UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number
811-05549
Reynolds Funds, Inc.
--------------------
(Exact name of registrant as specified in charter)
Wood Island, 3rd Floor
80 East Sir Francis Drake Blvd.
Larkspur, CA 94939
-------------------
(Address of principal executive offices) (Zip code)
Frederick L. Reynolds
Reynolds Capital Management
Wood Island, Third Floor
80 East Sir Francis Drake Blvd.
Larkspur, California 94939
---------------------------
(Name and address of agent for service)
(415) 461-7860
--------------
Registrant's telephone number, including area code:
Date of fiscal year end: September 30
Date of reporting period: 03/31/2005
ITEM 1. REPORTS TO STOCKHOLDERS.
- --------------------------------
SEMIANNUAL REPORT
MARCH 31, 2005
REYNOLDS FUNDS
NO-LOAD MUTUAL FUNDS
REYNOLDS
BLUE CHIP GROWTH FUND
SEEKING LONG-TERM CAPITAL APPRECIATION
REYNOLDS
OPPORTUNITY FUND
SEEKING LONG-TERM CAPITAL APPRECIATION
REYNOLDS
FUND
SEEKING LONG-TERM CAPITAL APPRECIATION
REYNOLDS
BALANCED FUND
(F/K/A/ REYNOLDS U.S. GOVERNMENT BOND FUND)
SEEKING CAPITAL APPRECIATION AND INCOME
REYNOLDS
MONEY MARKET FUND
SEEKING A HIGH LEVEL OF CURRENT INCOME CONSISTENT WITH PRESERVATION OF CAPITAL
AND A STABLE NET ASSET VALUE
1-800-773-9665
www.reynoldsfunds.com
REYNOLDS FUNDS
May 23, 2005
Dear Fellow Shareholders:
The Reynolds U. S. Government Bond Fund has a new name and new investment
objectives. It is now the Reynolds Balanced Fund and its new investment
objectives are "Seeking Capital Appreciation and Income". The Balanced Fund
will invest in both fixed income securities and common stocks-most of which
provide dividend income. Most of the time, the Balanced Fund's portfolio will
consist of 20% to 80% fixed income securities and 20 to 80% equity securities.
As of March 31, 2005 its investments were 59.8% fixed income securities (bonds),
17.2% equity securities and 23.0% short term money market instruments. The
Fund's new NASDAQ symbol is RBALX.
The U.S. economy continues in an expansionary mode. Gross Domestic Product
(GDP) grew at a 3.1% rate in the three months ended March 31, 2005. GDP is
estimated to increase 3.5% in calendar 2005 after increasing 4.4% in calendar
2004. Inflation increased at a rate of 2.5% in the three months ended March 31,
2005 as measured by the GDP Deflator. Inflation is estimated to increase 2.3%
in calendar 2005 after increasing 2.4% in 2004. Spending by consumers and
capital spending by companies have been some of the strongest sectors of the
economy. In the twelve months ended March 31, 2005 nearly 2.2 million jobs have
been created and during the first four months of 2005 nearly 844,000 jobs were
created showing an accelerating pace of job creation.
The Federal Reserve has raised short term interest rates eight times starting
in June 2004 through May 2005. However, interest rates are still at 41 year
lows. We believe that raising interest rates is the correct thing for the
Federal Reserve to do. Previously they reduced interest rates to an artificially
low level to stimulate the economy. Now that the economy is strong and jobs are
being created the Fed should move toward a more normal level of interest rates
to protect against future economic imbalances including inflation. Other
problems have been recent negative geopolitical news including terrorism,
negative events in Iraq and attempts to slow down China's strong growth, which
has been a key driver of Asian and worldwide growth.
Oil prices have risen during the past 9 months. Higher oil prices are a tax
on consumers in terms of higher fuel prices. However, the U.S economy is now
more service oriented and is not as dependent on oil as it was twenty years ago
when it was more heavily industrial oriented. Oil consumption currently accounts
for 12% of GDP. Twenty years ago it accounted for 18% of GDP. Alan Greenspan,
the Chairman of the Federal Reserve Board, recently estimated that these higher
oil prices would make the GDP growth rate 1/2% less than it would have been.
In the long run, the strength of the economy and the level of corporate
profitability have been key factors in determining the valuations of common
stocks. We believe that these factors, which are currently positive, are the
more important factors at the present time. Over the long term, interest rates
have typically risen during economic expansions and typically the stock market
has appreciated. If interest rates do not go up too rapidly from here (the
Federal Reserve has indicated that it will raise rates slowly) or too far, it
should not be a significant negative for stocks.
OPPORTUNISTIC INVESTING IN COMPANIES OF VARIOUS SIZES
The three Reynolds Stock Funds invest in companies of various sizes as
classified by their market capitalizations. A company's market capitalization is
calculated by taking the number of shares the company has outstanding multiplied
by its current market price. This is one way that the Reynolds Stock Funds
differentiate their investment styles. Other considerations in selecting
companies for the portfolios include revenue growth rates, product innovations,
financial strength, management's knowledge and experience plus the overall
economic and geopolitical environments and interest rates.
REYNOLDS BLUE CHIP GROWTH FUND
Portfolio as of March 31, 2005
------------------------------
Giant 25.42%
Large 36.72%
Medium 28.42%
Small 8.01%
Micro 1.43%
REYNOLDS OPPORTUNITY FUND
Portfolio as of March 31, 2005
------------------------------
Giant 4.81%
Large 16.48%
Medium 33.35%
Small 25.42%
Micro 19.94%
REYNOLDS FUND
Portfolio as of March 31, 2005
------------------------------
Giant 0.89%
Large 4.88%
Medium 23.09%
Small 34.15%
Micro 36.99%
Source: Morningstar web site and Morningstar Market Cap Breakpoints
Giant-cap stocks are defined as the group that accounts for the top
40% of the capitalization of the Morningstar domestic stock universe;
large-cap stocks represent the next 30%; mid-cap stocks represent the
next 20%; and small-cap stocks represent the balance. Micro is defined
as smaller than the "small" breakpoint.
Market caps are the minimum in each cap group; therefore, the minimum
large market cap is the large-medium breakpoint and medium is the
medium-small breakpoint. As of March 31, 2005 the minimums in each
cap group are as follows:
(in millions)
Giant $47260.59
Large $9043.16
Medium $1587.56
Small $455.30
Micro <$455.30
LOW INTEREST RATES BY HISTORICAL STANDARDS ARE A SIGNIFICANT POSITIVE FOR STOCK
VALUATIONS
Since January 2001, the Federal Reserve Board lowered short-term interest
rates twelve times to help stimulate the economy. Although interest rates have
been rising, they remain at historically low levels. Low interest rates usually
result in higher stock valuations for many reasons including:
(1) Borrowing costs of corporations are lower resulting in higher business
confidence and profits.
(2) Borrowing costs of individuals are lower which increases consumer
confidence and spending.
(3) Cash is not as attractive as an alternative investment to stocks.
(4) A company's stock is usually valued by placing a present value on that
company's future stream of earnings and dividends. The present value should
be higher when interest and inflation rates are low.
THE REYNOLDS BLUE CHIP GROWTH FUND
The long-term strategy of the Reynolds Blue Chip Growth Fund is to emphasize
investment in growth companies. Occasionally, these companies go out of favor
for a while. However, these companies should continue to build value if their
earnings grow and their stocks should begin appreciating again when they return
to favor.
THE REYNOLDS OPPORTUNITY FUND
The Reynolds Opportunity Fund usually invests in medium to smaller size
growth companies. A long-term investment in the Reynolds Opportunity Fund should
be a good complement to a long-term investment in the Reynolds Blue Chip Growth
Fund and the Reynolds Fund.
THE REYNOLDS FUND
The Reynolds Fund is a general stock fund and is intended to be a long-term
investment holding. The Fund may own common stocks of all types and sizes and
will mainly invest in common stocks of U.S. headquartered companies. While the
Fund will generally invest in "growth" stocks, it may also invest in "value"
stocks.
THE REYNOLDS BALANCED FUND
The Reynolds Balanced Fund emphasizes quality investments in high yielding
equities and U.S. Treasury and Federal Agency Bonds (issued by the Federal Home
Loan Bank - FHLB, Federal Home Loan Mortgage Corp. - FHLMC and Federal National
Mortgage Association - FNMA), Treasury Notes and Treasury Bills of varying
maturities. The Reynolds Balanced Fund is designed to satisfy many of the income
objectives of investors. For example, the Balanced Fund is actively managed and
the fixed income portion of the fund in invested in bonds having different
maturities, which reduces the risk that a large percentage of the bonds in the
Fund mature at an inopportune time for reinvestment. The average maturity of the
bonds in the Fund is continually reevaluated and adjusted based on short- and
long-term economic, inflation, and interest rate forecasts.
REYNOLDS BALANCED FUND
Portfolio as of March 31, 2005
------------------------------
Cash 4.52%
Stocks 17.20%
Federal Agencies 59.84%
U.S. Treasury Bills 18.44%
REYNOLDS MONEY MARKET FUND
Portfolio as of March 31, 2005
------------------------------
U.S. Treasury Bills 92.20%
Cash 7.80%
THE REYNOLDS MONEY MARKET FUND
The Reynolds Money Market Fund offers unlimited check writing with no minimum
amount per check. The Reynolds Money Market Fund is designed to provide for
investor's short-term cash management needs. For ease of redemption, the Money
Market Fund offers: (1) check writing ($0.20 printing charge per check); or (2)
telephone redemption where either a check is mailed to the shareholder, or money
may be wired to the shareholder's bank account ($15.00 wiring charge - no charge
if part of the Systematic Withdrawal Plan which has a $100 minimum withdrawal).
The Reynolds Money Market Fund's yield should vary with the rate of inflation
over the years. As of March 31, 2005, the dollar weighted average days to
maturity of the Money Market Fund was 33.3 days.
ECONOMIC DISCUSSION
THE WORLD ECONOMY
There are more than 1.5 billion people in the world who will be experiencing
a higher standard of living and using and consuming more products as capitalism
grows in China, Eastern Europe and Russia. Many other countries, such as India
and the democratic countries in Latin America, have rapidly emerging middle
classes that desire western goods and services and governments that are
encouraging foreign investment. Worldwide inflation remains low. There are many
reasons for this, including: (1) committed central bankers; (2) fiscal restraint
by governments; (3) economic systems are more efficient; (4) cost cutting and
restructuring is spreading to many countries; (5) more efficient private-sector
operations are replacing inefficient state-run enterprises; and (6) excess
capacity exists in many markets.
The Blue Chip, Opportunity and Reynolds Funds are well positioned to
participate in these long-term worldwide growth trends through their investments
in U.S. headquartered and foreign headquartered companies whose stocks or
American Depository Receipts (ADRs) trade in the United States. We have some
investments in foreign headquartered companies in the Reynolds Stock Funds at
the present time. We are planning on increasing our investments in foreign
headquartered companies in the future where we believe that the long-term
fundamentals are positive and their stock prices are attractive.
THE U.S. ECONOMY
The U.S. economy continues in a positive mode. The efficiencies of the
economy resulting from such things as technology enhancements and productivity
increases are impressive.
Consumer spending represents approximately 65% of GDP and has been a
positive. GDP increased 4.4% in 2004 compared to 3.0% in 2003, 1.9% in 2002,
0.8% in 2001, 3.7% in 2000 and 4.4% in 1999. GDP is estimated to increase 3.5%
in 2005.
U.S. inflation is low relative to the last thirty-five years due to such
factors as global competition, advances in technology resulting in increasing
productivity and technology innovations that are helping to lower production and
distribution costs. U.S. inflation increased 2.4% in 2004 after increasing 2.3%
in 2003, 1.6% in 2002, 2.8% in 2001, 3.4% in 2000 and 2.2% in 1999. U.S.
inflation is estimated to increase 2.3% in 2005.
INVESTMENT OUTLOOK
There are many investment positives. Among them are: (1) the economy is
growing; (2) corporate profits are rising; (3) job growth is strong; (4) even
though interest rates are probably going to climb, they are increasing from a
very low level, so there's room for them to go up and not slow down the economy
in a dangerous way; (5) U.S. industry is more competitive than at any time in
the past quarter century and U.S. companies are the leaders in the majority of
industries worldwide; (6) U. S. productivity continues to increase; (7) the
Internet is beginning to produce efficiencies; (8) consumer spending has
remained high; (9) most indicators in the economy are positive; (10) corporate
cost cutting has been very successful; and (11) price-earnings ratios are in
line with historical averages.
Some possible investment negatives, which we are closely watching are: (1)
the possibility of higher inflation resulting in such things as higher interest
rates; (2) high energy prices; (3) large federal spending and federal deficits;
(4) possible terrorist attacks; (5) dollar weakness; (6) Iraq; and (7) efforts
to slow China's economic boom.
INFORMATION ABOUT THE REYNOLDS FUNDS
REYNOLDSFUNDS.COM WEB SITE: You can now access current information about your
investment holdings via our web site, reynoldsfunds.com. You must first request
a personal identification number (PIN) by calling our shareholder service
representatives at (800) 773-9665. You will be able to view your account list,
account detail (including balances), transaction history, distributions, and
current Fund prices. Additional information available includes quarterly updates
of the returns of the Reynolds Funds, top ten holdings of each equity portfolio,
and industry percentages. Also detailed statistics and graphs of past
performances with a link to Quicken.com for the various Reynolds Funds.
FOR AUTOMATIC CURRENT DAILY NET ASSET VALUES: Call 1-800-773-9665 (1-800-
7REYNOLDS) twenty-four hours-a-day, seven days a week and press "any key" then
"1". The updated current net asset values for all of the Reynolds Funds are
usually available each business day after 5 P.M. (PST).
FOR REYNOLDS MONEY MARKET FUND CURRENT ONE AND SEVEN DAY YIELDS: Call 1-800-
773-9665 and press "any key" then "1".
FOR SHAREHOLDERS TO AUTOMATICALLY ACCESS THEIR CURRENT ACCOUNT INFORMATION:
Call 1-800-773-9665 (twenty-four hours-a-day, seven days a week), press "any
key" then "2" and enter your 16 digit account number which appears at the top
right of your statement.
TO SPEAK TO A FUND REPRESENTATIVE REGARDING QUESTIONS, CURRENT ACCOUNT
INFORMATION AND CURRENT DAILY NET ASSET VALUES: Call 1-800-773-9665 and press
"0" from 6 A.M. to 5 P.M. (PST).
SHAREHOLDER STATEMENT FREQUENCY: Consolidated statements summarizing all
Reynolds Funds held by a shareholder are sent quarterly. In addition, individual
Fund statements are sent whenever a transaction occurs. These transactions are:
(1) Blue Chip, Opportunity and Reynolds Fund statements are sent twice a year if
and when any ordinary income or capital gains are distributed; and (2)
statements are sent for any of the Funds when a shareholder purchases or redeems
shares.
TAX REPORTING: Individual 1099 forms, which summarize any dividend income and
any long- or short-term capital gains, are sent annually to shareholders each
January. The percentage of income earned from various government securities, if
any, for the Reynolds Funds are also reported in January.
MINIMUM INVESTMENT: $1,000 for regular and retirement accounts ($100 for
additional investments for all accounts - except for the Automatic Investment
Plan, which is $50 for regular and retirement plan accounts).
PROTOTYPE PLANS FOR RETIREMENT PLANS: All types are offered including the
Roth IRA, Coverdell Education Savings Account, SIMPLE IRA Plan, 401k, SEP IRA,
403b and Fund Sponsored Qualified Retirement Plans.
AUTOMATIC INVESTMENT PLAN: There is no charge to automatically debit your
checking account to invest in any of the Reynolds Funds ($50 minimum) at
periodic intervals to make automatic purchases in any of the Reynolds Funds.
This is useful for dollar cost averaging.
SYSTEMATIC WITHDRAWAL PLAN: For shareholders with a $10,000 minimum starting
balance, there is no charge to automatically redeem shares ($100 minimum) in any
of the Reynolds Funds as often as monthly and send a check to you or transfer
funds to your bank account.
EXCHANGES OR REGULAR REDEMPTIONS: As often as desired - no charge.
NASDAQ SYMBOLS: Reynolds Blue Chip Growth Fund - RBCGX, Reynolds Opportunity
Fund - ROPPX, Reynolds Fund - REYFX, Reynolds Balanced Fund - RBALX, Reynolds
Money Market Fund - REYXX.
PORTFOLIO MANAGER: Frederick Reynolds is the portfolio manager of each of the
Reynolds Funds.
THE REYNOLDS FUNDS ARE NO-LOAD: No front-end sales commissions or deferred
sales charges ("loads") are charged. Over 40% of all mutual funds impose these
marketing charges that are ultimately paid by the shareholder. These marketing
charges are either: (1) a front-end fee or "load" in which up to 5% of a
shareholder's assets are deducted from the original investment (some funds even
charge a fee when a shareholder reinvests capital gains or dividends); or (2) a
back-end penalty fee or "load" which is typically deducted from a shareholder's
account if a shareholder redeems within five years of the original investment.
These fees reduce a shareholder's return. The Reynolds Funds are No-Load as they
do not have these extra charges.
We appreciate your continued confidence in the Reynolds Funds and would like
to welcome our new shareholders. One hundred percent of our Company's pension
plan is invested in the Reynolds Funds. We look forward to strong results in
the future.
Sincerely,
/s/Frederick L. Reynolds
Frederick L. Reynolds
President
80 East Sir Francis Drake Blvd. o Larkspur, CA 94939 o 415-461-7860
This report is not authorized for use as an offer of sale or a solicitation of
an offer to buy shares of the Reynolds Funds unless accompanied or preceded by
the Funds' current prospectus. Performance data quoted represents past
---------------------------------------
performance; past performance does not guarantee future results. The investment
- ----------------------------------------------------------------
return and principal value of an investment will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
Current performance of the Funds may be lower or higher than the performance
quoted. Performance data current to the most recent month end may be obtained
by visiting www.reynoldsfunds.com.
Reynolds Funds, Inc.
COST DISCUSSION
As a shareholder of the Reynolds Funds, you do not incur (except as described
below) transaction costs, including sales charges (loads) on purchase payments,
reinvested dividends, or other distributions; redemption fees; and exchange
fees, but do incur ongoing costs, including management fees; distribution
[and/or service] (12b-1) fees; and other Fund expenses. This example is intended
to help you understand your ongoing costs (in dollars) of investing in the
Reynolds Funds and to compare these costs with the ongoing costs of investing in
other mutual funds.
The examples are based on an investment of $1,000 invested at the beginning of
the period and held for the entire period from September 30, 2004 through March
31, 2005.
ACTUAL EXPENSES
The first line for each Fund in the table below provides information about
actual account values and actual expenses for that particular Reynolds Fund. You
may use the information in this line, together with the amount you invested, to
estimate the expenses that you paid over the period. Simply divide your account
value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6),
then multiply the result by the number in the first line under the heading
entitled "Expenses Paid During Period" to estimate the expenses you paid on your
account during this period.
In addition to the costs highlighted and described below, the only Reynolds
Funds transaction costs you might currently incur would be wire fees ($15 per
wire), if you choose to have proceeds from a redemption wired to your bank
account instead of receiving a check. Additionally, U.S. Bank charges an annual
processing fee ($15) if you maintain an IRA account with a Reynolds Fund. To
determine your total costs of investing in a Reynolds Fund, you would need to
add any applicable wire or IRA processing fees you've incurred during the period
to the costs provided in the example below.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on a particular Reynolds Fund's
actual expense ratio and an assumed rate of return of 5% per year before
expenses, which is not the Fund's actual return. The hypothetical account values
and expenses may not be used to estimate the actual ending account balance or
expenses you paid for the period. You may use this information to compare the
ongoing costs of investing in a Reynolds Fund and other funds. To do so,
compare this 5% hypothetical example with the 5% hypothetical examples that
appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), redemption or exchange fees. Therefore, the second line of the
table is useful in comparing ongoing costs only, and will not help you determine
the relative total costs of owning different funds. In addition, if these
transactional costs were included, your costs would have been higher.
Beginning Account Ending Account Expenses Paid During
Value 9/30/04 Value 3/31/05 Period*<F1> 9/30/04-3/31/05
------------- ------------- -----------------------
Reynolds Blue Chip Growth Fund Actual $1,000 $1,000.00 $1,036.70 $ 9.60
Hypothetical (5% return before expenses) $1,000.00 $1,025.00 $ 9.54
Reynolds Opportunity Fund $1,000.00 $1,014.70 $10.40
Hypothetical (5% return before expenses) $1,000.00 $1,025.00 $10.45
Reynolds Fund Actual $1,000 $1,000.00 $ 996.30 $16.92
Hypothetical (5% return before expenses) $1,000.00 $1,025.00 $17.17
Reynolds Balanced Fund Actual $1,000 $1,000.00 $ 986.80 $ 4.90
Hypothetical (5% return before expenses) $1,000.00 $1,025.00 $ 5.00
Reynolds Money Market Fund Actual $1,000 $1,000.00 $1,006.10 $ 3.30
Hypothetical (5% return before expenses) $1,000.00 $1,025.00 $ 3.33
*<F1> Expenses are equal to the Funds' annualized expense ratio of 1.89%,
2.07%, 3.40%, 0.99% and 0.66%, respectively, multiplied by the average
account value over the period, multiplied by 182/365 (to reflect the
one-half year period between September 30, 2004 and March 31, 2005).
Reynolds Blue Chip Growth Fund
SCHEDULE OF INVESTMENTS
March 31, 2005 (Unaudited)
SHARES VALUE
------ -----
LONG-TERM INVESTMENTS 97.7% (A)<F3>
COMMON STOCKS -- 97.7% (A)<F3>
AIRLINES/AEROSPACE -- 1.3%
3,500 Boeing Co. $ 204,610
1,000 General Dynamics Corp. 107,050
5,000 United Technologies Corp. 508,300
-----------
819,960
APPLICATION SOFTWARE -- 3.6%
14,500 Adobe Systems Inc. 973,965
9,000 SAP AG SP-ADR 360,720
40,000 VERITAS Software Corp.*<F2> 928,800
-----------
2,263,485
AUTOMOTIVE -- 0.2%
3,000 CarMax, Inc.*<F2> 94,500
BANKS -- 0.8%
4,500 Bank of America Corp. 198,450
3,500 Citigroup Inc. 157,290
2,000 Wells Fargo & Co. 119,600
-----------
475,340
BEVERAGES -- 0.7%
8,000 PepsiCo, Inc. 424,240
BIOTECHNOLOGY -- 0.8%
3,000 Affymetrix, Inc.*<F2> 128,520
1,500 Amgen Inc.*<F2> 87,315
3,000 Genentech, Inc.*<F2> 169,830
1,500 Sepracor Inc.*<F2> 86,115
-----------
471,780
BUILDING -- 2.0%
17,000 Home Depot, Inc. 650,080
11,000 Lowe's Companies, Inc. 627,990
-----------
1,278,070
BUSINESS SOFTWARE & SERVICES -- 2.1%
7,000 CheckFree Corp.*<F2> 285,320
3,000 Comverse Technology, Inc.*<F2> 75,660
13,000 Rockwell Automation Inc. 736,320
26,000 TIBCO Software Inc.*<F2> 193,700
-----------
1,291,000
CABLE TV/BROADCASTING -- 2.7%
6,500 Grupo Televisa S.A. SP-ADR 382,200
62,000 Sirius Satellite Radio Inc.*<F2> 348,440
5,000 Viacom Inc. Cl B 174,150
24,000 XM Satellite Radio Holdings Inc.*<F2> 756,000
-----------
1,660,790
CHEMICALS -- 1.2%
1,000 3M Co. 85,690
5,500 Dow Chemical Co. 274,175
5,500 E.I. du Pont de Nemours and Co. 281,820
2,000 Monsanto Co. 129,000
-----------
770,685
COMMUNICATION EQUIPMENT -- 1.3%
14,000 L.M. Ericsson Telephone Co. ADR 394,800
10,500 QUALCOMM Inc.*<F2> 384,825
-----------
779,625
COMPUTER & PERIPHERALS -- 4.1%
24,000 Apple Computer, Inc.*<F2> 1,000,080
16,500 Dell Inc.*<F2> 633,930
6,400 International Business Machines Corp. 584,832
11,500 Network Appliance, Inc.*<F2> 318,090
-----------
2,536,932
COMPUTER NETWORKING -- 1.3%
14,000 Juniper Networks, Inc.*<F2> 308,840
17,000 Sierra Wireless, Inc.*<F2> 139,740
18,000 WebEx Communications, Inc.*<F2> 388,620
-----------
837,200
COMPUTER SOFTWARE & SERVICES -- 0.2%
4,000 Macromedia, Inc.*<F2> 134,000
DRUGS -- 0.6%
2,000 Bristol-Myers Squibb Co. 50,920
1,500 Eli Lilly & Co. 78,150
3,000 Merck & Co. Inc. 97,110
5,500 Pfizer Inc. 144,485
-----------
370,665
ELECTRICAL EQUIPMENT -- 1.5%
1,500 Emerson Electric Co. 97,395
15,500 General Electric Co. 558,930
12,000 PerkinElmer, Inc. 247,560
-----------
903,885
ENERGY -- 2.1%
500 Anadarko Petroleum Corp. 38,050
2,000 Burlington Resources Inc. 100,140
3,000 ChevronTexaco Corp. 174,930
1,500 ConocoPhillips 161,760
2,500 Exxon Mobil Corp. 149,000
3,000 Marathon Oil Corp. 140,760
1,500 Murphy Oil Corp. 148,095
3,000 Noble Energy, Inc. 204,060
1,000 Royal Dutch Petroleum Co. NYS 60,040
2,000 Unocal Corp. 123,380
-----------
1,300,215
ENERGY-SERVICES -- 5.5%
10,500 Baker Hughes Inc. 467,145
3,000 BJ Services Co. 155,640
1,000 Cooper Cameron Corp.*<F2> 57,210
4,500 Diamond Offshore Drilling, Inc. 224,550
3,000 Helmerich & Payne, Inc. 119,070
3,500 Nabors Industries, Ltd.*<F2> 206,990
3,500 Noble Corp. 196,735
5,000 Rowan Companies, Inc. 149,650
9,000 Schlumberger Ltd. 634,320
7,500 Smith International, Inc. 470,475
5,000 Tesoro Corp.*<F2> 185,100
8,500 Transocean Inc.*<F2> 437,410
2,000 Valero Energy Corp. 146,540
-----------
3,450,835
ENTERTAINMENT/MEDIA -- 1.7%
12,754 The Walt Disney Co. 366,423
1,000 DreamWorks Animation SKG, Inc.*<F2> 40,710
5,000 Electronic Arts Inc.*<F2> 258,900
5,000 Harrah's Entertainment, Inc. 322,900
500 Pixar, Inc.*<F2> 48,775
-----------
1,037,708
FINANCIAL SERVICES -- 3.6%
7,000 American Express Co. 359,590
1,000 A.G. Edwards, Inc. 44,800
2,000 Goldman Sachs Group, Inc. 219,980
2,500 Lehman Brothers Holdings Inc. 235,400
12,000 Merrill Lynch & Co., Inc. 679,200
12,000 Morgan Stanley 687,000
1,500 Paychex, Inc. 49,230
-----------
2,275,200
FOOD WHOLESALERS -- 0.1%
2,000 Sysco Corp. 71,600
FOODS -- 1.5%
3,500 Altria Group, Inc. 228,865
9,500 Hershey Foods Corp. 574,370
1,000 The J. M. Smucker Co. 50,300
1,500 Wm. Wrigley Jr. Co. 98,355
-----------
951,890
GOLD & SILVER -- 0.3%
5,000 Newmont Mining Corp. 211,250
HEALTH MAINTENANCE ORGANIZATIONS -- 0.1%
1,000 Community Health Systems Inc.*<F2> 34,910
HOME BUILDERS -- 0.7%
1,500 Beazer Homes USA, Inc. 74,790
500 KB Home, Inc. 58,730
1,000 Meritage Homes Corp.*<F2> 58,920
1,000 Pulte Homes, Inc. 73,630
1,000 Ryland Group, Inc. 62,020
1,000 Toll Brothers, Inc.*<F2> 78,850
-----------
406,940
HOTEL -- 2.1%
1,000 Four Seasons Hotels Inc. 70,700
15,000 Hilton Hotels Corp. 335,250
2,000 Marriott International, Inc. 133,720
11,000 Starwood Hotels & Resorts Worldwide, Inc 660,330
1,500 Wynn Resorts, Ltd.*<F2> 101,610
-----------
1,301,610
HOUSEHOLD PRODUCTS -- 0.9%
3,500 Clorox Co. 220,465
5,000 Procter & Gamble Co. 265,000
2,000 Tupperware Corp. 40,720
1,500 Wyeth 63,270
-----------
589,455
INSURANCE -- 1.9%
8,000 Aetna Inc. 599,600
1,500 Allstate Corp. 81,090
5,500 CIGNA Corp. 491,150
-----------
1,171,840
INTERNET INFORMATION PROVIDERS -- 1.8%
3,000 Google Inc.*<F2> 541,530
18,000 Yahoo! Inc.*<F2> 610,200
-----------
1,151,730
INTERNET SERVICE PROVIDERS -- 0.7%
15,000 SINA Corp.*<F2> 465,900
INTERNET SOFTWARE & SERVICES -- 0.2%
2,000 Priceline.com Inc.*<F2> 50,400
1,000 Websense, Inc.*<F2> 53,800
-----------
104,200
MACHINERY -- 0.9%
4,000 Caterpillar Inc. 365,760
1,500 Deere & Co. 100,695
1,500 Ingersoll-Rand Co. 119,475
-----------
585,930
MEDICAL SERVICES -- 2.6%
8,000 HCA, Inc. 428,560
6,000 McKesson Corp. 226,500
1,000 Quest Diagnostics Inc. 105,130
6,500 UnitedHealth Group Inc. 619,970
4,000 Universal Health Services, Inc. Cl B 209,600
500 WellPoint Inc.*<F2> 62,675
-----------
1,652,435
MEDICAL SUPPLIES -- 1.8%
2,000 Abbott Laboratories 93,240
15,500 Johnson & Johnson 1,040,980
-----------
1,134,220
METALS -- 0.8%
4,000 Commercial Metals Co. 135,560
3,500 Nucor Corp. 201,460
2,000 Peabody Energy Corp. 92,720
500 Phelps Dodge Corp. 50,865
-----------
480,605
PAPER & FOREST PRODUCTS -- 0.2%
1,500 Weyerhaeuser Co. 102,750
PUBLISHING -- 0.1%
1,500 Reuters Group PLC - SP-ADR 69,150
RESTAURANTS -- 4.6%
1,500 Brinker International, Inc.*<F2> 54,330
2,500 California Pizza Kitchen, Inc.*<F2> 58,600
2,000 CBRL Group, Inc. 82,600
14,500 The Cheesecake Factory Inc.*<F2> 514,025
1,000 Darden Restaurants, Inc. 30,680
2,500 IHOP Corp. 119,200
8,500 McDonald's Corp. 264,690
6,500 Outback Steakhouse, Inc. 297,635
4,500 P.F. Chang's China Bistro, Inc.*<F2> 269,100
4,000 Panera Bread Co.*<F2> 226,120
6,500 Papa John's International, Inc.*<F2> 225,680
14,500 Yum! Brands, Inc. 751,245
-----------
2,893,905
RETAIL-SPECIALTY -- 15.2%
12,500 Abercrombie & Fitch Co. 715,500
10,500 Amazon.com, Inc.*<F2> 359,835
25,000 American Eagle Outfitters, Inc. 738,750
500 AutoZone, Inc.*<F2> 42,850
14,000 bebe stores, inc. 475,300
9,000 Bed Bath & Beyond Inc.*<F2> 328,860
15,000 Best Buy Co., Inc. 810,150
16,500 Chico's FAS, Inc.*<F2> 466,290
18,000 Circuit City Stores, Inc. 288,900
4,500 Coach, Inc.*<F2> 254,835
4,000 Dollar Tree Stores, Inc.*<F2> 114,920
33,000 eBay Inc.*<F2> 1,229,580
2,500 Foot Locker, Inc. 73,250
1,500 Liz Claiborne, Inc. 60,195
2,500 The Men's Wearhouse, Inc.*<F2> 105,525
2,500 Michaels Stores, Inc. 90,750
5,500 NIKE, Inc. Cl B 458,205
3,000 Office Depot, Inc.*<F2> 66,540
3,500 Pacific Sunwear of California, Inc.*<F2> 97,930
4,000 PC Connection, Inc.*<F2> 23,480
5,000 PETCO Animal Supplies, Inc.*<F2> 184,050
4,000 PETsMART, Inc. 115,000
5,000 Pier 1 Imports, Inc. 91,150
12,500 Ross Stores, Inc. 364,250
4,000 Sharper Image Corp.*<F2> 66,440
11,500 Staples, Inc. 361,445
16,000 Starbucks Corp.*<F2> 826,560
2,500 Tiffany & Co. 86,300
9,500 Urban Outfitters, Inc.*<F2> 455,715
1,500 Whole Foods Market, Inc. 153,195
-----------
9,505,750
RETAIL STORES -- 6.0%
1,500 BJ's Wholesale Club, Inc.*<F2> 46,590
19,000 Costco Wholesale Corp. 839,420
1,500 Dillard's, Inc. 40,350
3,000 The Gap, Inc. 65,520
3,000 Kohl's Corp.*<F2> 154,890
4,000 Longs Drug Stores Corp. 136,880
6,500 Neiman Marcus Group, Inc. 594,815
18,500 Nordstrom, Inc. 1,024,530
3,000 Target Corp. 150,060
3,000 Walgreen Co. 133,260
11,500 Wal-Mart Stores, Inc. 576,265
-----------
3,762,580
SECURITY SOFTWARE & SERVICES -- 2.7%
14,000 Check Point Software Technologies Ltd.*<F2> 304,360
4,000 Internet Security Systems, Inc.*<F2> 73,200
20,000 RSA Security Inc.*<F2> 317,000
35,000 VeriSign, Inc.*<F2> 1,004,500
-----------
1,699,060
SEMICONDUCTOR CAPITAL SPENDING -- 1.7%
7,500 KLA-Tencor Corp. 345,075
11,000 Novellus Systems, Inc.*<F2> 294,030
30,000 Teradyne, Inc.*<F2> 438,000
-----------
1,077,105
SEMICONDUCTORS -- 6.1%
8,000 Broadcom Corp.*<F2> 239,360
11,000 Cypress Semiconductor Corp.*<F2> 138,600
12,000 Integrated Device Technology, Inc.*<F2> 144,360
15,880 Intel Corp. 368,892
17,500 Lam Research Corp.*<F2> 505,050
28,000 Mattson Technology, Inc.*<F2> 222,320
7,000 Maxim Integrated Products, Inc. 286,090
10,500 QLogic Corp.*<F2> 425,250
16,000 Rambus Inc.*<F2> 241,120
16,500 Texas Instruments Inc. 420,585
76,000 Vitesse Semiconductor Corp.*<F2> 203,680
22,000 Xilinx, Inc. 643,060
-----------
3,838,367
SERVICES -- 1.4%
4,000 FedEx Corp. 375,800
8,000 Taser International, Inc.*<F2> 96,000
5,500 United Parcel Service, Inc. Cl B 400,070
-----------
871,870
SYSTEM SOFTWARE -- 1.1%
23,000 Autodesk, Inc. 684,480
TELEPHONE SERVICES -- 0.4%
1,500 Verizon Communications Inc. 53,250
7,000 Vodafone Group PLC - SP-ADR 185,920
-----------
239,170
TRANSPORTATION -- 2.1%
11,000 Burlington Northern Santa Fe Corp. 593,230
3,000 CSX Corp. 124,950
5,000 Kansas City Southern*<F2> 96,300
4,500 Norfolk Southern Corp. 166,725
6,000 Yellow Roadway Corp.*<F2> 351,240
-----------
1,332,445
UTILITIES -- 0.4%
3,000 Kinder Morgan, Inc. 227,100
WIRELESS COMMUNICATION -- 2.0%
12,000 Nextel Communications, Inc.*<F2> 341,040
2,000 Nextel Partners, Inc.*<F2> 43,920
8,500 Research In Motion Ltd.*<F2> 649,570
4,000 Sprint Corp. (FON Group) 91,000
4,000 Western Wireless Corp.*<F2> 151,840
-----------
1,277,370
-----------
Total common stocks
(cost $51,725,694) 61,071,732
-----------
Total long-term investments
(cost $51,725,694) 61,071,732
PRINCIPAL AMOUNT VALUE
- ---------------- -----
SHORT-TERM INVESTMENTS -- 2.3% (A)<F3>
U.S. TREASURY SECURITIES -- 2.2%
$800,000 U.S. Treasury Bills, 2.12%, due 4/07/05 $ 799,717
600,000 U.S. Treasury Bills, 2.47%, due 4/14/05 599,465
-----------
Total U.S. treasury securities
(cost $1,399,182) 1,399,182
VARIABLE RATE DEMAND NOTE -- 0.1%
35,326 U.S. Bank, N.A., 2.60% 35,326
-----------
Total variable rate demand note
(cost $35,326) 35,326
-----------
Total short-term investments
(cost $1,434,508) 1,434,508
-----------
Total investments -- 100%
(cost $53,160,202) $62,506,240
-----------
-----------
*<F2> Non-income producing security.
(A)<F3> Percentages for the various classifications relate to total
investments.
ADR - American Depository Receipt
NYS - New York Registered Shares
The accompanying notes to financial statements are an integral part of this
schedule.
Reynolds Blue Chip Growth Fund
STATEMENT OF ASSETS AND LIABILITIES
March 31, 2005 (Unaudited)
ASSETS:
Investments in securities, at value (cost $53,160,202) $62,506,240
Receivable from investments sold 3,365,158
Dividends and interest receivable 32,401
Receivable from shareholders for purchases 3,426
-----------
Total assets $65,907,225
-----------
-----------
LIABILITIES:
Payable to brokers for securities purchased $1,979,912
Due to custodian 62,994
Payable to adviser for management fees 55,356
Payable to administrator for administrative fees 8,083
Payable to shareholders for redemptions 4,449
Interest payable 431
Other liabilities 156,849
-----------
Total liabilities 2,268,074
-----------
NET ASSETS:
Capital Stock, $0.01 par value; 40,000,000 shares
authorized; 2,275,556 shares outstanding 160,331,574
Net unrealized appreciation on investments 9,346,038
Accumulated net realized loss on investments (106,038,461)
-----------
Net assets 63,639,151
-----------
Total liabilities and net assets $65,907,225
-----------
-----------
CALCULATION OF NET ASSET VALUE PER SHARE:
Net asset value, offering and redemption price per
share ($63,639,151 / 2,275,556 shares outstanding) $ 27.97
-----------
-----------
The accompanying notes to financial statements are an integral part of this
statement.
Reynolds Blue Chip Growth Fund
STATEMENT OF OPERATIONS
For the Six Months Ending March 31, 2005 (Unaudited)
INCOME:
Dividends $ 190,074
Interest 7,958
----------
Total income 198,032
----------
EXPENSES:
Management fees 406,695
Transfer agent fees 85,575
Distribution fees 59,150
Administrative services 57,462
Printing and postage expense 45,770
Custodian fees 26,836
Insurance expense 23,106
Professional fees 19,582
Registration fees 18,504
Board of Directors fees 2,500
Other expenses 8,343
----------
Total operating expenses before interest expense 753,523
Interest expense 11,564
----------
Total expenses 765,087
----------
NET INVESTMENT LOSS (567,055)
----------
NET REALIZED LOSS ON INVESTMENTS (2,878,549)
NET CHANGE IN UNREALIZED APPRECIATION ON INVESTMENTS 7,651,396
----------
NET GAIN ON INVESTMENTS 4,772,847
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $4,205,792
----------
----------
The accompanying notes to financial statements are an integral part of this
statement.
Reynolds Blue Chip Growth Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ending March 31, 2005 (Unaudited) and For the Year Ended
September 30, 2004
2005 2004
---- ----
OPERATIONS:
Net investment loss $ (567,055) $(1,569,629)
Net realized (loss) gain on investments (2,878,549) 667,155
Net change in unrealized appreciation on investments 7,651,396 1,230,289
----------- -----------
Net increase in net assets resulting from operations 4,205,792 327,815
----------- -----------
FUND SHARE ACTIVITIES:
Proceeds from shares issued (309,463 and 1,748,524 shares, respectively) 8,755,147 54,718,743
Cost of shares redeemed (1,155,213 and 3,599,902 shares, respectively) (33,531,439) (109,740,156)
----------- -----------
Net decrease in net assets derived from Fund share activities (24,776,292) (55,021,413)
----------- -----------
TOTAL DECREASE (20,570,500) (54,693,598)
NET ASSETS AT THE BEGINNING OF THE PERIOD 84,209,651 138,903,249
----------- -----------
NET ASSETS AT THE END OF THE PERIOD $63,639,151 $84,209,651
----------- -----------
----------- -----------
FINANCIAL HIGHLIGHTS
(Selected data for each share of the Fund outstanding throughout each period)
(UNAUDITED)
FOR THE SIX FOR THE YEARS ENDED SEPTEMBER 30,
MONTHS ENDING ------------------------------------------------------------
MARCH 31, 2005 2004 2003 2002 2001 2000
-------------- ---- ---- ---- ---- ----
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $26.98 $27.93 $19.61 $29.73 $66.57 $53.98
Income from investment operations:
Net investment loss*<F4> (0.20) (0.40) (0.22) (0.25) (0.38) (0.51)
Net realized and unrealized gain
(loss) on investments 1.19 (0.55)**<F5> 8.54 (9.87) (36.46) 13.11
------ ------ ------ ------ ------ ------
Total from investment operations 0.99 (0.95) 8.32 (10.12) (36.84) 12.60
Less distributions:
Dividend from net investment income -- -- -- -- -- --
Distribution from net realized gains -- -- -- -- -- (0.01)
------ ------ ------ ------ ------ ------
Total from distributions -- -- -- -- -- (0.01)
------ ------ ------ ------ ------ ------
Net asset value, end of period $27.97 $26.98 $27.93 $19.61 $29.73 $66.57
------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------
TOTAL RETURN 3.67%(1)<F6> (3.44%) 42.43% (34.04%) (55.34%) 23.34%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's $) 63,639 84,210 138,903 80,033 182,742 583,884
Ratio of operating expenses before interest
expense to average net assets 1.86%(2)<F7> 1.61% 1.72% 1.49% 1.34% 1.29%
Ratio of interest expense to average net assets 0.03%(2)<F7> 0.02% 0.02% 0.02% 0.01% 0.00%
Ratio of net investment loss to average net assets (1.40%)(2)<F7> (1.33%) (0.88%) (0.82%) (0.82%) (0.84%)
Portfolio turnover rate 67.4% 94.0% 83.7% 67.0% 35.8% 17.3%
*<F4> In 2005, 2004, 2003, 2002 and 2001, net investment loss per share is
calculated using average shares outstanding. In 2000 net investment
loss per share is calculated using ending balances prior to
consideration of adjustments for permanent book and tax differences.
**<F5> The amount shown may not correlate with the aggregate gains and losses
of portfolio securities due to the timing of subscriptions and
redemptions of Fund shares.
(1)<F6> Not Annualized.
(2)<F7> Annualized.
The accompanying notes to financial statements are an integral part of these
statements.
Reynolds Opportunity Fund
SCHEDULE OF INVESTMENTS
March 31, 2005 (Unaudited)
SHARES VALUE
------ -----
LONG-TERM INVESTMENTS 75.4% (A)<F9>
COMMON STOCKS -- 75.4% (A)<F9>
APPLICATION SOFTWARE -- 1.3%
4,000 Business Objects S.A. - SP-ADR*<F8> $ 107,560
7,000 Compuware Corp.*<F8> 50,400
6,000 Novell, Inc.*<F8> 35,760
-----------
193,720
BIOTECHNOLOGY -- 4.5%
10,000 Altair Nanotechnologies, Inc.*<F8> 35,700
15,000 AVANIR Pharmaceuticals*<F8> 33,000
24,000 Biomira, Inc.*<F8> 44,640
5,000 Incyte Corp.*<F8> 34,150
5,800 Orchid Biosciences, Inc.*<F8> 68,208
3,000 Protein Design Labs, Inc.*<F8> 47,970
2,000 Sepracor Inc.*<F8> 114,820
3,000 Serologicals Corp.*<F8> 73,320
4,000 StemCells, Inc.*<F8> 12,600
7,000 Transkaryotic Therapies, Inc.*<F8> 174,755
10,000 Vion Pharmaceuticals, Inc.*<F8> 28,500
-----------
667,663
BUSINESS SOFTWARE & SERVICES -- 8.9%
13,000 Akamai Technologies, Inc.*<F8> 165,490
6,000 Aspen Technology, Inc.*<F8> 34,080
5,000 CheckFree Corp.*<F8> 203,800
18,000 Commtouch Software Ltd.*<F8> 12,600
7,000 Comverse Technology, Inc.*<F8> 176,540
500 CryptoLogic Inc. 15,490
3,000 Digital River, Inc.*<F8> 93,480
3,000 Monster Worldwide Inc.*<F8> 84,150
6,000 Radiant Systems, Inc.*<F8> 58,800
20,000 Sapient Corp.*<F8> 146,900
8,000 Sonic Solutions*<F8> 120,400
20,000 Sonus Networks, Inc.*<F8> 84,800
8,000 TIBCO Software Inc.*<F8> 59,600
22,000 Viewpoint Corp.*<F8> 61,600
-----------
1,317,730
CABLE TV/BROADCASTING -- 3.6%
9,000 Crown Media Holdings, Inc.*<F8> 81,090
28,000 Sirius Satellite Radio Inc.*<F8> 157,360
3,840 UnitedGlobalCom, Inc.*<F8> 36,327
8,000 XM Satellite Radio Holdings Inc.*<F8> 252,000
-----------
526,777
CHEMICALS-SPECIALTY -- 0.4%
5,000 W.R. Grace & Co.*<F8> 42,600
8,000 Isonics Corp.*<F8> 19,360
-----------
61,960
COMMUNICATION EQUIPMENT -- 5.4%
7,000 Brocade Communications Systems, Inc.*<F8> 41,440
10,000 Corning Inc.*<F8> 111,300
4,000 Endwave Corp.*<F8> 95,040
5,000 L.M. Ericsson Telephone Co. ADR 141,000
20,000 Harmonic Inc.*<F8> 191,200
5,000 NETGEAR, Inc.*<F8> 75,450
4,000 QUALCOMM Inc.*<F8> 146,600
-----------
802,030
COMMUNICATIONS SERVICES -- 0.3%
3,000 Crown Castle International Corp.*<F8> 48,180
COMPUTER & PERIPHERALS -- 2.1%
2,000 Apple Computer, Inc.*<F8> 83,340
5,000 Network Appliance, Inc.*<F8> 138,300
3,350 PalmOne, Inc.*<F8> 85,023
-----------
306,663
COMPUTER NETWORKING -- 2.9%
6,600 Cisco Systems Inc.*<F8> 118,074
7,000 Foundry Networks, Inc.*<F8> 69,300
3,000 Juniper Networks, Inc.*<F8> 66,180
8,000 WebEx Communications, Inc.*<F8> 172,720
-----------
426,274
COMPUTER SOFTWARE & SERVICES -- 0.3%
3,000 Wind River Systems, Inc.*<F8> 45,240
DIVERSIFIED -- 1.8%
17,000 Crown Holdings, Inc.*<F8> 264,520
DRUGS -- 0.7%
9,000 ARIAD Pharmaceuticals, Inc.*<F8> 50,400
1,000 Covance Inc.*<F8> 47,610
-----------
98,010
ELECTRICAL EQUIPMENT -- 0.3%
2,000 PerkinElmer, Inc. 41,260
ELECTRONICS -- 0.5%
3,000 Brightpoint, Inc.*<F8> 56,190
10,000 GigaMedia Ltd.*<F8> 15,500
-----------
71,690
ENERGY -- 0.2%
500 EOG Resources, Inc. 24,370
ENERGY-SERVICES -- 1.6%
1,500 Fiserv, Inc.*<F8> 59,700
1,500 NS Group, Inc.*<F8> 47,115
16,000 Parker Drilling Co.*<F8> 92,000
1,000 Veritas DGC Inc.*<F8> 29,960
-----------
228,775
ENTERTAINMENT/MEDIA -- 1.0%
2,000 The Walt Disney Co. 57,460
4,000 Lions Gate Entertainment Corp.*<F8> 44,200
10,000 WorldGate Communications, Inc.*<F8> 39,000
-----------
140,660
FINANCIAL SERVICES -- 1.9%
7,000 Ameritrade Holding Corp.*<F8> 71,470
8,000 E*TRADE Financial Corp.*<F8> 96,000
21,000 HomeStore, Inc.*<F8> 46,620
4,000 Providian Financial Corp.*<F8> 68,640
-----------
282,730
GOLD & SILVER -- 1.1%
10,000 Coeur d'Alene Mines Corp.*<F8> 36,700
5,000 Pan American Silver Corp.*<F8> 79,275
14,000 Wheaton River Minerals Ltd.*<F8> 49,700
-----------
165,675
HOUSEHOLD PRODUCTS -- 0.1%
2,000 Royal Group Technologies Ltd.*<F8> 21,100
INSTRUMENTS -- 0.3%
1,500 Itron, Inc.*<F8> 44,460
INSURANCE -- 0.4%
3,000 Danielson Holding Corp.*<F8> 51,750
INTERNET INFORMATION PROVIDERS -- 2.7%
3,000 Ask Jeeves, Inc.*<F8> 84,240
5,000 CNET Networks, Inc.*<F8> 47,200
2,000 InfoSpace, Inc.*<F8> 81,660
20,000 iVillage Inc.*<F8> 121,800
7,000 WebMD Corp.*<F8> 59,500
-----------
394,400
INTERNET SERVICE PROVIDERS -- 0.4%
7,000 EarthLink, Inc.*<F8> 63,000
INTERNET SOFTWARE & SERVICES -- 2.7%
24,000 CMGI Inc.*<F8> 49,920
10,000 Openwave Systems Inc.*<F8> 121,900
9,000 Red Hat, Inc.*<F8> 98,190
2,500 Websense, Inc.*<F8> 134,500
-----------
404,510
MEDICAL SERVICES -- 0.8%
1,000 Health Management Associates, Inc. 26,180
500 Lincare Holdings Inc.*<F8> 22,115
1,500 Triad Hospitals, Inc.*<F8> 75,150
-----------
123,445
METALS -- 0.4%
3,000 Metals USA, Inc.*<F8> 58,770
PHOTOGRAPHY -- 0.5%
3,000 Komag, Inc.*<F8> 67,050
RETAIL-SPECIALTY -- 3.2%
2,000 Best Buy Co., Inc. 108,020
8,000 Circuit City Stores, Inc. 128,400
2,000 Foot Locker, Inc. 58,600
2,000 J. Jill Group Inc.*<F8> 27,520
8,000 Navarre Corp.*<F8> 63,600
3,000 PC Connection, Inc.*<F8> 17,610
3,000 Pep Boys-Manny, Moe & Jack 52,740
1,000 Saks Inc.*<F8> 18,050
-----------
474,540
RETAIL STORES -- 0.3%
2,000 The Gap, Inc. 43,680
SECURITY SOFTWARE & SERVICES -- 4.2%
4,000 Check Point Software Technologies Ltd.*<F8> 86,960
4,000 Internet Security Systems, Inc.*<F8> 73,200
6,000 McAfee, Inc.*<F8> 135,360
11,000 VeriSign, Inc.*<F8> 315,700
-----------
611,220
SEMICONDUCTOR CAPITAL SPENDING -- 1.6%
5,000 ASML Holding N.V. - NYS*<F8> 83,850
10,000 Semitool, Inc.*<F8> 102,000
3,000 Teradyne, Inc.*<F8> 43,800
-----------
229,650
SEMICONDUCTORS -- 10.9%
11,000 Atmel Corp.*<F8> 32,450
4,000 Broadcom Corp.*<F8> 119,680
10,000 Cirrus Logic, Inc.*<F8> 45,200
6,000 Cypress Semiconductor Corp.*<F8> 75,600
4,000 Flextronics International Ltd.*<F8> 48,160
8,000 Integrated Device Technology, Inc.*<F8> 96,240
4,200 Intel Corp. 97,566
4,000 Lam Research Corp.*<F8> 115,440
1,500 Marvell Technology Group Ltd.*<F8> 57,510
17,000 Mattson Technology, Inc.*<F8> 134,980
9,666 Mindspeed Technologies Inc.*<F8> 21,555
10,000 MIPS Technologies, Inc.*<F8> 115,000
3,000 NVIDIA Corp.*<F8> 71,280
12,000 PLX Technology, Inc.*<F8> 126,000
18,000 PMC-Sierra, Inc.*<F8> 158,400
12,000 Rambus Inc.*<F8> 180,840
5,000 SIPEX Corp.*<F8> 11,600
4,000 Texas Instruments Inc. 101,960
-----------
1,609,461
SERVICES -- 0.5%
10,000 EVCI Career Colleges Holding Corp.*<F8> 76,000
SYSTEM SOFTWARE -- 0.5%
13,000 Parametric Technology Corp.*<F8> 72,670
TELECOMMUNICATIONS -- 1.3%
6,000 Avaya Inc.*<F8> 70,080
10,000 Lucent Technologies Inc.*<F8> 27,500
16,000 Nortel Networks Corp.*<F8> 43,680
7,000 Tellabs, Inc.*<F8> 51,100
-----------
192,360
TRANSPORTATION -- 0.1%
2,000 MC Shipping, Inc. 16,220
WIRELESS COMMUNICATION -- 5.7%
8,500 Motorola, Inc. 127,245
5,000 Research In Motion Ltd.*<F8> 382,100
3,000 Sprint Corp. (FON Group) 68,250
9,000 Telesystem International Wireless Inc.*<F8> 137,250
18,000 UbiquiTel Inc.*<F8> 120,600
-----------
835,445
-----------
Total common stocks
(cost $6,402,264) 11,103,658
-----------
Total long-term investments
(cost $6,402,264) 11,103,658
PRINCIPAL
AMOUNT
---------
SHORT-TERM INVESTMENTS -- 24.6% (A)<F9>
U.S. TREASURY SECURITIES -- 20.3%
$750,000 U.S. Treasury Bills, 2.50%, due 4/07/05 749,688
750,000 U.S. Treasury Bills, 2.51%, due 4/14/05 749,320
750,000 U.S. Treasury Bills, 2.55%, due 4/21/05 748,933
750,000 U.S. Treasury Bills, 2.56%, due 4/28/05 748,560
-----------
Total U.S. treasury securities
(cost $2,996,501) 2,996,501
-----------
Variable Rate Demand Note -- 4.3%
635,121 U.S. Bank, N.A., 2.60% 635,121
-----------
Total variable rate demand note
(cost $635,121) 635,121
-----------
Total short-term investments
(cost $3,361,622) 3,631,622
-----------
Total investments -- 100%
(cost $10,033,886) $14,735,280
-----------
-----------
*<F8> Non-income producing security.
(A)<F9> Percentages for the various classifications relate to total
investments.
ADR - American Depository Receipt
N.V. - Netherlands Antilles Limited Liability Corporation
NYS - New York Registered Shares
The accompanying notes to financial statements are an integral part of this
schedule.
Reynolds Opportunity Fund
STATEMENT OF ASSETS AND LIABILITIES
March 31, 2005 (Unaudited)
ASSETS:
Investments in securities, at value (cost $10,033,886) $14,735,280
Receivable from investments sold 1,030,324
Dividends and interest receivable 2,661
-----------
Total assets $15,768,265
-----------
-----------
LIABILITIES:
Payable to brokers for securities purchased $ 770,832
Payable to adviser for management fees 12,946
Payable to shareholders for redemptions 7,997
Due to custodian 5,334
Payable to administrator for administrative fees 2,589
Interest payable 258
Other liabilities 56,399
-----------
Total liabilities 856,355
-----------
NET ASSETS:
Capital Stock, $0.01 par value; 40,000,000 shares
authorized; 937,924 shares outstanding 11,237,702
Net unrealized appreciation on investments 4,701,394
Accumulated net realized loss on investments (1,027,186)
-----------
Net assets 14,911,910
-----------
Total liabilities and net assets $15,768,265
-----------
-----------
CALCULATION OF NET ASSET VALUE PER SHARE:
Net asset value, offering and redemption price
per share ($14,911,910 / 937,924 shares outstanding) $ 15.90
-----------
-----------
The accompanying notes to financial statements are an integral part of this
statement.
Reynolds Opportunity Fund
STATEMENT OF OPERATIONS
For the Six Months Ending March 31, 2005 (Unaudited)
INCOME:
Dividends $ 5,225
Interest 4,647
----------
Total income 9,872
----------
EXPENSES:
Management fees 90,720
Administrative services 19,608
Transfer agent fees 15,540
Distribution fees 13,650
Professional fees 11,787
Registration fees 8,884
Printing and postage expense 8,423
Custodian fees 6,136
Insurance expense 4,447
Board of Directors fees 2,500
Other expenses 769
----------
Total operating expenses before interest expense 182,464
Interest expense 5,325
----------
Total expenses 187,789
----------
NET INVESTMENT LOSS (177,917)
----------
NET REALIZED LOSS ON INVESTMENTS (749,117)
NET CHANGE IN UNREALIZED APPRECIATION ON INVESTMENTS 1,571,411
----------
NET GAIN ON INVESTMENTS 822,294
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 644,377
----------
----------
The accompanying notes to financial statements are an integral part of this
statement.
Reynolds Opportunity Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ending March 31, 2005 (Unaudited) and For the Year Ended
September 30, 2004
2005 2004
---- ----
OPERATIONS:
Net investment loss $ (177,917) $ (566,724)
Net realized (loss) gain on investments (749,117) 2,004,803
Net change in unrealized appreciation on investments 1,571,411 (2,992,834)
----------- -----------
Net increase (decrease) in net assets resulting from operations 644,377 (1,554,755)
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net realized gains ($1.30480 and $0.73628
per share, respectively) (1,432,499) (1,226,731)*<F10>
----------- -----------
FUND SHARE ACTIVITIES:
Proceeds from shares issued (311,657 and 1,920,545 shares, respectively) 5,457,373 40,315,699
Net asset value of shares issued in distributions reinvested
(82,940 and 57,761 shares, respectively) 1,389,237 1,193,946
Cost of shares redeemed (572,949 and 2,308,497 shares, respectively) (10,001,928) (46,318,679)
----------- -----------
Net decrease in net assets derived from Fund share activities (3,155,318) (4,809,034)
----------- -----------
TOTAL DECREASE (3,943,440) (7,590,520)
NET ASSETS AT THE BEGINNING OF THE PERIOD 18,855,350 26,445,870
----------- -----------
NET ASSETS AT THE END OF THE PERIOD $14,911,910 $18,855,350
----------- -----------
----------- -----------
*<F10> See Note 7
FINANCIAL HIGHLIGHTS
(Selected data for each share of the Fund outstanding throughout each period)
(UNAUDITED)
FOR THE SIX FOR THE YEARS ENDED SEPTEMBER 30,
MONTHS ENDING -------------------------------------------------------------
MARCH 31, 2005 2004 2003 2002 2001 2000
-------------- ---- ---- ---- ---- ----
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $16.89 $18.28 $11.24 $16.82 $43.31 $34.23
Income from investment operations:
Net investment loss*<F11> (0.17) (0.38) (0.23) (0.23) (0.37) (0.56)
Net realized and unrealized gain (loss)
on investments 0.48 (0.27) 7.27 (5.31) (25.47) 9.74
------ ------ ------ ------ ------ ------
Total from investment operations 0.31 (0.65) 7.04 (5.54) (25.84) 9.18
Less distributions:
Dividend from net investment income -- -- -- -- -- --
Distributions from net realized gains (1.30) (0.74) -- (0.04) (0.65) (0.10)
------ ------ ------ ------ ------ ------
Total from distributions (1.30) (0.74) -- (0.04) (0.65) (0.10)
------ ------ ------ ------ ------ ------
Net asset value, end of period $15.90 $16.89 $18.28 $11.24 $16.82 $43.31
------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------
TOTAL RETURN 1.47%(1)<F12> (4.29%) 62.63% (33.02%) (60.44%) 26.91%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's $) 14,912 18,855 26,446 14,065 27,794 104,610
Ratio of operating expenses before
interest expense to average net assets 2.01%(2)<F13> 1.91% 1.98% 1.84% 1.69% 1.31%
Ratio of interest expense to average net assets 0.06%(2)<F13> 0.05% 0.04% 0.03% 0.05% 0.00%
Ratio of net investment loss to average
net assets (1.96%)(2)<F13> (1.87%) (1.56%) (1.33%) (1.29%) (0.97%)
Portfolio turnover rate 16.0% 65.7% 88.4% 195.0% 74.0% 8.8%
*<F11> In 2005, 2004, 2003, 2002 and 2001, net investment loss per share is
calculated using average shares outstanding. In 2000 net investment
loss per share is calculated using ending balances prior to
consideration of adjustments for permanent book and tax differences.
(1)<F12> Not Annualized.
(2)<F13> Annualized.
The accompanying notes to financial statements are an integral part of these
statements.
Reynolds Fund
SCHEDULE OF INVESTMENTS
March 31, 2005 (Unaudited)
SHARES VALUE
------ -----
LONG-TERM INVESTMENTS -- 96.8% (A)<F15>
COMMON STOCKS -- 96.8% (A)<F15>
ADVERTISING -- 1.2%
24,000 ValueClick, Inc.*<F14> $ 254,640
APPLICATION SOFTWARE -- 1.2%
500 Cognos, Inc.*<F14> 20,970
10,000 Compuware Corp.*<F14> 72,000
10,000 Novell, Inc.*<F14> 59,600
5,000 VERITAS Software Corp.*<F14> 116,100
-----------
268,670
BIOTECHNOLOGY -- 4.3%
19,000 AVANIR Pharmaceuticals*<F14> 41,800
19,000 The Immune Response Corp.*<F14> 14,820
18,000 Incyte Corp.*<F14> 122,940
16,800 Orchid Biosciences, Inc.*<F14> 197,568
42,000 Peregrine Pharmaceuticals, Inc.*<F14> 61,740
5,000 Protein Design Labs, Inc.*<F14> 79,950
5,000 Serologicals Corp.*<F14> 122,200
16,000 StemCells, Inc.*<F14> 50,400
4,000 Transkaryotic Therapies, Inc.*<F14> 99,860
47,000 Vion Pharmaceuticals, Inc.*<F14> 133,950
-----------
925,228
BUSINESS SOFTWARE & SERVICES -- 7.9%
10,000 Akamai Technologies, Inc.*<F14> 127,300
10,000 Aspen Technology, Inc.*<F14> 56,800
3,000 Comverse Technology, Inc.*<F14> 75,660
72,000 I-many, Inc.*<F14> 114,480
18,000 Manugistics Group, Inc.*<F14> 30,240
15,000 Onstream Media Corp.*<F14> 24,750
30,466 OpenTV Corp.*<F14> 86,523
2,000 Quest Software, Inc.*<F14> 27,680
27,000 Radiant Systems, Inc.*<F14> 264,600
11,000 Sapient Corp.*<F14> 80,795
5,000 Sonic Solutions*<F14> 75,250
45,000 Sonus Networks, Inc.*<F14> 190,800
45,000 TIBCO Software Inc.*<F14> 335,250
53,000 Viewpoint Corp.*<F14> 148,400
11,000 webMethods, Inc.*<F14> 60,280
-----------
1,698,808
CABLE TV/BROADCASTING -- 4.6%
5,000 Crown Media Holdings, Inc.*<F14> 45,050
70,000 Sirius Satellite Radio Inc.*<F14> 393,400
16,640 UnitedGlobalCom, Inc.*<F14> 157,414
12,500 XM Satellite Radio Holdings Inc.*<F14> 393,750
-----------
989,614
CHEMICALS -- 0.3%
4,000 Wellman, Inc. 57,840
CHEMICALS-SPECIALTY -- 0.9%
19,000 Isonics Corp.*<F14> 45,980
7,000 KFx Inc.*<F14> 93,800
5,000 Star Scientific, Inc.*<F14> 26,450
4,000 Terra Industries Inc.*<F14> 31,040
-----------
197,270
COMMUNICATION EQUIPMENT -- 5.8%
13,000 Brocade Communications Systems, Inc.*<F14> 76,960
12,000 Concurrent Computer Corp.*<F14> 24,720
12,000 Corning Inc.*<F14> 133,560
61,000 Digital Lightwave, Inc.*<F14> 48,190
8,000 Endwave Corp.*<F14> 190,080
3,000 L.M. Ericsson Telephone Co. ADR 84,600
52,000 Harmonic Inc.*<F14> 497,120
8,000 Network Equipment Technologies, Inc.*<F14> 45,040
5,000 Plexus Corp.*<F14> 57,550
21,000 Terayon Communication Systems, Inc.*<F14> 64,680
12,100 Zhone Technologies, Inc.*<F14> 30,855
-----------
1,253,355
COMMUNICATION SERVICES -- 0.4%
5,000 Crown Castle International Corp.*<F14> 80,300
COMPUTER & PERIPHERALS -- 3.3%
7,000 Network Appliance, Inc.*<F14> 193,620
6,710 PalmOne, Inc.*<F14> 170,300
28,000 Quantum Corp.*<F14> 81,480
7,000 SimpleTech, Inc.*<F14> 27,580
9,000 Symbol Technologies, Inc. 130,410
8,000 Western Digital Corp.*<F14> 102,000
-----------
705,390
COMPUTER NETWORKING -- 3.4%
9,000 Computer Network Technology Corp.*<F14> 41,580
15,000 Extreme Networks, Inc.*<F14> 88,350
9,000 Foundry Networks, Inc.*<F14> 89,100
5,000 Juniper Networks, Inc.*<F14> 110,300
13,000 Sierra Wireless, Inc.*<F14> 106,860
14,000 WebEx Communications, Inc.*<F14> 302,260
-----------
738,450
COMPUTER SOFTWARE & SERVICES -- 2.1%
11,000 Borland Software Corp.*<F14> 89,320
29,000 Silicon Graphics, Inc.*<F14> 34,510
14,000 VA Software Corp.*<F14> 23,100
21,000 Wind River Systems, Inc.*<F14> 316,680
-----------
463,610
DIVERSIFIED -- 2.0%
27,500 Crown Holdings, Inc.*<F14> 427,900
DRUGS -- 0.8%
49,000 Alteon Inc.*<F14> 28,910
18,000 ARIAD Pharmaceuticals, Inc.*<F14> 100,800
68,000 Questcor Pharmaceuticals, Inc.*<F14> 38,760
-----------
168,470
ELECTRICAL EQUIPMENT -- 0.2%
32,000 Arotech Corp.*<F14> 44,480
ELECTRONICS -- 2.2%
39,000 Alanco Technologies, Inc.*<F14> 44,850
40,000 GigaMedia Ltd.*<F14> 62,000
18,000 Micrel, Inc.*<F14> 165,960
20,000 Powerwave Technologies, Inc.*<F14> 154,800
13,000 SRS Labs, Inc.*<F14> 51,870
-----------
479,480
ENERGY -- 0.7%
60,000 Harken Energy Corp.*<F14> 29,400
18,000 TransGlobe Energy Corp.*<F14> 115,560
-----------
144,960
ENERGY-SERVICES -- 1.6%
38,000 Parker Drilling Co.*<F14> 218,500
4,000 Veritas DGC Inc.*<F14> 119,840
-----------
338,340
ENTERTAINMENT/MEDIA -- 1.8%
12,000 Napster Inc.*<F14> 78,120
82,000 WorldGate Communications, Inc.*<F14> 319,800
-----------
397,920
FINANCIAL SERVICES -- 1.6%
50,000 HomeStore, Inc.*<F14> 111,000
4,000 Knight Trading Group, Inc.*<F14> 38,560
10,000 Providian Financial Corp.*<F14> 171,600
3,000 The Charles Schwab Corp. 31,530
-----------
352,690
GOLD & SILVER -- 2.4%
11,000 Coeur d'Alene Mines Corp.*<F14> 40,370
23,000 Northgate Minerals Corp.*<F14> 32,890
8,000 Pan American Silver Corp.*<F14> 126,840
90,000 Wheaton River Minerals Ltd.*<F14> 319,500
-----------
519,600
HOTEL -- 0.5%
139,000 Wyndham International, Inc.*<F14> 111,200
HOUSEHOLD PRODUCTS -- 0.2%
14,000 Revlon, Inc.*<F14> 40,320
INSTRUMENTS -- 0.4%
4,000 Clinical Data, Inc. 65,600
10,000 Therma-Wave Inc.*<F14> 19,300
-----------
84,900
INSURANCE -- 0.7%
4,000 Danielson Holding Corp.*<F14> 69,000
35,000 SCOR SP-ADR*<F14> 74,550
-----------
143,550
INTERNET -- 0.2%
3,000 Jupitermedia Corp.*<F14> 46,530
INTERNET INFORMATION PROVIDERS -- 4.6%
5,000 Autobytel Inc.*<F14> 25,200
45,000 BackWeb Technologies Ltd.*<F14> 24,750
25,000 CNET Networks, Inc.*<F14> 236,000
45,000 iVillage Inc.*<F14> 274,050
3,000 Sohu.com Inc.*<F14> 52,740
63,000 theglobe.com, inc.*<F14> 9,135
96,000 Verticalnet, Inc.*<F14> 83,520
23,000 WebMD Corp.*<F14> 195,500
3,000 Yahoo! Inc.*<F14> 101,700
-----------
1,002,595
INTERNET SERVICE PROVIDERS -- 1.0%
100,000 Internap Network Services Corp.*<F14> 59,000
5,000 SINA Corp.*<F14> 155,300
-----------
214,300
INTERNET SOFTWARE & SERVICES -- 6.2%
10,000 Art Technology Group, Inc.*<F14> 10,500
111,000 CMGI Inc.*<F14> 230,880
15,333 Openwave Systems Inc.*<F14> 186,909
7,000 RealNetworks, Inc.*<F14> 40,460
17,000 Red Hat, Inc.*<F14> 185,470
44,000 Safeguard Scientifics, Inc.*<F14> 62,480
8,500 SkyTerra Communications, Inc.*<F14> 328,525
14,000 SonicWALL, Inc.*<F14> 71,260
38,000 Youbet.com, Inc.*<F14> 222,680
-----------
1,339,164
MEDICAL SERVICES -- 0.1%
5,000 Delcath Systems Inc.*<F14> 11,700
MEDICAL SUPPLIES -- 0.8%
3,000 Cytyc Corp.*<F14> 69,030
25,000 HearUSA, Inc.*<F14> 49,750
7,000 Sonic Innovations, Inc.*<F14> 39,060
26,000 Vasomedical, Inc.*<F14> 24,440
-----------
182,280
METALS -- 0.7%
2,000 Commercial Metals Co. 67,780
3,000 NS Group, Inc.*<F14> 94,230
-----------
162,010
OFFICE EQUIPMENT & SUPPLIES -- 0.6%
8,000 Xerox Corp.*<F14> 121,200
PHOTOGRAPHY -- 0.7%
7,000 Komag, Inc.*<F14> 156,450
RESTAURANTS -- 0.8%
16,000 Luby's, Inc.*<F14> 124,000
2,000 O'Charley's Inc.*<F14> 43,480
-----------
167,480
RETAIL-SPECIALTY -- 2.3%
85,000 Ableauctions.com, Inc.*<F14> 49,300
22,000 Charming Shoppes, Inc.*<F14> 178,860
2,000 eBay Inc.*<F14> 74,520
8,000 Navarre Corp.*<F14> 63,600
9,000 PC Connection, Inc.*<F14> 52,830
3,000 Stein Mart, Inc.*<F14> 67,500
-----------
486,610
SECURITY SOFTWARE & SERVICES -- 4.7%
3,000 Check Point Software Technologies Ltd.*<F14> 65,220
4,000 Internet Security Systems, Inc.*<F14> 73,200
6,000 McAfee, Inc.*<F14> 135,360
12,000 RSA Security Inc.*<F14> 190,200
2,350 SafeNet, Inc.*<F14> 68,879
5,000 Secure Computing Corp.*<F14> 42,850
6,000 VASCO Data Security International, Inc.*<F14> 37,740
11,000 VeriSign, Inc.*<F14> 315,700
66,000 Vignette Corp.*<F14> 86,460
-----------
1,015,609
SEMICONDUCTOR CAPITAL SPENDING -- 3.3%
15,000 Asyst Technologies, Inc.*<F14> 71,850
32,000 ISCO International Inc.*<F14> 9,920
6,000 Ixia*<F14> 106,740
15,000 Kulicke and Soffa Industries, Inc.*<F14> 94,350
10,000 Semitool, Inc.*<F14> 102,000
12,000 Teradyne, Inc.*<F14> 175,200
113,000 TranSwitch Corp.*<F14> 154,810
-----------
714,870
SEMICONDUCTORS -- 11.5%
4,000 ATI Technologies Inc.*<F14> 69,040
21,000 Atmel Corp.*<F14> 61,950
6,000 Cirrus Logic, Inc.*<F14> 27,120
28,336 Conexant Systems, Inc.*<F14> 42,504
12,000 Integrated Device Technology, Inc.*<F14> 144,360
21,000 LSI Logic Corp.*<F14> 117,390
24,000 Mattson Technology, Inc.*<F14> 190,560
5,000 MEMC Electronic Materials, Inc.*<F14> 67,250
43,666 Mindspeed Technologies Inc.*<F14> 97,375
10,000 MIPS Technologies, Inc.*<F14> 115,000
4,000 Multi-Fineline Electronix, Inc.*<F14> 70,600
3,000 NVIDIA Corp.*<F14> 71,280
35,000 Oplink Communications, Inc.*<F14> 54,950
21,000 PLX Technology, Inc.*<F14> 220,500
25,000 PMC-Sierra, Inc.*<F14> 220,000
4,000 Rambus Inc.*<F14> 60,280
24,000 RF Micro Devices, Inc.*<F14> 125,280
26,000 SIPEX Corp.*<F14> 60,320
11,000 Solectron Corp.*<F14> 38,170
50,000 TriQuint Semiconductor, Inc.*<F14> 169,000
11,321 United Microelectronics Corp. SP-ADR*<F14> 38,152
88,000 Vitesse Semiconductor Corp.*<F14> 235,840
6,000 Xilinx, Inc. 175,380
-----------
2,472,301
SERVICES -- 1.5%
24,000 EVCI Career Colleges Holding Corp.*<F14> 182,400
6,000 Ventiv Health, Inc.*<F14> 138,000
-----------
320,400
SYSTEM SOFTWARE -- 0.2%
9,000 Parametric Technology Corp.*<F14> 50,310
TELECOMMUNICATIONS -- 0.8%
5,000 Avaya Inc.*<F14> 58,400
90,000 McLeodUSA Inc.*<F14> 16,200
14,000 McLeodUSA Inc. ESCROW SHRS*<F14> 0
8,400 Nortel Networks Corp.*<F14> 22,932
12,000 Qiao Xing Universal Telephone, Inc.*<F14> 71,760
-----------
169,292
TELEPHONE SERVICES -- 1.2%
5,000 Cable & Wireless PLC - SP-ADR 36,400
2,000 MCI Inc. 49,840
31,000 Primus Telecommunications Group, Inc.*<F14> 48,670
33,000 Time Warner Telecom Inc.*<F14> 131,010
-----------
265,920
TIRE & RUBBER -- 1.7%
25,000 Titan International, Inc. 359,250
UTILITIES -- 0.4%
93,000 Beacon Power Corp.*<F14> 95,790
WIRELESS COMMUNICATION -- 3.0%
4,000 Sprint Corp. (FON Group) 91,000
6,000 TeleCommunication Systems, Inc.*<F14> 16,020
10,500 Telesystem International Wireless Inc.*<F14> 160,125
31,000 Tumbleweed Communications Corp.*<F14> 85,560
44,000 UbiquiTel Inc.*<F14> 294,800
-----------
647,505
-----------
Total common stocks
(cost $17,153,758) 20,888,551
-----------
RIGHTS -- 0.0% (A)<F15>
3,280 VI Technologies, Inc.*<F14> 0
6,800 Virologic, Inc. CVR*<F14> 2,040
-----------
Total rights
(cost $0) 2,040
-----------
Total long-term investments
(cost $17,153,758) 20,890,591
PRINCIPAL
AMOUNT
---------
SHORT-TERM INVESTMENTS -- 3.2% (A)<F15>
U.S. TREASURY SECURITIES -- 3.2%
$700,000 U.S. Treasury Bills, 2.18%, due 4/07/05 $ 699,873
-----------
Total U.S. treasury securities
(cost $699,873) 699,873
-----------
VARIABLE RATE DEMAND NOTE -- 0.0%
671 U.S. Bank, N.A., 2.60% 671
-----------
Total variable rate demand note
(cost $671) 671
-----------
Total short-term investments
(cost $700,544) 700,544
-----------
Total investments -- 100%
(cost $17,854,302) $21,591,135
-----------
-----------
*<F14> Non-income producing security.
(A)<F15> Percentages for the various classifications relate to total
investments.
ADR - American Depository Receipt
CVR - Contingent Value Right
The accompanying notes to financial statements are an integral part of this
schedule.
Reynolds Fund
STATEMENT OF ASSETS AND LIABILITIES
March 31, 2005 (Unaudited)
ASSETS:
Investments in securities, at value (cost $17,854,302) $21,591,135
Receivable from investments sold 4,945,367
Receivable from shareholders for purchases 5,500
Dividends and interest receivable 1,361
-----------
Total assets $26,543,363
-----------
-----------
LIABILITIES:
Payable to U.S. Bank, loan $ 2,531,000
Payable to brokers for securities purchased 699,873
Interest payable 23,547
Payable to adviser for management fees 21,127
Due to custodian 16,214
Payable for shareholders redemptions 7,627
Payable to administrator for administrative fees 4,225
Other liabilities 53,981
-----------
Total liabilities 3,357,594
-----------
NET ASSETS:
Capital Stock, $0.01 par value; 40,000,000 shares
authorized; 4,320,692 shares outstanding 73,063,218
Net unrealized appreciation on investments 3,736,833
Accumulated net realized loss on investments (53,614,282)
-----------
Net assets 23,185,769
-----------
Total liabilities and net assets $26,543,363
-----------
-----------
CALCULATION OF NET ASSET VALUE PER SHARE:
Net asset value, offering and redemption price
per share ($23,185,769 / 4,320,692 shares outstanding) $ 5.37
-----------
-----------
The accompanying notes to financial statements are an integral part of this
statement.
Reynolds Fund
STATEMENT OF OPERATIONS
For the Six Months Ending March 31, 2005 (Unaudited)
INCOME:
Dividends $ 7,405
Interest 5
-----------
Total income 7,410
-----------
EXPENSES:
Management fees 165,292
Administrative services 31,773
Distribution fees 22,750
Transfer agent fees 20,357
Custodian fees 15,843
Professional fees 13,212
Printing and postage expense 12,504
Registration fees 12,382
Insurance expense 8,723
Board of Directors fees 2,500
Other expenses 1,100
-----------
Total operating expenses before interest expense 306,436
Interest expense 254,982
-----------
Total expenses 561,418
-----------
NET INVESTMENT LOSS (554,008)
-----------
NET REALIZED LOSS ON INVESTMENTS (9,035,832)
NET CHANGE IN UNREALIZED APPRECIATION ON INVESTMENTS 10,684,841
-----------
NET GAIN ON INVESTMENTS 1,649,009
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 1,095,001
-----------
-----------
The accompanying notes to financial statements are an integral part of this
statement.
Reynolds Fund
STATEMENT OF CASH FLOWS
For the Six Months Ending March 31, 2005 (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net increase in net assets from operations $ 1,095,001
Adjustments to reconcile net increase in net assets from
operations to net cash used in operating activities:
Unrealized appreciation on securities (10,684,841)
Net realized loss from investments 9,035,832
Purchase of investment securities (5,974,412)
Increase in payable for securities purchased 699,873
Purchase of short-term investment securities, net (699,574)
Proceeds from disposition of investment securities 33,421,447
Increase in receivables for securities sold (4,837,752)
Change in receivables/payables related to
operations, net (11,831)
-----------
Net cash used in operating activities 22,043,743
-----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Decrease in loan payable (10,240,000)
Proceeds from shares sold 8,324,306
Payment on shares redeemed (19,933,881)
Decrease in amount due to custodian (194,168)
-----------
Net cash provided by financing activities (22,043,743)
-----------
NET CHANGE IN CASH --
CASH:
Beginning balance --
-----------
Ending balance $ --
-----------
-----------
The accompanying notes to financial statements are an integral part of this
statement.
Reynolds Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ending March 31, 2005 (Unaudited) and For the Year Ended
September 30, 2004
2005 2004
---- ----
OPERATIONS:
Net investment loss $ (554,008) $(1,259,324)
Net realized loss on investments (9,035,832) (4,840,330)
Net change in unrealized appreciation on investments 10,684,841 (10,266,707)
----------- -----------
Net increase (decrease) in net assets resulting from operations 1,095,001 (16,366,361)
----------- -----------
FUND SHARE ACTIVITIES:
Proceeds from shares issued (1,346,787 and 17,693,276 shares, respectively) 8,230,306 133,527,947
Cost of shares redeemed (3,297,889 and 16,871,426 shares, respectively) (19,933,401) (116,096,075)
----------- -----------
Net (decrease) increase in net assets derived from Fund share activities (11,703,095) 17,431,872
----------- -----------
TOTAL (DECREASE) INCREASE (10,608,094) 1,065,511
NET ASSETS AT THE BEGINNING OF THE PERIOD 33,793,863 32,728,352
----------- -----------
NET ASSETS AT THE END OF THE PERIOD $23,185,769 $33,793,863
----------- -----------
----------- -----------
FINANCIAL HIGHLIGHTS
(Selected data for each share of the Fund outstanding throughout each period)
(UNAUDITED)
FOR THE SIX FOR THE YEARS ENDED SEPTEMBER 30,
MONTHS ENDING -------------------------------------------------------
MARCH 31, 2005 2004 2003 2002 2001 2000+<F16>
-------------- ---- ---- ---- ---- ----------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 5.39 $ 6.01 $ 3.01 $ 4.35 $13.14 $10.00
Income from investment operations:
Net investment loss (0.10) (0.16) (0.11) (0.06) (0.09) (0.12)
Net realized and unrealized gain (loss)
on investments 0.08 (0.46) 3.11 (1.28) (8.70) 3.26
------ ------ ------ ------ ------ ------
Total from investment operations (0.02) (0.62) 3.00 (1.34) (8.79) 3.14
Less distributions:
Dividend from net investment income -- -- -- -- -- --
Distribution from net realized gains -- -- -- -- -- --
------ ------ ------ ------ ------ ------
Total from distributions -- -- -- -- -- --
------ ------ ------ ------ ------ ------
Net asset value, end of period $ 5.37 $ 5.39 $ 6.01 $ 3.01 $ 4.35 $13.14
------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------
TOTAL RETURN (0.37%)(1)<F19> (10.17%) 99.67% (30.80%) (66.89%) 31.40%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's $) 23,186 33,794 32,728 10,481 20,136 69,255
Ratio of operating expenses before interest expense
(after reimbursement) to average net assets*<F17> 1.86%(2)<F20> 1.72% 1.93% 1.85% 1.51% 1.45%
Ratio of interest expense to average net assets 1.54%(2)<F20> 0.57% 0.89% 0.22% 0.15% 0.00%
Ratio of net investment loss to average
net assets**<F18> (3.36%)(2)<F20> (2.24%) (2.41%) (1.41%) (0.89%) (1.16%)
Portfolio turnover rate 13.8% 79.5% 119.9% 408.5% 275.5% 23.6%
+<F16> Commencement of operations October 1, 1999.
*<F17> Computed after giving effect to adviser's expense limitation
undertaking. If the Fund had paid all of its expenses for the year
ended September 30, 2003, the ratio would have been 1.99%.
**<F18> If the Fund had paid all of its expenses for the year ended September
30, 2003, the ratio would have been (2.47%).
(1)<F19> Not Annualized.
(2)<F20> Annualized.
The accompanying notes to financial statements are an integral part of these
statements.
Reynolds Balanced Fund
STATEMENT OF NET ASSETS
March 31, 2005 (Unaudited)
SHARES VALUE
------ -----
LONG-TERM INVESTMENTS -- 77.0% (A)<F22>
COMMON STOCKS -- 17.2% (A)<F22>
BANKS -- 3.4%
400 Bank of America Corp. $ 17,640
200 Citigroup Inc. 8,988
500 JPMorgan Chase & Co. 17,300
200 Wells Fargo & Co. 11,960
----------
55,888
BEVERAGES -- 0.8%
300 The Coca-Cola Co. 12,501
CHEMICALS -- 0.6%
200 E.I. du Pont de Nemours and Co. 10,248
DRUGS -- 1.8%
300 Bristol-Myers Squibb Co. 7,638
400 Merck & Co. Inc. 12,948
300 Pfizer Inc. 7,881
----------
28,467
ELECTRICAL EQUIPMENT -- 0.7%
300 General Electric Co. 10,818
ENERGY -- 0.7%
200 Royal Dutch Petroleum Co. NYS 12,008
FINANCIAL SERVICES -- 1.8%
200 PNC Financial Services Group, Inc. 10,296
200 Wachovia Corp. 10,182
200 Washington Mutual, Inc. 7,900
----------
28,378
FOODS -- 1.3%
200 Altria Group, Inc. 13,078
300 ConAgra Foods, Inc. 8,106
----------
21,184
GROCERY STORES -- 0.4%
300 Albertson's, Inc. 6,195
HOME APPLIANCES -- 0.3%
400 Maytag Corp. 5,588
HOUSEHOLD PRODUCTS -- 1.2%
400 Newell Rubbermaid Inc. 8,776
500 Tupperware Corp. 10,180
----------
18,956
TELEPHONE SERVICES -- 1.7%
300 BellSouth Corp. 7,887
400 SBC Communications Inc. 9,476
300 Verizon Communications Inc. 10,650
----------
28,013
UTILITIES -- 2.5%
300 Hawaiian Electric Industries, Inc. 7,656
200 Kinder Morgan, Inc. 15,140
400 Puget Energy, Inc. 8,816
300 Southern Co. 9,549
----------
41,161
----------
Total common stocks
(cost $290,432) 279,405
----------
PRINCIPAL
AMOUNT
------
FEDERAL AGENCIES -- 59.8% (A)<F22>
$300,000 Federal Home Loan Bank,
3.00%, due 12/10/05 (B)<F23> 291,429
200,000 Federal Home Loan Mortgage
Corp., 3.50%, due 3/26/06 (B)<F23> 196,037
200,000 Federal Home Loan Bank,
3.00%, due 3/30/06 (B)<F23> 195,149
300,000 Federal Home Loan Bank,
3.30%, due 12/18/08 289,710
----------
Total federal agencies
(cost $998,571) 972,325
----------
Total long-term investments
(cost $1,289,003) 1,251,730
SHORT-TERM INVESTMENTS -- 22.6% (A)<F22>
U.S. TREASURY SECURITIES -- 18.4%
100,000 U.S. Treasury Bills, 2.50%, due 4/07/05 99,958
100,000 U.S. Treasury Bills, 2.51%, due 4/14/05 99,910
100,000 U.S. Treasury Bills, 2.55%, due 4/21/05 99,858
----------
Total U.S. treasury securities
(cost $299,726) 299,726
----------
VARIABLE RATE DEMAND NOTE -- 4.2%
67,986 U.S. Bank, N.A., 2.60% 67,986
----------
Total variable rate demand note
(cost $67,986) 67,986
----------
Total short-term investments
(cost $367,712) 367,712
----------
Total investments
(cost $1,656,715) 1,619,442
Cash and receivables,
less liabilities -- 0.4% (A)<F22> 5,462
----------
NET ASSETS $1,624,904
----------
----------
Net Asset Value Per Share
($0.01 par value, 20,000,000 shares
authorized), offering and redemption price
($1,624,904 / 172,367 shares outstanding) $ 9.43
----------
----------
(A)<F22> Percentages for the various classifications relate to net assets.
(B)<F23> Variable Rate Security - the rate reported is the rate in effect as of
March 31, 2005. The date shown is the next interest adjustment date.
NYS - New York Registered Shares
The accompanying notes to financial statements are an integral part of this
statement.
Reynolds Balanced Fund
STATEMENT OF OPERATIONS
For the Six Months Ending March 31, 2005 (Unaudited)
INCOME:
Dividends $ 980
Interest 30,710
--------
Total income 31,690
--------
EXPENSES:
Professional fees 15,747
Transfer agent fees 9,942
Management fees 7,525
Registration fees 5,115
Administrative services 2,050
Printing and postage expense 1,217
Custodian fees 756
Board of Directors fees 625
Insurance expense 520
Other expenses 620
--------
Total expenses before reimbursement and management
fee waiver 44,117
Less expenses assumed by adviser (34,159)
--------
Net expenses 9,958
--------
NET INVESTMENT INCOME 21,732
--------
NET REALIZED LOSS ON INVESTMENTS (19,172)
NET CHANGE IN UNREALIZED APPRECIATION ON INVESTMENTS (18,539)
--------
NET LOSS ON INVESTMENTS (37,711)
--------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(15,979)
--------
--------
The accompanying notes to financial statements are an integral part of this
statement.
Reynolds Balanced Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ending March 31, 2005 (Unaudited) and For the Year Ended
September 30, 2004
2005 2004
---- ----
OPERATIONS:
Net investment income $ 21,732 $ 69,456
Net realized loss on investments (19,172) (4,459)
Net change in unrealized appreciation on investments (18,539) (7,757)
---------- ----------
Net (decrease) increase in net assets resulting from operations (15,979) 57,240
---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income ($0.1014 and $0.2202 per share, respectively) (21,532) (69,456)
---------- ----------
FUND SHARE ACTIVITIES:
Proceeds from shares issued (1,292 and 60,298 shares, respectively) 12,406 578,789
Net asset value of shares issued in distributions reinvested (2,732 and
7,168 shares, respectively) 26,169 68,728
Cost of shares redeemed (123,053 and 115,953 shares, respectively) (1,183,716) (1,109,783)
---------- ----------
Net decrease in net assets derived from Fund share activities (1,145,141) (462,266)
---------- ----------
TOTAL DECREASE (1,182,652) (474,482)
NET ASSETS AT THE BEGINNING OF THE PERIOD 2,807,556 3,282,038
---------- ----------
NET ASSETS AT THE END OF THE PERIOD (including undistributed net investment
income of $200 and $0, respectively) $1,624,904 $2,807,556
---------- ----------
---------- ----------
FINANCIAL HIGHLIGHTS
(Selected data for each share of the Fund outstanding throughout each period)
(UNAUDITED)
FOR THE SIX FOR THE YEARS ENDED SEPTEMBER 30,
MONTHS ENDING ------------------------------------------------------------
MARCH 31, 2005 2004 2003 2002 2001 2000
-------------- ---- ---- ---- ---- ----
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 9.63 $ 9.66 $ 9.72 $ 9.77 $ 9.62 $ 9.65
Income from investment operations:
Net investment income 0.10 0.22 0.15 0.22 0.43 0.49
Net realized and unrealized (loss) gain
on investments (0.20) (0.03) (0.06) (0.05) 0.15 (0.03)
------ ------ ------ ------ ------ ------
Total from investment operations (0.10) 0.19 0.09 0.17 0.58 0.46
Less distributions:
Dividends from net investment income (0.10) (0.22) (0.15) (0.22) (0.43) (0.49)
Distribution from net realized gains -- -- -- -- -- --
------ ------ ------ ------ ------ ------
Total from distributions (0.10) (0.22) (0.15) (0.22) (0.43) (0.49)
------ ------ ------ ------ ------ ------
Net asset value, end of period $ 9.43 $ 9.63 $ 9.66 $ 9.72 $ 9.77 $ 9.62
------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------
TOTAL RETURN (1.32%)(1)<F26> 1.48% 0.80% 1.72% 6.19% 4.85%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's $) 1,625 2,808 3,282 3,733 4,586 4,575
Ratio of expenses (after reimbursement) to
average net assets*<F24> 0.99%(2)<F27> 0.90% 0.90% 0.90% 0.90% 0.90%
Ratio of net investment income to average
net assets**<F25> 2.17%(2)<F27> 2.29% 1.55% 2.24% 4.50% 5.04%
Portfolio turnover rate 18.2% 46.1% 190.0% 138.1% 18.6% 17.0%
*<F24> Computed after giving effect to adviser's expense limitation
undertaking. If the Fund had paid all of its expenses, the ratios
would have been 4.40%(2)<F27>, 3.19%, 2.21%, 2.00%, 2.09% and 1.93%
for the six months ending March 31, 2005 and for the years ended
September 30, 2004, 2003, 2002, 2001 and 2000, respectively.
**<F25> The ratios of net investment income prior to adviser's expense
limitation undertaking to average net assets for the six months ending
March 31, 2005 and for the years ended September 30, 2004, 2003, 2002,
2001 and 2000 would have been (1.24%)(2)<F27>, 0.00%, 0.24%, 1.14%,
3.31% and 4.01%, respectively.
(1)<F26> Not Annualized.
(2)<F27> Annualized.
The accompanying notes to financial statements are an integral part of these
statements.
Reynolds Money Market Fund
STATEMENT OF NET ASSETS
March 31, 2005 (Unaudited)
PRINCIPAL
AMOUNT VALUE
------ -----
SHORT-TERM INVESTMENTS -- 100.2% (A)<F28>
U.S. TREASURY SECURITIES -- 92.2%
$500,000 U.S. Treasury Bills, 2.34%, due 4/07/05 $ 499,805
500,000 U.S. Treasury Bills, 2.47%, due 4/14/05 499,554
500,000 U.S. Treasury Bills, 2.41%, due 4/21/05 499,330
500,000 U.S. Treasury Bills, 2.45%, due 4/28/05 499,081
500,000 U.S. Treasury Bills, 2.51%, due 5/05/05 498,815
500,000 U.S. Treasury Bills, 2.51%, due 5/12/05 498,571
500,000 U.S. Treasury Bills, 2.55%, due 5/19/05 498,300
500,000 U.S. Treasury Bills, 2.60%, due 5/26/05 498,014
500,000 U.S. Treasury Bills, 2.59%, due 6/09/05 497,518
----------
Total U.S. treasury securities
(amortized cost $4,488,988) 4,488,988
VARIABLE RATE DEMAND NOTES -- 8.0%
180,349 U.S. Bank, N.A., 2.60% 180,349
209,000 Wisconsin Corporate Central Credit Union, 2.52% 209,000
----------
Total variable rate demand notes (cost $389,349) 389,349
----------
Total investments (amortized cost $4,878,337) 4,878,337
Liabilities, less cash and receivables -- (0.2%)(A)<F28> (9,361)
----------
NET ASSETS $4,868,976
----------
----------
Net Asset Value Per Share ($0.01 par value,
500,000,000 shares authorized), offering and
redemption price ($4,868,976 / 4,868,976
shares outstanding) $ 1.00
----------
----------
(A)<F28> Percentages for the various classifications relate to net assets.
The accompanying notes to financial statements are an integral part of this
statement.
Reynolds Money Market Fund
STATEMENT OF OPERATIONS
For the Six Months Ending March 31, 2005 (Unaudited)
INCOME:
Interest $ 48,100
--------
EXPENSES:
Registration fees 15,660
Management fees 12,868
Professional fees 12,850
Transfer agent fees 10,831
Administrative services 5,208
Printing and postage expense 2,536
Board of Directors fees 1,875
Insurance expense 1,486
Custodian fees 1,078
Other expenses 789
--------
Total operating expenses before interest expense,
reimbursement and management fee waiver 65,181
Interest expense 303
--------
Total expenses before reimbursement and management
fee waiver 65,484
Less expenses assumed by adviser (48,452)
--------
Net expenses 17,032
--------
NET INVESTMENT INCOME 31,068
NET REALIZED LOSS ON INVESTMENTS (37)
--------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 31,031
--------
--------
The accompanying notes to financial statements are an integral part of this
statement.
Reynolds Money Market Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ending March 31, 2005 (Unaudited) and For the Year Ended
September 30, 2004
2005 2004
---- ----
OPERATIONS:
Net investment income $ 31,068 $ 12,290
Net realized loss on investments (37) --
---------- ----------
Net increase in net assets resulting from operations 31,031 12,290
---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income ($0.0061 and $0.0022 per share, respectively) (31,031) (12,290)
---------- ----------
FUND SHARE ACTIVITIES:
Proceeds from shares issued (4,085,207 and 11,742,156 shares, respectively) 4,085,207 11,742,156
Net asset value of shares issued in distributions reinvested
(25,282 and 9,169 shares, respectively) 25,282 9,169
Cost of shares redeemed (5,968,337 and 10,212,049 shares, respectively) (5,968,337) (10,212,049)
---------- ----------
Net (decrease) increase in net assets derived from Fund share activities (1,857,848) 1,539,276
---------- ----------
TOTAL (DECREASE) INCREASE (1,857,848) 1,539,276
NET ASSETS AT THE BEGINNING OF THE PERIOD 6,726,824 5,187,548
---------- ----------
NET ASSETS AT THE END OF THE PERIOD $4,868,976 $6,726,824
---------- ----------
---------- ----------
FINANCIAL HIGHLIGHTS
(Selected data for each share of the Fund outstanding throughout each period)
(UNAUDITED)
FOR THE SIX FOR THE YEARS ENDED SEPTEMBER 30,
MONTHS ENDING -----------------------------------------------------------------
MARCH 31, 2005 2004 2003 2002 2001 2000
-------------- ---- ---- ---- ---- ----
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations:
Net investment income 0.01 0.00*<F29> 0.00*<F29> 0.01 0.04 0.05
Less distributions:
Dividends from net investment income (0.01) (0.00)*<F29> (0.00)*<F29> (0.01) (0.04) (0.05)
------ ------ ------ ------ ------ ------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------
TOTAL RETURN 0.61%(1)<F32> 0.22% 0.38% 1.03% 4.29% 5.34%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's $) 4,869 6,727 5,188 9,716 15,467 28,210
Ratio of operating expenses before
interest expense (after reimbursement)
to average net assets**<F30> 0.65%(2)<F33> 0.65% 0.65% 0.65% 0.65% 0.65%
Ratio of interest expense to average net
assets 0.01%(2)<F33> 0.03% 0.03% 0.02% 0.01% 0.01%
Ratio of net investment income to average
net assets***<F31> 1.21%(2)<F33> 0.22% 0.42% 1.08% 4.29% 5.24%
*<F29> Less than $0.005 per share.
**<F30> Computed after giving effect to adviser's expense limitation
undertaking. If the Fund had paid all of its expenses, the ratios
would have been 2.53%(2)<F33>, 2.34%, 1.72%, 1.22%, 1.09% and 1.16%
for the six months ending March 31, 2005 and for the years ended
September 30, 2004, 2003, 2002, 2001 and 2000, respectively.
***<F31> If the Fund had paid all of its expenses, the ratios would have been
(0.66%)(2)<F33>, (1.44%), (0.62%), 0.51%, 3.85% and 4.74% for the six
months ending March 31, 2005 and for the years ended September 30,
2004, 2003, 2002, 2001 and 2000, respectively.
(1)<F32> Not Annualized.
(2)<F33> Annualized.
The accompanying notes to financial statements are an integral part of these
statements.
Reynolds Funds, Inc.
NOTES TO FINANCIAL STATEMENTS
March 31, 2005 (Unaudited)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES --
The following is a summary of significant accounting policies of the
Reynolds Funds, Inc. (the "Company"), which is registered as a diversified,
open-end management investment company under the Investment Company Act of
1940, as amended. This Company consists of a series of five funds: the
Reynolds Blue Chip Growth Fund ("Blue Chip Fund"), the Reynolds Opportunity
Fund ("Opportunity Fund"), the Reynolds Fund ("Reynolds Fund"), the
Reynolds Balanced Fund ("Balanced Fund") and the Reynolds Money Market Fund
("Money Market Fund") (collectively the "Funds"). The assets and
liabilities of each Fund are segregated and a shareholder's interest is
limited to the Fund in which the shareholder owns shares. The Company was
incorporated under the laws of Maryland on April 28,1988.
The investment objective of the Blue Chip Fund is to produce long-term
growth of capital by investing in a diversified portfolio of common stocks
issued by well-established growth companies commonly referred to as "blue
chip" companies; the investment objective of the Opportunity Fund is to
produce long-term growth of capital by investing in a diversified portfolio
of common stocks having above average growth characteristics; the
investment objective of the Reynolds Fund is to produce long-term growth of
capital; the investment objective of the Balanced Fund is to seek capital
appreciation and income by investing in common stocks and fixed income
securities; and the investment objective of the Money Market Fund is to
provide a high level of current income, consistent with liquidity, the
preservation of capital and a stable net asset value, by investing in a
diversified portfolio of high-quality, highly liquid money market
instruments.
(a) Each security for the Blue Chip Fund, Opportunity Fund, Reynolds Fund
and Balanced Fund, excluding short-term investments, is valued at the last
sale price reported by the principal security exchange on which the issue
is traded, or if no sale is reported, the latest bid price. Securities
which are traded on the Nasdaq National Market or the Nasdaq SmallCap
Market are valued at the Nasdaq Official Closing Price, or if no sale is
reported, the latest bid price. Short-term investments with maturities of
60 days or less held by these Funds and all instruments held by the Money
Market Fund are valued at amortized cost which approximates value.
Securities for which quotations are not readily available are valued at
fair value as determined by the investment adviser under the supervision of
the Board of Directors. The fair value of a security is the amount which
the Fund might receive upon a current sale. The fair value of a security
may differ from the last quoted price and the Fund may not be able to sell
a security at the fair value. Market quotations may not be available, for
example, if trading in particular securities was halted during the day and
not resumed prior to the close of trading on the New York Stock Exchange.
For financial reporting purposes, investment transactions are recorded on
the trade date.
(b) Net realized gains and losses on sales of securities are computed on
the identified cost basis.
(c) The Funds record dividend income on the ex-dividend date and interest
income on an accrual basis.
(d) The Funds have investments in short-term variable rate demand notes,
which are unsecured instruments. The Funds may be susceptible to credit
risk with respect to these notes to the extent the issuer defaults on its
payment obligation. The Funds' policy is to monitor the creditworthiness
of the issuer and nonperformance by these counterparties is not
anticipated.
(e) Accounting principles generally accepted in the United States of
America ("GAAP") require that permanent differences between income for
financial reporting and tax purposes be reclassified in the capital
accounts.
(f) The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from these estimates.
(g) No provision has been made for Federal income taxes since the Funds
have elected to be taxed as "regulated investment companies" and intend to
distribute substantially all income to shareholders and otherwise comply
with the provisions of the Internal Revenue Code applicable to regulated
investment companies.
(2) INVESTMENT ADVISER AND MANAGEMENT AGREEMENT AND TRANSACTIONS WITH RELATED
PARTIES --
The Funds have management agreements with Reynolds Capital Management
("RCM"), #with whom certain officers and directors of the Funds are
affiliated, to serve as investment adviser and manager. Under the terms of
the agreements, the Blue Chip Fund, the Opportunity Fund and the Reynolds
Fund will pay RCM a monthly management fee at the annual rate of 1% of such
Funds' daily net assets; from the Balanced Fund a monthly fee of 0.75% of
such Fund's daily net assets; and from the Money Market Fund a monthly fee
of 0.50% of such Fund's daily net assets. For the six months ending March
31, 2005, RCM voluntarily waived $5,538 and $12,868 of the management fees
due from the Balanced Fund and the Money Market Fund, respectively, under
the agreements.
In addition, RCM has voluntarily reimbursed the Money Market Fund for
expenses over 0.65%, of the daily net assets of the Fund totaling $35,584.
Prior to January 31, 2005, RCM voluntarily reimbursed the Balanced Fund
(f/k/a Reynolds U.S. Government Bond Fund) for expenses over 0.90% and
effective January 31, 2005, RCM has agreed to reimburse the Balanced Fund
to the extent necessary to insure that total annual fund operating expenses
do not exceed 2.00%. In addition to the reimbursement required under the
terms of the agreement, RCM will voluntarily reimburse the Balanced Fund to
the extent necessary to insure that total annual fund operating expenses do
not exceed 1.25% for the fiscal year ending September 30, 2005. For the
six months ending March 31, 2005, RCM has voluntarily reimbursed the
Balanced Fund $28,621. Reimbursements to the Balanced Fund and the Money
Market Fund are voluntary and may be modified or discontinued at any time
by RCM.
The Funds have administrative agreements with Fiduciary Management, Inc.
("FMI"), with whom certain officers of the Funds are affiliated, to
supervise all aspects of the Funds' operations except those per#formed by
RCM pursuant to the management agreements. Under the terms of the
agreements, the Blue Chip Fund, the Opportunity Fund, the Reynolds Fund and
the Balanced Fund will pay FMI a monthly administrative fee at the annual
rate of 0.20% of such Funds' daily net assets up to and including
$30,000,000 and 0.10% of such Funds' daily net assets in excess of
$30,000,000; subject to a fiscal year minimum of twenty thousand dollars.
FMI has voluntarily waived the minimum for the fiscal year ending September
30, 2005. Prior to January 31, 2005, the Balanced Fund paid FMIa monthly
administrative fee at the annual rate of 0.10% of daily net assets. The
Money Market Fund will pay FMI a monthly administrative fee at the annual
rate of 0.10% of daily net assets.
The Blue Chip Fund, Opportunity Fund and the Reynolds Fund have adopted a
Service and Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the
Investment Company Act of 1940. The Plan provides that each Fund adopting
it may incur certain costs which may not exceed a maximum amount equal to
0.25% per annum of such Fund's average daily net assets. Payments made
pursuant to the Plan may only be used to pay distribution expenses incurred
in the current year.
In the normal course of business the Funds enter into contracts with
service providers that contain general indemnification clauses. The Funds'
maximum exposure under these arrangements is unknown as this would involve
future claims that may be made against the Funds that have not yet
occurred. However, based on experience, the Funds expect the risk of loss
to be remote.
(3) CREDIT FACILITY --
U.S. Bank, N.A. has made available to the Blue Chip Fund, Opportunity Fund,
Reynolds Fund and Money Market Fund a credit facility pursuant to the
respective Credit Agreements dated August 7, 2000 for the purpose of having
cash available to cover incoming redemptions. The Reynolds Fund can also
use the credit facility to purchase securities. The Credit Agreements
expire July 31, 2005. The terms of the respective agreements are as
follows:
BLUE CHIP OPPORTUNITY REYNOLDS MONEY MARKET
FUND FUND FUND FUND
-------------- -------------- -------------- --------------
Payment Terms Due in 45 days Due in 45 days Due in 90 days Due in 45 days
Interest Prime Rate - 1% Prime Rate - 1% Prime Rate - 1% Prime Rate - 1%
Unused Line Fees 0.10% 0.10% 0.10% 0.10%
Credit Limit $5,000,000 $3,000,000 $15,000,000 $600,000
Average Daily Balance Outstanding $446,714 $188,665 $13,509,808 $0
Maximum Amount Outstanding $4,786,000 $902,000 $15,000,000 $0
Interest Expense $11,564 $5,325 $254,982 $303
(4) DISTRIBUTION TO SHAREHOLDERS --
Net investment income, if any, for the Blue Chip, Opportunity and Reynolds
Funds are distributed to shareholders at least annually. The Balanced Fund
distributes substantially all of its net investment income quarterly and
the Money Market Fund distributes substantially all of its net investment
income monthly. All Funds will distribute net realized gains, if any, to
shareholders at least annually. On March 30, 2005 the Balanced Fund
distributed $4,663 from net investment income ($0.02713 per share). The
distribution was paid on March 31, 2005 to shareholders of record on March
29, 2005.
(5) INVESTMENT TRANSACTIONS --
For the six months ending March 31, 2005, purchases and proceeds of sales
of investment securities (excluding short-term securities) were as follows:
PURCHASES SALES
--------- -----
Blue Chip Fund $53,509,905 $82,222,267
Opportunity Fund 2,772,497 11,046,727
Reynolds Fund 5,974,412 33,421,447
Balanced Fund 334,579 1,624,479
(6) ACCOUNTS PAYABLE AND ACCRUED LIABILITIES --
As of March 31, 2005, liabilities of the Funds included the following:
BLUE CHIP OPPORTUNITY REYNOLDS BALANCED MONEY MARKET
FUND FUND FUND FUND FUND
--------- ---------- -------- -------- ------------
Payable to brokers for securities purchased $1,979,912 $770,832 $ 699,873 $ -- $ --
Payable to RCM for management fees 55,356 12,946 21,127 1,040 --
Payable to FMI for administrative fees 8,083 2,589 4,225 278 424
Payable to shareholders for redemptions 4,449 7,997 7,627 -- --
Due to custodian 62,994 5,334 16,214 -- --
Interest payable 431 258 23,547 -- 52
Other liabilities 156,849 56,399 53,981 239 4,755
Loan payable -- -- 2,531,000 -- --
(7) SOURCES OF NET ASSETS --
As of March 31, 2005, the sources of net assets were as follows:
BLUE CHIP OPPORTUNITY REYNOLDS BALANCED MONEY MARKET
FUND FUND FUND FUND FUND
--------- ----------- -------- -------- ------------
Fund shares issued and outstanding $ 160,331,574 $11,237,702 $73,063,218 $1,719,179 $4,868,976
Net unrealized appreciation (depreciation)
on investments 9,346,038 4,701,394 3,736,833 (37,273) --
Accumulated net realized loss
on investments (106,038,461) (1,027,186) (53,614,282) (57,202) --
Accumulated net investment income -- -- -- 200 --
------------- ----------- ----------- ---------- ----------
$ 63,639,151 $14,911,910 $23,185,769 $1,624,904 $4,868,976
------------- ----------- ----------- ---------- ----------
------------- ----------- ----------- ---------- ----------
(8) INCOME TAX INFORMATION --
The following information for the Funds is presented on an income tax basis
as of March 31, 2005:
NET UNREALIZED
GROSS GROSS APPRECIATION
COST OF UNREALIZED UNREALIZED (DEPRECIATION)
INVESTMENTS APPRECIATION DEPRECIATION ON INVESTMENTS
----------- ------------ ------------ --------------
Blue Chip Fund $53,514,353 $11,135,177 $2,143,290 $8,991,887
Opportunity Fund 10,238,246 4,665,702 168,668 4,497,034
Reynolds Fund 18,382,654 6,629,220 3,420,739 3,208,481
Balanced Fund 1,656,715 1,822 39,095 (37,273)
Money Market Fund 4,878,337 -- -- --
The following information for the Funds is presented on an income tax basis
as of September 30, 2004:
NET UNREALIZED
GROSS GROSS (DEPRECIATION) DISTRIBUTABLE DISTRIBUTABLE
COST OF UNREALIZED UNREALIZED APPRECIATION ORDINARY LONG-TERM
INVESTMENTS APPRECIATION DEPRECIATION ON INVESTMENTS INCOME CAPITAL GAINS
----------- ------------ ------------ -------------- ------------ ------------
Blue Chip Fund $86,638,505 $19,711,871 $21,312,971 $(1,601,100) $ -- $ --
Opportunity Fund 16,079,653 6,233,245 3,381,315 2,851,930 -- 1,432,482
Reynolds Fund 54,698,168 8,275,275 16,276,917 (8,001,642) -- --
Government Bond Fund 2,816,025 3,532 22,266 (18,734) -- --
Money Market Fund 6,732,872 -- -- -- -- --
The difference, if any, between the cost amount for financial statement and
federal income tax purposes is due primarily to timing differences in
recognizing certain gains and losses in security transactions and for mark
to market for Passive Foreign Investment Companies ("PFICs").
The tax components of dividends paid during the year ended September 30,
2004, capital loss carryovers, which may be used to offset future capital
gains, subject to Internal Revenue Code limitations (expiring in varying
amounts through 2012), as of September 30, 2004, and tax basis post-October
losses as of September 30, 2004, which are not recognized for tax purposes
until the first day of the following fiscal year are:
SEPTEMBER 30, 2004 SEPTEMBER 30, 2003
------------------------------------------------------------- ------------------------------
ORDINARY LONG-TERM NET CAPITAL ORDINARY LONG-TERM
INCOME CAPITAL GAINS LOSS POST-OCTOBER INCOME CAPITAL GAINS
DISTRIBUTIONS DISTRIBUTIONS CARRYOVERS LOSSES DISTRIBUTIONS DISTRIBUTIONS
------------- ------------- ------------ ----------- ------------- -------------
Blue Chip Fund $ -- $ -- $92,835,683 $7,028,488 $ -- $ --
Opportunity Fund -- 1,226,731 -- -- -- --
Reynolds Fund -- -- 37,924,836 5,599,986 -- --
Government Bond Fund 69,456 -- 33,570 4,459 55,669 --
Money Market Fund 12,290 -- -- -- 30,282 --
The Blue Chip Fund, Reynolds Fund and Government Bond Fund have utilized
$2,128,294, $525,443 and $2,622, respectively, of their post-October losses
from the prior year to increase current year net capital losses or reduce
any net capital gains. The Government Bond Fund had capital loss
carryovers of $19,651 which expired September 30, 2004.
Since there were no ordinary distributions paid for the year ended
September 30, 2004 for the Blue Chip, Opportunity or Reynolds Funds, there
are no distributions designated as qualifying for the dividends received
deduction for corporate shareholders nor as qualified dividend income under
the Jobs and Growth Tax Relief Act of 2003.
Reynolds Funds, Inc.
ADVISORY AGREEMENTS
On March 16, 2005, the Board of Directors of Reynolds Funds, Inc. approved
the continuation of the investment advisory agreements for the Reynolds Blue
Chip Fund, Reynolds Opportunity Fund and Reynolds Fund with Reynolds Capital
Management and on May 18, 2005, approved the continuation of the investment
advisory agreements for the Reynolds Balanced Fund and Reynolds Money Market
Fund with Reynolds Capital Management. Prior to approving the continuation of
the advisory agreements, the Directors considered:
o the nature, extent and quality of the services provided by Reynolds
Capital Management
o the investment performance of the Funds
o the costs of the services to be provided and profits to be realized by
Reynolds Capital Management from its relationship with the Funds
o the extent to which economies of scale would be realized as the Funds
grow and whether fee levels reflect those economies of scale
o the expense ratios of the Funds
In considering the nature, extent and quality of the services provided by
Reynolds Capital Management, the Directors reviewed a report describing the
portfolio management, shareholder communication and servicing and regulatory
compliance services provided by Reynolds Capital Management to the Funds. The
Directors concluded that Reynolds Capital Management was providing essential
services to the Funds as well as services that were in addition to services
typically provided non-mutual fund clients.
The Directors compared the performance of the Funds to benchmark indices
over various periods of time and concluded that the performance of the Funds
warranted the continuation of the advisory agreements. The Directors noted that
in addition to the absolute performance of the Funds, they also considered the
fact that the Funds adhered to the investment style expected by their
shareholders.
In concluding that the advisory fees payable by the Funds were reasonable,
the Directors reviewed reports of the costs of services provided by, and the
profits realized by, Reynolds Capital Management from its relationship with the
Funds and concluded that such profits were reasonable and not excessive. They
noted that Reynolds Capital Management was not realizing a profit from its
relationship with either the Balanced Fund or the Money Market Fund. The
Directors also reviewed reports comparing the expense ratios of, and the
advisory fees paid by, the Funds, to those of, and paid by, other comparable
mutual funds and concluded that the advisory fees paid by the Funds and the
expense ratios of the Funds were comparable to those of comparable mutual funds.
The Directors also considered whether the fee schedules of the investment
advisory agreements should be adjusted for an increase in assets under
management. They concluded that "breakpoints" were not warranted at this time
given the anticipated growth of the Funds in the next year and the other factors
considered.
For additional information about the Directors and Officers or for a description
of the policies and procedures that the Funds use to determine how to vote
proxies relating to portfolio securities, please call (800) 773-9665 and request
a Statement of Additional Information. One will be mailed to you free of charge.
The Statement of Additional Information is also available on the website of the
Securities and Exchange Commission (the "Commission") at http://www.sec.gov.
------------------
Information on how the Funds voted proxies relating to portfolio securities
during the twelve month period ending June 30, 2004 is available on the Funds'
website at http://www.reynoldsfunds.com or the website of the Commission. The
----------------------------
Funds' file their complete schedule of portfolio holdings with the Commission
for the first and third quarters of each fiscal year on Form N-Q; (ii) the
Funds' Form N-Q is available on the Commission's website; and (iii) the Funds'
Form N-Q may be reviewed and copied at the Commission's Public Reference Room in
Washington, DC, and that information on the operation of the Public Reference
Room may be obtained by calling 1-800-SEC-0330.
REYNOLDS FUNDS
Wood Island, Third Floor
80 East Sir Francis Drake Boulevard
Larkspur, California 94939
www.reynoldsfunds.com
BOARD OF DIRECTORS
DENNIS N. MOSER
FREDERICK L. REYNOLDS
ROBERT E. STAUDER
INVESTMENT ADVISER
REYNOLDS CAPITAL MANAGEMENT
Wood Island, Third Floor
80 East Sir Francis Drake Boulevard
Larkspur, California 94939
ADMINISTRATOR
FIDUCIARY MANAGEMENT, INC.
100 East Wisconsin Avenue, Suite 2200
Milwaukee, Wisconsin 53202
TRANSFER AGENT AND
DIVIDEND DISBURSING AGENT
U.S. BANCORP FUND SERVICES, LLC
615 East Michigan Street
Milwaukee, Wisconsin 53202
1-800-773-9665
OR 1-800-7REYNOLDS
1-414-765-4124
CUSTODIAN
U.S. Bank, N.A.
425 Walnut Street
Cincinnati, Ohio 45202
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PRICEWATERHOUSECOOPERS LLP
100 East Wisconsin Avenue
Suite 1500
Milwaukee, Wisconsin 53202
LEGAL COUNSEL
FOLEY & LARDNER LLP
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
ITEM 2. CODE OF ETHICS.
- -----------------------
Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
- -----------------------------------------
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
- -----------------------------------------------
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
- ----------------------------------------------
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
- --------------------------------
Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
- -------------------------------------------------------------------------
MANAGEMENT INVESTMENT COMPANIES.
- --------------------------------
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
- -------------------------------------------------------------------------
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
- --------------------------------------------------------------------------
COMPANY AND AFFILIATED PURCHASERS.
- ----------------------------------
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
- -------------------------------------------------------------
None.
ITEM 11. CONTROLS AND PROCEDURES.
- ---------------------------------
(a) The disclosure controls and procedures of the Reynolds Funds, Inc. are
periodically evaluated. As of April 18, 2005, the date of the last
evaluation, we concluded that our disclosure controls and procedures are
adequate.
(b) The internal controls of the Reynolds Funds, Inc. are periodically
evaluated. Since, April 18, 2005, the date of the last evaluation, there
have been no significant changes in the Reynolds Funds' internal controls
or in other factors that could have had a significant effect on such
controls. There have also been no significant deficiencies or material
weaknesses identified since the last evaluation that required any
corrective action.
ITEM 12. EXHIBITS.
- ------------------
(a) Any code of ethics or amendment thereto. Not applicable.
(b) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Filed herewith.
(c) Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Filed herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Reynolds Funds, Inc.
--------------------
Registrant
By /s/Frederick L. Reynolds
------------------------
Frederick L. Reynolds, Principal Executive Officer
Date 05/20/05
--------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
Reynolds Funds, Inc.
--------------------
Registrant
By /s/Frederick L. Reynolds
------------------------
Frederick L. Reynolds, Principal Financial Officer
Date 05/20/05
--------