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 811-04719
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The Westwood Funds
---------------------------------------------
(Exact name of registrant as specified in charter)
One Corporate Center
Rye, New York 10580-1422
---------------------------------------------
(Address of principal executive offices) (Zip code)
Bruce N. Alpert
Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580-1422
---------------------------------------------
(Name and address of agent for service)
registrant's telephone number, including area code: 1-800-422-3554
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Date of fiscal year end: September 30
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Date of reporting period: March 31, 2006
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 100 F Street, NE,
Washington, DC 20549. The OMB has reviewed this collection of information under
the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
The Report to Shareholders is attached herewith.
THE WESTWOOD FUNDS
================================================================================
EQUITY FUND SMALLCAP EQUITY FUND
BALANCED FUND INCOME FUND
INTERMEDIATE BOND FUND MIGHTY MITES(SM) FUND
CLASS AAA SHARES CLASS A SHARES
------------------------------------------------ -------------------------------------------------------
Average Annual Returns -- March 31, 2006 (a)(e) Average Annual Returns -- March 31, 2006 (a)(b)(e)
Since Since
1 Year 5 Year 10 Year Inception 1 Year 5 Year 10 Year Inception
------------------------------------------------ -------------------------------------------------------
Equity ............ 17.37% 5.13% 10.39% 12.05% 12.41% 3.99% 9.65% 11.62%
Balanced .......... 11.80 5.23 8.89 10.54 7.10 4.11 8.18 9.93
Intermediate Bond . 1.62 3.98 5.50 5.75 (2.60) 3.03 5.02 5.42
SmallCap Equity ... 27.50 4.75 N/A 8.33 22.19 3.81 N/A 7.79
Income ............ 17.14 17.35 N/A 10.80 12.19 16.13 N/A 10.12
Mighty Mites(SM) .. 16.20 12.33 N/A 14.27 11.24 11.19 N/A 13.52
CLASS B SHARES CLASS C SHARES
------------------------------------------------ -------------------------------------------------------
Average Annual Returns -- March 31, 2006 (a)(c)(e) Average Annual Returns -- March 31, 2006 (a)(d)(e)
Since Since
1 Year 5 Year 10 Year Inception 1 Year 5 Year 10 Year Inception
------------------------------------------------ -------------------------------------------------------
Equity ............ 11.58% 4.01% 9.89% 11.74% 15.54% 4.36% 9.87% 11.73%
Balanced .......... 5.98 4.08 8.40 10.09 9.97 4.51 8.44 10.12
Intermediate Bond . (4.23) 2.78 5.08 5.46 (0.62) 3.22 5.12 5.48
SmallCap Equity ... 21.59 3.66 N/A 7.90 23.85 3.90 N/A 7.84
Income ............ 11.28 16.54 N/A 10.47 15.31 16.90 N/A 10.55
Mighty Mites(SM) .. 10.34 11.27 N/A 13.76 14.27 11.55 N/A 13.77
(a) TOTAL RETURNS AND AVERAGE ANNUAL RETURNS REFLECT CHANGES IN SHARE PRICE AND
REINVESTMENT OF DISTRIBUTIONS AND ARE NET OF EXPENSES. OF COURSE, RETURNS
REPRESENT PAST PERFORMANCE AND DO NOT GUARANTEE FUTURE RESULTS. INVESTMENT
RETURNS AND THE PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE. WHEN SHARES
ARE REDEEMED, THEY MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. FOR
THE INTERMEDIATE BOND, SMALLCAP EQUITY, INCOME, AND MIGHTY MITES(SM) FUNDS,
THE ADVISER REIMBURSED EXPENSES TO LIMIT THE EXPENSE RATIO. HAD SUCH
LIMITATIONS NOT BEEN IN PLACE, RETURNS WOULD HAVE BEEN LOWER. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA PRESENTED.
VISIT WWW.GABELLI.COM FOR PERFORMANCE INFORMATION AS OF THE MOST RECENT
MONTH END. INVESTORS SHOULD CONSIDER THE INVESTMENT OBJECTIVES, RISKS,
CHARGES, AND EXPENSES OF THE FUND CAREFULLY BEFORE INVESTING. THE PROSPECTUS
CONTAINS MORE INFORMATION ABOUT THIS AND OTHER MATTERS AND SHOULD BE READ
CAREFULLY BEFORE INVESTING.
(b) INCLUDES THE EFFECT OF THE MAXIMUM 4.0% SALES CHARGE AT THE BEGINNING OF THE
PERIOD.
(c) INCLUDES THE EFFECT OF THE APPLICABLE CONTINGENT DEFERRED SALES CHARGE UPON
REDEMPTION OF CLASS B SHARES WITHIN 72 MONTHS.
(d) INCLUDES THE EFFECT OF THE APPLICABLE CONTINGENT DEFERRED SALES CHARGE UPON
REDEMPTION OF CLASS C SHARES WITHIN 12 MONTHS.
(e) THE PERFORMANCE OF THE CLASS AAA SHARES IS USED TO CALCULATE PERFORMANCE FOR
THE PERIODS PRIOR TO THE ISSUANCE OF CLASS A SHARES, CLASS B SHARES, AND
CLASS C SHARES. THE PERFORMANCE FOR THE CLASS B SHARES AND CLASS C SHARES
WOULD HAVE BEEN LOWER DUE TO THE ADDITIONAL EXPENSES ASSOCIATED WITH THESE
CLASSES OF SHARES. THE INCEPTION DATES FOR THE CLASS AAA SHARES AND THE
INITIAL ISSUANCE DATES FOR THE CLASS A SHARES, CLASS B SHARES, AND CLASS C
SHARES AFTER WHICH SHARES REMAINED CONTINUOUSLY OUTSTANDING ARE LISTED
BELOW.
Class AAA Shares Class A Shares Class B Shares Class C Shares
---------------- -------------- -------------- --------------
Equity .................... 01/02/87 01/28/94 03/27/01 02/13/01
Balanced .................. 10/01/91 04/06/93 03/27/01 09/25/01
Intermediate Bond ......... 10/01/91 07/26/01 03/27/01 10/22/01
SmallCap Equity ........... 04/15/97 11/26/01 03/27/01 11/26/01
Income .................... 09/30/97 05/09/01 11/26/01 11/26/01
Mighty Mites(SM) .......... 05/11/98 11/26/01 06/06/01 08/03/01
THE WESTWOOD FUNDS
DISCLOSURE OF FUND EXPENSES (UNAUDITED)
For the Six Month Period from October 1, 2005 through March 31, 2006
EXPENSE TABLE
================================================================================
We believe it is important for you to understand the impact of fees and expenses
regarding your investment. All mutual funds have operating expenses. As a
shareholder of a fund, you incur ongoing costs, which include costs for
portfolio management, administrative services, and shareholder reports (like
this one), among others. Operating expenses, which are deducted from a fund's
gross income, directly reduce the investment return of a fund. When a fund's
expenses are expressed as a percentage of its average net assets, this figure is
known as the expense ratio. The following examples are intended to help you
understand the ongoing costs (in dollars) of investing in your Fund and to
compare these costs with those of other mutual funds. The examples are based on
an investment of $1,000 made at the beginning of the period shown and held for
the entire period.
The Expense Table below illustrates your Fund's costs in two ways:
ACTUAL FUND RETURN: This section provides information about actual account
values and actual expenses. You may use this section to help you to estimate the
actual expenses that you paid over the period after any fee waivers and expense
reimbursements. The "Ending Account Value" shown is derived from the Fund's
ACTUAL return during the past six months, and the "Expenses Paid During Period"
shows the dollar amount that would have been paid by an investor who started
with $1,000 in the Fund. You may use this information, together with the amount
you invested, to estimate the expenses that you paid over the period.
To do so, 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
given for your Fund under the heading "Expenses Paid During Period" to estimate
the expenses you paid during this period.
HYPOTHETICAL 5% RETURN: This section provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio. It assumes a hypothetical annualized return of 5% before expenses during
the period shown. In this case - because the hypothetical return used is NOT the
Fund's actual return - the results do not apply to your investment and you
cannot use the hypothetical account value and expense to estimate the actual
ending account balance or expenses you paid for the period. This example is
useful in making comparisons of the ongoing costs of investing in the Fund and
other funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in shareholder reports of 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 fees, or exchange fees, if any, which are described
in the Prospectus. If these costs were applied to your account, your costs would
be higher. Therefore, the 5% hypothetical return is useful in comparing ongoing
costs only, and will not help you determine the relative total costs of owning
different funds. The "Annualized Expense Ratio" represents the actual expenses
for the last six months and may be different from the expense ratio in the
Financial Highlights which is for the six months ended March 31, 2006.
Beginning Ending Annualized Expenses
Account Value Account Value Expense Paid During
10/01/05 03/31/06 Ratio Period*
- --------------------------------------------------------------------------------
WESTWOOD EQUITY FUND
- --------------------------------------------------------------------------------
Actual Fund Return
Class AAA $1,000.00 $1,080.50 1.51% $ 7.83
Class A $1,000.00 $1,079.40 1.76% $ 9.12
Class B $1,000.00 $1,077.50 2.26% $11.71
Class C $1,000.00 $1,076.20 2.26% $11.70
Hypothetical 5% Return
Class AAA $1,000.00 $1,017.40 1.51% $ 7.59
Class A $1,000.00 $1,016.16 1.76% $ 8.85
Class B $1,000.00 $1,013.66 2.26% $11.35
Class C $1,000.00 $1,013.66 2.26% $11.35
2
THE WESTWOOD FUNDS
DISCLOSURE OF FUND EXPENSES (CONTINUED) (UNAUDITED)
For the Six Month Period from October 1, 2005 through March 31, 2006
EXPENSE TABLE
================================================================================
Beginning Ending Annualized Expenses
Account Value Account Value Expense Paid During
10/01/05 03/31/06 Ratio Period*
- --------------------------------------------------------------------------------
WESTWOOD BALANCED FUND
- --------------------------------------------------------------------------------
Actual Fund Return
Class AAA $1,000.00 $1,054.70 1.26% $ 6.45
Class A $1,000.00 $1,052.60 1.51% $ 7.73
Class B $1,000.00 $1,051.10 2.01% $10.28
Class C $1,000.00 $1,050.20 2.01% $10.27
Hypothetical 5% Return
Class AAA $1,000.00 $1,018.65 1.26% $ 6.34
Class A $1,000.00 $1,017.40 1.51% $ 7.59
Class B $1,000.00 $1,014.91 2.01% $10.10
Class C $1,000.00 $1,014.91 2.01% $10.10
- --------------------------------------------------------------------------------
WESTWOOD INTERMEDIATE BOND FUND
- --------------------------------------------------------------------------------
Actual Fund Return
Class AAA $1,000.00 $ 997.30 1.00% $ 4.98
Class A $1,000.00 $ 995.90 1.10% $ 5.47
Class B $1,000.00 $ 992.70 1.75% $ 8.69
Class C $1,000.00 $ 985.50 1.75% $ 8.66
Hypothetical 5% Return
Class AAA $1,000.00 $1,019.95 1.00% $ 5.04
Class A $1,000.00 $1,019.45 1.10% $ 5.54
Class B $1,000.00 $1,016.21 1.75% $ 8.80
Class C $1,000.00 $1,016.21 1.75% $ 8.80
- --------------------------------------------------------------------------------
WESTWOOD SMALLCAP EQUITY FUND
- --------------------------------------------------------------------------------
Actual Fund Return
Class AAA $1,000.00 $1,154.10 1.50% $ 8.06
Class A $1,000.00 $1,152.90 1.75% $ 9.39
Class B $1,000.00 $1,150.00 2.25% $12.06
Class C $1,000.00 $1,150.90 2.25% $12.07
Hypothetical 5% Return
Class AAA $1,000.00 $1,017.45 1.50% $ 7.54
Class A $1,000.00 $1,016.21 1.75% $ 8.80
Class B $1,000.00 $1,013.71 2.25% $11.30
Class C $1,000.00 $1,013.71 2.25% $11.30
Beginning Ending Annualized Expenses
Account Value Account Value Expense Paid During
10/01/05 03/31/06 Ratio Period*
- --------------------------------------------------------------------------------
WESTWOOD INCOME FUND
- --------------------------------------------------------------------------------
Actual Fund Return
Class AAA $1,000.00 $1,008.00 1.50% $ 7.51
Class A $1,000.00 $1,007.20 1.75% $ 8.76
Class B $1,000.00 $1,004.70 2.25% $11.25
Class C $1,000.00 $1,005.10 2.25% $11.25
Hypothetical 5% Return
Class AAA $1,000.00 $1,017.45 1.50% $ 7.54
Class A $1,000.00 $1,016.21 1.75% $ 8.80
Class B $1,000.00 $1,013.71 2.25% $11.30
Class C $1,000.00 $1,013.71 2.25% $11.30
- --------------------------------------------------------------------------------
WESTWOOD MIGHTY MITES(SM) FUND
- --------------------------------------------------------------------------------
Actual Fund Return
Class AAA $1,000.00 $1,084.90 1.67% $ 8.68
Class A $1,000.00 $1,083.10 1.92% $ 9.97
Class B $1,000.00 $1,080.60 2.42% $12.55
Class C $1,000.00 $1,080.30 2.42% $12.55
Hypothetical 5% Return
Class AAA $1,000.00 $1,016.60 1.67% $ 8.40
Class A $1,000.00 $1,015.36 1.92% $ 9.65
Class B $1,000.00 $1,012.86 2.42% $12.14
Class C $1,000.00 $1,012.86 2.42% $12.14
* Expenses are equal to the Fund's annualized expense ratio for the last six
months multiplied by the average account value over the period, multiplied by
the number of days in the most recent fiscal half-year, then divided by 365.
- --------------------------------------------------------------------------------
We have separated the portfolio manager's commentary from the financial
statements and investment portfolio due to corporate governance regulations
stipulated by the Sarbanes-Oxley Act of 2002. We have done this to ensure that
the content of the portfolio manager's commentary is unrestricted. The
financial statements and investment portfolio are mailed separately from the
commentary. Both the commentary and the financial statements, including the
portfolio of investments, will be available on our website at
www.gabelli.com/funds.
- --------------------------------------------------------------------------------
3
SUMMARY OF PORTFOLIO HOLDINGS (UNAUDITED)
The following table presents portfolio holdings as a percent of total net
assets:
- --------------------------------------------------------------------------------
WESTWOOD EQUITY FUND
- --------------------------------------------------------------------------------
Diversified Industrial ........................ 12.5%
Energy: Oil ................................... 9.9%
Brokerage ..................................... 8.8%
Banking ....................................... 8.5%
Financial Services ............................ 7.5%
Telecommunications ............................ 5.0%
Retail ........................................ 4.0%
Transportation ................................ 3.8%
Computer Software and Services ................ 3.8%
Business Services ............................. 3.8%
Utilities ..................................... 3.7%
Consumer Products ............................. 3.6%
Food and Beverage ............................. 2.6%
Energy: Integrated ............................ 2.5%
Aerospace ..................................... 2.5%
Communications Equipment ...................... 2.5%
Hotels and Gaming ............................. 2.5%
Metals and Mining ............................. 2.5%
Energy: Natural Gas ........................... 2.4%
Computer Hardware ............................. 2.4%
Paper and Forest Products ..................... 1.3%
Specialty Chemicals ........................... 1.3%
Aviation: Parts and Services .................. 1.2%
Other Assets and Liabilities (Net) ............ 1.4%
------
100.0%
======
- --------------------------------------------------------------------------------
WESTWOOD BALANCED FUND
- --------------------------------------------------------------------------------
U.S. Government Obligations ................... 13.9%
U.S. Government Agency Obligations ............ 12.9%
Diversified Industrial ........................ 8.0%
Banking ....................................... 6.9%
Energy: Oil ................................... 6.8%
Brokerage ..................................... 6.4%
Financial Services ............................ 4.5%
Telecommunications ............................ 4.1%
Retail ........................................ 3.3%
Computer Hardware ............................. 2.9%
Business Services ............................. 2.4%
Consumer Products ............................. 2.3%
Computer Software and Services ................ 2.3%
Transportation ................................ 2.3%
Energy: Integrated ............................ 2.3%
Metals and Mining ............................. 2.2%
Utilities ..................................... 2.2%
Food and Beverage ............................. 2.2%
Aerospace ..................................... 1.5%
Communications Equipment ...................... 1.5%
Hotels and Gaming ............................. 1.5%
Energy: Natural Gas ........................... 1.5%
Real Estate Investment Trusts ................. 1.1%
Specialty Chemicals ........................... 0.8%
Paper and Forest Products ..................... 0.8%
Aviation: Parts and Services .................. 0.8%
Foreign Government Bonds ...................... 0.7%
Asset Backed Securities ....................... 0.5%
Other Assets and Liabilities (Net) ............ 1.4%
------
100.0%
======
- --------------------------------------------------------------------------------
WESTWOOD INTERMEDIATE BOND FUND
- --------------------------------------------------------------------------------
Corporate Bonds ............................... 33.7%
U.S. Government Agency Obligations ............ 33.0%
U.S. Government Obligations ................... 27.9%
Asset Backed Securities ....................... 2.1%
Foreign Government Bonds ...................... 1.6%
Other Assets and Liabilities (Net) ............ 1.7%
------
100.0%
======
- --------------------------------------------------------------------------------
WESTWOOD SMALLCAP EQUITY FUND
- --------------------------------------------------------------------------------
Real Estate ................................... 12.4%
Financial Services ............................ 10.9%
Equipment and Supplies ........................ 10.0%
Energy and Utilities .......................... 8.1%
Aerospace ..................................... 6.0%
Transportation ................................ 5.9%
Computer Software and Services ................ 5.3%
Building and Construction ..................... 5.0%
Hotels and Gaming ............................. 4.3%
Telecommunications ............................ 4.0%
Diversified Industrial ........................ 4.0%
Health Care ................................... 4.0%
Retail ........................................ 3.1%
Consumer Products ............................. 3.1%
Electronics ................................... 2.1%
Food and Beverage ............................. 2.0%
Metals and Mining ............................. 1.9%
Business Services ............................. 1.8%
Paper and Forest Products ..................... 1.0%
Other Assets and Liabilities (Net) ............ 5.1%
------
100.0%
======
4
SUMMARY OF PORTFOLIO HOLDINGS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
WESTWOOD INCOME FUND
- --------------------------------------------------------------------------------
Financial Services ............................ 24.4%
Transportation ................................ 11.0%
Real Estate Investment Trusts ................. 10.1%
Energy and Utilities: Natural Gas ............. 7.5%
Telecommunications ............................ 7.5%
U.S. Government Obligations ................... 6.8%
U.S. Government Agency Obligations ............ 5.4%
Metals and Mining ............................. 3.9%
Entertainment ................................. 2.6%
Broadcasting .................................. 2.5%
Energy and Utilities: Integrated .............. 2.5%
Health Care ................................... 2.5%
Energy and Utilities: Electric ................ 2.5%
Food and Beverage ............................. 2.4%
Energy and Utilities: Oil ..................... 2.4%
Specialty Chemicals ........................... 1.2%
Other Assets and Liabilities (Net) ............ 4.8%
------
100.0%
======
- --------------------------------------------------------------------------------
WESTWOOD MIGHTY MITES(SM) FUND
- --------------------------------------------------------------------------------
Financial Services ............................ 13.7%
Health Care ................................... 11.5%
Manufactured Housing and Recreational Vehicles 7.6%
Equipment and Supplies ........................ 6.6%
Diversified Industrial ........................ 6.5%
Automotive: Parts and Accessories ............. 4.2%
Broadcasting .................................. 4.2%
Consumer Products ............................. 4.1%
Business Services ............................. 4.1%
Electronics ................................... 3.4%
Telecommunications ............................ 3.3%
Energy and Utilities: Services ................ 2.7%
Real Estate ................................... 2.6%
Energy and Utilities: Natural Gas ............. 2.5%
Food and Beverage ............................. 2.3%
Energy and Utilities: Integrated .............. 2.2%
Entertainment ................................. 2.2%
Computer Software and Services ................ 2.1%
Specialty Chemicals ........................... 2.0%
Aviation: Parts and Services .................. 1.8%
Energy and Utilities: Water ................... 1.6%
Publishing .................................... 1.3%
U.S. Government Obligations ................... 1.1%
Educational Services .......................... 1.0%
Retail ........................................ 0.8%
Closed-End Funds .............................. 0.6%
Restaurants ................................... 0.6%
Energy and Utilities: Electric ................ 0.5%
Paper and Forest Products ..................... 0.5%
Building and Construction ..................... 0.5%
Wireless Communications ....................... 0.3%
Hotels and Gaming ............................. 0.3%
Agriculture ................................... 0.3%
Communications Equipment ...................... 0.3%
Transportation ................................ 0.1%
Cable ......................................... 0.1%
Consumer Services ............................. 0.0%
Metals and Mining ............................. 0.0%
Other Assets and Liabilities (Net) ............ 0.5%
------
100.0%
======
THE FUNDS FILE A COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE SEC FOR THE
FIRST AND THIRD QUARTERS OF EACH FISCAL YEAR ON FORM N-Q, THE LAST OF WHICH WAS
FILED FOR THE QUARTER ENDED DECEMBER 31, 2005. SHAREHOLDERS MAY OBTAIN THIS
INFORMATION AT WWW.GABELLI.COM OR BY CALLING THE FUND AT 800-GABELLI
(800-422-3554). THE FUNDS' FORM N-Q IS AVAILABLE ON THE SEC'S WEBSITE AT
WWW.SEC.GOV AND MAY ALSO BE REVIEWED AND COPIED AT THE COMMISSION'S PUBLIC
REFERENCE ROOM IN WASHINGTON, DC. INFORMATION ON THE OPERATION OF THE PUBLIC
REFERENCE ROOM MAY BE OBTAINED BY CALLING 1-800-SEC-0330.
PROXY VOTING
Each Fund files Form N-PX with its complete proxy voting record for the 12
months ended June 30th, no later than August 31st of each year. A description of
the Funds' proxy voting policies, procedures, and how the Funds voted proxies
relating to portfolio securities are available without charge, upon request, (i)
by calling 800-GABELLI (800-422-3554); (ii) by writing to The Gabelli Funds at
One Corporate Center, Rye, NY 10580-1422; and (iii) by visiting the Securities
and Exchange Commission's website at www.sec.gov.
5
WESTWOOD EQUITY FUND
SCHEDULE OF INVESTMENTS -- MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- -----
COMMON STOCKS -- 98.6%
AEROSPACE -- 2.5%
30,300 Boeing Co. ................$ 1,136,730 $ 2,361,279
31,500 Lockheed Martin Corp. ..... 1,605,535 2,366,595
------------ ------------
2,742,265 4,727,874
------------ ------------
AVIATION: PARTS AND SERVICES -- 1.2%
40,100 United Technologies Corp. . 1,658,852 2,324,597
------------ ------------
BANKING -- 8.5%
101,000 Bank of America Corp. ..... 3,011,290 4,599,540
91,933 Citigroup Inc. ............ 3,750,629 4,341,995
114,484 JPMorgan Chase & Co. ...... 4,058,404 4,767,114
41,700 Wachovia Corp. ............ 2,022,024 2,337,285
------------ ------------
12,842,347 16,045,934
------------ ------------
BROKERAGE -- 8.8%
34,100 Bear Stearns
Companies Inc. ........... 2,346,728 4,729,670
37,700 Legg Mason Inc. ........... 4,099,049 4,724,941
32,700 Lehman Brothers
Holdings Inc. ............ 4,098,267 4,726,131
38,700 Morgan Stanley ............ 2,247,493 2,431,134
------------ ------------
12,791,537 16,611,876
------------ ------------
BUSINESS SERVICES -- 3.8%
101,000 Automatic Data
Processing Inc. .......... 4,718,425 4,613,680
21,500 FedEx Corp. ............... 2,246,996 2,428,210
------------ ------------
6,965,421 7,041,890
------------ ------------
COMMUNICATIONS EQUIPMENT -- 2.5%
206,200 Motorola Inc. ............. 4,034,473 4,724,042
------------ ------------
COMPUTER HARDWARE -- 2.4%
53,700 International Business
Machines Corp. ........... 4,373,288 4,428,639
------------ ------------
COMPUTER SOFTWARE AND SERVICES -- 3.8%
168,800 Microsoft Corp. ........... 4,561,593 4,593,048
181,400 Oracle Corp.+ ............. 2,418,906 2,483,366
------------ ------------
6,980,499 7,076,414
------------ ------------
CONSUMER PRODUCTS -- 3.6%
29,800 Altria Group Inc. ......... 1,623,661 2,111,628
80,600 Colgate-Palmolive Co. ..... 4,126,829 4,602,260
------------ ------------
5,750,490 6,713,888
------------ ------------
DIVERSIFIED INDUSTRIAL -- 12.5%
56,900 3M Co. .................... 4,468,250 4,306,761
65,180 Eaton Corp. ............... 4,154,034 4,756,184
136,000 General Electric Co. ...... 3,986,753 4,730,080
22,100 IPSCO Inc. ................ 2,159,573 2,300,389
85,000 ITT Industries Inc. ....... 3,575,057 4,778,700
27,200 Textron Inc. .............. 2,114,262 2,540,208
------------ ------------
20,457,929 23,412,322
------------ ------------
ENERGY: INTEGRATED -- 2.5%
75,200 ConocoPhillips ............ 3,276,641 4,748,880
------------ ------------
ENERGY: NATURAL GAS -- 2.4%
69,906 Apache Corp. .............. 3,020,788 4,579,542
------------ ------------
MARKET
SHARES COST VALUE
------ ---- -----
ENERGY: OIL -- 9.9%
70,000 Baker Hughes Inc. .........$ 3,967,955 $ 4,788,000
79,200 Exxon Mobil Corp. ......... 3,502,198 4,820,112
60,700 Marathon Oil Corp. ........ 3,883,203 4,623,519
41,235 Murphy Oil Corp. .......... 1,892,454 2,054,328
25,305 Occidental
Petroleum Corp. .......... 1,948,439 2,344,508
------------ ------------
15,194,249 18,630,467
------------ ------------
FINANCIAL SERVICES -- 7.5%
90,900 American Express Co. ...... 3,252,324 4,776,795
49,800 Franklin Resources Inc. ... 4,321,690 4,693,152
60,700 Prudential
Financial Inc. ........... 3,409,871 4,601,667
------------ ------------
10,983,885 14,071,614
------------ ------------
FOOD AND BEVERAGE -- 2.6%
94,800 General Mills Inc. ........ 4,569,382 4,804,464
------------ ------------
HOTELS AND GAMING -- 2.5%
69,600 Starwood Hotels & Resorts
Worldwide Inc. ........... 3,594,773 4,714,008
------------ ------------
METALS AND MINING -- 2.5%
58,500 Phelps Dodge Corp. ........ 3,692,309 4,711,005
------------ ------------
PAPER AND FOREST PRODUCTS -- 1.3%
54,642 Rayonier Inc. ............. 1,414,844 2,491,129
------------ ------------
RETAIL -- 4.0%
67,500 Federated Department
Stores Inc. .............. 3,918,274 4,927,500
18,775 Sears Holdings Corp.+ ..... 2,413,481 2,482,806
------------ ------------
6,331,755 7,410,306
------------ ------------
SPECIALTY CHEMICALS -- 1.3%
38,600 PPG Industries Inc. ....... 2,433,189 2,445,310
------------ ------------
TELECOMMUNICATIONS -- 5.0%
36,970 ALLTEL Corp. .............. 2,088,488 2,393,808
51,900 Harris Corp. .............. 1,513,036 2,454,351
135,804 Verizon
Communications Inc. ...... 5,154,559 4,625,484
------------ ------------
8,756,083 9,473,643
------------ ------------
TRANSPORTATION -- 3.8%
59,100 Burlington Northern Santa
Fe Corp. ................. 2,869,164 4,924,803
45,475 Overseas Shipholding
Group Inc. ............... 2,539,571 2,179,617
------------ ------------
5,408,735 7,104,420
------------ ------------
UTILITIES -- 3.7%
88,900 Exelon Corp. .............. 4,869,525 4,702,810
58,200 PG&E Corp. ................ 2,334,208 2,263,980
------------ ------------
7,203,733 6,966,790
------------ ------------
TOTAL COMMON STOCKS ....... 154,477,467 185,259,054
------------ ------------
TOTAL
INVESTMENTS -- 98.6% .....$154,477,467 185,259,054
============
OTHER ASSETS AND
LIABILITIES (NET) -- 1.4% ............... 2,619,000
------------
NET ASSETS -- 100.0% .....................$187,878,054
============
--------------
+ Non-income producing security.
See accompanying notes to financial statements.
6
WESTWOOD BALANCED FUND
SCHEDULE OF INVESTMENTS -- MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- -----
COMMON STOCKS -- 61.7%
AEROSPACE -- 1.5%
14,600 Boeing Co. ................$ 656,511 $ 1,137,778
15,195 Lockheed Martin Corp. ..... 879,118 1,141,600
------------ ------------
1,535,629 2,279,378
------------ ------------
AVIATION: PARTS AND SERVICES -- 0.8%
20,000 United
Technologies Corp. ....... 817,535 1,159,400
------------ ------------
BANKING -- 5.3%
51,200 Bank of America Corp. ..... 1,712,100 2,331,648
48,933 Citigroup Inc. ............ 1,825,468 2,311,106
55,196 JPMorgan Chase & Co. ...... 2,056,751 2,298,361
20,200 Wachovia Corp. ............ 980,426 1,132,210
------------ ------------
6,574,745 8,073,325
------------ ------------
BROKERAGE -- 5.4%
16,400 Bear Stearns
Companies Inc. ........... 1,249,370 2,274,680
18,200 Legg Mason Inc. ........... 2,010,554 2,281,006
16,500 Lehman Brothers
Holdings Inc. ............ 2,074,269 2,384,745
19,200 Morgan Stanley ............ 1,097,366 1,206,144
------------ ------------
6,431,559 8,146,575
------------ ------------
BUSINESS SERVICES -- 2.4%
48,900 Automatic Data
Processing Inc. .......... 2,284,692 2,233,752
12,300 FedEx Corp. ............... 1,285,388 1,389,162
------------ ------------
3,570,080 3,622,914
------------ ------------
COMMUNICATIONS EQUIPMENT -- 1.5%
99,400 Motorola Inc. ............. 1,884,263 2,277,254
------------ ------------
COMPUTER HARDWARE -- 1.6%
28,500 International Business
Machines Corp. ........... 2,238,281 2,350,395
------------ ------------
COMPUTER SOFTWARE AND SERVICES -- 2.3%
80,800 Microsoft Corp. ........... 2,164,240 2,198,568
95,680 Oracle Corp.+ ............. 1,268,806 1,309,859
------------ ------------
3,433,046 3,508,427
------------ ------------
CONSUMER PRODUCTS -- 2.3%
16,800 Altria Group Inc. ......... 904,854 1,190,448
41,000 Colgate-Palmolive Co. ..... 2,105,620 2,341,100
------------ ------------
3,010,474 3,531,548
------------ ------------
DIVERSIFIED INDUSTRIAL -- 7.2%
30,900 3M Co. .................... 2,429,232 2,338,821
31,900 Eaton Corp. ............... 2,055,928 2,327,743
76,000 General Electric Co. ...... 2,187,989 2,643,280
40,990 ITT Industries Inc. ....... 1,793,684 2,304,458
13,500 Textron Inc. .............. 1,050,160 1,260,765
------------ ------------
9,516,993 10,875,067
------------ ------------
ENERGY: INTEGRATED -- 2.3%
37,000 ConocoPhillips ............ 1,800,683 2,336,550
23,500 Kinder Morgan Energy
Partners LP .............. 961,682 1,132,230
------------ ------------
2,762,365 3,468,780
------------ ------------
MARKET
SHARES COST VALUE
------ ---- -----
ENERGY: NATURAL GAS -- 1.5%
33,855 Apache Corp. ..............$ 1,802,603 $ 2,217,841
------------ ------------
ENERGY: OIL -- 6.2%
33,940 Baker Hughes Inc. ......... 1,925,880 2,321,496
42,500 Exxon Mobil Corp. ......... 1,754,234 2,586,550
29,415 Marathon Oil Corp. ........ 1,952,469 2,240,541
23,586 Murphy Oil Corp. .......... 1,048,688 1,175,054
12,100 Occidental
Petroleum Corp. .......... 911,515 1,121,065
------------ ------------
7,592,786 9,444,706
------------ ------------
FINANCIAL SERVICES -- 4.5%
43,800 American Express Co. ...... 1,621,106 2,301,690
24,100 Franklin Resources Inc. ... 2,103,276 2,271,184
29,400 Prudential
Financial Inc. ........... 1,654,058 2,228,814
------------ ------------
5,378,440 6,801,688
------------ ------------
FOOD AND BEVERAGE -- 1.6%
46,500 General Mills Inc. ........ 2,249,859 2,356,620
------------ ------------
HOTELS AND GAMING -- 1.5%
33,620 Starwood Hotels &
Resorts Worldwide Inc. ... 1,813,027 2,277,083
------------ ------------
METALS AND MINING -- 2.2%
10,900 IPSCO Inc. ................ 1,064,338 1,134,581
28,200 Phelps Dodge Corp. ........ 1,928,293 2,270,946
------------ ------------
2,992,631 3,405,527
------------ ------------
PAPER AND FOREST PRODUCTS -- 0.8%
26,867 Rayonier Inc. ............. 738,310 1,224,867
------------ ------------
RETAIL -- 2.4%
33,635 Federated Department
Stores Inc. .............. 2,060,764 2,455,355
8,741 Sears Holdings Corp.+ ..... 1,135,534 1,155,910
------------ ------------
3,196,298 3,611,265
------------ ------------
SPECIALTY CHEMICALS -- 0.8%
19,400 PPG Industries Inc. ....... 1,213,727 1,228,990
------------ ------------
TELECOMMUNICATIONS -- 3.1%
17,900 ALLTEL Corp. .............. 1,018,199 1,159,025
25,600 Harris Corp. .............. 784,345 1,210,624
66,218 Verizon
Communications Inc. ...... 2,408,135 2,255,385
------------ ------------
4,210,679 4,625,034
------------ ------------
TRANSPORTATION -- 2.3%
28,800 Burlington Northern
Santa Fe Corp. ........... 1,375,613 2,399,904
22,700 Overseas Shipholding
Group Inc. ............... 1,245,407 1,088,011
------------ ------------
2,621,020 3,487,915
------------ ------------
UTILITIES -- 2.2%
42,900 Exelon Corp. .............. 2,353,825 2,269,410
28,200 PG&E Corp. ................ 1,130,988 1,096,980
------------ ------------
3,484,813 3,366,390
------------ ------------
TOTAL COMMON STOCKS ....... 79,069,163 93,340,989
------------ ------------
See accompanying notes to financial statements.
7
WESTWOOD BALANCED FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT COST VALUE
------- ---- -----
ASSET BACKED SECURITIES -- 0.5%
$ 825,000 GS Mortgage Securities
Corp. II, 97-GL Cl. A2D,
6.940%, 07/13/30 .........$ 831,894 $ 838,150
------------ ------------
CORPORATE BONDS -- 8.9%
BANKING -- 1.6%
1,250,000 Bank of America Corp.,
5.375%, 06/15/14 ......... 1,301,428 1,235,343
1,125,000 Citigroup Inc.,
6.500%, 01/18/11 ......... 1,228,248 1,175,337
------------ ------------
2,529,676 2,410,680
------------ ------------
BROKERAGE -- 1.0%
1,450,000 Goldman Sachs Group Inc.,
6.650%, 05/15/09 ......... 1,457,969 1,503,382
------------ ------------
COMPUTER HARDWARE -- 1.3%
750,000 Hewlett-Packard Co.,
3.625%, 03/15/08 ......... 749,051 726,713
1,250,000 International Business
Machines Corp.,
4.875%, 10/01/06 ......... 1,270,958 1,248,666
------------ ------------
2,020,009 1,975,379
------------ ------------
DIVERSIFIED INDUSTRIAL -- 0.8%
1,200,000 General Electric Co.,
5.000%, 02/01/13 ......... 1,212,860 1,168,904
------------ ------------
ENERGY: OIL -- 0.6%
1,005,000 Occidental Petroleum Corp.,
4.250%, 03/15/10 ......... 1,007,230 967,242
------------ ------------
FOOD AND BEVERAGE -- 0.6%
950,000 Anheuser-Busch Cos. Inc.,
4.375%, 01/15/13 ......... 936,364 892,549
------------ ------------
REAL ESTATE INVESTMENT TRUSTS -- 1.1%
1,600,000 Archstone-Smith Trust,
7.200%, 03/01/13 ......... 1,558,435 1,717,856
------------ ------------
RETAIL -- 0.9%
1,250,000 Wal-Mart Stores,
6.875%, 08/10/09 ......... 1,298,909 1,311,531
------------ ------------
TELECOMMUNICATIONS -- 1.0%
1,460,000 Verizon Communications
Inc., Deb.,
6.460%, 04/15/08 ......... 1,464,803 1,494,383
------------ ------------
TOTAL CORPORATE BONDS ..... 13,486,255 13,441,906
------------ ------------
FOREIGN GOVERNMENT BONDS -- 0.7%
1,000,000 Canadian Government Global Bond,
6.750%, 08/28/06 ......... 1,004,629 1,007,148
------------ ------------
PRINCIPAL MARKET
AMOUNT COST VALUE
------- ---- -----
GOVERNMENT AGENCY OBLIGATIONS -- 12.9%
FEDERAL HOME LOAN BANK -- 2.0%
$1,500,000 2.875%, 08/15/06 .........$ 1,495,227 $ 1,488,607
1,500,000 3.375%, 02/23/07 ......... 1,495,399 1,477,544
------------ ------------
2,990,626 2,966,151
------------ ------------
FEDERAL HOME LOAN MORTGAGE CORP. -- 4.8%
1,000,000 5.500%, 07/15/06 ......... 1,006,420 1,001,329
2,000,000 3.500%, 09/15/07 ......... 2,009,852 1,957,750
600,000 4.750%, 12/08/10 ......... 599,208 589,873
2,000,000 5.000%, 07/15/14 ......... 2,051,154 1,976,334
1,800,000 Zero Coupon, 04/04/06 .... 1,799,780 1,799,781
------------ ------------
7,466,414 7,325,067
------------ ------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 6.1%
1,000,000 2.625%, 11/15/06 ......... 999,209 985,042
2,000,000 4.250%, 07/15/07 ......... 1,989,999 1,979,064
1,500,000 4.625%, 01/15/08 ......... 1,493,877 1,488,861
1,000,000 4.250%, 05/15/09 ......... 975,353 976,235
2,500,000 4.375%, 03/15/13 ......... 2,478,694 2,385,830
1,500,000 5.000%, 04/15/15 ......... 1,573,433 1,487,400
------------ ------------
9,510,565 9,302,432
------------ ------------
TOTAL U.S. GOVERNMENT
AGENCY OBLIGATIONS ....... 19,967,605 19,593,650
------------ ------------
U.S. GOVERNMENT OBLIGATIONS -- 13.9%
U.S. INFLATION INDEX NOTES -- 1.0%
1,500,000 0.875%, 04/15/10 ......... 1,570,418 1,487,780
------------ ------------
U.S. TREASURY BILLS -- 3.2%
4,900,000 U.S. Treasury Bills,
4.520% to 4.620%++,
05/25/06 to 07/20/06 ..... 4,850,514 4,850,144
------------ ------------
U.S. TREASURY NOTES -- 9.7%
2,250,000 2.250%, 04/30/06 ......... 2,248,254 2,248,254
2,725,000 3.500%, 11/15/06 ......... 2,725,906 2,702,862
1,250,000 3.375%, 02/28/07 ......... 1,242,347 1,233,790
1,000,000 3.625%, 04/30/07 ......... 999,177 987,344
2,000,000 3.375%, 02/15/08 ......... 1,964,423 1,948,594
1,250,000 3.375%, 12/15/08 ......... 1,238,011 1,204,933
1,500,000 4.750%, 05/15/14 ......... 1,511,276 1,487,344
1,000,000 4.000%, 02/15/15 ......... 1,003,836 937,461
2,000,000 4.250%, 08/15/15 ......... 1,994,391 1,905,860
------------ ------------
14,927,621 14,656,442
------------ ------------
TOTAL U.S. GOVERNMENT
OBLIGATIONS .............. 21,348,553 20,994,366
------------ ------------
TOTAL
INVESTMENTS -- 98.6% .....$135,708,099 149,216,209
============
OTHER ASSETS AND LIABILITIES
(NET) -- 1.4% ........................... 2,087,756
------------
NET ASSETS -- 100.0% .....................$151,303,965
============
--------------
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
See accompanying notes to financial statements.
8
WESTWOOD INTERMEDIATE BOND FUND
SCHEDULE OF INVESTMENTS -- MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT COST VALUE
------- ---- -----
ASSET BACKED SECURITIES -- 2.1%
$225,000 GS Mortgage Securities Corp. II,
97-GL Cl. A2D,
6.940%, 07/13/30 .........$ 231,323 $ 228,586
------------ ------------
CORPORATE BONDS -- 33.7%
COMPUTER HARDWARE -- 5.2%
325,000 Hewlett-Packard Co.,
3.625%, 03/15/08 ......... 325,557 314,909
250,000 International Business
Machines Corp.,
4.875%, 10/01/06 ......... 251,621 249,733
------------ ------------
577,178 564,642
------------ ------------
DIVERSIFIED INDUSTRIAL -- 2.3%
250,000 General Electric Co.,
5.000%, 02/01/13 ......... 252,679 243,522
------------ ------------
ENERGY AND UTILITIES: OIL -- 4.0%
225,000 Chevron Corp.,
3.375%, 02/15/08 ......... 225,680 217,720
225,000 Occidental Petroleum Corp.,
4.250%, 03/15/10 ......... 225,000 216,547
------------ ------------
450,680 434,267
------------ ------------
FINANCIAL SERVICES -- 15.3%
300,000 Bank of America Corp.,
5.375%, 06/15/14 ......... 312,343 296,482
225,000 Bear Stearns Co. Inc.,
2.875%, 07/02/08 ......... 218,631 213,620
225,000 Citigroup Inc.,
6.500%, 01/18/11 ......... 245,325 235,067
300,000 Goldman Sachs Group Inc.,
6.650%, 05/15/09 ......... 307,738 311,045
260,000 International Bank for
Reconstruction &
Development,
8.625%, 10/15/16 ......... 320,101 331,492
275,000 Merrill Lynch & Co. Inc.,
5.000%, 01/15/15 ......... 275,251 262,831
------------ ------------
1,679,389 1,650,537
------------ ------------
FOOD AND BEVERAGE -- 2.2%
250,000 Anheuser-Busch Cos. Inc.,
4.375%, 01/15/13 ......... 246,420 234,881
------------ ------------
REAL ESTATE -- 1.5%
150,000 Archstone-Smith Trust,
7.200%, 03/01/13 ......... 146,417 161,049
------------ ------------
RETAIL -- 2.0%
200,000 Wal-Mart Stores,
6.875%, 08/10/09 ......... 207,826 209,845
------------ ------------
PRINCIPAL MARKET
AMOUNT COST VALUE
------- ---- -----
TELECOMMUNICATIONS -- 1.2%
$125,000 Verizon Communications
Inc., Deb.,
6.460%, 04/15/08 .........$ 125,875 $ 127,944
------------ ------------
TOTAL CORPORATE BONDS ..... 3,686,464 3,626,687
------------ ------------
FOREIGN GOVERNMENT BONDS -- 1.6%
175,000 Canadian Government
Global Bond,
6.750%, 08/28/06 ......... 175,180 176,251
------------ ------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 33.0%
FEDERAL HOME LOAN BANK -- 5.1%
250,000 2.875%, 08/15/06 ......... 249,205 248,101
300,000 4.625%, 11/21/08 ......... 299,245 296,889
------------ ------------
548,450 544,990
------------ ------------
FEDERAL HOME LOAN MORTGAGE CORP. -- 10.9%
250,000 3.750%, 04/15/07 ......... 249,366 246,610
300,000 3.500%, 09/15/07 ......... 297,864 293,662
250,000 3.625%, 09/15/08 ......... 243,955 242,008
200,000 4.250%, 07/15/09 ......... 197,360 194,893
200,000 Zero Coupon, 06/27/06 .... 197,913 197,769
------------ ------------
1,186,458 1,174,942
------------ ------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 11.0%
275,000 4.250%, 07/15/07 ......... 273,884 272,121
300,000 4.250%, 05/15/09 ......... 292,589 292,871
300,000 4.375%, 03/15/13 ......... 298,155 286,300
176,121 5.500%, 09/01/20 ......... 175,979 175,167
163,564 5.500%, 01/01/35 ......... 166,427 159,945
------------ ------------
1,207,034 1,186,404
------------ ------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 6.0%
12,148 GNMA, Pool #580871,
6.500%, 12/15/31 ......... 12,183 12,602
108,501 GNMA, Pool #562288,
6.000%, 12/15/33 ......... 110,807 109,884
185,937 GNMA, Pool #604946,
5.500%, 01/15/34 ......... 188,905 184,299
155,787 GNMA, Pool #604970,
5.500%, 01/15/34 ......... 157,798 154,415
194,988 GNMA, Pool #003747,
5.000%, 08/20/35 ......... 193,177 188,271
------------ ------------
662,870 649,471
------------ ------------
TOTAL U.S. GOVERNMENT
AGENCY OBLIGATIONS ....... 3,604,812 3,555,807
------------ ------------
See accompanying notes to financial statements.
9
WESTWOOD INTERMEDIATE BOND FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT COST VALUE
------- ---- -----
U.S. GOVERNMENT OBLIGATIONS -- 27.9%
U.S. INFLATION INDEX NOTES -- 2.5%
$275,000 0.875%, 04/15/10 .........$ 288,000 $ 272,760
------------ ------------
U.S. TREASURY BILLS -- 2.3%
250,000 U.S. Treasury Bill,
4.790%++, 09/07/06 ....... 244,952 245,026
------------ ------------
U.S. TREASURY BONDS -- 8.8%
250,000 7.125%, 02/15/23 ......... 309,462 307,539
300,000 6.125%, 11/15/27 ......... 308,862 341,625
275,000 5.500%, 08/15/28 ......... 301,464 291,436
------------ ------------
919,788 940,600
------------ ------------
U.S. TREASURY NOTES -- 14.3%
325,000 3.375%, 02/28/07 ......... 323,696 320,786
300,000 3.625%, 04/30/07 ......... 299,024 296,203
375,000 3.375%, 02/15/08 ......... 368,329 365,361
275,000 4.750%, 05/15/14 ......... 281,981 272,680
300,000 4.250%, 08/15/15 ......... 298,419 285,879
------------ ------------
1,571,449 1,540,909
------------ ------------
TOTAL U.S. GOVERNMENT
OBLIGATIONS .............. 3,024,189 2,999,295
------------ ------------
MARKET
SHARES COST VALUE
------ ---- -----
WARRANTS -- 0.0%
ENERGY AND UTILITIES -- 0.0%
8 Forman Petroleum Corp.,
Series A, expire
01/14/07+ (a) (b) ........$ 0 $ 0
25 Forman Petroleum Corp.,
Series B, expire
01/14/07+ (a) (b) ........ 0 0
25 Forman Petroleum Corp.,
Series C, expire
01/14/07+ (a) (b) ........ 0 0
25 Forman Petroleum Corp.,
Series D, expire
01/14/07+ (a) (b) ........ 0 0
------------ ------------
0 0
------------ ------------
TOTAL WARRANTS ............ 0 0
------------ ------------
TOTAL
INVESTMENTS -- 98.3% .....$ 10,721,968 10,586,626
============
OTHER ASSETS AND LIABILITIES
(NET) -- 1.7% ........................... 182,540
------------
NET ASSETS -- 100.0% .....................$ 10,769,166
============
--------------
(a) Security fair valued under procedures established by the Board of
Trustees. The procedures may include reviewing available financial
information about the company and reviewing valuation of comparable
securities and other factors on a regular basis. At March 31, 2006, the
market value of fair valued securities amounted to $0 or 0.00% of total
net assets.
(b) Security exempt from registration under Rule 144A of the Securities Act of
1933, as amended. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At March
31, 2006, the market value of Rule 144A securities amounted to $0 or 0.00%
of total net assets.
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
See accompanying notes to financial statements.
10
WESTWOOD SMALLCAP EQUITY FUND
SCHEDULE OF INVESTMENTS -- MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- -----
COMMON STOCKS -- 94.9%
AEROSPACE -- 6.0%
3,800 DRS Technologies Inc. .....$ 147,693 $ 208,506
6,100 Moog Inc., Cl. A+ ......... 153,574 216,489
5,900 Teledyne
Technologies Inc.+ ....... 197,619 210,040
------------ ------------
498,886 635,035
------------ ------------
BUILDING AND CONSTRUCTION -- 5.0%
6,400 Layne Christensen Co.+ .... 152,968 214,528
5,100 Technical Olympic USA Inc. 117,558 103,785
3,700 Washington Group
International Inc. ....... 161,988 212,343
------------ ------------
432,514 530,656
------------ ------------
BUSINESS SERVICES -- 1.8%
4,900 URS Corp.+ ................ 154,523 197,225
------------ ------------
COMPUTER SOFTWARE AND SERVICES -- 5.3%
3,150 Hyperion Solutions Corp.+ . 79,282 102,690
7,200 ManTech International Corp.,
Cl. A+ ................... 202,025 239,184
6,300 SI International Inc.+ .... 170,623 221,445
------------ ------------
451,930 563,319
------------ ------------
CONSUMER PRODUCTS -- 3.1%
4,400 Arctic Cat Inc. ........... 95,499 105,864
10,300 Knoll Inc. ................ 170,085 219,596
------------ ------------
265,584 325,460
------------ ------------
DIVERSIFIED INDUSTRIAL -- 4.0%
3,500 Kennametal Inc. ........... 150,481 213,990
4,200 Oregon Steel Mills Inc.+ .. 128,574 214,914
------------ ------------
279,055 428,904
------------ ------------
ELECTRONICS -- 2.1%
5,700 Benchmark
Electronics Inc.+ ........ 197,762 218,595
------------ ------------
ENERGY AND UTILITIES -- 8.1%
3,800 Atmos Energy Corp. ........ 103,075 100,054
4,700 Cleco Corp. ............... 104,946 104,951
5,700 Foundation Coal
Holdings Inc. ............ 147,545 234,498
2,400 Remington Oil &
Gas Corp.+ ............... 77,440 103,728
3,700 Unit Corp.+ ............... 155,602 206,275
2,700 Whiting Petroleum Corp.+ .. 115,746 110,673
------------ ------------
704,354 860,179
------------ ------------
EQUIPMENT AND SUPPLIES -- 10.0%
4,700 Greenbrier Companies Inc. . 128,406 188,235
2,900 Hydril Co.+ ............... 196,918 226,055
4,100 IDEX Corp. ................ 172,511 213,897
2,600 Middleby Corp.+ ........... 182,538 217,672
4,500 Titanium Metals Corp.+ .... 67,609 218,475
------------ ------------
747,982 1,064,334
------------ ------------
FINANCIAL SERVICES -- 10.9%
6,700 Boston Private Financial
Holdings Inc. ............ 164,481 226,393
2,700 Calamos Asset
Management Inc., Cl. A ... 59,551 100,980
5,700 Cathay General Bancorp .... 193,925 214,548
5,600 Provident Bankshares Corp. 184,011 204,120
MARKET
SHARES COST VALUE
------ ---- -----
8,450 Republic Bancorp Inc. .....$ 103,549 $ 101,738
7,400 State National
Bancshares Inc. .......... 198,068 201,650
2,600 Stifel Financial Corp.+ ... 93,328 113,542
------------ ------------
996,913 1,162,971
------------ ------------
FOOD AND BEVERAGE -- 2.0%
6,300 J & J Snack Foods Corp. ... 128,602 211,617
------------ ------------
HEALTH CARE -- 4.0%
5,400 Sybron Dental
Specialties Inc.+ ........ 189,418 222,696
9,500 Symmetry Medical Inc.+ .... 194,833 201,495
------------ ------------
384,251 424,191
------------ ------------
HOTELS AND GAMING -- 4.3%
12,200 Marcus Corp. .............. 248,350 243,390
5,600 Orient-Express Hotels
Ltd., Cl. A .............. 147,592 219,688
------------ ------------
395,942 463,078
------------ ------------
METALS AND MINING -- 1.9%
2,300 Cleveland-Cliffs Inc. ..... 166,766 200,376
------------ ------------
PAPER AND FOREST PRODUCTS -- 1.0%
4,200 Longview Fibre Co. ........ 76,108 108,528
------------ ------------
REAL ESTATE -- 12.4%
7,100 Getty Realty Corp. ........ 183,297 206,610
5,100 Heritage Property
Investment Trust ......... 168,933 201,909
5,100 LaSalle Hotel Properties .. 145,254 209,100
4,700 Lexington Corporate
Properties Trust ......... 105,349 97,995
5,800 Maguire Properties Inc. ... 196,242 211,700
4,400 Post Properties Inc. ...... 153,301 195,800
6,900 Sunstone Hotel
Investors Inc. ........... 165,697 199,893
------------ ------------
1,118,073 1,323,007
------------ ------------
RETAIL -- 3.1%
2,100 Children's Place Retail
Stores Inc.+ ............. 103,143 121,590
12,000 CKE Restaurants Inc. ...... 184,383 208,800
------------ ------------
287,526 330,390
------------ ------------
TELECOMMUNICATIONS -- 4.0%
17,776 General Communication
Inc., Cl. A+ ............. 179,488 214,912
16,400 Valor Communications
Group Inc. ............... 224,666 215,824
------------ ------------
404,154 430,736
------------ ------------
TRANSPORTATION -- 5.9%
9,200 Arlington Tankers Ltd. .... 207,272 211,600
3,200 Freightcar America Inc. ... 112,652 203,520
16,400 Horizon Lines Inc.,
Cl. A .................... 184,040 212,544
------------ ------------
503,964 627,664
------------ ------------
TOTAL COMMON STOCKS ....... 8,194,889 10,106,265
------------ ------------
TOTAL
INVESTMENTS -- 94.9% .....$ 8,194,889 10,106,265
============
OTHER ASSETS AND
LIABILITIES (NET) -- 5.1% ............... 543,619
------------
NET ASSETS -- 100.0% .....................$ 10,649,884
============
--------------
+ Non-income producing security.
See accompanying notes to financial statements.
11
WESTWOOD INCOME FUND
SCHEDULE OF INVESTMENTS -- MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- -----
COMMON STOCKS -- 57.5%
ENERGY AND UTILITIES: ELECTRIC -- 2.5%
8,500 FPL Group Inc. ............$ 348,293 $ 341,190
------------ ------------
ENERGY AND UTILITIES: NATURAL GAS -- 7.5%
14,100 Enterprise Products
Partners LP .............. 360,858 348,129
7,100 Kinder Morgan Energy
Partners LP .............. 365,911 342,078
7,200 Northern Border
Partners LP .............. 331,280 345,024
------------ ------------
1,058,049 1,035,231
------------ ------------
ENERGY AND UTILITIES: OIL -- 2.4%
8,200 San Juan Basin
Royalty Trust ............ 347,638 335,790
------------ ------------
ENTERTAINMENT -- 2.6%
18,900 Regal Entertainment Group,
Cl. A .................... 385,776 355,509
------------ ------------
FINANCIAL SERVICES -- 6.4%
5,500 AllianceBernstein
Holding LP ............... 297,687 364,375
3,800 Bank of America Corp. ..... 164,616 173,052
11,200 U.S. Bancorp .............. 336,309 341,600
------------ ------------
798,612 879,027
------------ ------------
FOOD AND BEVERAGE -- 2.4%
15,300 Reddy Ice Holdings Inc. ... 316,917 339,813
------------ ------------
HEALTH CARE -- 2.5%
7,000 Bristol-Myers Squibb Co. .. 154,851 172,270
6,900 Pfizer Inc. ............... 172,058 171,948
------------ ------------
326,909 344,218
------------ ------------
METALS AND MINING -- 3.9%
7,000 Compass Minerals
International Inc. ....... 174,158 174,930
6,300 Penn Virginia Resource
Partners LP .............. 340,360 361,431
------------ ------------
514,518 536,361
------------ ------------
REAL ESTATE INVESTMENT TRUSTS -- 10.1%
8,300 Crescent Real Estate
Equities Co. ............. 127,198 174,881
11,800 Getty Realty Corp. ........ 303,943 343,380
9,500 Healthcare Realty
Trust Inc. ............... 353,834 355,110
7,582 Rayonier Inc. ............. 258,651 345,663
6,000 Sunstone Hotel
Investors Inc. ........... 137,852 173,820
------------ ------------
1,181,478 1,392,854
------------ ------------
SPECIALTY CHEMICALS -- 1.2%
4,100 E.I. du Pont de Nemours
and Co. .................. 161,274 173,061
------------ ------------
TELECOMMUNICATIONS -- 5.0%
12,700 AT&T Inc. ................. 314,201 343,408
26,000 Valor Communications
Group Inc. ............... 373,160 342,160
------------ ------------
687,361 685,568
------------ ------------
MARKET
SHARES COST VALUE
------ ---- -----
TRANSPORTATION -- 11.0%
15,100 Arlington Tankers Ltd. ....$ 341,383 $ 347,300
26,200 Double Hull Tankers Inc. .. 350,691 347,150
11,000 Teekay LNG Partners LP .... 322,189 343,750
10,200 Top Tankers Inc. .......... 161,119 132,600
15,300 U.S. Shipping
Partners LP .............. 370,874 354,960
------------ ------------
1,546,256 1,525,760
------------ ------------
TOTAL COMMON STOCKS ....... 7,673,081 7,944,382
------------ ------------
PREFERRED STOCKS -- 20.5%
BROADCASTING -- 2.5%
13,800 CBS Corp., 7.250% Pfd. .... 350,398 346,380
------------ ------------
FINANCIAL SERVICES -- 15.5%
13,700 Bank One Capital VI,
7.200% Pfd. .............. 349,003 349,624
1,200 Bear Stearns Co.,
5.490% Pfd., Ser. G ...... 59,603 58,560
6,400 Fannie Mae, 7.065% Pfd.,
Ser. O (a) ............... 354,505 348,800
14,200 General Electric Capital Corp.,
5.875% Pfd. .............. 350,585 343,640
13,600 Lehman Brothers Holdings Inc.,
5.499% Pfd., Ser. G (a) .. 341,538 346,120
13,400 Metlife Inc., 5.910% Pfd.,
Ser. A (a) ............... 345,066 347,060
13,700 Wells Fargo Capital
Trust IV, 7.000% Pfd. .... 352,966 345,651
------------ ------------
2,153,266 2,139,455
------------ ------------
TELECOMMUNICATIONS -- 2.5%
13,600 Verizon New England Inc.,
7.000% Pfd., Ser. B ...... 346,909 346,800
------------ ------------
TOTAL PREFERRED STOCKS .... 2,850,573 2,832,635
------------ ------------
CONVERTIBLE PREFERRED STOCKS -- 5.0%
ENERGY AND UTILITIES: INTEGRATED -- 2.5%
6,800 Entergy Corp.,
7.625% Cv. Pfd. .......... 342,585 345,304
------------ ------------
FINANCIAL SERVICES -- 2.5%
13,100 Lehman Brothers Holdings Inc.,
6.250% Cv. Pfd.,
Ser. GIS ................. 340,968 347,150
------------ ------------
TOTAL CONVERTIBLE
PREFERRED STOCKS ......... 683,553 692,454
------------ ------------
See accompanying notes to financial statements.
12
WESTWOOD INCOME FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT COST VALUE
-------- ---- -----
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 5.4%
FEDERAL HOME LOAN MORTGAGE CORP. -- 2.2%
$300,000 3.500%, 09/15/07 .........$ 294,315 $ 293,663
------------ ------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 3.2%
450,000 4.250%, 07/15/27 ......... 447,902 445,289
------------ ------------
TOTAL U.S. GOVERNMENT
AGENCY OBLIGATIONS ....... 742,217 738,952
------------ ------------
U.S. GOVERNMENT OBLIGATIONS -- 6.8%
U.S. TREASURY BILLS -- 1.4%
200,000 U.S. Treasury Bill,
4.538%++, 05/25/06 ....... 198,722 198,722
------------ ------------
U.S. TREASURY NOTES -- 5.4%
325,000 3.500%, 11/15/06 ......... 323,022 322,359
425,000 3.125%, 05/15/07 ......... 419,017 417,065
------------ ------------
742,039 739,424
------------ ------------
TOTAL U.S. GOVERNMENT
OBLIGATIONS .............. 940,761 938,146
------------ ------------
TOTAL
INVESTMENTS -- 95.2% .....$ 12,890,185 13,146,569
============
OTHER ASSETS AND
LIABILITIES (NET) -- 4.8% ............... 663,587
------------
NET ASSETS -- 100.0% .....................$ 13,810,156
============
- ------------------------
++ Represents annualized yield at date of purchase.
(a) Floating rate security. The rate disclosed is that in effect at March 31,
2006.
See accompanying notes to financial statements.
13
WESTWOOD MIGHTY MITES(SM) FUND
SCHEDULE OF INVESTMENTS -- MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- -----
COMMON STOCKS -- 96.6%
AGRICULTURE -- 0.3%
200 J.G. Boswell Co. ..........$ 124,000 $ 126,800
------------ ------------
AUTOMOTIVE: PARTS AND ACCESSORIES -- 2.8%
50,000 Earl Scheib Inc.+ ......... 243,864 182,500
25,000 Midas Inc.+ ............... 336,250 546,750
52,000 Proliance
International Inc.+ ...... 243,947 283,920
1,000 Puradyn Filter
Technologies Inc.+ ....... 1,645 1,400
35,000 Standard Motor
Products Inc. ............ 387,785 310,800
------------ ------------
1,213,491 1,325,370
------------ ------------
AVIATION: PARTS AND SERVICES -- 1.8%
1,000 Aviall Inc.+ .............. 12,210 38,080
12,500 CPI Aerostructures Inc.+ .. 132,133 99,375
2,000 Curtiss-Wright Corp. ...... 43,050 132,400
156,000 Fairchild Corp., Cl. A+ ... 752,473 405,600
6,200 Kaman Corp. ............... 92,246 155,992
------------ ------------
1,032,112 831,447
------------ ------------
BROADCASTING -- 4.2%
58,000 Acme Communications Inc.+ . 350,848 240,120
23,000 Beasley Broadcast Group
Inc., Cl. A .............. 254,241 278,990
70,000 Crown Media Holdings Inc.,
Cl. A+ ................... 526,008 443,800
11,700 Fisher
Communications Inc.+ ..... 510,832 523,575
5,000 Granite Broadcasting
Corp.+ ................... 2,000 600
25,000 Gray Television Inc. ...... 232,195 210,000
15,000 Paxson Communications
Corp.+ ................... 56,558 14,100
7,300 Salem Communications Corp.,
Cl. A+ ................... 130,804 109,573
44,000 Young Broadcasting Inc.,
Cl. A+ ................... 320,825 149,600
------------ ------------
2,384,311 1,970,358
------------ ------------
BUILDING AND CONSTRUCTION -- 0.5%
5,000 Homasote Co.+ ............. 39,350 19,500
5,000 Huttig Building
Products Inc.+ ........... 17,127 46,550
6,000 Monarch Cement Co. ........ 140,135 162,000
------------ ------------
196,612 228,050
------------ ------------
BUSINESS SERVICES -- 3.8%
140,000 AMICAS Inc.+ .............. 717,718 660,800
28,000 ANC Rental Corp.+ ......... 840 3
82,000 Edgewater
Technology Inc.+ ......... 320,526 536,280
20,000 Information
Resources Inc.+ .......... 32,400 13,000
46,000 Nashua Corp.+ ............. 310,147 391,000
804 National Stock Yards Co. .. 80,700 162,810
10,000 PubliCARD Inc.+ ........... 14,436 500
500 StarTek Inc. .............. 8,375 11,780
------------ ------------
1,485,142 1,776,173
------------ ------------
MARKET
SHARES COST VALUE
------ ---- -----
CABLE -- 0.1%
90,000 Adelphia Communications
Corp., Cl. A+ ............$ 15,750 $ 3,960
2,500 Outdoor Channel
Holdings Inc.+ ........... 24,825 25,475
------------ ------------
40,575 29,435
------------ ------------
CLOSED-END FUNDS -- 0.6%
24,750 MVC Capital Inc. .......... 224,322 301,950
------------ ------------
COMMUNICATIONS EQUIPMENT -- 0.3%
1,000 Andrew Corp.+ ............. 3,413 12,280
10,000 Communications
Systems Inc. ............. 84,990 105,500
------------ ------------
88,403 117,780
------------ ------------
COMPUTER SOFTWARE AND SERVICES -- 2.1%
23,881 Gemplus International
SA+ ...................... 10,945 73,798
3,000 iVillage Inc.+ ............ 2,520 25,230
5,600 Lab-Volt Systems
Inc.+ (a) ................ 31,800 74,760
33,000 Mobius Management
Systems Inc.+ ............ 268,671 206,250
460,500 Net Perceptions Inc.+ ..... 188,818 276,300
834 Prosoft Learning Corp.+ ... 11,216 150
850,000 StorageNetworks Inc.
Escrow+ (a) .............. 0 25,500
11,000 Tyler Technologies Inc.+ .. 43,865 121,000
25,000 Vitria Technology Inc.+ ... 152,454 72,750
20,000 Xanser Corp.+ ............. 83,498 88,600
------------ ------------
793,787 964,338
------------ ------------
CONSUMER PRODUCTS -- 4.1%
68,000 Adams Golf Inc.+ .......... 115,878 106,080
8,000 American Locker
Group Inc.+ .............. 98,517 38,800
11,000 Ducati Motor Holding
SpA, ADR+ ................ 169,043 135,410
6,000 Levcor
International Inc.+ ...... 20,801 5,850
4,500 Marine Products Corp. ..... 4,609 49,455
5,000 Marzotto SpA .............. 3,933 22,480
500 National Presto
Industries Inc. .......... 14,537 24,585
200,000 Schiff Nutrition
International Inc.+ ...... 367,539 1,196,000
41,530 Syratech Corp.+ ........... 10,383 2,076
2,500 Valentino Fashion
Group SpA+ ............... 14,422 77,680
10,000 Water Pik
Technologies Inc.+ ....... 85,276 277,100
------------ ------------
904,938 1,935,516
------------ ------------
CONSUMER SERVICES -- 0.0%
1,000 Collectors Universe Inc.+ . 3,530 13,990
------------ ------------
DIVERSIFIED INDUSTRIAL -- 6.5%
20,000 Ampco-Pittsburgh Corp. .... 310,159 400,000
101,500 Harbor Global Co. Ltd.+ ... 504,865 913,500
63,000 Katy Industries Inc.+ ..... 302,369 226,170
500 Lamson & Sessions Co.+ .... 2,475 13,915
2,000 Lindsay Manufacturing Co. . 39,765 54,180
500 Oregon Steel Mills Inc.+ .. 4,276 25,585
30,000 Pinguely-Haulotte ......... 160,623 908,893
11,750 RWC Inc.+ ................. 281,315 22,031
35,000 Tech/Ops Sevcon Inc. ...... 205,347 224,000
24,500 WHX Corp.+ ................ 326,268 248,675
------------ ------------
2,137,462 3,036,949
------------ ------------
See accompanying notes to financial statements.
14
WESTWOOD MIGHTY MITES(SM) FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- -----
COMMON STOCKS (CONTINUED)
EDUCATIONAL SERVICES -- 1.0%
29,000 Concorde Career
Colleges Inc.+ ...........$ 569,099 $ 478,500
------------ ------------
ELECTRONICS -- 3.4%
7,000 California Micro
Devices Corp.+ ........... 42,015 55,370
25,000 CTS Corp. ................. 201,432 334,500
1,000 Fargo Electronics+ ........ 5,641 16,910
11,500 George Risk
Industries Inc. .......... 52,760 94,013
142,500 IntriCon Corp.+ ........... 446,708 996,075
20,000 SIRIT Inc.+ ............... 11,714 5,651
5,000 Zoran Corp.+ .............. 32,186 109,400
------------ ------------
792,456 1,611,919
------------ ------------
ENERGY AND UTILITIES: ELECTRIC -- 0.5%
800 British Energy
Group plc+ ............... 4,271 9,035
1,500 Green Mountain
Power Corp. .............. 32,356 43,335
7,000 Unitil Corp. .............. 172,585 182,770
------------ ------------
209,212 235,140
------------ ------------
ENERGY AND UTILITIES: INTEGRATED -- 2.2%
25,000 Aquila Inc.+ .............. 71,600 99,750
34,950 Florida Public
Utilities Co. ............ 318,064 494,542
9,000 MGE Energy Inc. ........... 285,435 298,620
800 Pardee Resources
Co. Inc. ................. 72,100 128,400
95,200 Progress Energy
Inc., CVO+ ............... 10,472 31,416
------------ ------------
757,671 1,052,728
------------ ------------
ENERGY AND UTILITIES: NATURAL GAS -- 2.5%
4,500 Cascade Natural
Gas Corp. ................ 92,753 88,650
11,000 Chesapeake Utilities
Corp. .................... 249,646 343,640
16,000 Corning Natural
Gas Corp.+ ............... 247,211 224,000
31,200 PetroCorp Escrow
Shares+ (a) .............. 0 1,872
2,500 Petroleum
Development Corp.+ ....... 54,647 113,400
16,000 RGC Resources Inc. ........ 343,134 408,800
2,100 U.S. Energy Corp.+ ........ 14,476 15,120
------------ ------------
1,001,867 1,195,482
------------ ------------
ENERGY AND UTILITIES: SERVICES -- 2.7%
950 Covanta Holding Corp.+ .... 3,996 15,837
1,000 KFx Inc.+ ................. 7,920 18,200
42,750 RPC Inc. .................. 259,619 976,837
16,000 Stolt Offshore SA, ADR+ ... 51,709 247,840
------------ ------------
323,244 1,258,714
------------ ------------
ENERGY AND UTILITIES: WATER -- 1.6%
3,000 Artesian Resources Corp.,
Cl. A .................... 48,062 100,200
1,500 BIW Ltd. .................. 27,266 29,295
2,500 California Water
Service Group ............ 55,553 112,625
2,000 Consolidated Water
Co. Ltd. ................. 7,500 48,980
7,700 Middlesex Water Co. ....... 131,488 145,838
11,000 SJW Corp. ................. 130,473 295,350
------------ ------------
400,342 732,288
------------ ------------
MARKET
SHARES COST VALUE
------ ---- -----
ENTERTAINMENT -- 2.2%
12,500 Canterbury Park
Holding Corp. ............$ 129,392 $ 170,000
1,802 Chestnut Hill
Ventures+ (a) ............ 67,956 38,701
30,000 Dover Motorsports Inc. .... 146,431 164,700
27,000 Jetix Europe NV+ .......... 159,843 595,507
2,500 LodgeNet
Entertainment Corp.+ ..... 27,500 38,950
5,000 Triple Crown Media Inc.+ .. 46,663 29,500
------------ ------------
577,785 1,037,358
------------ ------------
EQUIPMENT AND SUPPLIES -- 6.6%
174,000 Baldwin Technology Co.
Inc., Cl. A+ ............. 332,140 1,084,020
15,000 Capstone Turbine Corp.+ ... 27,450 54,600
23,000 Cherokee
International Corp.+ ..... 108,327 117,300
18,000 Core Molding
Technologies Inc.+ ....... 53,893 100,800
4,800 Eastern Co. ............... 74,890 100,560
25,000 Fedders Corp. ............. 132,266 38,000
1,000 Genoil Inc.+ .............. 225 1,190
11,200 Gerber Scientific Inc.+ ... 41,595 115,808
10,000 Gildemeister AG+ .......... 75,736 87,860
5,000 GrafTech International
Ltd.+ .................... 30,000 30,500
21,000 L.S. Starrett Co., Cl. A .. 339,639 299,670
28,000 Maezawa Kyuso
Industries Co. Ltd. ...... 151,579 473,883
7,500 Mine Safety
Appliances Co. ........... 227,906 315,000
13,900 SL Industries Inc.+ ....... 88,117 229,350
1,000 SRS Labs Inc.+ ............ 5,500 6,020
800 Watts Water Technologies
Inc., Cl. A .............. 12,236 29,072
------------ ------------
1,701,499 3,083,633
------------ ------------
FINANCIAL SERVICES -- 13.7%
3,000 Bancshares of
Florida Inc.+ ............ 42,938 65,893
15,500 Berkshire Bancorp Inc. .... 199,016 257,455
11,000 Crazy Woman Creek
Bancorp Inc. ............. 143,391 182,875
477,000 Epoch Holding Corp.+ ...... 707,426 2,289,600
6,000 Fidelity Southern Corp. ... 53,378 106,800
35,000 Flushing Financial Corp. .. 526,408 611,100
31,250 Fulton Financial Corp. .... 204,658 537,500
10 Guaranty Corp., Cl. A+ .... 137,500 156,500
70,000 Ladenburg Thalmann
Financial Services Inc.+ . 50,558 100,800
500 Magyar Bancorp Inc.+ ...... 5,275 6,010
3,000 Northrim BanCorp Inc. ..... 60,970 72,000
6,790 Parish National Corp.+ .... 255,328 393,820
9,167 Patriot National
Bancorp Inc. ............. 141,747 221,154
2,500 PennFed Financial
Services Inc. ............ 42,628 47,925
11,500 Seacoast Banking Corp.
of Florida ............... 222,420 334,765
116 Sunwest Bank+ ............. 322,721 426,300
15,000 SWS Group Inc. ............ 274,802 392,250
15,700 Synergy Financial
Group Inc. ............... 160,223 227,964
500 TIB Financial Corp. ....... 7,780 15,038
------------ ------------
3,559,167 6,445,749
------------ ------------
See accompanying notes to financial statements.
15
WESTWOOD MIGHTY MITES(SM) FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- -----
COMMON STOCKS (CONTINUED)
FOOD AND BEVERAGE -- 2.2%
6,000 Boston Beer Co. Inc.,
Cl. A+ ...................$ 107,160 $ 156,060
4,000 Genesee Corp., Cl. A+ ..... 13,980 6,520
30,100 Genesee Corp., Cl. B+ ..... 55,564 47,709
2,000 J & J Snack Foods Corp. ... 28,830 67,180
11,000 Lifeway Foods Inc.+ ....... 78,614 134,766
35,000 MGP Ingredients Inc. ...... 168,688 567,000
1,000 Poore Brothers Inc.+ ...... 2,660 2,800
7,500 Scheid Vineyards Inc.,
Cl. A+ ................... 42,420 49,875
100 Willamette Valley
Vineyards Inc.+ .......... 400 651
------------ ------------
498,316 1,032,561
------------ ------------
HEALTH CARE -- 11.5%
30,000 AFP Imaging Corp.+ ........ 65,459 61,500
16,500 Arkopharma ................ 236,371 265,942
62,000 BioLase Technology Inc. ... 733,882 592,100
2,800 Biosite Inc.+ ............. 84,132 145,404
14,600 Boiron SA ................. 238,258 306,091
7,000 Bruker BioSciences
Corp.+ ................... 27,970 37,800
44,000 Cholestech Corp.+ ......... 339,114 573,320
98,000 Del Global
Technologies Corp.+ ...... 210,765 388,080
5,000 DexCom Inc.+ .............. 93,086 101,350
1,000 Escalon Medical Corp.+ .... 4,920 4,660
15,279 Exactech Inc.+ ............ 235,527 213,600
1,800 ICU Medical Inc.+ ......... 54,362 65,142
52,000 Lifecore
Biomedical Inc.+ ......... 412,997 608,400
17,000 Neogen Corp.+ ............. 193,951 416,500
2,500 NMT Medical Inc.+ ......... 7,858 40,450
11,000 NWH Inc. .................. 203,610 153,340
1,500 Orthofix
International NV+ ........ 40,805 59,730
35,000 Quidel Corp.+ ............. 154,020 450,450
38,000 Regeneration
Technologies Inc.+ ....... 340,556 296,780
1,000 Schick Technologies
Inc.+ .................... 19,500 49,900
77,000 Sonic Innovations Inc.+ ... 386,033 385,000
2,000 Tutogen Medical Inc.+ ..... 10,180 10,000
1,500 United-Guardian Inc. ...... 14,010 14,700
5,000 Young Innovations Inc. .... 135,279 182,600
------------ ------------
4,242,645 5,422,839
------------ ------------
HOTELS AND GAMING -- 0.3%
1,000 Cloverleaf Kennel Club,
Cl. A+ ................... 3,250 3,050
4,000 Dover Downs Gaming &
Entertainment Inc. ....... 37,310 87,080
29 Fair Grounds Corp.+ (a) ... 177,460 8,033
2,000 Florida Gaming Corp.+ ..... 6,950 30,000
------------ ------------
224,970 128,163
------------ ------------
MANUFACTURED HOUSING AND RECREATIONAL VEHICLES -- 7.6%
88,000 Cavalier Homes Inc.+ ...... 487,003 616,000
10,000 Cavco Industries Inc.+ .... 185,699 485,900
11,000 Nobility Homes Inc. ....... 173,067 272,360
16,000 Palm Harbor
Homes Inc.+ .............. 325,687 342,880
29,000 Skyline Corp. ............. 981,194 1,200,020
107,000 Southern Energy
Homes Inc.+ .............. 407,370 637,720
------------ ------------
2,560,020 3,554,880
------------ ------------
MARKET
SHARES COST VALUE
------ ---- -----
METALS AND MINING -- 0.0%
615,000 Royal Oak Mines Inc.+ .....$ 2,314 $ 4,305
------------ ------------
PAPER AND FOREST PRODUCTS -- 0.5%
300 Keweenaw Land
Association Ltd. ......... 46,200 37,312
15,000 Packaging Dynamics Corp. .. 111,035 207,750
------------ ------------
157,235 245,062
------------ ------------
PUBLISHING -- 1.3%
100,000 PRIMEDIA Inc.+ ............ 190,965 207,000
13,000 Thomas Nelson Inc. ........ 139,221 380,250
------------ ------------
330,186 587,250
------------ ------------
REAL ESTATE -- 2.6%
4,300 Biloxi Marsh Lands Corp. .. 77,537 169,850
5,000 Capital Properties
Inc., Cl. A .............. 73,300 155,000
50 Case Pomeroy & Co.
Inc., Cl. A .............. 58,825 82,750
50 Case Pomeroy & Co.
Inc., Cl. B .............. 58,825 82,750
4,900 CKX Lands Inc. ............ 37,800 64,827
15,829 Griffin Land &
Nurseries Inc.+ .......... 315,356 490,699
3,200 Gyrodyne Company of
America Inc.+ ............ 56,549 144,000
400 Holobeam Inc.+ ............ 15,500 17,200
2,508 Royalty LLC+ (a) .......... 0 0
------------ ------------
693,692 1,207,076
------------ ------------
RESTAURANTS -- 0.6%
24,000 Nathan's Famous Inc.+ ..... 164,957 294,900
------------ ------------
RETAIL -- 0.8%
2,200 Bowlin Travel
Centers Inc.+ ............ 3,750 3,520
24,000 CoolBrands
International Inc.+ ...... 56,139 53,431
1,000 Cost-U-Less Inc.+ ......... 7,022 7,850
1,000 Gander Mountain Co.+ ...... 13,345 9,420
12,000 Movado Group Inc. ......... 171,186 276,960
8,000 Sport Supply
Group Inc.+ .............. 10,250 41,400
------------ ------------
261,692 392,581
------------ ------------
SPECIALTY CHEMICALS -- 2.0%
267,226 General Chemical
Group Inc.+ .............. 59,859 5,612
30,000 Hawkins Inc. .............. 380,688 422,100
1,000 KMG Chemicals Inc. ........ 3,270 8,570
14,000 Material Sciences Corp.+ .. 176,010 169,120
57,000 Omnova Solutions Inc.+ .... 315,576 348,840
------------ ------------
935,403 954,242
------------ ------------
TELECOMMUNICATIONS -- 3.3%
1,000 Ambient Corp.+ ............ 280 205
25,896 D&E Communications Inc. ... 290,401 291,071
13,000 HickoryTech Corp. ......... 154,118 109,590
80 Horizon Telecom Inc.,
Cl. A .................... 9,250 8,360
339 Horizon Telecom Inc.,
Cl. B .................... 39,073 29,832
1,500 Lexcom Inc., Cl. B ........ 86,355 54,225
20,000 New Ulm Telecom Inc. ...... 198,220 325,000
2,305 NTL Inc.+ ................. 31,540 67,099
10,000 PNV Inc.+ ................. 3 25
See accompanying notes to financial statements.
16
WESTWOOD MIGHTY MITES(SM) FUND
SCHEDULE OF INVESTMENTS (CONTINUED) -- MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
------ ---- -----
COMMON STOCKS (CONTINUED)
TELECOMMUNICATIONS (CONTINUED)
300 Preformed Line
Products Co. .............$ 13,941 $ 10,176
6,200 Shenandoah
Telecommunications Co. ... 97,036 278,938
20,000 Stratos
International Inc.+ ...... 81,837 161,800
500 SureWest Communications ... 13,332 12,060
45,000 Sycamore Networks Inc.+ ... 147,494 211,500
------------ ------------
1,162,880 1,559,881
------------ ------------
TRANSPORTATION -- 0.1%
2,500 Providence & Worcester
Railroad Co. ............. 36,934 40,625
------------ ------------
WIRELESS COMMUNICATIONS -- 0.3%
9,000 Rural Cellular Corp.,
Cl. A+ ................... 7,830 132,390
------------ ------------
TOTAL COMMON STOCKS ....... 31,800,101 45,346,422
------------ ------------
PREFERRED STOCKS -- 1.4%
AUTOMOTIVE: PARTS AND ACCESSORIES -- 1.4%
21,000 Jungheinrich AG Pfd. ...... 170,462 667,273
------------ ------------
CONVERTIBLE PREFERRED STOCKS -- 0.4%
BUSINESS SERVICES -- 0.3%
3,745 Interep National Radio Sales Inc.,
4.000% Cv. Pfd.,
Ser. A+ (a)(b)(c) ........ 360,483 131,070
------------ ------------
FOOD AND BEVERAGE -- 0.1%
4,000 Seneca Foods Corp., Cv. Pfd.
Ser. 2003+ ............... 61,000 64,000
------------ ------------
TOTAL CONVERTIBLE
PREFERRED STOCKS ......... 421,483 195,070
------------ ------------
WARRANTS -- 0.0%
BUSINESS SERVICES -- 0.0%
1,666 Avalon Digital Marketing
Systems Inc., expire
11/11/11+ (a)(c) ......... 0 0
37,500 Interep National Radio
Sales Inc., expire
05/06/07+ (a)(b)(c) ...... 0 0
------------ ------------
0 0
------------ ------------
DIVERSIFIED INDUSTRIAL -- 0.0%
3,780 WHX Corp., expire
02/28/08+ ................ 11,721 3,969
------------ ------------
ENERGY AND UTILITIES: ELECTRIC -- 0.0%
1,680 British Energy Group plc,
expire 01/14/09+ ......... 5,488 15,849
------------ ------------
TOTAL WARRANTS ............ 17,209 19,818
------------ ------------
PRINCIPAL MARKET
AMOUNT COST VALUE
------- ---- -----
U.S. GOVERNMENT OBLIGATIONS -- 1.1%
$509,000 U.S. Treasury Bills,
4.655% to 4.676%++,
04/20/06 to 04/27/06 .....$ 507,594 $ 507,594
------------ ------------
TOTAL
INVESTMENTS -- 99.5% .....$ 32,916,849 46,736,177
============
OTHER ASSETS AND
LIABILITIES (NET) -- 0.5% ............... 224,975
------------
NET ASSETS -- 100.0% .....................$ 46,961,152
============
--------------
(a) Security fair valued under procedures established by the Board of
Trustees. The procedures may include reviewing available financial
information about the company and reviewing valuation of comparable
securities and other factors on a regular basis. At March 31, 2006, the
market value of fair valued securities amounted to $279,936 or 0.60% of
total net assets.
(b) Security exempt from registration under Rule 144A of the Securities Act of
1933, as amended. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At March
31, 2006, the market value of Rule 144A securities amounted to $131,070 or
0.28% of total net assets.
(c) At March 31, 2006, the Fund held investments in restricted and illiquid
securities that were valued under methods approved by the Board, as
follows:
03/31/06
CARRYING
ACQUISITION ACQUISITION ACQUISITION VALUE
SHARES ISSUER DATE COST PER UNIT
-------- ------ ----------- ----------- --------
1,666 Avalon Digital Marketing
Systems Inc. Warrants
expire 11/11/11 ............. 04/03/00 -- --
3,745 Interep National Radio
Sales Inc., 4.000%
Cv. Pfd., Ser. A ............ 05/03/02 $360,483 $34.9987
37,500 Interep National Radio Sales Inc.
Warrants expire 05/06/07 .... 05/03/02 -- --
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
ADR American Depository Receipt
CVO Contingent Value Obligation
See accompanying notes to financial statements.
17
THE WESTWOOD FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
EQUITY BALANCED INTERMEDIATE SMALLCAP INCOME MIGHTY
FUND FUND BOND FUND EQUITY FUND FUND MITES(SM) FUND
------------ ------------ ----------- ----------- ----------- --------------
ASSETS:
Investments, at value (cost $154,477,467,
$135,708,099, $10,721,968,
$8,194,889, $12,890,185, and
$32,916,849, respectively) ........$185,259,054 $149,216,209 $10,586,626 $10,106,265 $13,146,569 $46,736,177
Cash ................................. 3,302,965 1,237,470 143,651 231,860 290,989 --
Receivable for investments sold ...... 3,200,600 2,250,358 -- 321,035 772,913 409,082
Receivable for Fund shares sold ...... 71,019 47,031 1,083 2,330 240 --
Dividends and interest receivable .... 200,998 613,999 105,172 22,620 53,058 38,013
Receivable from Adviser .............. -- -- 72 -- -- --
Other assets ......................... 5,956 5,180 1,260 1,217 1,387 2,240
------------ ------------ ----------- ----------- ----------- -----------
TOTAL ASSETS ......................... 192,040,592 153,370,247 10,837,864 10,685,327 14,265,156 47,185,512
------------ ------------ ----------- ----------- ----------- -----------
LIABILITIES:
Dividends payable .................... -- -- 35,694 -- -- --
Payable for Fund shares redeemed ..... 125,909 201,241 -- -- 69,341 12,887
Payable for investments purchased .... 3,704,292 1,649,084 -- -- 349,860 73,081
Payable for investment advisory fees . 168,035 102,361 -- 5,414 7,077 41,393
Payable for distribution fees ........ 42,780 36,060 2,720 2,528 3,309 10,868
Payable for shareholder services fees 24,242 18,689 3,851 2,990 4,350 32,163
Payable to custodian ................. -- -- -- -- -- 24,787
Other accrued expenses ............... 97,280 58,847 26,433 24,511 21,063 29,181
------------ ------------ ----------- ----------- ----------- -----------
TOTAL LIABILITIES .................... 4,162,538 2,066,282 68,698 35,443 455,000 224,360
------------ ------------ ----------- ----------- ----------- -----------
NET ASSETS ...........................$187,878,054 $151,303,965 $10,769,166 $10,649,884 $13,810,156 $46,961,152
============ ============ =========== =========== =========== ===========
NET ASSETS CONSIST OF:
Shares of beneficial interest,
each class at $0.001 par value .....$ 15,760 $ 12,154 $ 1,007 $ 818 $ 1,152 $ 2,949
Additional paid-in capital ........... 144,376,439 126,225,830 10,922,791 17,444,082 11,246,775 31,663,345
Accumulated (distributions in
excess of) net investment
income ............................. 225,031 160,698 (428) 71,333 (8,791) (145,558)
Accumulated net realized gain (loss)
on investments and foreign
currency transactions .............. 12,479,237 11,397,173 (18,862) (8,777,725) 2,314,636 1,621,059
Net unrealized appreciation
(depreciation) on investments
and foreign currency
translations ....................... 30,781,587 13,508,110 (135,342) 1,911,376 256,384 13,819,357
------------ ------------ ----------- ----------- ----------- -----------
NET ASSETS ...........................$187,878,054 $151,303,965 $10,769,166 $10,649,884 $13,810,156 $46,961,152
============ ============ =========== =========== =========== ===========
SHARES OF BENEFICIAL INTEREST:
CLASS AAA:
Net assets ...........................$184,958,684 $144,910,892 $10,222,408 $10,105,961 $13,698,040 $46,143,352
============ ============ =========== =========== =========== ===========
Shares of beneficial interest
outstanding; unlimited number
of shares authorized ............... 15,513,709 11,640,810 955,647 775,654 1,142,452 2,895,535
========== ========== ======= ======= ========= =========
NET ASSET VALUE, offering and
redemption price per share ......... $11.92 $12.45 $10.70 $13.03 $11.99 $15.94
====== ====== ====== ====== ====== ======
CLASS A:
Net assets ........................... $2,652,295 $5,258,610 $173,400 $304,271 $94,172 $45,162
========== ========== ======== ======== ======= =======
Shares of beneficial interest
outstanding; unlimited
number of shares authorized ........ 223,185 422,254 16,218 23,463 7,688 2,844
======= ======= ====== ====== ===== =====
NET ASSET VALUE and redemption
price per share .................... $11.88 $12.45 $10.69 $12.97 $12.25 $15.88
====== ====== ====== ====== ====== ======
Maximum offering price per share
(NAV / .96, based on maximum
sales charge of 4.00% of
the offering price) ................ $12.38 $12.97 $11.14 $13.51 $12.76 $16.54
====== ====== ====== ====== ====== ======
CLASS B:
Net assets ........................... $30,472 $146,563 $373,258 $11,532 $2,079 $461,954
======= ======== ======== ======= ====== ========
Shares of beneficial interest
outstanding; unlimited number
of shares authorized ............... 2,587.7 11,738 34,906 917.5 168 29,965
======= ====== ====== ===== === ======
NET ASSET VALUE and offering
price per share .................... $11.78(a) $12.49(a) $10.69(a) $12.57(a) $12.38(a) $15.42(a)
====== ====== ====== ====== ====== ======
CLASS C:
Net assets ........................... $236,603 $987,900 $100.15 $228,120 $15,865 $310,684
======== ======== ======= ======== ======= ========
Shares of beneficial interest
outstanding; unlimited number
of shares authorized ............... 20,095 79,028 9.63 18,242 1,240 20,250
====== ====== ==== ====== ===== ======
NET ASSET VALUE and offering
price per share .................... $11.77(a) $12.50(a) $10.40(a) $12.51(a) $12.79(a) $15.34(a)
====== ====== ====== ====== ====== ======
- --------------
(a) Redemption price varies based on length of time held.
See accompanying notes to financial statements.
18
THE WESTWOOD FUNDS
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
EQUITY BALANCED INTERMEDIATE SMALLCAP INCOME MIGHTY
FUND FUND BOND FUND EQUITY FUND FUND MITES(SM) FUND
------------ ------------ ------------ ----------- ----------- --------------
INVESTMENT INCOME:
Dividends (net of foreign taxes of
$0, $0, $0, $0, $0, and
$901, respectively) ................ $ 1,994,695 $ 1,070,719 $ -- $ 144,163 $ 229,791 $ 231,178
Interest ............................. 24,631 1,169,883 242,794 -- 19,895 3,692
----------- ----------- --------- ---------- ----------- ----------
TOTAL INVESTMENT INCOME .............. 2,019,326 2,240,602 242,794 144,163 249,686 234,870
----------- ----------- --------- ---------- ----------- ----------
EXPENSES:
Investment advisory fees ............. 915,192 574,812 32,671 48,095 74,183 231,128
Distribution fees -- Class AAA ....... 224,926 183,282 12,925 11,632 18,382 56,762
Distribution fees -- Class A ......... 7,176 13,740 229 491 230 106
Distribution fees -- Class B ......... 152 706 2,100 52 10 2,194
Distribution fees -- Class C ......... 963 4,818 1 532 78 1,530
Legal and audit fees ................. 61,080 53,715 9,550 8,936 11,814 19,270
Custodian fees ....................... 38,064 28,076 6,389 8,886 10,220 12,115
Shareholder services fees ............ 83,422 63,093 6,938 6,419 8,084 27,356
Registration fees .................... 25,420 25,956 21,182 20,198 25,051 12,699
Shareholder communications expenses .. 32,594 18,013 1,452 2,178 3,144 10,326
Trustees' fees ....................... 5,276 4,445 314 265 455 1,363
Interest expense ..................... -- -- -- -- -- 5,627
Miscellaneous expenses ............... 31,298 31,034 3,152 2,050 3,436 7,111
----------- ----------- --------- ---------- ----------- ----------
TOTAL EXPENSES ....................... 1,425,563 1,001,690 96,903 109,734 155,087 387,587
----------- ----------- --------- ---------- ----------- ----------
LESS:
Expense reimbursements (see Note 3) -- -- (36,947) (28,657) (33,969) --
Custodian fee credits .............. (37,153) (27,685) (3,865) (8,247) (9,818) --
----------- ----------- --------- ---------- ----------- ----------
TOTAL REIMBURSEMENTS AND CREDITS ... (37,153) (27,685) (40,812) (36,904) (43,787) --
----------- ----------- --------- ---------- ----------- ----------
TOTAL NET EXPENSES ................... 1,388,410 974,005 56,091 72,830 111,300 387,587
----------- ----------- --------- ---------- ----------- ----------
NET INVESTMENT INCOME (LOSS) ......... 630,916 1,266,597 186,703 71,333 138,386 (152,717)
----------- ----------- --------- ---------- ----------- ----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY:
Net realized gain (loss) on
investments and foreign
currency transactions .............. 16,999,708 12,027,478 (1,621) 551,672 2,616,964 2,391,731
Net change in unrealized appreciation/
depreciation on investments
and foreign currency translations .. (3,353,602) (5,066,538) (218,257) 821,793 (2,687,427) 1,452,153
----------- ----------- --------- ---------- ----------- ----------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND
FOREIGN CURRENCY ................... 13,646,106 6,960,940 (219,878) 1,373,465 (70,463) 3,843,884
----------- ----------- --------- ---------- ----------- ----------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS ......................... $14,277,022 $ 8,227,537 $ (33,175) $1,444,798 $ 67,923 $3,691,167
=========== =========== ========= ========== =========== ==========
See accompanying notes to financial statements.
19
THE WESTWOOD FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
EQUITY FUND BALANCED FUND
------------------------------ -------------------------------
FOR THE SIX FOR THE FOR THE SIX FOR THE
MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED
MARCH 31, 2006 SEPTEMBER 30, MARCH 31, 2006 SEPTEMBER 30,
(UNAUDITED) 2005 (UNAUDITED) 2005
-------------- ------------- -------------- -------------
OPERATIONS:
Net investment income .................. $ 630,916 $ 1,224,537 $ 1,266,597 $ 2,443,138
Net realized gain on investments ....... 16,999,708 25,102,359 12,027,478 13,147,368
Net change in unrealized appreciation/
depreciation on investments .......... (3,353,602) 6,163,758 (5,066,538) 2,236,304
------------- ------------- ------------- -------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ...................... 14,277,022 32,490,654 8,227,537 17,826,810
------------- ------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income
Class AAA ............................ (782,257) (1,760,755) (1,200,028) (2,246,908)
Class A .............................. (14,014) (8,953) (33,690) (61,410)
Class B .............................. (77) -- (454) (446)
Class C .............................. (619) (502) (2,980) (3,121)
------------- ------------- ------------- -------------
(796,967) (1,770,210) (1,237,152) (2,311,885)
------------- ------------- ------------- -------------
Net realized gain on investments
Class AAA ............................ -- -- (9,760,439) --
Class A .............................. -- -- (364,172) --
Class B .............................. -- -- (9,202) --
Class C .............................. -- -- (61,573) --
------------- ------------- ------------- -------------
-- -- (10,195,386) --
------------- ------------- ------------- -------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS .... (796,967) (1,770,210) (11,432,538) (2,311,885)
------------- ------------- ------------- -------------
SHARES OF BENEFICIAL INTEREST TRANSACTIONS:
Proceeds from shares issued
Class AAA ............................ 18,833,770 26,510,381 14,750,789 27,058,840
Class A .............................. 1,532,666 302,826 399,487 687,831
Class B .............................. -- -- 3,171 --
Class C .............................. 128,470 2,979 89,959 218,960
------------- ------------- ------------- -------------
20,494,906 26,816,186 15,243,406 27,965,631
------------- ------------- ------------- -------------
Proceeds from reinvestment of dividends
Class AAA ............................ 726,922 1,608,725 10,389,134 2,092,576
Class A .............................. 9,432 8,446 359,767 51,281
Class B .............................. 41 -- 8,142 380
Class C .............................. 619 502 52,080 2,172
------------- ------------- ------------- -------------
737,014 1,617,673 10,809,123 2,146,409
------------- ------------- ------------- -------------
Cost of shares redeemed
Class AAA ............................ (26,216,341) (59,376,350) (21,732,712) (35,775,507)
Class A .............................. (1,400,361) (1,815,288) (1,041,952) (984,117)
Class B .............................. (1,442) (13,854) (355) (40,935)
Class C .............................. (56,257) (31,680) (118,415) (188,945)
------------- ------------- ------------- -------------
(27,674,401) (61,237,172) (22,893,434) (36,989,504)
------------- ------------- ------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM SHARES OF BENEFICIAL
INTEREST TRANSACTIONS ................. (6,442,481) (32,803,313) 3,159,095 (6,877,464)
------------- ------------- ------------- -------------
REDEMPTION FEES ........................ -- (1,224) (23) 5,163
------------- ------------- ------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS .. 7,037,574 (2,084,093) (45,929) 8,642,624
NET ASSETS:
Beginning of period .................... 180,840,480 182,924,573 151,349,894 142,707,270
------------- ------------- ------------- -------------
End of period .......................... $ 187,878,054 $ 180,840,480 $ 151,303,965 $ 151,349,894
============= ============= ============= =============
Undistributed net investment income .... $ 225,031 $ 391,082 $ 160,698 $ 131,253
============= ============= ============= =============
See accompanying notes to financial statements.
20
THE WESTWOOD FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
INTERMEDIATE BOND FUND SMALLCAP EQUITY FUND
------------------------------ -------------------------------
FOR THE SIX FOR THE FOR THE SIX FOR THE
MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED
MARCH 31, 2006 SEPTEMBER 30, MARCH 31, 2006 SEPTEMBER 30,
(UNAUDITED) 2005 (UNAUDITED) 2005
-------------- ------------- -------------- -------------
OPERATIONS:
Net investment income (loss) ........... $ 186,703 $ 325,235 $ 71,333 $ (10,082)
Net realized gain (loss) on investments (1,621) 15,973 551,672 1,981,152
Net change in unrealized appreciation/
depreciation on investments ........... (218,257) (154,585) 821,793 329,566
------------ ------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ............ (33,175) 186,623 1,444,798 2,300,636
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income
Class AAA ............................ (178,815) (313,036) -- --
Class A .............................. (2,210) (2,268) -- --
Class B .............................. (5,676) (9,927) -- --
Class C .............................. (2) (4) -- --
------------ ------------ ------------ ------------
(186,703) (325,235) -- --
------------ ------------ ------------ ------------
Net realized gain on investments
Class AAA ............................ (14,113) (85,504) -- --
Class A .............................. (241) (644) -- --
Class B .............................. (665) (3,791) -- --
Class C .............................. -- (1) -- --
------------ ------------ ------------ ------------
(15,019) (89,940) -- --
------------ ------------ ------------ ------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS .... (201,722) (415,175) -- --
------------ ------------ ------------ ------------
SHARES OF BENEFICIAL INTEREST TRANSACTIONS:
Proceeds from shares issued
Class AAA ............................ 1,020,021 2,030,120 2,004,212 1,715,102
Class A .............................. 155,537 31,409 140,376 4,704
Class B .............................. 125,267 1,152 -- --
Class C .............................. -- -- 204,589 --
------------ ------------ ------------ ------------
1,300,825 2,062,681 2,349,177 1,719,806
------------ ------------ ------------ ------------
Proceeds from reinvestment of dividends
Class AAA ............................ 140,274 363,093 -- --
Class A .............................. 1,805 2,841 -- --
Class B .............................. 2,869 6,110 -- --
Class C .............................. -- -- -- --
------------ ------------ ------------ ------------
144,948 372,044 -- --
------------ ------------ ------------ ------------
Cost of shares redeemed
Class AAA ............................ (986,082) (1,457,099) (1,987,155) (7,388,405)
Class A .............................. (38,806) (50,245) -- (39,558)
Class B .............................. (127,483) (72,586) -- (13,872)
Class C .............................. -- -- -- (10,985)
------------ ------------ ------------ ------------
(1,152,371) (1,579,930) (1,987,155) (7,452,820)
------------ ------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM SHARES OF BENEFICIAL
INTEREST TRANSACTIONS ................. 293,402 854,795 362,022 (5,733,014)
------------ ------------ ------------ ------------
REDEMPTION FEES ........................ -- (78) -- (155)
------------ ------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS .. 58,505 626,165 1,806,820 (3,432,533)
NET ASSETS:
Beginning of period .................... 10,710,661 10,084,496 8,843,064 12,275,597
------------ ------------ ------------ ------------
End of period .......................... $ 10,769,166 $ 10,710,661 $ 10,649,884 $ 8,843,064
============ ============ ============ ============
Undistributed net investment income .... -- -- $ 71,333 --
============ ============ ============ ============
See accompanying notes to financial statements.
21
THE WESTWOOD FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
INCOME FUND MIGHTY MITES(SM) FUND
------------------------------ -------------------------------
FOR THE SIX FOR THE FOR THE SIX FOR THE
MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED
MARCH 31, 2006 SEPTEMBER 30, MARCH 31, 2006 SEPTEMBER 30,
(UNAUDITED) 2005 (UNAUDITED) 2005
-------------- ------------- -------------- -------------
OPERATIONS:
Net investment income (loss) ........... $ 138,386 $ 321,247 $ (152,717) $ (71,577)
Net realized gain on investments and
foreign currency transactions ........ 2,616,964 3,988,703 2,391,731 5,351,217
Net change in unrealized appreciation/
depreciation on investments and
foreign currency translations ........ (2,687,427) (504,578) 1,452,153 3,944,342
------------ ------------ ------------ ------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ............. 67,923 3,805,372 3,691,167 9,223,982
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income
Class AAA ............................ (154,470) (312,053) -- --
Class A .............................. (726) (1,038) -- --
Class B .............................. (7) (10) -- --
Class C .............................. (47) (73) -- --
------------ ------------ ------------ ------------
(155,250) (313,174) -- --
------------ ------------ ------------ ------------
Net realized gain on investments
Class AAA ............................ (4,124,003) (885,319) (5,443,979) (4,019,285)
Class A .............................. (24,170) (2,234) (5,023) (3,339)
Class B .............................. (544) (87) (53,095) (34,684)
Class C .............................. (3,976) (407) (35,532) (26,813)
------------ ------------ ------------ ------------
(4,152,693) (888,047) (5,537,629) (4,084,121)
------------ ------------ ------------ ------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS .... (4,307,943) (1,201,221) (5,537,629) (4,084,121)
------------ ------------ ------------ ------------
SHARES OF BENEFICIAL INTEREST TRANSACTIONS:
Proceeds from shares issued
Class AAA ............................ 3,284,060 4,500,719 1,779,723 1,101,902
Class A .............................. 144 80,304 576 1,152
Class B .............................. -- -- -- --
Class C .............................. -- 8,018 2,900 1,200
------------ ------------ ------------ ------------
3,284,204 4,589,041 1,783,199 1,104,254
------------ ------------ ------------ ------------
Proceeds from reinvestment of dividends
Class AAA ............................ 4,051,562 1,123,377 5,123,878 3,747,947
Class A .............................. 24,853 3,262 5,005 3,328
Class B .............................. 505 89 52,941 31,868
Class C .............................. 3,978 471 35,514 26,802
------------ ------------ ------------ ------------
4,080,898 1,127,199 5,217,338 3,809,945
------------ ------------ ------------ ------------
Cost of shares redeemed
Class AAA ............................ (5,608,024) (8,514,297) (5,442,602) (14,221,912)
Class A .............................. -- (3,263) -- (6,629)
Class B .............................. -- -- (5,580) (38,328)
Class C .............................. -- -- (43,008) (40,914)
------------ ------------ ------------ ------------
(5,608,024) (8,517,560) (5,491,190) (14,307,783)
------------ ------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM SHARES OF BENEFICIAL
INTEREST TRANSACTIONS ................. 1,757,078 (2,801,320) 1,509,347 (9,393,584)
------------ ------------ ------------ ------------
REDEMPTION FEES ........................ -- 6,511 -- 22
------------ ------------ ------------ ------------
NET DECREASE IN NET ASSETS ............. (2,482,942) (190,658) (337,115) (4,253,701)
NET ASSETS:
Beginning of period .................... 16,293,098 16,483,756 47,298,267 51,551,968
------------ ------------ ------------ ------------
End of period .......................... $ 13,810,156 $ 16,293,098 $ 46,961,152 $ 47,298,267
============ ============ ============ ============
Undistributed net investment income .... -- $ 8,073 -- $ 7,159
============ ============ ============ ============
See accompanying notes to financial statements.
22
THE WESTWOOD FUNDS
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
1. ORGANIZATION. The Westwood Funds, formerly the Gabelli Westwood Funds, (the
"Trust") was organized as a Massachusetts business trust on June 12, 1986. The
Trust is registered under the Investment Company Act of 1940, as amended (the
"1940 Act"), as a diversified open-end management investment company and
currently consists of six active separate investment portfolios: Equity Fund,
Balanced Fund, Intermediate Bond Fund, SmallCap Equity Fund, Income Fund, and
Mighty Mites(SM) Fund (collectively, the "Funds"), each with four classes of
shares outstanding known as the Class AAA Shares, Class A Shares, Class B
Shares, and Class C Shares. Each class of shares outstanding bears the same
voting, dividend, liquidation, and other rights and conditions, except that the
expenses incurred in the distribution and marketing of such shares are different
for each class. Prior to July 18, 2005, the Westwood Income Fund's name was
Westwood Realty Fund. The investment objectives of each Fund are as follows:
Equity Fund seeks to provide capital appreciation. The Fund's secondary goal is
to produce current income.
Balanced Fund seeks to provide capital appreciation and current income resulting
in a high total investment return consistent with prudent investment risk and a
balanced investment approach.
Intermediate Bond Fund seeks to maximize total return, while maintaining a level
of current income consistent with the maintenance of principal and liquidity.
SmallCap Equity Fund seeks to provide long-term capital appreciation by
investing primarily in smaller capitalization equity securities.
Income Fund seeks to provide a high level of current income as well as long-term
capital appreciation by investing primarily in income producing equity and fixed
income securities.
Mighty Mites(SM) Fund seeks to provide long-term capital appreciation by
investing primarily in micro-capitalization equity securities.
2. SIGNIFICANT ACCOUNTING POLICIES. The preparation of financial statements in
accordance with U.S. generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results could differ from
those estimates. The following is a summary of significant accounting policies
followed by the Funds in the preparation of their financial statements.
SECURITY VALUATION. Portfolio securities listed or traded on a nationally
recognized securities exchange or traded in the U.S. over-the-counter market for
which market quotations are readily available are valued at the last quoted sale
price or a market's official closing price as of the close of business on the
day the securities are being valued. If there were no sales that day, the
security is valued at the average of the closing bid and asked prices or, if
there were no asked prices quoted on that day, then the security is valued at
the closing bid price on that day. If no bid or asked prices are quoted on such
day, the security is valued at the most recently available price or, if the
Board of Trustees (the "Board") so determines, by such other method as the Board
shall determine in good faith, to reflect its fair market value. Portfolio
securities traded on more than one national securities exchange or market are
valued according to the broadest and most representative market, as determined
by Gabelli Advisers, Inc. (the "Adviser").
Portfolio securities primarily traded on foreign markets are generally valued at
the preceding closing values of such securities on their respective exchanges or
if after the close of the foreign markets, but prior to the close of business on
the day the securities are being valued, market conditions change significantly,
certain foreign securities may be fair valued pursuant to procedures established
by the Board. Debt instruments with remaining maturities of 60 days or less
23
THE WESTWOOD FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
that are not credit impaired are valued at amortized cost, unless the Board
determines such amount does not reflect the securities' fair value, in which
case these securities will be valued at their fair value as determined by the
Board. Debt instruments having a maturity greater than 60 days for which market
quotations are readily available are valued at the average of the latest bid and
asked prices. If there were no asked prices quoted on such day, the security is
valued using the closing bid price. Futures contracts are valued at the closing
settlement price of the exchange or board of trade on which the applicable
contract is traded.
Securities and assets for which market quotations are not readily available are
valued at their fair value as determined in good faith under procedures
established by and under the general supervision of the Board. Fair valuation
methodologies and procedures may include, but are not limited to: analysis and
review of available financial and non-financial information about the company;
comparisons to the valuation and changes in valuation of similar securities,
including a comparison of foreign securities to the equivalent U.S. dollar value
ADR securities at the close of the U.S. exchange; and evaluation of any other
information that could be indicative of the value of the security.
ACCOUNTING FOR REAL ESTATE INVESTMENT TRUSTS. The Funds (except for Intermediate
Bond Fund and Mighty Mites(SM) Fund) own shares of Real Estate Investment Trusts
("REITS") which report information on the source of their distributions
annually. Distributions received from REITS during the year which represent a
return of capital are recorded as a reduction to the cost of the individual REIT
and distributions which represent a capital gain dividend are recorded as a
realized long-term capital gain on investments.
FOREIGN CURRENCY TRANSLATIONS. The books and records of the Trust are maintained
in United States (U.S.) dollars. Foreign currencies, investments, and other
assets and liabilities are translated into U.S. dollars at the current exchange
rates. Purchases and sales of investment securities, income, and expenses are
translated at the exchange rate prevailing on the respective dates of such
transactions. Unrealized gains and losses that result from changes in foreign
exchange rates and/or changes in market prices of securities have been included
in unrealized appreciation/depreciation on investments and foreign currency
translations. Net realized foreign currency gains and losses resulting from
changes in exchange rates include foreign currency gains and losses between
trade date and settlement date on investment securities transactions, foreign
currency transactions, and the difference between the amounts of interest and
dividends recorded on the books of the Trust and the amounts actually received.
The portion of foreign currency gains and losses related to fluctuation in
exchange rates between the initial trade date and subsequent sale trade date is
included in realized gain/(loss) on investments.
FOREIGN SECURITIES. The Funds may directly purchase securities of foreign
issuers. Investing in securities of foreign issuers involves special risks not
typically associated with investing in securities of U.S. issuers. The risks
include possible revaluation of currencies, the ability to repatriate funds,
less complete financial information about companies, and possible future adverse
political and economic developments. Moreover, securities of many foreign
issuers and their markets may be less liquid and their prices more volatile than
those of securities of comparable U.S. issuers.
FOREIGN TAXES. The Funds may be subject to foreign taxes on income, gains on
investments, or currency repatriation, a portion of which may be recoverable.
The Funds will accrue such taxes and recoveries as applicable, based upon their
current interpretation of tax rules and regulations that exist in the markets in
which they invest.
24
THE WESTWOOD FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
RESTRICTED AND ILLIQUID SECURITIES. Each Fund may invest up to 5% (except for
the SmallCap Equity Fund, Income Fund, and Mighty Mites(SM) Fund which may
invest up to 15%) of its net assets in restricted securities issued under
Section 4(2) of the Securities Act of 1933 and up to 10% (except for the
SmallCap Equity Fund, Income Fund, and Mighty Mites(SM) Fund which may invest up
to 15%) of certain Rule 144A and other illiquid securities. Illiquid securities
include securities the disposition of which is subject to substantial legal or
contractual restrictions. The sale of illiquid securities often requires more
time and results in higher brokerage charges or dealer discounts and other
selling expenses than does the sale of securities eligible for trading on
national securities exchanges or in the over-the-counter markets. Restricted
securities may sell at a price lower than similar securities that are not
subject to restrictions on resale. Rule 144A securities freely saleable among
qualified institutional investors under special rules adopted by the Securities
and Exchange Commission ("SEC") may be treated as liquid if they satisfy
liquidity standards established by the Board. The continued liquidity of such
securities is not as well assured as that of publicly traded securities, and
accordingly the Board will monitor their liquidity.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Securities transactions are
accounted for on the trade date with realized gain or loss on investments
determined by using the identified cost method. Interest income (including
amortization of premium and accretion of discount) is recorded on the accrual
basis. Premiums and discounts on debt securities are amortized using the
effective yield to maturity method. Dividend income is recorded on the
ex-dividend date except for certain dividends which are recorded as soon as the
Funds are informed of the dividend.
DETERMINATION OF NET ASSET VALUE AND CALCULATION OF EXPENSES. Certain
administrative expenses are common to, and allocated among, the Funds and then
among the Classes of Shares. Such allocations are made on the basis of each
Fund's and Class' average net assets or other criteria directly affecting the
expenses as determined by the Adviser pursuant to procedures established by the
Board.
In calculating the net asset value ("NAV") per share of each class, investment
income, realized and unrealized gains and losses, redemption fees, and expenses
other than class specific expenses, are allocated daily to each class of shares
based upon the proportion of net assets of each class at the beginning of each
day. Distribution expenses are borne solely by the class incurring the expense.
CUSTODIAN FEE CREDITS. When cash balances are maintained in a Fund's custody
account, the Fund receives credits which are used to offset custodian fees. The
gross expenses paid under each custody arrangement are included in custodian
fees in the Statement of Operations with the corresponding expense offset, if
any, shown as "custodian fee credits".
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends from net investment
income are declared and paid annually for the Equity, SmallCap Equity, and
Mighty Mites(SM) Funds, and quarterly for the Balanced and Income Funds. The
Intermediate Bond Fund declares dividends daily and pays those dividends
monthly. Distributions of net realized gain on investments are normally declared
and paid at least annually by each Fund. Dividends and distributions to
shareholders are recorded on the ex-dividend date. Distributions to shareholders
are based on income and capital gains as determined in accordance with Federal
income tax regulations, which may differ from income and capital gains as
determined under U.S. generally accepted accounting principles. These
differences are primarily due to differing treatments of income and gains on
various investment securities and foreign currency transactions held by the
Funds, timing differences, and differing characterizations of distributions made
by the Funds. Distributions from net investment income include net realized
gains on foreign currency transactions. These book/tax differences are either
temporary or permanent in nature. To the extent these differences are permanent,
adjustments are made to the appropriate equity
25
THE WESTWOOD FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
accounts in the period when the differences arise. These reclassifications have
no impact on the NAV of the Funds and the calculation of net investment income
per share in the Financial Highlights excludes these adjustments. For the year
ended September 30, 2005, the following reclassifications were made to increase
(decrease) such accounts with offsetting adjustments to additional paid-in
capital. These reclassifications related primarily to distributions from Real
Estate Investment Trusts and net operating losses.
PAID-IN ACCUMULATED UNDISTRIBUTED ACCUMULATED REALIZED
CAPITAL NET INVESTMENT INCOME (LOSS) GAIN (LOSS) ON INVESTMENTS
------- ---------------------------- --------------------------
Equity Fund .................. -- -- --
Balanced Fund ................ -- -- --
Intermediate Bond Fund ....... -- -- --
SmallCap Equity Fund ......... $(10,082) $10,082 --
Income Fund .................. -- -- --
Mighty Mites(SM) Fund ........ -- 52,552 $(52,552)
The tax character of distributions paid during the year ended September 30, 2005
was ordinary income and long-term capital gains as follows:
INTERMEDIATE SMALLCAP MIGHTY
EQUITY BALANCED BOND EQUITY INCOME MITES(SM)
FUND FUND FUND FUND FUND FUND
---------- ---------- -------- ------- ---------- ----------
Ordinary income
(inclusive of short-term
capital gains) ......................... $1,770,210 $2,311,885 $326,226 -- $ 313,174 $1,345,361
Net long-term capital gains .............. -- -- 88,949 -- 888,047 2,738,760
---------- ---------- -------- ------- ---------- ----------
Total distributions paid ................. $1,770,210 $2,311,885 $415,175 -- $1,201,221 $4,084,121
========== ========== ======== ======= ========== ==========
PROVISION FOR INCOME TAXES. The Funds intend to continue to qualify as regulated
investment companies under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"). It is the policy of the Funds to comply with the
requirements of the Code applicable to regulated investment companies and to
distribute substantially all of the Funds' net investment company taxable income
and net capital gains. Therefore, no provision for Federal income taxes is
required.
At September 30, 2005, the difference between book and tax basis unrealized
appreciation/(depreciation) is primarily attributable to the tax basis deferral
of losses on wash sales. Additionally, Mighty Mites(SM) has a basis adjustment
due to an investment in a publicly traded limited partnership.
As of September 30, 2005, the components of accumulated earnings/(losses) on a
tax basis were as follows:
INTERMEDIATE SMALLCAP MIGHTY
EQUITY BALANCED BOND EQUITY INCOME MITES(SM)
FUND FUND FUND FUND FUND FUND
---------- ---------- -------- ------- ---------- ----------
Undistributed ordinary income ...........$ 391,082 $ 131,253 $11,088 -- $ 255,787 --
Undistributed long-term capital gain .... -- 9,714,779 6,369 -- 3,607,312 $ 4,991,966
Capital loss carryforward ............... (4,052,930) -- -- $(9,321,962) -- --
Unrealized appreciation/(depreciation) .. 33,667,649 18,424,950 65,711 1,082,148 2,939,150 12,151,430
Post-October currency losses ............ -- -- -- -- -- (2,076)
----------- ----------- ------- ----------- ---------- -----------
Total accumulated income/(loss) .........$30,005,801 $28,270,982 $83,168 $(8,239,814) $6,802,249 $17,141,320
=========== =========== ======= =========== ========== ===========
26
THE WESTWOOD FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
The Equity Fund has capital loss carryforwards for Federal income tax purposes
of $2,643,258 and $1,409,672 available through September 2011 and 2012,
respectively. The SmallCap Equity Fund has capital loss carryforwards for
Federal income tax purposes of $4,476,476 and $4,845,486 available through
September 2010 and 2011, respectively. These loss carryforwards are available to
reduce future required distributions of net capital gains to shareholders.
During the fiscal year ended September 30, 2005 the Equity Fund, Balanced Fund,
and SmallCap Equity Fund utilized capital loss carryforwards of $24,706,242,
$3,379,553, and $1,983,541, respectively.
Under the current tax law, capital losses related to securities realized after
October 31 and prior to the Funds' fiscal year end may be treated as occurring
on the first day of the following year. For the fiscal year ended September 30,
2005, the Funds had no capital losses to defer.
The following summarizes the tax cost of investments and related unrealized
appreciation/depreciation at March 31, 2006:
INTERMEDIATE SMALLCAP MIGHTY
EQUITY BALANCED BOND EQUITY INCOME MITES(SM)
FUND FUND FUND FUND FUND FUND
---------- ---------- -------- ------- ---------- ----------
Aggregate cost of investments ........... $154,930,289 $135,844,596 $10,721,968 $8,206,352 $12,893,904 $32,982,002
============ ============ =========== ========== =========== ===========
Gross unrealized appreciation ........... $ 32,173,793 $ 15,098,439 $ 68,028 $1,956,209 $ 452,264 $16,763,112
Gross unrealized depreciation ........... (1,845,028) (1,726,826) (203,370) (56,296) (199,599) (3,008,937)
------------ ------------ ----------- ---------- ----------- -----------
Net unrealized
appreciation/(depreciation) ........... $ 30,328,765 $ 13,371,613 $ (135,342) $1,899,913 $ 252,665 $13,754,175
============ ============ =========== ========== =========== ===========
3. INVESTMENT ADVISORY AGREEMENTS. The Funds have entered into an investment
advisory agreement (the "Advisory Agreement") with the Adviser which provides
that the Funds will pay the Adviser a fee, computed daily and paid monthly, at
the annual rate of 1.00% for the Equity, SmallCap Equity, Income, and Mighty
Mites(SM) Funds, 0.75% for the Balanced Fund, and 0.60% for the Intermediate
Bond Fund, of the value of the Fund's average daily net assets. In accordance
with the Advisory Agreement, the Adviser provides a continuous investment
program for the Funds' portfolios, oversees the administration of all aspects of
the Funds' business and affairs, and pays the compensation of all Officers and
Trustees of the Funds who are affiliated persons of the Adviser. The Adviser
contractually agreed to waive investment advisory fees and/or reimburse expenses
to the Intermediate Bond, SmallCap Equity, and Income Funds in the event annual
expenses of such Funds exceed certain prescribed limits. Such fee
waiver/reimbursement arrangement will continue until at least September 30,
2006. This reimbursement agreement ended on September 30, 2005 for the Mighty
Mites(SM) Fund. For the six months ended March 31, 2006, the Adviser was
entitled to fees of $915,192, $574,812, $32,671, $48,095, $74,183, and $231,128
for the Equity, Balanced, Intermediate Bond, SmallCap Equity, Income, and Mighty
Mites(SM) Funds, respectively. For the six months ended March 31, 2006, the
Adviser waived fees or reimbursed expenses in the amounts of $36,947, $28,657,
and $33,969 for the Intermediate Bond, SmallCap Equity, and Income Funds,
respectively.
The Intermediate Bond, SmallCap Equity, Income, and Mighty Mites(SM) Funds are
obliged to repay the Adviser for a period of two fiscal years following the
fiscal year in which the Adviser reimbursed the Fund only to the extent that the
operating expenses of the Fund fall below the applicable expense limitation for
Class AAA of 1.00%, 1.50%, 1.50%, and 1.50%, respectively, and for Class A of
1.10%, 1.75%, 1.75%, and 1.75%, respectively, and for Class B and Class C of
1.75%, 2.25%, 2.25%, and 2.25%, respectively of average daily net assets, the
annual limitation under the Advisory Agreement. As of March 31, 2006, the
cumulative unreimbursed amounts which may be recovered by the Adviser within the
next two fiscal years are $196,002, $189,422, $218,070, and $219,966 for the
Intermediate Bond, SmallCap Equity, Income, and Mighty Mites(SM) Funds,
respectively.
27
THE WESTWOOD FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
The Funds, with the exception of the Mighty Mites(SM) Fund, have also entered
into a sub-advisory agreement with Westwood Management Corp. (the "Sub-Adviser")
whereby the Adviser pays the Sub-Adviser the greater of $150,000 per year on an
aggregate basis for the Funds or a fee of 35% of net revenues to the Adviser
from the Funds. For the six months ended March 31, 2006, the Adviser informed
the Funds that it paid collectively to the Sub-Adviser fees of $405,926 for the
Equity, Balanced, Intermediate Bond, SmallCap Equity, and Income Funds.
4. DISTRIBUTION PLAN. The Funds' Board has adopted a distribution plan (the
"Plan") for each class of shares pursuant to Rule 12b-1 under the 1940 Act.
Gabelli & Company, Inc. ("Gabelli & Company"), an affiliate of the Adviser,
serves as distributor of the Funds. Under the Class AAA, Class A, Class B, and
Class C Share Plans, payments are authorized to Gabelli & Company at annual
rates of 0.25%, 0.50% (for the Intermediate Bond Fund at an annual rate of
0.35%), 1.00%, and 1.00%, respectively, of the average daily net assets of those
classes, the annual limitations under each Plan. Such payments are accrued daily
and paid monthly.
5. PORTFOLIO SECURITIES. Purchases and proceeds from the sales of securities for
the six months ended March 31, 2006, other than short-term securities, are as
follows:
PURCHASES SALES PURCHASES SALES
(EXCLUDING U.S. (EXCLUDING U.S. OF U.S. OF U.S.
GOVERNMENT GOVERNMENT GOVERNMENT GOVERNMENT
SECURITIES) SECURITIES) SECURITIES SECURITIES
------------- ------------- ---------- ----------
Equity Fund .......................... $70,560,608 $71,968,090 -- --
Balanced Fund ........................ 45,153,124 51,655,491 $9,177,483 $6,340,593
Intermediate Bond Fund ............... -- 639,717 2,303,944 921,786
SmallCap Equity Fund ................. 4,145,385 3,813,772 -- --
Income Fund .......................... 12,227,159 15,994,965 1,482,003 --
Mighty Mites(SM) Fund ................ 684,459 5,177,695 -- --
6. TRANSACTIONS WITH AFFILIATES. During the six months ended March 31, 2006, the
Mighty Mites(SM) Fund paid brokerage commissions of $7,608 to Gabelli & Company.
Additionally, Gabelli & Company informed the Trust that it received $6,667 from
investors representing commissions (sales charges and underwriting fees) on
sales and redemptions of Fund shares.
The cost of calculating each Fund's NAV per share is a Fund expense pursuant to
the Advisory Agreement between each Fund and the Adviser. During the six months
ended March 31, 2006, the Equity and Balanced Funds each reimbursed the Adviser
$22,500 in connection with the cost of computing the Fund's NAV, which is
included in miscellaneous expenses in the Statement of Operations. A
reimbursement was not sought during the six months ended March 31, 2006 for the
Income, Intermediate Bond, SmallCap Equity, and Mighty Mites(SM) Funds.
28
THE WESTWOOD FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
7. SHARES OF BENEFICIAL INTEREST. The Funds currently offer four classes of
shares -- Class AAA Shares, Class A Shares, Class B Shares, and Class C Shares.
Class AAA Shares are offered only to investors who acquire them directly from
Gabelli & Company, or through selected broker/dealers, or the transfer agent
without a sales charge. Class A Shares are subject to a maximum front-end sales
charge of 4.00%. Class B Shares are subject to a contingent deferred sales
charge ("CDSC") upon redemption within six years of purchase and automatically
convert to Class A Shares approximately eight years after the original purchase.
The applicable CDSC is equal to a declining percentage of the lesser of the NAV
per share at the date of original purchase or at the date of redemption, based
on the length of time held. Class C Shares are subject to a 1% CDSC for one year
after purchase. Class B Shares are available only through exchange of Class B
Shares of other funds distributed by Gabelli & Company. The Board has approved
Class I Shares which have not been offered publicly.
From August 1, 2004 to April 1, 2005, the Funds imposed a redemption fee on
Class AAA, Class A, Class B, and Class C Shares that were redeemed or exchanged
on or before the sixtieth day after the date of a purchase. Effective April 1,
2005, the redemption fee was eliminated for all Funds except Mighty Mites(SM)
Fund, whose redemption fee was retained at 2.00% applicable to redemptions or
exchanges within 7 days or less after the date of a purchase. The redemption fee
is deducted from the proceeds otherwise payable to the redeeming shareholders
and is retained by the Fund. The Mighty Mites(SM) Fund did not retain any
redemption fees during the six months ended March 31, 2006.
The redemption fee does not apply to shares purchased through programs that the
Adviser determined to have appropriate short-term trading policies in place.
Additionally, certain recordkeepers for qualified and non-qualified retirement
plans that could not collect the redemption fee at the participant level due to
systems limitations have received an extension to implement such systems.
29
THE WESTWOOD FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
Transactions in shares of beneficial interest were as follows:
EQUITY FUND BALANCED FUND INTERMEDIATE BOND FUND
----------------------------- ------------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
MARCH 31, 2006 SEPTEMBER 30, MARCH 31, 2006 SEPTEMBER 30, MARCH 31, 2006 SEPTEMBER 30,
(UNAUDITED) 2005 (UNAUDITED) 2005 (UNAUDITED) 2005
---------------- ------------ ---------------- ------------- --------------- -------------
CLASS AAA
Shares sold ....................... 1,648,469 2,614,599 1,187,241 2,242,945 94,089 183,882
Shares issued upon
reinvestment of dividends ....... 64,387 163,156 861,751 171,183 12,936 32,898
Shares redeemed ................... (2,302,407) (5,914,467) (1,754,161) (2,955,568) (90,805) (131,846)
---------- ---------- ---------- ---------- ------- --------
Net increase (decrease)
in Class AAA shares .......... (589,551) (3,136,712) 294,831 (541,440) 16,220 84,934
========== ========== ========== ========== ======= ========
CLASS A
Shares sold ....................... 138,779 29,818 32,352 57,114 14,342 2,852
Shares issued upon
reinvestment of dividends ...... 838 856 29,860 4,182 167 257
Shares redeemed ................... (121,524) (184,155) (84,140) (80,170) (3,566) (4,564)
---------- ---------- ---------- ---------- ------- --------
Net increase (decrease)
in Class A shares ............. 18,093 (153,481) (21,928) (18,874) 10,943 (1,455)
========== ========== ========== ========== ======= ========
CLASS B
Shares sold ....................... -- -- 258 -- 11,543 104
Shares issued upon
reinvestment of dividends ...... 4 -- 675 31 264 554
Shares redeemed ................... (123) (1,360) (29) (3,427) (11,786) (6,562)
---------- ---------- ---------- ---------- ------- --------
Net increase (decrease)
in Class B shares ............. (119) (1,360) 904 (3,396) 21 (5,904)
========== ========== ========== ========== ======= ========
CLASS C
Shares sold ....................... 11,287 278 7,344 18,332 -- --
Shares issued upon
reinvestment of dividends ....... 55 51 4,312 174 -- --
Shares redeemed ................... (4,875) (3,114) (9,504) (15,539) -- --
---------- ---------- ---------- ---------- ------- --------
Net increase (decrease)
in Class C shares ............. 6,467 (2,785) 2,152 2,967 -- --
========== ========== ========== ========== ======= ========
SMALLCAP EQUITY FUND INCOME FUND MIGHTY MITES(SM) FUND
----------------------------- -------------------------------- -----------------------------
CLASS AAA
Shares sold ....................... 174,261 167,006 238,430 294,028 117,569 70,495
Shares issued upon
reinvestment of dividends ....... -- -- 350,218 74,389 350,949 247,063
Shares redeemed ................... (169,382) (728,768) (425,413) (555,553) (352,511) (909,141)
---------- ---------- ---------- ---------- ------- --------
Net increase (decrease)
in Class AAA shares ........... 4,879 (561,762) 163,235 (187,136) 116,007 (591,583)
========== ========== ========== ========== ======= ========
CLASS A
Shares sold ....................... 11,825 427 10 5,237 36 74
Shares issued upon
reinvestment of dividends ...... -- -- 2,105 212 344 219
Shares redeemed ................... -- (4,228) -- (206) -- (409)
---------- ---------- ---------- ---------- ------- --------
Net increase (decrease)
in Class A shares ............. 11,825 (3,801) 2,115 5,243 380 (116)
========== ========== ========== ========== ======= ========
CLASS B
Shares sold ....................... -- -- -- -- -- --
Shares issued upon
reinvestment of dividends ...... -- -- 42 6 3,739 2,143
Shares redeemed ................... -- (1,353) -- -- (346) (2,562)
---------- ---------- ---------- ---------- ------- --------
Net increase (decrease)
in Class B shares ............. -- (1,353) 42 6 3,393 (419)
========== ========== ========== ========== ======= ========
CLASS C
Shares sold ....................... 18,232 -- -- 533 194 79
Shares issued upon
reinvestment of dividends ...... -- -- 323 30 2,520 1,809
Shares redeemed ................... -- (1,100) -- -- (2,620) (2,579)
---------- ---------- ---------- ---------- ------- --------
Net increase (decrease)
in Class C shares ............. 18,232 (1,100) 323 563 94 (691)
========== ========== ========== ========== ======= ========
30
THE WESTWOOD FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
8. INDEMNIFICATIONS. The Funds enter into contracts that contain a variety of
indemnifications. The Funds' maximum exposure under these arrangements is
unknown. However, the Funds have not had prior claims or losses pursuant to
these contracts and expect the risk of loss to be remote.
9. OTHER MATTERS. Affiliates of the Adviser have received subpoenas from the
Attorney General of the State of New York and the SEC requesting information on
mutual fund trading practices. GAMCO Investors, Inc., the Adviser's parent
company, is responding to these requests for documents and testimony. On a
separate matter, in September 2005, Gabelli Funds, LLC, an affiliate of the
Adviser, was informed by the staff of the SEC that the staff may recommend to
the Commission that an administrative remedy and a monetary penalty be sought
from Gabelli Funds, LLC in connection with the actions of two of seven
closed-end funds it manages relating to Section 19(a) and Rule 19a-1 of the 1940
Act. These provisions require registered investment companies to provide written
statements to shareholders when a dividend is made from a source other than net
investment income. While the two closed-end funds sent annual statements and
provided other materials containing this information, the funds did not send
written statements to shareholders with each distribution in 2002 and 2003.
Gabelli Funds, LLC believes that all of the funds it advises are now in
compliance. GAMCO Investors, Inc. believes that these matters would have no
effect on the Funds or any material adverse effect on the Adviser or its ability
to manage the Funds.
31
THE WESTWOOD FUNDS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period:
OPERATING PERFORMANCE DISTRIBUTIONS TO SHAREHOLDERS
--------------------------------------------------- --------------------------------------
NET
REALIZED
NET ASSET NET AND TOTAL NET
VALUE, INVESTMENT UNREALIZED GAIN FROM NET REALIZED
PERIOD ENDED BEGINNING INCOME (LOSS) ON INVESTMENT INVESTMENT GAIN ON TOTAL
SEPTEMBER 30 OF PERIOD (LOSS)(A) INVESTMENTS OPERATIONS INCOME INVESTMENTS DISTRIBUTIONS
- ------------ --------- ---------- --------------- ---------- ---------- ----------- -------------
EQUITY FUND
CLASS AAA
2006(c) $11.08 $ 0.04 $ 0.85 $ 0.89 $(0.05) -- $(0.05)
2005 9.32 0.07 1.79 1.86 (0.10) -- (0.10)
2004 7.99 0.08 1.36 1.44 (0.11) -- (0.11)
2003 7.02 0.09 0.96 1.05 (0.08) -- (0.08)
2002 8.32 0.07 (1.32) (1.25) (0.05) -- (0.05)
2001 11.12 0.04 (1.52) (1.48) (0.01) $(1.31) (1.32)
CLASS A
2006(c) $11.05 $ 0.02 $ 0.85 $ 0.87 $(0.04) -- $(0.04)
2005 9.28 0.06 1.75 1.81 (0.04) -- (0.04)
2004 7.97 0.05 1.35 1.40 (0.09) -- (0.09)
2003 6.99 0.07 0.97 1.04 (0.06) -- (0.06)
2002 8.29 0.05 (1.32) (1.27) (0.03) -- (0.03)
2001 11.10 0.02 (1.52) (1.50) -- $(1.31) (1.31)
CLASS B
2006(c) $10.96 $(0.00)(e) $ 0.85 $ 0.85 $(0.03) -- $(0.03)
2005 9.21 (0.00)(e) 1.75 1.75 -- -- --
2004 7.92 0.02 1.34 1.36 (0.07) -- (0.07)
2003 6.97 0.04 0.95 0.99 (0.04) -- (0.04)
2002 8.29 0.02 (1.32) (1.30) (0.02) -- (0.02)
2001(f) 9.65 (0.01) (1.35) (1.36) -- -- --
CLASS C
2006(c) $10.97 $(0.01) $ 0.84 $ 0.83 $(0.03) -- $(0.03)
2005 9.24 (0.01) 1.77 1.76 (0.03) -- (0.03)
2004 7.89 0.01 1.34 1.35 -- -- --
2003 6.98 0.04 0.96 1.00 (0.09) -- (0.09)
2002 8.28 0.01 (1.31) (1.30) -- -- --
2001(g) 10.25 (0.01) (1.96) (1.97) -- -- --
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
---------------------------------------------------------
NET NET ASSETS,
ASSET VALUE, END OF NET PORTFOLIO
PERIOD ENDED REDEMPTION END OF TOTAL PERIOD INVESTMENT OPERATING TURNOVER
SEPTEMBER 30 FEES(A) PERIOD RETURN+ (IN 000'S) INCOME (LOSS) EXPENSES(B) RATE
- ------------ ----------- ---------- ------- ---------- ------------- ----------- ---------
EQUITY FUND
CLASS AAA
2006(c) -- $11.92 8.1% $184,959 0.70%(d) 1.55%(d) 40%
2005 $(0.00)(e) 11.08 20.0 178,394 0.69 1.51 59
2004 0.00(e) 9.32 18.1 179,407 0.90 1.50 44
2003 -- 7.99 15.1 221,635 1.19 1.48 50
2002 -- 7.02 (15.1) 231,197 0.84 1.46 84
2001 -- 8.32 (14.9) 265,855 0.45 1.43 87
CLASS A
2006(c) -- $11.88 7.9% $ 2,652 0.38%(d) 1.80%(d) 40%
2005 $(0.00)(e) 11.05 19.6 2,267 0.59 1.76 59
2004 0.00(e) 9.28 17.7 3,328 0.61 1.75 44
2003 -- 7.97 15.0 2,923 0.94 1.73 50
2002 -- 6.99 (15.4) 1,808 0.59 1.71 84
2001 -- 8.29 (15.1) 2,096 0.20 1.68 87
CLASS B
2006(c) -- $11.78 7.8% $ 30 (0.05)%(d) 2.30%(d) 40%
2005 $(0.00)(e) 10.96 19.0 30 (0.01) 2.26 59
2004 0.00(e) 9.21 17.2 38 0.21 2.25 44
2003 -- 7.92 14.3 74 0.44 2.23 50
2002 -- 6.97 (15.7) 53 0.09 2.21 84
2001(f) -- 8.29 (14.1) 27 (0.30)(d) 2.18(d) 87
CLASS C
2006(c) -- $11.77 7.6% $ 237 (0.14)%(d) 2.30%(d) 40%
2005 $(0.00)(e) 10.97 19.1 149 (0.06) 2.26 59
2004 0.00(e) 9.24 17.1 152 0.11 2.25 44
2003 -- 7.89 14.4 129 0.44 2.23 50
2002 -- 6.98 (15.7) 33 0.09 2.21 84
2001(g) -- 8.28 (19.2) 4 (0.30)(d) 2.18(d) 87
- --------------------------
+ Total return represents aggregate total return of a hypothetical $1,000
investment at the beginning of the period and sold at the end of the period
including reinvestment of dividends. Total return for the period of less
than one year is not annualized.
(a) Per share data is calculated using the average shares outstanding method.
(b) The ratios do not include a reduction of expenses for custodian fee credits
on cash balances maintained with the custodian. Including such custodian fee
credits, the expense ratios would be 1.51% (Class AAA), 1.76% (Class A), and
2.26% (Class B and Class C) for the period ended March 31, 2006; 1.49%
(Class AAA), 1.74% (Class A), and 2.24% (Class B and Class C) for the
periods ended September 30, 2005 and 2004; 1.47% (Class AAA), 1.72% (Class
A), and 2.22% (Class B and Class C) for 2003; 1.43% (Class AAA), 1.68%
(Class A), and 2.18% (Class B and Class C) for 2002; and 1.42% (Class AAA),
1.67% (Class A), and 2.17% (Class B and Class C) for 2001.
(c) For the period ended March 31, 2006, unaudited.
(d) Annualized.
(e) Amount represents less than $0.005 per share.
(f) From March 27, 2001 through September 30, 2001, the period through which
Class B Shares were continuously outstanding.
(g) From February 13, 2001 through September 30, 2001, the period through which
Class C Shares were continuously outstanding.
See accompanying notes to financial statements.
32
THE WESTWOOD FUNDS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period:
OPERATING PERFORMANCE DISTRIBUTIONS TO SHAREHOLDERS
--------------------------------------------------- --------------------------------------
NET
REALIZED
NET ASSET NET AND TOTAL NET
VALUE, INVESTMENT UNREALIZED GAIN FROM NET REALIZED
PERIOD ENDED BEGINNING INCOME (LOSS) ON INVESTMENT INVESTMENT GAIN ON TOTAL
SEPTEMBER 30 OF PERIOD (LOSS)(A) INVESTMENTS OPERATIONS INCOME INVESTMENTS DISTRIBUTIONS
- ------------ --------- ---------- --------------- ---------- ---------- ----------- -------------
BALANCED FUND
CLASS AAA
2006(c) $12.74 $0.10 $ 0.56 $ 0.66 $(0.10) $(0.85) $(0.95)
2005 11.47 0.20 1.26 1.46 (0.19) -- (0.19)
2004 10.51 0.21 0.97 1.18 (0.22) -- (0.22)
2003 9.65 0.21 0.87 1.08 (0.22) -- (0.22)
2002 10.40 0.24 (0.75) (0.51) (0.24) (0.00)(d) (0.24)
2001 12.40 0.26 (0.90) (0.64) (0.26) (1.10) (1.36)
CLASS A
2006(c) $12.74 $0.09 $ 0.55 $ 0.64 $(0.08) $(0.85) $(0.93)
2005 11.44 0.17 1.26 1.43 (0.13) -- (0.13)
2004 10.48 0.18 0.97 1.15 (0.19) -- (0.19)
2003 9.62 0.19 0.86 1.05 (0.19) -- (0.19)
2002 10.37 0.21 (0.75) (0.54) (0.21) (0.00)(d) (0.21)
2001 12.36 0.23 (0.89) (0.66) (0.23) (1.10) (1.33)
CLASS B
2006(c) $12.76 $0.06 $ 0.56 $ 0.62 $(0.04) $(0.85) $(0.89)
2005 11.43 0.11 1.26 1.37 (0.04) -- (0.04)
2004 10.48 0.13 0.96 1.09 (0.14) -- (0.14)
2003 9.63 0.14 0.86 1.00 (0.15) -- (0.15)
2002 10.40 0.17 (0.77) (0.60) (0.17) (0.00)(d) (0.17)
2001(f) 11.35 0.08 (0.95) (0.87) (0.08) -- (0.08)
CLASS C
2006(c) $12.78 $0.06 $ 0.55 $ 0.61 $(0.04) $(0.85) $(0.89)
2005 11.45 0.11 1.26 1.37 (0.04) -- (0.04)
2004 10.49 0.13 0.97 1.10 (0.14) -- (0.14)
2003 9.62 0.14 0.87 1.01 (0.14) -- (0.14)
2002 10.40 0.19 (0.79) (0.60) (0.18) (0.00)(d) (0.18)
2001(g) 10.17 0.00(d) 0.23 0.23 -- -- --
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
---------------------------------------------------------
NET NET ASSETS,
ASSET VALUE, END OF NET PORTFOLIO
PERIOD ENDED REDEMPTION END OF TOTAL PERIOD INVESTMENT OPERATING TURNOVER
SEPTEMBER 30 FEES(A) PERIOD RETURN+ (IN 000'S) INCOME EXPENSES(B) RATE
- ------------ ----------- ---------- ------- ---------- ------------- ----------- ---------
BALANCED FUND
CLASS AAA
2006(c) $(0.00)(d) $12.45 5.5% $144,911 1.67%(e) 1.30%(e) 38%
2005 0.00(d) 12.74 12.8 144,572 1.67 1.25 56
2004 0.00(d) 11.47 11.3 136,400 1.92 1.23 41
2003 -- 10.51 11.2 152,409 2.10 1.23 56
2002 -- 9.65 (5.1) 150,915 2.25 1.22 78
2001 -- 10.40 (5.8) 154,179 2.23 1.17 81
CLASS A
2006(c) $(0.00)(d) $12.45 5.3% $ 5,259 1.42%(e) 1.55%(e) 38%
2005 0.00(d) 12.74 12.6 5,658 1.42 1.50 56
2004 0.00(d) 11.44 11.0 5,298 1.66 1.48 41
2003 -- 10.48 11.0 5,070 1.85 1.48 56
2002 -- 9.62 (5.4) 5,761 2.00 1.47 78
2001 -- 10.37 (6.0) 6,472 1.98 1.42 81
CLASS B
2006(c) $(0.00)(d) $12.49 5.1% $ 146 0.91%(e) 2.05%(e) 38%
2005 0.00(d) 12.76 12.0 138 0.93 2.00 56
2004 0.00(d) 11.43 10.4 163 1.18 1.98 41
2003 -- 10.48 10.4 184 1.35 1.98 56
2002 -- 9.63 (5.9) 113 1.50 1.97 78
2001(f) -- 10.40 (7.7) 2 1.48(e) 1.92(e) 81
CLASS C
2006(c) $(0.00)(d) $12.50 5.0% $ 988 0.91%(e) 2.05%(e) 38%
2005 0.00(d) 12.78 12.0 982 0.92 2.00 56
2004 0.00(d) 11.45 10.5 846 1.19 1.98 41
2003 -- 10.49 10.5 456 1.35 1.98 56
2002 -- 9.62 (5.9) 284 1.50 1.97 78
2001(g) -- 10.40 2.3 7 1.48(e) 1.92(e) 81
- --------------------------
+ Total return represents aggregate total return of a hypothetical $1,000
investment at the beginning of the period and sold at the end of the period
including reinvestment of dividends. Total return for the period of less
than one year is not annualized.
(a) Per share data is calculated using the average shares outstanding method.
(b) The ratios do not include a reduction of expenses for custodian fee credits
on cash balances maintained with the custodian. Including such custodian fee
credits, the expense ratios would be 1.26% (Class AAA), 1.51% (Class A), and
2.01% (Class B and Class C) for the period ended March 31, 2006; 1.22%
(Class AAA), 1.47% (Class A), and 1.97% (Class B and Class C) for the
periods ended September 30, 2005 and 2004; 1.20% (Class AAA), 1.45% (Class
A), and 1.95% (Class B and Class C) for 2003; 1.17% (Class AAA), 1.42%
(Class A), and 1.92% (Class B and Class C) for 2002; and 1.15% (Class AAA),
1.40% (Class A), and 1.90% (Class B and Class C) for 2001.
(c) For the period ended March 31, 2006, unaudited.
(d) Amount represents less than $0.005 per share.
(e) Annualized.
(f) From March 27, 2001 through September 30, 2001, the period through which
Class B Shares were continuously outstanding.
(g) From September 25, 2001 through September 30, 2001, the period through which
Class C Shares were continuously outstanding.
See accompanying notes to financial statements.
33
THE WESTWOOD FUNDS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period:
OPERATING PERFORMANCE DISTRIBUTIONS TO SHAREHOLDERS
------------------------------------------ --------------------------------------
NET
REALIZED
NET ASSET AND TOTAL NET
VALUE, NET UNREALIZED GAIN FROM NET REALIZED
PERIOD ENDED BEGINNING INVESTMENT (LOSS) ON INVESTMENT INVESTMENT GAIN ON TOTAL
SEPTEMBER 30 OF PERIOD INCOME(A) INVESTMENTS OPERATIONS INCOME INVESTMENTS DISTRIBUTIONS
- ------------ ---------- ---------- -------------- ---------- ---------- ----------- -------------
INTERMEDIATE BOND FUND
CLASS AAA
2006(d) $10.93 $0.19 $(0.22) $(0.03) $(0.19) $(0.01) $(0.20)
2005 11.18 0.34 (0.16) 0.18 (0.34) (0.09) (0.43)
2004 11.31 0.33 (0.12) 0.21 (0.33) (0.01) (0.34)
2003 11.30 0.31 -- 0.31 (0.30) -- (0.30)
2002 10.82 0.45 0.48 0.93 (0.45) -- (0.45)
2001 10.08 0.51 0.74 1.25 (0.51) -- (0.51)
CLASS A
2006(d) $10.93 $0.18 $(0.23) $(0.05) $(0.18) $(0.01) $(0.19)
2005 11.18 0.33 (0.16) 0.17 (0.33) (0.09) (0.42)
2004 11.31 0.32 (0.12) 0.20 (0.32) (0.01) (0.33)
2003 11.30 0.30 0.01 0.31 (0.30) -- (0.30)
2002 10.82 0.44 0.48 0.92 (0.44) -- (0.44)
2001(g) 10.55 0.09 0.27 0.36 (0.09) -- (0.09)
CLASS B
2006(d) $10.93 $0.15 $(0.23) $(0.08) $(0.15) $(0.01) $(0.16)
2005 11.18 0.26 (0.16) 0.10 (0.26) (0.09) (0.35)
2004 11.30 0.25 (0.11) 0.14 (0.25) (0.01) (0.26)
2003 11.29 0.23 -- 0.23 (0.22) -- (0.22)
2002 10.82 0.37 0.47 0.84 (0.37) -- (0.37)
2001(h) 10.53 0.22 0.29 0.51 (0.22) -- (0.22)
CLASS C (I)
2006(d) $10.82 $0.09 $(0.25) $(0.16) $(0.25) $(0.01) $(0.26)
2005 11.17 0.27 (0.12) 0.15 (0.41) (0.09) (0.50)
2004 11.30 0.25 (0.09) 0.16 (0.28) (0.01) (0.29)
2003 11.29 0.22 0.01 0.23 (0.22) -- (0.22)
2002(j) 10.84 0.35 0.45 0.80 (0.35) -- (0.35)
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
----------------------------------------------------------------------
OPERATING OPERATING
NET NET EXPENSES EXPENSES
ASSET ASSETS, NET OF BEFORE
VALUE, END OF NET WAIVERS/ WAIVERS/ PORTFOLIO
PERIOD ENDED REDEMPTION END OF TOTAL PERIOD INVESTMENT REIMBURSE- REIMBURSE- TURNOVER
SEPTEMBER 30 FEES(A) PERIOD RETURN+ (IN 000'S) INCOME MENTS(B) MENTS(C) RATE
- ------------ ---------- ------ ------- ---------- ---------- ---------- ------------ ---------
INTERMEDIATE BOND FUND
CLASS AAA
2006(d) -- $10.70 (0.3)% $10,223 3.46%(e) 1.07%(e) 1.75%(e) 16%
2005 $(0.00)(f) 10.93 1.7 10,272 3.10 1.04 1.79 33
2004 0.00(f) 11.18 2.0 9,553 2.97 1.02 1.76 32
2003 -- 11.31 2.8 12,174 2.70 1.06 1.57 73
2002 -- 11.30 8.9 15,157 4.06 1.05 1.69 46
2001 -- 10.82 12.7 8,140 4.90 1.07 2.02 77
CLASS A
2006(d) -- $10.69 (0.4)% $ 173 3.39%(e) 1.17%(e) 1.85%(e) 16%
2005 $(0.00)(f) 10.93 1.6 58 3.00 1.14 1.88 33
2004 0.00(f) 11.18 1.8 75 2.88 1.12 1.86 32
2003 -- 11.31 2.8 138 2.60 1.16 1.67 73
2002 -- 11.30 8.8 56 3.96 1.15 1.79 46
2001(g) -- 10.82 3.4 93 4.80(e) 1.17(e) 2.12(e) 77
CLASS B
2006(d) -- $10.69 (0.7)% $ 373 2.70%(e) 1.82%(e) 2.50%(e) 16%
2005 $(0.00)(f) 10.93 0.9 381 2.34 1.79 2.53 33
2004 0.00(f) 11.18 1.3 456 2.23 1.77 2.51 32
2003 -- 11.30 2.1 502 1.95 1.81 2.32 73
2002 -- 11.29 8.0 229 3.31 1.80 2.44 46
2001(h) -- 10.82 4.9 23 4.15(e) 1.82(e) 2.77(e) 77
CLASS C (I)
2006(d) -- $10.40 (1.5)% $ 0.1 1.66%(e) 1.82%(e) 2.50%(e) 16%
2005 $(0.00)(f) 10.82 1.4 0.1 2.50 1.79 2.90 33
2004 0.00(f) 11.17 1.5 0 2.21 1.77 2.51 32
2003 -- 11.30 2.1 46 1.95 1.81 2.32 73
2002(j) -- 11.29 7.6 50 3.31(e) 1.80(e) 2.44(e) 46
- -------------------
+ Total return represents aggregate total return of a hypothetical $1,000
investment at the beginning of the period and sold at the end of the period
including reinvestment of dividends. Total return for the period of less
than one year is not annualized.
(a) Per share data is calculated using the average shares outstanding method.
(b) The ratios do not include a reduction of expenses for custodian fee credits
on cash balances maintained with the custodian. Including such custodian fee
credits, the expense ratios for Class AAA, Class A, Class B, and Class C
would be 1.00%, 1.10%, 1.75%, and 1.75%, respectively, for each period.
(c) During the period, certain fees were voluntarily reduced and/or reimbursed.
If such fee reductions and/or reimbursements had not occurred, the ratio
would have been as shown.
(d) For the period ended March 31, 2006, unaudited.
(e) Annualized.
(f) Amount represents less than $0.005 per share.
(g) From July 26, 2001 through September 30, 2001, the period through which
Class A Shares were continuously outstanding.
(h) From March 27, 2001 through September 30, 2001, the period through which
Class B Shares were continuously outstanding.
(i) Class C Shares were outstanding for the periods March 21, 2001 through March
26, 2001 and July 18, 2001 through July 24, 2001. Financial Highlights are
not presented for Class C Shares for these periods as the information is not
considered meaningful.
(j) From October 22, 2001 through September 30, 2002, the period through which
Class C Shares were continuously outstanding.
See accompanying notes to financial statements.
34
THE WESTWOOD FUNDS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period:
OPERATING PERFORMANCE DISTRIBUTIONS TO SHAREHOLDERS
---------------------------------- -----------------------------------------
NET
REALIZED AND IN EXCESS
NET ASSET NET UNREALIZED TOTAL NET OF NET
VALUE, INVESTMENT GAIN FROM REALIZED REALIZED
PERIOD ENDED BEGINNING INCOME (LOSS) ON INVESTMENT GAIN ON GAIN ON TOTAL
SEPTEMBER 30 OF PERIOD (LOSS)(A) INVESTMENTS OPERATIONS INVESTMENTS INVESTMENTS DISTRIBUTIONS
- ------------ --------- --------- ----------- ---------- ----------- ----------- -------------
SMALLCAP EQUITY FUND
CLASS AAA
2006(d) $11.29 $ 0.09 $ 1.65 $ 1.74 -- -- --
2005 9.08 (0.01) 2.22 2.21 -- -- --
2004 8.18 (0.10) 1.00 0.90 -- -- --
2003 7.49 (0.08) 0.77 0.69 -- -- --
2002 8.86 (0.09) (1.28) (1.37) -- -- --
2001 22.10 (0.16) (8.12) (8.28) $(4.53) $(0.43)(h) $(4.96)
CLASS A
2006(d) $11.25 $ 0.11 $ 1.61 $ 1.72 -- -- --
2005 9.07 (0.04) 2.22 2.18 -- -- --
2004 8.18 (0.12) 1.01 0.89 -- -- --
2003 7.51 (0.10) 0.77 0.67 -- -- --
2002(i) 9.91 (0.09) (2.31) (2.40) -- -- --
CLASS B
2006(d) $10.93 $ 0.04 $ 1.60 $ 1.64 -- -- --
2005 8.86 (0.08) 2.15 2.07 -- -- --
2004 8.03 (0.17) 1.00 0.83 -- -- --
2003 7.41 (0.13) 0.75 0.62 -- -- --
2002 8.83 (0.16) (1.26) (1.42) -- -- --
2001(j) 10.41 (0.10) (1.48) (1.58) -- -- --
CLASS C
2006(d) $10.87 $ 0.12 $ 1.52 $ 1.64 -- -- --
2005 8.99 (0.13) 2.01 1.88 -- -- --
2004 8.15 (0.17) 1.01 0.84 -- -- --
2003 7.47 (0.10) 0.78 0.68 -- -- --
2002(i) 9.91 (0.11) (2.33) (2.44) -- -- --
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
-----------------------------------------------------------------------
OPERATING OPERATING
NET NET EXPENSES EXPENSES
ASSET ASSETS, NET NET OF BEFORE
VALUE, END OF INVESTMENT WAIVERS/ WAIVERS/ PORTFOLIO
PERIOD ENDED REDEMPTION END OF TOTAL PERIOD INCOME REIMBURSE- REIMBURSE- TURNOVER
SEPTEMBER 30 FEES(A) PERIOD RETURN+ (IN 000'S) (LOSS) MENTS(B) MENTS(C) RATE
- ------------ ---------- ------ ------- ---------- --------- ----------- ---------- ---------
SMALLCAP EQUITY FUND
CLASS AAA
2006(d) -- $13.03 15.4% $10,106 1.47%(e) 1.67%(e) 2.27%(e) 42%
2005 $(0.00)(f) 11.29 24.3 8,702 (0.10) 1.56 2.37 108
2004 0.00(f) 9.08 11.0(g) 12,106 (1.11) 1.51 2.12 260
2003 -- 8.18 9.2 15,721 (1.03) 1.53 1.99 329
2002 -- 7.49 (15.5) 16,212 (0.98) 1.56 1.76 202
2001 -- 8.86 (43.2) 21,768 (1.27) 1.59 1.74 184
CLASS A
2006(d) -- $12.97 15.3% $ 304 1.90%(e) 1.92%(e) 2.52%(e) 42%
2005 $(0.00)(f) 11.25 24.0 131 (0.35) 1.81 2.69 108
2004 0.00(f) 9.07 10.9(g) 140 (1.31) 1.76 2.37 260
2003 -- 8.18 8.9 112 (1.28) 1.78 2.24 329
2002(i) -- 7.51 (24.2) 71 (1.23)(e) 1.80(e) 2.01(e) 202
CLASS B
2006(d) -- $12.57 15.0% $ 12 0.78%(e) 2.42%(e) 3.02%(e) 42%
2005 $(0.00)(f) 10.93 23.4 10 (0.81) 2.31 3.17 108
2004 0.00(f) 8.86 10.3(g) 20 (1.93) 2.26 2.87 260
2003 -- 8.03 8.4 65 (1.78) 2.28 2.74 329
2002 -- 7.41 (16.1) 31 (1.73) 2.30 2.51 202
2001(j) -- 8.83 (15.2) 31 (2.02)(e) 2.34(e) 2.49(e) 184
CLASS C
2006(d) -- $12.51 15.1% $ 228 2.06%(e) 2.42%(e) 3.02%(e) 42%
2005 $(0.00)(f) 10.87 20.9 0.1 (1.40) 2.31 2.73 108
2004 0.00(f) 8.99 10.3(g) 10 (1.98) 2.26 2.87 260
2003 -- 8.15 9.1 111 (1.78) 2.28 2.74 329
2002(i) -- 7.47 (24.6) 0.1 (1.73)(e) 2.30(e) 2.51(e) 202
- --------------------------
+ Total return represents aggregate total return of a hypothetical $1,000
investment at the beginning of the period and sold at the end of the period
including reinvestment of dividends. Total return for the period of less
than one year is not annualized.
(a) Per share data is calculated using the average shares outstanding method.
(b) The ratios do not include a reduction of expenses for custodian fee credits
on cash balances maintained with the custodian. Including such custodian fee
credits, the expense ratios for Class AAA, Class A, Class B, and Class C
would be 1.50%, 1.75%, 2.25%, and 2.25%, respectively, for each period.
(c) During the period, certain fees were voluntarily reduced and/or reimbursed.
If such fee reductions and/or reimbursements had not occurred, the ratio
would have been as shown.
(d) For the period ended March 31, 2006, unaudited.
(e) Annualized.
(f) Amount represents less than $0.005 per share.
(g) Total return excluding the effect of the reimbursement from the Fund's
Adviser of $51,180 for the year ended September 30, 2004 was 10.6%, 10.5%,
10.0%, and 9.9% for Class AAA, Class A, Class B, and Class C, respectively.
The Adviser fully reimbursed the Fund for a loss on a transaction exceeding
the Fund's investment restrictions, which otherwise would have reduced total
return by 0.4%, 0.4%, 0.3%, and 0.4% for Class AAA, Class A, Class B, and
Class C, respectively.
(h) Return of Capital.
(i) From November 26, 2001 through September 30, 2002, the period through which
Class A Shares and Class C Shares were continuously outstanding.
(j) From March 27, 2001 through September 30, 2001, the period through which
Class B Shares were continuously outstanding.
See accompanying notes to financial statements.
35
THE WESTWOOD FUNDS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period:
OPERATING PERFORMANCE DISTRIBUTIONS TO SHAREHOLDERS
------------------------------------------ --------------------------------------
NET
REALIZED
NET ASSET AND TOTAL NET
VALUE, NET UNREALIZED GAIN FROM NET REALIZED
PERIOD ENDED BEGINNING INVESTMENT (LOSS) ON INVESTMENT INVESTMENT GAIN ON TOTAL
SEPTEMBER 30 OF PERIOD INCOME(A) INVESTMENTS OPERATIONS INCOME INVESTMENTS DISTRIBUTIONS
- ------------ ---------- ---------- -------------- ---------- ---------- ----------- -------------
INCOME FUND
CLASS AAA
2006(d) $16.53 $0.13 $(0.20) $(0.07) $(0.14) $(4.33) $(4.47)
2005 14.12 0.28 3.12 3.40 (0.27) (0.73) (1.00)
2004 11.87 0.33 2.30 2.63 (0.33) (0.05) (0.38)
2003 10.03 0.38 1.85 2.23 (0.39) -- (0.39)
2002 9.76 0.43 0.31 0.74 (0.47) -- (0.47)
2001 9.10 0.40 0.62 1.02 (0.36) -- (0.36)
CLASS A
2006(d) $16.76 $0.11 $(0.19) $(0.08) $(0.10) $(4.33) $(4.43)
2005 14.33 0.29 3.13 3.42 (0.26) (0.73) (0.99)
2004 12.00 0.51 2.12 2.63 (0.26) (0.04) (0.30)
2003 10.04 0.38 1.85 2.23 (0.27) -- (0.27)
2002 9.76 0.41 0.30 0.71 (0.43) -- (0.43)
2001(g) 9.24 0.02 0.70 0.72 (0.20) -- (0.20)
CLASS B
2006(d) $16.86 $0.08 $(0.19) $(0.11) $(0.04) $(4.33) $(4.37)
2005 14.33 0.18 3.16 3.34 (0.08) (0.73) (0.81)
2004 12.04 0.25 2.35 2.60 (0.27) (0.04) (0.31)
2003 10.07 0.27 1.91 2.18 (0.21) -- (0.21)
2002(h) 9.90 0.36 0.22 0.58 (0.41) -- (0.41)
CLASS C
2006(d) $17.26 $0.08 $(0.18) $(0.10) $(0.04) $(4.33) $(4.37)
2005 14.66 0.25 3.17 3.42 (0.09) (0.73) (0.82)
2004 12.32 0.24 2.41 2.65 (0.27) (0.04) (0.31)
2003 10.26 0.32 1.99 2.31 (0.25) -- (0.25)
2002(h) 9.90 0.09 0.49 0.58 (0.22) -- (0.22)
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
----------------------------------------------------------------------
OPERATING OPERATING
NET NET EXPENSES EXPENSES
ASSET ASSETS, NET OF BEFORE
VALUE, END OF NET WAIVERS/ WAIVERS/ PORTFOLIO
PERIOD ENDED REDEMPTION END OF TOTAL PERIOD INVESTMENT REIMBURSE- REIMBURSE- TURNOVER
SEPTEMBER 30 FEES(A) PERIOD RETURN+ (IN 000'S) INCOME MENTS(B) MENTS(C) RATE
- ------------ ---------- ------ ------- ---------- ---------- ---------- ------------ ---------
INCOME FUND
CLASS AAA
2006(d) -- $11.99 0.8% $13,698 1.87%(e) 1.63%(e) 2.09%(e) 99%
2005 $0.01 16.53 24.9 16,182 1.83 1.62 2.40 58
2004 0.00(f) 14.12 22.5 16,472 2.51 1.54 1.85 28
2003 -- 11.87 22.8 13,923 3.70 1.56 2.05 33
2002 -- 10.03 7.5 9,122 4.42 1.59 2.61 47
2001 -- 9.76 11.4 3,526 4.27 1.64 4.51 64
CLASS A
2006(d) -- $12.25 0.7% $ 94 1.62%(e) 1.88%(e) 2.34%(e) 99%
2005 $0.00(f) 16.76 24.6 93 1.87 1.87 3.03 58
2004 0.00(f) 14.33 22.2 5 3.96 1.79 2.10 28
2003 -- 12.00 22.6 10 3.45 1.81 2.30 33
2002 -- 10.04 7.2 3 4.17 1.84 2.86 47
2001(g) -- 9.76 7.8 3 4.02(e) 1.90(e) 4.77(e) 64
CLASS B
2006(d) -- $12.38 0.5% $ 2 1.16%(e) 2.38%(e) 2.84%(e) 99%
2005 $0.00(f) 16.86 23.9 2 1.14 2.37 3.18 58
2004 0.00(f) 14.33 21.8 2 1.86 2.29 2.60 28
2003 -- 12.04 22.0 2 2.95 2.31 2.80 33
2002(h) -- 10.07 5.8 10 3.67(e) 2.34(e) 3.36(e) 47
CLASS C
2006(d) -- $12.79 0.5% $ 16 1.13%(e) 2.38%(e) 2.84%(e) 99%
2005 $0.00(f) 17.26 23.9 16 1.56 2.37 3.41 58
2004 0.00(f) 14.66 21.7 5 1.79 2.29 2.60 28
2003 -- 12.32 22.8 4 2.95 2.31 2.80 33
2002(h) -- 10.26 5.8 0.1 3.67(e) 2.34(e) 3.36(e) 47
- ------------------------
+ Total return represents aggregate total return of a hypothetical $1,000
investment at the beginning of the period and sold at the end of the period
including reinvestment of dividends. Total return for the period of less
than one year is not annualized.
(a) Per share data is calculated using the average shares outstanding method.
(b) The ratios do not include a reduction of expenses for custodian fee credits
on cash balances maintained with the custodian. Including such custodian fee
credits, the expense ratios for Class AAA, Class A, Class B, and Class C
would be 1.50%, 1.75%, 2.25%, and 2.25%, respectively, for each period.
(c) During the period, certain fees were voluntarily reduced and/or reimbursed.
If such fee reductions and/or reimbursements had not occurred, the ratio
would have been as shown.
(d) For the period ended March 31, 2006, unaudited.
(e) Annualized.
(f) Amount represents less than $0.005 per share.
(g) From May 9, 2001 through September 30, 2001, the period through which Class
A Shares were continuously outstanding.
(h) From November 26, 2001 through September 30, 2002, the period through which
Class B and C Shares were continuously outstanding.
See accompanying notes to financial statements.
36
THE WESTWOOD FUNDS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period:
OPERATING PERFORMANCE DISTRIBUTIONS TO SHAREHOLDERS
------------------------------------------ --------------------------------------
NET
REALIZED
NET ASSET NET AND TOTAL NET
VALUE, INVESTMENT UNREALIZED GAIN FROM NET REALIZED
PERIOD ENDED BEGINNING INCOME (LOSS) ON INVESTMENT INVESTMENT GAIN ON TOTAL
SEPTEMBER 30 OF PERIOD (LOSS)(A) INVESTMENTS OPERATIONS INCOME INVESTMENTS DISTRIBUTIONS
- ------------ ---------- ---------- -------------- ---------- ---------- ----------- -------------
MIGHTY MITES(SM) FUND
CLASS AAA
2006(e) $16.73 $(0.05) $ 1.28 $ 1.23 -- $(2.02) $(2.02)
2005 15.07 (0.02) 2.97 2.95 -- (1.29) (1.29)
2004 13.42 (0.03) 1.84 1.81 -- (0.16) (0.16)
2003 11.29 (0.03) 2.25 2.22 $(0.04) (0.05) (0.09)
2002 10.99 0.03 0.37 0.40 (0.10) -- (0.10)
2001 14.00 0.12 (0.59) (0.47) (0.08) (2.46) (2.54)
CLASS A
2006(e) $16.70 $(0.07) $ 1.27 $ 1.20 -- $(2.02) $(2.02)
2005 15.08 (0.06) 2.97 2.91 -- (1.29) (1.29)
2004 13.46 (0.06) 1.84 1.78 -- (0.16) (0.16)
2003 11.36 (0.05) 2.26 2.21 $(0.06) (0.05) (0.11)
2002(h) 10.97 (0.01) 0.40 0.39 -- -- --
2001 14.00 0.09 (0.59) (0.50) (0.07) (2.46) (2.53)
CLASS B
2006(e) $16.31 $(0.11) $ 1.24 $ 1.13 -- $(2.02) $(2.02)
2005 14.82 (0.14) 2.92 2.78 -- (1.29) (1.29)
2004 13.30 (0.14) 1.82 1.68 -- (0.16) (0.16)
2003 11.24 (0.11) 2.22 2.11 -- (0.05) (0.05)
2002 10.96 (0.02) 0.34 0.32 $(0.04) -- (0.04)
2001(i) 11.92 0.00(g) (0.96) (0.96) -- -- --
CLASS C
2006(e) $16.24 $(0.11) $ 1.23 $ 1.12 -- $(2.02) $(2.02)
2005 14.77 (0.14) 2.90 2.76 -- (1.29) (1.29)
2004 13.25 0.02 1.66 1.68 -- (0.16) (0.16)
2003 11.19 (0.12) 2.23 2.11 -- (0.05) (0.05)
2002 10.98 (0.06) 0.37 0.31 $(0.10) -- (0.10)
2001(j) 12.25 0.00(g) (1.27) (1.27) -- -- --
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA
----------------------------------------------------------------------
OPERATING OPERATING
NET NET EXPENSES EXPENSES
ASSET ASSETS, NET NET OF BEFORE
VALUE, END OF INVESTMENT WAIVERS/ WAIVERS/ PORTFOLIO
PERIOD ENDED REDEMPTION END OF TOTAL PERIOD INCOME REIMBURSE- REIMBURSE- TURNOVER
SEPTEMBER 30 FEES(A) PERIOD RETURN+ (IN 000'S) (LOSS) MENTS(B) MENTS(C)(D) RATE
- ------------ ---------- ------ ------- ---------- ---------- ---------- ------------ ---------
MIGHTY MITES(SM) FUND
CLASS AAA
2006(e) -- $15.94 8.5% $46,143 (0.65)%(f) 1.67%(f) 1.67%(f) 1%
2005 $0.00(g) 16.73 20.4 46,497 (0.13) 1.50 1.74 9
2004 0.00(g) 15.07 13.6 50,805 (0.20) 1.50 1.66 36
2003 -- 13.42 19.8 51,138 (0.21) 1.50 1.66 14
2002 -- 11.29 3.6 31,103 0.27 1.50 1.78 18
2001 -- 10.99 (2.8) 17,404 0.98 1.52 2.20 66
CLASS A
2006(e) -- $15.88 8.3% $ 45 (0.90)%(f) 1.92%(f) 1.92%(f) 1%
2005 $0.00(g) 16.70 20.1 41 (0.41) 1.75 2.00 9
2004 0.00(g) 15.08 13.3 39 (0.42) 1.75 1.91 36
2003 -- 13.46 19.7 33 (0.46) 1.75 1.91 14
2002(h) -- 11.36 3.6 1 0.02 1.75 2.03 18
2001 -- 10.97 (3.1) 47 0.73 1.77 2.45 66
CLASS B
2006(e) -- $15.42 8.1% $ 462 (1.40)%(f) 2.42%(f) 2.42%(f) 1%
2005 $0.00(g) 16.31 19.6 433 (0.89) 2.25 2.49 9
2004 0.00(g) 14.82 12.7 400 (0.95) 2.25 2.41 36
2003 -- 13.30 18.9 517 (0.96) 2.25 2.41 14
2002 -- 11.24 2.9 4 (0.48) 2.25 2.53 18
2001(i) -- 10.96 (8.1) 4 0.23(f) 2.27(f) 2.95(f) 66
CLASS C
2006(e) -- $15.34 8.0% $ 311 (1.40)%(f) 2.42%(f) 2.42%(f) 1%
2005 $0.00(g) 16.24 19.5 327 (0.91) 2.25 2.49 9
2004 0.00(g) 14.77 12.7 308 (0.89) 2.25 2.41 36
2003 -- 13.25 19.0 99 (0.96) 2.25 2.41 14
2002 -- 11.19 2.8 59 (0.48) 2.25 2.53 18
2001(j) -- 10.98 (10.4) 19 0.23(f) 2.27(f) 2.95(f) 66
- --------------------------
+ Total return represents aggregate total return of a hypothetical $1,000
investment at the beginning of the period and sold at the end of the period
including reinvestment of dividends. Total return for the period of less
than one year is not annualized.
(a) Per share data is calculated using the average shares outstanding method.
(b) The ratios do not include a reduction of expenses for custodian fee credits
on cash balances maintained with the custodian. Including such custodian fee
credits, the expense ratios for Class AAA, Class A, Class B, and Class C
would be 1.50%, 1.75%, 2.25%, and 2.25%, respectively, for the fiscal years
ended September 30, 2001, 2002, and 2003.
(c) Prior to the period ended March 31, 2006, certain fees were voluntarily
reduced and/or reimbursed. If such fee reductions and/or reimbursements had
not occurred, the ratio would have been as shown.
(d) The fund incurred interest expense during the six months ended March 31,
2006. If interest expense had not been incurred, the ratios of operating
expenses to average net assets would have been 1.64% (Class AAA), 1.89%
(Class A), and 2.39% (Class B and Class C).
(e) For the period ended March 31, 2006, unaudited.
(f) Annualized.
(g) Amount represents less than $0.005 per share.
(h) From November 26, 2001 through September 30, 2002, the period through which
Class A Shares were continuously outstanding. From October 1, 2001 through
November 25, 2001, no Class A Shares were outstanding.
(i) From June 6, 2001 through September 30, 2001, the period through which Class
B Shares were continuously outstanding.
(j) From August 3, 2001 through September 30, 2001, the period through which
Class C Shares were continuously outstanding.
See accompanying notes to financial statements.
37
- --------------------------------------------------------------------------------
GABELLI FUNDS AND YOUR PERSONAL PRIVACY
================================================================================
WHO ARE WE?
The Gabelli/GAMCO Funds are investment companies registered with the
Securities and Exchange Commission under the Investment Company Act of
1940. We are managed by Gabelli Funds, LLC and Gabelli Advisers, Inc.,
which are affiliated with GAMCO Investors, Inc. GAMCO Investors, Inc. is a
publicly held company that has subsidiaries that provide investment
advisory or brokerage services for a variety of clients.
WHAT KIND OF NON-PUBLIC INFORMATION DO WE COLLECT ABOUT YOU IF YOU BECOME A
GABELLI CUSTOMER?
If you apply to open an account directly with us, you will be giving us
some non-public information about yourself. The non-public information we
collect about you is:
o INFORMATION YOU GIVE US ON YOUR APPLICATION FORM. This could include
your name, address, telephone number, social security number, bank
account number, and other information.
o INFORMATION ABOUT YOUR TRANSACTIONS WITH US, ANY TRANSACTIONS WITH OUR
AFFILIATES, AND TRANSACTIONS WITH THE ENTITIES WE HIRE TO PROVIDE
SERVICES TO YOU. This would include information about the shares that
you buy or redeem. If we hire someone else to provide services--like a
transfer agent--we will also have information about the transactions
that you conduct through them.
WHAT INFORMATION DO WE DISCLOSE AND TO WHOM DO WE DISCLOSE IT?
We do not disclose any non-public personal information about our customers
or former customers to anyone other than our affiliates, our service
providers who need to know such information, and as otherwise permitted by
law. If you want to find out what the law permits, you can read the privacy
rules adopted by the Securities and Exchange Commission. They are in volume
17 of the Code of Federal Regulations, Part 248. The Commission often posts
information about its regulations on its web site, www.sec.gov.
WHAT DO WE DO TO PROTECT YOUR PERSONAL INFORMATION?
We restrict access to non-public personal information about you to the
people who need to know that information in order to provide services to
you or the Fund and to ensure that we are complying with the laws governing
the securities business. We maintain physical, electronic, and procedural
safeguards to keep your personal information confidential.
- --------------------------------------------------------------------------------
GABELLI FAMILY OF FUNDS
VALUE _______________________________________
GABELLI ASSET FUND
Seeks to invest primarily in a diversified portfolio of common stocks selling at
significant discounts to their private market value. The Fund's primary
objective is growth of capital. (MULTICLASS)
PORTFOLIO MANAGER: MARIO J. GABELLI, CFA
GABELLI BLUE CHIP VALUE FUND
Seeks long term growth of capital through investment primarily in the common
stocks of established companies which are temporarily out of favor. The fund's
objective is to identify a catalyst or sequence of events that will return the
company to a higher value.
(MULTICLASS) PORTFOLIO MANAGER: BARBARA MARCIN, CFA
WESTWOOD EQUITY FUND
Seeks to invest primarily in the common stock of well-seasoned companies that
have recently reported positive earnings surprises and are trading below
Westwood's proprietary growth rate estimates. The Fund's primary objective is
capital appreciation.
(MULTICLASS) PORTFOLIO MANAGER: SUSAN M. BYRNE
FOCUSED VALUE _______________________________
GABELLI VALUE FUND
Seeks to invest in securities of companies believed to be undervalued. The
Fund's primary objective is long-term capital appreciation. (MULTICLASS)
PORTFOLIO MANAGER: MARIO J. GABELLI, CFA
SMALL CAP VALUE _____________________________
GABELLI SMALL CAP FUND
Seeks to invest primarily in common stock of smaller companies (market
capitalizations less than $1 billion) believed to have rapid revenue and
earnings growth potential. The Fund's primary objective is capital appreciation.
(MULTICLASS) PORTFOLIO MANAGER: MARIO J. GABELLI, CFA
WESTWOOD SMALLCAP EQUITY FUND
Seeks to invest primarily in smaller capitalization equity securities - market
caps of $2.5 billion or less. The Fund's primary objective is long-term capital
appreciation. (MULTICLASS) TEAM MANAGED
GABELLI WOODLAND SMALL CAP VALUE FUND
Seeks to invest primarily in the common stocks of smaller companies (market
capitalizations less than $1.5 billion) believed to be undervalued with
shareholder oriented management teams that are employing strategies to grow the
company's value. The Fund's primary objective is capital appreciation.
(MULTICLASS) PORTFOLIO MANAGER: ELIZABETH M. LILLY, CFA
GROWTH ______________________________________
GAMCO GROWTH FUND
Seeks to invest primarily in large cap stocks believed to have favorable, yet
undervalued, prospects for earnings growth. The Fund's primary objective is
capital appreciation. (MULTICLASS) PORTFOLIO MANAGER: HOWARD F. WARD, CFA
GAMCO INTERNATIONAL GROWTH FUND
Seeks to invest in the equity securities of foreign issuers with long-term
capital appreciation potential. The Fund offers investors global
diversification. (MULTICLASS) PORTFOLIO MANAGER: CAESAR BRYAN
AGGRESSIVE GROWTH ___________________________
GAMCO GLOBAL GROWTH FUND
Seeks capital appreciation through a disciplined investment program focusing on
the globalization and interactivity of the world's marketplace. The Fund invests
in companies at the forefront of accelerated growth. The Fund's primary
objective is capital appreciation. (MULTICLASS) TEAM MANAGED
MICRO-CAP ___________________________________
WESTWOOD MIGHTY MITES(SM) FUND
Seeks to invest in micro-cap companies that have market capitalizations of $300
million or less. The Fund's primary objective is long-term capital appreciation.
(MULTICLASS) TEAM MANAGED
EQUITY INCOME _______________________________
GABELLI EQUITY INCOME FUND
Seeks to invest primarily in equity securities with above market average yields.
The Fund pays monthly dividends and seeks a high level of total return with an
emphasis on income. (MULTICLASS) PORTFOLIO MANAGER: MARIO J. GABELLI, CFA
WESTWOOD BALANCED FUND
Seeks to invest in a balanced and diversified portfolio of stocks and bonds. The
Fund's primary objective is both capital appreciation and current income.
(MULTICLASS) CO-PORTFOLIO MANAGERS: SUSAN M. BYRNE
MARK FREEMAN, CFA
WESTWOOD INCOME FUND
Seeks to provide a high level of current income as well as long-term capital
appreciation by investing in income producing equity and fixed income
securities. (MULTICLASS) TEAM MANAGED
SPECIALTY EQUITY ____________________________
GAMCO GLOBAL CONVERTIBLE SECURITIES FUND
Seeks to invest principally in bonds and preferred stocks which are convertible
into common stock of foreign and domestic companies. The Fund's primary
objective is total return through a combination of current income and capital
appreciation. (MULTICLASS) TEAM MANAGED
GAMCO GLOBAL OPPORTUNITY FUND
Seeks to invest in common stock of companies which have rapid growth in revenues
and earnings and potential for above average capital appreciation or are
undervalued. The Fund's primary objective is capital appreciation.
(MULTICLASS) TEAM MANAGED
SECTOR ______________________________________
GAMCO GLOBAL TELECOMMUNICATIONS FUND
Seeks to invest in telecommunications companies throughout the world - targeting
undervalued companies with strong earnings and cash flow dynamics. The Fund's
primary objective is capital appreciation. (MULTICLASS) TEAM MANAGED
GAMCO GOLD FUND
Seeks to invest in a global portfolio of equity securities of gold mining and
related companies. The Fund's objective is long-term capital appreciation.
Investment in gold stocks is considered speculative and is affected by a variety
of world-wide economic, financial, and political factors. (MULTICLASS)
PORTFOLIO MANAGER: CAESAR BRYAN
GABELLI UTILITIES FUND
Seeks to provide a high level of total return through a combination of capital
appreciation and current income. (MULTICLASS) TEAM MANAGED
MERGER AND ARBITRAGE ________________________
GABELLI ABC FUND
Seeks to invest in securities with attractive opportunities for appreciation or
investment income. The Fund's primary objective is total return in various
market conditions without excessive risk of capital loss.
(NO-LOAD) PORTFOLIO MANAGER: MARIO J. GABELLI, CFA
CONTRARIAN___________________________________
GAMCO MATHERS FUND
Seeks long-term capital appreciation in various market conditions without
excessive risk of capital loss. (CLASS AAA-NO-LOAD)
PORTFOLIO MANAGER: HENRY VAN DER EB, CFA
COMSTOCK CAPITAL VALUE FUND
Seeks capital appreciation and current income. The Fund may use either long or
short positions to achieve its objective.
(MULTICLASS) PORTFOLIO MANAGER: MARTIN WEINER, CFA
COMSTOCK STRATEGY FUND
The Fund emphasizes investments in debt securities, which maximize total return
in light of credit risk, interest rate risk, and the risk associated with the
length of maturity of the debt instrument. (MULTICLASS)
PORTFOLIO MANAGER: MARTIN WEINER, CFA
FIXED INCOME ________________________________
WESTWOOD INTERMEDIATE BOND FUND
Seeks to invest in a diversified portfolio of bonds with various maturities. The
Fund's primary objective is total return.
(MULTICLASS) PORTFOLIO MANAGER: MARK FREEMAN, CFA
CASH MANAGEMENT-MONEY MARKET ________________
GABELLI U.S. TREASURY MONEY MARKET FUND
Seeks to invest exclusively in short-term U.S. Treasury securities. The Fund's
primary objective is to provide high current income consistent with the
preservation of principal and liquidity. (NO-LOAD)
PORTFOLIO MANAGER: JUDITH A. RANERI
AN INVESTMENT IN THE ABOVE MONEY MARKET FUND IS NEITHER INSURED NOR GUARANTEED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY GOVERNMENT AGENCY. ALTHOUGH
THE FUND SEEKS TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT
IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUND.
THE FUNDS MAY INVEST IN FOREIGN SECURITIES WHICH INVOLVE RISKS NOT ORDINARILY
ASSOCIATED WITH INVESTMENTS IN DOMESTIC ISSUES, INCLUDING CURRENCY FLUCTUATION,
ECONOMIC, AND POLITICAL RISKS.
TO RECEIVE A PROSPECTUS, CALL 800-GABELLI (422-3554). INVESTORS SHOULD CONSIDER
THE INVESTMENT OBJECTIVES, RISKS, CHARGES, AND EXPENSES OF THE FUND CAREFULLY
BEFORE INVESTING. THE PROSPECTUS CONTAINS MORE COMPLETE INFORMATION
ABOUT THIS AND OTHER MATTERS AND SHOULD BE READ CAREFULLY BEFORE INVESTING.
THE WESTWOOD FUNDS
==================
One Corporate Center
Rye, New York 10580-1422
GENERAL AND ACCOUNT INFORMATION:
800-GABELLI [800-422-3554]
fax: 914-921-5118
website: www.gabelli.com
e-mail: info@gabelli.com
Board of Trustees
ANTHONY J. COLAVITA WERNER J. ROEDER, MD
ATTORNEY-AT-LAW MEDICAL DIRECTOR
ANTHONY J. COLAVITA, P.C. LAWRENCE HOSPITAL
JAMES P. CONN SALVATORE J. ZIZZA
FORMER CHIEF INVESTMENT OFFICER CHAIRMAN
FINANCIAL SECURITY ASSURANCE HALLMARK ELECTRICAL SUPPLIES CORP.
HOLDINGS LTD.
Officers
BRUCE N. ALPERT JAMES E. McKEE
PRESIDENT SECRETARY
PETER D. GOLDSTEIN AGNES MULLADY
CHIEF COMPLIANCE OFFICER TREASURER
INVESTMENT ADVISER
Gabelli Advisers, Inc.
INVESTMENT SUB-ADVISER
Westwood Management Corp.
DISTRIBUTOR
Gabelli & Company, Inc.
CUSTODIAN
The Bank of New York
LEGAL COUNSEL
Paul, Hastings, Janofsky & Walker LLP
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This report is submitted for the information of the shareholders of The Westwood
Funds. It is not authorized for distribution to prospective investors unless
preceded or accompanied by an effective prospectus.
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GABWWQ106SR
THE
WESTWOOD
FUNDS
EQUITY FUND
BALANCED FUND
INTERMEDIATE BOND FUND
SMALLCAP EQUITY FUND
INCOME FUND
MIGHTY MITES(SM) FUND
SEMI-ANNUAL REPORT
MARCH 31, 2006
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.
Schedule of Investments in securities of unaffiliated issuers as of the close of
the reporting period is included as part of the report to shareholders filed
under Item 1 of this form.
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.
There have been no material changes to the procedures by which the shareholders
may recommend nominees to the registrant's board of directors, where those
changes were implemented after the registrant last provided disclosure in
response to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A (17 CFR
240.14a-101), or this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of the report that includes the disclosure
required by this paragraph, based on their evaluation of these
controls and procedures required by Rule 30a-3(b) under the 1940 Act
(17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the
Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or
240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act
(17 CFR 270.30a-3(d)) that occurred during the registrant's second
fiscal quarter of the period covered by this report that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) Not applicable.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and
Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.
(a)(3) Not applicable.
(b) Certifications pursuant to Rule 30a-2(b) under the 1940 Act and
Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) The Westwood Funds
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By (Signature and Title)* /s/ Bruce N. Alpert
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Bruce N. Alpert, Principal Executive Officer
Date June 8, 2006
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Bruce N. Alpert
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Bruce N. Alpert, Principal Executive Officer
Date June 8, 2006
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By (Signature and Title)* /s/ Agnes Mullady
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Agnes Mullady,
Principal Financial Officer and Treasurer
Date June 7, 2006
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* Print the name and title of each signing officer under his or her signature.