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OMB APPROVAL
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OMB NUMBER 3235-0570
Expires: Nov. 30, 2005
Estimated average burden
hours per reponse: 5.0
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UNITED STATES
SECURITIES AND EXCHANGE COMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-09112
-------------------------------------
EACM Select Managers Equity Fund
---------------------------------------------------------------
(Exact name of registrant as specified in charter)
200 Connecticut Avenue, Sixth Floor, Norwalk, CT 06854-1958
---------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Evaluation Associates Capital Markets Inc.
---------------------------------------------------------------
200 Connecticut Avenue, Norwalk, CT 06854-1958
---------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: 203-855-2255 (call collect)
---------------------------
Date of fiscal year end: December 31, 2003
-----------------
Date of reporting period: December 31, 2003
-----------------
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policy making roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
Item 1. Report to Shareholders
================================================================================
INVESTMENT MANAGER
Evaluation Associates Capital Markets, Inc.
200 Connecticut Avenue
Sixth Floor
Norwalk, CT 06854-1958
ADMINISTRATOR
Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
INDEPENDENT AUDITORS
PricewaterhouseCoopers LLP
1055 Broadway
Kansas City, MO 64105
LEGAL COUNSEL
Day, Berry & Howard LLP
CityPlace
Hartford, CT 06103
TRANSFER AGENT
DST Systems, Inc.
210 West 10th Street
Kansas City, MO 64105-1802
CUSTODIAN
Mellon Trust of New England, N.A.
One Boston Place
Boston, MA 02108
- --------------------------------------------------------------------------------
THIS REPORT MUST BE ACCOMPANIED OR PRECEDED BY AN EFFECTIVE PROSPECTUS WHICH
INCLUDES MORE COMPLETE INFORMATION SUCH AS CHARGES AND EXPENSES. FOR A
PROSPECTUS AND ADDITIONAL INFORMATION ABOUT EACM SELECT MANAGERS EQUITY FUND,
PLEASE CALL THE NUMBER LISTED BELOW.
[EACM LOGO]
EACM Select Managers Equity Fund
EACM Securities Inc. -- DISTRIBUTOR
200 Connecticut Avenue
Sixth Floor
Norwalk, CT 06854-1958
(203) 855-2255 (call collect)
www.eacmselect.com
================================================================================
- --------------------------------------------------------------------------------
EACM SELECT
-------------------
MANAGERS
-------------------
EQUITY FUND
-------------------
ANNUAL
-------------------
REPORT
-------------------
DECEMBER 31, 2003
- --------------------------------------------------------------------------------
[EACM LOGO]
EACM SELECT MANAGERS EQUITY FUND
Review of 2003
- --------------------------------------------------------------------------------
Dear Fellow Shareholder:
We are very pleased to present the eighth annual report on the EACM Select
Managers Equity Fund (the "Fund"). The first part of this review details the
performance of the Fund and the factors that influenced it, while the second and
third parts summarize the economy and domestic equity market in 2003.
EACM SELECT MANAGERS EQUITY FUND
EACM Select Managers Equity Fund was up 28.92% for the full calendar year 2003,
outperforming the S&P 500, which was up 28.69%. The Fund benefited from the
broad strength of the US equity markets, posting double-digit gains in each of
the 10 economic sectors measured.
Excellent stock selection within the health care sector, which was 14% of the
portfolio on a market-weighted based, was a significant contributor to fund
performance. Within the Fund, health care issues were up 31.4% versus a gain of
15.1% for the S&P 500-health care economic sector. The relative outperformance
of the healthcare sector was due to an overweighting in biotech stocks which
were up 50.8% and represented 4% of the Fund versus 1% of the S&P 500 and an
underweighting in pharmaceuticals, up 12.5%, but only 5% of the portfolio versus
9% of the S&P 500. Strong performers among biotech issues included Genentech
Inc., up 182.2%, and Genzyme Corp., up 66.9%. Both stocks rallied on news of
promising new drugs in the pipeline.
The Fund also benefited from good performance from its second largest sector,
consumer discretionary issues, which, at 21% of the portfolio, posted a 34.8%
gain. Among the consumer discretionary stocks, retail, up 41.9%, was
particularly strong, led by Home Depot Inc., up 49.0%.
A number of individual issues also played a key role in Fund performance. The
single largest contributor, Crown Castle Int'l Corp., was up 194.1%. The
communications equipment maker has been helped by ongoing financial
restructuring and increased demand. Cendant Corp., a franchiser of brands such
as Avis and Century 21, was also a strong performer, earning 112.5% due to an
improving economic environment.
Although the Fund earned double-digit gains in all 10 economic sectors, a couple
of groups underperformed relative to their S&P 500 sector benchmarks.
Information technology, which was among the best performing groups on an
absolute basis, gained 34.5% compared to the S&P 500-information technology
group, up 47.3%. Within information technology, the fund was underweight in
semiconductors (1.4% versus 2.6%), which were up 55.6%, while overweight in
information technology services (2.4% vs. 0.9%) which lost 2.2%. Positions in
materials were also a drag on relative performance. Within the Fund, the group
was up 26.9%, but a lack of exposure to metals/mining stocks, up 79.7%, cost the
Fund 28 basis points.
PERCENT OF NET ASSETS AS OF 12/31/03: GENENTECH INC. (0.44%), GENZYME CORP.
(0.92%), HOME DEPOT INC. (1.14%), CROWN CASTLE INT'L CORP. (1.96%) AND CENDANT
CORP. (1.86%).
ECONOMIC REVIEW
A difficult winter and a drop in consumer confidence caused by the geo-political
events in the early part of the year left the U.S. economy on the verge of
falling into recession. With a quick end to the Iraqi regime in April,
confidence rebounded. By the third quarter, GDP was up 8.2%, reaching levels not
seen in 20 years. And the jobs picture also improved. The outlook for 2004 calls
for continued growth in the 4.0% to 5.0% range.
1
EACM SELECT MANAGERS EQUITY FUND
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Federal Reserve actions in 2003 were very similar to 2002, with policy makers
reducing short-term interest rates only once during the year. After leaving
rates unchanged during the first half of the year, policy makers reduced
short-term interest rates by 0.25% at their regularly scheduled June 24/25
meeting. Thirteen cuts since early 2001 brought the cumulative reduction to
5.50% (Fed Funds: 6.5% down to 1.00%). This has been the most aggressive pace of
cuts since 1982, with rates falling to their lowest levels since the 1950s. Fed
Chairman Greenspan described the mid-year rate cut, the first in 7 months, as a
fight against "an unwelcome fall in inflation" and an "insurance policy" for
continued economic growth. No actions were taken over the balance of the year,
as the economy showed clear signs of growth.
THE STOCK MARKET REVIEW
QUARTERLY RETURNS
------------------------------ YEAR
MARCH JUNE SEPT. DEC. 2003
------ ------ ------ ------ ------
S&P 500 .......... -3.2% 15.4% 2.6% 12.2% 28.7%
Russell 2000 ..... -4.5 23.4 9.1 14.5 47.3
NASDAQ ........... 0.6 21.1 10.2 12.3 50.8
- --------------------------------------------------------------------------------
In 2003, the S&P 500 rose 28.7%, marking the first year of gains since 1999.
The U.S. markets had two distinct phases during 2003. See below.
PERIOD S&P 500 RUSSELL 2000 NASDAQ
- ------ -------- -------------- ---------
12/31--3/11 -8.6% -9.2% -4.7%
3/11--12/31 +40.9 +62.2 +58.2
As the table above illustrates, the market was on the defensive during the first
21/2 months of the year, before a sustained rally took the Indexes to levels not
seen since early 2002.
The year began on an upbeat note, with the equity market rising 6.0% by January
14th. A stronger than expected manufacturing report, the unveiling of the
economic stimulus plan and an upbeat forecast by European software provider SAP,
set the tone for a strong rebound after a dismal December 2002. But as had been
the case since the bear market began, the rally unraveled. For the next eight
weeks, through March 11, the market lost 13.8%. This time it was caused by a
combination of earnings malaise and tumultuous geopolitical events, with the
latter overwhelming the former.
The U.S. announcement of a March 17 deadline for Iraq to disarm or face war
removed much uncertainty in this escalating conflict. The markets rallied
broadly, rising 11.9% up to and including the second day after the first shots
were fired on March 19th. Hopes of a quick resolution to the conflict took
center stage. However, a small pull back occurred over the next couple of weeks
on news that the U.S. objective would take longer than first thought. But when
it became clear, with the fall of Baghdad on April 9th, that coalition forces
had secured the oil fields and controlled all key strategic positions, the
markets, which had already been moving higher, accelerated their advance.
With geopolitical tensions eased, attention shifted to the economy and earnings.
The news on both counts got better and better as the year progressed. By the
third quarter, earnings growth was north of 20%, while real GDP growth of 8.2%
was the best since 1984. Confidence improved, and employment, which lagged for
most of the spring and early summer, started to move higher.
With all of these positive influences, the market advanced almost without
interruption for the remainder of the year. During this period, the largest
correction was less than 7%. Some negatives did crop up, such as a sharply lower
U.S. Dollar, increased terrorist activity and a less than rosy forecast by
Wal-Mart Stores, but none of these were enough to derail the advance.
2
EACM SELECT MANAGERS EQUITY FUND
- --------------------------------------------------------------------------------
THE MUTUAL FUND CONTROVERSY
We have not uncovered any issues with respect to market-timing and other
violations, which have been cited recently by various regulatory authorities.
The authorities have reacted to these improprieties by proposing new more
stringent regulations for the entire fund industry. Some of the regulations, if
enacted, will make it very difficult for smaller mutual funds to operate in a
cost-effective manner. The consequence, while unintended, may be to cause many
smaller funds to cease operations.
This is a matter which both the Trustees and the sponsoring Manager must
consider during 2004. Our performance justifies the continuation of our fund as
long as it can be done on a cost-effective basis for the shareholders.
* * * * *
The attached report provides you with the performance results, schedule of
investments and the financial statements as of December 31, 2003. As always,
should you have any questions, please feel free to contact us at 203-855-2255
(call collect), or visit the fund's website at: www.eacmselect.com.
We thank you for your continued confidence in the EACM Select Managers Equity
Fund.
Sincerely,
/s/ Phillip Maisano
Phillip Maisano
President
January 19, 2004
EACM SELECT MANAGERS EQUITY FUND
VS. S&P 500
[The table below represents a line chart in the printed report.]
EAI Select S&P 500
12/31/95 10000 10000
12/31/96 11435 12296
12/31/97 14732 16398
12/31/98 18247 21083
12/31/99 23851 25517
12/31/00 22565 23192
12/31/01 19513 20437
12/31/02 14635 15918
12/31/03 18868 20485
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 12/31/03
- --------------------------------------------------------------------------------
SINCE
INCEPTION
1 YEAR 3 YEARS 5 YEARS (1/2/96)
- --------------------------------------------------------------------------------
The Fund ....................... 28.92 -5.79 0.67 8.26
- --------------------------------------------------------------------------------
S&P 500 Index .................. 28.69 -4.05 -0.57 9.38
- --------------------------------------------------------------------------------
The performance data represents past performance and is not indicative of future
results. Investment return and principal value of an investment in the Fund will
vary so that shares, when redeemed, may be worth more or less than their
original cost.
The Manager is currently waiving certain or all expenses on the Fund. Had the
Fund incurred all expenses, investment returns would have been reduced.
The S&P 500 is an unmanaged capitalization weighted index of 500 commonly traded
stocks designed to measure performance of the broad domestic economy through
changes in the aggregate market value of those stocks. The index assumes
reinvestment of dividends. Unless otherwise indicated, performance figures are
for the month indicated (through the last trading date that month).
3
EACM SELECT MANAGERS EQUITY FUND
SCHEDULE OF INVESTMENTS DECEMBER 31, 2003
NO. OF
COMMON
SHARES SECURITIES VALUE (NOTE 1)
================================================================================
AEROSPACE & DEFENSE: 2.2%
2,010 L-3 Communications Holdings, Inc.+ ................... $ 103,234
6,475 Lockheed Martin Corp. ................................ 332,815
2,500 Northrop Grumman Corp. ............................... 239,000
2,900 United Technologies Corp. ............................ 274,833
------------
949,882
------------
AIR FREIGHT & LOGISTICS: 1.1%
3,500 Expeditors International of Washington, Inc. ......... 131,810
3,100 FedEx Corp. .......................................... 209,250
4,000 Ryder System, Inc. ................................... 136,600
------------
477,660
------------
BEVERAGES: 3.5%
3,300 Anheuser-Busch Co., Inc. ............................. 173,844
6,400 Coca-Cola Co. ........................................ 324,800
4,100 Diageo plc (Sponsored ADR) ........................... 216,726
16,900 PepsiCo, Inc. ........................................ 787,878
------------
1,503,248
------------
BIOTECHNOLOGY: 4.5%
5,500 Affymetrix, Inc.+ .................................... 135,355
6,000 Amgen, Inc.+ ......................................... 370,800
10,170 Biogen, Inc.+ ........................................ 374,053
2,900 Cephalon, Inc.+ ...................................... 140,389
2,000 Genentech, Inc.+ ..................................... 187,140
7,900 Genzyme Corp.--General Division+ ..................... 389,786
3,100 Invitrogen Corp.+ .................................... 217,000
4,200 MedImmune, Inc.+ ..................................... 106,680
------------
1,921,203
------------
CAPITAL MARKETS: 6.8%
2,900 Bear Stearns Companies, Inc. ......................... 231,855
34,900 Charles Schwab Co. ................................... 413,216
4,200 Franklin Recourses, Inc. ............................. 218,652
2,900 Goldman Sachs Group, Inc. ............................ 286,317
10,200 J.P. Morgan Chase & Co. .............................. 374,646
2,100 Lehman Brothers Holdings, Inc. ....................... 162,162
8,050 Merrill Lynch and Co., Inc. .......................... 472,133
10,830 Morgan Stanley ....................................... 626,732
1,055 SEI Investments Co. .................................. 32,146
1,190 State Street Corp. ................................... 61,975
------------
2,879,834
------------
CHEMICALS: 0.5%
2,400 E.I. Du Pont de Nemours & Co. ........................ $ 110,136
2,765 Praxair, Inc. ........................................ 105,623
------------
215,759
------------
COMMERCIAL BANKS: 3.7%
700 Bank of America Corp. ................................ 56,301
7,400 Charter One Financial, Inc. .......................... 255,670
11,500 FleetBoston Financial Corp. .......................... 501,975
630 Popular, Inc. ........................................ 28,312
10,100 U.S. Bancorp ......................................... 300,778
7,205 Wells Fargo & Co. .................................... 424,302
------------
1,567,338
------------
COMMERCIAL SERVICES & SUPPLIES: 3.4%
35,500 Cendant Corp.+ ....................................... 790,585
790 ChoicePoint, Inc.+ ................................... 30,091
9,000 H&R Block, Inc. ...................................... 498,330
3,700 Valassis Communications, Inc.+ ....................... 108,595
------------
1,427,601
------------
COMMUNICATIONS EQUIPMENT: 1.2%
8,100 Cisco Systems, Inc. .................................. 196,749
8,375 Nokia Oyj (ADR) ...................................... 142,375
3,000 Qualcomm, Inc. ....................................... 161,790
------------
500,914
------------
COMPUTERS & PERIPHERALS: 3.3%
8,800 Dell Computer Corp.+ ................................. 298,848
15,300 EMC Corp.+ ........................................... 197,676
18,550 Hewlett Packard Co. .................................. 426,094
3,125 International Business Machines Corp. ................ 289,625
2,500 Seagate Technology+ .................................. 47,250
27,620 Sun Microsystems, Inc.+ .............................. 124,014
------------
1,383,507
------------
CONSTRUCTION & ENGINEERING: 0.1%
1,085 Jacobs Engineering Group, Inc.+ ...................... 52,091
------------
CONSUMER FINANCE: 2.8%
3,500 American Express Co. ................................. 168,805
4,500 Capital One Financial Corp. .......................... 275,805
20,720 MBNA Corp. ........................................... 514,892
5,600 SLM Corp. ............................................ 211,008
------------
1,170,510
------------
4 See Notes to Financial Statements
EACM SELECT MANAGERS EQUITY FUND
SCHEDULE OF INVESTMENTS DECEMBER 31, 2003 (continued)
NO. OF
COMMON
SHARES SECURITIES VALUE (NOTE 1)
================================================================================
CONTAINERS & PACKAGING: 0.2%
3,820 Pactiv Corp.+ ........................................ $ 91,298
------------
DIVERSIFIED FINANCIAL SERVICES: 2.3%
8,610 Citigroup, Inc. ...................................... 417,929
9,600 Moody's Corp. ........................................ 581,280
------------
999,209
------------
DIVERSIFIED TELECOMM SERVICES: 0.2%
1,740 Alltel Corp. ......................................... 81,049
------------
ELECTRIC UTILITIES: 0.2%
1,400 Exelon Corp. ......................................... 92,904
------------
ELECTRICAL EQUIPMENT: 0.2%
2,700 American Power Conversion Corp. ...................... 66,015
------------
ELECTRONIC EQUIPMENT &
INSTRUMENTATION: 1.5%
5,000 Agilent Technologies, Inc.+ .......................... 146,200
1,250 Amphenol Corp. (Class A)+ ............................ 79,913
6,100 Jabil Circuit, Inc.+ ................................. 172,630
7,110 Waters Corp.+ ........................................ 235,768
------------
634,511
------------
ENERGY EQUIPMENT & SERVICES: 0.9%
3,000 Schlumberger Ltd. .................................... 164,160
9,300 Transocean, Inc.+ .................................... 223,293
------------
387,453
------------
FOOD & STAPLES RETAILING: 1.1%
8,440 Wal-Mart Stores, Inc. ................................ 447,742
------------
FOOD PRODUCTS: 1.7%
3,500 Hershey Foods Corp. .................................. 269,465
8,400 Wrigley (Wm.) Jr. Co. ................................ 472,164
------------
741,629
------------
HEALTHCARE EQUIPMENT & SUPPLIES: 3.3%
2,000 Alcon, Inc. .......................................... 121,080
7,300 Baxter International, Inc. ........................... 222,796
7,500 Becton Dickinson & Co. ............................... 308,550
585 C.R. Bard, Inc. ...................................... 47,531
2,115 DENTSPLY International, Inc. ......................... 95,535
1,230 Edwards Lifesciences Corp.+ .......................... 36,998
6,300 Guidant Corp. ........................................ 379,260
2,300 Stryker Corp. ........................................ 195,523
------------
1,407,273
------------
HEALTHCARE PROVIDERS & SERVICES: 3.1%
5,400 Anthem, Inc.+ ........................................ $ 405,000
945 Cardinal Health, Inc. ................................ 57,796
10,105 Caremark Rx, Inc.+ ................................... 255,960
9,475 HCA, Inc. ............................................ 407,046
3,200 UnitedHealth Group ................................... 186,176
------------
1,311,978
------------
HOTELS, RESTAURANTS & LEISURE: 2.8%
2,050 Brinker International, Inc.+ ......................... 67,978
14,100 Harrah's Entertainment, Inc. ......................... 701,757
14,000 McDonalds Corp. ...................................... 347,620
1,600 Starwood Hotels and Resorts
Worldwide, Inc. ................................... 57,552
------------
1,174,907
------------
HOUSEHOLD PRODUCTS: 1.0%
3,300 Kimberly-Clark Corp. ................................. 194,997
2,445 Proctor & Gamble Co. ................................. 244,207
------------
439,204
------------
INDUSTRIAL CONGLOMERATES: 1.7%
7,385 General Electric Co. ................................. 228,787
19,500 Tyco International Ltd. .............................. 516,750
------------
745,537
------------
INFORMATION TECHNOLOGY SERVICES: 4.0%
2,870 Accenture Ltd. (Class A)+ ............................ 75,538
2,605 Affiliated Computer Services,
Inc. (Class A)+ ................................... 141,868
4,000 Automatic Data Processing, Inc. ...................... 158,440
6,700 Concord EFS, Inc.+ ................................... 99,428
850 DST Systems, Inc.+ ................................... 35,496
19,500 First Data Corp. ..................................... 801,255
2,570 Fiserv, Inc.+ ........................................ 101,541
1,065 Hewitt Associates, Inc. (Class A)+ ................... 31,844
6,300 Sabre Holdings Corp. ................................. 136,017
4,020 Sungard Data Systems, Inc.+ .......................... 111,394
------------
1,692,821
------------
INSURANCE: 3.2%
5,400 Ace Ltd. ............................................. 223,668
3,320 American International Group, Inc. ................... 220,050
150 Berkshire Hathaway, Inc. (Class B)+ .................. 422,250
1,270 Lincoln National Corp. ............................... 51,270
See Notes to Financial Statements 5
EACM SELECT MANAGERS EQUITY FUND
SCHEDULE OF INVESTMENTS DECEMBER 31, 2003 (continued)
NO. OF
COMMON
SHARES SECURITIES VALUE (NOTE 1)
================================================================================
INSURANCE: (CONTINUED)
4,495 Marsh & McLennan Cos., Inc. .......................... $ 215,266
5,500 St. Paul Cos., Inc. .................................. 218,075
------------
1,350,579
------------
INTERNET & CATALOG RETAIL: 0.4%
3,000 EBAY, Inc.+ .......................................... 193,770
------------
MACHINERY: 0.4%
2,800 Deere & Co. .......................................... 182,140
------------
MEDIA: 11.3%
17,051 Cablevision Systems Corp.- New York Group (Class A)+ . 398,823
6,800 Clear Channel Communications, Inc. ................... 318,444
4,400 Comcast Corp. (Special Class A)+ ..................... 137,632
8,300 EchoStar Communications Corp.+ ....................... 282,200
23,000 Entravision Communications Corp. (Class A)+ .......... 255,300
4,500 Fox Entertainment Group, Inc. (Class A)+ ............. 131,175
2,400 Gannett Co., Inc. .................................... 213,984
9,884 Hughes Electronics Corp.+ ............................ 163,582
1,400 Lamar Advertising Co.+ ............................... 52,248
12,800 Liberty Media Corp.+ ................................. 152,192
5,700 McGraw-Hill Companies, Inc. .......................... 398,544
11,511 Metro-Goldwyn-Mayer Inc.+ ............................ 196,723
7,406 News Corp. Ltd. (ADR) ................................ 224,037
2,300 Omnicon Group, Inc. .................................. 200,859
8,500 Time Warner, Inc.+ ................................... 152,915
950 Tribune Co. .......................................... 49,020
10,800 Univision Communications, Inc. (Class A)+ ............ 428,652
13,178 Viacom, Inc. (Class B) ............................... 584,840
5,300 Walt Disney Co. ...................................... 123,649
3,300 Westwood One, Inc.+ .................................. 112,893
4,407 WPP Group PLC (ADR) .................................. 216,604
------------
4,794,316
------------
MULTILINE RETAIL: 1.5%
4,300 Dollar Tree Stores, Inc.+ ............................ 129,258
10,100 Family Dollar Stores, Inc. ........................... 362,388
1,600 Federated Department Stores, Inc. .................... 75,408
1,850 Target Corp. ......................................... 71,040
------------
638,094
------------
OFFICE ELECTRONICS: 0.3%
9,700 Xerox Corp.+ ......................................... $ 133,860
------------
OIL & GAS: 1.7%
3,400 Anadarko Petroleum Corp. ............................. 173,434
4,334 ChevronTexaco Corp. .................................. 374,414
4,245 Exxon Mobil Corp. .................................... 174,045
------------
721,893
------------
PAPER & FOREST PRODUCTS: 0.8%
1,700 International Paper Co. .............................. 73,287
4,400 Weyerhaeuser Co. ..................................... 281,600
------------
354,887
------------
PERSONAL PRODUCTS: 1.0%
1,285 Avon Products, Inc. .................................. 86,725
9,015 Gillette Co. ......................................... 331,121
------------
417,846
------------
PHARMACEUTICALS: 4.1%
8,585 Abbott Laboratories .................................. 400,061
2,100 Eli Lilly & Co. ...................................... 147,693
4,000 Johnson & Johnson .................................... 206,640
5,000 Merck & Co., Inc. .................................... 231,000
18,335 Pfizer, Inc. ......................................... 647,776
2,600 Wyeth ................................................ 110,370
------------
1,743,540
------------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT: 2.1%
4,200 Analog Devices, Inc. ................................. 191,730
6,200 Applied Materials, Inc.+ ............................. 139,190
6,700 Intel Corp. .......................................... 215,740
4,000 Novellus Systems, Inc.+ .............................. 168,200
6,500 Texas Instruments, Inc. .............................. 190,970
------------
905,830
------------
SOFTWARE: 4.7%
4,800 Adobe Systems, Inc. .................................. 188,640
465 Fair Isaac Corp. ..................................... 22,859
30,005 Microsoft Corp. ...................................... 826,338
31,200 Oracle Corp.+ ........................................ 411,840
11,400 Symantec Corp.+ ...................................... 395,010
4,000 Veritas Software Corp.+ .............................. 148,640
------------
1,993,327
------------
6 See Notes to Financial Statements
EACM SELECT MANAGERS EQUITY FUND
SCHEDULE OF INVESTMENTS DECEMBER 31, 2003 (continued)
NO. OF
COMMON
SHARES SECURITIES VALUE (NOTE 1)
================================================================================
SPECIALTY RETAIL: 1.7%
6,000 Gap, Inc. ............................................ $ 139,260
13,600 Home Depot, Inc. ..................................... 482,664
5,500 TJX Cos Inc USD COM .................................. 121,275
------------
743,199
------------
TEXTILE & APPAREL: 1.0%
1,595 Fossil, Inc.+ ........................................ 44,676
1,615 Liz Claiborne, Inc. .................................. 57,268
4,600 Nike, Inc. (Class B) ................................. 314,916
------------
416,860
------------
THRIFTS & MORTGAGE FINANCE: 4.6%
1,273 Doral Financial Corp. ................................ 41,076
13,565 Federal Home Loan Mortgage Corp. ..................... 791,111
13,110 Federal National Mortgage Association ................ 984,037
1,300 Golden West Financial Corp. .......................... 134,147
------------
1,950,371
------------
TOBACCO: 0.2%
1,295 Altria Group, Inc. ................................... 70,474
------------
WIRELESS TELECOM SERVICE: 2.4%
24,200 AT&T Wireless+ ....................................... $ 193,358
75,400 Crown Castle International Corp.+ .................... 831,658
------------
1,025,016
------------
TOTAL COMMON STOCKS: 98.7%
(cost: $36,616,833) ............................................. 41,999,079
------------
SHORT-TERM INVESTMENT: 2.6%
1,097,184 Dreyfus Cash Management Fund (Institutional Shares) .. 1,097,184
------------
TOTAL SHORT-TERM INVESTMENT
(cost: $1,097,184) .............................................. 1,097,184
------------
TOTAL INVESTMENTS: 101.3%
(cost: $37,714,017) ............................................. 43,096,263
OTHER ASSETS LESS LIABILITIES: (1.3)% ........................... (558,164)
------------
NET ASSETS: 100% ................................................ $ 42,538,099
------------
- ----------
Glossary:
ADR--American Depository Receipt
+ Non-income producing.
See Notes to Financial Statements 7
EACM SELECT MANAGERS EQUITY FUND
================================================================================
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2003
ASSETS:
Investments, at value (cost: $37,714,017)(Note 1) $ 43,096,263
Cash 3,730
Receivables:
Securities sold 387,687
Capital shares sold 60,755
Dividends and interest 45,345
------------
Total assets 43,593,780
------------
LIABILITIES:
Payables:
Capital shares redeemed 935,619
Dividends payable 871
Management fee 28,963
Administration fee 8,197
Securities purchased 7,477
Accrued expenses 74,554
------------
Total liabilities 1,055,681
------------
NET ASSETS $ 42,538,099
============
Net asset value, maximum offering price and
redemption price per share
($42,538,099 / 5,643,804 shares of beneficial
interest outstanding with an unlimited number of
no par value shares authorized) $ 7.54
------------
Composition of net assets:
Aggregate paid in capital 45,603,899
Net unrealized appreciation of investments 5,382,246
Accumulated net realized loss (8,448,046)
------------
$ 42,538,099
============
================================================================================
STATEMENT OF OPERATIONS
Year Ended December 31, 2003
INCOME:
Dividends (net of foreign taxes withheld of $849) $ 436,908
Interest 9,721
------------
Total income 446,629
EXPENSES:
Management (Note 2) $ 352,189
Administrative (Note 2) 100,000
Insurance 80,963
Professional 78,198
Custodian 61,709
Transfer agent 36,449
Trustees 30,000
Shareholder reports 20,778
Registration 15,309
Other 12,542
------------
Total expenses 788,137
------------
STATEMENT OF OPERATIONS (CONTINUED)
Fees waived by the Manager (Note 2) $ (347,901)
------------
Net expenses 440,236
------------
Net investment income 6,393
------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS: (NOTE 3)
Net realized loss from investments (2,067,750)
Net change in unrealized depreciation of investments 11,963,177
------------
Net realized and unrealized gain on investments 9,895,427
------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 9,901,820
============
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
2003 2002
------------ ------------
INCREASE (DECREASE) IN
NET ASSETS:
Operations:
Net investment income (loss) $ 6,393 $ (53,425)
Net realized loss
from investments (2,067,750) (4,388,901)
Net change in unrealized
appreciation (depreciation)
of investments 11,963,177 (8,297,222)
------------ ------------
Net increase (decrease) in net assets
resulting from operations 9,901,820 (12,739,548)
------------ ------------
Dividends to shareholders from: (Note1)
Net investment income (11,517) --
Capital share transactions*:
Net proceeds from sales of shares 14,342,253 3,289,749
Reinvestment of dividends 10,646 --
Cost of shares redeemed (16,870,721) (5,521,602)
------------ ------------
Decrease in net assets
resulting from capital share
transactions (2,517,822) (2,231,853)
------------ ------------
Total increase (decrease) in net assets 7,372,481 (14,971,401)
NET ASSETS:
Beginning of year 35,165,618 50,137,019
------------ ------------
End of year $ 42,538,099 $ 35,165,618
============ ============
*SHARES OF BENEFICIAL INTEREST
ISSUED AND REDEEMED:
Shares sold 2,104,091 488,701
Reinvestment of dividends 1,412 --
Shares redeemed (2,473,309) (906,681)
------------ ------------
Net decrease (367,806) (417,980)
============ ============
8 See Notes to Financial Statements
EACM SELECT MANAGERS EQUITY FUND
================================================================================
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each year:
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------
2003 2002 2001 2000 1999
-------- -------- -------- -------- --------
Net Asset Value, Beginning of Year .............. $ 5.85 $ 7.80 $ 9.02 $ 11.13 $ 10.29
-------- -------- -------- -------- --------
Income From Investment Operations:
Net Investment Income (Loss) .................... --(c) (0.01) (0.02) (0.02) (0.02)
Net Gain (Loss) on Investments
(both realized and unrealized) ................ 1.69 (1.94) (1.20) (0.58) 3.18
-------- -------- -------- -------- --------
Total From Investment Operations ................ 1.69 (1.95) (1.22) (0.60) 3.16
Less Distributions from:
Net Investment Income ......................... --(c) -- -- -- --
Net Realized Gain on Investments .............. -- -- -- (1.51) (2.32)
-------- -------- -------- -------- --------
Total Distributions ............................. -- -- -- (1.51) (2.32)
-------- -------- -------- -------- --------
Net Asset Value, End of Year .................... $ 7.54 $ 5.85 $ 7.80 $ 9.02 $ 11.13
======== ======== ======== ======== ========
Total Investment Return(a) ...................... 28.92% (25.00)% (13.53)% (5.39)% 30.71%
========
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Year (000) ................... $ 42,538 $ 35,166 $ 50,137 $ 63,748 $ 65,545
Ratio of Gross Expenses to Average Net Assets ... 2.06% 1.85% 1.66% 1.56% 1.60%
Ratio of Net Expenses to Average Net Assets ..... 1.15% 1.15% 1.15% 1.15% 1.15%
Ratio of Net Investment Income (Loss)
to Average Net Assets(b) ...................... 0.02% (0.13%) (0.21%) (0.21%) (0.19%)
Portfolio Turnover Rate ......................... 77% 50% 70% 93% 82%
- ----------
(a) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the year, reinvestment of distributions at
net asset value on the payable date and a redemption on the last day of the
year.
(b) Ratios would have been (0.89%), (0.83%), (0.72%), (0.62%) and (0.64%),
respectively, had the Manager not waived and assumed expenses.
(c) Amount represents $0.002 per share.
See Notes to Financial Statements 9
EACM SELECT MANAGERS EQUITY FUND
================================================================================
NOTES TO FINANCIAL STATEMENTS
NOTE 1--ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES:
EACM Select Managers Equity Fund (the "Fund") formerly EAI Select Managers
Equity Fund, is organized as a Massachusetts business trust on September 27,
1995, is registered under the Investment Company Act of 1940 as an open-end
diversified management company. At a meeting of the Board of Trustees of the
Fund, including the "non-interested" Trustees (as defined in the Investment
Company Act of 1940, as amended) held on November 7, 2003 the Trustees agreed to
change the name of the Fund from EAI Select Managers Equity Fund to EACM Select
Managers Equity Fund. The primary investment objective of the Fund is to achieve
long-term capital appreciation.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
financial statements are presented in conformity with generally accepted
accounting principles in the United States. The preparation of financial
statements in conformity with generally accepted accounting principles in the
United States requires management to make estimates and assumptions that affect
reported amounts in the financial statements. Actual results could differ from
these estimates.
A. SECURITY VALUATION--Securities traded on national exchanges or traded in
the NASDAQ National Market System are valued at the last sales prices
reported at the close of business on the principal markets for such
securities on the last business day of the year. Over-the-counter
securities not included in the NASDAQ National Market System and listed
securities for which no sale was reported are valued at the last bid price.
Short-term obligations with more than sixty days remaining to maturity are
valued at market. Short-term obligations with sixty days or less to
maturity are valued at amortized cost, which, with accrued interest,
approximates market value. Securities for which quotations are not readily
available are stated at fair value as determined by the Board of Trustees.
B. FEDERAL INCOME TAXES--It is the Fund's policy to comply with the provisions
of Subchapter M of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable income to its
shareholders. Therefore, no federal income tax provision is required.
C. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS--Distributions to shareholders
are recorded on the ex-dividend date. Income distributions and capital gain
distributions are determined in accordance with income tax regulations,
which may differ from such amounts reported in accordance with generally
accepted accounting principles in the United States. These "book/tax"
differences are either considered temporary or permanent in nature. To the
extent these differences are permanent in nature, such amounts are
reclassified within the capital accounts based on their federal tax basis
treatment; temporary differences do not require reclassification.
D. SECURITY TRANSACTIONS AND INVESTMENT INCOME--Security transactions are
accounted for on the date the securities are purchased or sold. Realized
gains and losses on securities are determined on the specific
identification cost method. Dividend income is recorded on ex-dividend
date. Interest income is accrued as earned.
NOTE 2--AGREEMENTS AND TRANSACTIONS OF RELATED PARTIES--Evaluation Associates
Capital Markets, Inc. (the "Manager"), a wholly owned subsidiary of EACM
Partners, L.P. (the "Parent"), earned fees of $352,189 for the year ended
December 31, 2003 for management of the Fund. The fee is based on an annual rate
of 0.92% of average daily net assets. For the year ended December 31, 2003, the
Manager agreed to waive management fees and assumed expenses in the amount of
$347,901 which represents the amount exceeding a self imposed expense limitation
of 1.15% of average daily net assets per annum through December 31, 2003.
Effective January 1, 2004 the limitation changed to 1.25% and will remain in
effect until December 31, 2004.
Certain officers and trustees of the Fund are officers, directors, or partners
of the Manager or Parent.
Affiliates of the Manager or Parent and service providers to the Fund own
2,867,550 shares (50.8%) and 340,196 shares (6.0%), respectively, of the
outstanding shares of the Fund. Additionally, 1,633,236 shares are owned by
three other shareholders, each of whom owns 15.6%, 7.6% and 5.7% of the
outstanding shares of the Fund, respectively.
The Manager pays from its management fee four Subadvisers a fee at the annual
rate of 0.375 of 1% and one Subadviser a fee at the annual rate of 0.25 of 1% of
the average monthly net asset value of the Fund managed by that Subadviser. One
of the Subadvisers reimbursed the Fund $4,688 for a trading loss incurred by the
Fund during the year ended December 31, 2003.
At December 31, 2003, the Subadvisers are Iridian Asset Management LLC, Goldman
Sachs Asset Management,
10
EACM SELECT MANAGERS EQUITY FUND
================================================================================
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
L.P. Mastrapasqua Asset Management, Inc., Chartwell Investment Partners., and
Siphron Capital Management. On February 13, 2003 the Board of Trustees met and
terminated the subadvisery agreement of Cohen, Klingenstein & Marks, Inc. and
approved the subadvisery agreement of Chartwell Investment Partners effective
March 7, 2003.
In accordance with a Portfolio Accounting and Administration Agreement with Van
Eck Associates Corporation, the Fund accrued $100,000 in administration fees for
the year ended December 31, 2003. The annual fee is graduated, beginning at 0.20
of 1% of the average daily net assets of less than $100 million to 0.12 of 1% of
the average daily net assets in excess of $260 million. There is a minimum
annual fee of $100,000 payable to Van Eck Associates Corporation.
The Fund accrued $46,100 of legal fees payable to Day, Berry & Howard LLP,
counsel to the Fund, for the year ended December 31, 2003 for legal services in
conjunction with the Fund's ongoing operations.
DISTRIBUTION AGREEMENT--Under the terms of a Distribution Agreement with the
Fund, EACM Securities Inc., a wholly owned subsidiary of the Parent, serves as
the Distributor of the Fund's shares. EACM Securities, Inc., does not receive
any fees for services provided pursuant to this agreement.
NOTE 3--PURCHASES AND SALES--Purchases and sales of securities, other than U.S.
government securities and short-term obligations, aggregated $28,468,213 and
$30,556,114, respectively, for the year ended December 31, 2003. For federal
income tax purposes the cost of investments owned at December 31, 2003 was
$38,823,640.
Primary differences between book and tax basis unrealized appreciation is
primarily attributable to wash sales. As of December 31, 2003, net unrealized
appreciation for federal income tax purposes aggregated $4,272,623 of which
$5,141,932 related to appreciated securities and $869,309 related to depreciated
securities.
NOTE 4--CAPITAL LOSS CARRYFORWARDS--At December 31, 2003, the Fund had for tax
purposes, capital loss carryforwards of $7,338,423. The capital loss
carryforwards of $1,903,579, $5,013,774 and $421,070 expire on December 31,
2011, December 31, 2010 and December 31, 2009, respectively.
11
EACM SELECT MANAGERS EQUITY FUND
================================================================================
TAX INFORMATION (UNAUDITED)
By now shareholders to whom year-end tax reporting is required by the IRS should
have received their 2003 Form 1099 DIV from the Fund.
During the year ended December 31, 2003, the Fund paid a dividend in the amount
of $0.002 per share. This dividend was paid from net investment income. Pursuant
to the Jobs and Growth Tax Relief Reconciliation Act of 2003, this dividend of
net investment income is qualified dividend income and is eligible for a maximum
allowable rate of 15% for individuals.
For the year ended December 31, 2003 100% of the income paid qualified for
dividends received deduction available to corporation.
Shareholders are advised to consult with their own tax advisors as to the
Federal, state and local tax status of the income received.
12
EACM SELECT MANAGERS EQUITY FUND
================================================================================
Report of Independent Auditors
To the Board of Directors and Shareholders of the
EACM Select Managers Equity Fund:
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the EACM Select Managers Equity
Fund (the "Fund") at December 31, 2003, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the
period then ended and the financial highlights for each of the five years in the
period then ended, in conformity with accounting principles generally accepted
in the United States of America. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audit, which included confirmation of securities at December
31, 2003 by correspondence with the custodian and brokers, provides a reasonable
basis for our opinion.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Kansas City, Missouri
February 9, 2004
13
EACM SELECT MANAGERS EQUITY FUND
====================================================================================================================================
TRUSTEE'S/OFFICER'S NAME,
ADDRESS(1), AGE, POSITION(S)
HELD WITH FUND AND LENGTH
OF SERVICE AS AN EACM SELECT OTHER DIRECTORSHIPS
TRUSTEE OR OFFICER(2): PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS: HELD:
- ------------------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEES
Phillip N. Maisano (56)*+# Chairman, Chief Executive Officer, President and Director of None
Trustee, Chief Executive Officer Evaluation Associates Holding Corporation ("Holding"), which
and President since 1995 is the general partner of EACM Partners, L.P., an investment
consulting and management company and parent of the Manager,
(the "Parent"); Chairman, Chief Executive Officer and Director
of Evaluation Associates Capital Markets, Incorporated (the
"Manager"), an investment management company and investment
adviser to the Fund; Chairman and Director of EACM Securities Inc.
(the "Distributor"), a registered broker/dealer and the distributor
for the Fund.
- ------------------------------------------------------------------------------------------------------------------------------------
Keith Stransky (52)*# Senior Vice President of Holding; Executive Vice President of None
Trustee and Senior Vice the Manager.
President since 1995
- ------------------------------------------------------------------------------------------------------------------------------------
NON-INTERESTED TRUSTEES
Charles E. Collard (70) @^ President, Collard Network L.L.C., insurance claims and lawsuit None
Trustee since 1995 consulting company.
- ------------------------------------------------------------------------------------------------------------------------------------
Neal Jewell (68) @^ Retired/part-time independent consultant. Trustee of Diversified
Trustee since 1995 Investment Portfolios
- ------------------------------------------------------------------------------------------------------------------------------------
James Schuppenhauer (60)+@^ Vice President, Administration and Finance, Belmont None
Trustee since 1995 Abbey College.
- ------------------------------------------------------------------------------------------------------------------------------------
OFFICERS
Peter Gwiazdowski (50)* Vice President and Treasurer of the Manager. None
Treasurer (Chief Financial &
Accounting Officer) since 1995
- ------------------------------------------------------------------------------------------------------------------------------------
14
EACM SELECT MANAGERS EQUITY FUND
====================================================================================================================================
OFFICERS (CONT'D)
Andrew R. Mylott (39)* Associate Schulte Roth & Zabel LLP (1998-1999); Counsel to the None
Vice President and Manager (1999-2000); Vice President and Counsel of the Manager,
Secretary since 2003 Holding and the Distributor.
- ---------------------------------------------------------------------------------------------------------------------------
Thomas H. Elwood (56)& Vice President and Secretary of funds advised by Van Eck None
99 Park Avenue Associates Corporation and officer of funds distributed and
New York, NY 10016 administered by Van Eck Associates Corporation; Vice President
Assistant Secretary since 1998 and/or General Counsel of Van Eck Associates Corporation
and other affiliated companies.
- ----------
(1) The address for each Trustee/Officer is 200 Connecticut Avenue, Suite 600,
Norwalk, CT 06854, except where noted.
(2) Each trustee serves for an indefinite term, until his resignation, death or
removal. Officers are elected yearly by the Trustees.
* An "interested person" as defined in the Investment Company Act of 1940.
+ Member of the Executive Committee--exercises general powers of Board of
Trustees between meetings of the Board. The committee did not meet in 2003.
# Member of the Nominating Committee for interested Trustees. Such committee
will not consider nominees recommended by shareholders. The committee did
not meet in 2003.
^ Member of the Nominating Committee for non-interested Trustees. Such
committee will not consider nominees recommended by shareholders. The
committee did not meet in 2003.
@ Member of the Audit Committee--reviews fees, services, procedures,
conclusions and recommendations of independent auditors. The Audit
Committee met three times in the year ended December 31, 2003.
& Thomas H. Elwood resigned as Assistant Secretary, effective February 11,
2004. A proposed replacement will be recommended at the next regularly
scheduled Board of Trustees meeting.
15
Item 2. Code of Ethics.
(a) The Registrant has adopted a code of ethics (the "Code of
Ethics") that applies to its principal executive and senior
financial officers.
(b) The Registrant has not amended its Code of Ethics during the
period covered by the shareholder report presented in Item 1
hereto.
(c) The Registrant has not granted a wavier or an implicit wavier
from a provision of its Code of Ethics during the period covered
by the Shareholder report presented in Item 1 hereto.
(d) The registrant's Code of Ethics is attached as an Exhibit
hereto.
Item 3. Audit Committee Financial Expert.
(a)i On May 15, 2003 the Registrant's board of trustees determined
that the registrant has at least one audit committee financial
expert serving on the audit committee.
(a)ii The audit committee financial expert is James W. Schuppenhauer
who is independent (as defined in the instructions to Form N-CSR
Item 3 (a) (2)).
Item 4. Principal Accountant Fees and Services.
Fees Billed by PricewaterhouseCoopers LLP Related to the Fund.
PricewaterhouseCoopers LLP billed the Fund aggregate fees for
services rendered to the Fund for the last two years as follows:
2003 2002
------- -------
Audit Fees $23,000 $22,000
Audit -Related Fees $ 5,000 $ --
Tax Compliance Fees $ 5,000 $ 5,000
All Other fees $ -- $ --
Totals $33,000 $27,000
PricewaterhouseCoopers LLP billed the Fund aggregate non-audit
fees of $10,000 (43% of audit fees) for the year ended December
31, 2003, and $5,000 (23% of audit fees) for the year ended
December 31, 2002 for non-audit services rendered to the Fund.
The non-audit services were for tax compliance and on-site
reviews of certain subadvisers of the Fund. All non-audit
services and fees, for both years shown, were pre-approved by
the Fund's audit committee.
Pursuant to its charter, the Fund's audit committee will:
o Pre-approve all audit and non-audit services, to be
provided to the Fund, by the independent accountants as
required by Section 10A of the Securities Exchange Act
of 1934.
o Approve all Evaluation Associates Capital Markets, Inc.
(Investment Manager) non-audit services, provided by the
Fund's independent accountants that relate to the Fund.
o Authorize the Chairman of the audit committee to
approve, between meeting dates, appropriate non-audit
services; however, the Chairman is required to report,
at the next meeting of the audit committee, all such
approvals.
o After review, including review of independence issues,
recommend to the board of trustees the independent
auditors to be selected to audit the financial
statements of the Fund.
PricewaterhouseCoopers LLP billed the Fund and Evaluation
Associates Capital Markets Inc. ("Investment Manager") and EACM
Securities, Inc. (the "Distributor") aggregate fees for
non-audit services rendered for the last two years as follows:
2003 2002
------- -------
Audit-Related $ 5,000 $ --
Tax compliance $21,692 $35,999
All other fees $50,500 $ --
Totals $77,192 $35,999
The audit committee of the board of trustees concluded that the
non-audit services provided by PricewaterhouseCoopers LLP to the
Fund, the Investment Manager and to the Distributor are
compatible with maintaining the principal accountant's
independence.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Reserved.
Item 7. Disclosure of Proxy Voting Policies and Procedures for
Closed-End Management Investment Companies.
Not Applicable.
Item 8. Purchases of Equity Securities by Closed-End Management Company
and Affiliated Purchasers.
Not Applicable.
Item 9. Submission of Matters to a Vote of Security Holders.
Not applicable and not required until reporting periods after
January 1, 2004.
Item 10. Controls and Procedures.
(a) The Chief Executive Officer and the Chief Financial officer have
concluded that the EACM Select Managers Equity Fund disclosure
controls and procedures (as defined in Rule 30a-3(c) under the
Investment Company Act) provide reasonable assurances that
material information relating to the EACM Select Managers Equity
Fund is made known to them by the appropriate persons, based on
their evaluation of these controls and procedures as of a date
within 90 days of the filing date of this report.
(b) There were no significant changes in EACM Select Managers Equity
Fund internal controls or in other factors that could
significantly affect these controls subsequent to the date of
the evaluation referenced in (a) above.
Item 11. Exhibits.
(a) The Code of Ethics is attached as EX-99.CODE ETH
(b) Certifications of principal executive officer and principal
financial officer as required by Rule 30a-2(a) under the
Investment Company Act of 1940 are attached as Exhibit 99.CERT
(c) Certifications of principal executive officer and principal
financial officer as required by rule 30a-2(b) under the
Investment Company Act of 1940 are attached as Exhibit
99.906CERT
16
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.
EACM SELECT MANAGERS EQUITY FUND
- --------------------------------------------------------------------------------
By
/s/ Phillip N. Maisano
- --------------------------------------------------------------------------------
Phillip N. Maisano
Chief Executive Officer
Dated: February 24, 2004
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By
/s/ Phillip N. Maisano
- --------------------------------------------------------------------------------
Phillip N. Maisano
Chief Executive Officer
Dated: February 24, 2004
By
/s/ Peter P. Gwiazdowski
- --------------------------------------------------------------------------------
Peter P. Gwiazdowski
Chief Financial Officer
Dated: February 24, 2004