As filed with the Securities and Exchange Commission on July 2, 2003
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 811-07292
NORTH AMERICAN GOVERNMENT BOND FUND, INC.
535 Madison Avenue, 30th Floor
New York, New York 10022
(212) 446-5600
R. Alan Medaugh, President
535 Madison Avenue, 30th Floor
New York, NY 10022
(212) 446-5600
Date of fiscal year end: OCTOBER 31, 2003
Date of reporting period: APRIL 30, 2003
Form N-CSR is to be used by management investment companies to file reports
with the Commission not later than 10 days after the transmission to
stockholders of any report that is required to be transmitted to stockholders
under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1).
The Commission may use the information provided on Form N-CSR in its regulatory,
disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form
N-CSR, and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
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ISI
INTERNATIONAL STRATEGY & INVESTMENT
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SEMI - ANNUAL REPORT
APRIL 30, 2003
TOTAL RETURN
US TREASURY
FUND
MANAGED MUNICIPAL
FUND
NORTH AMERICAN
GOVERNMENT BOND
FUND
ISI STRATEGY
FUND
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ISI FUNDS SEMI-ANNUAL REPORT - TABLE OF CONTENTS
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Investment Advisor's Report............................................... 1
Performance Comparisons................................................... 2
Schedule of Investments................................................... 6
Statements of Assets and Liabilities...................................... 25
Statements of Operations.................................................. 27
Statements of Changes in Net Assets....................................... 29
Financial Highlights...................................................... 35
Notes to Financial Statements............................................. 39
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INVESTMENT ADVISOR'S REPORT:
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Dear Shareholder:
I am pleased to present the Semi-Annual report to shareholders for the ISI
Funds. This report consolidates the four funds into one report. This report
covers the six month reporting period ended April 30, 2003. For this period, the
Total Return US Treasury Fund, Inc. (`Total Return') produced a +2.80% return;
Managed Municipal Fund, Inc. (`Managed Municipal') produced a +3.50% return;
North American Government Bond Fund, Inc. (`North American') produced a +3.79%
return; and Strategy Fund (`Strategy') produced a +3.96% return. These figures
assume the reinvestment of dividend and capital gain distributions, and exclude
the impact of any sales charges.
DESCRIPTION OF FUND OBJECTIVES
Total Return, Managed Municipal, North American and Strategy, (each a
'Fund' and collectively, the 'Funds') are registered under the Investment
Company Act of 1940 (the 'Act'), as amended, as open-end management investment
companies. The Funds are organized as corporations under the laws of the state
of Maryland.
ISI manages all four Funds for total return through active management.
Total Return's investment objective is to achieve a high level of total return
with relative stability of principal, and secondarily, high current income
consistent with an investment in securities issued by the United States
Treasury. Managed Municipal's investment objective is designed to provide a high
level of total return with relative stability of principal and, secondarily,
high current income exempt from federal income tax through investment in a
portfolio consisting primarily of tax-free municipal obligations. North
American's investment objective is designed to provide a high level of current
income, consistent with prudent investment risk. Strategy's investment objective
is designed to maximize total return through a combination of long-term growth
of capital and current income.
RECENT FUND EVENTS
Effective October 31, 2002, North American changed its fiscal year end from
March 31 to October 31 and Strategy changed its fiscal year end from May 31 to
October 31. Total Return and Managed Municipal already had an October 31 fiscal
year end. These changes to North American and Strategy gave us the ability to
produce a combined annual and semi-annual report.
For the six month reporting period ended April 30, 2003, The Funds offered
only one class of shares to investors: ISI Shares. On May 16, 2003 the North
American Fund started offering C Shares, and the existing ISI Shares were
redesignated as A Shares.
We would like to welcome new investors to the ISI Funds and thank those who have
been with us for some time. We appreciate your confidence.
Sincerely,
/s/ R. Alan Medaugh
R. Alan Medaugh
President
May 19, 2003
1
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TOTAL RETURN US TREASURY FUND - ISI SHARES PERFORMANCE COMPARISON 1
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[EDGAR REPRESENTATION OF BAR CHART:
TOTAL RETURN LEHMAN BROTHERS LEHMAN BROTHERS
US TREASURY LEHMAN BROTHERS INTERMEDIATE LONG-TERM
FUND TREASURY INDEX TREASURY INDEX TREASURY INDEX
------------ --------------- --------------- ---------------
Date Load
---- -----
4/30/1993 9,704 10,000 10,000 10,000
5/31/1993 9,704 9,988 9,971 10,033
6/30/1993 10,020 10,211 10,118 10,457
7/31/1993 10,110 10,271 10,137 10,625
8/31/1993 10,411 10,500 10,290 11,052
9/30/1993 10,466 10,541 10,332 11,091
10/31/1993 10,503 10,581 10,356 11,171
11/30/1993 10,308 10,465 10,305 10,885
12/31/1993 10,347 10,505 10,347 10,920
1/31/1994 10,509 10,650 10,450 11,181
2/28/1994 10,258 10,421 10,303 10,723
3/31/1994 10,005 10,187 10,154 10,252
4/30/1994 9,916 10,108 10,090 10,131
5/31/1994 9,888 10,095 10,097 10,064
6/30/1994 9,839 10,073 10,099 9,968
7/31/1994 10,051 10,256 10,230 10,306
8/31/1994 10,034 10,259 10,260 10,230
9/30/1994 9,857 10,114 10,176 9,908
10/31/1994 9,850 10,108 10,179 9,874
11/30/1994 9,842 10,088 10,132 9,932
12/31/1994 9,931 10,150 10,165 10,085
1/31/1995 10,118 10,338 10,330 10,344
2/28/1995 10,339 10,558 10,527 10,637
3/31/1995 10,386 10,625 10,585 10,729
4/30/1995 10,521 10,764 10,707 10,920
5/31/1995 11,099 11,199 11,009 11,758
6/30/1995 11,191 11,287 11,082 11,895
7/31/1995 11,083 11,245 11,087 11,705
8/31/1995 11,244 11,376 11,176 11,964
9/30/1995 11,383 11,485 11,250 12,184
10/31/1995 11,624 11,662 11,376 12,525
11/30/1995 11,844 11,843 11,515 12,839
12/31/1995 12,077 12,012 11,630 13,180
1/31/1996 12,092 12,088 11,730 13,180
2/29/1996 11,694 11,841 11,605 12,543
3/31/1996 11,510 11,738 11,548 12,294
4/30/1996 11,372 11,667 11,514 12,088
5/31/1996 11,340 11,644 11,509 12,025
6/30/1996 11,510 11,792 11,623 12,281
7/31/1996 11,526 11,820 11,658 12,286
8/31/1996 11,433 11,795 11,673 12,133
9/30/1996 11,667 11,989 11,822 12,467
10/31/1996 12,023 12,252 12,015 12,958
11/30/1996 12,345 12,465 12,160 13,390
12/31/1996 12,103 12,336 12,094 13,065
1/31/1997 12,057 12,348 12,138 12,972
2/28/1997 12,048 12,364 12,156 12,978
3/31/1997 11,865 12,230 12,085 12,646
4/30/1997 12,044 12,405 12,220 12,951
5/31/1997 12,162 12,513 12,315 13,096
6/30/1997 12,344 12,652 12,420 13,349
7/31/1997 12,859 13,015 12,652 14,133
8/31/1997 12,618 12,884 12,602 13,740
9/30/1997 12,842 13,079 12,739 14,118
10/31/1997 13,105 13,307 12,888 14,594
11/30/1997 13,201 13,376 12,918 14,787
12/31/1997 13,388 13,517 13,024 15,035
1/31/1998 13,590 13,724 13,199 15,341
2/28/1998 13,528 13,683 13,181 15,231
3/31/1998 13,558 13,721 13,220 15,263
4/30/1998 13,589 13,782 13,283 15,320
5/31/1998 13,782 13,925 13,375 15,612
6/30/1998 14,003 14,085 13,465 15,975
7/31/1998 13,979 14,107 13,518 15,908
8/31/1998 14,531 14,491 13,785 16,626
9/30/1998 14,947 14,895 14,118 17,235
10/31/1998 14,744 14,847 14,146 16,974
11/30/1998 14,845 14,844 14,093 17,104
12/31/1998 14,834 14,873 14,147 17,069
1/31/1999 14,925 14,959 14,208 17,222
2/28/1999 14,410 14,577 14,001 16,376
3/31/1999 14,414 14,633 14,094 16,338
4/30/1999 14,462 14,668 14,134 16,361
5/31/1999 14,291 14,531 14,044 16,103
6/30/1999 14,192 14,501 14,069 15,933
7/31/1999 14,137 14,488 14,083 15,857
8/31/1999 14,082 14,491 14,111 15,794
9/30/1999 14,192 14,602 14,221 15,911
10/31/1999 14,181 14,617 14,239 15,922
11/30/1999 14,110 14,590 14,245 15,813
12/31/1999 13,992 14,493 14,205 15,577
1/31/2000 14,150 14,530 14,166 15,799
2/29/2000 14,448 14,749 14,277 16,276
3/31/2000 14,825 15,042 14,459 16,832
4/30/2000 14,782 14,994 14,449 16,698
5/31/2000 14,740 15,017 14,509 16,637
6/30/2000 14,981 15,270 14,719 16,997
7/31/2000 15,176 15,428 14,818 17,290
8/31/2000 15,452 15,654 14,973 17,684
9/30/2000 15,329 15,667 15,088 17,470
10/31/2000 15,527 15,819 15,187 17,743
11/30/2000 15,872 16,144 15,407 18,303
12/31/2000 16,203 16,452 15,663 18,734
1/31/2001 16,241 16,585 15,848 18,766
2/28/2001 16,476 16,786 15,995 19,087
3/31/2001 16,431 16,840 16,121 18,991
4/30/2001 16,103 16,630 16,057 18,474
5/31/2001 16,142 16,682 16,123 18,498
6/30/2001 16,198 16,772 16,182 18,657
7/31/2001 16,677 17,190 16,475 19,351
8/31/2001 16,954 17,418 16,618 19,765
9/30/2001 17,079 17,694 16,962 19,912
10/31/2001 17,634 18,185 17,219 20,891
11/30/2001 17,052 17,734 17,024 19,898
12/31/2001 16,883 17,562 16,942 19,523
1/31/2002 16,993 17,658 16,989 19,711
2/28/2002 17,104 17,839 17,129 20,005
3/31/2002 16,703 17,410 16,867 19,197
4/30/2002 17,135 17,843 17,168 19,926
5/31/2002 17,210 17,943 17,287 19,988
6/30/2002 17,500 18,196 17,497 20,347
7/31/2002 17,936 18,628 17,847 20,975
8/31/2002 18,465 19,030 18,034 21,890
9/30/2002 18,959 19,543 18,380 22,803
10/31/2002 18,653 19,327 18,346 22,148
11/30/2002 18,473 19,136 18,175 21,903
12/31/2002 18,918 19,633 18,514 22,800
1/31/2003 18,848 19,573 18,460 22,723
2/28/2003 19,186 19,910 18,660 23,411
3/31/2003 19,078 19,827 18,659 23,116
4/30/2003 19,175 19,919 18,696 23,351 ]
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CUMULATIVE TOTAL RETURNS WITH LOAD ANNUALIZED TOTAL RETURNS WITH LOAD
PERIODS ENDED SINCE SINCE
APRIL 30, 2003 6 MONTHS 1 YEAR 5 YEARS 10 YEARS INCEPTION2 1 YEAR 5 YEARS 10 YEARS INCEPTION2
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Total Return US Treasury
Fund - ISI Shares -0.24% 8.51% 36.90% 91.75% 206.51% 8.51% 6.48% 6.73% 7.91%
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Lehman Brothers
Treasury Index3 3.06% 11.64% 44.53% 99.19% 232.41% 11.64% 7.64% 7.13% 8.54%
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Lehman Brothers Intermediate
Treasury Index3 1.91% 8.90% 40.75% 86.96% 201.19% 8.90% 7.08% 6.46% 7.81%
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Lehman Brothers Long-Term
Treasury Index4 5.43% 17.19% 52.43% 133.51% 329.03% 17.19% 8.80% 8.85% 10.44%
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1 PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed,
may be worth more or less than their original cost. The performance
information presented in the graph and table above does not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or
the redemption of Fund shares. All performance assumes the reinvestment of
dividend and capital gain distributions and includes the Fund s maximum
3.00% sales charge. Distribution of the Fund s capital gains and non-US
Treasury income may be subject to state and local taxes. Management is not
aware of any single index that is truly representative of the Fund since
its active maturity management policy allows the manager to adjust the
weighted average maturity throughout each US Treasury sector. Currently the
Fund s weighted average maturity is approximately 10.7 years.
2 The Fund s inception date is August 10, 1988. Benchmark returns are for the
periods beginning August 31, 1988.
3 The Lehman Brothers Treasury Index is an unmanaged index reflecting the
performance of all public obligations and does not focus on one particular
segment of the Treasury market. The Lehman Brothers Long-Term Treasury
Index is an unmanaged index reflecting the performance of US Treasury
securities in the long-term Treasury sector. The Lehman Brothers
Intermediate Treasury Index is an unmanaged index reflecting the
performance of US Treasury securities in the intermediate-term Treasury
sector. Benchmark returns do not reflect expenses or sales charges that
have been deducted from the Fund's returns.
2
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MANAGED MUNICIPAL FUND - ISI SHARES PERFORMANCE COMPARISON 1
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[EDGAR REPRESENTATION OF BAR CHART:
LEHMAN BROTHERS LEHMAN BROTHERS
MANAGED GENERAL PREREFUNDED MUNICIPAL CONSUMER
MUNICIPAL FUND OBLIGATION INDEX BOND INDEX PRICE INDEX
-------------- ---------------- -------------------- -----------
Date Load
---- ----
4/30/1993 9,703 10,000 10,000 10,000
5/31/1993 9,739 10,052 10,020 10,010
6/30/1993 9,939 10,209 10,204 10,020
7/31/1993 9,884 10,226 10,180 10,020
8/31/1993 10,139 10,430 10,371 10,050
9/30/1993 10,286 10,541 10,487 10,070
10/31/1993 10,267 10,553 10,531 10,110
11/30/1993 10,147 10,482 10,403 10,121
12/31/1993 10,341 10,699 10,599 10,121
1/31/1994 10,482 10,823 10,708 10,151
2/28/1994 10,128 10,532 10,490 10,181
3/31/1994 9,754 10,145 10,267 10,212
4/30/1994 9,788 10,254 10,295 10,222
5/31/1994 9,898 10,334 10,331 10,232
6/30/1994 9,816 10,271 10,329 10,263
7/31/1994 9,975 10,433 10,466 10,294
8/31/1994 10,000 10,477 10,535 10,335
9/30/1994 9,801 10,331 10,457 10,366
10/31/1994 9,600 10,182 10,373 10,376
11/30/1994 9,420 10,022 10,225 10,387
12/31/1994 9,692 10,199 10,382 10,387
1/31/1995 9,987 10,441 10,535 10,428
2/28/1995 10,323 10,717 10,788 10,470
3/31/1995 10,399 10,861 10,864 10,501
4/30/1995 10,363 10,869 10,922 10,533
5/31/1995 10,764 11,193 11,172 10,554
6/30/1995 10,616 11,117 11,200 10,575
7/31/1995 10,723 11,246 11,320 10,575
8/31/1995 10,821 11,389 11,395 10,607
9/30/1995 10,868 11,462 11,395 10,628
10/31/1995 11,080 11,592 11,467 10,660
11/30/1995 11,274 11,755 11,593 10,649
12/31/1995 11,415 11,848 11,663 10,639
1/31/1996 11,494 11,963 11,795 10,702
2/29/1996 11,372 11,908 11,752 10,735
3/31/1996 11,155 11,776 11,636 10,788
4/30/1996 11,108 11,735 11,642 10,831
5/31/1996 11,071 11,716 11,640 10,853
6/30/1996 11,206 11,834 11,688 10,864
7/31/1996 11,341 11,947 11,796 10,886
8/31/1996 11,292 11,946 11,792 10,907
9/30/1996 11,450 12,093 11,901 10,940
10/31/1996 11,598 12,234 11,994 10,973
11/30/1996 11,801 12,462 12,141 10,995
12/31/1996 11,725 12,412 12,113 10,995
1/31/1997 11,725 12,445 12,157 11,028
2/28/1997 11,808 12,559 12,253 11,061
3/31/1997 11,646 12,397 12,119 11,094
4/30/1997 11,742 12,493 12,159 11,105
5/31/1997 11,917 12,680 12,332 11,094
6/30/1997 12,047 12,816 12,414 11,105
7/31/1997 12,406 13,148 12,624 11,116
8/31/1997 12,229 13,031 12,564 11,139
9/30/1997 12,396 13,180 12,672 11,161
10/31/1997 12,459 13,252 12,722 11,183
11/30/1997 12,512 13,315 12,750 11,172
12/31/1997 12,710 13,504 12,860 11,161
1/31/1998 12,839 13,643 12,973 11,183
2/28/1998 12,809 13,654 13,008 11,205
3/31/1998 12,815 13,666 13,005 11,228
4/30/1998 12,738 13,594 12,965 11,250
5/31/1998 12,970 13,818 13,127 11,273
6/30/1998 13,000 13,868 13,173 11,284
7/31/1998 13,018 13,901 13,222 11,295
8/31/1998 13,254 14,120 13,365 11,307
9/30/1998 13,417 14,310 13,475 11,318
10/31/1998 13,399 14,313 13,525 11,341
11/30/1998 13,430 14,360 13,567 11,341
12/31/1998 13,479 14,406 13,590 11,329
1/31/1999 13,639 14,595 13,737 11,352
2/28/1999 13,546 14,520 13,737 11,363
3/31/1999 13,528 14,526 13,735 11,397
4/30/1999 13,571 14,567 13,775 11,477
5/31/1999 13,434 14,485 13,725 11,477
6/30/1999 13,220 14,272 13,605 11,477
7/31/1999 13,271 14,329 13,687 11,512
8/31/1999 13,132 14,245 13,687 11,535
9/30/1999 13,068 14,257 13,731 11,592
10/31/1999 12,915 14,133 13,717 11,616
11/30/1999 13,082 14,277 13,785 11,627
12/31/1999 12,966 14,188 13,747 11,627
1/31/2000 12,876 14,135 13,765 11,650
2/29/2000 13,083 14,276 13,820 11,720
3/31/2000 13,408 14,563 13,938 11,814
4/30/2000 13,278 14,489 13,930 11,826
5/31/2000 13,186 14,412 13,930 11,838
6/30/2000 13,567 14,783 14,131 11,909
7/31/2000 13,766 14,978 14,257 11,933
8/31/2000 13,951 15,192 14,383 11,944
9/30/2000 13,831 15,114 14,371 12,004
10/31/2000 14,005 15,273 14,460 12,028
11/30/2000 14,140 15,380 14,533 12,040
12/31/2000 14,557 15,743 14,737 12,028
1/31/2001 14,625 15,915 14,945 12,100
2/28/2001 14,679 15,963 15,000 12,149
3/31/2001 14,788 16,103 15,107 12,173
4/30/2001 14,569 15,936 15,038 12,222
5/31/2001 14,720 16,097 15,182 12,283
6/30/2001 14,830 16,197 15,263 12,307
7/31/2001 15,038 16,427 15,411 12,270
8/31/2001 15,274 16,693 15,599 12,270
9/30/2001 15,177 16,656 15,658 12,332
10/31/2001 15,372 16,826 15,797 12,295
11/30/2001 15,232 16,678 15,690 12,270
12/31/2001 15,133 16,545 15,622 12,221
1/31/2002 15,332 16,816 15,850 12,246
2/28/2002 15,518 17,021 16,021 12,295
3/31/2002 15,203 16,696 15,696 12,368
4/30/2002 15,462 17,040 15,996 12,443
5/31/2002 15,577 17,134 16,097 12,443
6/30/2002 15,693 17,326 16,259 12,455
7/31/2002 15,882 17,540 16,435 12,467
8/31/2002 16,100 17,740 16,577 12,505
9/30/2002 16,436 18,099 16,816 12,530
10/31/2002 16,158 17,806 16,619 12,555
11/30/2002 16,084 17,718 16,565 12,555
12/31/2002 16,454 18,066 16,908 12,530
1/31/2003 16,365 18,035 16,887 12,580
2/28/2003 16,588 18,284 17,077 12,681
3/31/2003 16,603 18,319 17,050 12,757
4/30/2003 16,723 18,437 17,137 12,731 ]
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CUMULATIVE TOTAL RETURNS WITH LOAD ANNUALIZED TOTAL RETURNS WITH LOAD
PERIODS ENDED SINCE SINCE
APRIL 30, 2003 6 MONTHS 1 YEAR 5 YEARS 10 YEARS INCEPTION2 1 YEAR 5 YEARS 10 YEARS INCEPTION2
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Managed Municipal
Fund - ISI Shares 0.40% 4.94% 27.37% 67.23% 120.44% 4.94% 4.96% 5.28% 6.18%
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Lehman Brothers
General Obligation Index3 3.55% 8.20% 35.63% 84.37% 148.21% 8.20% 6.29% 6.31% 7.15%
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Lehman Brothers Prerefunded
Municipal Bond Index3 3.11% 7.13% 32.18% 71.37% 124.62% 7.13% 5.74% 5.53% 6.34%
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Consumer Price Index 4 1.40% 2.32% 13.16% 27.31% 43.08% 2.32% 2.50% 2.44% 2.76%
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1 PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed,
may be worth more or less than their original cost. The performance
information presented in the graph and table above does not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or
the redemption of Fund shares. All performance assumes the reinvestment of
dividend and capital gain distributions and includes the Fund's maximum
3.00% sales charge. Performance would have been lower during the specified
period if certain of the Fund's fees and expenses had not been waived. For
certain investors, a portion of the Fund's income may be subject to the
federal alternative minimum tax. Distribution of the Fund's income and
capital gains may be subject to state and local taxes.
2 The Fund's inception date is February 26, 1990. Benchmark returns are for
the periods beginning February 28, 1990.
3 The Lehman Brothers Prerefunded Municipal Bond Index, an unmanaged index,
is a subcomponent of the main Lehman Brothers Municipal Bond Index, and
contains only bonds from the main index that have been prerefunded or
escrowed to maturity. The Lehman Brothers General Obligation Index is an
unmanaged index reflecting general municipal market performance. Benchmark
returns do not reflect expenses or sales charges that have been deducted
from the Fund's returns.
4 The Consumer Price Index is a widely used measure of inflation.
3
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NORTH AMERICAN GOVERNMENT BOND FUND - A SHARES PERFORMANCE COMPARISON 1
- --------------------------------------------------------------------------------
[EDGAR REPRESENTATION OF BAR CHART:
LEHMAN BROTHERS LEHMAN BROTHERS
NA GOVERNMENT INTERMEDIATE CONSUMER EMERGING AMERICAS
BOND FUND TREASURY INDEX PRICE INDEX INDEX
-------------- ---------------- ------------- ----------------
Date Load
- ---- -----
4/30/1993 9,703 10,000 10,000 10,000
5/31/1993 9,758 9,971 10,010 10,183
6/30/1993 9,950 10,118 10,020 10,339
7/31/1993 10,123 10,137 10,020 10,519
8/31/1993 10,327 10,290 10,050 10,786
9/30/1993 10,319 10,332 10,070 10,733
10/31/1993 10,450 10,356 10,110 11,351
11/30/1993 10,353 10,305 10,121 11,476
12/31/1993 10,459 10,347 10,121 12,011
1/31/1994 10,635 10,450 10,151 11,943
2/28/1994 10,344 10,303 10,181 11,211
3/31/1994 9,916 10,154 10,212 10,742
4/30/1994 9,927 10,090 10,222 10,493
5/31/1994 9,854 10,097 10,232 10,902
6/30/1994 9,769 10,099 10,263 10,552
7/31/1994 9,865 10,230 10,294 10,843
8/31/1994 10,037 10,260 10,335 11,128
9/30/1994 9,994 10,176 10,366 11,018
10/31/1994 9,929 10,179 10,376 10,960
11/30/1994 9,951 10,132 10,387 11,059
12/31/1994 9,135 10,165 10,387 9,750
1/31/1995 9,025 10,330 10,428 9,308
2/28/1995 9,237 10,527 10,470 8,613
3/31/1995 9,091 10,585 10,501 8,340
4/30/1995 9,397 10,707 10,533 9,439
5/31/1995 9,796 11,009 10,554 9,908
6/30/1995 9,923 11,082 10,575 10,522
7/31/1995 9,910 11,087 10,575 10,868
8/31/1995 10,062 11,176 10,607 10,989
9/30/1995 10,203 11,250 10,628 11,099
10/31/1995 10,251 11,376 10,660 10,808
11/30/1995 10,371 11,515 10,649 11,127
12/31/1995 10,563 11,630 10,639 11,731
1/31/1996 10,647 11,730 10,702 12,343
2/29/1996 10,307 11,605 10,735 11,852
3/31/1996 10,271 11,548 10,788 12,186
4/30/1996 10,247 11,514 10,831 12,629
5/31/1996 10,297 11,509 10,853 12,520
6/30/1996 10,423 11,623 10,864 12,715
7/31/1996 10,486 11,658 10,886 12,746
8/31/1996 10,510 11,673 10,907 13,193
9/30/1996 10,779 11,822 10,940 13,639
10/31/1996 11,101 12,015 10,973 13,688
11/30/1996 11,425 12,160 10,995 14,180
12/31/1996 11,217 12,094 10,995 14,309
1/31/1997 11,217 12,138 11,028 14,807
2/28/1997 11,229 12,156 11,061 15,062
3/31/1997 11,083 12,085 11,094 14,469
4/30/1997 11,231 12,220 11,105 14,833
5/31/1997 11,380 12,315 11,094 15,368
6/30/1997 11,543 12,420 11,105 15,697
7/31/1997 12,065 12,652 11,116 16,401
8/31/1997 11,872 12,602 11,139 16,260
9/30/1997 12,123 12,739 11,161 16,715
10/31/1997 12,235 12,888 11,183 15,949
11/30/1997 12,348 12,918 11,172 16,352
12/31/1997 12,562 13,024 11,161 16,693
1/31/1998 12,676 13,199 11,183 17,047
2/28/1998 12,648 13,181 11,205 17,199
3/31/1998 12,706 13,220 11,228 17,335
4/30/1998 12,764 13,283 11,250 17,384
5/31/1998 12,838 13,375 11,273 17,231
6/30/1998 12,986 13,465 11,284 17,149
7/31/1998 13,001 13,518 11,295 17,314
8/31/1998 13,226 13,785 11,307 14,591
9/30/1998 13,545 14,118 11,318 15,085
10/31/1998 13,453 14,146 11,341 15,600
11/30/1998 13,576 14,093 11,341 16,622
12/31/1998 13,622 14,147 11,329 16,574
1/31/1999 13,669 14,208 11,352 16,396
2/28/1999 13,352 14,001 11,363 16,479
3/31/1999 13,464 14,094 11,397 17,247
4/30/1999 13,576 14,134 11,477 17,787
5/31/1999 13,350 14,044 11,477 17,013
6/30/1999 13,367 14,069 11,477 17,245
7/31/1999 13,350 14,083 11,512 17,061
8/31/1999 13,334 14,111 11,535 17,238
9/30/1999 13,434 14,221 11,592 17,647
10/31/1999 13,418 14,239 11,616 17,974
11/30/1999 13,452 14,245 11,627 18,490
12/31/1999 13,401 14,205 11,627 18,973
1/31/2000 13,504 14,166 11,650 18,832
2/29/2000 13,781 14,277 11,720 19,718
3/31/2000 14,113 14,459 11,814 20,240
4/30/2000 14,042 14,449 11,826 19,962
5/31/2000 14,025 14,509 11,838 19,573
6/30/2000 14,185 14,719 11,909 20,343
7/31/2000 14,418 14,818 11,933 20,836
8/31/2000 14,654 14,973 11,944 21,359
9/30/2000 14,599 15,088 12,004 21,409
10/31/2000 14,710 15,187 12,028 21,198
11/30/2000 15,025 15,407 12,040 21,520
12/31/2000 15,287 15,663 12,028 21,838
1/31/2001 15,363 15,848 12,100 22,246
2/28/2001 15,553 15,995 12,149 22,088
3/31/2001 15,629 16,121 12,173 22,179
4/30/2001 15,513 16,057 12,222 22,310
5/31/2001 15,610 16,123 12,283 22,823
6/30/2001 15,707 16,182 12,307 23,277
7/31/2001 16,042 16,475 12,270 23,327
8/31/2001 16,281 16,618 12,270 23,802
9/30/2001 16,302 16,962 12,332 23,206
10/31/2001 16,865 17,219 12,295 24,125
11/30/2001 16,440 17,024 12,270 24,237
12/31/2001 16,337 16,942 12,221 24,566
1/31/2002 16,440 16,989 12,246 24,958
2/28/2002 16,564 17,129 12,295 25,727
3/31/2002 16,313 16,867 12,368 25,340
4/30/2002 16,545 17,168 12,443 25,920
5/31/2002 16,566 17,287 12,443 25,934
6/30/2002 16,690 17,497 12,455 25,518
7/31/2002 17,007 17,847 12,467 25,233
8/31/2002 17,457 18,034 12,505 26,295
9/30/2002 17,756 18,380 12,530 26,246
10/31/2002 17,577 18,346 12,555 26,784
11/30/2002 17,507 18,175 12,555 27,357
12/31/2002 17,786 18,514 12,530 28,093
1/31/2003 17,670 18,460 12,580 27,961
2/28/2003 17,935 18,660 12,681 28,512
3/31/2003 17,930 18,659 12,757 29,059
4/30/2003 18,243 18,696 12,731 30,076
- ---------------------------------------------------------------------------------------------------------------------
CUMULATIVE TOTAL RETURNS WITH LOAD ANNUALIZED TOTAL RETURNS WITH LOAD
PERIODS ENDED SINCE SINCE
APRIL 30, 2003 6 MONTHS 1 YEAR 5 YEARS 10 YEARS INCEPTION2 1 YEAR 5 YEARS 10 YEARS INCEPTION2
- ---------------------------------------------------------------------------------------------------------------------
ISI North American Government
Bond Fund - A Shares 0.66% 7.00% 38.63% 82.43% 87.38% 7.00% 6.75% 6.20% 6.29%
- ---------------------------------------------------------------------------------------------------------------------
Lehman Brothers Intermediate
Treasury Index3 1.91% 8.90% 40.75% 86.96% 91.94% 8.90% 7.08% 6.46% 6.57%
- ---------------------------------------------------------------------------------------------------------------------
Lehman Brothers Emerging
Americas Index: Mexico Section4 12.29% 16.04% 73.02% 200.76% 210.64% 16.04% 11.59% 11.64% 11.69%
- ---------------------------------------------------------------------------------------------------------------------
Consumer Price Index5 1.40% 2.32% 13.16% 27.31% 28.59% 2.32% 2.50% 2.44% 2.48%
- ---------------------------------------------------------------------------------------------------------------------
1 Past Performance is not indicative of future results. Investment return and
principal will fluctuate so that an investor's shares when redeemed, may be
worth more or less than their original cost. The performance information
presented in the graph and table above does not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or the redemption
of Fund shares. All performance assumes the reinvestment of dividend and
capital gain distributions and includes the Fund's maximum 3.00% sales
charge. Performance does not reflect the deduction of taxes that a
shareholder would pay on a fund distribution or the redemption of fund
shares. Performance would have been lower during the specified periods if
certain of the Fund's fees and expenses had not been waived.
2 The Fund's inception date is January 15, 1993. Benchmark returns are for
the periods beginning January 31, 1993.
3 The Lehman Brothers Intermediate Treasury Index is an unmanaged index
reflecting the performance of US Treasury securities in the
intermediate-term Treasury sector.
4 Lehman Brothers Emerging Americas Index: Mexico Section is an unmanaged
sub-index of the Lehman Brothers Emerging Markets Index reflecting the
performance of selected Mexican debt instruments with maturities of one
year or more. The performance information in the graph and table above is
quoted in US dollars. Benchmark returns do not reflect expenses or sales
charges that have been deducted from the Fund's returns.
5 The Consumer Price Index is a widely used measure of inflation.
4
- --------------------------------------------------------------------------------
ISI STRATEGY FUND - ISI SHARES PERFORMANCE COMPARISON 1
- --------------------------------------------------------------------------------
[EDGAR REPRESENTATION OF BAR CHART:
LIPPER FLEXIBLE
ISI STRATEGY WILSHIRE 500 CONSUMER FUNDS PORTFOLIO
FUND STOCK INDEX PRICE INDEX AVERAGE
-------------- ---------------- ------------- ----------------
Date Load
- ---- -----
9/16/1997 9,699 10,000 10,000 10,000
9/30/1997 9,719 10,000 10,000 10,000
10/31/1997 9,554 9,667 10,020 9,776
11/30/1997 9,767 9,983 10,010 9,925
12/31/1997 9,933 10,168 10,000 10,053
1/31/1998 10,020 10,223 10,020 10,123
2/28/1998 10,459 10,967 10,040 10,582
3/31/1998 10,810 11,516 10,060 10,934
4/30/1998 10,878 11,653 10,080 11,022
5/31/1998 10,761 11,343 10,100 10,895
6/30/1998 11,044 11,741 10,110 11,110
7/31/1998 10,887 11,483 10,121 10,971
8/31/1998 9,992 9,695 10,131 9,871
9/30/1998 10,483 10,328 10,141 10,261
10/31/1998 10,888 11,097 10,161 10,720
11/30/1998 11,337 11,796 10,161 11,125
12/31/1998 11,776 12,550 10,151 11,542
1/31/1999 12,079 13,012 10,171 11,752
2/28/1999 11,634 12,540 10,181 11,423
3/31/1999 11,937 13,024 10,212 11,729
4/30/1999 12,301 13,648 10,283 12,077
5/31/1999 12,068 13,350 10,283 11,872
6/30/1999 12,443 14,041 10,283 12,259
7/31/1999 12,148 13,590 10,314 12,070
8/31/1999 12,046 13,464 10,335 11,993
9/30/1999 11,863 13,112 10,387 11,867
10/31/1999 12,282 13,946 10,407 12,233
11/30/1999 12,496 14,413 10,418 12,487
12/31/1999 12,953 15,507 10,418 13,091
1/31/2000 12,649 14,864 10,439 12,749
2/29/2000 12,869 15,196 10,501 12,993
3/31/2000 13,498 16,099 10,585 13,574
4/30/2000 13,056 15,260 10,596 13,267
5/31/2000 12,804 14,727 10,606 13,065
6/30/2000 13,183 15,377 10,670 13,390
7/31/2000 13,098 15,063 10,691 13,278
8/31/2000 13,734 16,157 10,702 13,873
9/30/2000 13,289 15,403 10,756 13,516
10/31/2000 13,205 15,076 10,777 13,420
11/30/2000 12,491 13,576 10,788 12,857
12/31/2000 12,735 13,818 10,777 13,153
1/31/2001 13,063 14,347 10,842 13,401
2/28/2001 12,340 12,986 10,885 12,728
3/31/2001 11,865 12,112 10,907 12,204
4/30/2001 12,299 13,109 10,951 12,775
5/31/2001 12,379 13,239 11,005 12,840
6/30/2001 12,254 13,018 11,027 12,620
7/31/2001 12,259 12,803 10,994 12,569
8/31/2001 11,814 12,028 10,994 12,134
9/30/2001 11,107 10,947 11,049 11,437
10/31/2001 11,416 11,226 11,016 11,657
11/30/2001 11,874 12,084 10,994 12,138
12/31/2001 12,006 12,301 10,950 12,235
1/31/2002 11,903 12,149 10,972 12,083
2/28/2002 11,765 11,899 11,016 11,955
3/31/2002 12,087 12,420 11,082 12,255
4/30/2002 11,814 11,813 11,148 11,953
5/31/2002 11,768 11,674 11,148 11,898
6/30/2002 11,193 10,854 11,160 11,308
7/31/2002 10,618 9,978 11,171 10,705
8/31/2002 10,745 10,036 11,204 10,803
9/30/2002 10,041 9,029 11,227 10,113
10/31/2002 10,515 9,720 11,249 10,551
11/30/2002 10,885 10,306 11,249 10,930
12/31/2002 10,500 9,735 11,227 10,618
1/31/2003 10,291 9,490 11,272 10,459
2/28/2003 10,221 9,329 11,362 10,374
3/31/2003 10,326 9,435 11,430 10,409
4/30/2003 10,932 10,208 11,407 10,963
- --------------------------------------------------------------------------------------------------------------------
CUMULATIVE TOTAL RETURNS WITH LOAD ANNUALIZED TOTAL RETURNS WITH LOAD
PERIODS ENDED SINCE SINCE
APRIL 30, 2003 6 MONTHS 1 YEAR 5 YEARS INCEPTION2 1 YEAR 5 YEARS INCEPTION2
- --------------------------------------------------------------------------------------------------------------------
ISI Strategy Fund Shares 0.85% -10.27% -2.49% 9.32% -10.27% -0.50% 1.60%
- --------------------------------------------------------------------------------------------------------------------
Wilshire 5000 Index3 5.02% -13.59% -12.40% 2.08% -13.59% -2.61% 0.37%
- --------------------------------------------------------------------------------------------------------------------
Consumer Price Index4 1.40% 2.32% 13.16% 14.07% 2.32% 2.50% 2.39%
- --------------------------------------------------------------------------------------------------------------------
Lipper Flexible Portfolio
Funds Average5 3.88% -8.11% -0.83% 9.63% -8.11% -0.33% 1.51%
- --------------------------------------------------------------------------------------------------------------------
1 PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Investment return and
principal will fluctuate so that an investor's shares when redeemed, may be
worth more or less than their original cost. The performance information
presented in the graph and table above does not reflect the deduction of
taxes that a shareholder would pay on fund distributions or the redemption
of Fund shares. All performance assumes the reinvestment of dividend and
capital gain distributions and includes the Fund's maximum 3.00% sales
charge. Performance would have been lower during the specified period if
certain of the Fund's fees and expenses had not been waived.
2 The Fund's inception date is September 16, 1997. Benchmark returns are for
the periods beginning September 30, 1997.
3 The Wilshire 5000 Index is an unmanaged index that represents the broadest
measure of the US equity market. Benchmark returns do not reflect expenses
or sales charges that have been deducted from the Fund's returns.
4 The Consumer Price Index is a widely used measure of inflation.
5 Lipper figures represent the average total returns reported by all the
mutual funds designated by Lipper, Inc. as falling into the category
indicated.
5
- --------------------------------------------------------------------------------
TOTAL RETURN US TREASURY FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (UNAUDITED) APRIL 30, 2003
INTEREST MATURITY PAR MARKET
SECURITY RATE DATE VALUE VALUE
- --------------------------------------------------------------------------------
US TREASURY OBLIGATIONS - 87.32%
US Treasury Bond 10.375% 11/15/12 $ 14,250,000 $ 18,889,600
US Treasury Bond 8.875% 2/15/19 10,800,000 16,068,796
US Treasury Bond 7.500% 11/15/24 61,000,000 82,969,531
US Treasury Bond 5.250% 11/15/28 2,000,000 2,106,563
US Treasury Note 3.250% 12/31/03 56,000,000 56,787,500
US Treasury Note 3.000% 2/15/08 15,000,000 15,162,891
US Treasury Note 5.500% 5/15/09 25,000,000 28,281,250
----------
TOTAL US TREASURY OBLIGATIONS
(COST $216,139,167) 220,266,131
-----------
ZERO COUPON US TREASURY BONDS (STRIPs) - 2.87%
US Treasury STRIPs1 5.410%2 8/15/15 5,000,000 2,871,114
US Treasury STRIPs1 5.640%2 5/15/17 8,500,000 4,362,024
---------
TOTAL ZERO COUPON US TREASURY BONDS (STRIPs)
(Cost $6,486,560) 7,233,138
---------
REPURCHASE AGREEMENT - 8.51%
GOLDMAN SACHS & Co.
Dated 4/30/03, 1.220%, principal and interest in the
amount of $21,464,727 due 5/1/03, collateralized by
US Treasury Obligations, par value of $21,963,000,
due 9/18/03 to 9/30/03 with a value of $21,894,028. 21,464,000
----------
TOTAL REPURCHASE AGREEMENT
(Cost $21,464,000) 21,464,000
----------
TOTAL INVESTMENTS - 98.70% 248,963,269
(Cost $244,089,727)
OTHER ASSETS IN EXCESS OF LIABILITIES - 1.30% 3,285,499
-------------
NET ASSETS - 100% $ 252,248,768
=============
- --------------------------------------------------------------------------------
1 Includes principal of underlying security only.
2 Yield as of April 30, 2003.
6 See Notes to Financial Statements.
- --------------------------------------------------------------------------------
MANAGED MUNICIPAL FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (UNAUDITED) APRIL 30, 2003
RATING*
ISSUER (MOODY'S/S&P) PAR VALUE MARKET VALUE
- ----------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS - 86.14%
General Obligations - 56.55%
Arlington County, VA
5.000% 10/1/14 Aaa / AAA $ 2,000,00 2,183,760
Cary, NC
5.000% 3/1/18 Aaa / AAA 2,000,000 2,161,220
Charlotte, NC
5.000% 2/1/19 Aaa / AAA 2,300,000 2,436,643
Chesterfield County, VA
5.625% 1/15/14 Aaa / AAA 1,350,000 1,532,210
Chesterfield County, VA
5.000% 1/15/20 Aaa / NR 1,000,000 1,054,850
Du page County, IL, Jail Project
5.600% 1/1/21 Aaa / AAA 1,600,000 1,840,432
Florida State, Board of Education, Public Education
5.125% O6/1/21 Aa2 / AA+ 1,000,000 1,054,410
Franklin County, OH
5.450% 12/1/09 Aaa / AAA 1,500,000 1,567,170
Georgia State, Series B
5.000% 7/1/19 Aaa / AAA 5,000,000 5,316,600
Georgia State, Series D
5.000% 10/1/17 Aaa / AAA 1,850,000 1,990,082
Guilford County, NC, Series B
5.250% 10/1/16 Aa1 / AAA 3,000,000 3,323,790
King County, WA, Series G
5.000% 12/1/17 Aa1 / AA+ 2,565,000 2,732,135
Mecklenburg County, NC, Series D
4.250% 2/1/19 Aaa / AAA 2,000,000 2,006,240
Minneapolis, MN, Ref- Series B
5.200% 3/1/13 Aa1 / AAA 3,200,000 3,441,632
Minnesota State
5.000% 11/1/14 Aaa / AAA 2,500,000 2,731,100
Minnesota State
5.500% 6/1/18 Aaa / AAA 2,000,000 2,247,680
Missouri State, Fourth Street Building, Series A
4.125% 10/1/19 Aaa / AAA 2,000,000 1,994,040
Missouri State, Fourth State Building, Series A
5.000% 6/1/23 Aaa / AAA 2,000,000 2,056,840
Montgomery County, MD, Series A
5.000% 2/1/22 Aaa / AAA 2,750,000 2,907,960
North Carolina, Public School Building
4.600% 4/1/17 Aa1 / AAA 5,000,000 5,249,250
See Notes to Financial Statements. 7
- --------------------------------------------------------------------------------
MANAGED MUNICIPAL FUND (CONTINUED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (UNAUDITED) APRIL 30, 2003
RATING*
ISSUER (MOODY'S/S&P) PAR VALUE MARKET VALUE
- -------------------------------------------------------------------------------------------------------
Salt Lake City, UT, Series A
4.500% 3/1/20 Aaa / NR 2,240,000 2,268,336
South Carolina State, Highway, Series B
5.000% 4/1/19 Aaa / AAA 1,000,000 1,068,950
South Carolina State, Highway, Series B
5.650% 7/1/21 Aaa / AAA 1,260,000 1,406,727
South Carolina State, State Institutional Series A
5.300% 3/1/17 Aaa / AAA 1,700,000 1,877,667
Spring Branch, TX, Independent School District
5.125% 2/1/26 Aaa / AAA 2,000,000 2,057,420
Virginia State
5.250% 6/1/16 Aaa / AAA 1,320,000 1,459,801
Washington State, Series E
5.000% 7/1/22 Aa1 / AA+ 2,000,000 2,035,980
---------
62,002,925
----------
OTHER REVENUE - 8.76%
Fairfax County, VA, Water Authority Water Revenue
5.000% 4/1/27 Aa1 / AAA 3,500,000 3,615,570
Gwinett County, GA, Water & Sewer Authority
5.300% 8/1/20 Aaa / AAA 1,250,000 1,348,675
Gwinett County, GA, Water & Sewer Authority
5.250% 8/1/24 Aaa / AAA 1,500,000 1,592,430
Texas, Water Development Board Revenue
4.750% 7/15/20 Aaa / AAA 3,000,000 3,053,790
---------
9,610,465
---------
PREREFUNDED ISSUES - 20.83%
Arlington, TX, School District
5.750% 2/15/21 Aaa / NR 3,535,000 3,809,351
Charlotte, NC, Water & Sewer System Revenue
5.250% 6/1/24 Aa1 / AAA 1,600,000 1,835,984
Chicago, IL, Metropolitan Water Reclamation District-
6.300% 12/1/09 Aaa / AA+ 1,000,000 1,121,190
Dallas, TX
5.000% 2/15/10 Aaa / AAA 1,750,000 1,862,665
Delaware State, Series A
5.125% 4/1/16 Aaa / AAA 2,150,000 2,362,721
Delaware State, Series A
5.500% 4/1/19 Aaa / AAA 2,500,000 2,878,575
Florida State, Transportaton, Series A
5.800% 7/1/18 Aa2 / AAA 2,000,000 2,205,840
Indianapolis, IN, Public Improvement Board Revenue,
Series A 6.000% 1/10/18 Aaa / AAA 300,000 307,101
8 See Notes to Financial Statements.
- --------------------------------------------------------------------------------
MANAGED MUNICIPAL FUND (CONTINUED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (UNAUDITED) APRIL 30, 2003
RATING*
ISSUER (MOODY'S/S&P) PAR VALUE MARKET VALUE
- ----------------------------------------------------------------------------------------------------------
Portland, OR, Metro Open Spaces Progressive, Series A
5.250% 9/1/07 Aa1 / AA+ 1,500,000 1,550,745
Tennessee State, Series A
5.500% 3/1/09 Aa2 / AA 1,535,000 1,650,018
Tennessee State, Series A
5.550% 3/1/10 Aa2 / AA 1,000,000 1,075,840
Texas State, Series A
6.000% 10/1/14 Aaa / AA 2,000,000 2,174,800
---------
22,834,830
----------
TOTAL MUNICIPAL BONDS
(COST $87,054,010) 94,448,220
----------
REPURCHASE AGREEMENT - 10.03%
GOLDMAN SACHS & Co. 10,994,000
----------
Dated 4/30/03, 1.22%, principal and interest in the amount of $10,994,373
due 5/1/03, collateralized by US Treasury Bond, par value of $9,392,000,
due 11/15/27 with a market value of $11,214,283.
TOTAL REPURCHASE AGREEMENT
(COST $10,994,000) 10,994,000
----------
TOTAL INVESTMENTS - 96.17% 105,442,220
(COST $98,048,010)
OTHER ASSETS IN EXCESS OF LIABILITIES - 3.83% 4,200,993
----------
NET ASSETS - 100% $ 109,643,213
===========
- --------------------------------------------------------------------------------
* The Moody's and Standard & Poor's ratings indicated are believed to be the
most recent ratings available as of April 30, 2003. The ratings shown are not
audited. Moody's Municipal Bond Ratings :
Aaa Judged to be of the best quality.
Aa Judged to be of high quality by all standards. Issues are sometimes
denoted with a 1, 2 or 3, which denote a high, medium or low ranking
within the rating.
NR Not Rated.
S&P Municipal Bond Ratings:
AAA Of the highest quality.
AA The second strongest capicity for payment of debt services. Those
issues determined to possess very strong safety characteristics are
denoted with a plus (+) sign.
NR Not Rated.
See Notes to Financial Statements. 9
- --------------------------------------------------------------------------------
NORTH AMERICAN GOVERNMENT BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (UNAUDITED) APRIL 30, 2003
INTEREST MATURITY PAR/NOMINAL MARKET
SECURITY RATE DATE VALUE1 VALUE
- ----------------------------------------------------------------------------------------------------------
CANADIAN SECURITIES - 10.81%
Canadian Government Bond 4.500% 9/1/07 C22,300,000 $ 15,744,562
Canadian Government Bond 6.000% 6/1/11 8,500,000 6,395,724
Canadian Government Bond 5.250% 6/1/12 11,000,000 7,865,364
---------
TOTAL CANADIAN SECURITIES
(COST $28,144,265) 30,005,650
----------
MEXICAN SECURITIES - 15.80%
Mexican Bono2 14.000% 9/2/04 P189,596,100 20,034,310
Mexican Bono2 14.500% 5/12/05 71,387,700 7,851,574
Mexican Bono2 10.500% 7/14/11 96,938,900 10,273,932
Mexican Cetes3 8.360%4 6/12/03 59,108,280 5,715,928
---------
TOTAL MEXICAN SECURITIES
(COST $42,792,849) 43,875,744
----------
US SECURITIES - 65.75%
General Electric Co. 5.000% 2/1/13 $ 1,000,000 1,037,683
US Treasury Bond 8.750% 8/15/20 14,100,000 20,982,563
US Treasury Bond 7.875% 2/15/21 2,750,000 3,807,300
US Treasury Bond 7.500% 11/15/24 44,000,000 59,846,875
US Treasury Bond 6.875% 8/15/25 8,750,000 11,165,820
US Treasury Note 3.250% 12/31/03 47,000,000 47,660,936
US Treasury Note 3.000% 2/15/08 16,100,000 16,274,836
US Treasury Note 5.500% 5/15/09 19,250,000 21,776,563
----------
TOTAL US SECURITIES 182,552,576
(Cost $180,946,747) -----------
10 See Notes to Financial Statements.
- --------------------------------------------------------------------------------
NORTH AMERICAN GOVERNMENT BOND FUND (CONCLUDED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (UNAUDITED) APRIL 30, 2003
MARKET
SECURITY VALUE
- ----------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 6.49%
GOLDMAN SACHS & Co. 18,019,000
----------
Dated 4/30/03, 1.220%, principal and interest in the amount of $18,019,611
due 5/1/03, collateralized by US Treasury Bills, par value of $18,484,000,
due 10/23/03 with a value of $18,379,491.
TOTAL REPURCHASE AGREEMENT
(COST $18,019,000) 18,019,000
----------
TOTAL INVESTMENTS - 98.85% 274,452,970
(COST $269,902,861)
ASSETS IN EXCESSS OF LIABILITIES - 1.15% 3,203,478
---------------
NET ASSETS - 100% $ 277,656,448
===============
- ------------------------------------------------------------------------------------------------------------------------
1 Par Value is shown in local currency: Canadian dollars (C), Mexican Pesos
(P) and US dollars ($).
2 Bonos are fixed-rate, local currency-denominated coupon bonds issued by the
Mexican government.
3 Cetes are short-term Mexican government debt securities.
4 Yield as of April 30, 2003.
See Notes to Financial Statements. 11
- --------------------------------------------------------------------------------
ISI STRATEGY FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (UNAUDITED) APRIL 30, 2003
MARKET MARKET
SECURITY SHARES VALUE SECURITY SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCK - 78.80% BIOTECHNOLOGY - 1.53%
Basic Materials - 1.73% Allos Therapeutics + 201 378
Air Products & Chemicals, Inc. 250 10,767 Amgen, Inc.+ 1,500 91,965
Alcoa, Inc. 662 15,180 Andrx Group + 100 1,614
Arch Chemicals, Inc. 325 6,932 Biogen, Inc.+ 200 7,598
Bowater, Inc. 100 3,893 Bio-Technology General Corp.+ 100 346
Brady Corp. - Class A 100 3,351 Charles River Laboratories International, Inc.+ 100 2,715
Cabot Corp. 100 2,787 Chiron Corp.+ 100 4,083
Crompton Corp. 92 591 Ciphergen Biosystems, Inc.+ 1,045 5,110
Cytec Industries, Inc.+ 57 1,825 Covance, Inc.+ 100 1,773
Dow Chemical Co. 542 17,691 Cubist Pharmaceuticals, Inc.+ 88 812
Du Pont (E.I.) de Nemours & Co. 2,556 108,707 Diagnostic Products Corp. 100 3,950
Eastman Chemical Co. 100 3,053 Discovery Partners International + 1,367 4,429
Ecolab, Inc. 100 5,109 Exelixis, Inc.+ 900 7,667
Engelhard Corp. 100 2,455 Genencor International, Inc.+ 96 1,061
Georgia-Pacific Corp. 79 1,220 Genentech, Inc.+ 100 3,799
Glatfelter 100 1,145 Genzyme Corp. - General Division + 100 4,028
Goodrich Corp. 22 310 Gilead Sciences, Inc.+ 2,031 93,710
International Paper Co. 43 1,537 Human Genome Sciences, Inc.+ 84 982
Lafarge North America, Inc. 200 6,370 Idexx Laboratories, Inc.+ 100 3,900
Lubrizol Corp. 100 3,161 Invitrogen, Corp.+ 100 3,270
Martin Marietta Materials, Inc. 62 1,833 Kendle International, Inc.+ 100 489
MeadWestvaco Corp. 94 2,217 Kosan Biosciences, Inc.+ 76 497
Monsanto Co. 282 4,907 Lexicon Genetics, Inc.+ 92 460
Newmont Mining Corp. 205 5,539 Medimmune, Inc.+ 1,205 42,500
Ns Group, Inc.+ 2,344 17,697 Millennium Pharmaceuticals, Inc.+ 49 539
Nucor Corp. 100 4,085 Quest Diagnostics, Inc.+ 410 24,498
PPG Industries, Inc. 200 9,702 Rigel Pharmaceuticals, Inc.+ 1,865 1,623
Praxair, Inc. 200 11,616 Sangamo Biosciences, Inc.+ 100 283
Quanex Corp. 821 23,612 Seattle Genetics, Inc.+ 100 261
Rohm & Haas Co. 273 9,039 Sequenom, Inc.+ 93 188
Sigma - Aldrich Corp. 100 4,982 Serologicals Corp.+ 58 535
Smurfit - Stone Container Corp.+ 97 1,365 Universal Display Corp.+ 22 215
Southern Peru Copper Corp. 1,440 22,522 -------
Temple-Inland, Inc. 100 4,530 315,278
Texas Industries, Inc. 55 1,086 -------
United States Steel Corp. 66 945
Valspar Corp. 100 4,319 BUSINESS SERVICES - 1.41%
Vulcan Materials Co. 100 3,497 Advent Software, Inc.+ 100 1,259
Wausau-Mosinee Paper Corp. 123 1,309 Agile Software Corp.+ 981 6,808
Weyerhaeuser Co. 300 14,877 Allied Waste Industries, Inc.+ 100 830
Wolverine Tube Co.+ 1,896 10,238 Answerthink, Inc.+ 100 195
------- Apollo Group, Inc. - Class A + 25 1,355
356,001 Automatic Data Processing, Inc. 488 16,411
------- BearingPoint, Inc.+ 100 817
CDW Computer Centers, Inc.+ 283 12,067
Cendant Corp.+ 1,540 21,991
12 See Notes to Financial Statements.
- --------------------------------------------------------------------------------
ISI STRATEGY FUND (CONTINUED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (UNAUDITED) APRIL 30, 2003
MARKET MARKET
SECURITY SHARES VALUE SECURITY SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCK (CONTINUED) Onyx Software Corp.+ 578 347
BASIC MATERIAL (CONTINUED) Opnet Technologies, Inc.+ 1,701 11,958
Ceridian Corp.+ 100 1,395 Paychex, Inc. 62 1,931
Certegy, Inc.+ 48 1,200 Pec Solutions, Inc.+ 100 1,477
ChoicePoint, Inc.+ 410 14,465 Pegasus Solutions, Inc.+ 100 1,190
Ciber, Inc.+ 100 543 Pegasystems, Inc.+ 220 1,503
Cintas Corp. 154 5,529 Perot Systems Corp. - Class A + 100 1,062
Convergys Corp.+ 17 276 Per-Se Technologies, Inc.+ 100 873
CoStar Group, Inc.+ 100 2,226 Polycom, Inc.+ 79 776
CSG Systems International, Inc.+ 100 1,053 Pomeroy Computer + 1,153 8,359
Datastream Systems, Inc.+ 359 3,138 Pre-paid Legal Services, Inc.+ 100 2,306
Deluxe Corp. 100 4,401 QRS Corp.+ 100 520
DeVry, Inc.+ 100 2,314 Republic Services, Inc.+ 113 2,425
Digital River, Inc.+ 347 5,802 R.H. Donnelley Corp.+ 120 3,583
Dun & Bradstreet Corp.+ 410 15,498 Serena Software Co.+ 412 6,493
Equifax, Inc. 100 2,319 ServiceMaster Co. 168 1,520
Fidelity National Information Systems, Inc.+ 520 9,126 Sycamore Networks, Inc.+ 100 323
Fiserv, Inc.+ 190 5,594 Sylvan Learning Systems, Inc.+ 100 1,754
Forrester Research, Inc.+ 648 10,031 TeleTech Holdings, Inc.+ 100 408
Gartner, Inc. - Class B + 77 604 Tetra Technologies, Inc.+ 100 2,660
Global Payments, Inc. 80 2,481 Transaction Systems Architects, Inc.+ 83 577
Heidrick & Struggles International, Inc.+ 96 1,344 Universal Electronics, Inc.+ 100 1,046
H&R Block, Inc. 140 5,407 URS Corp.+ 630 8,946
IDX Systems Corp.+ 100 1,467 Verisity Ltd.+ 85 997
IMS Health, Inc. 100 1,540 Viad Corp. 9 181
InFocus Corp.+ 310 1,392 Wallace Computer Services, Inc. 222 5,801
infoUSA, Inc.+ 285 1,505 WebMD Corp.+ 52 501
Inrange Technologies Corp, - Class B + 100 228 ---
Interpublic Group of Companies, Inc.+ 220 2,508 290,613
Iron Mountain, Inc.+ 229 9,126 -------
Kelly Services, Inc. - Class A 100 2,315 CAPITAL GOODS - 5.18%
Lamar Advertising Co.+ 100 3,592 3M Co. 806 101,588
Landamerica Financial Group, Inc. 100 4,107 American Power Conversion Corp.+ 310 4,830
Macrovision Corp.+ 408 7,209 American Standard Companies, Inc.+ 200 14,238
Manpower, Inc. 93 3,058 Avery Dennison Corp. 100 5,301
Mapinfo Corp.+ 100 505 Baldor Electric Co. 100 2,224
Memberworks, Inc.+ 100 2,193 Ball Corp. 100 5,616
Mentor Corp. 100 1,851 Belden, Inc. 43 511
Metro One Telecommunications, Inc.+ 50 324 Boeing Co. 805 21,960
MPS Group, Inc.+ 100 675 Caterpillar, Inc. 410 21,566
NETIQ Corp.+ 75 1,033 Clarcor, Inc. 100 3,741
Nautilus Group, Inc. 720 9,144 Cooper Industries Ltd. - Class A 1,150 42,665
Navigant Consulting, Inc.+ 100 751 Cummins, Inc. 100 2,711
NCO Group, Inc.+ 96 1,608 Deere & Co. 200 8,806
NDCHealth Corp. 100 1,925 Diebold, Inc. 200 7,996
Omnicom Group 106 6,561 Digi International, Inc.+ 93 394
Dover Corp. 100 2,874
See Notes to Financial Statements. 13
- --------------------------------------------------------------------------------
ISI STRATEGY FUND (CONTINUED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (UNAUDITED) APRIL 30, 2003
MARKET MARKET
SECURITY SHARES VALUE SECURITY SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCK (CONTINUED) CONSUMER CYCLICALS - 2.70%
CAPITAL GOODS (CONTINUED) Applebee's International, Inc. 8 219
Eaton Corp. 300 24,621 A O Smith Corp. 34 1,014
Emerson Electric Co. 410 20,787 A.T. Cross Co. - Class A + 100 512
Energizer Holdings, Inc.+ 376 10,836 Belo Corp. - Class A 25 563
Fastenal Co. 1,035 35,801 Black & Decker Corp. 100 4,125
Fisher Scientific International, Inc.+ 100 2,881 Brinker International, Inc.+ 250 7,938
Fluor Corp. 100 3,457 Brunswick Corp. 271 5,916
FMC Technologies, Inc.+ 60 1,129 Carnival Corp. 196 5,408
General Dynamics Corp. 610 37,863 Centex Corp. 100 6,602
General Electric Co. 13,914 409,767 Choice Hotels International, Inc.+ 100 2,440
Harsco Corp. 97 3,344 Coach, Inc.+ 1,560 67,876
Illinois Tool Works, Inc. 490 31,350 CSK Auto Corp.+ 100 1,025
Ingersoll-Rand Co. - Class A 200 8,816 Danaher Corp. 29 2,000
Johnson Controls, Inc. 410 33,718 Darden Restaurants, Inc. 100 1,751
Kaydon Corp. 100 2,230 Delphi Corp. 33 277
Lawson Products, Inc. 100 2,700 Donaldson Co., Inc. 72 2,874
Littelfuse, Inc.+ 19 372 Dow Jones & Co., Inc. 100 3,960
Lockheed Martin Corp. 200 10,010 DR Horton, Inc. 20 474
Millipore Corp.+ 25 854 Dura Automotive Systems Co.+ 100 805
Molex, Inc. 50 1,167 Ethan Allen Interiors, Inc. 72 2,425
Moog, Inc. - Class A + 31 986 Ford Motor Co. 24 247
Navistar International Corp.+ 96 2,678 Fortune Brands, Inc. 138 6,679
Northrop Grumman Corp. 463 40,721 Furniture Brands International, Inc.+ 100 2,375
Owens-Illinois, Inc.+ 100 889 Gannett Company, Inc. 21 1,590
Paccar, Inc. 150 8,761 General Motors Corp. 95 3,425
Pactiv Corp.+ 100 2,052 General Motors Corp. - Class H + 150 1,770
Pall Corp. 100 2,112 Genesis Intermedia, Inc.+ 600 12
Parker Hannifin Corp. 100 4,068 Genuine Parts Co. 1,175 37,565
Power-One, Inc.+ 231 1,351 Haggar Corp. 2,137 22,225
Precision Castparts Corp. 100 2,769 Harley-Davidson, Inc. 300 13,332
Raytheon Co. 200 5,986 Harrah's Entertainment, Inc.+ 200 7,878
Rockwell Automation, Inc. 1,535 34,998 Hasbro, Inc. 100 1,600
Rockwell Collins, Inc. 100 2,138 Hillenbrand Industries, Inc. 100 4,990
Roper Industries, Inc. 69 2,111 Hudson Highland Group, Inc.+ 5 74
Shaw Group, Inc.+ 100 1,165 International Game Technology + 200 17,260
Snap-On, Inc. 100 2,935 Jones Apparel Group, Inc.+ 100 2,852
Sonoco Products Co. 720 15,732 KB Home 100 4,927
Stewart Enterprises, Inc.+ 100 293 Knight-Ridder, Inc. 69 4,454
Teleflex, Inc. 100 3,839 Lancaster Colony Corp. 32 1,367
Textron, Inc. 200 5,898 La-Z-Boy, Inc. 58 1,133
United Technologies Corp. 465 28,742 Lear Corp.+ 300 11,922
White Electronic Designs Co.+ 96 752 Lee Enterprises, Inc. 100 3,587
W.W. Grainger, Inc. 100 4,615 Leggett & Platt, Inc. 100 2,065
York International Corp. 100 2,390 Lennar Corp. - Class A 100 5,424
----- Lennar Corp. - Class B 10 536
1,066,705 Liz Claiborne, Inc. 72 2,342
---------
14 See Notes to Financial Statements.
- --------------------------------------------------------------------------------
ISI STRATEGY FUND (CONTINUED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (UNAUDITED) APRIL 30, 2003
MARKET MARKET
SECURITY SHARES VALUE SECURITY SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCK (CONTINUED) CONSUMER STAPLES - 10.12%
CONSUMER CYCLICALS (CONTINUED) 7-Eleven, Inc.+ 100 899
Marriott International, Inc. - Class A 300 0,773 AMC Entertainment, Inc.+ 100 958
Masco Corp. 210 4,425 Alberto-Culver Co. - Class B 100 4,928
Mattel, Inc. 20 435 Albertson's, Inc. 3,176 63,075
Maytag Corp. 100 2,084 Altria Group, Inc. 3,021 92,926
McClatchy Co. - Class A 100 5,860 Anheuser-Busch Cos., Inc. 3,452 172,186
McGraw-Hill Cos., Inc. 200 1,678 Archer-Daniels-Midland Co. 44 488
MGM MIRAGE + 66 1,876 Avon Products, Inc. 300 17,451
Mohawk Industries, Inc.+ 100 5,547 Brown-Forman Corp. - Class B 200 15,308
New York Times Co. - Class A 200 9,276 Cablevision Systems Corp.+ 14,125 316,683
Newell Rubbermaid, Inc. 1,702 1,877 Campbell Soup Co. 100 2,203
Nike, Inc. - Class B 300 6,059 Clear Channel Communications, Inc.+ 85 3,324
Outback Steakhouse, Inc. 129 4,610 Clorox Co. 268 12,119
Photronics, Inc.+ 28 352 Coca Cola Enterprises, Inc. 100 1,949
Polaris Industries, Inc. 68 3,595 Coca-Cola Co. 4,462 180,265
PracticeWorks, Inc.+ 22 259 Colgate Palmolive Co. 620 35,445
Pulitzer, Inc. 78 3,637 Comcast Corp. - Class A + 1,305 41,643
Pulte Homes, Inc. 97 5,625 Comerica, Inc. 250 10,877
Reebok International Ltd.+ 100 3,106 Conagra Foods, Inc. 419 8,799
Scripps (E.W.) Co. - Class A 200 5,850 Constellation Brands, Inc. - Class A + 310 8,311
Sherwin-Williams Co. 64 1,784 Coors (Adolph) Co. 100 5,353
Speedway Motorsports, Inc. 100 2,431 Corn Products International, Inc. 24 717
SPX Corp.+ 73 2,467 COX Communications, Inc. - Class A + 876 28,996
Stanley Works 100 2,403 Dean Foods Co.+ 284 12,363
Starbucks Corp.+ 100 2,349 Del Monte Foods, Inc.+ 33 262
Starwood Hotels & Resorts Worldwide, Inc. 91 2,442 Delta & Pine Land Co. 100 2,326
Timberland Co. - Class A + 29 1,450 Dreyer's Grand Ice Cream, Inc. 1,212 77,423
Toro Co. 16 597 Eastman Kodak Co. 620 18,544
Tribune Co. 265 2,980 Echostar Communications Corp. - Class A + 100 2,996
Tweeter Home Entertainment Group, Inc.+ 574 3,306 Entercom Communications Corp. + 410 19,922
United Auto Group, Inc.+ 49 835 Estee Lauder Cos., Inc. 100 3,250
United Rentals, Inc.+ 1,175 2,102 Flowers Foods, Inc. 60 1,698
V.F. Corp. 200 7,868 Fox Entertainment Group, Inc. - Class A + 95 2,413
Washington Post Co. - Class B 36 6,244 Gaylord Entertainment Co.+ 100 2,081
Weight Watchers International, Inc.+ 510 3,960 General Mills, Inc. 300 13,533
Wendy's International, Inc. 100 2,904 Harte-Hanks, Inc. 50 900
Whirlpool Corp. 100 5,349 Heinz (H.J.) Co. 300 8,964
Wolverine World Wide, Inc. 100 1,844 Hershey Foods Corp. 200 13,050
Yum! Brands, Inc.+ 180 4,446 Hispanic Broadcasting Corp.+ 2,375 60,919
Zygo Corp.+ 96 717 Hormel Foods Corp. 100 2,301
--- Ingram Micro, Inc.+ 72 720
555,237 International Flavors & Fragrances, Inc. 300 9,534
------- J.M Smucker Co. 52 1,887
Kellogg Co. 400 13,096
See Notes to Financial Statements. 15
- --------------------------------------------------------------------------------
ISI STRATEGY FUND (CONTINUED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (UNAUDITED) APRIL 30, 2003
MARKET MARKET
SECURITY SHARES VALUE SECURITY SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCK (CONTINUED) Cimarex Energy Co.+ 32 630
CONSUMER STAPLES (CONTINUED) ConocoPhillips 425 21,378
Kimberly-Clark Corp. 564 28,070 Consol Energy, Inc. 300 11,661
Kraft Foods, Inc. 665 20,549 Cooper Cameron Corp.+ 300 14,358
Kroger Co.+ 210 3,003 Devon Energy Corp. 1,086 51,332
Lexar Media, Inc.+ 462 2,241 Diamond Offshore Drilling, Inc. 100 1,864
McCormick & Co., Inc. 100 2,479 Dril-Quip, Inc.+ 96 1,476
Meredith Corp. 100 4,322 Encore Acquisition Co.+ 61 1,052
Metro-Goldwyn-Mayer, Inc.+ 100 1,115 EOG Resources, Inc. 80 2,990
Mondavi (Robert) Corp. - Class A + 66 1,620 Exxon Mobil Corp. 2,863 452,778
Nash Finch Co. 88 1,100 FMC Corp.+ 100 1,812
Pathmark Stores, Inc.+ 100 699 Frontier Oil Corp. 32 541
PepsiAmericas, Inc. 100 1,249 Global Industries Ltd.+ 93 413
Pepsi Bottling Group, Inc. 100 2,054 GlobalSantaFe Corp. 696 14,727
PepsiCo, Inc. 2,411 104,348 Halliburton Co. 1,393 29,824
Playtex Products, Inc.+ 50 367 Hanover Compressor Co.+ 1,574 13,237
Price Communications Corp.+ 21 256 Headwaters, Inc.+ 660 10,824
Procter & Gamble Co. 2,922 262,542 Helmerich & Payne, Inc. 100 2,573
R.J. Reynolds Tobacco Holdings, Inc. 100 2,817 Holly Corp. 411 11,709
R.R. Donnelley & Sons Co. 100 2,016 Hydril Co.+ 100 2,381
Safety Components International, Inc.* 12 0 Kerr-McGee Corp. 73 3,074
Safeway, Inc.+ 310 5,152 Marathon Oil Corp. 100 2,277
Sara Lee Corp. 300 5,034 Murphy Oil Corp. 820 34,153
Smithfield Foods, Inc.+ 1,502 29,439 Nabors Industries Ltd.+ 200 7,840
Supervalu, Inc. 100 1,647 National-Oilwell, Inc.+ 100 2,099
Sysco Corp. 620 17,813 Noble Corp.+ 100 3,095
Univision Communications, Inc. - Class A + 100 3,028 NL Industries 100 1,740
USA Interactive + 465 13,927 Noble Energy, Inc. 100 3,320
UST, Inc. 100 3,133 Occidental Petroleum Corp. 322 9,612
Viacom, Inc. - Class B + 3,066 133,095 Patterson - UTI Energy, Inc.+ 1,730 57,246
Walt Disney Co. 1,985 37,040 Pioneer Natural + 2,820 67,454
Weis Markets, Inc. 100 3,196 Pride International, Inc.+ 1,445 22,426
Westwood One, Inc.+ 100 3,490 Schlumberger Ltd. 100 4,193
Whole Foods Market, Inc.+ 540 32,054 Seacor Smit, Inc.+ 100 3,582
Winn-Dixie Stores, Inc. 965 12,091 Smith International, Inc.+ 200 7,112
W.M. Wrigley Jr. Co. 300 17,013 Stone Energy Corp.+ 673 23,642
Xm Satellite Radio + 3,311 32,017 Sunoco, Inc. 1,863 69,322
------ Tidewater, Inc. 100 2,690
2,083,101 Universal Compression Holdings, Inc.+ 91 1,651
--------- Unocal Corp. 100 2,770
ENERGY - 5.78% Valero Energy Corp. 284 10,437
Anadarko Petroleum Corp. 82 3,641 Weatherford International Ltd.+ 100 4,023
Apache Corp. 885 50,666 W-H Energy Services, Inc.+ 85 1,530
Ashland, Inc. 330 9,785 -----
B.J. Services Co.+ 100 3,651 1,190,071
Burlington Resources, Inc. 200 9,262 ---------
ChevronTexaco Corp. 1,914 120,218
16 See Notes to Financial Statements.
- --------------------------------------------------------------------------------
ISI STRATEGY FUND (CONTINUED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (UNAUDITED) APRIL 30, 2003
MARKET MARKET
SECURITY SHARES VALUE SECURITY SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCK (CONTINUED) Commerce Bancorp, Inc./NJ 720 29,282
FINANCE - 17.37% Commerce Bancshares, Inc. 126 4,769
21st Century Insurance Group 100 1,353 Community First Bankshares, Inc. 50 1,346
Aflac, Inc. 510 16,682 Compass Bancshares, Inc. 50 1,686
Alliance Capital Management Holding LP 100 3,188 Compucredit Corp.+ 1,561 11,817
Allmerica Financial Corp.+ 98 1,499 Countrywide Credit Industries, Inc. 100 6,760
Allstate Corp. 50 1,889 Crescent Real Estate Equities Co. 100 1,418
AMB Property Corp. 100 2,730 Cullen/Frost Bankers, Inc. 100 3,279
AMBAC Financial Group, Inc. 150 8,753 Duke Realty Corp. 100 2,740
Amcore Financial, Inc. 100 2,342 Eaton Vance Corp. 100 2,980
American Capital Strategies Ltd. 2,789 67,661 Edwards (A.G.), Inc. 100 2,983
American Express Co. 1,525 57,737 Electro Rent Co.+ 1,930 19,261
American Financial Group, Inc. 644 14,284 Equity Office Properties Trust 344 8,934
American International Group, Inc. 3,139 81,905 Equity Residential 200 5,182
American National Insurance Co. 300 24,000 Fannie Mae 4,502 25,900
AmSouth Bancorp 49 1,031 Federated Department Stores + 22 674
AON Corp. 50 1,108 Fidelity National Financial, Inc. 11 378
Apartment Investment & Management Co. 52 1,964 Fifth Third Bancorp 19 937
Archstone-Smith Trust 100 2,280 Financial Federal Corp.+ 2,312 51,789
Arden Realty, Inc. 100 2,383 First American Corp. 100 2,650
Argonaut Group, Inc. 100 1,008 First Financial Corp./Indiana 100 5,100
Associated Banc Corp. 121 4,228 First Niagara Financial Corp. 58 705
Astoria Financial Corp. 100 2,502 First Place Financial Corp. 100 1,601
AvalonBay Communities, Inc. 100 3,989 First Tennessee National Corp. 100 4,380
Bancorpsouth, Inc. 100 2,010 First Virginia Banks, Inc. 620 25,327
Bank of America Corp. 4,887 61,882 FirstMerit Corp. 100 2,050
Bank of Hawaii Corp. 1,555 51,253 Flagstar Bancorp, Inc. 75 2,483
Bank of New York Co., Inc. 620 16,399 FleetBoston Financial Co. 1,071 28,403
Banknorth Group, Inc. 100 2,388 Flushing Financial Corp. 25 478
BB&T Corp. 460 14,996 Franklin Resources, Inc. 300 10,464
Bear Stearns Companies, Inc. 120 8,021 Freddie Mac 810 46,899
Berkshire Hathaway Inc. - Class A + 2 39,630 GBC Bancorp 100 2,747
Boston Properties, Inc. 100 3,920 Glenborough Realty Trust, Inc. 100 1,658
Capital One Financial Corp. 100 4,187 Glimcher Realty Trust 100 2,066
CarrAmerica Realty Corp. 100 2,608 Golden West Financial Corp. 200 15,084
Catellus Development Corp.+ 100 2,118 Greenpoint Financial Corp. 100 4,776
Charles Schwab Corp. 150 1,294 Hartford Financial Services Group 300 12,228
Charter One Financial, Inc. 160 4,648 Health Care Property Investors, Inc. 100 3,722
Chubb Corp. 300 15,867 Hibernia Corp. - Class A 100 1,812
Cincinnati Financial Corp. 200 7,370 HSBC Holdings - ADR 57 3,101
Citigroup, Inc. 6,252 45,391 Hudson United Bancorp 13 433
Citizens Banking Corp./MI 100 2,297 Hugoton Royalty Trust 100 1,456
City Bank Lynnwood WA 798 19,024 Huntington Bancshares, Inc. 86 1,674
City National Corp. 100 4,117 Independent Bank Corp. 26 620
CNA Financial Corp.+ 1,985 47,541 IndyMac Bancorp 100 2,228
Colonial BancGroup, Inc. 100 1,273 Insignia Financial Group + 2,148 23,843
See Notes to Financial Statements. 17
- --------------------------------------------------------------------------------
ISI STRATEGY FUND (CONTINUED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (UNAUDITED) APRIL 30, 2003
MARKET MARKET
SECURITY SHARES VALUE SECURITY SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCK (CONTINUED) Penford Corp. 100 1,349
FINANCE (CONTINUED) Pennsylvania Real Estate Investment Trust 100 2,855
Integra Bank Corp. 26 443 People's Bank/Bridgeport 100 2,635
Interpool, Inc. 100 1,524 PMI Group, Inc. 100 3,082
iStar Financial, Inc. 100 2,993 PNC Financial Services Group, Inc. 410 17,999
Janus Capital Group, Inc. 89 1,237 Popular, Inc. 100 3,654
Jefferson-Pilot Corp. 225 9,020 Progressive Corp. 610 41,480
John Hancock Financial Services, Inc. 260 7,545 Prologis 100 2,574
J.P. Morgan Chase & Co. 2,180 63,983 Provident Bankshares Corp. 20 508
KeyCorp 310 7,474 Provident Financial Group, Inc. 100 2,365
Kilroy Realty Corp. 100 2,482 Providian Financial Corp.+ 100 737
Kimco Realty Corp. 150 5,430 Prudential Financial, Inc. 1,175 37,565
Knight Trading Group, Inc.+ 720 3,643 Public Storage, Inc. 186 5,980
LaBranche & Co., Inc. 100 1,658 Radian Group, Inc. 200 7,940
La Quinta Corp.+ 55 186 Regions Financial Corp. 200 6,742
Legg Mason, Inc. 100 5,430 Reinsurance Group of America, Inc. 100 2,865
Lehman Brothers Holdings, Inc. 300 18,891 R & G Financial Corp. - Class B 100 2,708
Leucadia National Corp. 100 3,810 RLI Corp. 100 2,955
Liberty Property Trust 100 3,129 Rouse Co. 100 3,475
Lincoln National Corp. 200 6,392 Silicon Valley Bancshares + 100 2,338
Loews Corp. 40 1,651 Simon Property Group, Inc. 100 3,672
M & T Bank Corp. 312 26,355 SLM Corp. 350 39,200
Marsh & Mclennan Cos., Inc. 1,250 59,600 SouthTrust Corp. 100 2,686
Marshall & Ilsley Corp. 100 2,942 Southwest Bancorp of Texas, Inc.+ 100 3,398
MBIA, Inc. 150 6,705 Sovereign Bancorp, Inc. 60 927
MBNA, Inc. 1,225 23,153 St. Paul Cos., Inc. 100 3,434
Mellon Financial Corp. 210 5,555 State Street Corp. 300 10,509
Mercantile Bankshares Corp. 100 3,834 Stewart Information Services Corp.+ 100 2,668
Mercury General Corp. 100 4,400 Student Loan Corp. 410 43,956
Merrill Lynch & Co., Inc. 920 37,766 SunTrust Banks, Inc. 402 23,002
Metlife, Inc. 598 17,181 Synovus Financial Corp. 25 487
Metris Cos., Inc. 2,260 8,159 TCF Financial 100 3,960
MGIC Investment Corp. 153 6,955 Torchmark Corp. 200 7,750
Mony Group, Inc. 100 2,323 T. Rowe Price Group, Inc. 100 3,052
Moody's Corp. 3,207 54,866 Transatlantic Holdings, Inc. 620 42,160
Morgan Stanley 2,131 95,362 Travelers Property Casualty Corp. - Class B 662 10,757
National City Corp. 660 19,774 Trustmark Corp. 100 2,458
National Health Investors, Inc. 100 1,625 Union Planters Corp. 300 8,562
Nationwide Financial Services, Inc. 891 25,082 UnionbanCal Corp. 200 8,080
Neuberger Berman, Inc. 50 1,535 Unitrin, Inc. 100 2,471
New Century Financial 2,012 74,102 UnumProvident Corp. 1,263 14,524
North Fork Bancorp, Inc. 150 4,854 US Bancorp 2,123 47,024
Northern Trust Corp. 300 10,530 Valley National Bancorp 384 10,169
Northwest Bancorp, Inc. 100 1,630 Vornado Realty Trust 43 1,634
Old National Bancorp 84 1,833 Wachovia Corp. 1,567 59,875
Old Republic International Corp. 100 3,060 Waddell & Reed Financial, Inc. - Class A 100 2,000
18 See Notes to Financial Statements.
- --------------------------------------------------------------------------------
ISI STRATEGY FUND (CONTINUED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (UNAUDITED) APRIL 30, 2003
MARKET MARKET
SECURITY SHARES VALUE SECURITY SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCK (CONTINUED) Haemonetics Corp.+ 98 1,738
FINANCE (CONTINUED) HCA, Inc. 610 19,581
Washington Mutual, Inc. 859 33,930 Health Management Associate, Inc. - Class A 50 853
Webster Financial Corp. 152 5,706 Health Net, Inc.+ 120 3,131
Wells Fargo & Co. 2,636 27,213 Henry Schein, Inc.+ 100 4,315
Westamerica Bancorp. 100 4,310 Humana, Inc.+ 100 1,105
White Mountains Insurance Group Ltd. 25 9,412 Invacare Corp. 78 2,492
Whitney Holding Corp. 150 5,067 IVAX Corp.+ 50 804
Wilmington Trust Corp. 200 5,382 Johnson & Johnson 4,806 270,866
WP Carey & Co. LLC 2,720 72,080 King Pharmaceuticals, Inc.+ 49 618
Zions Bancorp. 100 4,927 LifePoint Hospitals, Inc.+ 56 1,093
----- Lincare Holdings, Inc.+ 100 3,037
3,577,203 Manor Care, Inc.+ 410 7,975
--------- McKesson Corp. 59 1,637
MedQuist, Inc.+ 100
HEALTH CARE - 10.53% Medtronic, Inc. 1,520 72,565
Abbott Laboratories 1,985 80,651 Merck & Co., Inc. 5,643 328,310
Accredo Health, Inc.+ 37 546 Mid Atlantic Medical Services + 84 3,658
Allergan, Inc. 510 35,828 Molecular Devices Corp.+ 86 1,079
AmerisourceBergen Corp. 218 12,611 Mylan Laboratories, Inc. 775 21,909
Anthem, Inc.+ 300 20,592 Nabi Biopharmaceuticals + 666 4,169
Apogent Technologies, Inc.+ 100 1,718 Oakley, Inc.+ 58 609
Applerra Corp.- Applied Biosystems Group 100 1,753 Omnicare, Inc. 100 2,652
Apria Healthcare Group, Inc.+ 100 2,345 Orthodontic Centers of America, Inc.+ 100 580
Arrow International, Inc. 100 4,266 Oxford Health Plans, Inc.+ 730 21,367
Bausch & Lomb, Inc. 100 3,516 Pacificare Health Systems + 25 796
Baxter International, Inc. 450 10,350 Patterson Dental Co.+ 100 4,017
Beckman Coulter, Inc. 100 3,887 Perrigo 100 1,536
Becton Dickinson & Co. 200 7,080 Pfizer, Inc. 11,213 344,800
Beverly Enterprises, Inc.+ 100 191 PolyMedica Corp. 100 3,725
Biomet, Inc. 275 8,377 Province Healthcare Co.+ 25 250
Boston Scientific Corp.+ 720 30,996 RehabCare Group, Inc.+ 51 891
Bristol-Myers Squibb Co. 3,105 79,302 Renal Care Group, Inc.+ 100 3,240
Cardinal Health, Inc. 616 34,052 Respironics, Inc.+ 100 3,842
Caremark Rx, Inc.+ 6,529 129,992 Salix Pharmaceuticals Ltd.+ 24 270
Community Health Systems, Inc.+ 100 1,900 Schering-Plough Corp. 1,325 23,982
Coventry Health Care, Inc.+ 66 2,694 Sola International, Inc.+ 100 1,401
C.R. Bard, Inc. 510 32,324 St. Jude Medical, Inc.+ 620 32,525
Cymer, Inc.+ 100 2,855 Steris Corp.+ 100 2,270
Cytyc Corp.+ 86 1,135 Stryker Corp. 200 13,402
DaVita, Inc.+ 20 412 Sunrise Assisted Living, Inc.+ 66 1,782
Dentsply International, Inc. 150 5,618 Sybron Dental Specialties, Inc.+ 33 672
Edwards Lifesciences Corp.+ 80 2,310 Triad Hospitals, Inc.+ 82 1,805
Eli Lilly & Co. 1,846 117,812 UnitedHealth Group, Inc. 620 57,121
Express Scripts, Inc.+ 100 5,896 US Oncology, Inc.+ 88 632
First Health Group Corp.+ 100 2,505 Ventas, Inc. 19 247
Forest Laboratories, Inc.+ 1,896 98,061
Guidant Corp. 1,030 40,160
See Notes to Financial Statements. 19
- --------------------------------------------------------------------------------
ISI STRATEGY FUND (CONTINUED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (UNAUDITED) APRIL 30, 2003
MARKET MARKET
SECURITY SHARES VALUE SECURITY SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCK (CONTINUED) IDT Corp.+ 210 2,999
HEALTH CARE (CONTINUED) Inet Technologies, Inc.+ 100 802
Viasys Healthcare, Inc.+ 23 373 Intercept, Inc.+ 1,826 13,129
Watson Pharmaceuticals, Inc.+ 100 2,907 Intuit, Inc.+ 917 35,561
Wellpoint Health Systems + 720 54,677 Juniper Networks, Inc.+ 100 1,022
Wyeth 930 40,483 Level 3 Communications, Inc.+ 100 572
Zimmer Holdings, Inc.+ 211 9,896 Netbank, Inc. 934 9,321
----- Network Associates, Inc.+ 50 571
2,167,319 NIC, Inc.+ 1,000 2,
--------- Overture Services, Inc.+ 75 802
Packeteer, Inc.+ 68 889
INFORMATION SERVICES - 2.42% PC-Tel, Inc.+ 55 505
Adtran, Inc.+ 817 33,072 Portal Software, Inc.+ 2,075 2,594
Alltel Corp. 377 17,666 Quest Software, Inc.+ 96 1,027
AT&T Corp. 74 1,262 Qwest Communications International + 4,899 18,469
AT&T Wireless Services, Inc.+ 5,476 35,375 Sun Microsystems, Inc.+ 3,165 10,444
BellSouth Corp. 730 18,608 Synplicity, Inc.+ 81 285
Boston Communications Group, Inc.+ 452 8,177 TIBCO Software, Inc.+ 100 493
CenturyTel, Inc. 25 736 Ulticom, Inc.+ 960 6,960
CT Communications, Inc. 60 595 WatchGuard Technolgies, Inc.+ 96 422
InfoSpace, Inc.+ 80 997 Yahoo! Inc.+ 3,168 78,503
Liberty Media Corp. - Class A + 4,330 47,630 ------
Nextel Communications, Inc. - Class A + 380 5,620 604,651
Nextel Partners, Inc. - Class A + 78 453 -------
SBC Communications, Inc. 3,697 86,362
Sprint Corp. - FON Group 53 610
Surewest Communications 593 15,720
Talk America Holdings, Inc.+ 1,617 14,213 RETAIL - 4.17%
Telephone & Data Systems, Inc. 100 4,309 Abercrombie & Fitch Co.+ 54 1,776
Time Warner Telecom, Inc. - Class A + 1,503 5,411 American Eagle Outfitters + 16 280
Triton PCS Holdings, Inc. - Class A + 265 755 Automation, Inc.+ 234 3,241
Turnstone Systems, Inc.+ 2,515 6,287 Autozone, Inc.+ 300 24,243
U.S. Cellular Corp.+ 476 11,448 Barnes & Noble, Inc.+ 100 1,970
Verizon Communications, Inc. 4,888 182,713 Bed Bath & Beyond, Inc.+ 300 11,853
------- Best Buy Co., Inc.+ 304 10,512
498,019 Big Lots, Inc. 681 8,526
------- BJ's Wholesale Club, Inc.+ 100 1,412
Carmax, Inc.+ 31 656
INTERNET - 2.94% Circuit City Stores, Inc. 34 195
Amazon.Com, Inc.+ 3,242 92,948 Costco Wholesale Corp.+ 410 14,198
Ameritrade Holding Corp.+ 100 502 CVS Corp. 272 6,585
AOL Time Warner, Inc.+ 5,950 81,396 Dillards, Inc. - Class A 213 2,978
At Road, Inc.+ 525 3,365 Dollar General Corp. 38 553
Cisco Systems, Inc.+ 10,757 161,785 Dollar Tree Stores, Inc.+ 50 1,273
Covad Communications Group, Inc.+ 5,670 4,082 Family Dollar Stores, Inc. 100 3,419
DoubleClick, Inc.+ 899 7,731 Federated Investors, Inc. - Class B 50 1,365
E*TRADE Group, Inc.+ 100 550 Foot Locker, Inc. 100 1,100
eFunds Corp.+ 80 732 Gap, Inc. 2,162 35,954
ebay, Inc.+ 410 38,036 Home Depot, Inc. 1,245 35,022
Embarcadero Technologies + 674 4,624 Kohl's Corp.+ 410 23,288
Hotels.com + 300 21,480
20 See Notes to Financial Statements.
- --------------------------------------------------------------------------------
ISI STRATEGY FUND (CONTINUED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (UNAUDITED) APRIL 30, 2003
MARKET MARKET
SECURITY SHARES VALUE SECURITY SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCK (CONTINUED) Apple Computer, Inc.+ 100 1,420
RETAIL (CONTINUED) Applied Materials, Inc.+ 2,930 42,778
Limited Brands 624 9,073 Applied Micro Circuits Corp.+ 100 448
Longs Drug Stores Corp. 83 1,286 Arbitron, Inc.+ 610 20,777
Lowe's Companies, Inc. 909 39,896 Arrow Electronics, Inc.+ 93 1,570
May Department Stores Co. 255 5,513 Ascential Software Corp.+ 96 369
Men's Warehouse, Inc.+ 30 500 Asyst Technologies, Inc.+ 96 458
Michaels Stores, Inc.+ 353 11,028 Audiovox Corp.+ 100 720
Nordstrom, Inc. 90 1,560 Avnet, Inc.+ 98 1,250
Office Depot, Inc.+ 100 1,266 Avocent Corp.+ 228 6,753
PC Connection, Inc.+ 100 704 AVX Corp. 620 6,591
Petsmart, Inc.+ 1,385 20,955 BEA Systems, Inc.+ 50 536
Pier 1 Imports, Inc. 100 1,856 BMC Software, Inc.+ 100 1,492
RadioShack Corp. 100 2,371 Broadcom Corp. - Class A + 896 16,029
Ross Stores, Inc. 391 14,819 Cabot Microelectronics Corp.+ 97 4,192
Saks, Inc.+ 530 4,743 CACI International, Inc.+ 100 3,493
Sears Roebuck & Co. 210 5,951 Cadence Design Systems, Inc.+ 100 1,143
ShopKo Stores, Inc.+ 100 1,203 Catapult Communication + 597 5,283
Staples, Inc.+ 50 952 CCC Information Services + 848 14,119
Talbots, Inc. 72 2,063 Celera Genomics Group + 1,365 14,333
Target Corp. 998 33,373 Checkfree Corp.+ 68 1,875
Tiffany & Co. 100 2,774 Checkpoint Systems, Inc.+ 100 1,335
TJX Cos., Inc. 200 3,850 CIENA Corp.+ 71 346
Toys R US, Inc.+ 32 328 Computer Network Technology Corp.+ 96 543
Walgreen Co. 1,275 39,346 Computer Sciences Corp.+ 210 6,920
Wal-Mart Stores, Inc. 7,716 434,565 Concerto Software, Inc.+ 100 455
Williams-Sonoma, Inc.+ 1,075 27,821 Corning, Inc.+ 1,495 8,103
------ Dell Computer Corp.+ 3,891 112,489
858,195 DocuCorp International, Inc.+ 163 712
------- DST Systems, Inc.+ 100 3,070
Electronic Art + 710 42,082
TECHNOLOGY - 10.16% Electronic Scientific Industries, Inc.+ 100 1,343
3D Systems Corp.+ 75 379 EMC Corp.+ 1,615 14,680
Acxiom Corp.+ 100 1,396 ESS Technology, Inc.+ 1,109 7,674
Adobe Systems, Inc. 100 3,456 Fair Isaac & Co., Inc. 51 2,656
Advanced Fiber Communications, Inc.+ 30 459 Fairchild Semiconductor - Class A + 1,621 19,241
Advanced Micro Devices, Inc.+ 100 744 First Data Corp. 1,055 41,388
Affiliated Computer Services, Inc. Flir Systems, Inc.+ 100 5,208
- - Class A + 279 24,327 FuelCell Energy, Inc.+ 1,130 6,961
Agere Systems, Inc. - Class A + 156 510 Gerber Scientific, Inc.+ 68 561
Agere Systems, Inc. - Class B + 1,310 2,240 Getty Images, Inc.+ 100 3,385
Agilent Technologies, Inc.+ 205 3,284 Harman International Industries, Inc. 80 5,327
Allen Telecom, Inc.+ 598 8,091 Harris Corp. 100 2,856
Alliance Data + 65 1,365 Hewlett-Packard Co. 4,222 68,819
Altera Corp.+ 100 1,581 Honeywell International, Inc. 920 21,712
American Management Systems + 100 1,230 Hutchinson Technology, Inc.+ 100 2,364
Amkor Technologies, Inc.+ 72 545
Analog Devices, Inc.+ 200 6,624
Anaren, Inc.+ 2,075 15,562
See Notes to Financial Statements. 21
- --------------------------------------------------------------------------------
ISI STRATEGY FUND (CONTINUED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (UNAUDITED) APRIL 30, 2003
MARKET MARKET
SECURITY SHARES VALUE SECURITY SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCK (CONTINUED) Pioneer Standard Electronics, Inc. 100 969
TECHNOLOGY (CONTINUED) Pitney Bowes, Inc. 379 13,307
IBM 3,072 260,813 Pixelworks, Inc.+ 1,263 9,409
IKON Office Solutions, Inc. 2,009 15,590 Powerwave Technologies, Inc.+ 75 301
Illumina, Inc.+ 330 657 QLogic Corp.+ 52 2,287
Integrated Device Technology, Inc.+ 100 1,033 Qualcomm, Inc. 3,044 97,073
Intel Corp. 8,874 163,282 Rayovac Corp.+ 96 998
Interactive Data Corp.+ 100 1,600 Read-Rite Corp.+ 830 672
Intergrated Circuit Systems, Inc.+ 210 4,561 Rudolph Technologies, Inc.+ 358 5,409
International Rectifier Corp.+ 100 2,262 Sandisk Corp.+ 75 1,815
Internet Security Systems + 167 2,191 Sanmina-SCI Corp.+ 72 346
Invision Technologies, Inc.+ 370 8,791 Scientific-Atlanta, Inc. 100 1,625
Iomega Corp.+ 40 372 SCM Microsystems, Inc.+ 100 382
ITT Industries, Inc. 100 5,830 Siebel Systems, Inc.+ 100 867
Jabil Circuit, Inc.+ 100 1,870 Silicon Image, Inc.+ 96 574
J.D. Edwards & Co.+ 100 1,198 Skyworks Solutions, Inc.+ 1,882 10,069
JDS Uniphase Corp.+ 720 2,326 SoftBrands, Inc.+ 44 59
Keane, Inc.+ 100 964 Standard Microsystems Corp.+ 100 1,266
Kemet Corp.+ 210 1,926 Storage Technology Corp.+ 100 2,472
KLA-Tencor Corp.+ 200 8,200 Stratex Networks, Inc.+ 219 539
Kulicke & Soffa Industries, Inc.+ 64 332 Stratos Lightwave, Inc.+ 100 378
Lam Research Corp.+ 75 1,090 Sungard Data Systems, Inc.+ 100 2,150
Lexmark International, Inc.+ 100 7,451 Symbol Technologies, Inc. 1,039 11,356
Linear Technology Corp. 1,961 67,596 Symmetricom, Inc.+ 64 264
LSI Logic Corp.+ 33 177 Synopsys, Inc.+ 37 1,800
Lucent Technologies, Inc.+ 5,208 9,374 Talx Corp. 1,655 21,052
Manufacturers' Services Ltd.+ 230 886 Tektronix, Inc.+ 200 3,754
Maxim Integrated Products, Inc. 65 2,554 Teledyne Technologies, Inc.+ 42 591
McData Corp. - Class A + 620 6,560 Tellabs, Inc.+ 100 618
Mercury Interactive Corp.+ 892 30,274 Teradyne, Inc.+ 100 1,160
MEMC Electronic Materials, Inc.+ 497 5,894 Texas Instruments, Inc. 1,865 34,484
Microchip Technology, Inc. 297 6,175 Thermo Electron Corp.+ 70 1,272
Micron Technology, Inc. 2,375 20,187 THQ, Inc.+ 50 706
Microsoft Corp. 16,846 430,752 Total System Services, Inc. 50 925
Motorola, Inc. 2,020 15,978 TTM Technologies, Inc.+ 96 452
Nanometrics, Inc.+ 100 484 Unisys Corp.+ 50 520
National Semiconductor Corp.+ 410 7,679 Veritas Software Corp.+ 768 16,904
NCR Corp.+ 75 1,644 Vishay Intertechnology, Inc.+ 61 762
Neoware Systems, Inc.+ 96 979 Western Digital Corp.+ 716 6,680
Netro Corp.+ 2,850 8,236 Western Wireless Corp.+ 96 588
Novellus Systems, Inc.+ 100 2,804 Wind River Systems + 100 331
Nvidia Corp.+ 94 1,341 Xerox Corp.+ 1,645 16,220
ON Semiconductor Corp.+ 459 624 Zomax, Inc.+ 96 321
Oracle Corp.+ 8,981 106,694 ---
Peoplesoft, Inc.+ 25 376 2,090,755
---------
22 See Notes to Financial Statements.
- --------------------------------------------------------------------------------
ISI STRATEGY FUND (CONTINUED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (UNAUDITED) APRIL 30, 2003
MARKET MARKET
SECURITY SHARES VALUE SECURITY SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCK (CONTINUED) Northeast Utilities 100 1,492
TRANSPORTATION - 1.50% Northwest Natural Gas Co. 95 2,454
Burlington Northern Santa Fe Corp. 2,295 64,627 Northwestern Corp.+ 2,576 6,234
C. H. Robinson Worldwide 923 33,957 NUI Corp. 668 9,399
Continental Airlines, Inc. - Class B + 100 912 Oneok, Inc. 84 1,593
CSX Corp. 970 31,021 Pepco Holdings, Inc. 100 1,718
Delta Airlines, Inc. 100 1,279 PG&E Corp.+ 93 1,393
Expeditors International of Washington, Inc. 2,213 80,462 Piedmont Natural Gas Co. 95 3,549
FedEx Corp. 410 24,551 Pinnacle West Capital Corp. 100 3,322
GATX Corp. 100 1,884 PPL Corp. 93 3,367
Norfolk Southern Corp. 100 2,121 Progress Energy, Inc. 200 8,356
Ryder Systems, Inc. 100 2,484 Public Service Enterprise Group, Inc. 293 11,272
Sabre Holdings Corp. - Class A + 44 920 Puget Energy, Inc. 100 2,112
Shugard Storage Centers, Inc. 100 3,267 Questar Corp. 100 3,020
Southwest Airlines Co. 150 2,394 Sempra Energy 50 1,342
Swift Transport + 1,608 29,137 Southern Co. 720 20,945
Union Pacific Corp. 410 24,403 TECO Energy, Inc. 2,685 28,971
United Parcel Service, Inc. - Class B 100 6,212 TXU Corp. 100 1,992
--- ----- Veritas DGC, Inc.+ 581 3,980
309,631 Westar Energy, Inc. 387 5,441
------- Wisconsin Energy Corp. 100 2,633
------
UTILITIES - 1.26% 260,378
Allegheny Energy, Inc.+ 1,665 13,820 -------
Alliant Energy Corp. 100 1,756 TOTAL COMMON STOCK
Ameren Corp. 200 8,196 (Cost $15,106,506) 16,223,157
American Electric Power Co., Inc. 36 950 ----------
Aquila, Inc.+ 210 584 RIGHTS - 0.01%
Avista Corp. 1,000 11,830 Allied Capital Corp. 100 2,119
Calpine Corp.+ 100 537 Seagate* 300 -
Cinergy Corp. 200 6,828 -------
CMS Energy Corp.+ 100 623 TOTAL RIGHTS
Consolidated Edison, Inc. 310 5,332 (Cost $1,747) 2,119
Constellation Energy Group, Inc. 100 2,928 -----
DPL, Inc. 100 1,384
DTE Energy Co. 200 8,064 WARRANTS - 0.00%
Duke Energy Corp. 78 1,372 Golden State Bancorp, Inc. 100 98
Edison International + 50 730 MasoTech* 200 -
Energy East Corp. 100 1,822 Seabulk International, Inc. 1 -
Entergy Corp. 300 13,983 Tokheim Corp. 500 -
Exelon Corp. 372 19,731 -----
FirstEnergy Corp. 200 6,746
FPL Group, Inc. 200 12,174 TOTAL WARRANTS
Great Plains Energy, Inc. 100 2,617 (Cost $8,690) 98
KeySpan Corp. 188 6,368 -----
MDU Resources Group, Inc. 100 2,976
Nicor, Inc. 100 3,006
NiSource, Inc. 76 1,436
See Notes to Financial Statements. 23
- --------------------------------------------------------------------------------
ISI STRATEGY FUND (CONCLUDED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (UNAUDITED) APRIL 30, 2003
INTEREST MATURITY PAR MARKET
RATE DATE VALUE VALUE
- ----------------------------------------------------------------------------------------------------------
US TREASURY SECURITIES - 15.34%
US Treasury Bond 9.250% 2/15/16 $ 1,000,000 1,491,055
US Treasury Bond 8.750% 5/15/17 500,000 727,812
US Treasury Bond 7.250% 8/15/22 500,000 656,641
US Treasury Note 5.500% 5/15/09 250,000 282,812
-------
TOTAL US TREASURY SECURITIES
(COST $2,684,669) 3,158,320
---------
REPURCHASE AGREEMENT - 5.66%
GOLDMAN SACHS & Co.
Dated 4/30/03, 1.220%, principal and interest in the amount of $1,164,039 due
5/1/03, collateralized by US Treasury Note, par value of $1,177,000,
due 9/30/03 with a value of $1,187,561. 1,164,000
---------
TOTAL REPURCHASE AGREEMENT
(COST $1,164,000) 1,164,000
---------
TOTAL INVESTMENTS IN SECURITIES - 99.81% 20,547,694
(COST $18,965,612)
OTHER ASSETS IN EXCESS OF LIABILITIES - 0.19% 39,554
--------------
NET ASSETS - 100.0% $ 20,587,248
==============
- --------------------------------------------------------------------------------
+ Non-income producing security.
ADR American Depositary Receipt.
* Security fair valued in good faith under procedures established by and
under the general supervision of the Fund's Board of Directors.
24 See Notes to Financial Statements.
- --------------------------------------------------------------------------------
ISI FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED) APRIL 30, 2003
TOTAL RETURN US MANAGED
TREASURY FUND MUNICIPAL FUND
- ---------------------------------------------------------------------------------------------------------------------------
ASSETS:
Investments:
In securities, at market value
(cost $222,625,727 and $87,054,010, respectively) $ 227,499,269 $ 94,448,220
Repurchase agreement
(cost $21,464,000 and $10,994,000, respectively) 21,464,000 10,994,000
Cash 793 3,457,093
Receivables:
Capital shares sold 557,318 201,398
Interest 4,376,257 1,067,513
Prepaid expenses 22,177 19,691
----------- -----------
Total assets 253,919,814 110,187,915
----------- -----------
LIABILITIES:
Payables:
Capital shares redeemed 464,263 38,000
Dividends 1,032,688 396,965
Accrued Liabilities:
Investment advisory fees 53,476 35,175
Distribution fees 51,682 21,984
Administration fees 10,309 4,394
Accrued expenses and other 58,628 48,184
----------- -----------
Total liabilities 1,671,046 544,702
----------- -----------
Net assets $ 252,248,768 $ 109,643,213
----------- -----------
COMPONENTS OF NET ASSETS:
Paid in capital $ 244,741,111 $ 102,840,063
Distributions in excess of net investment income (4,129,374) (760,433)
Accumulated net realized gain from investment transactions 6,763,489 169,373
Net unrealized appreciation on investments 4,873,542 7,394,210
----------- -----------
Net assets $ 252,248,768 $ 109,643,213
============ ============
SHARES OF BENEFICIAL INTEREST OUTSTANDING 24,705,934 9,879,029
(115,000,000 and 55,000,000 shares authorized, respectively) ============ ============
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
(net assets / shares of beneficial interest outstanding) $ 10.21 $ 11.10
============ ============
MAXIMUM OFFERING PRICE PER SHARE
($10.21 / 0.97 and $11.10 / 0.97, respectively) $ 10.53 $ 11.44
============ ============
See Notes to Financial Statements. 25
- --------------------------------------------------------------------------------
ISI FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED) APRIL 30, 2003
NORTH AMERICAN
GOVERNMENT
BOND FUND ISI STRATEGY FUND
- ---------------------------------------------------------------------------------------------------------------------------
ASSETS:
Investments:
In securities, at market value
(cost $251,883,861 and $17,801,612, respectively) $ 256,433,970 $ 19,383,694
Repurchase agreement
(cost $18,019,000 and $1,164,000, respectively) 18,019,000 1,164,000
Cash 646 4,888
Receivables:
Capital shares sold 503,861 12,138
Interest 4,633,640 66,621
Expense reimbursement by advisor - 9,201
Prepaid expenses 46,890 -
----------- -----------
Total assets 279,638,007 20,640,542
----------- -----------
LIABILITIES:
Payables:
Capital shares redeemed 101,867 5,454
Dividends 1,667,680 -
Accrued Liabilities:
Investment advisory fees 90,110 -
Distribution fees 90,110 4,044
Administration fees 11,240 2,482
Accrued expenses and other 20,552 41,314
----------- -----------
Total liabilities 1,981,559 53,294
----------- -----------
Net assets $ 277,656,448 $ 20,587,248
=========== ===========
COMPONENTS OF NET ASSETS:
Paid in capital $ 274,059,903 $ 23,745,090
Undistributed (Distributions in excess of) net investment income (7,419,676) 18,000
Accumulated net realized gain (loss) from investment transactions 6,412,331 (4,757,924)
Net unrealized appreciation on investments and receivables/
payables denominated in foreign currency 4,603,890 1,582,082
----------- -----------
Net assets $ 277,656,448 $ 20,587,248
=========== ===========
SHARES OF BENEFICIAL INTEREST OUTSTANDING* 34,743,331 2,191,919
(60,000,000 and 25,000,000 shares authorized, respectively) =========== ===========
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
(net assets / shares of beneficial interest outstanding) $ 7.99 $ 9.39
=========== ===========
MAXIMUM OFFERING PRICE PER SHARE
($7.99 / 0.97 and $9.39 / 0.97, respectively) $ 8.24 $ 9.68
=========== ===========
26 See Notes to Financial Statements.
- --------------------------------------------------------------------------------
ISI FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS (UNAUDITED) FOR THE SIX MONTHS ENDED APRIL 30, 2003
TOTAL RETURN US MANAGED
TREASURY FUND MUNICIPAL FUND
- --------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest $ 4,220,172 $ 2,348,059
----------- -----------
EXPENSES:
Investment advisory fees 302,768 206,147
Distribution fees 319,361 128,842
Administration fees 63,874 25,769
Transfer agent fees 48,976 19,909
Custody fees 5,020 4,465
Professional fees 43,711 22,642
Accounting fees 27,637 26,472
Printing and shareholder reports 9,395 6,131
Registration fees 11,486 8,985
Directors' fees 8,924 3,623
Miscellaneous 12,774 6,492
----------- -----------
Total expenses 853,926 459,477
----------- -----------
Net investment income 3,366,246 1,888,582
----------- -----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain from investment transactions 6,763,489 169,373
Net change in unrealized appreciation on investments (3,026,083) 1,523,926
----------- -----------
Net realized and unrealized gain on investments 3,737,406 1,693,299
----------- -----------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 7,103,652 $ 3,581,881
=========== ===========
See Notes to Financial Statements. 27
- --------------------------------------------------------------------------------
ISI FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS (UNAUDITED) FOR THE SIX MONTHS ENDED APRIL 30, 2003
NORTH AMERICAN
GOVERNMENT
BOND FUND ISI STRATEGY FUND
- -------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest $ 5,234,505 $ 92,186
Dividend - 129,899
--------- -------
5,234,505 222,085
--------- -------
EXPENSES:
Investment advisory fees 527,514 39,462
Distribution fees 527,514 24,664
Administration fees 65,941 18,000
Transfer agent fees 76,362 12,497
Custody fees 38,542 18,572
Professional fees 61,213 10,655
Accounting fees 35,110 24,330
Printing and shareholder reports 15,548 1,897
Registration fees 25,024 5,529
Directors' fees 11,826 839
Miscellaneous 12,776 21,014
--------- --------
Total expenses 1,397,370 177,459
Less: fee waiver and/or expense reimbursements - (49,207)
---------- --------
Net expenses 1,397,370 128,252
---------- --------
Net investment income 3,837,135 93,833
---------- --------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain (loss) from:
Investment transactions 6,491,179 (850,455)
Foreign currency transactions (78,848) -
Net change in unrealized appreciation/depreciation on investments and
receivables/payables denominated in foreign currency
foreign currencies 4,343 1,504,625
---------- ---------
Net realized and unrealized gain on investments and receivables/
payables denominated in foreign currency foreign currencies 6,416,674 654,170
---------- ---------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 10,253,809 $ 748,003
=========== =========
28 See Notes to Financial Statements.
- --------------------------------------------------------------------------------
TOTAL RETURN US TREASURY FUND
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS FOR THE YEAR ENDED
ENDED APRIL 30, OCTOBER 31,
2003 1 2002
- ------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 3,366,246 $ 9,005,811
Net realized gain on investment transactions 6,763,489 6,049,948
Net change in unrealized appreciation on investments (3,026,083) (1,512,881)
---------- ----------
Net increase in net assets from operations 7,103,652 13,542,878
---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income and net realized short-term gains:
ISI Shares (6,386,729) (10,807,120)
Class A Shares (a) - (2,230,399)
Net realized long-term capital gains:
ISI Shares - (854,348)
Tax return of capital:
ISI Shares - (504,515)
Class A Shares (a) - (96,495)
---------- ----------
Total distributions (6,386,729) (14,492,877)
---------- ----------
CAPITAL SHARE TRANSACTIONS: (a)
Proceeds from sale of shares
ISI Shares 15,526,014 34,572,482
Class A Shares - 4,895,334
Contributions from share class merger
ISI Shares - 102,172,420
Dividend reinvestments
ISI Shares 3,316,649 7,591,702
Class A Shares - 1,060,736
Cost of shares redeemed
ISI Shares (30,238,326) (35,772,474)
Class A Shares - (12,474,587)
Redemptions from share class merger
Class A Shares - (102,172,420)
---------- -----------
Net decrease in net assets from capital share transactions (11,395,663) (126,807)
---------- ----------
Total decrease in net assets (10,678,740) (1,076,806)
---------- ----------
NET ASSETS:
Beginning of period 262,927,508 264,004,314
----------- -----------
End of year (including distributions in excess of net investment
income of $4,129,374 and $1,108,891, respectively) $ 252,248,768 $ 262,927,508
============ ============
See Notes to Financial Statements. 29
- --------------------------------------------------------------------------------
TOTAL RETURN US TREASURY FUND
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (CONCLUDED)
FOR THE SIX MONTHS FOR THE YEAR ENDED
ENDED APRIL 30, OCTOBER 31,
2003 1 2002
- ------------------------------------------------------------------------------------------------------------
SHARE TRANSACTIONS: (a)
Shares sold
ISI Shares 1,527,726 3,496,625
Class A Shares - 500,532
Shares issued in connection with share class merger
ISI Shares - 10,551,813
Shares issued to shareholders on reinvestment of dividends
ISI Shares 325,645 774,546
Class A Shares - 109,242
Shares redeemed
ISI Shares (2,978,514) (3,661,239)
Class A Shares - (1,278,524)
Shares redeemed in connection with share class merger
Class A Shares - (10,551,813)
----------- -----------
Net decrease in shares from capital share transactions (1,125,143) (58,818)
=========== ===========
- --------------------------------------------------------------------------------
(1) Unaudited.
(a) On February 28, 2002, Class A Shares merged into ISI Shares.
30 See Notes to Financial Statements.
- --------------------------------------------------------------------------------
MANAGED MUNICIPAL FUND
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS FOR THE YEAR ENDED
ENDED APRIL 30, OCTOBER 31,
2003 1 2002
- ------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 1,888,582 $ 3,895,074
Net realized gain on investment transactions 169,373 257,404
Net change in unrealized appreciation on investments 1,523,926 853,535
----------- -----------
Net increase in net assets from operations 3,581,881 5,006,013
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income and net realized short-term gains:
ISI Shares (2,647,211) (3,625,097)
Class A Shares (a) - (478,023)
Net realized long-term capital gains:
ISI Shares - (575,789)
Class A Shares (a) - (150,753)
----------- -----------
Total distributions (2,647,211) (4,829,662)
CAPITAL SHARE TRANSACTIONS: (a)
Proceeds from sale of shares
ISI Shares 11,990,075 18,934,042
Class A Shares - 534,152
Contributions from share class merger
ISI Shares - 31,732,581
Dividend reinvestments
ISI Shares 1,183,077 1,895,264
Class A Shares - 296,034
Cost of shares redeemed
ISI Shares (7,662,555) (15,996,773)
Class A Shares - (2,191,497)
Redemptions from share class merger
Class A Shares - (31,732,581)
----------- -----------
Net increase in net assets from capital share transactions 5,510,597 3,471,222
----------- -----------
Total increase in net assets 6,445,267 3,647,573
----------- -----------
NET ASSETS:
Beginning of year 103,197,946 99,550,373
End of year (including distributions in excess of net investment ----------- -----------
income of $760,433 and $1,804, respectively) $ 109,643,213 $ 103,197,946
=========== ===========
See Notes to Financial Statements. 31
- --------------------------------------------------------------------------------
MANAGED MUNICIPAL FUND
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (CONCLUDED)
FOR THE SIX MONTHS FOR THE YEAR ENDED
ENDED APRIL 30, OCTOBER 31,
2003 1 2002
- ------------------------------------------------------------------------------------------------------------
SHARE TRANSACTIONS: (a)
Shares sold
ISI Shares 1,087,670 1,738,501
Class A Shares - 49,939
Shares issued in connection with share class merger
ISI Shares - 2,917,173
Shares issued to shareholders on reinvestment of dividends
ISI Shares 107,530 174,818
Class A Shares - 27,402
Shares redeemed
ISI Shares (696,731) (1,467,447)
Class A Shares - (204,623)
Shares redeemed in connection with share class merger
Class A Shares - (2,917,173)
----------- -----------
Net increase in shares from capital share transactions 498,469 318,590
=========== ===========
- --------------------------------------------------------------------------------
(1) Unaudited.
(a) On February 28, 2002, Class A Shares merged into ISI Shares.
32 See Notes to Financial Statements.
- --------------------------------------------------------------------------------
NORTH AMERICAN GOVERNMENT BOND FUND
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS APRIL 1, 2002 FOR THE YEAR ENDED
ENDED APRIL 30, THROUGH MARCH 31,
2003 1 OCTOBER 31, 2002(A) 2002
- ------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 3,837,135 $ 5,387,935 $ 7,637,648
Net realized gain on investment
and foreign currency transactions 6,412,331 1,781,470 5,267,104
Net change in unrealized appreciation/depreciation
on investments and receivables/payables
denominated in foreign currencies 4,343 10,487,725 (7,138,087)
----------- ---------- ---------
Net increase in net assets from operations 10,253,809 17,657,130 5,766,665
----------- ---------- ---------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment incomeand net realized
short-term capital gains (11,231,939) (6,543,691) (11,728,591)
Distribution in excess of net
investment income - - (12,671)
Net realized long-term capital gains - (632,453) (1,176,161)
Tax return of capital - (3,573,142) (1,611,215)
----------- ---------- ---------
Total distributions (11,231,939) (10,749,286) (14,528,638)
----------- ---------- ----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of shares 37,798,022 49,986,841 121,835,448
Dividend reinvestments 5,123,294 5,738,371 7,703,881
Cost of shares redeemed (21,781,622) (25,767,420) (17,593,303)
----------- ---------- ----------
Net increase in net assets from
capital share transactions 21,139,694 29,957,792 111,946,026
----------- ---------- -----------
Total increase in net assets 20,161,564 36,865,636 103,184,053
NET ASSETS:
Beginning of year 257,494,884 220,629,248 117,445,195
----------- ---------- -----------
End of year (including distributions in
excess of net investment income of
$7,419,676, $24,872 and $18,133,
respectively $ 277,656,448 $ 257,494,884 $ 220,629,248
=========== ============ ============
SHARE TRANSACTIONS:
Shares sold 4,761,340 6,302,362 15,153,019
Shares issued to shareholders on reinvestment of dividends 646,362 728,793 959,827
Shares redeemed (2,746,569) (3,246,075) (2,189,379)
----------- ---------- -----------
Net increase in shares from capital share transactions 2,661,133 3,785,080 13,923,467
=========== ============ ============
- ------------------------------------------------------------------------------------------------------------------------------
(1) Unaudited.
(a) The fund changed its fiscal year end from March 31 to October 31.
See Notes to Financial Statements. 33
- --------------------------------------------------------------------------------
ISI STRATEGY FUND
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS JUNE 1, 2002 FOR THE YEAR ENDED
ENDED APRIL 30, THROUGH MAY 31,
2003 1 OCTOBER 31, 2002(A) 2002
- ------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income 93,833 103,547 296,642
Net realized loss on investment transactions (850,455) (814,078) (1,526,739)
Net change in unrealized appreciation/depreciation
on investments 1,504,625 (1,878,640) (105,118)
Net increase (decrease) in net assets ---------- ---------- -----------
from operations 748,003 (2,589,171) (1,335,215)
---------- ---------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (88,792) (136,525) (307,863)
Net realized capital gains (15,803) - -
---------- ---------- -----------
Total distributions (104,595) (136,525) (307,863)
---------- ---------- -----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of shares 3,459,466 647,734 4,461,904
Dividend reinvestments 93,827 122,740 276,748
Cost of shares redeemed (3,533,211) (2,518,850) (5,748,944)
---------- ---------- -----------
Net increase (decrease) in net assets from
capital share transaction 20,082 (1,748,376) (1,010,292)
---------- ---------- -----------
Total increase (decrease) in net assets 663,490 (4,474,072) (2,653,370)
NET ASSETS:
Beginning of year 19,923,758 24,397,830 27,051,200
---------- ---------- -----------
End of year (including undistributed net investment income of
$18,000, $12,959 and $45,937, respectively) $ 20,587,248 $ 19,923,758 $ 24,397,830
=========== =========== ===========
SHARE TRANSACTIONS:
Shares sold 268,395 70,518 426,058
Shares issued to shareholders on
reinvestment of dividends 10,433 13,501 26,909
Shares redeemed (281,281) (274,011) (553,271)
---------- ---------- -----------
Net decrease in shares from capital share
transactions (2,453) (189,992) (100,304)
=========== =========== ===========
- --------------------------------------------------------------------------------
(1) Unaudited.
(a) The fund changed its fiscal year end from May 31 to October 31.
34 See Notes to Financial Statements.
- --------------------------------------------------------------------------------
TOTAL RETURN US TREASURY FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
SIX MONTHS
ENDED
APRIL 30, FOR THE YEARS ENDED OCTOBER 31,
2003 1 2002 2001 2000 1999 1998
- ----------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $ 10.18 $ 10.20 $ 9.57 $ 9.35 $ 10.62 $ 10.04
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.13 0.35 0.45 0.50 0.64 0.51
Net realized and unrealized gain (loss)
on investments 0.15 0.20 0.82 0.38 (1.03) 0.71
Total from investment operations 0.28 0.55 1.27 0.88 (0.39) 1.22
LESS DISTRIBUTIONS:
Net investment income and
short-term capital gains (0.25) (0.51) (0.45) (0.50) (0.71) (0.64)
Net realized long-term capital gains - (0.04) (0.19) (0.16) - -
Tax Return of Capital - (0.02) - - (0.17) -
Total distributions (0.25) (0.57) (0.64) (0.66) (0.88) (0.64)
Net asset value, end of period $ 10.21 $ 10.18 $ 10.20 $ 9.57 $ 9.35 $ 10.62
TOTAL RETURN2 2.80% 3 5.78% 13.57% 9.49% (3.82)% 12.50%
SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000s) $252,249 $262,928 $149,588 $136,728 $151,532 $171,336
Ratios to average daily net assets:
Net investment income 2.64%4 3.64% 4.51% 5.10% 4.68% 4.98%
Expenses 0.67%4 0.74% 0.78% 0.82% 0.81% 0.85%
Portfolio turnover rate 85%3 129% 61% 15% 77% 179%
- ----------------------------------------------------------------------------------------------------------------------
1 Unaudited.
2 Total return excludes the effect of sales charges.
3 Not Annualized.
4 Annualized.
See Notes to Financial Statements. 35
- --------------------------------------------------------------------------------
MANAGED MUNICIPAL FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
SIX MONTHS
ENDED
APRIL 30, FOR THE YEARS ENDED OCTOBER 31,
2003 1 2002 2001 2000 1999 1998
- ----------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $ 11.00 $ 10.99 $ 10.47 $ 10.12 $ 11.01 $ 10.79
------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.20 0.45 0.45 0.47 0.45 0.46
Net realized and unrealized gain (loss)
on investments 0.18 0.09 0.55 0.36 (0.83) 0.33
------- ------- ------- ------- ------- -------
Total from investment operations 0.38 0.54 1.00 0.83 (0.38) 0.79
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Net investment income and
short-term capital gains (0.28) (0.45) (0.47) (0.48) (0.47) (0.54)
Net realized long-term capital gains - (0.08) (0.01) - (0.04) (0.03)
------- ------- ------- ------- ------- -------
Total distributions (0.28) (0.53) (0.48) (0.48) (0.51) (0.57)
------- ------- ------- ------- ------- -------
Net asset value, end of period $ 11.10 $ 11.00 $ 10.99 $ 10.47 $ 10.12 $ 11.01
======= ======= ======= ======= ======= ========
TOTAL RETURN2 3.50%3 5.11% 9.76% 8.44% (3.61)% 7.51%
SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000s) $109,643 $103,198 $66,105 $65,233 $70,609 $80,749
Ratios to average daily net assets:
Net investment income 3.66%4 3.92% 4.18% 4.60% 4.23% 4.24%
Expenses after waivers and/or
reimbursements 0.89%4 0.94% 0.93% 0.90% 0.90% 0.90%
Expenses before waivers and/or
reimbursements 0.89%4 0.96% 0.99% 1.01% 1.10% 1.13%
Portfolio turnover rate 4%3 11% 21% 22% 8% 18%
- ----------------------------------------------------------------------------------------------------------------------
1 Unaudited.
2 Total return excludes the effect of sales charges.
3 Not Annualized.
4 Annualized.
36 See Notes to Financial Statements.
- --------------------------------------------------------------------------------
NORTH AMERICAN GOVERNMENT BOND FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD INDICATED)
A SHARES 1 SIX MONTHS
ENDED APRIL 1, 2002
APRIL 30, THROUGH FOR THE YEARS ENDED MARCH 31,
2003 2 10/31/2002 3 2002 2001 2000 1999 1998
- ---------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $ 8.03 $ 7.80 $ 8.17 $ 8.07 $ 8.42 $ 8.74 $ 8.29
-------- -------- -------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.13 0.18 0.38 0.44 0.49 0.60 0.61
Net realized and unrealized gain (loss)
on investments and foreign
currency transactions 0.17 0.41 (0.03) 0.38 (0.12) (0.09) 0.56
-------- -------- -------- -------- -------- -------- --------
Total from investment operations 0.30 0.59 0.35 0.82 0.37 0.51 1.17
-------- -------- -------- -------- -------- -------- --------
LESS DISTRIBUTIONS:
Net investment income and
short-term capital gains (0.34) (0.22) (0.58) (0.53) (0.49) (0.60) (0.67)
In excess of net investment income - - -7 (0.01) - - (0.05)
Net realized long-term capital gains - (0.02) (0.06) (0.06) - (0.23) -
Tax return of capital - (0.12) (0.08) (0.12) (0.23) - -
-------- -------- -------- -------- -------- -------- --------
Total distributions (0.34) (0.36) (0.72) (0.72) (0.72) (0.83) (0.72)
-------- -------- -------- -------- -------- -------- --------
Net asset value, end of period $ 7.99 $ 8.03 $ 7.80 $ 8.17 $ 8.07 $ 8.42 $ 8.74
======== ======== ======== ======== ======== ======== ========
TOTAL RETURN4 3.79%5 7.75%5 4.38% 10.74% 4.82% 5.96% 14.65%
SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000s) $277,656 $257,495 $220,629 $117,445 $61,697 $55,891 $ 52,018
Ratios to average daily net assets:
Net investment income 2.91%6 3.84%6 4.60% 5.62% 5.59% 5.79% 7.17%
Expenses after waivers and/or
reimbursements 1.06%6 1.01%6 1.13% 1.24% 1.25% 1.25% 1.25%
Expenses before waivers and/or
reimbursements 1.06%6 1.01%6 1.13% 1.24% 1.41% 1.42% 1.28%
Portfolio turnover rate 86%5 95%5 136% 89% 32% 173% 125%
- --------------------------------------------------------------------------------------------------------------------------
1 On May 16, 2003, ISI Shares were designated A Shares.
2 Unaudited.
3 The fund changed its fiscal year end from March 31 to October 31.
4 Total return excludes the effect of sales charges.
5 Not Annualized.
6 Annualized.
7 Less than $0.01 per share.
See Notes to Financial Statements. 37
- --------------------------------------------------------------------------------
ISI STRATEGY FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD INDICATED)
Six Months June 1, 2002
Ended through September 16, 1997 3
April 30, October 31, For the years ended May 31, through
2003 1 20022 2002 2001 2000 1999 May 31, 1998
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $ 9.08 $ 10.23 $ 10.89 $ 12.15 $ 11.91 $ 11.00 $ 10.00
------ ------- ------- ------- ------- ------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.04 0.05 0.12 0.25 0.26 0.21 0.13
Net realized and unrealized gain (loss)
on investments 0.32 (1.14) (0.66) (0.62) 0.46 1.10 0.96
------ ------- ------- ------- ------- ------- --------
Total from investment operations 0.36 (1.09) (0.54) (0.37) 0.72 1.31 1.09
------ ------- ------- ------- ------- ------- --------
LESS DISTRIBUTIONS:
Net investment income and short-term
capital gains (0.04) (0.06) (0.12) (0.27) (0.24) (0.21) (0.09)
Net realized long-term capital gains (0.01) - - (0.62) (0.24) (0.19) -
------ ------- ------- ------- ------- ------- --------
Total distributions (0.05) (0.06) (0.12) (0.89) (0.48) (0.40) (0.09)
------ ------- ------- ------- ------- ------- --------
Net asset value, end of period $ 9.39 $ 9.08 $ 10.23 $ 10.89 $ 12.15 $ 11.91 $ 11.00
====== ======= ======= ======= ======= ======= ========
TOTAL RETURN4 3.96%5 (10.65)%5 (4.93)% (3.32)% 6.09% 12.15% 10.94%5
SUPPLEMENTAL DATA AND RATIOS
Net assets, end of period (000s) $20,587 $19,924 $24,398 $27,051 $36,544 $35,734 $18,220
Ratios to average daily net assets:
Net investment income 0.95%6 1.18%6 1.14% 2.09% 2.10% 1.81% 2.03%6
Expenses after waivers and/or
reimbursements 1.30%6 1.30%6 1.19% 1.00% 1.00% 1.00% 1.00%6
Expenses before waivers and/or
reimbursements 1.80%6 1.99%6 1.42% 1.38% 1.31% 1.68% 2.25%6
Portfolio turnover rate 24%5 12%5 72% 57% 59% 32% 20%5
- --------------------------------------------------------------------------------
1 Unaudited.
2 The fund changed its fiscal year end from May 31 to October 31.
3 Commencement of Operations
4 Total Return figures exclude the impact of sales charges.
5 Not Annualized.
6 Annualized.
38 See Notes to Financial Statements.
- --------------------------------------------------------------------------------
ISI FUNDS NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
A. ORGANIZATION
Total Return US Treasury Fund, Inc. (`Total Return'), Managed Municipal
Fund, Inc. (`Managed Municipal'), North American Government Bond Fund, Inc.
(`North American') and Strategy Fund, Inc. (`Strategy'), (each a `Fund' and
collectively, the `Funds') are registered under the Investment Company Act of
1940 (the `Act'), as amended, as open-end management investment companies. The
Funds are organized as corporations under the laws of the state of Maryland.
Total Return's investment objective is to achieve a high level of total
return with relative stability of principal, and secondarily, high current
income consistent with an investment in securities issued by the United States
Treasury. Managed Municipal's investment objective is designed to provide a high
level of total return with relative stability of principal and, secondarily,
high current income exempt from federal income tax through investment in a
portfolio consisting primarily of tax-free municipal obligations. North
American's investment objective is designed to provide a high level of current
income, consistent with prudent investment risk. Strategy's investment objective
is designed to maximize total return through a combination of long-term growth
of capital and current income.
Effective October 31, 2002, North American changed its fiscal year end from
March 31 to October 31 and Strategy changed its fiscal year end from May 31 to
October 31.
The Funds currently offer one class of shares to investors: ISI Shares. ISI
Shares in Total Return, Managed Municipal, North American and Strategy are
subject to a maximum front-end sales charge of 3.00%. Prior to February 28,
2002, Total Return and Managed Municipal offered Deutsche Asset Management Class
A Shares (`Class A Shares') to investors. On February 28, 2002, the Class A
Shares were merged into the ISI Shares. On May 16, 2003 North American Fund
started offering C Shares and ISI Shares were redesigned as A Shares.
B. VALUATION OF SECURITIES
The Funds value their investments at market value.
When valuing fixed income securities, the Funds use the last bid price
prior to the calculation of the Funds' net asset value. If a current bid price
is not available, the Funds use the mean between the latest quoted bid and asked
prices.
When valuing listed equity securities, Strategy uses the last sale
price prior to the calculation of its net asset value. When valuing equity
securities that are not listed or that are listed but have not traded, the Fund
use the bid price in the over-the-counter market.
When valuing securities for which market quotations are not readily
available or for which the market quotations that are available are considered
unreliable, the Funds determine a fair value in good faith under procedures
established by and under the general supervision of the Funds' Board of
Directors. The Funds may use these procedures to establish the fair value of
securities when, for example, a significant event occurs between the time the
market closes and the time the Funds value their investments. After
consideration of various factors, the Funds may value the securities at their
last reported price or at fair value. On April 30, 2003 Strategy had fair valued
securities, which are footnoted accordingly in the Fund's schedule of
investments.
C. SECURITIES TRANSACTIONS AND INVESTMENT INCOME
Securities transactions are recorded on trade date. Realized gains and
losses are determined by comparing the proceeds of a sale or the cost of a
purchase with a specific offsetting transaction. Dividend income is recorded on
the ex-dividend date. Interest income, including amortization of premiums and
accretion of discounts, is accrued daily.
39
- --------------------------------------------------------------------------------
ISI FUNDS NOTES TO FINANCIAL STATEMENTS (UNAUDITED-CONTINUED)
- --------------------------------------------------------------------------------
Estimated expenses are also accrued daily. Income, gains (losses) and common
expenses are allocated to each class based on its respective net assets. Class
specific expenses are charged directly to each class.
D. DISTRIBUTIONS
Total Return pays a daily dividend and, Managed Municipal and North
American pay monthly dividends at rates approved by the Funds' Board of
Directors. To the extent that their net investment income and short-term capital
gains are less than the approved rate, the Funds may pay some of their dividend
from long-term capital gains or as a return of shareholder capital. Strategy
pays dividends quarterly from its net investment income and annually from
capital gains. An additional distribution of net realized short-term and
long-term capital gains earned by the Funds, if any, may be made annually to the
extent they exceed capital loss carryforwards. The Funds record dividends and
distributions on the ex-dividend date
E. FEDERAL INCOME TAXES
The Funds each have a policy to qualify as a regulated investment companies
under the Internal Revenue Code and to distribute substantially all of their
taxable income to shareholders. Accordingly, no federal income taxes have been
accrued.
The Funds may periodically make reclassifications among certain capital
accounts as a result of differences in the characterization and allocation of
certain income and capital gain distributions determined annually in accordance
with federal tax regulations, which may differ from accounting principals
generally accepted in the United States. These book/tax differences are either
temporary or permanent in nature. To the extent these differences are permanent,
they are charged or credited to paid-in-capital or accumulated net realized gain
as appropriate, in the period that the differences arise.
F. FOREIGN CURRENCY TRANSLATION
The Funds maintain their accounting records in US dollars. North American
determines the US dollar value of foreign currency denominated assets,
liabilities and transactions by using prevailing exchange rates. In valuing
assets and liabilities, North American uses the prevailing exchange rate on
valuation date. In valuing security transactions, the receipt of income and the
payment of expenses, North American uses the prevailing exchange rate on the
transaction date.
Net realized gains and losses on foreign currency transactions shown on
North American's financial statements result from the sale of foreign bonds,
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of interest recorded on its books and the US dollar equivalent of the
amounts actually received or paid.
G. FORWARD FOREIGN CURRENCY CONTRACTS
North American may use forward foreign currency contracts to manage foreign
exchange rate risk. The Fund may use these contracts to fix the US dollar value
of a securities transaction for the period between the date of the transaction
and the date of the security is received or delivered to hedge the US dollar
value of securities that it already owns. The use of forward foreign currency
contracts does not eliminate fluctuations in the prices of the underlying
securities, but does establish a rate of exchange that can be achieved in the
future.
The Fund determines the net US dollar value of forward foreign currency
contracts using prevailing exchange rates. On April 30, 2003 there were no open
forward currency contracts.
40
- --------------------------------------------------------------------------------
ISI FUNDS NOTES TO FINANCIAL STATEMENTS (UNAUDITED-CONTINUED)
- --------------------------------------------------------------------------------
H. REPURCHASE AGREEMENTS
The Funds may make short-term investments in repurchase agreements that
are fully collateralized by US government securities. Under the terms of a
repurchase agreement, a financial institution sells fixed-income securities to
the Funds and agrees to buy them back on a specified day in return for the
principal amount of the original sale plus accrued interest. The custodial bank
holds the collateral in a separate account until the agreement matures. If the
value of the securities falls below the principal amount of the repurchase
agreement plus accrued interest, the financial institution deposits additional
collateral by the following business day. If the financial institution either
fails to deposit the required additional collateral or fails to repurchase the
securities as agreed, the Funds have the right to sell the securities and
recover any resulting loss from the financial institution. If the financial
institution enters into bankruptcy, the Funds' claims on the collateral may be
subject to legal proceedings.
I. ESTIMATES
In preparing its financial statements in conformity with accounting
principles generally accepted in the United States, management makes estimates
and assumptions. Actual results may be different.
Note 2 - FEES AND TRANSACTIONS WITH AFFILIATES
International Strategy & Investment, Inc. ('ISI') is the Funds'
Advisor. As compensation for its advisory services, Total Return pays ISI an
annual fee based on the Fund's average daily net assets, which is calculated
daily and paid monthly at the following annual rates: 0.20% of the first $100
million, 0.18% of the next $100 million, 0.16% of the next $100 million, 0.14%
of the next $200 million and 0.12% of the amount over $500 million. In addition,
Total Return pays ISI 1.50% of the Fund's gross income. Managed Municipal, North
American and Strategy pay ISI an annual fee based on each Fund's average daily
net assets, which is calculated daily and paid monthly at the annual rate of
0.40%.
ISI has contractually agreed to waive its fees and/or reimburse
expenses of Managed Municipal through February 29, 2004, to the extent
necessary, to limit all expenses to 0.95% of the average daily net assets of the
Fund. ISI has contractually agreed to waive its fees and/or reimburse expenses
of North American through February 29, 2004, to the extent necessary, to limit
all expenses to 1.25% of the average daily net assets of the Funds. ISI has
contractually agreed to waive its fees and/or reimburse expenses of Strategy
through February 29, 2004, to the extent necessary, to limit all expenses to
1.30% of the average daily net assets of the Fund.
Los Angeles Capital Management and Equity Research, Inc. (`LA Capital')
is Strategy's Sub-Advisor and is responsible for managing the common stocks in
the Fund's portfolio. The Sub-Advisor is paid by ISI.
Forum Administrative Services, LLC ("FAdS") is the Funds'
Administrator. FAdS receives, for its services, a minimum monthly fee or an
annual fee based on each Fund's average daily net assets which is calculated
daily and paid monthly.
41
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ISI FUNDS NOTES TO FINANCIAL STATEMENTS (UNAUDITED-CONTINUED)
- --------------------------------------------------------------------------------
Forum Shareholder Services, LLC ("FSS") is the Funds' Transfer Agent.
FSS receives for its services a monthly fee and a monthly per account fee, all
of which are calculated daily and paid monthly.
Forum Accounting Services, LLC ("FAcS") is the Funds' Accountant. FAcS
receives for its services a monthly fee plus an annual fee based on the each
Fund's average daily net assets, all of which are calculated daily and paid
monthly.
Certain officers and directors of the Fund are also officers or
directors of ISI or FAcS. These persons are not paid by the Fund for serving in
these capacities.
The Northern Trust Company is the Fund's Custodian.
ISI Group, Inc. (`ISI Group'), an affiliate of ISI, is the Distributor
for the ISI Shares. Total Return, Managed Municipal and Strategy each pay ISI
Group an annual fee, pursuant to Rule 12b-1, that is calculated daily and paid
monthly at the annual rate of 0.25% of their average daily net assets. North
American pays ISI Group an annual fee, pursuant to Rule 12b-1, that is
calculated daily and paid monthly at the annual rate of 0.40% of its average
daily net assets.
Note 3 - INVESTMENT TRANSACTIONS
The aggregate cost of purchases and proceeds from sales of investments,
other than short-term obligations, for the six months ended April 30, 2003 were
as follows:
- -------------------------------------------------------------------------------
Non-US Government Obligations US Government Obligations
- -------------------------------------------------------------------------------
Purchases Sales Purchases Sales
Total Return $ - $ - $ 184,336,953 $ 187,428,598
Managed Municipal 4,148,060 5,814,000 - -
North American 43,876,095 6,442,562 176,897,094 175,504,237
Strategy 4,753,532 3,804,081 - 710,938
- -------------------------------------------------------------------------------
The cost basis of investments, aggregate gross unrealized appreciation
and depreciation for all investments held at April 30, 2003 were as follows:
- --------------------------------------------------------------------------------
Cost Appreciation Depreciation Net Appreciation
- --------------------------------------------------------------------------------
Total Return $ 244,089,727 $ 4,902,950 $ 29,408 $ 4,873,542
Managed Municipal 98,048,010 7,394,210 - 7,394,210
North American 269,902,861 3,282,969 27,257 3,255,712
Strategy 18,965,612 2,747,369 1,165,287 1,582,082
- --------------------------------------------------------------------------------
42
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ISI FUNDS NOTES TO FINANCIAL STATEMENTS (UNAUDITED-CONCLUDED)
- --------------------------------------------------------------------------------
Note 4 - MARKET AND CREDIT RISK
North American invests in Canadian and Mexican government securities.
Investing in Canadian and Mexican government securities may have different risks
than investing in US government securities. An investment in Canada or Mexico
may be affected by developments unique to those countries. These developments
may not affect the US economy or the prices of US government securities in the
same manner. In addition, the value of bonds issued by international
organizations may be affected by adverse international political and economic
developments that may not impact the value of US government securities.
43
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ISI
INTERNATIONAL STRATEGY & INVESTMENT
- --------------------------------------------------------------------------------
DIRECTORS AND OFFICERS
EDWARD S. HYMAN THOMAS D. STEVENS*
CHAIRMAN VICE PRESIDENT
R. ALAN MEDAUGH STEVEN V. KILLORIN
PRESIDENT VICE PRESIDENT
JOSEPH R. HARDIMAN MARGARET M. BEELER
DIRECTOR ASSISTANT VICE PRESIDENT
W. MURRAY JACQUES KEITH C. REILLY
DIRECTOR ASSISTANT VICE PRESIDENT
LOUIS E. LEVY STACEY E. HONG
DIRECTOR TREASURER
CARL W. VOGT, ESQ. DAWN L. TAYLOR
DIRECTOR ASSISTANT TREASURER
NANCY R. LAZAR THOMAS G. SHEEHAN
VICE PRESIDENT SECRETARY
CARRIE L. BUTLER DANA A. LUKENS
VICE PRESIDENT ASSISTANT SECRETARY
EDWARD J. VEILLEUX *Thomas D. Stevens is only an
VICE PRESIDENT officer for the ISI Strategy Fund.
- --------------------------------------------------------------------------------
INVESTMENT ADVISOR
- --------------------------------------------------------------------------------
ISI, INC.
535 MADISON AVENUE, 30TH FLOOR
NEW YORK, NY 10022
(800) 955-7175
- --------------------------------------------------------------------------------
SHAREHOLDER SERVICING AGENT
- --------------------------------------------------------------------------------
FORUM SHAREHOLDER SERVICES, LLC
TWO PORTLAND SQUARE
PORTLAND, ME 04101
(800) 822-8585
- --------------------------------------------------------------------------------
DISTRIBUTOR
- --------------------------------------------------------------------------------
ISI GROUP, INC.
535 MADISON AVENUE, 30TH FLOOR
NEW YORK, NY 10022
(800) 955-7175
- --------------------------------------------------------------------------------
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. [RESERVED]
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES
(a) - The certifying officers, whose certifications are included herewith,
have evaluated the registrant's disclosure controls and procedures within 90
days of the filing date of this report. In their opinion, based on their
evaluation, the registrant's disclosure controls and procedures are adequately
designed, and are operating effectively to ensure, that material information
relating to the registrant, including its consolidated subsidiaries, is made
known to them by others within those entities, particularly during the period in
which this report is being prepared. Further, in their opinion, the registrant's
disclosure controls and procedures are adequately designed, and are operating
effectively to ensure that information required to be disclosed by the
registrant in the reports it files or submits under the Securities Exchange Act
of 1934 is recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission's rules and forms.
(b) - There were no significant changes in the registrant's internal
controls or in other factors that could significantly affect these controls
subsequent to the date of their most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
ITEM 10. EXHIBITS.
(a) Not applicable.
(b) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
(Exhibit filed herewith).
(c) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(Exhibit filed herewith).