Sachs Group, Inc.
1,575,000 4.125%, 1/15/2008 1,596,385
Household Finance Corporation
2,000,000 4.625%, 1/15/2008 2,056,826
International Lease Finance Corporation
3,000,000 4.750%, 2/15/2008 3,100,722
Time Warner Inc.
1,000,000 6.150%, 5/01/2007 1,069,858
-----------
Total Corporate Bonds
(Cost $20,176,130) 20,739,744
-----------
MUNICIPAL BONDS -- 61.1%
Alabama -- 0.8%
University of Alabama University
Revenue, Huntsville General
Fees -- Series A (CS: FSA)
460,000 2.050%, 12/01/2004 462,328
-----------
Alaska -- 2.6%
Alaska Industrial Development &
Export Authority, Revolving
Fund -- Series A (CS: GO of Auth.)
1,400,000 4.500%, 4/01/2005 1,429,582
-----------
Arizona -- 1.8%
Maricopa County Arizona Pollution
Control Corporation Pollution
Control Revenue, Arizona Public
Service Company -- Series D
1,000,000 1.875%, 3/01/2005 (b)<F14> 998,080
-----------
Arkansas -- 3.7%
Searcy Arkansas Industrial
Development Revenue,
Yarnell Ice Cream Co. Project
(SPA: Amsouth Bank of Alabama)
2,000,000 2.214%, 1/01/2010 (a)<F13> 2,000,000
-----------
California -- 3.7%
California Pollution Control
Financing Authority Solid Waste
Disposal Revenue, Republic
Services Inc. Project
1,000,000 2.000%, 12/01/2004 (b)<F14> 999,770
California Statewide Communities
Development Authority Solid Waste
Facilities Revenue, Waste
Management Inc. Project
(CS: Waste Management Inc.)
1,000,000 2.900%, 3/31/2007 (b)<F14> 1,000,000
-----------
1,999,770
-----------
Colorado -- 6.3%
Colorado Health Facilities Authority
Revenue, Evangelical Lutheran
3,405,000 2.800%, 10/01/2004 3,413,240
-----------
Indiana -- 5.5%
Indiana State Development Finance
Authority Solid Waste Disposal ,
Revenue Waste Management
Inc. Project
1,000,000 2.700%, 10/01/2004 (b)<F14> 1,001,180
Vigo County Indiana Industrial
Development Revenue, Republic
Services Inc. Project
2,000,000 1.815%, 5/07/2004 (a)<F13> (b)<F14> 2,000,000
-----------
3,001,180
-----------
Massachusetts -- 5.0%
Massachusetts State Development
Finance Agency Environmental
Improvement Revenue,
Mead Corp. Project -- Series A
1,500,000 2.250%, 5/07/2004 (b)<F14> 1,500,000
Massachusetts State Industrial
Financing Agency Industrial
Revenue, Asahi/America Inc.
(LOC: Citizens Bank of MA)
1,250,000 3.125%, 3/01/2009 (b)<F14> 1,229,475
-----------
2,729,475
-----------
Michigan -- 5.6%
Michigan State Strategic Fund,
Dow Chemical Project
1,000,000 3.100%, 12/01/2004 (b)<F14> 1,006,960
1,000,000 3.800%, 6/01/2006 (b)<F14> 1,025,060
Michigan State Strategic Fund
Solid Waste Disposal Revenue,
Waste Management
1,000,000 2.200%, 2/01/2005 (b)<F14> 998,530
-----------
3,030,550
-----------
Missouri -- 2.8%
St. Louis County Missouri Industrial
Development Authority Multifamily
Housing Revenue, Pinetree
Apartments -- Series A
825,000 5.200%, 11/15/2004 (b)<F14> 830,478
St. Louis Missouri Airport Revenue
Project, Series C (CS: MBIA)
680,000 3.000%, 7/01/2004 681,707
-----------
1,512,185
-----------
New Hampshire -- 1.8%
New Hampshire State Business
Finance Authority Pollution
Control Revenue
1,000,000 2.050%, 2/01/2005 (b)<F14> 1,003,280
-----------
New Mexico -- 2.7%
Farmington New Mexico Pollution
Control Revenue, Public Service-
San Juan Project
1,500,000 2.100%, 4/01/2006 (b)<F14> 1,491,930
-----------
New York -- 5.5%
St. Catherine Siena Medical Center /
NY Taxable Revenue Bonds
3,000,000 5.750%, 05/30/2004 (a)<F13> (b)<F14> 3,000,000
-----------
North Carolina -- 4.6%
Mecklenburg County North Carolina
Industrial Facilities & Pollution
Control Financing Authority
Industrial Revenue, Okaya
Shinnichi America
(LOC: Tokai Bank Ltd.)
2,490,000 2.400%, 5/07/2004 (a)<F13> (b)<F14> 2,490,000
-----------
Ohio -- 2.9%
Ohio State Air Quality Development
Authority Revenue, Toledo
1,600,000 2.200%, 10/01/2004 (b)<F14> 1,598,480
-----------
Oklahoma -- 0.5%
Oklahoma Development Finance
Authority Hospital Revenue, Duncan
Regional Hospital Project -- Series A
250,000 2.500%, 12/01/2004 250,878
-----------
Texas -- 4.2%
Cypress-Fairbanks Texas Independent
School District, Schoolhouse-Series B
(SPA: Toronto-Dominion Bank)
1,200,000 5.000%, 8/15/2007 (b)<F14> 1,291,836
Matagorda County Texas Navigation
District No. 1 Pollution Control
Revenue, Central Power & Light
1,000,000 2.350%, 11/01/2004 (b)<F14> 1,000,000
-----------
2,291,836
-----------
Washington -- 1.1%
Washington State Housing Finance
Community Nonprofit Revenue,
Childhaven Project
(LOC: Washington Mutual Bank)
600,000 1.227%, 5/01/2004 (a)<F13> (b)<F14> 600,000
-----------
Total Municipal Bonds
(cost $33,295,356) 33,302,794
-----------
Total Bonds
(cost $53,471,486) 54,042,538
-----------
MONEY MARKET FUNDS -- 0.2%
69,295 Federated Government Obligations
Fund -- Institutional Shares 69,295
-----------
Total Money Market Funds
(cost $69,295) 69,295
-----------
Total Investments
(cost $53,540,781) 99.3% 54,111,833
Other Assets
less Liabilities 0.7% 404,807
-----------
Net Assets 100.0% $54,516,640
-----------
-----------
(a)<F13> Variable Rate Security -- The rate reported is the rate in effect as
of April 30, 2004. The date shown is the next reset date.
(b)<F14> Maturity date represents first available put date.
CS - Credit Support
LOC - Letter of Credit
SPA - Standby Purchase Agreement
See notes to financial statements.
ALPINE MUTUAL FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
APRIL 30, 2004 (UNAUDITED)
DYNAMIC DYNAMIC
BALANCE DIVIDEND
FUND FUND
------- --------
ASSETS:
Investments, at value(1)<F15> $54,727,044 $27,160,576
Cash 1,247 81
Dividends receivable 67,061 201,832
Interest receivable 154,682 --
Receivable for capital shares issued -- 242,300
Receivable for investment securities sold 2,636,724 603,786
Prepaid expenses and other assets 15,151 14,861
----------- -----------
Total assets 57,601,909 28,223,436
----------- -----------
LIABILITIES:
Payable for investment securities purchased -- 995,292
Payable for capital shares redeemed 102,823 14,610
Accrued expenses and other liabilities:
Investment advisory fees 55,608 18,126
Other 46,470 51,773
----------- -----------
Total liabilities 204,901 1,079,801
----------- -----------
NET ASSETS $57,397,008 $27,143,635
----------- -----------
----------- -----------
NET ASSETS REPRESENTED BY
Capital stock $49,570,634 $24,851,568
Accumulated undistributed net investment income 140,384 83,963
Accumulated net realized gains from investments,
short sales, and foreign currencies 1,141,262 1,650,021
Net unrealized appreciation on investments 6,544,728 558,083
----------- -----------
TOTAL NET ASSETS $57,397,008 $27,143,635
----------- -----------
----------- -----------
NET ASSET VALUE
Net assets $57,397,008 $27,143,635
Shares of beneficial interest
issued and outstanding 4,941,672 2,285,104
Net asset value, offering price and
redemption price per share $11.61 $11.88
(1)<F15> Cost of Investments $48,182,316 $26,602,493
See notes to financial statements.
ALPINE MUTUAL FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
APRIL 30, 2004 (UNAUDITED)
MUNICIPAL TAX OPTIMIZED
MONEY MARKET INCOME
FUND FUND
------------ -------------
ASSETS:
Investments, at value(1)<F16> $83,554,749 $54,111,833
Interest receivable 338,663 436,535
Receivable for capital shares issued 722,011 --
Prepaid expenses and other assets 23,332 23,023
----------- -----------
Total assets 84,638,755 54,571,391
----------- -----------
LIABILITIES:
Dividends payable to shareholders 1,464 954
Accrued expenses and other liabilities:
Investment advisory fees 11,055 19,051
Payable to custodian 69,606 3,937
Other 51,443 30,809
----------- -----------
Total liabilities 133,568 54,751
----------- -----------
NET ASSETS $84,505,187 $54,516,640
----------- -----------
----------- -----------
NET ASSETS REPRESENTED BY
Capital stock $84,505,187 $53,916,359
Accumulated undistributed net investment income -- 4,145
Accumulated net realized gains
from investments sold -- 25,084
Net unrealized appreciation on investments -- 571,052
----------- -----------
TOTAL NET ASSETS $84,505,187 $54,516,640
----------- -----------
----------- -----------
NET ASSET VALUE
Adviser Class Shares
Net assets $ 5,004 $ 4,972
Shares of beneficial interest
issued and outstanding 5,004 490
Net asset value, offering price
and redemption price per share $1.00 $10.15
Investor Class Shares
Net assets $84,500,183 $54,511,668
Shares of beneficial interest
issued and outstanding 84,500,183 5,368,363
Net asset value, offering price
and redemption price per share $1.00 $10.15
(1)<F16> Cost of Investments $83,554,749 $53,540,781
See notes to financial statements.
ALPINE MUTUAL FUNDS
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 2004 (UNAUDITED)
DYNAMIC DYNAMIC
BALANCE DIVIDEND
FUND FUND
------- --------
INVESTMENT INCOME:
Interest income $ 264,037 $ 2,225
Dividend income*<F17> 661,200 968,832
---------- ----------
Total investment income 925,237 971,057
---------- ----------
EXPENSES:
Investment advisory fees 287,921 101,884
Administration fees 17,350 10,010
Fund accounting fees 16,930 13,436
Audit fees 6,880 9,980
Custodian fees 6,850 6,918
Legal fees 310 3,148
Registration and filing fees 9,992 12,786
Printing fees 2,376 5,172
Transfer agent fees 9,962 7,434
Trustee fees 1,800 1,810
Other fees 3,645 100
---------- ----------
Total expenses before expense
recovery (reimbursement) by Adviser 364,016 172,678
Expense recovery (reimbursement) by Adviser 24,693 (35,135)
---------- ----------
Net expenses 388,709 137,543
---------- ----------
Net investment income 536,528 833,514
---------- ----------
REALIZED/UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on:
Long transactions 1,309,857 1,683,132
Short transactions -- (3,286)
Foreign currencies -- 1,591
---------- ----------
Net realized gain 1,309,857 1,681,437
---------- ----------
Change in unrealized
appreciation / depreciation on investments 1,254,954 (222,305)
---------- ----------
Net realized/unrealized gain on investments 2,564,811 1,459,132
---------- ----------
Change in net assets resulting from operations $3,101,339 $2,292,646
---------- ----------
---------- ----------
*<F17> Net of foreign taxes withheld $ 216 $ 18,312
---------- ----------
---------- ----------
See notes to financial statements.
ALPINE MUTUAL FUNDS
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 2004 (UNAUDITED)
MUNICIPAL TAX OPTIMIZED
MONEY MARKET INCOME
FUND FUND
------------ -------------
INVESTMENT INCOME:
Interest income $552,175 $911,191
-------- --------
Total investment income 552,175 911,191
-------- --------
EXPENSES:
Investment advisory fees 184,039 213,650
Administration fees 22,251 16,456
Distribution fees -- Adviser Class 1 1
Fund accounting fees 23,251 17,455
Audit fees 6,976 6,876
Custodian fees 5,904 5,276
Interest expense 2,081 --
Legal fees 2,880 2,600
Registration and filing fees 20,559 13,214
Printing fees 1,992 1,142
Transfer agent fees 20,887 15,619
Trustee fees 1,770 1,770
Insurance expense 1,686 1,956
-------- --------
Total expenses before expense
reimbursement by Adviser 294,277 296,015
Less: Reimbursement by Adviser (154,119) (125,094)
-------- --------
Net expenses 140,158 170,921
-------- --------
Net investment income 412,017 740,270
-------- --------
REALIZED/UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments -- 25,114
Change in unrealized
appreciation/depreciation on investments -- (96,531)
-------- --------
Net realized/unrealized loss on investments -- (71,417)
-------- --------
Change in net assets resulting from operations $412,017 $668,853
-------- --------
-------- --------
See notes to financial statements.
ALPINE MUTUAL FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
DYNAMIC BALANCE FUND
------------------------------------
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 2004 OCTOBER 31, 2003
---------------- ----------------
(UNAUDITED)
OPERATIONS:
Net investment income $ 536,528 $ 1,057,657
Net realized gain (loss) on investments 1,309,857 (30,104)
Change in unrealized appreciation/depreciation on investments 1,254,954 9,058,775
----------- -----------
Change in net assets resulting from operations 3,101,339 10,086,328
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions to Shareholders:
From net investment income (502,841) (1,020,091)
----------- -----------
Change in net assets resulting from distributions to shareholders (502,841) (1,020,091)
----------- -----------
SHARES OF BENEFICIAL INTEREST TRANSACTIONS:
Proceeds from shares sold 1,354,831 1,436,616
Dividends reinvested 446,497 896,893
Cost of shares redeemed (759,152) (670,726)
----------- -----------
Change in net assets from shares of beneficial interest transactions 1,042,176 1,662,783
----------- -----------
Total change in net assets 3,640,674 10,729,020
----------- -----------
NET ASSETS:
Beginning of period 53,756,334 43,027,314
----------- -----------
End of period*<F18> $57,397,008 $53,756,334
----------- -----------
----------- -----------
*<F18> Including undistributed net investment income of $ 140,384 $ 106,697
----------- -----------
----------- -----------
See notes to financial statements.
ALPINE MUTUAL FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
DYNAMIC DIVIDEND FUND
---------------------------------------------
FOR THE PERIOD
SEPTEMBER 22, 2003(1)<F20>
SIX MONTHS ENDED THROUGH
APRIL 30, 2004 OCTOBER 31, 2003
---------------- --------------------------
(UNAUDITED)
OPERATIONS:
Net investment income $ 833,514 $ 71,597
Net realized gain (loss) on:
Long transactions 1,683,132 (31,416)
Short transactions (3,286) --
Foreign currencies 1,591 --
Change in unrealized appreciation/depreciation on investments (222,305) 780,388
----------- -----------
Change in net assets resulting from operations 2,292,646 820,569
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions to Shareholders:
From net investment income (821,894) --
----------- -----------
Change in net assets resulting from distributions to shareholders (821,894) --
----------- -----------
SHARES OF BENEFICIAL INTEREST TRANSACTIONS:
Proceeds from shares sold 12,421,531 12,717,086
Dividends reinvested 734,418 --
Redemption fees 4,007 --
Cost of shares redeemed (1,014,433) (10,295)
----------- -----------
Change in net assets from shares of beneficial interest transactions 12,145,523 12,706,791
----------- -----------
Total change in net assets 13,616,275 13,527,360
----------- -----------
NET ASSETS:
Beginning of period 13,527,360 --
----------- -----------
End of period*<F19> $27,143,635 $13,527,360
----------- -----------
----------- -----------
*<F19> Including undistributed net investment income of $ 83,963 $ 72,343
----------- -----------
----------- -----------
(1)<F20> Commencement of Operations
See notes to financial statements.
ALPINE MUTUAL FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
MUNICIPAL MONEY MARKET FUND
---------------------------------------------
FOR THE PERIOD
DECEMBER 5, 2002(1)<F21>
SIX MONTHS ENDED THROUGH
APRIL 30, 2004 OCTOBER 31, 2003
---------------- ------------------------
(UNAUDITED)
OPERATIONS:
Net investment income $ 412,017 $ 468,679
Net realized loss on investments -- (36)
Change in unrealized appreciation/depreciation on investments -- --
----------- -----------
Change in net assets resulting from operations 412,017 468,643
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions to Adviser Class Shareholders:
From net investment income (3) --
Distributions to Investor Class Shareholders:
From net investment income (412,014) (468,643)
----------- -----------
Change in net assets resulting from distributions to shareholders (412,017) (468,643)
----------- -----------
SHARES OF BENEFICIAL INTEREST TRANSACTIONS:
Proceeds from shares sold 90,329,928 102,670,596
Dividends reinvested 400,378 466,068
Cost of shares redeemed (65,351,498) (44,010,285)
----------- -----------
Change in net assets from shares of beneficial interest transactions 25,378,808 59,126,379
----------- -----------
Total change in net assets 25,378,808 59,126,379
----------- -----------
NET ASSETS:
Beginning of period 59,126,379 --
----------- -----------
End of period $84,505,187 $59,126,379
----------- -----------
----------- -----------
(1)<F21> Commencement of Operations
See notes to financial statements.
ALPINE MUTUAL FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
TAX OPTIMIZED INCOME FUND
---------------------------------------------
FOR THE PERIOD
DECEMBER 6, 2002(1)<F23>
SIX MONTHS ENDED THROUGH
APRIL 30, 2004 OCTOBER 31, 2003
---------------- ------------------------
(UNAUDITED)
OPERATIONS:
Net investment income $ 740,270 $ 1,060,845
Net realized gain on investments 25,114 54,913
Change in unrealized appreciation/depreciation on investments (96,531) 667,583
----------- -----------
Change in net assets resulting from operations 668,853 1,783,341
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions to Adviser Class Shareholders
From net investment income (23) --
Distributions to Investor Class Shareholders:
From net investment income (736,102) (1,060,845)
From net realized gains on investments (31,474) (23,469)
----------- -----------
Change in net assets resulting from distributions to shareholders (767,599) (1,084,314)
----------- -----------
SHARES OF BENEFICIAL INTEREST TRANSACTIONS:
Proceeds from shares sold 6,995,874 57,078,436
Dividends reinvested 756,892 1,083,329
Cost of shares redeemed (8,728,003) (3,270,169)
----------- -----------
Change in net assets from shares of beneficial interest transactions (975,237) 54,891,596
----------- -----------
Total change in net assets (1,073,983) 55,590,623
----------- -----------
NET ASSETS:
Beginning of period 55,590,623 --
----------- -----------
End of period*<F22> $54,516,640 $55,590,623
----------- -----------
----------- -----------
*<F22> Including undistributed net investment income of $ 4,145 $ --
----------- -----------
----------- -----------
(1)<F23> Commencement of Operations
See notes to financial statements.
ALPINE MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2004 (UNAUDITED)
1. ORGANIZATION:
Alpine Series Trust (the "Series Trust") was organized in 2001 as a
Delaware Business Trust, and is registered under the Investment Company Act
of 1940, as amended (the "1940 Act"), as an open-end management investment
company. Alpine Income Trust (the "Income Trust") was organized in 2002 as
a Delaware Business Trust, and is registered under the 1940 Act, as an
open-end management investment company. Alpine Dynamic Balance Fund and
Alpine Dynamic Dividend Fund are two separate funds of the Series Trust and
Alpine Municipal Money Market Fund and Alpine Tax Optimized Income Fund are
two separate funds of the Income Trust. Alpine Dynamic Balance Fund,
Alpine Dynamic Dividend Fund, Alpine Municipal Money Market Fund and Alpine
Tax Optimized Income Fund (individually referred to as a "Fund" and
collectively, "the Funds") are diversified funds. Alpine Management &
Research, LLC (the "Adviser") is a Delaware Corporation and serves as the
investment manager to the Funds. Effective March 30, 2004, the Alpine
Municipal Money Market Fund and the Alpine Tax Optimized Income Fund began
to offer both Investor Class and Adviser Class shares.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. The
policies are in conformity with accounting principles generally accepted in
the United States of America ("GAAP"), which require management to make
estimates and assumptions that affect amounts reported herein. Actual
results could differ from those estimates.
A. VALUATION OF SECURITIES:
The Dynamic Balance, Dynamic Dividend and Tax Optimized Income Funds value
securities for which the primary market is on a domestic or foreign
exchange and over-the-counter securities admitted to trading on the
National Association of Securities Dealers Automated Quotation National
Market System ("NASDAQ") National List at the last quoted sale price at the
end of each business day or, if no sale, at the mean of closing bid and
asked price. Over-the-counter securities not included in the NASDAQ
National List for which market quotations are readily available are valued
at a price quoted by one or more brokers. Securities for which accurate
quotations are not available or market quotations are not readily
available, are valued at fair value as determined in good faith according
to procedures approved by the Board of Trustees. The valuation of certain
debt securities for which market quotations are not readily available may
be based upon current market prices of securities, which are comparable in
coupon, rating and maturity or an appropriate matrix utilizing similar
factors.
The Municipal Money Market Fund values its investments at amortized cost,
which approximates market value. Pursuant to Rule 2a-7 of the Investment
Company Act of 1940, amortized cost, as defined, is a method of valuing
securities at acquisition cost, adjusted for amortization of premium or
accretion of discount rather than at their value based on current market
factors.
B. REPURCHASE AGREEMENTS:
The Funds may invest in repurchase agreements. A custodian holds securities
pledged as collateral for repurchase agreements on the Funds' behalf. The
Funds monitor the adequacy of the collateral daily and will require the
seller to provide additional collateral in the event the market value of
the securities pledged falls below the carrying value of the repurchase
agreement, including accrued interest. The Funds will only enter into
repurchase agreements with banks and other financial institutions which are
deemed by the investment advisor to be creditworthy pursuant to guidelines
established by the Board of Trustees.
C. SECURITY TRANSACTIONS AND INVESTMENT INCOME:
Securities transactions are recorded on the date a security is purchased or
sold (i.e. on the trade date). Realized gains and losses are computed on
the identified cost basis. Interest income is recorded on the accrual basis
and includes accretion of discounts and amortization of premiums where
applicable. Dividend income is recorded on the ex-dividend date or in the
case of some foreign securities, on the date thereafter when the Funds are
made aware of the dividend. Foreign income may be subject to foreign
withholding taxes, which are accrued as applicable. Capital gains realized
on some foreign securities are subject to foreign taxes, which are accrued
as applicable.
D. SHORT SALE TRANSACTIONS:
The Dynamic Balance Fund and the Dynamic Dividend Fund are authorized to
engage in short selling. Short sales are transactions in which a Fund sells
a security it does not own in anticipation of a decline in the market value
of that security. To complete such a transaction, a fund must borrow the
security to deliver to the buyer when effecting a short sale. The fund is
then obligated to replace the security borrowed by purchasing it in the
open market at some later date. When a fund sells a security short, an
amount equal to the sales proceeds is included in the Statements of Assets
and Liabilities as an asset and an equal amount as a liability. The amount
of the liability is subsequently marked-to-market to reflect the current
value of the short position. A fund will incur a loss, which could be
substantial and potentially unlimited, if the market price of the security
increases between the date of the short sale and the date on which the fund
replaces the borrowed security. A fund will realize a gain if the security
declines in value between those dates. A fund is also at risk of incurring
dividend expense if the issuer of the security that has been sold short
declares a dividend. A fund must pay the dividend to the lender of the
security.
All short sales must be fully collateralized. Accordingly, a fund maintains
collateral in a segregated account with their custodian, consisting of cash
and/or liquid securities sufficient to collateralize their obligations on
short positions.
E. INTEREST EXPENSE:
The Funds are charged by U.S. Bank, N.A. for all cash overdrafts at the
bank's prime lending rate. The Dynamic Balance Fund and the Alpine
Municipal Money Market Fund incurred interest expense totaling $15 and
$2,081 for the six months ended April 30, 2004.
F. FEDERAL TAXES:
It is each Fund's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
timely, all of its investment company taxable income and net realized
capital gains to shareholders. Therefore, no federal income tax provision
is recorded.
Under applicable foreign tax laws, a withholding tax may be imposed on
interest, dividends and capital gains earned on foreign investments. Where
available, the Funds will file for claims on foreign taxes withheld.
G. DIVIDENDS AND DISTRIBUTIONS:
The Dynamic Balance Fund, the Dynamic Dividend Fund and the Tax Optimized
Income Fund intend to distribute substantially all of their net investment
income and net realized capital gains, if any, throughout the year to their
shareholders in the form of dividends. The Municipal Money Market Fund
declares and accrues dividends daily on each business day based upon the
Fund's net income, and pays dividends monthly. Distributions to
shareholders are recorded at the close of business on the ex-dividend date.
All dividends are automatically reinvested in full and fractional shares of
a Fund at net asset value per share, unless otherwise requested.
The amounts of dividends from net investment income and of distributions
from net realized gains are determined in accordance with federal income
tax regulations, which may differ from GAAP. These differences are either
considered temporary or permanent in nature. To the extent these
differences are permanent in nature, such amounts are reclassified within
the composition of net assets based on their federal tax-basis treatment;
temporary differences do not require reclassification. In the event
dividends and distributions to shareholders exceed net investment income
and net realized gains for tax purposes, they are reported as a return of
capital.
H. CLASS ALLOCATIONS:
Income, expenses (other than class specific expenses) and realized and
unrealized gains and losses of the Tax Optimized Income Fund and Municipal
Money Market Fund are allocated among the classes of each respective Fund
based on the relative net assets of each class. Class specific expenses
are allocated to the class to which they relate. Currently, class specific
expenses are limited to those incurred under the Distribution Plan for
Adviser Class shares.
I. FOREIGN EXCHANGE TRANSACTIONS:
The Dynamic Balance and Dynamic Dividend Funds may invest up to 15% of the
value of their total assets in foreign securities. The books and records of
the Funds are maintained in U.S. dollars. Non-U.S. denominated amounts are
translated into U.S. dollars as follows, with the resultant exchange gains
and losses recorded in the Statement of Operations:
i) market value of investment securities and other assets and
liabilities at the exchange rate on the valuation date,
ii) purchases and sales of investment securities, income and expenses
at the exchange rate prevailing on the respective date of such
transactions.
Dividends and interest from non-U.S. sources received by the Funds are
generally subject to non-U.S. withholding taxes at rates ranging up to 30%.
Such withholding taxes may be reduced or eliminated under the terms of
applicable U.S. income tax treaties, and the Funds intend to undertake any
procedural steps required to claim the benefits of such treaties.
J. RISK ASSOCIATED WITH FOREIGN SECURITIES AND CURRENCIES:
Investments in securities of foreign issuers carry certain risks not
ordinarily associated with investments in securities of domestic issuers.
Such risks include future political and economic developments and the
possible imposition of exchange controls or other foreign governmental laws
and restrictions. In addition, with respect to certain countries, there is
a possibility of expropriation of assets, confiscatory taxation, political
or social instability or diplomatic developments, which could adversely
affect investments in those countries.
Certain countries may also impose substantial restrictions on investments
in their capital markets by foreign entities, including restrictions on
investments in issuers or industries deemed sensitive to relevant national
interests. These factors may limit the investment opportunities available
to the Fund or result in a lack of liquidity and high price volatility with
respect to securities of issuers from developing countries.
3. CAPITAL SHARE TRANSACTIONS:
The Funds have an unlimited number of shares of beneficial interest, with
$0.001 par value, authorized. Transactions in shares and dollars of the
Funds were as follows:
DYNAMIC BALANCE FUND
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 2004 OCTOBER 31, 2003
------------------- ------------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
Shares sold 113,174 $ 1,354,831 138,742 $ 1,436,616
Shares issued in reinvestment of dividends 37,966 446,497 91,251 896,893
Shares redeemed (63,202) (759,152) (68,511) (670,726)
------- ----------- ------- ------------
Total net change 87,938 $ 1,042,176 161,482 $ 1,662,783
------- ----------- ------- ------------
------- ----------- ------- ------------
DYNAMIC DIVIDEND FUND
FOR THE PERIOD
SEPTEMBER 22, 2003(1)<F24>
SIX MONTHS ENDED THROUGH
APRIL 30, 2004 OCTOBER 31, 2003
-------------------- -------------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
Shares sold 1,040,527 $12,421,531 1,266,615 $ 12,717,086
Shares issued in reinvestment of dividends 62,009 734,418 -- --
Redemption fees -- 4,007 -- --
Shares redeemed (83,085) (1,014,433) (962) (10,295)
--------- ----------- --------- ------------
Total net change 1,019,451 $12,145,523 1,265,653 $ 12,706,791
--------- ----------- --------- ------------
--------- ----------- --------- ------------
(1)<F24> Commencement of operations.
MUNICIPAL MONEY MARKET FUND
FOR THE PERIOD
DECEMBER 5, 2002(1)<F25>
SIX MONTHS ENDED THROUGH
APRIL 30, 2004 OCTOBER 31, 2003
-------------------- -------------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
Investor Class
Shares sold 90,324,928 $90,324,928 102,670,596 $102,670,596
Shares issued in reinvestment of dividends 400,374 400,374 466,068 466,068
Shares redeemed (65,351,498) (65,351,498) (44,010,285) (44,010,285)
----------- ----------- ----------- ------------
Total net change 25,373,804 $25,373,804 59,126,379 $ 59,126,379
----------- ----------- ----------- ------------
----------- ----------- ----------- ------------
Adviser Class
Shares sold 5,000 $ 5,000 -- $ --
Shares issued in reinvestment of dividends 4 4 -- --
Shares redeemed -- -- -- --
----------- ----------- ----------- ------------
Total net change 5,004 $ 5,004 -- $ --
----------- ----------- ----------- ------------
----------- ----------- ----------- ------------
(1)<F25> Commencement of operations.
TAX OPTIMIZED INCOME FUND
FOR THE PERIOD
DECEMBER 6, 2002(1)<F26>
SIX MONTHS ENDED THROUGH
APRIL 30, 2004 OCTOBER 31, 2003
-------------------- -------------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
Investor Class
Shares sold 685,917 $ 6,990,874 5,668,318 $ 57,078,436
Shares issued in reinvestment of dividends 74,162 756,870 115,511 1,083,329
Shares redeemed (852,259) (8,728,003) (323,286) (3,270,169)
-------- ----------- --------- ------------
Total net change (92,180) $ (980,259) 5,460,543 $ 54,891,596
-------- ----------- --------- ------------
-------- ----------- --------- ------------
Adviser Class
Shares sold 488 $ 5,000 -- $ --
Shares issued in reinvestment of dividends 2 22 -- --
Shares redeemed -- -- -- --
-------- ----------- --------- ------------
Total net change 490 $ 5,022 -- $ --
-------- ----------- --------- ------------
-------- ----------- --------- ------------
(1)<F26> Commencement of operations.
4. PURCHASES AND SALES OF SECURITIES:
Purchases and sales of securities (excluding short-term securities) for the
six months ended April 30, 2004 are as follows:
NON-U.S. GOVERNMENT U.S. GOVERNMENT
------------------------ ------------------------
PURCHASES SALES PURCHASES SALES
--------- --------- --------- ---------
Dynamic Balance Fund $13,668,898 $14,628,881 $1,063,437 $2,124,844
Dynamic Dividend Fund 30,712,453 18,854,663 -- --
Tax Optimized Income Fund 12,846,690 9,864,460 -- --
5. DISTRIBUTION PLANS:
Quasar Distributors, LLC ("Quasar") serves as the Funds' distributor. The
Municipal Money Market Fund and the Tax Optimized Income Fund have each
adopted a distribution plan (the "Plan") for its Adviser Class shares as
allowed by Rule 12b-1 under the 1940 Act. The Plan authorizes payments by
the Fund in connection with the distribution and servicing of its shares at
an annual rate, as determined from time to time by the Board of Trustees,
of up to 0.25% of the Fund's average daily net assets. Amounts paid under
the plan by the Funds may be spent by the Funds on any activities or
expenses primarily intended to result in the sale of shares of the Funds,
including but not limited to, advertising, compensation for sales and
marketing activities of financial institutions and others such as dealers
and distributors, shareholder account servicing, the printing and mailing
of prospectuses to other than current shareholders and the printing and
mailing of sales literature. The Municipal Money Market Fund incurred $1
and the Tax Optimized Income Fund incurred $1 pursuant to the plan for the
period ended April 30, 2004.
The plan for the Municipal Money Market Fund and the Tax Optimized Income
Fund may be terminated at any time by vote of the Trustees of the Income
Trust who are not "interested persons" as defined by the 1940 Act of the
Income Trust, or by vote of a majority of the outstanding voting shares of
the respective class.
6. INVESTMENT ADVISORY AGREEMENT AND OTHER AFFILIATED TRANSACTIONS:
Alpine Management & Research, LLC ("Alpine") provides investment advisory
services to the Funds. Pursuant to the investment adviser's agreement with
the Funds, Alpine is entitled to an annual fee based on 1.00% of each
Fund's average daily net assets for the Dynamic Balance Fund and the
Dynamic Dividend Fund. Alpine is entitled to an annual fee based on 0.45%
of the Municipal Money Market Fund's average daily net assets and an annual
fee based on 0.75% of the Tax Optimized Income Fund's average daily net
assets.
The Adviser agreed to reimburse the Dynamic Balance Fund, the Dynamic
Dividend Fund and the Tax Optimized Income Fund to the extent necessary to
ensure that the Funds' total operating expenses (excluding 12b-1 fees,
interest, brokerage commissions and extraordinary expenses) did not exceed
1.35%, 1.35% and 0.60% of the Funds' average daily net assets,
respectively. For the period November 1, 2003 through March 9, 2004, the
Adviser agreed to reimburse the Municipal Money Market Fund to the extent
necessary to ensure that the Fund's total operating expenses (excluding
12b-1 fees, interest, brokerage commissions and extraordinary expenses) did
not exceed 0.32% of the Fund's average daily net assets. Effective March
10, 2004, the Adviser raised the amount of total operating expenses to be
capped from 0.32% to 0.37% of the Fund's average daily net assets. The
Adviser may recover from each Fund the expenses paid in excess of the cap
on expenses for the three previous years, as long as the recovery does not
cause the Fund to exceed such cap on expenses. For the six months ended
April 30, 2004, the Adviser waived investment advisory fees totaling
$35,135, $154,119 and $125,094 for the Dynamic Dividend Fund, the Municipal
Money Market Fund and the Tax Optimized Income Fund, respectively. For the
six months ended April 30, 2004, the Adviser recovered previous
reimbursed/absorbed expenses totaling $24,693 for the Dynamic Balance Fund.
Reimbursed/absorbed expenses subject to potential recovery by year of
expiration are as follows:
Year of Expiration Dynamic Balance Fund Dynamic Dividend Fund
------------------ -------------------- ---------------------
10/31/05 $45,313 $ --
10/31/06 $73,377 $22,179
10/31/07 $ -- $35,135
Year of Expiration Municipal Money Market Fund Tax Optimized Income Fund
------------------ --------------------------- -------------------------
10/31/06 $175,958 $181,472
10/31/07 $154,119 $125,094
7. FEDERAL INCOME TAX INFORMATION:
At October 31, 2003, the components of accumulated earnings (losses) on a
tax basis were as follows:
DYNAMIC DYNAMIC MUNICIPAL TAX
BALANCE DIVIDEND MONEY OPTIMIZED
FUND FUND MARKET FUND INCOME FUND
------- -------- ----------- -----------
Cost of investments $48,896,691 $13,409,021 $59,044,482 $55,510,837
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Gross unrealized appreciation $ 7,963,556 $ 856,845 $ -- $ 688,754
Gross unrealized depreciation (2,658,328) (76,640) -- (21,171)
----------- ----------- ----------- -----------
Net unrealized appreciation $ 5,305,228 $ 780,205 $ -- $ 667,583
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Undistributed ordinary income $ 84,368 $ 72,343 $ -- $ 31,444
Undistributed long-term capital gain -- -- -- --
----------- ----------- ----------- -----------
Total distributable earnings $ 84,368 $ 72,343 $ -- $ 31,444
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Other accumulated losses
and temporary differences $ (161,721) $ (31,233) $ -- $ --
----------- ----------- ----------- -----------
Total accumulated earnings $ 5,227,875 $ 821,315 $ -- $ 699,027
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
The tax basis of investments for tax and financial reporting purposes
differs principally due to the deferral of losses on wash sales and REIT
tax adjustments.
The tax character of distributions paid during the periods ended October
31, 2003 and 2002 were as follows:
DYNAMIC BALANCE FUND 2003 2002
---- ----
Ordinary income $1,020,091 $1,090,248
Long-term capital gain -- --
---------- ----------
$1,020,091 $1,090,248
---------- ----------
---------- ----------
DYNAMIC DIVIDEND FUND 2003
----
Ordinary income --
Long-term capital gain --
----------
--
----------
----------
MUNICIPAL MONEY MARKET FUND 2003
----
Exempt interest dividends $ 468,643
Long-term capital gain --
----------
$ 468,643
----------
----------
TAX OPTIMIZED INCOME FUND 2003
----
Ordinary income $ 574,675
Exempt interest dividends 509,639
Long-term capital gain --
----------
$1,084,314
----------
----------
Capital loss carryovers as of October 31, 2003 are as follows:
Net Capital Capital Loss
Loss Carryover*<F27> Carryover Expiration
-------------------- --------------------
Dynamic Balance Fund $140,968 10/31/10
20,753 10/31/11
Dynamic Dividend Fund 31,233 10/31/11
*<F27> Capital gain distributions will resume in the future to the extent
gains are realized in excess of the available carryovers.
8. AVAILABILITY OF PROXY VOTING INFORMATION
Information regarding how the Fund votes proxies relating to portfolio
securities is available without charge upon request by calling toll-free at
1-888-785-5578 and on the SEC's website at www.sec.gov. Information
regarding how the Fund voted proxies relating to portfolio securities
during the period ending June 30, 2004 will be available after August 31,
2004 on the SEC's website at www.sec.gov or by calling the toll-free number
listed above.
ALPINE MUTUAL FUNDS
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
DYNAMIC BALANCE FUND
-----------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
APRIL 30, OCTOBER 31, OCTOBER 31, OCTOBER 31,
2004 2003 2002 2001 (A)<F28>
---------------- ----------- ----------- -------------
(UNAUDITED)
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD $11.08 $ 9.17 $10.10 $10.00
------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.11 0.22 0.24 0.09
Net realized/unrealized gains (losses) on investments 0.52 1.91 (0.91) 0.07
------ ------ ------ ------
Total from investment operations 0.63 2.13 (0.67) 0.16
------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income (0.10) (0.22) (0.25) (0.06)
Net realized gains on investments -- -- (0.01) --
------ ------ ------ ------
Total distributions (0.10) (0.22) (0.26) (0.06)
------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $11.61 $11.08 $ 9.17 $10.10
------ ------ ------ ------
------ ------ ------ ------
TOTAL RETURN 5.70%(b)<F29> 23.50% (6.82)% 1.64%(b)<F29>
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $57,397 $53,756 $43,027 $38,203
Ratio of expenses to average net assets:
Before waivers and recoveries 1.26%(c)<F30> 1.51% 1.50% 1.40%(c)<F30>
After waivers and recoveries 1.35%(c)<F30> 1.35% 1.35% 1.35%(c)<F30>
Ratio of net investment income to average net assets 1.86%(c)<F30> 2.26% 2.45% 2.55%(c)<F30>
Portfolio turnover 27% 39% 42% 9%
(a)<F28> For the period from June 7, 2001 (commencement of operations) to
October 31, 2001.
(b)<F29> Not Annualized.
(c)<F30> Annualized.
See notes to financial statements.
ALPINE MUTUAL FUNDS
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
DYNAMIC DIVIDEND FUND
---------------------------------------------
SIX MONTHS ENDED PERIOD ENDED
APRIL 30, 2004 OCTOBER 31, 2003(A)<F31>
---------------- ------------------------
(UNAUDITED)
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD $10.69 $10.00
------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.48(b)<F32> 0.06
Net realized/unrealized gains on investments 1.16 0.63
------ ------
Total from investment operations 1.64 0.69
------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income (0.45) --
Net realized gains on investments -- --
------ ------
Total distributions (0.45) --
------ ------
NET ASSET VALUE, END OF PERIOD $11.88 $10.69
------ ------
------ ------
TOTAL RETURN 15.42%(c)<F33> 6.90%(c)<F33>
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $27,144 $13,527
Ratio of expenses to average net assets:
Before waivers and reimbursements 1.69%(d)<F34> 3.11%(d)<F34>
After waivers and reimbursements 1.35%(d)<F34> 1.35%(d)<F34>
Ratio of net investment income to average net assets 8.18%(d)<F34> 5.69%(d)<F34>
Portfolio turnover 95% 9%
(a)<F31> For the period from September 22, 2003 (commencement of operations) to
October 31, 2003.
(b)<F32> Net investment income is calculated using average shares outstanding
during the period.
(c)<F33> Not Annualized.
(d)<F34> Annualized.
See notes to financial statements.
ALPINE MUTUAL FUNDS
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
MUNICIPAL MONEY
MARKET FUND
----------------------
PERIOD ENDED
APRIL 30, 2004(A)<F35>
----------------------
(UNAUDITED)
ADVISER CLASS SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD $1.00
-----
INCOME FROM INVESTMENT OPERATIONS:
Net investment income --(b)<F36>
Net realized/unrealized gains on investments --
-----
Total from investment operations --(b)<F36>
-----
LESS DISTRIBUTIONS:
Dividends from net investment income --(b)<F36>
Net realized gains on investments --
-----
Total distributions --(b)<F36>
-----
NET ASSET VALUE, END OF PERIOD $1.00
-----
-----
TOTAL RETURN 0.07%(c)<F37>
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period $4,972
Ratio of expenses to average net assets:
Before waivers and reimbursements 0.93%(d)<F38>
After waivers and reimbursements 0.62%(d)<F38>
Ratio of net investment income to average net assets 0.75%(d)<F38>
(a)<F35> For the period from March 30, 2004 (commencement of operations) to
April 30, 2004.
(b)<F36> Amount is less than $0.005.
(c)<F37> Not Annualized.
(d)<F38> Annualized.
See notes to financial statements.
ALPINE MUTUAL FUNDS
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
MUNICIPAL MONEY MARKET FUND
---------------------------------------------
SIX MONTHS ENDED PERIOD ENDED
APRIL 30, 2004 OCTOBER 31, 2003(A)<F39>
---------------- ------------------------
(UNAUDITED)
INVESTOR CLASS SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00
----- -----
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.01 0.01
Net realized/unrealized gains on investments -- --
----- -----
Total from investment operations 0.01 0.01
----- -----
LESS DISTRIBUTIONS:
Dividends from net investment income (0.01) (0.01)
Net realized gains on investments -- --
----- -----
Total distributions (0.01) (0.01)
----- -----
NET ASSET VALUE, END OF PERIOD $1.00 $1.00
----- -----
----- -----
TOTAL RETURN 0.50%(b)<F40> 1.00%(b)<F40>
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $84,500 $59,126
Ratio of expenses to average net assets:
Before waivers and reimbursements 0.72%(c)<F41> 0.73%(c)<F41>
After waivers and reimbursements 0.34%(c)<F41> 0.32%(c)<F41>
Ratio of net investment income to average net assets 1.01%(c)<F41> 1.09%(c)<F41>
(a)<F39> For the period from December 5, 2002 (commencement of operations) to
October 31, 2003.
(b)<F40> Not Annualized.
(c)<F41> Annualized.
See notes to financial statements.
ALPINE MUTUAL FUNDS
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
TAX OPTIMIZED
INCOME FUND
----------------------
PERIOD ENDED
APRIL 30, 2004(A)<F42>
----------------------
ADVISER CLASS SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD $10.26
------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.02
Net realized/unrealized losses on investments (0.08)
------
Total from investment operations (0.06)
------
LESS DISTRIBUTIONS:
Dividends from net investment income (0.05)
Net realized gains on investments --
------
Total distributions (0.05)
------
NET ASSET VALUE, END OF PERIOD $10.15
------
------
TOTAL RETURN (0.62)%(b)<F43>
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period $4,972
Ratio of expenses to average net assets:
Before waivers and reimbursements 1.17%(c)<F44>
After waivers and reimbursements 0.85%(c)<F44>
Ratio of net investment income to average net assets 2.52%(c)<F44>
Portfolio turnover 28%(d)<F45>
(a)<F42> For the period from March 30, 2004 (commencement of operations) to
April 30, 2004.
(b)<F43> Not Annualized.
(c)<F44> Annualized.
(d)<F45> 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.
ALPINE MUTUAL FUNDS
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
TAX OPTIMIZED INCOME FUND
---------------------------------------------
SIX MONTHS ENDED PERIOD ENDED
APRIL 30, 2004 OCTOBER 31, 2003(A)<F46>
---------------- ------------------------
(UNAUDITED)
INVESTOR CLASS SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD $10.18 $10.00
------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.14 0.23
Net realized/unrealized gains (losses) on investments (0.03) 0.18
------ ------
Total from investment operations 0.11 0.41
------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income (0.13) (0.23)
Net realized gains on investments (0.01) --(d)<F49>
------ ------
Total distributions (0.14) (0.23)
------ ------
NET ASSET VALUE, END OF PERIOD $10.15 $10.18
------ ------
------ ------
TOTAL RETURN 1.08%(b)<F47> 4.12%(b)<F47>
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $54,512 $55,591
Ratio of expenses to average net assets:
Before waivers and reimbursements 1.04%(c)<F48> 1.02%(c)<F48>
After waivers and reimbursements 0.60%(c)<F48> 0.60%(c)<F48>
Ratio of net investment income to average net assets 2.60%(c)<F48> 2.48%(c)<F48>
Portfolio turnover 28%(e)<F50> 46%
(a)<F46> For the period from December 6, 2002 (commencement of operations) to
October 31, 2003.
(b)<F47> Not Annualized.
(c)<F48> Annualized.
(d)<F49> Amount is less than $0.005.
(e)<F50> 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.
TRUSTEES
Samuel A. Lieber
Laurence B. Ashkin
H. Guy Leibler
INVESTMENT ADVISER
Alpine Management and Research, LLC
2500 Westchester Avenue, Suite 215
Purchase, NY 10577
www.alpinefunds.com
CUSTODIAN
U.S. Bank, N.A.
425 Walnut Street
Cincinnati, OH 45202
SUB-CUSTODIAN
The Bank of New York
One Wall Street
New York, NY 10286
TRANSFER AGENT & ADMINISTRATOR
U.S. Bancorp Fund Services, LLC
615 East Michigan Street
Milwaukee, WI 53202
INDEPENDENT AUDITORS
Deloitte & Touche LLP
411 East Wisconsin Avenue
Milwaukee, WI 53202
LEGAL COUNSEL
Blank Rome LLP
The Chrysler Building
405 Lexington Avenue
New York, NY 10174
DISTRIBUTOR
Quasar Distributors, LLC
615 East Michigan Street
Milwaukee, WI 53202
SHAREHOLDER/INVESTOR INFORMATION
(888) 785-5578
ALPINE FUNDS
2500 Westchester Avenue, Suite 215
Purchase, NY 10577
(914) 251-0880
(06/04)
ITEM 2. CODE OF ETHICS.
- -----------------------
Not applicable for semi-annual reports.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
- ----------------------------------------
Not applicable for semi-annual reports.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
- -----------------------------------------------
Not applicable for semi-annual reports.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
- ----------------------------------------------
Not applicable to open-end investment companies.
ITEM 6. SCHEDULE OF INVESTMENTS.
- --------------------------------
Not applicable for periods ending before July 9, 2004.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
- -------------------------------------------------------------------------
MANAGEMENT INVESTMENT COMPANIES.
- --------------------------------
Not applicable to open-end investment companies.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
- ---------------------------------------------------------------------------
COMPANY AND AFFILIATED PURCHASES.
- ---------------------------------
Not applicable to open-end investment companies.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
- ------------------------------------------------------------
There have been no material changes to the procedures by which shareholders may
recommend nominees to the registrant's board of directors/trustees.
ITEM 10. CONTROLS AND PROCEDURES.
- ---------------------------------
(a) The Registrant's President/Chief Executive Officer and Treasurer/Chief
Financial Officer have concluded that the Registrant's disclosure controls
and procedures (as defined in Rule 30a-3(c) under the Investment Company
Act of 1940 (the "1940 Act")) are effective as of a date within 90 days of
the filing date of the report that includes the disclosure required by this
paragraph, based on the evaluation of these controls and procedures
required by Rule 30a-3(b) under the 1940 Act and Rules 15d-15(b) under the
Securities Exchange Act of 1934, as amended.
(b) There were no significant changes in the Registrant's internal controls
over financial reporting that occurred during the Registrant's last fiscal
half-year that has materially affected, or is reasonably likely to
materially affect, the Registrant's internal control over financial
reporting.
ITEM 11. EXHIBITS.
- -----------------
(a) (1) Any code of ethics or amendment thereto, that is subject of the
disclosure required by Item 2, to the extent that the registrant
intends to satisfy Item 2 requirements through filing an exhibit.
Not Applicable.
(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of
2002. Filed herewith.
(3) Any written solicitation to purchase securities under Rule 23c-1 under
the Act sent or given during the period covered by the report by or on
behalf of the registrant to 10 or more persons. Not applicable to
open-end investment companies.
(b) Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Furnished herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Alpine Income Trust
--------------------------------
By (Signature and Title) /s/ Samuel A. Lieber
----------------------------------------------
Samuel A. Lieber, President
Date 7-7-04
----------------------------------
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)*<F51> /s/ Samuel A. Lieber
----------------------------------------
Samuel A. Lieber, President
Date 7-7-04
----------------------------------
By (Signature and Title)*<F51> /s/ Sheldon Flamm
----------------------------------------
Sheldon Flamm, Treasurer
Date 7-7-04
----------------------------------
*<F51> Print the name and title of each signing officer under his or her
signature.