N-CSRS 1 g36773_ncsrscombined.txt COMBINED RBB 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 811-05518 --------- The RBB Fund, Inc. -------------------------------------------------- (Exact name of registrant as specified in charter) 103 Bellevue Parkway, 4th Floor Wilmington, DE 19809 -------------------------------------------------- (Address of principal executive offices) (Zip code) Edward J. Roach, President & Treasurer 103 Bellevue Parkway, 4th Floor Wilmington, DE 19809 -------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: 302-791-1112 ------------ Date of fiscal year end: August 31 --------- Date of reporting period: February 28, 2007 ----------------- Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507. ITEM 1. REPORTS TO STOCKHOLDERS. The Report to Shareholders is attached herewith. ================================================================================ THE BEDFORD CLASS OF THE RBB FUND, INC. MONEY MARKET PORTFOLIO SEMI-ANNUAL REPORT FEBRUARY 28, 2007 (UNAUDITED) This report is submitted for the general information of the shareholders of the Portfolio. It is not authorized for distribution unless preceded or accompanied by a prospectus for the Portfolio. ================================================================================ THE RBB FUND, INC. MONEY MARKET PORTFOLIO FUND EXPENSE EXAMPLES (UNAUDITED) As a shareholder of the Portfolio, you incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees, distribution fees, and other Portfolio expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Portfolio and to compare these costs with the ongoing costs of investing in other mutual funds. These examples are based on an investment of $1,000 invested at the beginning of the six-month period from September 1, 2006 through February 28, 2007, and held for the entire period. ACTUAL EXPENSES The first line of the accompanying tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second line of the accompanying tables provides information about hypothetical account values and hypothetical expenses based on the Portfolio's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare these 5% hypothetical examples with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that the expenses shown in the accompanying tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees that may be incurred by shareholders of other funds. Therefore, the second line of the accompanying tables is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
MONEY MARKET PORTFOLIO - BEDFORD CLASS ------------------------------------------------------------------- BEGINNING ENDING EXPENSES PAID ACCOUNT VALUE ACCOUNT VALUE DURING SEPTEMBER 1, 2006 FEBRUARY 28, 2007 PERIOD* ----------------- ----------------- ------------- Actual $1,000.00 $1,022.30 $4.51 Hypothetical (5% return before expenses) 1,000.00 1,020.28 4.52 MONEY MARKET PORTFOLIO - SANSOM STREET CLASS ------------------------------------------------------------------- BEGINNING ENDING EXPENSES PAID ACCOUNT VALUE ACCOUNT VALUE DURING SEPTEMBER 1, 2006 FEBRUARY 28, 2007 PERIOD* ----------------- ----------------- ------------- Actual $1,000.00 $1,025.10 $1.76 Hypothetical (5% return before expenses) 1,000.00 1,023.04 1.76 * Expenses are equal to the Portfolio's annualized expense ratio of 0.90% for the Bedford Class shares and 0.35% for the Sansom Street Class shares, which includes waived fees or reimbursed expenses, multiplied by the average account value over the period, multiplied by the number of days (181) in the most recent fiscal half-year, then divided by 365 to reflect the one-half year period. The Portfolio's ending account value on the first line in each table is based on the actual total return for each class of 2.23% for the Bedford Class shares and 2.51% for the Sansom Street Class shares.
1 THE RBB FUND, INC. MONEY MARKET PORTFOLIO PORTFOLIO HOLDINGS SUMMARY TABLE FEBRUARY 28, 2007 (UNAUDITED) SECURITY % OF NET TYPE ASSETS VALUE -------- -------- ------------ Short Term Investments: Commercial Paper ............................ 55.0% $118,333,030 Certificates of Deposit ..................... 22.5 48,405,039 Variable Rate Obligations ................... 16.7 36,003,330 Master Notes ................................ 3.9 8,520,000 Repurchase Agreements ....................... 1.0 2,100,000 Municipal Bonds ............................. 0.7 1,540,000 Other Assets In Excess of Liabilities ....... 0.2 402,630 ----- ------------ NET ASSETS ..................................... 100.0% $215,304,029 ===== ============ Portfolio holdings are subject to change at any time. 2 THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF NET ASSETS FEBRUARY 28, 2007 (UNAUDITED) PAR (000) VALUE ------- ------------ CERTIFICATES OF DEPOSIT--22.5% DOMESTIC CERTIFICATES OF DEPOSIT--4.2% Bank of America, N.A. 5.310%, 03/20/07 ........................... $ 5,000 $ 5,000,000 Washington Mutual Bank 5.320%, 04/16/07 ........................... 3,925 3,925,000 ------------ 8,925,000 ------------ EURODOLLAR CERTIFICATES OF DEPOSIT--4.6% Credit Industriel Et Commercial Bank(a) 5.325%, 04/05/07 ........................... 8,200 8,200,039 5.375%, 04/30/07 ........................... 1,780 1,780,000 ------------ 9,980,039 ------------ YANKEE DOLLAR CERTIFICATES OF DEPOSIT--13.7% Barclays Bank P.L.C. (New York Branch)(a) 5.320%, 04/02/07 ........................... 7,500 7,500,000 Mizuho Corporate Bank (New York Branch)(a) 5.320%, 05/21/07 ........................... 10,000 10,000,000 Norinchukin Bank (New York Branch)(a) 5.330%, 04/26/07 ........................... 12,000 12,000,000 ------------ 29,500,000 ------------ TOTAL CERTIFICATES OF DEPOSIT (Cost $48,405,039) ..................... 48,405,039 ------------ COMMERCIAL PAPER--55.0% ASSET BACKED SECURITIES--13.8% Atlantic Asset Securitization Corp. ........... 5.250%, 04/16/07 ........................... 1,800 1,787,925 Crown Point Capital Co. ....................... 5.280%, 03/20/07 ........................... 8,000 7,977,707 North Sea Funding LLC 5.270%, 03/09/07 ........................... 8,225 8,215,367 5.270%, 03/23/07 ........................... 2,622 2,613,556 Park Granada LLC 5.370%, 03/01/07 ........................... 9,000 9,000,000 ------------ 29,594,555 ------------ PAR (000) VALUE ------- ------------ COMMERCIAL PAPER--(CONTINUED) BANKS--15.4% Allied Irish Bank 5.205%, 08/06/07 ........................... $ 1,050 $ 1,026,014 ANZ National Bank Ltd.(b) 5.240%, 04/24/07 ........................... 13,000 12,897,820 Banco Bilbao Vizcaya Argentaria Puerto Rico(b) 5.270%, 05/23/07 ........................... 10,800 10,668,777 Bank of America Corp. ......................... 5.250%, 04/17/07 ........................... 1,000 993,146 5.250%, 04/20/07 ........................... 5,500 5,459,896 Societe Generale North America, Inc. .......... 5.195%, 07/23/07 ........................... 1,230 1,204,440 St. George Bank Ltd.(b) 5.210%, 08/07/07 ........................... 400 390,796 Unicredito Italiano Bank(b) 5.210%, 08/06/07 ........................... 435 425,053 ------------ 33,065,942 ------------ CHEMICALS & ALLIED PRODUCTS--4.6% BASF AG 5.230%, 04/04/07 ........................... 10,000 9,950,605 ------------ FINANCE SERVICES--11.1% CIT Group, Inc. ............................... 5.240%, 04/20/07 ........................... 12,500 12,409,028 Countrywide Financial Corp. ................... 5.280%, 04/11/07 ........................... 10,000 9,939,867 Santander Finance, Inc. ....................... 5.200%, 07/23/07 ........................... 1,635 1,600,992 ------------ 23,949,887 ------------ INSURANCE--5.5% ING America Insurance Holdings 5.240%, 04/19/07 ........................... 12,000 11,914,413 ------------ SECURITY BROKERS & DEALERS--4.6% Bear Stearns Co. .............................. 5.230%, 06/07/07 ........................... 10,000 9,857,628 ------------ TOTAL COMMERCIAL PAPER (Cost $118,333,030) .................... 118,333,030 ------------ See Accompanying Notes to Financial Statements. 3 THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF NET ASSETS (CONCLUDED) FEBRUARY 28, 2007 (UNAUDITED) PAR (000) VALUE ------- ------------ MUNICIPAL BONDS--0.7% PENNSYLVANIA--0.7% Franklin County IDR (Manufacturers & Traders LOC) 5.370%, 03/02/07 ........................... $ 1,540 $ 1,540,000 ------------ TOTAL MUNICIPAL BONDS (Cost $1,540,000) ...................... 1,540,000 ------------ VARIABLE RATE OBLIGATIONS--16.7% ASSET BACKED SECURITIES--2.3% Cullinan Finance Corp.(c) 5.280%, 03/26/07 ........................... 3,000 2,999,805 5.280%, 03/26/07 ........................... 1,000 999,935 Racers Trust 2004-6-MM(c)(d) 5.340%, 03/22/07 ........................... 1,000 1,000,000 ------------ 4,999,740 ------------ BANKS--9.3% Commonwealth Bank of Australia(b)(c) 5.360%, 04/30/07 ........................... 10,000 10,003,590 HBOS Treasury Services PLC(b)(c) 5.436%, 03/26/07 ........................... 8,000 8,000,000 Westpac Banking Corp. New York(b)(c) 5.393%, 03/12/07 ........................... 2,000 2,000,000 ------------ 20,003,590 ------------ LIFE INSURANCE--2.3% MetLife Global Funding, Inc.(c)(d) 5.420%, 03/28/07 ........................... 5,000 5,000,000 ------------ SECURITY BROKERS & DEALERS--2.8% Merrill Lynch & Company, Inc.(c) 5.325%, 05/29/07 ........................... 6,000 6,000,000 ------------ TOTAL VARIABLE RATE OBLIGATIONS (Cost $36,003,330) ..................... 36,003,330 ------------ MASTER NOTES--3.9% Morgan Stanley Mortgage Capital, Inc.(c) 5.483%, 03/01/07 ........................... 8,520 8,520,000 ------------ TOTAL MASTER NOTES (Cost $8,520,000) ...................... 8,520,000 ------------ PAR (000) VALUE ------- ------------ REPURCHASE AGREEMENTS--1.0% Morgan Stanley & Co., Inc. (Tri-party Agreement dated 2/28/07 to be repurchased at $2,100,615, collateralized by $2,160,000 par value, U.S. Treasury Bill, due 3/22/07, Market Value of collateral is $2,153,261) 5.270%, 03/01/07 ........................... $ 2,100 $ 2,100,000 ------------ TOTAL REPURCHASE AGREEMENTS (Cost $2,100,000) ...................... 2,100,000 ------------ TOTAL INVESTMENTS AT VALUE--99.8% (Cost $214,901,399*) ....................... 214,901,399 ------------ OTHER ASSETS IN EXCESS OF LIABILITIES--0.2% .......................... 402,630 ------------ NET ASSETS (APPLICABLE TO 196,739,809 BEDFORD SHARES AND 18,568,813 SANSOM STREET SHARES )--100.0% ........................... $215,304,029 ============ NET ASSET VALUE, Offering and Redemption Price Per Bedford Share ($196,737,299 / 196,739,809) ............... $1.00 ===== NET ASSET VALUE, Offering and Redemption Price Per Sansom Street Share ($18,566,730 / 18,568,813) ............... $1.00 ===== * Aggregate cost is the same for financial reporting and federal tax purposes. (a) Issuer is a U.S. Branch of a foreign domiciled Bank. (b) U.S. dollar denominated security issued by foreign domiciled entity. (c) Variable Rate Obligations -- The interest rate shown is the rate as of February 28, 2007 and the maturity date shown is the next interest rate readjustment date or the maturity date. (d) Security is exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional investors. INVESTMENT ABBREVIATIONS IDR Industrial Development Revenue LOC Letter of Credit See Accompanying Notes to Financial Statements. 4 THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED FEBRUARY 28, 2007 (UNAUDITED) Investment Income Interest ................................................ $5,209,647 ---------- Expenses Distribution and service fees ........................... 563,376 Investment advisory and administration fees ............. 436,690 Registration and filing fees ............................ 36,200 Professional fees ....................................... 34,938 Printing and shareholder reporting fees ................. 26,363 Custodian fees .......................................... 22,892 Directors' and Officers' fees ........................... 19,553 Regulatory administration fees .......................... 17,825 Transfer agent fees ..................................... 17,313 Insurance fees .......................................... 12,925 Service organization fees ............................... 464 Other expenses .......................................... 4,334 ---------- Total expenses ..................................... 1,192,873 Less fees waived ........................................ (374,063) ---------- Net total expenses ................................. 818,810 ---------- Net investment income ...................................... 4,390,837 ---------- Realized gain on investments ............................... 185 ---------- Net increase in net assets resulting from operations ......................................... $4,391,022 ========== See Accompanying Notes to Financial Statements. 5 THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED FOR THE FEBRUARY 28, 2007 YEAR ENDED (UNAUDITED) AUGUST 31, 2006 ----------------- --------------- Increase (decrease) in net assets: Operations: Net investment income ......................................... $ 4,390,837 $ 9,453,852 Net gain (loss) on investments ................................ 185 (1,104) ------------ ------------ Net increase in net assets resulting from operations .......... 4,391,022 9,452,748 ------------ ------------ Dividends to shareholders from Net investment income: Bedford shares .............................................. (3,825,504) (5,087,205) Sansom Street shares ........................................ (565,333) (4,366,647) ------------ ------------ Total dividends to shareholders ............................. (4,390,837) (9,453,852) ------------ ------------ Net capital share transactions (See Note 3) ..................... 49,122,033 (30,616,253) ------------ ------------ Total increase/(decrease) in net assets ......................... 49,122,218 (30,617,357) Net Assets: Beginning of period ........................................... 166,181,811 196,799,168 ------------ ------------ End of period ................................................. $215,304,029 $166,181,811 ============ ============
See Accompanying Notes to Financial Statements. 6 THE RBB FUND, INC. MONEY MARKET PORTFOLIO FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
THE BEDFORD CLASS ------------------------------------------------------------------------------------------ FOR THE SIX MONTHS FOR THE FOR THE FOR THE FOR THE FOR THE ENDED YEAR YEAR YEAR YEAR YEAR FEBRUARY 28, ENDED ENDED ENDED ENDED ENDED 2007 AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, (UNAUDITED) 2006 2005 2004 2003 2002 ------------ ---------- ---------- ----------- ----------- ---------- Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 -------- -------- -------- -------- -------- -------- Income from investment operations: Net investment income 0.0221 0.0388 0.0162 0.0025 0.0046 0.0157 Net gains (losses) on securities --(b) --(b) --(b) --(b) 0.0005 -- -------- -------- -------- -------- -------- -------- Total net income from investment operations 0.0221 0.0388 0.0162 0.0025 0.0051 0.0157 -------- -------- -------- -------- -------- -------- Less dividends and distributions: Dividends (from net investment income) (0.0221) (0.0388) (0.0162) (0.0025) (0.0046) (0.0157) Distributions (from capital gains) -- -- -- -- (0.0005) -- -------- -------- -------- -------- -------- -------- Total dividends and distributions (0.0221) (0.0388) (0.0162) (0.0025) (0.0051) (0.0157) -------- -------- -------- -------- -------- -------- Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======== ======== ======== ======== ======== ======== Total Return 2.23% 3.95% 1.63% 0.25% 0.53% 1.59% Ratios/Supplemental Data Net assets, end of period (000's omitted) $196,737 $150,657 $109,495 $ 72,001 $ 80,406 $ 52,878 Ratios of expenses to average net assets(a) 0.90%(c) 0.85% 0.97% 0.94% 0.98% 1.00% Ratios of net investment income to average net assets 4.46%(c) 3.81% 1.68% 0.24% 0.46% 1.75% (a) Without the waiver of advisory fees and reimbursement of certain operating expenses, the ratios of expenses to average net assets for the Bedford Class of the Money Market Portfolio would have been 1.25% for the six months ended February 28, 2007 and 1.34%, 1.23%, 1.34%, 1.30% and 1.25% for the years ended August 31, 2006, 2005, 2004, 2003 and 2002, respectively. (b) Amount is less than $0.0005 per share. (c) Annualized.
See Accompanying Notes to Financial Statements. 7 THE RBB FUND, INC. MONEY MARKET PORTFOLIO FINANCIAL HIGHLIGHTS (CONTINUED) (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
THE SANSOM STREET CLASS ------------------------------------------------------------------------------------------ FOR THE SIX MONTHS FOR THE FOR THE FOR THE FOR THE FOR THE ENDED YEAR YEAR YEAR YEAR YEAR FEBRUARY 28, ENDED ENDED ENDED ENDED ENDED 2007 AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, (UNAUDITED) 2006 2005 2004 2003 2002 ------------ ---------- ---------- ----------- ----------- ---------- Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 -------- -------- -------- -------- -------- -------- Income from investment operations: Net investment income 0.0249 0.0434 0.0239 0.0100 0.0114 0.0209 Net gains (losses) on securities --(b) --(b) --(b) --(b) 0.0005 -- -------- -------- -------- -------- -------- -------- Total net income from investment operations 0.0249 0.0434 0.0239 0.0100 0.0119 0.0209 -------- -------- -------- -------- -------- -------- Less dividends and distributions: Dividends (from net investment income) (0.0249) (0.0434) (0.0239) (0.0100) (0.0114) (0.0209) Distributions (from capital gains) -- -- -- -- (0.0005) -- -------- -------- -------- -------- -------- -------- Total distributions (0.0249) (0,0434) (0.0239) (0.0100) (0.0119) (0.0209) -------- -------- -------- -------- -------- -------- Net asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======== ======== ======== ======== ======== ======== Total Return 2.51% 4.42% 2.41% 1.00% 1.21% 2.11% Ratios/Supplemental Data Net assets, end of year (000's omitted) $ 18,567 $ 15,525 $ 87,304 $141,372 $198,373 $244,212 Ratios of expenses to average net assets(a) 0.35%(c) 0.26% 0.20% 0.20% 0.30% 0.49% Ratios of net investment income to average net assets 5.02%(c) 4.25% 2.39% 0.98% 1.14% 2.10% (a) Without the waiver of advisory fees and reimbursement of certain operating expenses, the ratios of expenses to average net assets for the Sansom Street Class of the Money Market Portfolio would have been 0.69% for the six months ended February 28, 2007 and 0.67%, 0.67%, 0.59%, 0.57% and 0.64% for the years ended August 31, 2006, 2005, 2004, 2003 and 2002, respectively. (b) Amount is less than $0.0005 per share. (c) Annualized.
See Accompanying Notes to Financial Statements. 8 THE RBB FUND, INC. MONEY MARKET PORTFOLIO NOTES TO FINANCIAL STATEMENTS FEBRUARY 28, 2007 (UNAUDITED) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The RBB Fund, Inc. ("RBB" or "Company") was incorporated under the laws of the State of Maryland on February 29, 1988, and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company. RBB is a "series fund," which is a mutual fund divided into separate portfolios. Each portfolio is treated as a separate entity for certain matters under the 1940 Act, and for other purposes, and a shareholder of one portfolio is not deemed to be a shareholder of any other portfolio. Currently, RBB has eighteen active investment portfolios, including the Money Market Portfolio ("Portfolio"), which comprise the RBB family of funds. RBB has authorized capital of one hundred billion shares of common stock of which 76.673 billion shares are currently classified into one hundred and six classes of common stock. The Portfolio has issued shares with a par value of $0.001. Each class represents an interest in an active or inactive RBB investment portfolio. The active classes have been grouped into eight separate "families." SECURITY VALUATION -- Securities held in the Portfolio are valued under the amortized cost method, which approximates current market value. Under this method, securities are valued at cost when purchased and thereafter a constant accretion of discount or amortization of premium is recorded until maturity of the security. Regular review and monitoring of the valuation is performed to ensure that cost continues to approximate market value and to avoid dilution or other unfair results to shareholders. The Portfolio seeks to maintain net asset value per share at $1.00. SECURITY TRANSACTIONS, INVESTMENT INCOME, AND EXPENSES -- Security transactions are accounted for on the trade date. The cost of investments sold is determined by use of the specific identification method for both financial reporting and income tax purposes. Interest income is accrued when earned. Certain expenses, such as distribution, transfer agency and printing, are class specific expenses and vary by class. Expenses not directly attributable to a specific portfolio or class are allocated based on relative net assets of each portfolio and class. Expenses incurred on behalf of a specific class, fund or fund family are charged directly to the class, fund or fund family (in proportion to net assets). Expenses incurred for all portfolios within the Company (such as director or professional fees) are charged to all portfolios in proportion to their average net assets. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net investment income are declared daily, recorded on the ex-date and paid monthly. All dividends from net investment income are taxed as ordinary income. Any net realized capital gains are distributed at least annually. Income subject to dividends and capital gain subject to distributions are determined in accordance with income tax regulations, which may differ from accounting principles generally accepted in the United States of America. FEDERAL INCOME TAXES -- No provision is made for federal income taxes. It is the Company's intention to have each portfolio continue to qualify for and elect the tax treatment applicable to regulated investment companies under the Internal Revenue Code and make the requisite distributions to its shareholders which will be sufficient to relieve it from federal income and excise taxes. 9 THE RBB FUND, INC. MONEY MARKET PORTFOLIO NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2007 (UNAUDITED) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) REPURCHASE AGREEMENTS -- Money market instruments may be purchased subject to the seller's agreement to repurchase them at an agreed upon date and price. The seller will be required on a daily basis to maintain the value of the securities as collateral, subject to the agreement at not less than the repurchase price plus accrued interest. If the value of the collateral falls below 102% of the value of the repurchase price plus accrued interest, the Portfolio will require the seller to deposit additional collateral by the next Portfolio business day. In the event that the seller under the agreement defaults on its repurchase obligation or fails to deposit sufficient collateral, the Portfolio has the contractual right, subject to the requirements of applicable bankruptcy and insolvency laws, to sell the underlying securities and may claim any resulting loss from the seller. The agreements are conditioned upon the collateral being deposited under the Federal Reserve Book Entry System or with the Portfolio's custodian or a third party sub-custodian. USE OF ESTIMATES -- The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. OTHER -- In the normal course of business, the Portfolio may enter into contracts that provide general indemnifications. The Portfolio's maximum exposure under these arrangements is dependent on claims that may be made against the Portfolio in the future, and, therefore, cannot be estimated; however, based on experience, the risk of material loss for such claims is considered remote. 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES Pursuant to an Investment Advisory and Administration Agreement, BlackRock Institutional Management Corp. (the "Adviser" or "BIMC"), an indirect majority-owned subsidiary of The PNC Financial Services Group, Inc., serves as investment adviser and as administrator for the Portfolio. BIMC and PFPC Inc. ("PFPC"), a wholly-owned subsidiary of PFPC Worldwide Inc. and an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc., entered into a delegation agreement on behalf of the Portfolio, wherein PFPC has agreed to perform administration and accounting services for an annual fee of 0.10% of the average net assets of the Portfolio, paid out of the fee paid to BIMC. For its advisory services, BIMC is entitled to receive the following fees, computed daily and payable monthly, and based on the Portfolio's average daily net assets: ANNUAL RATE -------------------------------------------------- 0.45% of first $250 million of net assets; 0.40% of next $250 million of net assets; and 0.35% of net assets in excess of $500 million. 10 THE RBB FUND, INC. MONEY MARKET PORTFOLIO NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2007 (UNAUDITED) 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONTINUED) BIMC may, at its discretion, voluntarily waive all or any portion of its advisory fee for the Portfolio. For each class of shares within the Portfolio, the net advisory fee charged to each class is the same on a relative basis. For the six months ended February 28, 2007, advisory fees and waivers for the investment portfolio were as follows: GROSS NET ADVISORY ADVISORY FEE WAIVER FEE -------- ---------- -------- $436,690 $(331,158) $105,532 As of February 28, 2007, the Portfolio owed BIMC $14,960 in advisory fees. BIMC may voluntarily waive and/or reimburse a portion of its fees. PFPC may also voluntarily waive a portion of its fees and/or reimburse expenses. The Portfolio will not pay BIMC at a later time for any amounts it may waive or any amounts that BIMC has assumed. For providing regulatory administration services to RBB, PFPC is entitled to receive compensation as agreed to by the Company and PFPC. This fee is allocated to each portfolio in proportion to their net assets. The Portfolio's portion of this fee for the six months ended February 28, 2007 was $17,825. PFPC serves as the transfer and dividend disbursing agent for each class. Both PFPC Trust Company and PFPC are wholly-owned subsidiaries of PFPC Worldwide Inc., an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc. For providing transfer agent services, PFPC is entitled to receive fees from the Portfolio. PFPC may, at its discretion, voluntarily waive all or any portion of its transfer agency fee for any class of shares. For the six months ended February 28, 2007, transfer agency fees for the Portfolio were $17,313. PFPC Trust Company provides certain custodial services to the Portfolio. As compensation for such custodial services, PFPC Trust Company is entitled to receive the following fees, computed daily and payable monthly, and based on the Portfolio's average gross assets: ANNUAL RATE -------------------------------------------------- 0.025% of first $50 million of gross assets; 0.020% of next $50 million of gross assets; 0.015% of gross assets in excess of $100 million. The Portfolio, on behalf of each class of shares of the Portfolio, has adopted Distribution Plans pursuant to Rule 12b-1 under the 1940 Act (the "Plans"). The Portfolio has entered into a Distribution Contract with PFPC Distributors, Inc. ("PFPC Distributors"). PFPC Distributors is a wholly-owned subsidiary of PFPC Worldwide Inc. and an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc. 11 THE RBB FUND, INC. MONEY MARKET PORTFOLIO NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2007 (UNAUDITED) 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONTINUED) The Plans provide for each class to make monthly payments, based on average net assets, to PFPC Distributors of up to 0.65% on an annualized basis for the Bedford Class and up to 0.05% on an annualized basis for the Sansom Street Class. For the six months ended February 28, 2007, distribution fees paid to PFPC Distributors for each class were as follows:
GROSS NET DISTRIBUTION DISTRIBUTION FEE WAIVER FEE ------------- --------- ------------ Bedford Class $557,741 $(42,905) $514,836 Sansom Street Class 5,635 -- 5,635 -------- -------- -------- Total Money Market Portfolio $563,376 $(42,905) $520,471 ======== ======== =========
The Portfolio has entered into service agreements with banks affiliated with PNC who render support services to customers who are the beneficial owners of the Sansom Street Class in consideration of the payment of 0.10% of the daily net asset value of such shares. For the six months ended February 28, 2007, service organization fees were $464 for the Portfolio. As of February 28, 2007, the Portfolio owed PFPC and its affiliates $101,493 for their services. 3. CAPITAL SHARES Transactions in capital shares (at $1 per capital share) for each year were as follows:
BEDFORD CLASS ---------------------------------------- FOR THE FOR THE SIX MONTHS ENDED YEAR ENDED FEBRUARY 28, 2007 AUGUST 31, 2006 ---------------- --------------- (UNAUDITED) VALUE VALUE -------------- -------------- Shares sold $ 249,710,363 $ 506,580,146 Shares issued on reinvestment of dividends 3,656,114 5,326,071 Shares repurchased (207,290,237) (470,739,390) -------------- -------------- Net Increase/(Decrease) $ 46,076,240 $ 41,166,827 -------------- ------------- Bedford Shares authorized 1,500,000,000 1,500,000,000 ============== ============== SANSOM STREET CLASS ---------------------------------------- FOR THE FOR THE SIX MONTHS ENDED YEAR ENDED FEBRUARY 28, 2007 AUGUST 31, 2006 ---------------- --------------- (UNAUDITED) VALUE VALUE -------------- -------------- Shares sold $ 119,544,126 $ 1,554,920,729 Shares issued on reinvestment of dividends 72,575 146,903 Shares repurchased (116,570,908) (1,626,850,712) -------------- --------------- Net Increase/(Decrease) $ 3,045,793 $ (71,783,080) -------------- --------------- Sansom Street Shares authorized 1,500,000,000 1,500,000,000 ============== ===============
12 THE RBB FUND, INC. MONEY MARKET PORTFOLIO NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2007 (UNAUDITED) 4. NET ASSETS At February 28, 2007, net assets consisted of the following: MONEY MARKET PORTFOLIO ------------ Paid-in capital $215,308,622 Accumulated net realized loss on investments (4,593) ------------ Total net assets $215,304,029 ============ 5. FEDERAL INCOME TAX INFORMATION The Portfolio intends to continue to qualify as a regulated investment company and distribute all of its taxable income. Therefore, no federal tax provision is required. For federal income tax purposes, realized capital losses may be carried forward and applied against future realized gains. At August 31, 2006, the Portfolio had capital loss carryforwards of $4,504 of which $3,587 will expire on August 31, 2013 and $917 will expire on August 31, 2014. 6. NEW ACCOUNTING PRONOUNCEMENTS In July 2006, the Financial Accounting Standards Board ("FASB") issued Interpretation No. 48, "Accounting for Uncertainty in Income Taxes -- an Interpretation of FASB Statement No. 109" (the "Interpretation"). The Interpretation establishes for all entities, a minimum threshold for financial statement recognition of the benefit of positions taken in filing tax returns (including whether an entity is taxable in a particular jurisdiction), and requires certain expanded tax disclosures. The Interpretation is effective for fiscal years beginning after December 15, 2006, and is required to be implemented by calendar year funds by no later than June 29, 2007. The Adviser has recently begun to evaluate the application of the Interpretation to the Fund, and is not in a position at this time to estimate the significance of its impact, if any, on the Portfolio's financial statements. In September 2006, FASB issued Statement of Financial Accounting Standards ("SFAS") 157, Fair Value Measurements, which clarifies the definition of fair value and requires companies to expand their disclosure about the use of fair value to measure assets and liabilities in interim and annual periods subsequent to initial recognition. Adoption of SFAS 157 requires the use of the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. At this time, the Portfolio is in the process of reviewing the impact, if any, of the SFAS on the Portfolio's financial statements. 13 ADDITIONAL INFORMATION (UNAUDITED) PROXY VOTING Policies and procedures that the Portfolio uses to determine how to vote proxies relating to portfolio securities as well as information regarding how the Portfolio voted proxies relating to portfolio securities for the most recent 12-month period ended June 30 are available without charge, upon request, by calling the number shown below and on the Securities and Exchange Commission's ("SEC") website at http://www.sec.gov. Bedford (800) 888-9723 Sansom Street (800) 430-9618 QUARTERLY PORTFOLIO SCHEDULES The Company files its complete schedule of portfolio holdings with the SEC for the first and third fiscal quarter of each fiscal year (quarters ended November 30 and May 31) on Form N-Q. The Company's Form N-Q is available on the SEC website at http://www.sec.gov and may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. Information on the operation of the SEC Public Reference Room may be obtained by calling 1-800-SEC-0330. SPECIAL MEETING OF SHAREHOLDERS The RBB Fund, Inc., on behalf of the Portfolio, convened a Special Meeting of Shareholders of the Portfolio's Bedford Class and Sansom Street Class on October 20, 2006 (as reconvened on November 28, 2006 and December 15, 2006) (the "Meeting"). At the Meeting, the Portfolio's shareholders voted on the approval of a new Investment Advisory and Administration Agreement with BIMC (the "Agreement"). The results of the voting were as follows: 70,121,805.420 shares of the Portfolio were voted IN FAVOR of the proposal to approve the Agreement 3,080,660.660 shares of the Portfolio were voted AGAINST the proposal to approve the Agreement 9,487,268.350 shares of the Portfolio abstained. Accordingly, the Agreement was approved by the Portfolio's shareholders. 14 [THIS PAGE INTENTIONALLY LEFT BLANK.] INVESTMENT ADVISER BlackRock Institutional Management Corporation 100 Bellevue Parkway Wilmington, DE 19809 TRANSFER AGENT PFPC Inc. 101 Sabin Street Pawtucket, RI 02866 DISTRIBUTOR PFPC Distributors, Inc. 760 Moore Road King of Prussia, PA 19406 CUSTODIAN PFPC Trust Company 8800 Tinicum Boulevard Suite 200 Philadelphia, PA 19153 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Deloitte & Touche LLP 1700 Market Street Philadelphia, PA 19103-3984 COUNSEL Drinker Biddle & Reath LLP One Logan Square 18th and Cherry Streets Philadelphia, PA 19103-6996 SHAREBUILDER BEDFORD SHARES OF THE RBB MONEY MARKET PORTFOLIO -------------------------------------------------------------------------------- Managed by BlackRock Institutional Management Corporation SHAREBUILDER(R) SEMI-ANNUAL REPORT February 28, 2007 (Unaudited) www.sharebuilder.com ================================================================================ THE BEDFORD CLASS OF THE RBB FUND, INC. MONEY MARKET PORTFOLIO SEMI-ANNUAL REPORT FEBRUARY 28, 2007 (UNAUDITED) This report is submitted for the general information of the shareholders of the Portfolio. It is not authorized for distribution unless preceded or accompanied by a prospectus for the Portfolio. ================================================================================ THE RBB FUND, INC. MONEY MARKET PORTFOLIO FUND EXPENSE EXAMPLES (UNAUDITED) As a shareholder of the Portfolio, you incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees, distribution fees, and other Portfolio expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Portfolio and to compare these costs with the ongoing costs of investing in other mutual funds. These examples are based on an investment of $1,000 invested at the beginning of the six-month period from September 1, 2006 through February 28, 2007, and held for the entire period. ACTUAL EXPENSES The first line of the accompanying tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second line of the accompanying tables provides information about hypothetical account values and hypothetical expenses based on the Portfolio's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare these 5% hypothetical examples with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that the expenses shown in the accompanying tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees that may be incurred by shareholders of other funds. Therefore, the second line of the accompanying tables is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
MONEY MARKET PORTFOLIO - BEDFORD CLASS ------------------------------------------------------------------- BEGINNING ENDING EXPENSES PAID ACCOUNT VALUE ACCOUNT VALUE DURING SEPTEMBER 1, 2006 FEBRUARY 28, 2007 PERIOD* ----------------- ----------------- ------------- Actual $1,000.00 $1,022.30 $4.51 Hypothetical (5% return before expenses) 1,000.00 1,020.28 4.52 MONEY MARKET PORTFOLIO - SANSOM STREET CLASS ------------------------------------------------------------------- BEGINNING ENDING EXPENSES PAID ACCOUNT VALUE ACCOUNT VALUE DURING SEPTEMBER 1, 2006 FEBRUARY 28, 2007 PERIOD* ----------------- ----------------- ------------- Actual $1,000.00 $1,025.10 $1.76 Hypothetical (5% return before expenses) 1,000.00 1,023.04 1.76 * Expenses are equal to the Portfolio's annualized expense ratio of 0.90% for the Bedford Class shares and 0.35% for the Sansom Street Class shares, which includes waived fees or reimbursed expenses, multiplied by the average account value over the period, multiplied by the number of days (181) in the most recent fiscal half-year, then divided by 365 to reflect the one-half year period. The Portfolio's ending account value on the first line in each table is based on the actual total return for each class of 2.23% for the Bedford Class shares and 2.51% for the Sansom Street Class shares.
1 THE RBB FUND, INC. MONEY MARKET PORTFOLIO PORTFOLIO HOLDINGS SUMMARY TABLE FEBRUARY 28, 2007 (UNAUDITED) SECURITY % OF NET TYPE ASSETS VALUE -------- -------- ------------ Short Term Investments: Commercial Paper ............................ 55.0% $118,333,030 Certificates of Deposit ..................... 22.5 48,405,039 Variable Rate Obligations ................... 16.7 36,003,330 Master Notes ................................ 3.9 8,520,000 Repurchase Agreements ....................... 1.0 2,100,000 Municipal Bonds ............................. 0.7 1,540,000 Other Assets In Excess of Liabilities ....... 0.2 402,630 ----- ------------ NET ASSETS ..................................... 100.0% $215,304,029 ===== ============ Portfolio holdings are subject to change at any time. 2 THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF NET ASSETS FEBRUARY 28, 2007 (UNAUDITED) PAR (000) VALUE ------- ------------ CERTIFICATES OF DEPOSIT--22.5% DOMESTIC CERTIFICATES OF DEPOSIT--4.2% Bank of America, N.A. 5.310%, 03/20/07 ........................... $ 5,000 $ 5,000,000 Washington Mutual Bank 5.320%, 04/16/07 ........................... 3,925 3,925,000 ------------ 8,925,000 ------------ EURODOLLAR CERTIFICATES OF DEPOSIT--4.6% Credit Industriel Et Commercial Bank(a) 5.325%, 04/05/07 ........................... 8,200 8,200,039 5.375%, 04/30/07 ........................... 1,780 1,780,000 ------------ 9,980,039 ------------ YANKEE DOLLAR CERTIFICATES OF DEPOSIT--13.7% Barclays Bank P.L.C. (New York Branch)(a) 5.320%, 04/02/07 ........................... 7,500 7,500,000 Mizuho Corporate Bank (New York Branch)(a) 5.320%, 05/21/07 ........................... 10,000 10,000,000 Norinchukin Bank (New York Branch)(a) 5.330%, 04/26/07 ........................... 12,000 12,000,000 ------------ 29,500,000 ------------ TOTAL CERTIFICATES OF DEPOSIT (Cost $48,405,039) ..................... 48,405,039 ------------ COMMERCIAL PAPER--55.0% ASSET BACKED SECURITIES--13.8% Atlantic Asset Securitization Corp. ........... 5.250%, 04/16/07 ........................... 1,800 1,787,925 Crown Point Capital Co. ....................... 5.280%, 03/20/07 ........................... 8,000 7,977,707 North Sea Funding LLC 5.270%, 03/09/07 ........................... 8,225 8,215,367 5.270%, 03/23/07 ........................... 2,622 2,613,556 Park Granada LLC 5.370%, 03/01/07 ........................... 9,000 9,000,000 ------------ 29,594,555 ------------ PAR (000) VALUE ------- ------------ COMMERCIAL PAPER--(CONTINUED) BANKS--15.4% Allied Irish Bank 5.205%, 08/06/07 ........................... $ 1,050 $ 1,026,014 ANZ National Bank Ltd.(b) 5.240%, 04/24/07 ........................... 13,000 12,897,820 Banco Bilbao Vizcaya Argentaria Puerto Rico(b) 5.270%, 05/23/07 ........................... 10,800 10,668,777 Bank of America Corp. ......................... 5.250%, 04/17/07 ........................... 1,000 993,146 5.250%, 04/20/07 ........................... 5,500 5,459,896 Societe Generale North America, Inc. .......... 5.195%, 07/23/07 ........................... 1,230 1,204,440 St. George Bank Ltd.(b) 5.210%, 08/07/07 ........................... 400 390,796 Unicredito Italiano Bank(b) 5.210%, 08/06/07 ........................... 435 425,053 ------------ 33,065,942 ------------ CHEMICALS & ALLIED PRODUCTS--4.6% BASF AG 5.230%, 04/04/07 ........................... 10,000 9,950,605 ------------ FINANCE SERVICES--11.1% CIT Group, Inc. ............................... 5.240%, 04/20/07 ........................... 12,500 12,409,028 Countrywide Financial Corp. ................... 5.280%, 04/11/07 ........................... 10,000 9,939,867 Santander Finance, Inc. ....................... 5.200%, 07/23/07 ........................... 1,635 1,600,992 ------------ 23,949,887 ------------ INSURANCE--5.5% ING America Insurance Holdings 5.240%, 04/19/07 ........................... 12,000 11,914,413 ------------ SECURITY BROKERS & DEALERS--4.6% Bear Stearns Co. .............................. 5.230%, 06/07/07 ........................... 10,000 9,857,628 ------------ TOTAL COMMERCIAL PAPER (Cost $118,333,030) .................... 118,333,030 ------------ See Accompanying Notes to Financial Statements. 3 THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF NET ASSETS (CONCLUDED) FEBRUARY 28, 2007 (UNAUDITED) PAR (000) VALUE ------- ------------ MUNICIPAL BONDS--0.7% PENNSYLVANIA--0.7% Franklin County IDR (Manufacturers & Traders LOC) 5.370%, 03/02/07 ........................... $ 1,540 $ 1,540,000 ------------ TOTAL MUNICIPAL BONDS (Cost $1,540,000) ...................... 1,540,000 ------------ VARIABLE RATE OBLIGATIONS--16.7% ASSET BACKED SECURITIES--2.3% Cullinan Finance Corp.(c) 5.280%, 03/26/07 ........................... 3,000 2,999,805 5.280%, 03/26/07 ........................... 1,000 999,935 Racers Trust 2004-6-MM(c)(d) 5.340%, 03/22/07 ........................... 1,000 1,000,000 ------------ 4,999,740 ------------ BANKS--9.3% Commonwealth Bank of Australia(b)(c) 5.360%, 04/30/07 ........................... 10,000 10,003,590 HBOS Treasury Services PLC(b)(c) 5.436%, 03/26/07 ........................... 8,000 8,000,000 Westpac Banking Corp. New York(b)(c) 5.393%, 03/12/07 ........................... 2,000 2,000,000 ------------ 20,003,590 ------------ LIFE INSURANCE--2.3% MetLife Global Funding, Inc.(c)(d) 5.420%, 03/28/07 ........................... 5,000 5,000,000 ------------ SECURITY BROKERS & DEALERS--2.8% Merrill Lynch & Company, Inc.(c) 5.325%, 05/29/07 ........................... 6,000 6,000,000 ------------ TOTAL VARIABLE RATE OBLIGATIONS (Cost $36,003,330) ..................... 36,003,330 ------------ MASTER NOTES--3.9% Morgan Stanley Mortgage Capital, Inc.(c) 5.483%, 03/01/07 ........................... 8,520 8,520,000 ------------ TOTAL MASTER NOTES (Cost $8,520,000) ...................... 8,520,000 ------------ PAR (000) VALUE ------- ------------ REPURCHASE AGREEMENTS--1.0% Morgan Stanley & Co., Inc. (Tri-party Agreement dated 2/28/07 to be repurchased at $2,100,615, collateralized by $2,160,000 par value, U.S. Treasury Bill, due 3/22/07, Market Value of collateral is $2,153,261) 5.270%, 03/01/07 ........................... $ 2,100 $ 2,100,000 ------------ TOTAL REPURCHASE AGREEMENTS (Cost $2,100,000) ...................... 2,100,000 ------------ TOTAL INVESTMENTS AT VALUE--99.8% (Cost $214,901,399*) ....................... 214,901,399 ------------ OTHER ASSETS IN EXCESS OF LIABILITIES--0.2% .......................... 402,630 ------------ NET ASSETS (APPLICABLE TO 196,739,809 BEDFORD SHARES AND 18,568,813 SANSOM STREET SHARES )--100.0% ........................... $215,304,029 ============ NET ASSET VALUE, Offering and Redemption Price Per Bedford Share ($196,737,299 / 196,739,809) ............... $1.00 ===== NET ASSET VALUE, Offering and Redemption Price Per Sansom Street Share ($18,566,730 / 18,568,813) ............... $1.00 ===== * Aggregate cost is the same for financial reporting and federal tax purposes. (a) Issuer is a U.S. Branch of a foreign domiciled Bank. (b) U.S. dollar denominated security issued by foreign domiciled entity. (c) Variable Rate Obligations -- The interest rate shown is the rate as of February 28, 2007 and the maturity date shown is the next interest rate readjustment date or the maturity date. (d) Security is exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional investors. INVESTMENT ABBREVIATIONS IDR Industrial Development Revenue LOC Letter of Credit See Accompanying Notes to Financial Statements. 4 THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED FEBRUARY 28, 2007 (UNAUDITED) Investment Income Interest ................................................ $5,209,647 ---------- Expenses Distribution and service fees ........................... 563,376 Investment advisory and administration fees ............. 436,690 Registration and filing fees ............................ 36,200 Professional fees ....................................... 34,938 Printing and shareholder reporting fees ................. 26,363 Custodian fees .......................................... 22,892 Directors' and Officers' fees ........................... 19,553 Regulatory administration fees .......................... 17,825 Transfer agent fees ..................................... 17,313 Insurance fees .......................................... 12,925 Service organization fees ............................... 464 Other expenses .......................................... 4,334 ---------- Total expenses ..................................... 1,192,873 Less fees waived ........................................ (374,063) ---------- Net total expenses ................................. 818,810 ---------- Net investment income ...................................... 4,390,837 ---------- Realized gain on investments ............................... 185 ---------- Net increase in net assets resulting from operations ......................................... $4,391,022 ========== See Accompanying Notes to Financial Statements. 5 THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED FOR THE FEBRUARY 28, 2007 YEAR ENDED (UNAUDITED) AUGUST 31, 2006 ----------------- --------------- Increase (decrease) in net assets: Operations: Net investment income ......................................... $ 4,390,837 $ 9,453,852 Net gain (loss) on investments ................................ 185 (1,104) ------------ ------------ Net increase in net assets resulting from operations .......... 4,391,022 9,452,748 ------------ ------------ Dividends to shareholders from Net investment income: Bedford shares .............................................. (3,825,504) (5,087,205) Sansom Street shares ........................................ (565,333) (4,366,647) ------------ ------------ Total dividends to shareholders ............................. (4,390,837) (9,453,852) ------------ ------------ Net capital share transactions (See Note 3) ..................... 49,122,033 (30,616,253) ------------ ------------ Total increase/(decrease) in net assets ......................... 49,122,218 (30,617,357) Net Assets: Beginning of period ........................................... 166,181,811 196,799,168 ------------ ------------ End of period ................................................. $215,304,029 $166,181,811 ============ ============
See Accompanying Notes to Financial Statements. 6 THE RBB FUND, INC. MONEY MARKET PORTFOLIO FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
THE BEDFORD CLASS ------------------------------------------------------------------------------------------ FOR THE SIX MONTHS FOR THE FOR THE FOR THE FOR THE FOR THE ENDED YEAR YEAR YEAR YEAR YEAR FEBRUARY 28, ENDED ENDED ENDED ENDED ENDED 2007 AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, (UNAUDITED) 2006 2005 2004 2003 2002 ------------ ---------- ---------- ----------- ----------- ---------- Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 -------- -------- -------- -------- -------- -------- Income from investment operations: Net investment income 0.0221 0.0388 0.0162 0.0025 0.0046 0.0157 Net gains (losses) on securities --(b) --(b) --(b) --(b) 0.0005 -- -------- -------- -------- -------- -------- -------- Total net income from investment operations 0.0221 0.0388 0.0162 0.0025 0.0051 0.0157 -------- -------- -------- -------- -------- -------- Less dividends and distributions: Dividends (from net investment income) (0.0221) (0.0388) (0.0162) (0.0025) (0.0046) (0.0157) Distributions (from capital gains) -- -- -- -- (0.0005) -- -------- -------- -------- -------- -------- -------- Total dividends and distributions (0.0221) (0.0388) (0.0162) (0.0025) (0.0051) (0.0157) -------- -------- -------- -------- -------- -------- Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======== ======== ======== ======== ======== ======== Total Return 2.23% 3.95% 1.63% 0.25% 0.53% 1.59% Ratios/Supplemental Data Net assets, end of period (000's omitted) $196,737 $150,657 $109,495 $ 72,001 $ 80,406 $ 52,878 Ratios of expenses to average net assets(a) 0.90%(c) 0.85% 0.97% 0.94% 0.98% 1.00% Ratios of net investment income to average net assets 4.46%(c) 3.81% 1.68% 0.24% 0.46% 1.75% (a) Without the waiver of advisory fees and reimbursement of certain operating expenses, the ratios of expenses to average net assets for the Bedford Class of the Money Market Portfolio would have been 1.25% for the six months ended February 28, 2007 and 1.34%, 1.23%, 1.34%, 1.30% and 1.25% for the years ended August 31, 2006, 2005, 2004, 2003 and 2002, respectively. (b) Amount is less than $0.0005 per share. (c) Annualized.
See Accompanying Notes to Financial Statements. 7 THE RBB FUND, INC. MONEY MARKET PORTFOLIO FINANCIAL HIGHLIGHTS (CONTINUED) (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
THE SANSOM STREET CLASS ------------------------------------------------------------------------------------------ FOR THE SIX MONTHS FOR THE FOR THE FOR THE FOR THE FOR THE ENDED YEAR YEAR YEAR YEAR YEAR FEBRUARY 28, ENDED ENDED ENDED ENDED ENDED 2007 AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, (UNAUDITED) 2006 2005 2004 2003 2002 ------------ ---------- ---------- ----------- ----------- ---------- Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 -------- -------- -------- -------- -------- -------- Income from investment operations: Net investment income 0.0249 0.0434 0.0239 0.0100 0.0114 0.0209 Net gains (losses) on securities --(b) --(b) --(b) --(b) 0.0005 -- -------- -------- -------- -------- -------- -------- Total net income from investment operations 0.0249 0.0434 0.0239 0.0100 0.0119 0.0209 -------- -------- -------- -------- -------- -------- Less dividends and distributions: Dividends (from net investment income) (0.0249) (0.0434) (0.0239) (0.0100) (0.0114) (0.0209) Distributions (from capital gains) -- -- -- -- (0.0005) -- -------- -------- -------- -------- -------- -------- Total distributions (0.0249) (0,0434) (0.0239) (0.0100) (0.0119) (0.0209) -------- -------- -------- -------- -------- -------- Net asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======== ======== ======== ======== ======== ======== Total Return 2.51% 4.42% 2.41% 1.00% 1.21% 2.11% Ratios/Supplemental Data Net assets, end of year (000's omitted) $ 18,567 $ 15,525 $ 87,304 $141,372 $198,373 $244,212 Ratios of expenses to average net assets(a) 0.35%(c) 0.26% 0.20% 0.20% 0.30% 0.49% Ratios of net investment income to average net assets 5.02%(c) 4.25% 2.39% 0.98% 1.14% 2.10% (a) Without the waiver of advisory fees and reimbursement of certain operating expenses, the ratios of expenses to average net assets for the Sansom Street Class of the Money Market Portfolio would have been 0.69% for the six months ended February 28, 2007 and 0.67%, 0.67%, 0.59%, 0.57% and 0.64% for the years ended August 31, 2006, 2005, 2004, 2003 and 2002, respectively. (b) Amount is less than $0.0005 per share. (c) Annualized.
See Accompanying Notes to Financial Statements. 8 THE RBB FUND, INC. MONEY MARKET PORTFOLIO NOTES TO FINANCIAL STATEMENTS FEBRUARY 28, 2007 (UNAUDITED) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The RBB Fund, Inc. ("RBB" or "Company") was incorporated under the laws of the State of Maryland on February 29, 1988, and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company. RBB is a "series fund," which is a mutual fund divided into separate portfolios. Each portfolio is treated as a separate entity for certain matters under the 1940 Act, and for other purposes, and a shareholder of one portfolio is not deemed to be a shareholder of any other portfolio. Currently, RBB has eighteen active investment portfolios, including the Money Market Portfolio ("Portfolio"), which comprise the RBB family of funds. RBB has authorized capital of one hundred billion shares of common stock of which 76.673 billion shares are currently classified into one hundred and six classes of common stock. The Portfolio has issued shares with a par value of $0.001. Each class represents an interest in an active or inactive RBB investment portfolio. The active classes have been grouped into eight separate "families." SECURITY VALUATION -- Securities held in the Portfolio are valued under the amortized cost method, which approximates current market value. Under this method, securities are valued at cost when purchased and thereafter a constant accretion of discount or amortization of premium is recorded until maturity of the security. Regular review and monitoring of the valuation is performed to ensure that cost continues to approximate market value and to avoid dilution or other unfair results to shareholders. The Portfolio seeks to maintain net asset value per share at $1.00. SECURITY TRANSACTIONS, INVESTMENT INCOME, AND EXPENSES -- Security transactions are accounted for on the trade date. The cost of investments sold is determined by use of the specific identification method for both financial reporting and income tax purposes. Interest income is accrued when earned. Certain expenses, such as distribution, transfer agency and printing, are class specific expenses and vary by class. Expenses not directly attributable to a specific portfolio or class are allocated based on relative net assets of each portfolio and class. Expenses incurred on behalf of a specific class, fund or fund family are charged directly to the class, fund or fund family (in proportion to net assets). Expenses incurred for all portfolios within the Company (such as director or professional fees) are charged to all portfolios in proportion to their average net assets. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net investment income are declared daily, recorded on the ex-date and paid monthly. All dividends from net investment income are taxed as ordinary income. Any net realized capital gains are distributed at least annually. Income subject to dividends and capital gain subject to distributions are determined in accordance with income tax regulations, which may differ from accounting principles generally accepted in the United States of America. FEDERAL INCOME TAXES -- No provision is made for federal income taxes. It is the Company's intention to have each portfolio continue to qualify for and elect the tax treatment applicable to regulated investment companies under the Internal Revenue Code and make the requisite distributions to its shareholders which will be sufficient to relieve it from federal income and excise taxes. 9 THE RBB FUND, INC. MONEY MARKET PORTFOLIO NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2007 (UNAUDITED) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) REPURCHASE AGREEMENTS -- Money market instruments may be purchased subject to the seller's agreement to repurchase them at an agreed upon date and price. The seller will be required on a daily basis to maintain the value of the securities as collateral, subject to the agreement at not less than the repurchase price plus accrued interest. If the value of the collateral falls below 102% of the value of the repurchase price plus accrued interest, the Portfolio will require the seller to deposit additional collateral by the next Portfolio business day. In the event that the seller under the agreement defaults on its repurchase obligation or fails to deposit sufficient collateral, the Portfolio has the contractual right, subject to the requirements of applicable bankruptcy and insolvency laws, to sell the underlying securities and may claim any resulting loss from the seller. The agreements are conditioned upon the collateral being deposited under the Federal Reserve Book Entry System or with the Portfolio's custodian or a third party sub-custodian. USE OF ESTIMATES -- The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. OTHER -- In the normal course of business, the Portfolio may enter into contracts that provide general indemnifications. The Portfolio's maximum exposure under these arrangements is dependent on claims that may be made against the Portfolio in the future, and, therefore, cannot be estimated; however, based on experience, the risk of material loss for such claims is considered remote. 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES Pursuant to an Investment Advisory and Administration Agreement, BlackRock Institutional Management Corp. (the "Adviser" or "BIMC"), an indirect majority-owned subsidiary of The PNC Financial Services Group, Inc., serves as investment adviser and as administrator for the Portfolio. BIMC and PFPC Inc. ("PFPC"), a wholly-owned subsidiary of PFPC Worldwide Inc. and an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc., entered into a delegation agreement on behalf of the Portfolio, wherein PFPC has agreed to perform administration and accounting services for an annual fee of 0.10% of the average net assets of the Portfolio, paid out of the fee paid to BIMC. For its advisory services, BIMC is entitled to receive the following fees, computed daily and payable monthly, and based on the Portfolio's average daily net assets: ANNUAL RATE -------------------------------------------------- 0.45% of first $250 million of net assets; 0.40% of next $250 million of net assets; and 0.35% of net assets in excess of $500 million. 10 THE RBB FUND, INC. MONEY MARKET PORTFOLIO NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2007 (UNAUDITED) 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONTINUED) BIMC may, at its discretion, voluntarily waive all or any portion of its advisory fee for the Portfolio. For each class of shares within the Portfolio, the net advisory fee charged to each class is the same on a relative basis. For the six months ended February 28, 2007, advisory fees and waivers for the investment portfolio were as follows: GROSS NET ADVISORY ADVISORY FEE WAIVER FEE -------- ---------- -------- $436,690 $(331,158) $105,532 As of February 28, 2007, the Portfolio owed BIMC $14,960 in advisory fees. BIMC may voluntarily waive and/or reimburse a portion of its fees. PFPC may also voluntarily waive a portion of its fees and/or reimburse expenses. The Portfolio will not pay BIMC at a later time for any amounts it may waive or any amounts that BIMC has assumed. For providing regulatory administration services to RBB, PFPC is entitled to receive compensation as agreed to by the Company and PFPC. This fee is allocated to each portfolio in proportion to their net assets. The Portfolio's portion of this fee for the six months ended February 28, 2007 was $17,825. PFPC serves as the transfer and dividend disbursing agent for each class. Both PFPC Trust Company and PFPC are wholly-owned subsidiaries of PFPC Worldwide Inc., an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc. For providing transfer agent services, PFPC is entitled to receive fees from the Portfolio. PFPC may, at its discretion, voluntarily waive all or any portion of its transfer agency fee for any class of shares. For the six months ended February 28, 2007, transfer agency fees for the Portfolio were $17,313. PFPC Trust Company provides certain custodial services to the Portfolio. As compensation for such custodial services, PFPC Trust Company is entitled to receive the following fees, computed daily and payable monthly, and based on the Portfolio's average gross assets: ANNUAL RATE -------------------------------------------------- 0.025% of first $50 million of gross assets; 0.020% of next $50 million of gross assets; 0.015% of gross assets in excess of $100 million. The Portfolio, on behalf of each class of shares of the Portfolio, has adopted Distribution Plans pursuant to Rule 12b-1 under the 1940 Act (the "Plans"). The Portfolio has entered into a Distribution Contract with PFPC Distributors, Inc. ("PFPC Distributors"). PFPC Distributors is a wholly-owned subsidiary of PFPC Worldwide Inc. and an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc. 11 THE RBB FUND, INC. MONEY MARKET PORTFOLIO NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2007 (UNAUDITED) 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONTINUED) The Plans provide for each class to make monthly payments, based on average net assets, to PFPC Distributors of up to 0.65% on an annualized basis for the Bedford Class and up to 0.05% on an annualized basis for the Sansom Street Class. For the six months ended February 28, 2007, distribution fees paid to PFPC Distributors for each class were as follows:
GROSS NET DISTRIBUTION DISTRIBUTION FEE WAIVER FEE ------------- --------- ------------ Bedford Class $557,741 $(42,905) $514,836 Sansom Street Class 5,635 -- 5,635 -------- -------- -------- Total Money Market Portfolio $563,376 $(42,905) $520,471 ======== ======== =========
The Portfolio has entered into service agreements with banks affiliated with PNC who render support services to customers who are the beneficial owners of the Sansom Street Class in consideration of the payment of 0.10% of the daily net asset value of such shares. For the six months ended February 28, 2007, service organization fees were $464 for the Portfolio. As of February 28, 2007, the Portfolio owed PFPC and its affiliates $101,493 for their services. 3. CAPITAL SHARES Transactions in capital shares (at $1 per capital share) for each year were as follows:
BEDFORD CLASS ---------------------------------------- FOR THE FOR THE SIX MONTHS ENDED YEAR ENDED FEBRUARY 28, 2007 AUGUST 31, 2006 ---------------- --------------- (UNAUDITED) VALUE VALUE -------------- -------------- Shares sold $ 249,710,363 $ 506,580,146 Shares issued on reinvestment of dividends 3,656,114 5,326,071 Shares repurchased (207,290,237) (470,739,390) -------------- -------------- Net Increase/(Decrease) $ 46,076,240 $ 41,166,827 -------------- ------------- Bedford Shares authorized 1,500,000,000 1,500,000,000 ============== ============== SANSOM STREET CLASS ---------------------------------------- FOR THE FOR THE SIX MONTHS ENDED YEAR ENDED FEBRUARY 28, 2007 AUGUST 31, 2006 ---------------- --------------- (UNAUDITED) VALUE VALUE -------------- -------------- Shares sold $ 119,544,126 $ 1,554,920,729 Shares issued on reinvestment of dividends 72,575 146,903 Shares repurchased (116,570,908) (1,626,850,712) -------------- --------------- Net Increase/(Decrease) $ 3,045,793 $ (71,783,080) -------------- --------------- Sansom Street Shares authorized 1,500,000,000 1,500,000,000 ============== ===============
12 THE RBB FUND, INC. MONEY MARKET PORTFOLIO NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2007 (UNAUDITED) 4. NET ASSETS At February 28, 2007, net assets consisted of the following: MONEY MARKET PORTFOLIO ------------ Paid-in capital $215,308,622 Accumulated net realized loss on investments (4,593) ------------ Total net assets $215,304,029 ============ 5. FEDERAL INCOME TAX INFORMATION The Portfolio intends to continue to qualify as a regulated investment company and distribute all of its taxable income. Therefore, no federal tax provision is required. For federal income tax purposes, realized capital losses may be carried forward and applied against future realized gains. At August 31, 2006, the Portfolio had capital loss carryforwards of $4,504 of which $3,587 will expire on August 31, 2013 and $917 will expire on August 31, 2014. 6. NEW ACCOUNTING PRONOUNCEMENTS In July 2006, the Financial Accounting Standards Board ("FASB") issued Interpretation No. 48, "Accounting for Uncertainty in Income Taxes -- an Interpretation of FASB Statement No. 109" (the "Interpretation"). The Interpretation establishes for all entities, a minimum threshold for financial statement recognition of the benefit of positions taken in filing tax returns (including whether an entity is taxable in a particular jurisdiction), and requires certain expanded tax disclosures. The Interpretation is effective for fiscal years beginning after December 15, 2006, and is required to be implemented by calendar year funds by no later than June 29, 2007. The Adviser has recently begun to evaluate the application of the Interpretation to the Fund, and is not in a position at this time to estimate the significance of its impact, if any, on the Portfolio's financial statements. In September 2006, FASB issued Statement of Financial Accounting Standards ("SFAS") 157, Fair Value Measurements, which clarifies the definition of fair value and requires companies to expand their disclosure about the use of fair value to measure assets and liabilities in interim and annual periods subsequent to initial recognition. Adoption of SFAS 157 requires the use of the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. At this time, the Portfolio is in the process of reviewing the impact, if any, of the SFAS on the Portfolio's financial statements. 13 ADDITIONAL INFORMATION (UNAUDITED) PROXY VOTING Policies and procedures that the Portfolio uses to determine how to vote proxies relating to portfolio securities as well as information regarding how the Portfolio voted proxies relating to portfolio securities for the most recent 12-month period ended June 30 are available without charge, upon request, by calling the number shown below and on the Securities and Exchange Commission's ("SEC") website at http://www.sec.gov. Bedford (800) 888-9723 QUARTERLY PORTFOLIO SCHEDULES The Company files its complete schedule of portfolio holdings with the SEC for the first and third fiscal quarter of each fiscal year (quarters ended November 30 and May 31) on Form N-Q. The Company's Form N-Q is available on the SEC website at http://www.sec.gov and may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. Information on the operation of the SEC Public Reference Room may be obtained by calling 1-800-SEC-0330. SPECIAL MEETING OF SHAREHOLDERS The RBB Fund, Inc., on behalf of the Portfolio, convened a Special Meeting of Shareholders of the Portfolio's Bedford Class and Sansom Street Class on October 20, 2006 (as reconvened on November 28, 2006 and December 15, 2006) (the "Meeting"). At the Meeting, the Portfolio's shareholders voted on the approval of a new Investment Advisory and Administration Agreement with BIMC (the "Agreement"). The results of the voting were as follows: 70,121,805.420 shares of the Portfolio were voted IN FAVOR of the proposal to approve the Agreement 3,080,660.660 shares of the Portfolio were voted AGAINST the proposal to approve the Agreement 9,487,268.350 shares of the Portfolio abstained. Accordingly, the Agreement was approved by the Portfolio's shareholders. 14 [THIS PAGE INTENTIONALLY LEFT BLANK.] INVESTMENT ADVISER BlackRock Institutional Management Corporation 100 Bellevue Parkway Wilmington, DE 19809 TRANSFER AGENT PFPC Inc. 101 Sabin Street Pawtucket, RI 02866 DISTRIBUTOR PFPC Distributors, Inc. 760 Moore Road King of Prussia, PA 19406 CUSTODIAN PFPC Trust Company 8800 Tinicum Boulevard Suite 200 Philadelphia, PA 19153 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Deloitte & Touche LLP 1700 Market Street Philadelphia, PA 19103-3984 COUNSEL Drinker Biddle & Reath LLP One Logan Square 18th and Cherry Streets Philadelphia, PA 19103-6996 CUSTOMER CARE For questions regarding your ShareBuilder account please call 1-800-SHRBLDR (1-800-747-2537) or visit ShareBuilder online at ShareBuilder.com. Please be aware that ShareBuilder Customer Care Agents are NOT able to place a trade for you over the phone, open your account over the phone, or provide any type of financial advice or recommendations. WRITTEN CORRESPONDENCE Post Office Address: ShareBuilder - Bedford Shares of The RBB Money Market Portfolio c/o Sharebuilder Securities Corporation PO Box 1728 Bellevue, WA 98009 Street Address: ShareBuilder - Bedford Shares of The RBB Money Market Portfolio c/o Sharebuilder Securities Corporation 1445 - 120th Avenue Northeast Bellevue, WA 98005 ------------------------------------------------------------------------------------------
INVESTMENT COMPANY ACT FILE NO. 811-05518 ================================================================================ THE SANSOM STREET CLASS OF THE RBB FUND, INC. MONEY MARKET PORTFOLIO Semi-Annual Report February 28, 2007 (Unaudited) This report is submitted for the general information of the shareholders of the Portfolio. It is not authorized for distribution unless preceded or accompanied by a prospectus for the Fund. ================================================================================ THE RBB FUND, INC. MONEY MARKET PORTFOLIO FUND EXPENSE EXAMPLES (UNAUDITED) As a shareholder of the Portfolio, you incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees, distribution fees, and other Portfolio expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Portfolio and to compare these costs with the ongoing costs of investing in other mutual funds. These examples are based on an investment of $1,000 invested at the beginning of the six-month period from September 1, 2006 through February 28, 2007, and held for the entire period. ACTUAL EXPENSES The first line of the accompanying tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second line of the accompanying tables provides information about hypothetical account values and hypothetical expenses based on the Portfolio's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare these 5% hypothetical examples with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that the expenses shown in the accompanying tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees that may be incurred by shareholders of other funds. Therefore, the second line of the accompanying tables is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
MONEY MARKET PORTFOLIO - BEDFORD CLASS ------------------------------------------------------------------- BEGINNING ENDING EXPENSES PAID ACCOUNT VALUE ACCOUNT VALUE DURING SEPTEMBER 1, 2006 FEBRUARY 28, 2007 PERIOD* ----------------- ----------------- ------------- Actual $1,000.00 $1,022.30 $4.51 Hypothetical (5% return before expenses) 1,000.00 1,020.28 4.52 MONEY MARKET PORTFOLIO - SANSOM STREET CLASS ------------------------------------------------------------------- BEGINNING ENDING EXPENSES PAID ACCOUNT VALUE ACCOUNT VALUE DURING SEPTEMBER 1, 2006 FEBRUARY 28, 2007 PERIOD* ----------------- ----------------- ------------- Actual $1,000.00 $1,025.10 $1.76 Hypothetical (5% return before expenses) 1,000.00 1,023.04 1.76 * Expenses are equal to the Portfolio's annualized expense ratio of 0.90% for the Bedford Class shares and 0.35% for the Sansom Street Class shares, which includes waived fees or reimbursed expenses, multiplied by the average account value over the period, multiplied by the number of days (181) in the most recent fiscal half-year, then divided by 365 to reflect the one-half year period. The Portfolio's ending account value on the first line in each table is based on the actual total return for each class of 2.23% for the Bedford Class shares and 2.51% for the Sansom Street Class shares.
1 THE RBB FUND, INC. MONEY MARKET PORTFOLIO PORTFOLIO HOLDINGS SUMMARY TABLE FEBRUARY 28, 2007 (UNAUDITED) SECURITY % OF NET TYPE ASSETS VALUE -------- -------- ------------ Short Term Investments: Commercial Paper ............................ 55.0% $118,333,030 Certificates of Deposit ..................... 22.5 48,405,039 Variable Rate Obligations ................... 16.7 36,003,330 Master Notes ................................ 3.9 8,520,000 Repurchase Agreements ....................... 1.0 2,100,000 Municipal Bonds ............................. 0.7 1,540,000 Other Assets In Excess of Liabilities ....... 0.2 402,630 ----- ------------ NET ASSETS ..................................... 100.0% $215,304,029 ===== ============ Portfolio holdings are subject to change at any time. 2 THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF NET ASSETS FEBRUARY 28, 2007 (UNAUDITED) PAR (000) VALUE ------- ------------ CERTIFICATES OF DEPOSIT--22.5% DOMESTIC CERTIFICATES OF DEPOSIT--4.2% Bank of America, N.A. 5.310%, 03/20/07 ........................... $ 5,000 $ 5,000,000 Washington Mutual Bank 5.320%, 04/16/07 ........................... 3,925 3,925,000 ------------ 8,925,000 ------------ EURODOLLAR CERTIFICATES OF DEPOSIT--4.6% Credit Industriel Et Commercial Bank(a) 5.325%, 04/05/07 ........................... 8,200 8,200,039 5.375%, 04/30/07 ........................... 1,780 1,780,000 ------------ 9,980,039 ------------ YANKEE DOLLAR CERTIFICATES OF DEPOSIT--13.7% Barclays Bank P.L.C. (New York Branch)(a) 5.320%, 04/02/07 ........................... 7,500 7,500,000 Mizuho Corporate Bank (New York Branch)(a) 5.320%, 05/21/07 ........................... 10,000 10,000,000 Norinchukin Bank (New York Branch)(a) 5.330%, 04/26/07 ........................... 12,000 12,000,000 ------------ 29,500,000 ------------ TOTAL CERTIFICATES OF DEPOSIT (Cost $48,405,039) ..................... 48,405,039 ------------ COMMERCIAL PAPER--55.0% ASSET BACKED SECURITIES--13.8% Atlantic Asset Securitization Corp. ........... 5.250%, 04/16/07 ........................... 1,800 1,787,925 Crown Point Capital Co. ....................... 5.280%, 03/20/07 ........................... 8,000 7,977,707 North Sea Funding LLC 5.270%, 03/09/07 ........................... 8,225 8,215,367 5.270%, 03/23/07 ........................... 2,622 2,613,556 Park Granada LLC 5.370%, 03/01/07 ........................... 9,000 9,000,000 ------------ 29,594,555 ------------ PAR (000) VALUE ------- ------------ COMMERCIAL PAPER--(CONTINUED) BANKS--15.4% Allied Irish Bank 5.205%, 08/06/07 ........................... $ 1,050 $ 1,026,014 ANZ National Bank Ltd.(b) 5.240%, 04/24/07 ........................... 13,000 12,897,820 Banco Bilbao Vizcaya Argentaria Puerto Rico(b) 5.270%, 05/23/07 ........................... 10,800 10,668,777 Bank of America Corp. ......................... 5.250%, 04/17/07 ........................... 1,000 993,146 5.250%, 04/20/07 ........................... 5,500 5,459,896 Societe Generale North America, Inc. .......... 5.195%, 07/23/07 ........................... 1,230 1,204,440 St. George Bank Ltd.(b) 5.210%, 08/07/07 ........................... 400 390,796 Unicredito Italiano Bank(b) 5.210%, 08/06/07 ........................... 435 425,053 ------------ 33,065,942 ------------ CHEMICALS & ALLIED PRODUCTS--4.6% BASF AG 5.230%, 04/04/07 ........................... 10,000 9,950,605 ------------ FINANCE SERVICES--11.1% CIT Group, Inc. ............................... 5.240%, 04/20/07 ........................... 12,500 12,409,028 Countrywide Financial Corp. ................... 5.280%, 04/11/07 ........................... 10,000 9,939,867 Santander Finance, Inc. ....................... 5.200%, 07/23/07 ........................... 1,635 1,600,992 ------------ 23,949,887 ------------ INSURANCE--5.5% ING America Insurance Holdings 5.240%, 04/19/07 ........................... 12,000 11,914,413 ------------ SECURITY BROKERS & DEALERS--4.6% Bear Stearns Co. .............................. 5.230%, 06/07/07 ........................... 10,000 9,857,628 ------------ TOTAL COMMERCIAL PAPER (Cost $118,333,030) .................... 118,333,030 ------------ See Accompanying Notes to Financial Statements. 3 THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF NET ASSETS (CONCLUDED) FEBRUARY 28, 2007 (UNAUDITED) PAR (000) VALUE ------- ------------ MUNICIPAL BONDS--0.7% PENNSYLVANIA--0.7% Franklin County IDR (Manufacturers & Traders LOC) 5.370%, 03/02/07 ........................... $ 1,540 $ 1,540,000 ------------ TOTAL MUNICIPAL BONDS (Cost $1,540,000) ...................... 1,540,000 ------------ VARIABLE RATE OBLIGATIONS--16.7% ASSET BACKED SECURITIES--2.3% Cullinan Finance Corp.(c) 5.280%, 03/26/07 ........................... 3,000 2,999,805 5.280%, 03/26/07 ........................... 1,000 999,935 Racers Trust 2004-6-MM(c)(d) 5.340%, 03/22/07 ........................... 1,000 1,000,000 ------------ 4,999,740 ------------ BANKS--9.3% Commonwealth Bank of Australia(b)(c) 5.360%, 04/30/07 ........................... 10,000 10,003,590 HBOS Treasury Services PLC(b)(c) 5.436%, 03/26/07 ........................... 8,000 8,000,000 Westpac Banking Corp. New York(b)(c) 5.393%, 03/12/07 ........................... 2,000 2,000,000 ------------ 20,003,590 ------------ LIFE INSURANCE--2.3% MetLife Global Funding, Inc.(c)(d) 5.420%, 03/28/07 ........................... 5,000 5,000,000 ------------ SECURITY BROKERS & DEALERS--2.8% Merrill Lynch & Company, Inc.(c) 5.325%, 05/29/07 ........................... 6,000 6,000,000 ------------ TOTAL VARIABLE RATE OBLIGATIONS (Cost $36,003,330) ..................... 36,003,330 ------------ MASTER NOTES--3.9% Morgan Stanley Mortgage Capital, Inc.(c) 5.483%, 03/01/07 ........................... 8,520 8,520,000 ------------ TOTAL MASTER NOTES (Cost $8,520,000) ...................... 8,520,000 ------------ PAR (000) VALUE ------- ------------ REPURCHASE AGREEMENTS--1.0% Morgan Stanley & Co., Inc. (Tri-party Agreement dated 2/28/07 to be repurchased at $2,100,615, collateralized by $2,160,000 par value, U.S. Treasury Bill, due 3/22/07, Market Value of collateral is $2,153,261) 5.270%, 03/01/07 ........................... $ 2,100 $ 2,100,000 ------------ TOTAL REPURCHASE AGREEMENTS (Cost $2,100,000) ...................... 2,100,000 ------------ TOTAL INVESTMENTS AT VALUE--99.8% (Cost $214,901,399*) ....................... 214,901,399 ------------ OTHER ASSETS IN EXCESS OF LIABILITIES--0.2% .......................... 402,630 ------------ NET ASSETS (APPLICABLE TO 196,739,809 BEDFORD SHARES AND 18,568,813 SANSOM STREET SHARES )--100.0% ........................... $215,304,029 ============ NET ASSET VALUE, Offering and Redemption Price Per Bedford Share ($196,737,299 / 196,739,809) ............... $1.00 ===== NET ASSET VALUE, Offering and Redemption Price Per Sansom Street Share ($18,566,730 / 18,568,813) ............... $1.00 ===== * Aggregate cost is the same for financial reporting and federal tax purposes. (a) Issuer is a U.S. Branch of a foreign domiciled Bank. (b) U.S. dollar denominated security issued by foreign domiciled entity. (c) Variable Rate Obligations -- The interest rate shown is the rate as of February 28, 2007 and the maturity date shown is the next interest rate readjustment date or the maturity date. (d) Security is exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional investors. INVESTMENT ABBREVIATIONS IDR Industrial Development Revenue LOC Letter of Credit See Accompanying Notes to Financial Statements. 4 THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED FEBRUARY 28, 2007 (UNAUDITED) Investment Income Interest ................................................ $5,209,647 ---------- Expenses Distribution and service fees ........................... 563,376 Investment advisory and administration fees ............. 436,690 Registration and filing fees ............................ 36,200 Professional fees ....................................... 34,938 Printing and shareholder reporting fees ................. 26,363 Custodian fees .......................................... 22,892 Directors' and Officers' fees ........................... 19,553 Regulatory administration fees .......................... 17,825 Transfer agent fees ..................................... 17,313 Insurance fees .......................................... 12,925 Service organization fees ............................... 464 Other expenses .......................................... 4,334 ---------- Total expenses ..................................... 1,192,873 Less fees waived ........................................ (374,063) ---------- Net total expenses ................................. 818,810 ---------- Net investment income ...................................... 4,390,837 ---------- Realized gain on investments ............................... 185 ---------- Net increase in net assets resulting from operations ......................................... $4,391,022 ========== See Accompanying Notes to Financial Statements. 5 THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED FOR THE FEBRUARY 28, 2007 YEAR ENDED (UNAUDITED) AUGUST 31, 2006 ----------------- --------------- Increase (decrease) in net assets: Operations: Net investment income ......................................... $ 4,390,837 $ 9,453,852 Net gain (loss) on investments ................................ 185 (1,104) ------------ ------------ Net increase in net assets resulting from operations .......... 4,391,022 9,452,748 ------------ ------------ Dividends to shareholders from Net investment income: Bedford shares .............................................. (3,825,504) (5,087,205) Sansom Street shares ........................................ (565,333) (4,366,647) ------------ ------------ Total dividends to shareholders ............................. (4,390,837) (9,453,852) ------------ ------------ Net capital share transactions (See Note 3) ..................... 49,122,033 (30,616,253) ------------ ------------ Total increase/(decrease) in net assets ......................... 49,122,218 (30,617,357) Net Assets: Beginning of period ........................................... 166,181,811 196,799,168 ------------ ------------ End of period ................................................. $215,304,029 $166,181,811 ============ ============
See Accompanying Notes to Financial Statements. 6 THE RBB FUND, INC. MONEY MARKET PORTFOLIO FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
THE BEDFORD CLASS ------------------------------------------------------------------------------------------ FOR THE SIX MONTHS FOR THE FOR THE FOR THE FOR THE FOR THE ENDED YEAR YEAR YEAR YEAR YEAR FEBRUARY 28, ENDED ENDED ENDED ENDED ENDED 2007 AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, (UNAUDITED) 2006 2005 2004 2003 2002 ------------ ---------- ---------- ----------- ----------- ---------- Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 -------- -------- -------- -------- -------- -------- Income from investment operations: Net investment income 0.0221 0.0388 0.0162 0.0025 0.0046 0.0157 Net gains (losses) on securities --(b) --(b) --(b) --(b) 0.0005 -- -------- -------- -------- -------- -------- -------- Total net income from investment operations 0.0221 0.0388 0.0162 0.0025 0.0051 0.0157 -------- -------- -------- -------- -------- -------- Less dividends and distributions: Dividends (from net investment income) (0.0221) (0.0388) (0.0162) (0.0025) (0.0046) (0.0157) Distributions (from capital gains) -- -- -- -- (0.0005) -- -------- -------- -------- -------- -------- -------- Total dividends and distributions (0.0221) (0.0388) (0.0162) (0.0025) (0.0051) (0.0157) -------- -------- -------- -------- -------- -------- Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======== ======== ======== ======== ======== ======== Total Return 2.23% 3.95% 1.63% 0.25% 0.53% 1.59% Ratios/Supplemental Data Net assets, end of period (000's omitted) $196,737 $150,657 $109,495 $ 72,001 $ 80,406 $ 52,878 Ratios of expenses to average net assets(a) 0.90%(c) 0.85% 0.97% 0.94% 0.98% 1.00% Ratios of net investment income to average net assets 4.46%(c) 3.81% 1.68% 0.24% 0.46% 1.75% (a) Without the waiver of advisory fees and reimbursement of certain operating expenses, the ratios of expenses to average net assets for the Bedford Class of the Money Market Portfolio would have been 1.25% for the six months ended February 28, 2007 and 1.34%, 1.23%, 1.34%, 1.30% and 1.25% for the years ended August 31, 2006, 2005, 2004, 2003 and 2002, respectively. (b) Amount is less than $0.0005 per share. (c) Annualized.
See Accompanying Notes to Financial Statements. 7 THE RBB FUND, INC. MONEY MARKET PORTFOLIO FINANCIAL HIGHLIGHTS (CONTINUED) (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
THE SANSOM STREET CLASS ------------------------------------------------------------------------------------------ FOR THE SIX MONTHS FOR THE FOR THE FOR THE FOR THE FOR THE ENDED YEAR YEAR YEAR YEAR YEAR FEBRUARY 28, ENDED ENDED ENDED ENDED ENDED 2007 AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, (UNAUDITED) 2006 2005 2004 2003 2002 ------------ ---------- ---------- ----------- ----------- ---------- Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 -------- -------- -------- -------- -------- -------- Income from investment operations: Net investment income 0.0249 0.0434 0.0239 0.0100 0.0114 0.0209 Net gains (losses) on securities --(b) --(b) --(b) --(b) 0.0005 -- -------- -------- -------- -------- -------- -------- Total net income from investment operations 0.0249 0.0434 0.0239 0.0100 0.0119 0.0209 -------- -------- -------- -------- -------- -------- Less dividends and distributions: Dividends (from net investment income) (0.0249) (0.0434) (0.0239) (0.0100) (0.0114) (0.0209) Distributions (from capital gains) -- -- -- -- (0.0005) -- -------- -------- -------- -------- -------- -------- Total distributions (0.0249) (0,0434) (0.0239) (0.0100) (0.0119) (0.0209) -------- -------- -------- -------- -------- -------- Net asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======== ======== ======== ======== ======== ======== Total Return 2.51% 4.42% 2.41% 1.00% 1.21% 2.11% Ratios/Supplemental Data Net assets, end of year (000's omitted) $ 18,567 $ 15,525 $ 87,304 $141,372 $198,373 $244,212 Ratios of expenses to average net assets(a) 0.35%(c) 0.26% 0.20% 0.20% 0.30% 0.49% Ratios of net investment income to average net assets 5.02%(c) 4.25% 2.39% 0.98% 1.14% 2.10% (a) Without the waiver of advisory fees and reimbursement of certain operating expenses, the ratios of expenses to average net assets for the Sansom Street Class of the Money Market Portfolio would have been 0.69% for the six months ended February 28, 2007 and 0.67%, 0.67%, 0.59%, 0.57% and 0.64% for the years ended August 31, 2006, 2005, 2004, 2003 and 2002, respectively. (b) Amount is less than $0.0005 per share. (c) Annualized.
See Accompanying Notes to Financial Statements. 8 THE RBB FUND, INC. MONEY MARKET PORTFOLIO NOTES TO FINANCIAL STATEMENTS FEBRUARY 28, 2007 (UNAUDITED) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The RBB Fund, Inc. ("RBB" or "Company") was incorporated under the laws of the State of Maryland on February 29, 1988, and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company. RBB is a "series fund," which is a mutual fund divided into separate portfolios. Each portfolio is treated as a separate entity for certain matters under the 1940 Act, and for other purposes, and a shareholder of one portfolio is not deemed to be a shareholder of any other portfolio. Currently, RBB has eighteen active investment portfolios, including the Money Market Portfolio ("Portfolio"), which comprise the RBB family of funds. RBB has authorized capital of one hundred billion shares of common stock of which 76.673 billion shares are currently classified into one hundred and six classes of common stock. The Portfolio has issued shares with a par value of $0.001. Each class represents an interest in an active or inactive RBB investment portfolio. The active classes have been grouped into eight separate "families." SECURITY VALUATION -- Securities held in the Portfolio are valued under the amortized cost method, which approximates current market value. Under this method, securities are valued at cost when purchased and thereafter a constant accretion of discount or amortization of premium is recorded until maturity of the security. Regular review and monitoring of the valuation is performed to ensure that cost continues to approximate market value and to avoid dilution or other unfair results to shareholders. The Portfolio seeks to maintain net asset value per share at $1.00. SECURITY TRANSACTIONS, INVESTMENT INCOME, AND EXPENSES -- Security transactions are accounted for on the trade date. The cost of investments sold is determined by use of the specific identification method for both financial reporting and income tax purposes. Interest income is accrued when earned. Certain expenses, such as distribution, transfer agency and printing, are class specific expenses and vary by class. Expenses not directly attributable to a specific portfolio or class are allocated based on relative net assets of each portfolio and class. Expenses incurred on behalf of a specific class, fund or fund family are charged directly to the class, fund or fund family (in proportion to net assets). Expenses incurred for all portfolios within the Company (such as director or professional fees) are charged to all portfolios in proportion to their average net assets. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net investment income are declared daily, recorded on the ex-date and paid monthly. All dividends from net investment income are taxed as ordinary income. Any net realized capital gains are distributed at least annually. Income subject to dividends and capital gain subject to distributions are determined in accordance with income tax regulations, which may differ from accounting principles generally accepted in the United States of America. FEDERAL INCOME TAXES -- No provision is made for federal income taxes. It is the Company's intention to have each portfolio continue to qualify for and elect the tax treatment applicable to regulated investment companies under the Internal Revenue Code and make the requisite distributions to its shareholders which will be sufficient to relieve it from federal income and excise taxes. 9 THE RBB FUND, INC. MONEY MARKET PORTFOLIO NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2007 (UNAUDITED) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) REPURCHASE AGREEMENTS -- Money market instruments may be purchased subject to the seller's agreement to repurchase them at an agreed upon date and price. The seller will be required on a daily basis to maintain the value of the securities as collateral, subject to the agreement at not less than the repurchase price plus accrued interest. If the value of the collateral falls below 102% of the value of the repurchase price plus accrued interest, the Portfolio will require the seller to deposit additional collateral by the next Portfolio business day. In the event that the seller under the agreement defaults on its repurchase obligation or fails to deposit sufficient collateral, the Portfolio has the contractual right, subject to the requirements of applicable bankruptcy and insolvency laws, to sell the underlying securities and may claim any resulting loss from the seller. The agreements are conditioned upon the collateral being deposited under the Federal Reserve Book Entry System or with the Portfolio's custodian or a third party sub-custodian. USE OF ESTIMATES -- The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. OTHER -- In the normal course of business, the Portfolio may enter into contracts that provide general indemnifications. The Portfolio's maximum exposure under these arrangements is dependent on claims that may be made against the Portfolio in the future, and, therefore, cannot be estimated; however, based on experience, the risk of material loss for such claims is considered remote. 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES Pursuant to an Investment Advisory and Administration Agreement, BlackRock Institutional Management Corp. (the "Adviser" or "BIMC"), an indirect majority-owned subsidiary of The PNC Financial Services Group, Inc., serves as investment adviser and as administrator for the Portfolio. BIMC and PFPC Inc. ("PFPC"), a wholly-owned subsidiary of PFPC Worldwide Inc. and an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc., entered into a delegation agreement on behalf of the Portfolio, wherein PFPC has agreed to perform administration and accounting services for an annual fee of 0.10% of the average net assets of the Portfolio, paid out of the fee paid to BIMC. For its advisory services, BIMC is entitled to receive the following fees, computed daily and payable monthly, and based on the Portfolio's average daily net assets: ANNUAL RATE -------------------------------------------------- 0.45% of first $250 million of net assets; 0.40% of next $250 million of net assets; and 0.35% of net assets in excess of $500 million. 10 THE RBB FUND, INC. MONEY MARKET PORTFOLIO NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2007 (UNAUDITED) 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONTINUED) BIMC may, at its discretion, voluntarily waive all or any portion of its advisory fee for the Portfolio. For each class of shares within the Portfolio, the net advisory fee charged to each class is the same on a relative basis. For the six months ended February 28, 2007, advisory fees and waivers for the investment portfolio were as follows: GROSS NET ADVISORY ADVISORY FEE WAIVER FEE -------- ---------- -------- $436,690 $(331,158) $105,532 As of February 28, 2007, the Portfolio owed BIMC $14,960 in advisory fees. BIMC may voluntarily waive and/or reimburse a portion of its fees. PFPC may also voluntarily waive a portion of its fees and/or reimburse expenses. The Portfolio will not pay BIMC at a later time for any amounts it may waive or any amounts that BIMC has assumed. For providing regulatory administration services to RBB, PFPC is entitled to receive compensation as agreed to by the Company and PFPC. This fee is allocated to each portfolio in proportion to their net assets. The Portfolio's portion of this fee for the six months ended February 28, 2007 was $17,825. PFPC serves as the transfer and dividend disbursing agent for each class. Both PFPC Trust Company and PFPC are wholly-owned subsidiaries of PFPC Worldwide Inc., an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc. For providing transfer agent services, PFPC is entitled to receive fees from the Portfolio. PFPC may, at its discretion, voluntarily waive all or any portion of its transfer agency fee for any class of shares. For the six months ended February 28, 2007, transfer agency fees for the Portfolio were $17,313. PFPC Trust Company provides certain custodial services to the Portfolio. As compensation for such custodial services, PFPC Trust Company is entitled to receive the following fees, computed daily and payable monthly, and based on the Portfolio's average gross assets: ANNUAL RATE -------------------------------------------------- 0.025% of first $50 million of gross assets; 0.020% of next $50 million of gross assets; 0.015% of gross assets in excess of $100 million. The Portfolio, on behalf of each class of shares of the Portfolio, has adopted Distribution Plans pursuant to Rule 12b-1 under the 1940 Act (the "Plans"). The Portfolio has entered into a Distribution Contract with PFPC Distributors, Inc. ("PFPC Distributors"). PFPC Distributors is a wholly-owned subsidiary of PFPC Worldwide Inc. and an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc. 11 THE RBB FUND, INC. MONEY MARKET PORTFOLIO NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2007 (UNAUDITED) 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONTINUED) The Plans provide for each class to make monthly payments, based on average net assets, to PFPC Distributors of up to 0.65% on an annualized basis for the Bedford Class and up to 0.05% on an annualized basis for the Sansom Street Class. For the six months ended February 28, 2007, distribution fees paid to PFPC Distributors for each class were as follows:
GROSS NET DISTRIBUTION DISTRIBUTION FEE WAIVER FEE ------------- --------- ------------ Bedford Class $557,741 $(42,905) $514,836 Sansom Street Class 5,635 -- 5,635 -------- -------- -------- Total Money Market Portfolio $563,376 $(42,905) $520,471 ======== ======== =========
The Portfolio has entered into service agreements with banks affiliated with PNC who render support services to customers who are the beneficial owners of the Sansom Street Class in consideration of the payment of 0.10% of the daily net asset value of such shares. For the six months ended February 28, 2007, service organization fees were $464 for the Portfolio. As of February 28, 2007, the Portfolio owed PFPC and its affiliates $101,493 for their services. 3. CAPITAL SHARES Transactions in capital shares (at $1 per capital share) for each year were as follows:
BEDFORD CLASS ---------------------------------------- FOR THE FOR THE SIX MONTHS ENDED YEAR ENDED FEBRUARY 28, 2007 AUGUST 31, 2006 ---------------- --------------- (UNAUDITED) VALUE VALUE -------------- -------------- Shares sold $ 249,710,363 $ 506,580,146 Shares issued on reinvestment of dividends 3,656,114 5,326,071 Shares repurchased (207,290,237) (470,739,390) -------------- -------------- Net Increase/(Decrease) $ 46,076,240 $ 41,166,827 -------------- ------------- Bedford Shares authorized 1,500,000,000 1,500,000,000 ============== ============== SANSOM STREET CLASS ---------------------------------------- FOR THE FOR THE SIX MONTHS ENDED YEAR ENDED FEBRUARY 28, 2007 AUGUST 31, 2006 ---------------- --------------- (UNAUDITED) VALUE VALUE -------------- -------------- Shares sold $ 119,544,126 $ 1,554,920,729 Shares issued on reinvestment of dividends 72,575 146,903 Shares repurchased (116,570,908) (1,626,850,712) -------------- --------------- Net Increase/(Decrease) $ 3,045,793 $ (71,783,080) -------------- --------------- Sansom Street Shares authorized 1,500,000,000 1,500,000,000 ============== ===============
12 THE RBB FUND, INC. MONEY MARKET PORTFOLIO NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2007 (UNAUDITED) 4. NET ASSETS At February 28, 2007, net assets consisted of the following: MONEY MARKET PORTFOLIO ------------ Paid-in capital $215,308,622 Accumulated net realized loss on investments (4,593) ------------ Total net assets $215,304,029 ============ 5. FEDERAL INCOME TAX INFORMATION The Portfolio intends to continue to qualify as a regulated investment company and distribute all of its taxable income. Therefore, no federal tax provision is required. For federal income tax purposes, realized capital losses may be carried forward and applied against future realized gains. At August 31, 2006, the Portfolio had capital loss carryforwards of $4,504 of which $3,587 will expire on August 31, 2013 and $917 will expire on August 31, 2014. 6. NEW ACCOUNTING PRONOUNCEMENTS In July 2006, the Financial Accounting Standards Board ("FASB") issued Interpretation No. 48, "Accounting for Uncertainty in Income Taxes -- an Interpretation of FASB Statement No. 109" (the "Interpretation"). The Interpretation establishes for all entities, a minimum threshold for financial statement recognition of the benefit of positions taken in filing tax returns (including whether an entity is taxable in a particular jurisdiction), and requires certain expanded tax disclosures. The Interpretation is effective for fiscal years beginning after December 15, 2006, and is required to be implemented by calendar year funds by no later than June 29, 2007. The Adviser has recently begun to evaluate the application of the Interpretation to the Fund, and is not in a position at this time to estimate the significance of its impact, if any, on the Portfolio's financial statements. In September 2006, FASB issued Statement of Financial Accounting Standards ("SFAS") 157, Fair Value Measurements, which clarifies the definition of fair value and requires companies to expand their disclosure about the use of fair value to measure assets and liabilities in interim and annual periods subsequent to initial recognition. Adoption of SFAS 157 requires the use of the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. At this time, the Portfolio is in the process of reviewing the impact, if any, of the SFAS on the Portfolio's financial statements. 13 ADDITIONAL INFORMATION (UNAUDITED) PROXY VOTING Policies and procedures that the Portfolio uses to determine how to vote proxies relating to portfolio securities as well as information regarding how the Portfolio voted proxies relating to portfolio securities for the most recent 12-month period ended June 30 are available without charge, upon request, by calling the number shown below and on the Securities and Exchange Commission's ("SEC") website at http://www.sec.gov. Bedford (800) 888-9723 Sansom Street (800) 430-9618 QUARTERLY PORTFOLIO SCHEDULES The Company files its complete schedule of portfolio holdings with the SEC for the first and third fiscal quarter of each fiscal year (quarters ended November 30 and May 31) on Form N-Q. The Company's Form N-Q is available on the SEC website at http://www.sec.gov and may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. Information on the operation of the SEC Public Reference Room may be obtained by calling 1-800-SEC-0330. SPECIAL MEETING OF SHAREHOLDERS The RBB Fund, Inc., on behalf of the Portfolio, convened a Special Meeting of Shareholders of the Portfolio's Bedford Class and Sansom Street Class on October 20, 2006 (as reconvened on November 28, 2006 and December 15, 2006) (the "Meeting"). At the Meeting, the Portfolio's shareholders voted on the approval of a new Investment Advisory and Administration Agreement with BIMC (the "Agreement"). The results of the voting were as follows: 70,121,805.420 shares of the Portfolio were voted IN FAVOR of the proposal to approve the Agreement 3,080,660.660 shares of the Portfolio were voted AGAINST the proposal to approve the Agreement 9,487,268.350 shares of the Portfolio abstained. Accordingly, the Agreement was approved by the Portfolio's shareholders. 14 [THIS PAGE INTENTIONALLY LEFT BLANK.] INVESTMENT ADVISER BlackRock Institutional Management Corporation 100 Bellevue Parkway Wilmington, DE 19809 TRANSFER AGENT PFPC Inc. 101 Sabin Street Pawtucket, RI 02866 DISTRIBUTOR PFPC Distributors, Inc. 760 Moore Road King of Prussia, PA 19406 CUSTODIAN PFPC Trust Company 8800 Tinicum Blvd. Suite 200 Philadelphia, PA 19153 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Deloitte & Touche LLP 1700 Market Street Philadelphia, PA 19103-3984 COUNSEL Drinker Biddle & Reath LLP One Logan Square 18th and Cherry Streets Philadelphia, PA 19103-6996 [GRAPHIC OMITTED] N/I NUMERIC INVESTORS FAMILY OF FUNDS [GRAPHIC OMITTED] 101 Sabin Street Pawtucket, RI 02866 1-800-numeric [686-3742] http://www.numeric.com [GRAPHIC OMITTED] N/I NUMERIC INVESTORS FAMILY OF FUNDS [GRAPHIC OMITTED] N/I NUMERIC INVESTORS Emerging Growth Fund [GRAPHIC OMITTED] N/I NUMERIC INVESTORS Growth Fund [GRAPHIC OMITTED] N/I NUMERIC INVESTORS Mid Cap Fund [GRAPHIC OMITTED] N/I NUMERIC INVESTORS Small Cap Value Fund Semi-Annual Report February 28, 2007 (Unaudited) This report is submitted for the general information of the shareholders of each Fund. It is not authorized for distribution unless preceded or accompanied by a current prospectus for the Funds._ [GRAPHIC OMITTED] N/I NUMERIC INVESTORS FAMILY OF FUNDS EMERGING GROWTH FUND GROWTH FUND MID CAP FUND SMALL CAP VALUE FUND SEMI-ANNUAL REPORT (UNAUDITED) Dear Shareholder: On January 12, 2007, Numeric Investors LLC ("Numeric") submitted a letter of resignation as investment advisor to the N/I NUMERIC INVESTORS FAMILY OF FUNDS (each, a "Fund" and collectively, the "Funds") a series of The RBB Fund, Inc. (the "Company"). Our four Funds are the N/I NUMERIC INVESTORS Emerging Growth Fund, the N/I NUMERIC INVESTORS Growth Fund, the N/I NUMERIC INVESTORS Mid Cap Fund and the N/I NUMERIC INVESTORS Small Cap Value Fund. This was a difficult but necessary decision, as we seek to focus on our core institutional and alternative investment products. In light of that decision and other factors, the Board of Directors of the Company approved the liquidation of the Funds effective on or about March 30, 2007. The table below compares the returns of our four Funds with the returns of their respective benchmarks for several periods all ended on December 31, 2006, the last full month prior to Numeric's resignation.
TOTAL RETURNS --------------------------------------------------------------------------------------------------------------------------- SIX MONTHS ONE YEARYEARS FIVE YEARS TEN YEARS ENDED ENDED ENDED ANNUALIZED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, SINCE 2006 2006 2006 2006 2006 INCEPTION* --------------------------------------------------------------------------------------------------- EMERGING GROWTH FUND 3.86% 14.91% 13.87% 15.05% 15.49% 16.28% Russell 2000(R) Growth Index 6.86% 13.35% 10.51% 6.93% 4.88% 3.88% DIFFERENCE -3.00% 1.57% 3.36% 8.12% 10.61% 12.39% GROWTH FUND 7.50% 13.90% 12.18% 11.44% 9.47% 9.95% Russell 2500(R) Growth Index 6.94% 12.26% 11.64% 7.62% 7.11% 6.42% DIFFERENCE 0.56% 1.63% 0.54% 3.82% 2.37% 3.54% MID CAP FUND 8.88% 15.55% 17.41% 13.73% 13.08% 13.47% Russell MidCap(R) Index 9.94% 15.26% 16.00% 12.88% 12.14% 12.20% S&P MidCap 400(R) Index** 5.83% 10.32% 13.09% 10.89% 13.46% 13.45% DIFFERENCE (RUSSELL MIDCAP(R) INDEX) -1.06% 0.29% 1.41% 0.86% 0.94% 1.27% SMALL CAP VALUE FUND 8.98% 19.82% 17.16% 19.52% N/A 19.89% Russell 2000(R) Value Index 11.81% 23.48% 16.48% 15.37% n/a 14.12% DIFFERENCE -2.83% -3.66% 0.67% 4.15% N/A 5.77% * Inception Dates: June 3, 1996 for all Funds except Small Cap Value Fund, which launched on November 30, 1998. ** Effective November 12, 2004 the Mid Cap Fund's benchmark index changed from the S&P MidCap 400(R) Index to the Russell MidCap(R) Index; the Russell MidCap(R) Index more appropriately reflects the types of securities held in the Fund and provides the best comparative performance information.
---------------------- THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND DOES NOT GUARANTEE FUTURE RESULTS. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER. PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH-END MAY BE OBTAINED AT WWW.NUMERIC.COM. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THE INDICES ARE UNMANAGED INDICES THAT ARE NOT AVAILABLE FOR DIRECT INVESTMENT. SMALL AND MID-SIZED COMPANY STOCKS ARE GENERALLY MORE VOLATILE THAN LARGE COMPANY STOCKS. 1 Numeric was founded seventeen years ago in an attempt to offer a reasonably consistent source of returns for investors seeking better-than-benchmark performance. We started the firm with a focus on institutional asset management. However, not long after the firm was founded, we decided to expand into the mutual fund arena. To that end, we determined we would employ the same quantitative stock-selection models in managing our Funds that we used for institutional accounts. We decided to focus our Fund investments primarily in the small cap space, where we believed we could deliver significant value to Fund shareholders. Over the years, numerous publications and mutual fund research firms have acknowledged the success of our approach. We believe that our success has been attributable in large part to our focus on delivering better-than-market returns for Fund shareholders, even when that meant we had to close our Funds to new investments. As you are probably aware, all but one of our Funds, the Mid Cap Fund, have been closed to new investments for quite some time. Since we launched the n/i numeric investors family of funds, the dynamics of the mutual fund marketplace have changed. Because we are a focused institutional manager with capacity constrained strategies, the dynamics of today's mutual fund business are at odds with our current business model. It has been our pleasure to have you as a shareholder in our Funds. We sincerely hope you will achieve strong returns in the future with another fund family. Sincerely, /s/ Langdon B. Wheeler /s/ Joseph J. Schirripa ----------------------------------------- ----------------------- Langdon B. Wheeler, CFA Joseph Schirripa, CFA Chief Investment Officer and Chairman of Co-Portfolio Manager the Board of Directors n/i Mid Cap Fund Numeric Investors LLC ---------- For more information regarding the holdings of the N/I NUMERIC INVESTORS FAMILY OF FUNDS, please refer to the Portfolio of Investments on pages 5-8. Portfolio holdings may be subject to change at any time. In addition to historical information, this report contains forward-looking statements that may concern, among other things, the domestic market, industry and economic trends and developments and government regulation and their potential impact on each Fund's investment portfolio. These statements are subject to risks and uncertainties and actual trends, developments and regulations in the future and their impact on the Funds could be materially different from those projected, anticipated or implied. The Funds have no obligation to update or revise forward-looking statements. Funds are distributed by PFPC Distributors, Inc., 760 Moore Road, King of Prussia, PA 19406. 2 [GRAPHIC OMITTED] N/I NUMERIC INVESTORS FAMILY OF FUNDS EMERGING GROWTH FUND GROWTH FUND MID CAP FUND SMALL CAP VALUE FUND FUND EXPENSE EXAMPLES (UNAUDITED) As a shareholder of the Fund(s), you incur two types of costs: (1) transaction costs, including redemption fees and (2) costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund(s) and to compare these costs with the ongoing costs of investing in other mutual funds. These examples are based on an investment of $1,000 invested at the beginning of the period from September 1, 2006 through February 28, 2007, and held for the entire period. ACTUAL EXPENSES The first line of the accompanying tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expense that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second line of the accompanying tables provides information about hypothetical account values and hypothetical expenses based on your Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that the expenses shown in the accompanying tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees. Therefore, the second line of the accompanying tables is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. 3 [GRAPHIC OMITTED] N/I NUMERIC INVESTORS FAMILY OF FUNDS EMERGING GROWTH FUND GROWTH FUND MID CAP FUND SMALL CAP VALUE FUND FUND EXPENSE EXAMPLES (UNAUDITED) (CONCLUDED)
EMERGING GROWTH FUND ------------------------------------------------------------------------- BEGINNING ENDING EXPENSES PAID ACCOUNT VALUE ACCOUNT VALUE DURING SEPTEMBER 1, 2006 FEBRUARY 28, 2007 PERIOD* ----------------- ----------------- ------------- Actual $1,000.00 $1,088.30 $ 7.56 Hypothetical (5% return before expenses) 1,000.00 1,017.46 7.33 GROWTH FUND ------------------------------------------------------------------------- BEGINNING ENDING EXPENSES PAID ACCOUNT VALUE ACCOUNT VALUE DURING SEPTEMBER 1, 2006 FEBRUARY 28, 2007 PERIOD* ----------------- ----------------- ------------- Actual $1,000.00 $1,106.00 $10.97 Hypothetical (5% return before expenses) 1,000.00 1,014.25 10.54 MID CAP FUND ------------------------------------------------------------------------- BEGINNING ENDING EXPENSES PAID ACCOUNT VALUE ACCOUNT VALUE DURING SEPTEMBER 1, 2006 FEBRUARY 28, 2007 PERIOD* ----------------- ----------------- ------------- Actual $1,000.00 $1,094.40 $ 6.91 Hypothetical (5% return before expenses) 1,000.00 1,018.12 6.68 SMALL CAP VALUE FUND ------------------------------------------------------------------------- BEGINNING ENDING EXPENSES PAID ACCOUNT VALUE ACCOUNT VALUE DURING SEPTEMBER 1, 2006 FEBRUARY 28, 2007 PERIOD* ----------------- ----------------- ------------- Actual $1,000.00 $1,101.10 $ 4.74 Hypothetical (5% return before expenses) 1,000.00 1,020.23 4.57 * Expenses are equal to the Funds' annualized expense ratios in the table below, which include waived fees, multiplied by the average account value over the period, multiplied by the number of days (181) in the most recent fiscal half-year, then divided by 365 to reflect the one-year half period.
EXPENSE RATIO ------------- Emerging Growth Fund 1.46% Growth Fund 2.10% Mid Cap Fund 1.33% Small Cap Value Fund 0.91% 4 [GRAPHIC OMITTED] N/I NUMERIC INVESTORS FAMILY OF FUNDS EMERGING GROWTH FUND PORTFOLIO OF INVESTMENTS FEBRUARY 28, 2007 (UNAUDITED) -------------------------------------------------------------------------------- PRINCIPAL AMOUNT VALUE (000'S) (NOTE 1) -------------------------------------------------------------------------------- REPURCHASE AGREEMENT--103.1% $ 41,975 Bear, Stearns & Co., Inc. (Agreement dated 02/28/07 to be repurchased at $41,981,213, collateralized by $14,030,000 par amount of U.S. Treasury Note, at a rate of 3.625%, due 7/15/09, and $21,740,000 par amount of U.S. Treasury Bond, at a rate of 8.875%, due 8/15/17, market value of collateral is $43,194,251) 5.27%, 03/01/07 ................................... $41,975,068 ----------- Total Investments -- 103.1% (Cost $41,975,068*) ......................................... 41,975,068 ----------- Liabilities in Excess of Other Assets -- (3.1)% ................ (1,264,642) ----------- Net Assets -- 100.0% ........................................... $40,710,426 =========== ---------- * Aggregate cost is the same for financial reporting and federal tax purposes. The accompanying notes are an integral part of the financial statements. 5 [GRAPHIC OMITTED] N/I NUMERIC INVESTORS FAMILY OF FUNDS GROWTH FUND PORTFOLIO OF INVESTMENTS FEBRUARY 28, 2007 (UNAUDITED) -------------------------------------------------------------------------------- PRINCIPAL AMOUNT VALUE (000'S) (NOTE 1) -------------------------------------------------------------------------------- REPURCHASE AGREEMENT--113.4% $ 14,217 Bear, Stearns & Co., Inc. (Agreement dated 02/28/07 to be repurchased at $14,219,420, collateralized by $10,820,000 par amount of U.S. Treasury Bond, at a rate of 8.875%, due 8/15/17, market value of collateral is $14,634,172) 5.27%, 03/01/07 ...................... $14,217,339 ----------- Total Investments -- 113.4% (Cost $14,217,339*) ......................................... 14,217,339 ----------- Liabilities in Excess of Other Assets -- (13.4)% ............... (1,683,413) ----------- Net Assets -- 100.0% ........................................... $12,533,926 =========== ---------- * Aggregate cost is the same for financial reporting and federal tax purposes. The accompanying notes are an integral part of the financial statements. 6 [GRAPHIC OMITTED] N/I NUMERIC INVESTORS FAMILY OF FUNDS MID CAP FUND PORTFOLIO OF INVESTMENTS FEBRUARY 28, 2007 (UNAUDITED) -------------------------------------------------------------------------------- PRINCIPAL AMOUNT VALUE (000'S) (NOTE 1) -------------------------------------------------------------------------------- REPURCHASE AGREEMENT--101.8% $ 45,767 Bear, Stearns & Co., Inc. (Agreement dated 2/28/07 to be repurchased at $45,773,400, collateralized by $46,868,848 par amount of U.S. Treasury Bonds, at a rate of 7.25% to 8.88%, due 5/15/16 to 8/15/17, market value of collateral is $47,097,451) 5.27%, 03/01/07 ...................... $45,766,701 ----------- Total Investments -- 101.8% (Cost $45,766,701*) ......................................... 45,766,701 ----------- Liabilities in Excess of Other Assets -- (1.8)% ................ (805,251) ----------- Net Assets -- 100.0% ........................................... $44,961,450 =========== ---------- * Aggregate cost is the same for financial reporting and federal tax purposes. The accompanying notes are an integral part of the financial statements. 7 [GRAPHIC OMITTED] N/I NUMERIC INVESTORS FAMILY OF FUNDS SMALL CAP VALUE FUND PORTFOLIO OF INVESTMENTS FEBRUARY 28, 2007 (UNAUDITED) -------------------------------------------------------------------------------- PRINCIPAL AMOUNT VALUE (000'S) (NOTE 1) -------------------------------------------------------------------------------- REPURCHASE AGREEMENT--104.7% $ 93,660 Bear, Stearns & Co., Inc. (Agreement dated 02/28/07 to be repurchased at $93,673,589, collateralized by $79,030,000 par amount of U.S. Treasury Bond, at a rate of 7.25%, due 5/15/16, market value of collateral is $96,379,804) 5.27%, 03/01/07 ...................... $93,659,878 ----------- Total Investments -- 104.7% (Cost $93,659,878*) ......................................... 93,659,878 ----------- Liabilities in Excess of Other Assets -- (4.7)% ................ (4,192,326) ----------- Net Assets -- 100.0% ........................................... $89,467,552 =========== ---------- * Aggregate cost is the same for financial reporting and federal tax purposes. The accompanying notes are an integral part of the financial statements. 8 [THIS PAGE INTENTIONALLY LEFT BLANK.] 9 [GRAPHIC OMITTED] N/I NUMERIC INVESTORS FAMILY OF FUNDS STATEMENTS OF ASSETS AND LIABILITIES FEBRUARY 28, 2007 (UNAUDITED)
EMERGING GROWTH GROWTH MID CAP SMALL CAP VALUE FUND FUND FUND FUND --------------- ------- ------- --------------- ASSETS Investments in Repurchase Agreements, at amortized cost, which approximates market value .............................. $41,975,068 $14,217,339 $45,766,701 $93,659,878 Cash ......................................... -- -- -- 233,507 Dividends and interest receivable ............ 209,783 67,625 215,520 435,021 Receivable for capital shares sold ........... -- 218 -- -- ----------- ----------- ----------- ----------- Total assets .............................. 42,184,851 14,285,182 45,982,221 94,328,406 ----------- ----------- ----------- ----------- LIABILITIES Payable for capital shares redeemed .......... 1,289,319 1,638,054 895,732 4,599,821 Investment advisory fee payable .............. 31,222 16,602 13,369 87,774 Accrued expenses and other liabilities ....... 153,884 96,600 111,670 173,259 ----------- ----------- ----------- ----------- Total liabilities ......................... 1,474,425 1,751,256 1,020,771 4,860,854 ----------- ----------- ----------- ----------- NET ASSETS Capital stock, $0.001 par value .............. 3,121 894 2,493 5,186 Additional paid-in capital ................... 32,125,388 10,859,923 40,468,161 69,238,130 Undistributed net investment income .......... 269,910 93,125 271,618 626,513 Accumulated net realized gain from investments 8,312,007 1,579,984 4,219,178 19,597,723 ----------- ----------- ----------- ----------- Net assets applicable to shares outstanding .. $40,710,426 $12,533,926 $44,961,450 $89,467,552 =========== =========== =========== =========== Shares outstanding 3,121,104 894,220 2,492,471 5,186,071 ----------- ----------- ----------- ----------- Net asset value, offering and redemption price per share ................................... $13.04 $14.02 $18.04 $17.25 ====== ====== ====== ======
The accompanying notes are an integral part of the financial statements. 10 [GRAPHIC OMITTED] N/I NUMERIC INVESTORS FAMILY OF FUNDS STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED FEBRUARY 28, 2007 (UNAUDITED)
EMERGING GROWTH GROWTH MID CAP SMALL CAP VALUE FUND FUND FUND FUND --------------- ---------- ----------- --------------- INVESTMENT INCOME Dividends * .................................. $ 337,610 $ 196,362 $ 287,431 $ 1,486,111 Interest ..................................... 740,272 189,735 504,339 1,447,409 Securities lending (Note 6) .................. 18,413 4,194 8,286 31,314 ----------- ---------- ----------- ----------- Total investment income ...................... 1,096,295 390,291 800,056 2,964,834 ----------- ---------- ----------- ----------- EXPENSES Investment advisory fees (Note 2) ............ 425,412 81,901 101,966 430,722 Co-Administration fees (Note 2) .............. 118,798 58,679 66,738 206,744 Transfer agent fees .......................... 86,402 68,710 77,358 84,323 Administrative services fees ................. 85,007 21,195 41,996 160,879 Professional fees ............................ 57,754 19,668 25,129 87,581 Custodian fees ............................... 32,001 10,579 23,399 57,176 Printing and shareholder reporting fees ...... 28,500 11,311 10,111 25,560 Shareholder service fees (Note 3) ............ 23,528 18,099 30,212 21,987 Directors' and officers' fees ................ 23,346 10,358 10,189 16,930 Registration and filing fees ................. 18,585 14,259 17,358 26,474 Other expenses ............................... 13,475 3,276 6,465 23,578 ----------- ---------- ----------- ----------- Total expenses before waivers ................ 912,808 318,035 410,921 1,141,954 Less: waivers ................................ (86,423) (20,869) (38,897) (163,561) ----------- ---------- ----------- ----------- Net expenses after waivers ................... 826,385 297,166 372,024 978,393 ----------- ---------- ----------- ----------- Net Investment Income ........................ 269,910 93,125 428,032 1,986,441 ----------- ---------- ----------- ----------- NET REALIZED AND UNREALIZED GAIN/(LOSS) FROM INVESTMENTS: Net realized gain from investments ........... 12,878,938 3,523,007 5,988,297 27,205,160 Net change in unrealized depreciation on investments ............................ (1,970,676) (524,221) (1,581,252) (6,628,302) ----------- ---------- ----------- ----------- Net realized and unrealized gain on investments ............................ 10,908,262 2,998,786 4,407,045 20,576,858 ----------- ---------- ----------- ----------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .............................. $11,178,172 $3,091,911 $ 4,835,077 $22,563,299 =========== ========== =========== =========== ----------- * Net of foreign withholding taxes of $286 for the Small Cap Value Fund.
The accompanying notes are an integral part of the financial statements. 11 [GRAPHIC OMITTED] N/I NUMERIC INVESTORS FAMILY OF FUNDS STATEMENTS OF CHANGES IN NET ASSETS
EMERGING GROWTH GROWTH FUND FUND ---------------------------------- ---------------------------------- FOR THE FOR THE FOR THE FOR THE SIX MONTHS ENDED FISCAL SIX MONTHS ENDED FISCAL FEBRUARY 28, 2007 YEAR ENDED FEBRUARY 28, 2007 YEAR ENDED (UNAUDITED) AUGUST 31, 2006 (UNAUDITED) AUGUST 31, 2006 ----------------- --------------- ----------------- --------------- INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS: Net investment income/(loss) ................. $ 269,910 $ (568,924) $ 93,125 $ (126,763) Net realized gain from investments ........... 12,878,938 24,945,791 3,523,007 5,263,305 Net change in unrealized appreciation/ (depreciation)on investments .............. (1,970,676) (10,856,287) (524,221) (2,375,364) ----------- ------------ ------------ ------------ Net increase in net assets resulting from operations ................................ 11,178,172 13,520,580 3,091,911 2,761,178 ----------- ------------ ------------ ------------ DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income ........................ -- -- -- -- Net realized capital gains ................... (26,693,267) (26,155,202) (5,830,967) (3,932,855) ----------- ------------ ------------ ------------ Total dividends and distributions to shareholders (26,693,267) (26,155,202) (5,830,967) (3,932,855) ----------- ------------ ------------ ------------ INCREASE/(DECREASE) IN NET ASSETS DERIVED FROM CAPITAL SHARE TRANSACTIONS (NOTE 5) .......... (79,081,006) (8,543,377) (14,973,126) (13,107,559) ----------- ------------ ------------ ------------ Total increase/(decrease) in net assets ...... (94,596,101) (21,177,999) (17,712,182) (14,279,236) NET ASSETS Beginning of period .......................... 135,306,527 156,484,526 30,264,108 44,525,344 ----------- ------------ ------------ ------------ End of period* ............................... $40,710,426 $135,306,527 $ 12,533,926 $ 30,246,108 =========== ============ ============ ============ MID CAP SMALL CAP VALUE FUND FUND ---------------------------------- ---------------------------------- FOR THE FOR THE FOR THE FOR THE SIX MONTHS ENDED FISCAL SIX MONTHS ENDED FISCAL FEBRUARY 28, 2007 YEAR ENDED FEBRUARY 28, 2007 YEAR ENDED (UNAUDITED) AUGUST 31, 2006 (UNAUDITED) AUGUST 31, 2006 ----------------- --------------- ----------------- --------------- INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS: Net investment income/(loss) ................. $ 428,032 $ 57,688 $ 1,986,441 $ 2,025,336 Net realized gain from investments ........... 5,988,297 5,265,638 27,205,160 30,602,053 Net change in unrealized appreciation/ (depreciation)on investments .............. (1,581,252) (1,002,657) (6,628,302) (7,086,034) ----------- ----------- ------------- ------------ Net increase in net assets resulting from operations ................................ 4,835,077 4,320,669 22,563,299 25,541,355 ----------- ----------- ------------- ------------ DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income ........................ (170,910) (88,126) (2,142,817) (1,881,275) Net realized capital gains ................... (6,087,796) (6,256,944) (34,788,945) (43,503,123) ----------- ----------- ------------- ------------ Total dividends and distributions to shareholders (6,258,706) (6,345,070) (36,931,762) (45,384,398) ----------- ----------- ------------- ------------ INCREASE/(DECREASE) IN NET ASSETS DERIVED FROM CAPITAL SHARE TRANSACTIONS (NOTE 5) .......... 337,909 12,239,093 (127,359,420) 8,208,845 ----------- ----------- ------------- ------------ Total increase/(decrease) in net assets ...... (1,085,720) 10,214,692 (141,727,883) (11,634,198) NET ASSETS Beginning of period .......................... 46,047,170 35,832,478 231,195,435 242,829,633 ----------- ----------- ------------- ------------ End of period* ............................... $44,961,450 $46,047,170 $ 89,467,552 $231,195,435 =========== =========== ============= ============ ----------- * Includes undistributed net investment income as follows:
FOR THE SIX MONTHS ENDED FOR THE FEBRUARY 28, 2007 FISCAL YEAR ENDED (UNAUDITED) AUGUST 31, 2006 ----------------- ----------------- Emerging Growth Fund ....... $269,910 $ -- Growth Fund ................ 93,125 -- Mid Cap Fund ............... 271,618 14,496 Small Cap Value Fund ....... 626,513 782,889 The accompanying notes are an integral part of the financial statements. 12 and 13 [GRAPHIC OMITTED] N/I NUMERIC INVESTORS FAMILY OF FUNDS FINANCIAL HIGHLIGHTS -------------------------------------------------------------------------------- Contained below is per share operating performance data for each share outstanding, total investment return, ratios to average net assets and other supplemental data for the respective periods. This information has been derived from information provided in the financial statements. --------------------------------------------------------------------------------
EMERGING GROWTH FUND --------------------------------------------------------------------------------------------- FOR THE SIX MONTHS ENDED FOR THE FISCAL YEARS ENDED AUGUST 31, FEBRUARY 28, 2007 -------------------------------------------------------------------------- (UNAUDITED) 2006 2005 2004 2003 2002 ----------------- ------------- -------------- ----------- ------------- ----------- PER SHARE OPERATING PERFORMANCE Net asset value, beginning of period $14.72 $ 16.20 $ 17.48 $ 15.81 $ 11.81 $ 12.73 ------- -------- -------- -------- -------- ------- Net investment income/(loss) ....... 0.09 (0.06) (0.11) (0.11)(1) (0.07)(1) (0.10) Net realized and unrealized gain/(loss) on investments ...... 1.15 1.30 3.53 2.12 4.07 (0.82) ------- -------- -------- -------- -------- ------- Net increase/(decrease) in net assets resulting from operations ....... 1.24 1.24 3.42 2.01 4.00 (0.92) ------- -------- -------- -------- -------- ------- Dividends and distributions to shareholders from: Net investment income .............. -- -- -- -- -- -- Net realized capital gains ......... (2.92) (2.72) (4.70) (0.34) -- -- ------- -------- -------- -------- -------- ------- Total dividends and distributions to shareholder .................. (2.92) (2.72) (4.70) (0.34) -- -- ------- -------- -------- -------- -------- ------- Redemption fees (Note 5)* .......... -- -- -- -- -- -- ------- -------- -------- -------- -------- ------- Net asset value, end of period ..... $ 13.04 $ 14.72 $ 16.20 $ 17.48 $ 15.81 $ 11.81 ======= ======== ======== ======== ======== ======= Total investment return (2) ........ 8.83% 9.59% 26.06% 12.71% 33.87% (7.23)% ======= ======== ======== ======== ======== ======= RATIOS/SUPPLEMENTAL DATA Net assets, end of period (000's omitted) ................. $40,710 $135,307 $156,485 $133,531 $130,286 $96,865 Ratio of expenses to average net assets (3) .................. 1.46%(4) 1.16% 1.18% 1.15% 1.20% 1.12% Ratio of expenses to average net assets without waivers ...... 1.61%(4) 1.31% 1.33% 1.31% 1.36% 1.26% Ratio of net investment loss to average net assets (3) .......... 0.48%(4) (0.39)% (0.68)% (0.58)% (0.55)% (0.75)% Portfolio turnover rate ............ 104.70% 227.47% 318.36% 269.90% 227.46% 216.40% GROWTH FUND ----------------------------------------------------------------------------------------- FOR THE SIX MONTHS ENDED FOR THE FISCAL YEARS ENDED AUGUST 31, FEBRUARY 28, 2007 ---------------------------------------------------------------------- (UNAUDITED) 2006 2005 2004 2003 2002 ----------------- ----------- ---------- ----------- ---------- ----------- PER SHARE OPERATING PERFORMANCE Net asset value, beginning of period $ 15.43 $ 16.08 $ 12.99 $ 11.53 $ 9.07 $ 10.48 ------- ------- ------- ------- ------- ------- Net investment income/(loss) ....... 0.10 (0.07) (0.09)(1) (0.09)(1) (0.08)(1) (0.10) Net realized and unrealized gain/(loss) on investments ...... 1.43 0.84 3.18 1.55 2.54 (1.31) ------- ------- ------- ------- ------- ------- Net increase/(decrease) in net assets resulting from operations ....... 1.53 0.77 3.09 1.46 2.46 (1.41) ------- ------- ------- ------- ------- ------- Dividends and distributions to shareholders from: Net investment income .............. -- -- -- -- -- -- Net realized capital gains ......... (2.94) (1.42) -- -- -- -- ------- ------- ------- ------- ------- ------- Total dividends and distributions to shareholder .................. (2.94) (1.42) -- -- -- -- ------- ------- ------- ------- ------- ------- Redemption fees (Note 5)* .......... -- -- -- -- -- -- ------- ------- ------- ------- ------- ------- Net asset value, end of period ..... $ 14.02 $ 15.43 $ 16.08 $ 12.99 $ 11.53 $ 9.07 ======= ======= ======= ======= ======= ======= Total investment return (2) ........ 10.60% 5.51% 23.79% 12.66% 27.12% (13.45)% ======= ======= ======= ======= ======= ======= RATIOS/SUPPLEMENTAL DATA Net assets, end of period (000's omitted) ................. $12,534 $30,246 $44,525 $36,076 $33,809 $34,034 Ratio of expenses to average net assets (3) .................. 2.10%(4) 1.06% 1.20% 1.36% 1.49% 1.35% Ratio of expenses to average net assets without waivers ...... 2.25%(4) 1.20% 1.39% 1.59% 1.79% 1.54% Ratio of net investment loss to average net assets (3) .......... 0.66%(4) (0.31)% (0.62)% (0.65)% (0.81)% (0.96)% Portfolio turnover rate ............ 100.41% 254.81% 343.20% 291.02% 237.59% 241.28% ---------- * Amount is less than $0.01 per share. (1) Calculated based on average shares outstanding for the period. (2) Total investment return is calculated assuming a purchase of shares on the first day and a sale of shares on the last day of each period reported and includes reinvestment of dividends and distributions, if any. (3) Reflects waivers and expense reimbursements, if any. (4) Annualized.
The accompanying notes are an integral part of the financial statements. 14 and 15 [GRAPHIC OMITTED] N/I NUMERIC INVESTORS FAMILY OF FUNDS FINANCIAL HIGHLIGHTS (CONCLUDED) -------------------------------------------------------------------------------- Contained below is per share operating performance data for each share outstanding, total investment return, ratios to average net assets and other supplemental data for the respective periods. This information has been derived from information provided in the financial statements. --------------------------------------------------------------------------------
MID CAP FUND -------------------------------------------------------------------------------------------- FOR THE SIX MONTHS ENDED FOR THE FISCAL YEARS ENDED AUGUST 31, FEBRUARY 28, 2007 ------------------------------------------------------------------------- (UNAUDITED) 2006 2005 2004 2003 2002 ----------------- ------------- -------------- ----------- ------------- ---------- PER SHARE OPERATING PERFORMANCE Net asset value, beginning of period $ 18.52 $ 20.16 $ 15.82 $ 13.88 $ 11.98 $ 13.16 ------- ------- ------- ------- ------- ------- Net investment income/(loss) ........ 0.23 0.03 0.02 (1) 0.07 0.08 0.08 Net realized and unrealized gain/(loss) from investments ..... 1.43 1.93 4.47 1.96 1.90 (1.22) ------- ------- ------- ------- ------- ------- Net increase/(decrease) in net assets resulting from operations ........ 1.66 1.96 4.49 2.03 1.98 (1.14) ------- ------- ------- ------- ------- ------- Dividends and distributions to shareholders from: Net investment income ............... (0.06) (0.05) (0.07) (0.09) (0.08) (0.06) Net realized capital gains .......... (2.08) (3.55) (0.08) -- -- -- ------- ------- ------- ------- ------- ------- Total dividends and distributions to shareholders .................. (2.14) (3.60) (0.15) (0.09) (0.08) (0.06) ------- ------- ------- ------- ------- ------- Redemption fees (Note 5) ............ --* --* --* --* --* 0.02 ------- ------- ------- ------- ------- ------- Net asset value, end of period ...... $ 18.04 $ 18.52 $ 20.16 $ 15.82 $ 13.88 $ 11.98 ======= ======== ======= ======== ======= ======= Total investment return (2) ......... 9.44% 12.10% 28.52% 14.64% 16.70% (8.48)% ======= ======== ======= ======== ======= ======= RATIOS/SUPPLEMENTAL DATA Net assets, end of year (000's omitted) .................. $44,961 $46,047 $35,832 $30,822 $26,112 $25,109 Ratio of expenses to average net assets (3) ................... 1.33%(6) 1.38% 1.23% 0.97% 1.00% 0.85% Ratio of expenses to average net assets without waivers ....... 1.47%(6) 1.53% 1.44% 1.35% 1.52% 1.27% Ratio of net investment income/(loss) to average net assets (3) ................... 1.53%(6) 0.15% 0.13% 0.47% 0.66% 0.59% Portfolio turnover rate ............. 138.31% 302.69% 321.41% 292.78% 227.20% 270.77% SMALL CAP VALUE FUND ----------------------------------------------------------------------------------------- FOR THE SIX MONTHS ENDED FOR THE FISCAL YEARS ENDED AUGUST 31, FEBRUARY 28, 2007 ---------------------------------------------------------------------- (UNAUDITED) 2006 2005 2004 2003 2002 ----------------- ----------- ---------- ----------- ---------- ----------- PER SHARE OPERATING PERFORMANCE Net asset value, beginning of period $ 18.42 $20.43 $19.90 $18.46 $16.86 $ 17.61 ------- ------- ------- ------- ------- ------- Net investment income/(loss) ........ 0.23 0.16 0.08(1) 0.09 0.05 (0.05) Net realized and unrealized gain/(loss) from investments ..... 1.52 1.69 4.29 3.67 2.90 1.71 ------- ------- ------- ------- ------- ------- Net increase/(decrease) in net assets resulting from operations ........ 1.75 1.85 4.37 3.76 2.95 1.66 ------- ------- ------- ------- ------- ------- Dividends and distributions to shareholders from: Net investment income ............... (0.17) (0.15) (0.08) (0.09) -- (0.02) Net realized capital gains .......... (2.75) (3.71) (3.76) (2.24) (1.41) (2.58) ------- ------- ------- ------- ------- ------- Total dividends and distributions to shareholders .................. (2.92) (3.86) (3.84) (2.33) (1.41) (2.60) ------- ------- ------- ------- ------- ------- Redemption fees (Note 5) ............ --* --* --* 0.01 0.06 0.19 ------- ------- ------- ------- ------- ------- Net asset value, end of period ...... $17.25 $18.42 $20.43 $19.90 $18.46 $16.86 ======= ======== ======= ======== ======= ======= Total investment return (2) ......... 10.11% 11.76%(5) 26.37% 21.46% 20.51% 13.31% ======= ======== ======= ======== ======= ======= RATIOS/SUPPLEMENTAL DATA Net assets, end of year (000's omitted) .................. $89,468 $231,195 $242,830 $197,295 $180,497 $130,380 Ratio of expenses to average net assets (3) ................... 0.91%(6) 0.98%(4) 0.99% 0.92% 1.55% 1.73% Ratio of expenses to average net assets without waivers ....... 1.06%(6) 1.13% 1.14% 1.07% 1.70% 1.88% Ratio of net investment income/(loss) to average net assets (3) ................... 1.85%(6) 0.43%(4) 0.43% 0.45% 0.33% (0.35)% Portfolio turnover rate ............. 101.19% 241.63% 348.63% 366.70% 268.07% 275.73% ---------- * Amount is less than $0.01 per share. (1) Calculated based on average shares outstanding for the period. (2) Total investment return is calculated assuming a purchase of shares on the first day and a sale of shares on the last day of each period reported and includes reinvestment of dividends and distributions, if any. (3) Reflects waivers. (4) Does not reflect the amount reimbursed by affiliate (Note 2). Including the effect of the amount reimbursed by affiliate the Ratio of expenses to average net assets would be 0.54% and the Ratio of net investment income/(loss) to average net assets would be 0.87%. (5) Total return includes the amount reimbursed by affiliate (Note 2). Excluding the amount reimbursed by affiliate, total return would have been 11.17%. (6) Annualized.
The accompanying notes are an integral part of the financial statements. 16 and 17 [GRAPHIC OMITTED] N/I NUMERIC INVESTORS FAMILY OF FUNDS EMERGING GROWTH FUND GROWTH FUND MID CAP FUND SMALL CAP VALUE FUND NOTES TO FINANCIAL STATEMENTS 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES The RBB Fund, Inc. ("RBB" or "Company") was incorporated under the laws of the State of Maryland on February 29, 1988, and is registered under the Investment Company Act of 1940, as amended (the "Investment Company Act"), as an open-end management investment company. RBB is a "series fund," which is a mutual fund divided into separate portfolios. Each portfolio is treated as a separate entity for certain matters under the Investment Company Act, and for other purposes, and a shareholder of one portfolio is not deemed to be a shareholder of any other portfolio. Currently, RBB has eighteen active investment portfolios, including the N/I NUMERIC INVESTORS FAMILY OF FUNDS ("n/i numeric investors Family") which consists of four diversified portfolios: N/I NUMERIC INVESTORS Emerging Growth Fund ("Emerging Growth Fund"), N/I NUMERIC INVESTORS Growth Fund ("Growth Fund"), N/I NUMERIC INVESTORS Mid Cap Fund ("Mid Cap Fund") and N/I NUMERIC INVESTORS Small Cap Value Fund ("Small Cap Value Fund") (each, a "Fund," and collectively, the "Funds"). RBB has authorized capital of one hundred billion shares of common stock of which 76.673 billion shares are currently classified into one hundred and six classes of common stock. Each class represents an interest in an active or inactive RBB investment portfolio. The active classes have been grouped into eight separate "families." USE OF ESTIMATES -- The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. PORTFOLIO VALUATION -- Each Fund's net asset value ("NAV") is calculated once daily at the close of regular trading hours on the New York Stock Exchange ("NYSE") (generally 4:00 p.m. Eastern time) on each day the NYSE is open. Securities held by the Funds are valued using the closing price or the last sale price on a national securities exchange or the National Association of Securities Dealers Automatic Quotation System (NASDAQ) market system where they are primarily traded. Equity securities traded in the over-the-counter market are valued at their closing prices. If there were no transactions on that day, securities traded principally on an exchange or on NASDAQ will be valued at the mean of the last bid and ask prices prior to the market close. Fixed income securities having a remaining maturity of greater than 60 days are valued using an independent pricing service. Fixed income securities having a remaining maturity of 60 days or less are amortized to maturity based on their cost. Investments in other open-end investment companies are valued based on the NAV of those investment companies (which may use fair value pricing as discussed in their prospectuses). If market quotations are unavailable or deemed unreliable, securities will be valued in accordance with procedures adopted by the Company's Board of Directors. Relying on prices supplied by pricing services or dealers or using fair valuation may result in values that are higher or lower than the values used by other investment companies and investors to price the same investments. 18 [GRAPHIC OMITTED] N/I NUMERIC INVESTORS FAMILY OF FUNDS EMERGING GROWTH FUND GROWTH FUND MID CAP FUND SMALL CAP VALUE FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) REPURCHASE AGREEMENTS -- Each Fund has agreed to purchase securities from financial institutions subject to the seller's agreement to repurchase them at an agreed-upon time and price ("repurchase agreements"). The financial institutions with whom each Fund enters into repurchase agreements are banks and broker/dealers, which Numeric Investors LLC(R) (the Funds' "Adviser" or "Numeric") considers creditworthy. The seller under a repurchase agreement will be required to maintain the value of the securities as collateral, subject to the agreement at not less than the repurchase price plus Numeric marks to market daily the value of the collateral, and, if necessary, requires the seller to deposit additional collateral by the next business day, so that the value of the collateral is not less than the repurchase price. Default by or bankruptcy of the seller would, however, expose each Fund to possible loss because of adverse market action or delays in connection with the disposition of the underlying securities. FUTURES -- Each Numeric Fund may enter into futures contracts. A futures contract is an agreement between two parties to buy and sell a security at a set price on a future date. Upon entering into such a contract, a Fund is required to pledge to the broker an amount of cash and/or securities equal to the minimum "initial margin" requirements of the exchange on which such contract is traded. Pursuant to the contract, the Fund agrees to receive from, or pay to the broker, an amount of cash equal to the daily fluctuation in value of the contract. Such a receipt of payment is known as a "variation margin" and is recorded by each Fund as an unrealized gain or loss. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The Fund is also required to fully collateralize futures contracts purchased. The Fund only enters into futures contracts which are traded on exchanges. At February 28, 2007, the Funds did not hold any futures. INVESTMENT TRANSACTIONS, INVESTMENT INCOME AND EXPENSES -- The Funds record security transactions on the trade date. The cost of investments sold is determined by use of the specific identification method for both financial reporting and income tax purposes in determining realized gains and losses on investments. Interest income is accrued when earned. Dividend income is recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Funds estimate the components of distributions received that may be considered return of capital distributions or capital gain distributions. Expenses incurred on behalf of a specific fund or fund family are charged directly to the fund or fund family (in proportion to net assets). Expenses incurred for all of the RBB families (such as director or professional fees) are charged to all funds in proportion to their net assets of the RBB Funds, or in such other manner as the Board of Directors deems fair or equitable. Expenses and fees, including investment advisory and administration fees, are accrued daily and taken into account for the purpose of determining the net asset value of the Funds. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net investment income and distributions from net realized capital gains, if any, will be declared and recorded on the ex-dividend date and paid at least annually to shareholders. Income dividends and capital gain distributions are determined in accordance with U.S. federal income tax regulations, which may differ from accounting principles generally accepted in the United States of America. These differences can include the treatment of non-taxable dividends, expiring capital loss carryforwards, foreign currency gain/loss, and losses deferred due to wash sales and excise tax regulations. Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications within the composition of net assets. 19 [GRAPHIC OMITTED] N/I NUMERIC INVESTORS FAMILY OF FUNDS EMERGING GROWTH FUND GROWTH FUND MID CAP FUND SMALL CAP VALUE FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) U.S. TAX STATUS -- No provision is made for U.S. income taxes as it is each Fund's intention to continue to qualify for and elect the tax treatment applicable to regulated investment companies under Subchapter M of the Internal Revenue Code of 1986, as amended, and make the requisite distributions to its shareholders which will be sufficient to relieve it from all or substantially all U.S. federal income and excise taxes. OTHER -- In the normal course of business, the Funds may enter into contracts that provide general indemnifications. The Funds' maximum exposure under these arrangements is dependent on claims that may be made against the Funds in the future, and, therefore, cannot be estimated; however, based on experience, the risk of material loss for such claims is considered remote. 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES Numeric serves as each Fund's investment adviser. Numeric is entitled to a performance based fee for its advisory services for the Growth, Mid Cap and Small Cap Value Funds calculated at the end of each month using a basic fee of 0.85% of average daily net assets and a performance fee adjustment based upon each Fund's performance during the last rolling 12-month period. Each Fund's net performance is compared with the performance of its benchmark index during that same rolling 12-month period. When a Fund's performance is between 4.00% and 4.99% better than its benchmark, it would pay Numeric the basic fee. When a Fund's performance is at least 5.00% better than its benchmark, it would pay Numeric more than the basic fee. If a Fund did not perform at least 4.00% better than its benchmark, Numeric would be paid less than the basic fee. Each 1.00% of the difference in performance between a Fund and its benchmark plus 4.00% during the performance period would result in a 0.10% adjustment to the basic fee. The benchmark index for the Growth Fund is the Russell 2500(R) Growth Index. On November 12, 2004, during a special meeting, shareholders of the Mid Cap Fund approved a proposal to change the Fund's benchmark from the S&P MidCap 400(R) Index to the Russell MidCap(R) Index. The Adviser elected to change the benchmark index because the Russell MidCap(R) Index more appropriately reflects the types of securities held in the Fund's portfolio and provides the best comparative performance information. From December 1, 2004 through November 30, 2005, the performance fee was compared to both the S&P MidCap 400(R) Index and the Russell MidCap(R) Index separately each month. Each month during this period, the Fund paid the advisory fee based upon whichever performance fee calculation resulted in a lower advisory fee. Effective December 1, 2005, the Fund began paying an advisory fee based solely on the performance fee calculation of the Russell MidCap(R) Index. The benchmark index for the Small Cap Value Fund is the Russell 2000(R) Value Index. The maximum annualized performance adjustment rate would be + or - 0.50% of average daily net assets which would be added to or deducted from the basic fee if a Fund outperformed its benchmark index over a rolling 12-month period by 9.00% or more or if it underperformed its benchmark index over a rolling 12-month period. 20 [GRAPHIC OMITTED] N/I NUMERIC INVESTORS FAMILY OF FUNDS EMERGING GROWTH FUND GROWTH FUND MID CAP FUND SMALL CAP VALUE FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) The chart below shows what the management fee rate would be if a Fund exceeds its benchmark by the stated amount.
PERCENTAGE POINT DIFFERENCE BETWEEN FUND PERFORMANCE PERFORMANCE TOTAL (NET OF EXPENSES INCLUDING ADVISORY FEES) AND ADJUSTMENT ADVISORY FEE CHANGE IN TOTAL BENCHMARK INDEX BASIC FEE RATE RATE -------------------------------------------------- --------- ----------- ------------- +9% or more............................................................. 0.85% 0.50% 1.35% +8% or more but less than +9%........................................... 0.85% 0.40% 1.25% +7% or more but less than +8%........................................... 0.85% 0.30% 1.15% +6% or more but less than +7%........................................... 0.85% 0.20% 1.05% +5% or more but less than +6%........................................... 0.85% 0.10% 0.95% +4% or more but less than +5%........................................... 0.85% None 0.85% +3% or more but less than +4%........................................... 0.85% (0.10)% 0.75% +2% or more but less than +3%........................................... 0.85% (0.20)% 0.65% +1% or more but less than +2%........................................... 0.85% (0.30)% 0.55% +0% or more but less than +1%........................................... 0.85% (0.40)% 0.45% Less than 0%............................................................ 0.85% (0.50)% 0.35%
At the end of each month, the advisory fee rate is applied to the net assets averaged over the same 12-month rolling period over which the investment performance of a Fund was measured to determine the monthly management fee. Numeric is entitled to receive 0.75% of the Emerging Growth Fund's average daily net assets, computed daily and payable monthly for its advisory services. For the six months ended February 28, 2007, investment advisory fees were as follows: FUND ADVISORY FEES ---- ------------- Emerging Growth Fund ........................ $425,412 Growth Fund ................................. 81,901 Mid Cap Fund ................................ 101,966 Small Cap Value Fund ........................ 430,722 During the fiscal year ended August 31, 2004, the Staff of the Securities and Exchange Commission (the "SEC" or "Staff") notified RBB that the methodology used to calculate the performance-based investment advisory fee for the Small Cap Value Fund, the Growth Fund and the Mid Cap Fund managed by Numeric did not comply with the rules under the Investment Advisers Act of 1940, as amended, (the "Advisers Act") concerning performance fees. The rules under the Advisers Act require the performance rate to be applied to the average net assets over the performance period (a twelve-month rolling period for these Funds) rather than the average daily net assets in the most recent month, as was done previously. 21 [GRAPHIC OMITTED] N/I NUMERIC INVESTORS FAMILY OF FUNDS EMERGING GROWTH FUND GROWTH FUND MID CAP FUND SMALL CAP VALUE FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) Applying the revised methodology to the Small Cap Value Fund for the period since the inception of the performance fee (January 2001) indicates that the Small Cap Value Fund overpaid Numeric by approximately $920,000. In addition, the Staff indicated that interest of approximately $110,000 was also due from Numeric on this amount. During December 2005, Numeric reimbursed these amounts to the Small Cap Value Fund. With respect to the Growth Fund and the Mid Cap Fund, application of the revised methodology indicated that these funds had underpaid Numeric since the inception of the performance fee. Numeric has agreed to waive repayment of the underpaid fees. On September 7, 2006, Numeric consented to the entry of a cease-and-desist order by the SEC in connection with violations of Section 205(a) of the Advisers Act as a result of the use of an incorrect methodology to calculate performance-based investment advisory fees for the Small Cap Value Fund, the Growth Fund and the Mid Cap Fund as described above. There were no changes to the amount above due to the cease-and-desist order. Effective September 1, 2004, the performance for all three aforementioned Funds began to be calculated in accordance with the Advisers Act. PFPC Inc. ("PFPC"), a wholly-owned subsidiary of PFPC Worldwide, Inc. and an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc., and Bear Stearns Funds Management Inc. ("BSFM"), a wholly-owned subsidiary of The Bear Stearns Companies Inc., serve as co-administrators for each Fund. For providing administrative services PFPC is entitled to receive a monthly fee equal to an annual rate of 0.125% of each Fund's average daily net assets subject to a minimum monthly fee of $6,250 per Fund. BSFM is entitled to receive a monthly fee equal to an annual rate of 0.05% on the first $150 million and 0.02% of each Fund's average daily net assets thereafter. For the six months ended February 28, 2007, PFPC voluntarily agreed to waive a portion of its administration fees. During such period, co-administration fees and related waivers were as follows:
TOTAL NET C0-ADMINISTRATION C0-ADMINISTRATION FUND FEES WAIVERS FEES ---- ----------------- ---------- ----------------- Emerging Growth Fund........................................ $118,798 $(12,751) $106,047 Growth Fund................................................. 58,679 (2,500) 56,179 Mid Cap Fund................................................ 66,738 (2,500) 64,238 Small Cap Value Fund........................................ 206,744 (24,132) 182,612
Included in the Co-Administration Fees shown above are fees for providing regulatory administration services to RBB. For providing these services, PFPC is entitled to receive compensation as agreed to by the Company and PFPC. This fee is allocated to each portfolio in proportion to its net assets of the RBB Funds. In addition, PFPC serves as each Fund's transfer and dividend disbursing agent. For the six months ended February 28, 2007, transfer agency fees and expenses were $86,402, $68,710, $77,358, and $84,323 for the Emerging Growth Fund, Growth Fund, Mid Cap Fund and Small Cap Value Fund, respectively. 22 [GRAPHIC OMITTED] N/I NUMERIC INVESTORS FAMILY OF FUNDS EMERGING GROWTH FUND GROWTH FUND MID CAP FUND SMALL CAP VALUE FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) PFPC Distributors, Inc. ("PFPC Distributors"), a wholly-owned subsidiary of PFPC Worldwide, Inc. and an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc., provides certain administrative services to each Fund. As compensation for such administrative services, PFPC Distributors received a monthly fee equal to an annual rate of 0.15% of each Fund's average daily net assets. For the six months ended February 28, 2007, PFPC Distributors voluntarily agreed to waive a portion of its administrative services fees for each Fund. During such period, administrative services fees were as follows:
TOTAL ADMINISTRATIVE NET ADMINISTRATIVE FUND SERVICES FEES WAIVERS SERVICES FEES ---- -------------- ---------- ----------------- Emerging Growth Fund....................................... $ 85,007 $ (73,672) $11,335 Growth Fund................................................ 21,195 (18,369) 2,426 Mid Cap Fund............................................... 41,996 (36,397) 5,599 Small Cap Value Fund....................................... 160,879 (139,429) 21,450
As of February 28, 2007, the Emerging Growth Fund, Growth Fund, Mid Cap Fund and Small Cap Value Fund owed PFPC and its affiliates $75,004, $67,697, $67,867 and $80,479, respectively, for their services. 3. SHAREHOLDER SERVICES PLAN The Board of Directors of the Company approved a Shareholder Services Plan which permits the Funds to pay fees to certain "shareholder organizations" of up to 0.25% of the average daily net assets of accounts held with each Fund for which such organizations provide services for the benefit of customers. Shareholder organizations may include trusts, foundations, plan administrators or broker-dealers purchasing Fund shares for the account of others, and such organizations agree to provide certain shareholder and administrative services to underlying investors holding shares of the Funds. Services that may be provided include acting as a shareholder of record, processing purchase and redemption orders, maintaining investor account records and answering questions regarding the Funds. 4. INVESTMENT IN SECURITIES For the six months ended February 28, 2007, aggregate purchases and sales of investment securities (excluding short-term investments) were as follows:
FUND PURCHASES SALES ---- --------------- --------------- Emerging Growth Fund........................................................ $ 83,185,045 $227,075,889 Growth Fund................................................................. 20,361,705 52,990,152 Mid Cap Fund................................................................ 47,267,665 96,008,987 Small Cap Value Fund...................................................... 152,364,858 400,599,082
23 [GRAPHIC OMITTED] N/I NUMERIC INVESTORS FAMILY OF FUNDS EMERGING GROWTH FUND GROWTH FUND MID CAP FUND SMALL CAP VALUE FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) 5. CAPITAL SHARE TRANSACTIONS As of February 28, 2007, each Fund has 50,000,000 shares of $0.001 par value capital stock authorized. Transactions in capital shares for the respective periods were as follows:
EMERGING GROWTH FUND ------------------------------------------------------------ FOR THE SIX MONTHS ENDED FOR THE FEBRUARY 28, 2007 FISCAL YEAR ENDED (UNAUDITED) AUGUST 31, 2006 -------------------------- ---------------------------- SHARES AMOUNT SHARES AMOUNT ----------- ------------- ----------- -------------- Sales........................................................ 111,538 $ 1,505,276 329,837 $ 4,840,088 Repurchases.................................................. (8,181,271) (106,883,322) (2,664,563) (37,998,732) Redemption fees(1)........................................... -- 361 -- 4,806 Reinvestments................................................ 2,001,023 26,296,679 1,864,420 24,610,461 ---------- ------------- --------- ------------ Net decrease ................................................ (6,068,710) $ (79,081,006) (470,306) $ (8,543,377) ========== ============= ========= ============
GROWTH FUND ------------------------------------------------------------ FOR THE SIX MONTHS ENDED FOR THE FEBRUARY 28, 2007 FISCAL YEAR ENDED (UNAUDITED) AUGUST 31, 2006 -------------------------- ---------------------------- SHARES AMOUNT SHARES AMOUNT ----------- ------------- ----------- -------------- Sales........................................................ 45,578 $ 660,836 230,980 $ 3,588,524 Repurchases.................................................. (1,507,595) (21,160,607) (1,304,095) (20,481,398) Redemption fees(1)........................................... -- 997 -- 7,635 Reinvestments................................................ 395,890 5,525,648 264,729 3,777,680 ---------- ------------- --------- ------------ Net decrease................................................. (1,066,127) $ (14,973,126) (808,386) $(13,107,559) ========== ============= ========= ============
MID CAP FUND ------------------------------------------------------------ FOR THE SIX MONTHS ENDED FOR THE FEBRUARY 28, 2007 FISCAL YEAR ENDED (UNAUDITED) AUGUST 31, 2006 -------------------------- ---------------------------- SHARES AMOUNT SHARES AMOUNT ----------- ------------- ----------- -------------- Sales........................................................ 1,062,052 $ 19,444,167 649,466 $11,903,338 Repurchases.................................................. (1,400,249) (25,236,301) (318,312) (5,832,947) Redemption fees(1)........................................... -- 21,833 -- 9,193 Reinvestments................................................ 344,878 6,108,210 377,022 6,159,509 ---------- ------------- --------- ------------ Net increase................................................. 6,681 $ 337,909 708,176 $12,239,093 ========== ============= ========= ===========
24 [GRAPHIC OMITTED] N/I NUMERIC INVESTORS FAMILY OF FUNDS EMERGING GROWTH FUND GROWTH FUND MID CAP FUND SMALL CAP VALUE FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SMALL CAP VALUE FUND ------------------------------------------------------------ FOR THE SIX MONTHS ENDED FOR THE FEBRUARY 28, 2007 FISCAL YEAR ENDED (UNAUDITED) AUGUST 31, 2006 -------------------------- ---------------------------- SHARES AMOUNT SHARES AMOUNT ----------- ------------- ----------- -------------- Sales................................................... 638,290 $ 11,175,710 1,418,700 $ 25,551,623 Repurchases............................................. (10,136,893) (174,493,330) (3,402,955) (60,282,581) Redemption fees(1)...................................... -- 9,331 -- 25,464 Reinvestments........................................... 2,132,463 35,948,869 2,648,951 42,914,339 ---------- ------------- --------- ------------ Net increase/(decrease)................................. (7,366,140) $(127,359,420) 664,696 $ 8,208,845 =========== ============= ========= ============
(1) There is a 2.00% redemption fee on shares redeemed which have been held for less than one year on each of the Funds. The redemption fees are collected and retained by each Fund for the benefit of the remaining shareholders and recorded as additional paid-in capital. As of February 28, 2007, the following shareholders held 10% or more of the outstanding shares of the Funds. These shareholders may be omnibus accounts which are comprised of many individual shareholders. Emerging Growth Fund (1 shareholder)...................... 19% Growth Fund (1 shareholder)............................... 29% Mid Cap Fund (1 shareholder).............................. 48% Small Cap Value Fund (1 shareholder)...................... 54% 6. SECURITIES LENDING Loans of securities are required at all times to be secured by collateral equal to at least 100% of the market value of the securities on loan. However, in the event of default or bankruptcy by the other party to the agreement, realization and/or retention of the collateral may be subject to legal proceedings. In the event that the borrower fails to return securities, and collateral being maintained by the lender is insufficient to cover the value of loaned securities, the borrower is obligated to pay the amount of the shortfall (and interest thereon) to the Funds. However, there can be no assurance the Funds can recover this amount. The Funds had no securities on loan to brokers as of February 28, 2007. 7. FEDERAL INCOME TAX INFORMATION As of August 31, 2006, the components of distributable earnings on a tax basis were as follows: UNDISTRIBUTED UNDISTRIBUTED ORDINARY LONG-TERM FUND INCOME GAINS ---- -------------- -------------- Emerging Growth Fund........................... $18,827,632 $3,849,497 Growth Fund.................................... 3,639,403 599,308 Mid Cap Fund................................... 3,775,488 630,008 Small Cap Value Fund........................... 24,758,218 4,112,682 At August 31, 2006, the Funds had no capital loss carryforwards available to offset future capital gains. 25 [GRAPHIC OMITTED] N/I NUMERIC INVESTORS FAMILY OF FUNDS EMERGING GROWTH FUND GROWTH FUND MID CAP FUND SMALL CAP VALUE FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) The estimated tax character of dividends and distributions paid during the six months ended February 28, 2007 and the fiscal year ended August 31, 2006 are as follows:
ORDINARY LONG-TERM FUND PERIOD INCOME GAINS TOTAL ---- -------- ----------- ---------- ------------ Emerging Growth Fund........................... 2/28/07 $20,150,439 $6,542,828 $26,693,267 8/31/06 20,674,149 5,481,053 26,155,202 Growth Fund.................................... 2/28/07 4,533,453 1,297,514 5,830,967 8/31/06 2,271,085 1,661,770 3,932,855 Mid Cap Fund................................... 2/28/07 4,227,485 2,031,221 6,258,706 8/31/06 5,604,812 740,258 6,345,070 Small Cap Value Fund........................... 2/28/07 30,336,947 6,594,815 36,931,762 8/31/06 41,045,812 4,338,586 45,384,398
8. NEW ACCOUNTING PRONOUNCEMENTS In July 2006, the Financial Accounting Standards Board ("FASB")issued Interpretation No. 48, "Accounting for Uncertainty in Income Taxes - an Interpretation of FASB Statement No. 109" (the "Interpretation"). The Interpretation establishes for all entities, a minimum threshold for financial statement recognition of the benefit of positions taken in filing tax returns (including whether an entity is taxable in a particular jurisdiction), and requires certain expanded tax disclosures. The Interpretation is effective for fiscal years beginning after December 15, 2006, and is required to be implemented by calendar year funds by no later than June 29, 2007. In September 2006, the FASB issued Statement of Financial Accounting Standards ("SFAS") 157, Fair Value Measurements, which clarifies the definition of fair value and requires companies to expand their disclosure about the use of fair value to measure assets and liabilities in interim and annual periods subsequent to initial recognition. Adoption of SFAS 157 requires the use of the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. 9. SUBSEQUENT EVENT On January 12, 2007, the Board of Directors of the Company considered and approved a proposal to effect liquidating redemptions of all shares of the Funds. The liquidating redemptions occurred on March 30, 2007. 26 [GRAPHIC OMITTED] N/I NUMERIC INVESTORS FAMILY OF FUNDS EMERGING GROWTH FUND GROWTH FUND MID CAP FUND SMALL CAP VALUE FUND OTHER INFORMATION (UNAUDITED)_ PROXY VOTING Policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities as well as information regarding how the Funds voted proxies relating to portfolio securities for the most recent 12-month period ended June 30 are available without charge, upon request, by calling (800) 348-5031 and on the Securities and Exchange Commission's ("SEC") website at http://www.sec.gov. QUARTERLY PORTFOLIO SCHEDULES The Company will file its complete schedule of portfolio holdings with the SEC for the first and third fiscal quarters of each fiscal year (quarters ended November 30 and May 31) on Form N-Q. The Company's Form N-Q will be available on the SEC's website at http://www.sec.gov and may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. Information on the operation of the SEC Public Reference Room may be obtained by calling 1-800-SEC-0330. 27 [THIS PAGE INTENTIONALLY LEFT BLANK.] [THIS PAGE INTENTIONALLY LEFT BLANK.] [THIS PAGE INTENTIONALLY LEFT BLANK.] [GRAPHIC OMITTED] N/I NUMERIC INVESTORS FAMILY OF FUNDS 101 Sabin Street Pawtucket, RI 02866 1-800-numeric [686-3742] http://www.numeric.com INVESTMENT ADVISER Numeric Investors LLC(R) One Memorial Drive, 9th floor Cambridge, MA 02142 CO-ADMINISTRATORS Bear Stearns Funds Management Inc. 383 Madison Avenue New York, NY 10179 PFPC Inc. Bellevue Corporate Center 301 Bellevue Parkway Wilmington, DE 19809 DISTRIBUTOR PFPC Distributors, Inc. 760 Moore Road King of Prussia, PA 19406 CUSTODIAN Custodial Trust Company 101 Carnegie Center Princeton, NJ 08540 TRANSFER AGENT PFPC Inc. 101 Sabin Street Pawtucket, RI 02866 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM PricewaterhouseCoopers LLP Two Commerce Square Philadelphia, PA 19103 COUNSEL Drinker Biddle & Reath LLP One Logan Square 18th and Cherry Streets Philadelphia, PA 19103 ROBECO ------ ------ ------ ------ ------ ------ ------ ------ ROBECO INVESTMENT FUNDS OF THE RBB FUND, INC. SEMI-ANNUAL REPORT FEBRUARY 28, 2007 (UNAUDITED) ROBECO BOSTON PARTNERS SMALL CAP VALUE FUND II ROBECO BOSTON PARTNERS LONG/SHORT EQUITY FUND ROBECO BOSTON PARTNERS LARGE CAP VALUE FUND ROBECO BOSTON PARTNERS MID CAP VALUE FUND ROBECO BOSTON PARTNERS ALL-CAP VALUE FUND ROBECO WPG SMALL CAP VALUE FUND ROBECO WPG LARGE CAP GROWTH FUND ROBECO WPG CORE BOND FUND THIS REPORT IS SUBMITTED FOR THE GENERAL INFORMATION OF THE SHAREHOLDERS OF THE FUNDS. IT IS NOT AUTHORIZED FOR DISTRIBUTION UNLESS PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS FOR THE FUNDS. SHARES OF ROBECO INVESTMENT FUNDS ARE DISTRIBUTED BY PFPC DISTRIBUTORS, INC., 760 MOORE ROAD, KING OF PRUSSIA, PA 19406. ROBECO INVESTMENT FUNDS -------------------------------------------------------------------------------- GENERAL MARKET COMMENTARY Dear Shareholder: The U.S. equity markets continued their positive performance through the end of calendar year 2006. Most major U.S. equity indices posted double digit returns in 2006 with value beating growth and small cap beating large cap. While January 2007 witnessed continued positive returns despite a rocky start, February was negatively impacted by the heavy sell-off activity in the Far East and the U.S. equity markets were down for the month. During the six-month period of September 1, 2006 through February 28, 2007, the fixed income market spread between lower quality and investment grade bonds continued to tighten and the yield curve remained flat. An encouraging outlook from the Federal Reserve in January boosted investor confidence but the prime rate was held steady at 5.25% as the Fed continued to assess the outlook for inflation and economic growth. Ripples in the global capital markets combined with uncertainty in the housing and sub-prime lending sectors create an interesting environment as we head into the second half of the Robeco Investment Funds' fiscal year. Although the level of perceived risk has increased, we view the accompanying increase in volatility as a benefit to our style of equity investing. Our portfolios are comprised of fundamentally sound companies generating attractive levels of free cash flow, which are important characteristics during times of stress in the financial markets. We will continue to implement our philosophy of investing in high quality companies. The following pages provide returns, holdings, sector information and other useful information regarding each Fund and Share Class. We encourage you to review your particular investment and welcome any questions that you may have. Warm regards, Robeco Investment Funds SEMI-ANNUAL REPORT 2007 | 1 ROBECO INVESTMENT FUNDS -------------------------------------------------------------------------------- TOTAL RETURNS FOR THE PERIOD ENDED FEBRUARY 28, 2007 (UNAUDITED)
AVERAGE ANNUAL ------------------------------------ SINCE SIX-MONTH 1 YEAR 5 YEAR 10 YEAR INCEPTION --------- ------ ------ ------- --------- ROBECO BOSTON PARTNERS SMALL CAP VALUE FUND II Institutional Class(1) 13.47% 12.09% 14.48% N/A 15.70% Investor Class(1) 13.35% 11.86% 14.19% N/A 15.45% Russell 2000(R) Value Index 10.37% 14.34% 14.99% N/A 11.32% Russell 2000(R) Index(2) 10.76% 9.87% 12.44% N/A 7.92% 1 Inception date July 1, 1998 2 This is not a primary benchmark of the Fund. Results of index performance are presented for general comparative purposes. ROBECO BOSTON PARTNERS LONG/SHORT EQUITY FUND Institutional Class(1) 7.73% 22.58% 8.20% N/A 11.31% Investor Class(1) 7.60% 22.32% 7.94% N/A 11.06% S&P 500(R) Index 8.93% 11.97% 6.81% N/A 3.94% 1 Inception date November 17, 1998 ROBECO BOSTON PARTNERS LARGE CAP VALUE FUND Institutional Class 9.81% 14.63% 9.64% 9.36% N/A Investor Class 9.68% 14.33% 9.36% 9.11% N/A S&P 500(R) Index 8.93% 11.97% 6.81% 7.63% N/A Russell 1000(R) Value Index(1) 9.82% 16.61% 10.93% 10.28% N/A 1 This is not a primary benchmark of the Fund. Results of index performance are presented for general comparative purposes. ROBECO BOSTON PARTNERS MID CAP VALUE FUND Institutional Class(1) 17.40% 18.86% 13.18% N/A 10.10% Investor Class(1) 17.22% 18.61% 12.90% N/A 9.86% Russell 2500(R) Value Index(2) 12.45% 14.85% 15.47% N/A 13.21% Russell 2500(R) Index(2) 12.83% 11.35% 13.43% N/A 11.10% Russell Midcap(R) Value Index 13.95% 18.36% 16.12% N/A 13.30% 1 Inception date June 2, 1997 2 This is not a primary benchmark of the Fund. Results of index performance are presented for general comparative purposes. ROBECO BOSTON PARTNERS ALL-CAP VALUE FUND Institutional Class(1) 10.77% 13.89% N/A N/A 15.52% Investor Class(1) 10.68% 13.66% N/A N/A 15.25% Russell 3000(R) Value Index 9.87% 16.40% N/A N/A 12.95% Russell 3000(R) Index(2) 9.77% 12.03% N/A N/A 10.81% 1 Inception date July 1, 2002 2 This is not a primary benchmark of the Fund. Results of index performance are presented for general comparative purposes.
2 | SEMI-ANNUAL REPORT 2007 ROBECO INVESTMENT FUNDS -------------------------------------------------------------------------------- TOTAL RETURNS FOR THE PERIOD ENDED FEBRUARY 28, 2007 (UNAUDITED)
AVERAGE ANNUAL ------------------------------------ SINCE SIX-MONTH 1 YEAR 5 YEAR 10 YEAR INCEPTION --------- ------ ------ ------- --------- ROBECO WPG SMALL CAP VALUE FUND1 Institutional Class 14.82% 18.55% 12.77% 6.61% N/A Russell 2000(R) Value Index 10.37% 14.34% 14.99% 13.02% N/A 1 Formerly Robeco WPG Tudor Fund (name changed 1/1/2007) ROBECO WPG LARGE CAP GROWTH FUND Institutional Class 8.28% 7.89% 3.54% 5.31% N/A Russell 1000(R) Growth Index 9.54% 8.05% 4.07% 4.87% N/A ROBECO WPG CORE BOND FUND Institutional Class 3.49% 4.84% 5.12% 6.32% N/A Investor Class(1) 3.36% 4.59% N/A N/A 3.79% Retirement Class(1) 3.43% 4.75% N/A N/A 2.86% Lehman Brothers Aggregate Index 3.66% 7.54% 5.00% 6.34% N/A 1 Inception date January 17, 2006 for Investor Class and September 1, 2005 for Retirement Class
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE. 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. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH-END, PLEASE CALL 1-888-261-4073 OR VISIT OUR WEBSITE AT WWW.ROBECOINVEST.COM. ROBECO INVESTMENT MANAGEMENT, INC. CONTRACTUALLY AGREED TO WAIVE A PORTION OF THEIR ADVISORY FEE AND REIMBURSE A PORTION OF THE FUNDS' OPERATING EXPENSES, IF NECESSARY, TO MAINTAIN THE EXPENSE LIMITATIONS, IF ANY, AS SET FORTH IN THE NOTES TO THE FINANCIAL STATEMENTS. TOTAL RETURNS SHOWN INCLUDE FEE WAIVERS AND EXPENSE REIMBURSEMENTS, IF ANY; TOTAL RETURNS WOULD HAVE BEEN LOWER HAD THERE BEEN NO WAIVER OR REIMBURSEMENT OF FEES AND EXPENSES IN EXCESS OF EXPENSE LIMITATIONS. RETURNS SHOWN INCLUDE THE REINVESTMENT OF ALL DIVIDENDS AND OTHER DISTRIBUTIONS AND DO NOT REFLECT TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR ON THE REDEMPTION OF FUND SHARES. INVESTORS SHOULD NOTE THAT THE FUNDS ARE ACTIVELY MANAGED MUTUAL FUNDS WHILE THE INDICES ARE UNMANAGED, DO NOT INCUR EXPENSES AND ARE NOT AVAILABLE FOR INVESTMENT. SMALL COMPANY STOCKS ARE GENERALLY RISKIER THAN LARGE COMPANY STOCKS DUE TO GREATER VOLATILITY AND LESS LIQUIDITY. The following are the gross annual operating expense ratios as stated in the most recent prospectus:
Institutional Investor Retirement Class Class Class ------------- -------- ---------- Robeco Boston Partners Small Cap Value Fund II ................................. 1.53% 1.78% N/A Robeco Boston Partners Long/Short Equity Fund .................................. 3.40% 3.65% N/A Robeco Boston Partners Large Cap Value Fund .................................... 1.22% 1.47% N/A Robeco Boston Partners Mid Cap Value Fund ...................................... 1.38% 1.63% N/A Robeco Boston Partners All-Cap Value Fund ...................................... 2.93% 3.18% N/A Robeco WPG Small Cap Value Fund ........................... 1.43% N/A N/A Robeco WPG Large Cap Growth Fund ............................................. 1.79% N/A N/A Robeco WPG Core Bond Fund ................................. 0.79% 0.68% 0.53%
SEMI-ANNUAL REPORT 2007 | 3 ROBECO INVESTMENT FUNDS -------------------------------------------------------------------------------- FUND EXPENSE EXAMPLES (unaudited) As a shareholder of the Fund(s), you incur two types of costs: (1) transaction costs, redemption fees; and (2) ongoing costs, including management fees, distribution fees and other Fund expenses. The examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund(s) and to compare these costs with the ongoing costs of investing in other mutual funds. The examples are based on an investment of $1,000 invested at the beginning of the six month period from September 1, 2006 through February 28, 2007, and held for the entire period. ACTUAL EXPENSES The first line of the accompanying tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second line of the accompanying tables provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare these 5% hypothetical examples with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that the expenses shown in the accompanying tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees. Therefore, the second line of the accompanying tables is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
ROBECO BOSTON PARTNERS SMALL CAP VALUE FUND II -- INSTITUTIONAL CLASS ------------------------------------------------------------------------ BEGINNING ACCOUNT ENDING ACCOUNT VALUE VALUE EXPENSES PAID DURING SEPTEMBER 1, 2006 FEBRUARY 28, 2007 PERIOD* -------------------- ------------------- -------------------- Actual................................................. $1,000.00 $1,134.70 $ 8.20 Hypothetical (5% return before expenses)............... 1,000.00 1,017.02 7.78
ROBECO BOSTON PARTNERS SMALL CAP VALUE FUND II -- INVESTOR CLASS ------------------------------------------------------------------------ BEGINNING ACCOUNT ENDING ACCOUNT VALUE VALUE EXPENSES PAID DURING SEPTEMBER 1, 2006 FEBRUARY 28, 2007 PERIOD* -------------------- ------------------- -------------------- Actual $1,000.00 $1,133.50 $ 9.52 Hypothetical (5% return before expenses)............... 1,000.00 1,015.76 9.04 ------------------------------------------------------------------------------------------------------------------------------
ROBECO BOSTON PARTNERS LONG/SHORT EQUITY FUND -- INSTITUTIONAL CLASS ------------------------------------------------------------------------ BEGINNING ACCOUNT ENDING ACCOUNT VALUE VALUE EXPENSES PAID DURING SEPTEMBER 1, 2006 FEBRUARY 28, 2007 PERIOD* -------------------- ------------------- -------------------- Actual................................................. $1,000.00 $1,077.30 $ 16.95 Hypothetical (5% return before expenses)............... 1,000.00 1,008.28 16.52
4 | SEMI-ANNUAL REPORT 2007 ROBECO INVESTMENT FUNDS -------------------------------------------------------------------------------- FUND EXPENSE EXAMPLES (unaudited) (continued)
ROBECO BOSTON PARTNERS LONG/SHORT EQUITY FUND -- INVESTOR CLASS ------------------------------------------------------------------------ BEGINNING ACCOUNT ENDING ACCOUNT VALUE VALUE EXPENSES PAID DURING SEPTEMBER 1, 2006 FEBRUARY 28, 2007 PERIOD* -------------------- ------------------- -------------------- Actual................................................. $1,000.00 $1,076.00 $ 18.22 Hypothetical (5% return before expenses)............... 1,000.00 1,007.03 17.77 ------------------------------------------------------------------------------------------------------------------------------
ROBECO BOSTON PARTNERS LARGE CAP VALUE FUND -- INSTITUTIONAL CLASS ------------------------------------------------------------------------ BEGINNING ACCOUNT ENDING ACCOUNT VALUE VALUE EXPENSES PAID DURING SEPTEMBER 1, 2006 FEBRUARY 28, 2007 PERIOD* -------------------- ------------------- -------------------- Actual................................................. $1,000.00 $1,098.10 $ 3.90 Hypothetical (5% return before expenses)............... 1,000.00 1,021.03 3.77
ROBECO BOSTON PARTNERS LARGE CAP VALUE FUND -- INVESTOR CLASS ------------------------------------------------------------------------ BEGINNING ACCOUNT ENDING ACCOUNT VALUE VALUE EXPENSES PAID DURING SEPTEMBER 1, 2006 FEBRUARY 28, 2007 PERIOD* -------------------- ------------------- -------------------- Actual................................................. $1,000.00 $1,096.80 $ 5.20 Hypothetical (5% return before expenses)............... 1,000.00 1,019.78 5.02 ------------------------------------------------------------------------------------------------------------------------------
ROBECO BOSTON PARTNERS MID CAP VALUE FUND -- INSTITUTIONAL CLASS ------------------------------------------------------------------------ BEGINNING ACCOUNT ENDING ACCOUNT VALUE VALUE EXPENSES PAID DURING SEPTEMBER 1, 2006 FEBRUARY 28, 2007 PERIOD* -------------------- ------------------- -------------------- Actual................................................. $1,000.00 $1,174.00 $ 5.39 Hypothetical (5% return before expenses)............... 1,000.00 1,019.78 5.02
ROBECO BOSTON PARTNERS MID CAP VALUE FUND -- INVESTOR CLASS ------------------------------------------------------------------------ BEGINNING ACCOUNT ENDING ACCOUNT VALUE VALUE EXPENSES PAID DURING SEPTEMBER 1, 2006 FEBRUARY 28, 2007 PERIOD* -------------------- ------------------- -------------------- Actual................................................. $1,000.00 $1,172.20 $ 6.73 Hypothetical (5% return before expenses)............... 1,000.00 1,018.52 6.28 ------------------------------------------------------------------------------------------------------------------------------
ROBECO BOSTON PARTNERS ALL-CAP VALUE FUND -- INSTITUTIONAL CLASS ------------------------------------------------------------------------ BEGINNING ACCOUNT ENDING ACCOUNT VALUE VALUE EXPENSES PAID DURING SEPTEMBER 1, 2006 FEBRUARY 28, 2007 PERIOD* -------------------- ------------------- -------------------- Actual................................................. $1,000.00 $1,107.70 $ 4.96 Hypothetical (5% return before expenses)............... 1,000.00 1,020.03 4.77
ROBECO BOSTON PARTNERS ALL-CAP VALUE FUND -- INVESTOR CLASS ------------------------------------------------------------------------ BEGINNING ACCOUNT ENDING ACCOUNT VALUE VALUE EXPENSES PAID DURING SEPTEMBER 1, 2006 FEBRUARY 28, 2007 PERIOD* -------------------- ------------------- -------------------- Actual................................................. $1,000.00 $1,106.80 $ 6.27 Hypothetical (5% return before expenses)............... 1,000.00 1,018.78 6.02 ------------------------------------------------------------------------------------------------------------------------------
SEMI-ANNUAL REPORT 2007 | 5 FUND EXPENSE EXAMPLES (unaudited) (concluded) --------------------------------------------------------------------------------
ROBECO WPG SMALL CAP VALUE FUND(2) -- INSTITUTIONAL CLASS ------------------------------------------------------------------------ BEGINNING ACCOUNT ENDING ACCOUNT VALUE VALUE EXPENSES PAID DURING SEPTEMBER 1, 2006 FEBRUARY 28, 2007 PERIOD* -------------------- ------------------- -------------------- Actual................................................. $1,000.00 $1,148.20 $ 7.94 Hypothetical (5% return before expenses)............... 1,000.00 1,017.32 7.48 ------------------------------------------------------------------------------------------------------------------------------
ROBECO WPG LARGE CAP GROWTH FUND -- INSTITUTIONAL CLASS ------------------------------------------------------------------------ BEGINNING ACCOUNT ENDING ACCOUNT VALUE VALUE EXPENSES PAID DURING SEPTEMBER 1, 2006 FEBRUARY 28, 2007 PERIOD* -------------------- ------------------- -------------------- Actual................................................. $1,000.00 $1,082.80 $ 7.23 Hypothetical (5% return before expenses)............... 1,000.00 1,017.77 7.03 ------------------------------------------------------------------------------------------------------------------------------
ROBECO WPG CORE BOND FUND -- INSTITUTIONAL CLASS ------------------------------------------------------------------------ BEGINNING ACCOUNT ENDING ACCOUNT VALUE VALUE EXPENSES PAID DURING SEPTEMBER 1, 2006 FEBRUARY 28, 2007 PERIOD* -------------------- ------------------- -------------------- Actual................................................. $1,000.00 $1,034.90 $ 2.17 Hypothetical (5% return before expenses)............... 1,000.00 1,022.64 2.16
ROBECO WPG CORE BOND FUND -- INVESTOR CLASS ------------------------------------------------------------------------ BEGINNING ACCOUNT ENDING ACCOUNT VALUE VALUE EXPENSES PAID DURING SEPTEMBER 1, 2006 FEBRUARY 28, 2007 PERIOD* -------------------- ------------------- -------------------- Actual................................................. $1,000.00 $1,033.60 $ 3.43 Hypothetical (5% return before expenses)............... 1,000.00 1,021.39 3.41
ROBECO WPG CORE BOND FUND -- RETIREMENT CLASS ------------------------------------------------------------------------ BEGINNING ACCOUNT ENDING ACCOUNT VALUE VALUE EXPENSES PAID DURING SEPTEMBER 1, 2006 FEBRUARY 28, 2007 PERIOD* -------------------- ------------------- -------------------- Actual................................................. $1,000.00 $1,034.30 $ 2.67 Hypothetical (5% return before expenses)............... 1,000.00 1,022.14 2.66 ------------------------------------------------------------------------------------------------------------------------------
* Expenses are equal to the Fund's annualized expense ratios in the table below, which include waived fees or reimbursed expenses, multiplied by the average account value over the period, multiplied by the number of days (181) in the most recent fiscal half-year, then divided by 365 to reflect the one-year half period.
INSTITUTIONAL INVESTOR RETIREMENT -------------- ---------- ------------ Robeco Boston Partners Small Cap Value Fund II......... 1.55% 1.80% N/A Robeco Boston Partners Long/Short Equity Fund.......... 3.29%(1) 3.54%(1) N/A Robeco Boston Partners Large Cap Value Fund............ 0.75% 1.00% N/A Robeco Boston Partners Mid Cap Value Fund.............. 1.00% 1.25% N/A Robeco Boston Partners All-Cap Value Fund.............. 0.95% 1.20% N/A Robeco WPG Small Cap Value Fund........................ 1.49% N/A N/A Robeco WPG Large Cap Growth Fund....................... 1.40% N/A N/A Robeco WPG Core Bond Fund.............................. 0.43% 0.68% 0.53%
(1) These amounts include dividends and related interest expense paid on securities which the Fund has sold short ("short-sale dividends"). Short-sale dividends generally reduce the market value of the securities by the amount of the dividend declared -- thus increasing the Fund's unrealized gain or reducing the Fund's unrealized loss on the securities sold short. Short-sale dividends are treated as an expense, and increase the Fund's total expense ratio, although no cash is received or paid by the Fund. The amount of short-sale dividends was 0.79% of average net assets for the most recent fiscal half-year. (2) Formerly Robeco WPG Tudor Fund (name changed 1/1/2007) 6 | SEMI-ANNUAL REPORT 2007 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS SMALL CAP VALUE FUND II PORTFOLIO HOLDINGS SUMMARY TABLE % of Net Security Type/Industry Classification Assets Value ------------------------------------------- --------- ----------- COMMON STOCK Insurance - Other ............................... 13.9% $46,043,629 Health Care - Services .......................... 6.0 19,913,815 Services - Business ............................. 5.0 16,467,349 Real Estate Investment Trust (REIT) ........................................ 4.9 16,214,276 Apparel ......................................... 4.9 16,053,635 Manufacturing ................................... 3.7 12,161,370 Computer Equipment & Services ...................................... 3.5 11,627,180 Financial Services .............................. 2.9 9,755,725 Office Equipment & Supplies ..................... 2.8 9,111,461 Publishing & Information Services ...................................... 2.6 8,442,413 Automotive & Trucks ............................. 2.4 8,017,780 Electronics ..................................... 2.4 8,007,439 Consumer Non-Cyclical ........................... 2.3 7,748,180 Consulting Services ............................. 2.2 7,224,186 Semiconductor Equipment & Products ...................................... 2.1 6,980,613 Medical Equipment and Supplies .................. 2.1 6,862,488 Health Care - Drugs ............................. 1.9 6,445,325 Oil Services .................................... 1.8 6,011,163 Building & Construction ......................... 1.8 5,967,799 Aerospace & Defense ............................. 1.7 5,560,959 Chemicals - Specialty ........................... 1.7 5,487,486 Oil & Gas - Exploration ......................... 1.5 4,997,568 Containers ...................................... 1.5 4,822,088 Foods ........................................... 1.4 4,714,714 Building Products - Air & Heating ....................................... 1.4 4,475,328 Computer Software ............................... 1.3 4,454,164 Transport - Services ............................ 1.3 4,197,593 Consumer Products ............................... 1.2 3,996,858 Banks - Regional ................................ 1.1 3,605,930 Motor Homes ..................................... 1.0 3,353,950 Paper, Forest Products & Packaging ..................................... 0.9 2,973,793 Internet Services ............................... 0.9 2,962,650 Building Materials .............................. 0.9 2,903,040 Business & Public Services ...................... 0.8 2,742,984 Commercial Services ............................. 0.7 2,465,980 Tobacco ......................................... 0.7 2,287,478 Industrial Equipment & Supplies ...................................... 0.6 1,818,721 Real Estate ..................................... 0.5 1,668,996 Health Care - Supplies .......................... 0.5 1,631,899 Schools ......................................... 0.5 1,628,698 Iron & Steel .................................... 0.4 1,417,280 Environmental Services .......................... 0.4 1,386,996 Machinery ....................................... 0.4 1,329,384 Savings & Loans ................................. 0.4 1,237,995 Retail - Food & Drug ............................ 0.3 1,087,913 Telecommunications .............................. 0.3 983,663 Retail .......................................... 0.3 839,503 % of Net Security Type/Industry Classification Assets Value ------------------------------------------- --------- ----------- Retail - Hard Goods ............................. 0.3% $ 832,013 Marketing ....................................... 0.2 789,105 Data Processing Services ........................ 0.2 788,411 Media & Entertainment ........................... 0.2 751,248 Trucking ........................................ 0.1 476,483 SHORT-TERM INVESTMENTS ............................. 4.1 13,592,820 INVESTMENT COMPANY.................................. 1.5 4,975,645 LIABILITIES IN EXCESS OF OTHER ASSETS...................................... (0.4) (1,462,700) ----- ------------ NET ASSETS -- 100.0%................................ 100.0% $330,832,462 ===== ============ THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2007 | 7 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS LONG/SHORT EQUITY FUND PORTFOLIO HOLDINGS SUMMARY TABLE % of Net Security Type/Industry Classification Assets Value ------------------------------------------- --------- ----------- DOMESTIC COMMON STOCK Financial Guarantee Insurance ................... 6.0% $ 6,995,446 Medical - Drugs ................................. 5.4 6,231,654 Medical - Products .............................. 5.3 6,183,052 Multi-line Insurance ............................ 4.7 5,415,644 Reinsurance ..................................... 4.1 4,751,844 Property & Casualty Insurance ................... 3.1 3,596,789 Building - Residential/ Commercial .................................... 3.0 3,499,103 Building - Heavy Construction ................... 3.0 3,465,185 Manufacturing ................................... 2.5 2,834,570 Finance - Mortgage Loan/Banker .................. 2.4 2,767,643 Semiconductor Components - Integrated Circuits ........................... 2.2 2,520,465 Applications Software ........................... 2.1 2,473,022 Food - Miscellaneous/Diversified ................ 2.1 2,429,887 Containers - Paper/Plastic ...................... 2.0 2,309,219 Vitamins & Nutrition Products ................... 1.9 2,219,963 Electronic Components - Miscellaneous ................................. 1.9 2,190,684 Medical - Hospitals ............................. 1.9 2,141,250 Retail - Apparel/Shoes .......................... 1.8 2,121,984 Transport - Services ............................ 1.8 2,050,742 Tobacco ......................................... 1.7 1,980,825 Office Supplies & Forms ......................... 1.7 1,966,347 Internet Security ............................... 1.7 1,963,775 Computer Services ............................... 1.7 1,912,643 Investment Management/Adviser Services ...................................... 1.6 1,880,142 Household Products .............................. 1.6 1,800,117 Finance - Investment Banker/ Broker ........................................ 1.4 1,648,080 Apparel Manufacturers ........................... 1.3 1,492,175 Computers - Peripheral Equipment ..................................... 1.2 1,364,636 Enterprise Software/Services .................... 1.1 1,323,956 Physicians' Practice Management ................. 1.1 1,322,973 Broadcasting Services/ Programming ................................... 1.1 1,314,257 Consulting Services ............................. 1.1 1,295,732 Electronic Components - Semiconductors ................................ 1.1 1,278,982 Private Corrections ............................. 1.1 1,276,344 Medical Instruments ............................. 1.0 1,179,682 Printing - Commercial ........................... 1.0 1,172,242 Electronic Parts Distributor .................... 1.0 1,141,150 Home Furnishings ................................ 1.0 1,125,578 Intimate Apparel ................................ 0.9 1,087,492 Commercial Services - Finance ................... 0.9 1,056,310 Internet Information/Network .................... 0.8 950,649 Life & Health Insurance ......................... 0.8 936,428 Wireless Equipment .............................. 0.8 933,408 Real Estate Management/ Services ...................................... 0.8 894,940 % of Net Security Type/Industry Classification Assets Value ------------------------------------------- --------- ----------- Auto/Truck Parts & Equipment - Original ...................................... 0.7% $ 864,678 Cellular Telecom ................................ 0.7 807,778 Telecommunications Equipment .................... 0.7 806,403 Agriculture ..................................... 0.7 770,377 Data Processing Management ...................... 0.6 689,786 Footwear & Related Apparel ...................... 0.6 678,913 Leisure & Recreational Products ................. 0.6 646,611 Medical - Outpatient/Home Medical Care .................................. 0.5 616,395 Oil Company - Exploration & Production .................................... 0.5 606,751 Retail - Fabric ................................. 0.5 585,058 Optical Supplies ................................ 0.5 584,599 Research & Development .......................... 0.5 546,788 Investment Company .............................. 0.5 537,186 Machinery ....................................... 0.4 510,758 E-Commerce/Products ............................. 0.4 491,510 Aerospace/Defense ............................... 0.4 441,818 Drug Delivery Systems ........................... 0.4 411,993 Diversified Operations/ Commercial Services ........................... 0.4 405,125 Cosmetics & Toiletries .......................... 0.4 403,632 Pharmacy Services ............................... 0.3 392,832 Air Pollution Control Equipment ................. 0.3 387,177 Office Automation & Equipment ................... 0.3 350,135 Web Portals/Internet Service Provider ...................................... 0.3 349,300 Internet Infrastructure Software ................ 0.3 340,627 Computer Software ............................... 0.3 313,811 Health & Personal Care .......................... 0.2 285,934 Software ........................................ 0.2 284,821 Auction House/Art Dealer ........................ 0.2 221,810 Telecom Equipment Fiber Optics ........................................ 0.2 206,508 Medical Information Systems ..................... 0.2 191,620 Medical - Biomedical/Genetics ................... 0.2 182,853 Marine Services ................................. 0.2 173,932 Oil - Field Services ............................ 0.1 138,800 Physical Therapy/Rehabilitation Centers........................................ -- 42,482 Electronic Security Devices...................... -- 36,602 SHORT-TERM INVESTMENTS.............................. 7.7 8,980,176 WARRANTS............................................ 0.2 199,545 SECURITIES SOLD SHORT............................... (45.1) (52,242,232) OTHER ASSETS IN EXCESS OF LIABILITIES...................................... 37.2 43,088,622 ----- ------------ NET ASSETS -- 100.0%................................ 100.0% $115,828,523 ===== ============ THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 8 | SEMI-ANNUAL REPORT 2007 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS LARGE CAP VALUE FUND PORTFOLIO HOLDINGS SUMMARY TABLE % of Net Security Type/Industry Classification Assets Value ------------------------------------------- --------- ----------- COMMON STOCK Insurance - Other ............................... 18.3% $12,079,816 Financial Services .............................. 13.7 9,063,891 Oil & Gas - Integrated Majors ................... 7.7 5,105,886 Computer Equipment & Services ...................................... 5.7 3,776,716 Health Care - Drugs ............................. 4.7 3,121,365 Media & Entertainment ........................... 4.1 2,678,215 Manufacturing ................................... 3.3 2,204,465 Tobacco ......................................... 3.0 1,984,855 Computer Software ............................... 2.9 1,899,275 Telecommunications Equipment .................... 2.8 1,858,855 Oil & Gas - Exploration ......................... 2.8 1,857,141 Health Care - Services .......................... 2.7 1,764,980 Electronics ..................................... 2.4 1,551,914 Aerospace & Defense ............................. 2.3 1,498,112 Foods ........................................... 2.3 1,484,748 Retail - Hard Goods ............................. 2.2 1,434,168 Publishing & Information Services ...................................... 2.1 1,377,710 Telecommunications .............................. 1.7 1,138,566 Telecommunication Services ...................... 1.6 1,049,870 Apparel ......................................... 1.5 1,002,912 Technology ...................................... 1.5 971,324 Banks - Major ................................... 1.5 952,306 Semiconductor Equipment & Products ...................................... 1.3 880,316 Health & Personal Care .......................... 1.3 848,401 Chemicals - Commodity ........................... 1.0 642,625 Consulting Services ............................. 0.9 614,040 Oil Services .................................... 0.7 490,122 Banks - Regional ................................ 0.7 427,776 Utilities - Electric ............................ 0.7 425,960 Energy .......................................... 0.6 410,544 Transportation - Road & Rail .................... 0.5 353,647 SHORT-TERM INVESTMENTS.............................. 1.5 1,012,250 OTHER ASSETS IN EXCESS OF LIABILITIES...................................... -- 110 ----- ------------ NET ASSETS -- 100.0%................................ 100.0% $ 65,962,881 ===== ============ THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2007 | 9 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS MID CAP VALUE FUND PORTFOLIO HOLDINGS SUMMARY TABLE % of Net Security Type/Industry Classification Assets Value ------------------------------------------- --------- ----------- COMMON STOCK Insurance - Other ............................... 14.6% $ 6,391,745 Financial Services .............................. 6.8 2,965,854 Oil & Gas - Exploration ......................... 6.2 2,722,128 Health Care - Services .......................... 5.7 2,478,663 Manufacturing ................................... 4.6 2,014,634 Chemicals - Specialty ........................... 3.5 1,520,388 Electronics ..................................... 3.5 1,511,494 Insurance - Life ................................ 2.9 1,251,760 Apparel ......................................... 2.8 1,206,086 Telecommunications Equipment .................... 2.7 1,184,530 Leisure & Lodging ............................... 2.5 1,094,840 Banks - Major ................................... 2.3 995,055 Data Processing Services ........................ 2.2 984,665 Real Estate Investment Trust (REIT) ........................................ 2.2 982,291 Computer Software ............................... 2.2 979,759 Computer Equipment & Services ...................................... 2.0 886,766 Publishing & Information Services ...................................... 1.9 844,046 Banks - Regional ................................ 1.8 798,738 Consulting Services ............................. 1.7 733,548 Restaurants ..................................... 1.7 726,330 Media ........................................... 1.6 707,487 Recreational Products - Toys .................... 1.6 698,376 Telecommunications .............................. 1.4 631,100 Semiconductor Equipment & Products ...................................... 1.4 621,864 Transportation - Road & Rail .................... 1.3 559,138 Containers ...................................... 1.2 527,604 Telecommunication Services ...................... 1.2 517,979 Distribution .................................... 1.2 516,519 Travel Services ................................. 1.2 515,649 Foods ........................................... 1.1 482,596 Gas Utilities ................................... 1.0 426,624 Automotive Parts & Equipment .................... 0.9 405,020 Utilities - Electric ............................ 0.9 390,600 Internet Services ............................... 0.8 352,260 Medical Equipment & Supplies .................... 0.8 351,120 Energy .......................................... 0.8 339,360 Building Products ............................... 0.7 316,410 Tobacco ......................................... 0.7 309,729 Machinery ....................................... 0.7 298,914 Transport - Services ............................ 0.6 276,858 Electronic Components & Instruments ................................... 0.5 239,931 Retail - Hard Goods ............................. 0.4 173,030 Savings & Loans ................................. 0.3 151,420 SHORT-TERM INVESTMENTS ............................. 4.0 1,752,529 LIABILITIES IN EXCESS OF OTHER ASSETS ..................................... (0.1) (50,667) ----- ------------ NET ASSETS -- 100.0% ............................... 100.0 $ 43,784,770 ===== ============ THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 10 | SEMI-ANNUAL REPORT 2007 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS ALL-CAP VALUE FUND PORTFOLIO HOLDINGS SUMMARY TABLE % of Net Security Type/Industry Classification Assets Value ------------------------------------------- --------- ----------- COMMON STOCK Insurance - Other ............................... 23.6% $ 4,431,897 Health Care - Drugs ............................. 7.0 1,312,565 Financial Services .............................. 6.1 1,141,791 Diversified Operation ........................... 6.0 1,116,974 Computer Equipment & Services ................... 5.1 957,620 Apparel ......................................... 5.1 951,021 Oil & Gas - Exploration ......................... 3.9 725,028 Manufacturing ................................... 3.8 708,644 Oil & Gas - Integrated Majors ................... 3.7 688,932 Recreational Products - Toys .................... 2.7 512,214 Telecommunication Services ...................... 2.5 475,799 Health & Personal Care .......................... 2.4 455,851 Health Care - Services .......................... 2.4 443,652 Computer Software ............................... 2.3 436,755 Real Estate Investment Trust (REIT) ........................................ 2.1 387,722 Internet Services ............................... 2.0 382,955 Telecommunications Equipment .................... 2.0 378,030 Distribution .................................... 1.8 346,759 Insurance - Life ................................ 1.7 317,999 Utilities - Electric ............................ 1.5 273,550 Services - Business ............................. 1.2 217,169 Foods ........................................... 1.1 213,387 Consumer Products ............................... 1.1 196,995 Data Processing Services ........................ 1.0 191,730 Medical Equipment and Supplies .................. 1.0 189,215 Electronic Components & Instruments ................................... 0.7 136,024 Travel Services ................................. 0.6 121,561 Retail - Hard Goods ............................. 0.6 110,240 Information Service ............................. 0.6 105,685 Consumer Non-Cyclical ........................... 0.5 102,733 Office Equipment & Supplies ..................... 0.5 98,361 Leisure & Lodging ............................... 0.5 95,228 Media & Entertainment ........................... 0.5 93,344 Transportation - Shipping ....................... 0.3 59,007 Investment Company .............................. 0.3 50,530 Real Estate ..................................... 0.2 31,215 SHORT-TERM INVESTMENTS.............................. 2.0 381,653 INVESTMENT COMPANY.................................. 0.1 11,656 OPTIONS WRITTEN..................................... (0.3) (53,979) LIABIITIES IN EXCESS OF OTHER ASSETS...................................... (0.2) (46,121) ----- ----------- NET ASSETS -- 100.0%................................ 100.0% $18,751,391 ===== =========== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2007 | 11 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- ROBECO WPG SMALL CAP VALUE FUND* PORTFOLIO HOLDINGS SUMMARY TABLE % of Net Security Type/Industry Classification Assets Value ------------------------------------------- --------- ----------- COMMON STOCK Real Estate Investment Trust (REIT) ........................................ 10.0% $ 5,470,540 Insurance - Other ............................... 7.3 4,014,907 Publishing & Information Services ...................................... 7.0 3,810,440 Oil & Gas - Exploration ......................... 6.9 3,806,997 Banks - Regional ................................ 6.1 3,348,157 Computer Equipment & Services ...................................... 4.3 2,336,289 Consulting Services ............................. 4.2 2,297,755 Services - Business ............................. 4.0 2,175,096 Household Products .............................. 3.4 1,875,595 Telecommunications Equipment .................... 3.3 1,815,958 Consumer Products ............................... 2.9 1,584,991 Apparel ......................................... 2.4 1,290,117 Metals & Mining ................................. 2.3 1,261,387 Oil Services .................................... 2.2 1,188,575 Financial Services .............................. 2.1 1,132,399 Restaurants ..................................... 2.0 1,094,978 Utilities - Electric ............................ 2.0 1,081,679 Savings & Loans ................................. 1.8 1,010,377 Foods ........................................... 1.7 938,700 Transport - Services ............................ 1.7 919,880 Gas Utilities ................................... 1.6 890,024 Internet Services ............................... 1.6 872,910 Airlines ........................................ 1.5 805,667 Medical Equipment and Supplies .................. 1.0 566,407 Trucking ........................................ 0.9 490,853 Chemicals - Commodity ........................... 0.9 467,865 Electronic Equipment & Products ...................................... 0.8 433,736 Health Care - Services .......................... 0.7 406,260 Data Processing Services ........................ 0.7 403,706 Machinery - General Industry .................... 0.7 400,596 Commercial Services ............................. 0.7 395,136 Manufacturing ................................... 0.6 351,190 Chemicals - Specialty ........................... 0.6 336,224 Tobacco ......................................... 0.5 279,151 Semiconductor Equipment & Products ...................................... 0.5 270,864 Engine Manufacturing ............................ 0.5 260,236 Building & Construction ......................... 0.5 251,922 Paper, Forest Products & Packaging ..................................... 0.4 219,751 Health Care - Drugs ............................. 0.1 55,397 SHORT-TERM INVESTMENTS.............................. 8.0 4,344,833 RIGHTS/WARRANTS..................................... 0.7 392,550 LIABILITIES IN EXCESS OF OTHER ASSETS...................................... (1.1) (583,488) ----- ----------- NET ASSETS -- 100.0%................................ 100.0% $54,766,607 ===== =========== ----------------- * Formerly Robeco WPG Tudor Fund (name changed 1/1/2007) THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 12 | SEMI-ANNUAL REPORT 2007 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- ROBECO WPG LARGE CAP GROWTH FUND PORTFOLIO HOLDINGS SUMMARY TABLE % of Net Security Type/Industry Classification Assets Value ------------------------------------------- --------- ----------- COMMON STOCK Financial Services .............................. 6.8% $ 1,232,169 Computer Equipment & Services ...................................... 6.2 1,127,852 Semiconductor Equipment & Products ...................................... 6.1 1,114,563 Healthcare Facilities/Supplies .................. 6.1 1,112,882 Health Care - Services .......................... 6.1 1,106,853 Foods ........................................... 5.2 942,246 Consumer Non-Cyclical ........................... 5.1 927,653 Retail .......................................... 5.0 917,857 Medical Equipment and Supplies .................. 3.7 664,961 Telecommunications Equipment .................... 3.3 592,810 Computer Software ............................... 3.2 577,485 Insurance - Other ............................... 3.1 568,356 Technology ...................................... 2.6 466,715 Retail - Hard Goods ............................. 2.5 451,265 Services - Business ............................. 2.5 446,250 Chemicals - Commodity ........................... 2.3 423,738 Media & Entertainment ........................... 2.3 411,243 Retail - Food & Drug ............................ 2.2 391,055 Aerospace/Defense ............................... 2.0 363,185 Transportation - Shipping ....................... 1.9 348,436 Publishing & Information Services ...................................... 1.8 332,742 Internet Software ............................... 1.8 330,787 Internet Services ............................... 1.8 322,089 Consumer Cyclical Services ...................... 1.7 311,690 Restaurants ..................................... 1.7 304,185 Oil & Gas - Exploration ......................... 1.6 294,905 Energy .......................................... 1.5 273,228 Health & Personal Care .......................... 1.2 220,371 Diversified Operations .......................... 1.2 211,266 Oil & Gas - Refining & Marketing ..................................... 1.1 205,373 Transportation - Road & Rail .................... 1.1 203,188 Chemicals - Specialty ........................... 1.1 201,489 Machinery ....................................... 1.0 184,352 Oil Services .................................... 1.0 183,920 Telecommunications .............................. 0.8 152,720 Airlines ........................................ 0.8 146,412 Biotechnology ................................... 0.6 118,118 Metals .......................................... 0.6 112,419 INVESTMENT COMPANY.................................. 0.3 47,167 LIABILITIES IN EXCESS OF OTHER ASSETS................................... (0.9) (159,426) ----- ----------- NET ASSETS -- 100.0%................................ 100.0% $18,184,569 ===== =========== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2007 | 13 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- ROBECO WPG CORE BOND FUND PORTFOLIO HOLDINGS SUMMARY TABLE % of Net Security Type/Industry Classification Assets Value ------------------------------------------- --------- ----------- GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS ...................................... 33.4% $ 57,681,555 CORPORATE BONDS .................................... 27.8 48,030,532 COLLATERALIZED MORTGAGE OBLIGATIONS ...................................... 14.5 24,977,369 ASSET BACKED SECURITIES ............................ 12.5 21,653,082 U.S. TREASURY OBLIGATIONS .......................... 11.7 20,135,777 GOVERNMENT AGENCY OBLIGATIONS ...................................... 5.9 10,104,425 SHORT-TERM INVESTMENTS ............................. 2.1 3,542,170 LIABILITIES IN EXCESS OF OTHER ASSETS ..................................... (7.9) (13,586,074) ------------ NET ASSETS -- 100.0% ............................... 100.0% $172,538,836 ============ THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 14 | SEMI-ANNUAL REPORT 2007 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS SMALL CAP VALUE FUND II PORTFOLIO OF INVESTMENTS Number of Shares Value --------- ----------- COMMON STOCK--94.8% AEROSPACE & DEFENSE--1.7% DRS Technologies, Inc. ........................ 49,536 $ 2,624,913 K&F Industries Holdings, Inc.* ............... 119,400 2,936,046 ----------- 5,560,959 ----------- APPAREL--4.9% Brown Shoe Co., Inc. .......................... 32,325 1,658,272 Charming Shoppes, Inc.* ....................... 163,900 2,043,833 Children's Place Retail Stores, Inc., (The)* ............................... 23,000 1,252,580 Dress Barn, Inc., (The)* ...................... 81,500 1,713,130 Finish Line, Inc., (The), Class A ............. 96,025 1,220,478 Hartmarx Corp.* ............................... 276,635 1,828,557 Kellwood Co. .................................. 33,970 1,071,074 Kenneth Cole Productions, Inc., Class A .................................... 25,800 659,190 Oxford Industries, Inc. ....................... 65,530 3,236,527 Warnaco Group, Inc., (The)* ................... 52,450 1,369,994 ----------- 16,053,635 ----------- AUTOMOTIVE & TRUCKS--2.4% Adesa, Inc. ................................... 130,665 3,593,288 Asbury Automotive Group, Inc. ................. 80,995 2,163,376 Group 1 Automotive, Inc. ...................... 24,355 1,126,906 Lithia Motors, Inc., Class A .................. 38,500 1,134,210 ----------- 8,017,780 ----------- BANKS - REGIONAL--1.1% BankUnited Financial Corp., Class A .................................... 147,663 3,605,930 ----------- BUILDING & CONSTRUCTION--1.8% Champion Enterprises, Inc.* ................... 227,410 1,803,361 Infrasource Services, Inc.* ................... 51,815 1,270,504 Palm Harbor Homes, Inc.* ...................... 41,743 544,746 Perini Corp.* ................................. 32,920 1,194,667 Washington Group International, Inc.* ....................... 19,695 1,154,521 ----------- 5,967,799 ----------- BUILDING MATERIALS--0.9% Drew Industries, Inc.* ........................ 100,800 2,903,040 ----------- BUILDING PRODUCTS - AIR & HEATING--1.4% Lennox International, Inc. .................... 130,400 4,475,328 ----------- BUSINESS & PUBLIC SERVICES--0.8% Gevity HR, Inc. ............................... 137,700 2,742,984 ----------- CHEMICALS - SPECIALTY--1.7% Spartech Corp. ................................ 22,815 604,141 UAP Holding Corp. ............................. 192,485 4,883,345 ----------- 5,487,486 ----------- Number of Shares Value --------- ----------- COMMERCIAL SERVICES--0.7% CBIZ, Inc.* ................................... 187,900 $ 1,281,478 Steiner Leisure Ltd.* ......................... 26,200 1,184,502 ----------- 2,465,980 ----------- COMPUTER EQUIPMENT & SERVICES--3.5% CIBER, Inc.* .................................. 147,000 1,033,410 Electronics For Imaging, Inc.* ............... 183,900 4,196,598 Imation Corp. ................................. 40,300 1,676,883 Insight Enterprises, Inc.* .................... 142,585 2,754,742 Keane, Inc.* .................................. 91,700 1,258,124 Mercury Computer Systems, Inc.* ...................................... 55,615 707,423 ----------- 11,627,180 ----------- COMPUTER SOFTWARE--1.3% Neoware, Inc.* ................................ 47,900 564,262 Open Text Corp.* .............................. 61,100 1,335,035 PAR Technology Corp.* ......................... 72,100 653,947 Smart Modular Technologies* ................... 175,200 1,900,920 ----------- 4,454,164 ----------- CONSULTING SERVICES--2.2% FTI Consulting, Inc.* ......................... 73,518 2,467,999 MAXIMUS, Inc. ................................. 78,250 2,358,455 Watson Wyatt Worldwide, Inc., Class A .................................... 49,880 2,397,732 ----------- 7,224,186 ----------- CONSUMER NON-CYCLICAL--2.3% Natuzzi S.p.A. - ADR .......................... 87,500 770,000 Sealy Corp.* .................................. 279,000 4,812,750 Tempur-Pedic International, Inc. .............. 87,000 2,165,430 ----------- 7,748,180 ----------- CONSUMER PRODUCTS--1.2% Playtex Products, Inc.* ....................... 146,550 2,009,200 Tupperware Brands Corp. ....................... 42,800 1,001,948 WD-40 Co. ..................................... 30,900 985,710 ----------- 3,996,858 ----------- CONTAINERS--1.5% Silgan Holdings, Inc. ......................... 97,990 4,822,088 ----------- DATA PROCESSING SERVICES--0.2% Goldleaf Financial Solutions, Inc.* ........... 116,975 788,411 ----------- ELECTRONICS--2.4% Bel Fuse, Inc., Class B ....................... 18,000 572,220 Hypercom Corp.* ............................... 111,800 633,906 Paxar Corp.* .................................. 101,900 2,346,757 Planar Systems, Inc.* ......................... 54,700 489,018 Schawk, Inc. .................................. 75,560 1,326,078 Technitrol, Inc. .............................. 120,030 2,639,460 ----------- 8,007,439 ----------- THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2007 | 15 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS SMALL CAP VALUE FUND II (continued) PORTFOLIO OF INVESTMENTS Number of Shares Value --------- ----------- ENVIRONMENTAL SERVICES--0.4% Tetra Tech, Inc.* ............................. 77,790 $ 1,386,996 ----------- FINANCIAL SERVICES--2.9% Advanta Corp., Class B ........................ 77,365 3,231,536 CMET Finance Holdings, Inc. 144A ++* ................................... 15,000 165,000 Cowen Group., Inc.* ........................... 90,955 1,804,547 Federal Agricultural Mortgage Corp., Class C ............................. 108,000 2,764,800 IndyMac Bancorp, Inc. ......................... 30,700 1,053,931 RAM Holdings Ltd.* ............................ 44,900 735,911 ----------- 9,755,725 ----------- FOODS--1.4% Performance Food Group Co.* ................... 85,500 2,519,685 Premium Standard Farms, Inc. .................. 105,581 2,195,029 ----------- 4,714,714 ----------- HEALTH CARE - DRUGS--1.9% Alpharma, Inc.* ............................... 96,500 2,543,740 Obagi Medical Products, Inc.* ................. 120,900 1,553,565 Perrigo Co. ................................... 140,600 2,348,020 ----------- 6,445,325 ----------- HEALTH CARE - SERVICES--6.0% Amedisys, Inc.* ............................... 83,333 2,665,000 Healthspring, Inc.* ........................... 114,000 2,408,820 Kindred Healthcare, Inc.* ..................... 117,430 3,865,795 LifePoint Hospitals, Inc.* .................... 112,190 4,106,154 Magellan Health Services, Inc.* ............... 22,400 936,544 Odyssey HealthCare, Inc.* ..................... 133,500 1,812,930 Option Care, Inc. ............................. 142,625 1,894,060 PRA International* ............................ 36,200 726,172 RehabCare Group, Inc.* ........................ 49,570 753,464 Res-Care, Inc.* ............................... 41,800 744,876 ----------- 19,913,815 ----------- HEALTH CARE - SUPPLIES--0.5% Owens & Minor, Inc. ........................... 17,900 590,163 Vital Signs, Inc. ............................. 19,700 1,041,736 ----------- 1,631,899 ----------- INDUSTRIAL EQUIPMENT & SUPPLIES--0.6% LSI Industries, Inc. .......................... 35,845 591,801 Nordson Corp. ................................. 13,600 663,408 Rofin-Sinar Technologies, Inc.* ............... 9,370 563,512 ----------- 1,818,721 ----------- INSURANCE - OTHER--13.9% American Equity Investment Life Holding Co. ... 123,545 1,638,207 Amerisafe, Inc.* .............................. 116,830 2,159,018 Aspen Insurance Holdings Ltd. ................. 39,515 1,047,148 Assured Guaranty Ltd. ......................... 195,700 5,538,310 Bristol West Holdings, Inc. ................... 36,625 595,156 CNA Surety Corp.* ............................. 110,525 2,181,763 Number of Shares Value --------- ----------- INSURANCE - OTHER--(CONTINUED) Hanover Insurance Group, Inc. ................. 18,290 $ 859,081 Hilb, Rogal & Hobbs Co. ....................... 21,200 960,360 Hub International Ltd. ........................ 85,700 3,363,725 Infinity Property & Casualty Corp. ............ 21,200 979,016 IPC Holdings Ltd. ............................. 150,300 4,367,718 KMG America Corp.* ............................ 362,110 3,320,549 Max Re Capital Ltd. ........................... 176,700 4,322,082 Navigators Group, Inc., (The)* ............... 60,110 2,987,467 Platinum Underwriters Holdings Ltd............. 221,760 7,085,232 ProAssurance Corp.* ........................... 46,100 2,374,150 Quanta Capital Holdings Ltd.* ................. 192,100 424,541 Seabright Insurance Holdings, Inc.* ........... 35,530 667,609 United America Indemnity Ltd., Class A* ....... 49,640 1,172,497 ----------- 46,043,629 ----------- INTERNET SERVICES--0.9% EarthLink, Inc.* .............................. 169,300 1,205,416 United Online, Inc. ........................... 133,630 1,757,234 ----------- 2,962,650 ----------- IRON & STEEL--0.4% Ryerson, Inc. ................................. 41,200 1,417,280 ----------- MACHINERY--0.4% Actuant Corp., Class A ........................ 12,000 626,400 CIRCOR International, Inc. .................... 20,400 702,984 ----------- 1,329,384 ----------- MANUFACTURING--3.7% Acuity Brands, Inc. ........................... 29,200 1,617,680 EnerSys* ...................................... 44,025 755,029 Federal Signal Corp. .......................... 103,815 1,562,416 Griffon Corp.* ................................ 39,500 927,855 Matthews International Corp., Class A ......... 59,595 2,384,396 NN, Inc. ...................................... 56,700 670,761 Olin Corp. .................................... 42,100 728,330 RBC Bearings, Inc.* ........................... 107,720 3,514,903 ----------- 12,161,370 ----------- MARKETING--0.2% Nu Skin Enterprises, Inc., Class A ............ 46,500 789,105 ----------- MEDIA & ENTERTAINMENT--0.2% Journal Communications, Inc., Class A ......... 56,400 751,248 ----------- MEDICAL EQUIPMENT AND SUPPLIES--2.1% Conmed Corp.* ................................. 90,000 2,462,400 ICU Medical, Inc.* ............................ 25,915 1,012,240 Medical Action Industries, Inc.* .............. 42,690 948,572 Symmetry Medical, Inc.* ....................... 163,600 2,439,276 ----------- 6,862,488 ----------- THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 16 | SEMI-ANNUAL REPORT 2007 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS SMALL CAP VALUE FUND II (continued) PORTFOLIO OF INVESTMENTS Number of Shares Value --------- ----------- MOTOR HOMES--1.0% Winnebago Industries, Inc. .................... 103,135 $ 3,353,950 ------------ OFFICE EQUIPMENT & SUPPLIES--2.8% ACCO Brands Corp.* ............................ 100,700 2,193,246 Ennis, Inc. ................................... 70,800 1,826,640 Global Imaging Systems, Inc.* ................. 127,750 2,563,942 Knoll, Inc. ................................... 109,185 2,527,633 ------------ 9,111,461 ------------ OIL & GAS - EXPLORATION--1.5% Comstock Resources, Inc.* ..................... 97,600 2,620,560 Swift Energy Co.* ............................. 61,200 2,377,008 ------------ 4,997,568 ------------ OIL SERVICES--1.8% Key Energy Services, Inc.* .................... 114,665 1,891,973 Newpark Resources, Inc.* ...................... 246,380 1,502,918 Parker Drilling Co.* .......................... 78,500 672,745 Trico Marine Services, Inc.* .................. 53,335 1,943,527 ------------ 6,011,163 ------------ PAPER, FOREST PRODUCTS & PACKAGING--0.9% Neenah Paper, Inc. ............................ 38,000 1,409,800 Rock-Tenn Co. ................................. 29,870 969,879 Schweitzer-Mauduit International, Inc. ........ 24,900 594,114 ------------ 2,973,793 ------------ PUBLISHING & INFORMATION SERVICES--2.6% Bowne & Co., Inc. ............................. 91,400 1,419,442 infoUSA, Inc. ................................. 162,800 1,671,956 Reader's Digest Association, Inc., (The) ...... 67,400 1,143,778 Scholastic Corp.* ............................. 96,300 3,350,277 Valassis Communications, Inc.* ............... 51,500 856,960 ------------ 8,442,413 ------------ REAL ESTATE--0.5% Meruelo Maddux Properties, Inc.* .............. 174,035 1,668,996 ------------ REAL ESTATE INVESTMENT TRUST (REIT)--4.9% American Home Mortgage Investment Corp. ....... 180,200 4,928,470 Anworth Mortgage Asset Corp. .................. 135,235 1,202,239 Ashford Hospitality Trust ..................... 60,075 744,930 Capital Lease Funding, Inc. ................... 107,975 1,145,615 Gladstone Commercial Corp. .................... 59,875 1,212,469 Government Properties Trust, Inc. ............. 64,375 678,513 Lexington Realty Trust ........................ 36,050 740,827 MFA Mortgage Investments, Inc. ................ 255,945 1,896,552 Opteum, Inc., Class A 144A .................... 85,325 431,745 Origen Financial, Inc. ........................ 210,425 1,245,716 Redwood Trust, Inc. ........................... 36,800 1,987,200 ------------ 16,214,276 ------------ Number of Shares Value --------- ----------- RETAIL--0.3% Golfsmith International Holdings, Inc.* ....... 73,965 $ 839,503 ------------ RETAIL - FOOD & DRUG--0.3% PetMed Express, Inc.* ......................... 86,001 1,087,913 ------------ RETAIL - HARD GOODS--0.3% School Specialty, Inc.* ....................... 22,300 832,013 ------------ SAVINGS & LOANS--0.4% Franklin Bank Corp.* .......................... 67,100 1,237,995 ------------ SCHOOLS--0.5% Universal Technical Institute, Inc.* .......... 68,925 1,628,698 ------------ SEMICONDUCTOR EQUIPMENT & PRODUCTS--2.1% Emulex Corp.* ................................. 123,600 2,212,440 Ikanos Communications, Inc.* .................. 117,300 1,058,046 Photronics, Inc.* ............................. 100,000 1,542,000 Verigy Ltd.* .................................. 92,300 2,168,127 ------------ 6,980,613 ------------ SERVICES - BUSINESS--5.0% Clark, Inc. ................................... 140,650 2,416,367 Cornell Cos., Inc.* ........................... 41,880 859,378 IKON Office Solutions, Inc. ................... 160,500 2,243,790 John H. Harland Co. ........................... 55,630 2,809,315 Kforce, Inc.* ................................. 64,376 875,514 MPS Group, Inc.* .............................. 121,000 1,732,720 Spherion Corp.* ............................... 101,900 903,853 Standard Parking Corp.* ....................... 62,855 2,136,441 World Fuel Services Corp. ..................... 55,210 2,489,971 ------------ 16,467,349 ------------ TELECOMMUNICATIONS--0.3% Gilat Satellite Networks Ltd.* ............... 116,135 983,663 ------------ TOBACCO--0.7% Alliance One International, Inc.* ............. 188,700 1,586,967 Universal Corp. ............................... 13,300 700,511 ------------ 2,287,478 ------------ TRANSPORT - SERVICES--1.3% Bristow Group, Inc.* .......................... 64,895 2,378,402 Quintana Maritime Ltd. ........................ 131,730 1,819,191 ------------ 4,197,593 ------------ TRUCKING--0.1% Quality Distribution, Inc.* ................... 55,405 476,483 ------------ TOTAL COMMON STOCK (Cost $252,312,088) ....................... 313,726,697 ------------ THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2007 | 17 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS SMALL CAP VALUE FUND II (concluded) PORTFOLIO OF INVESTMENTS Number of Shares Value --------- ----------- INVESTMENT COMPANY--1.5% FINANCIAL SERVICES--1.5% Apollo Investment Corp. ..................... 112,200 $ 2,544,696 Ares Capital Corp. .......................... 120,225 2,430,949 ------------ 4,975,645 ------------ TOTAL INVESTMENT COMPANY (Cost $3,550,557) ....................... 4,975,645 ------------ SHORT-TERM INVESTMENTS--4.1% PNC Bank Money Market Deposit Account 4.900% 03/01/07 .......................... 13,592,820 13,592,820 ------------ TOTAL SHORT-TERM INVESTMENTS (Cost $13,592,820) ...................... 13,592,820 ------------ TOTAL INVESTMENTS--100.4% (Cost $269,455,465) .......................... 332,295,162 ------------ LIABILITIES IN EXCESS OF OTHER ASSETS--(0.4)% ......................... (1,462,700) ------------ NET ASSETS--100.0%.............................. $330,832,462 ============ ---------------- * -- Non-income producing. ++ -- Security has been valued at fair market value as determined in good faith by or under the direction of The RBB Fund, Inc.'s Board of Directors. ADR -- American Depository Receipt. 144A -- Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may not be resold subject to that rule except to qualified institutional buyers. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 18 | SEMI-ANNUAL REPORT 2007 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS LONG/SHORT EQUITY FUND PORTFOLIO OF INVESTMENTS Number of Shares Value --------- ----------- LONG POSITIONS--107.9% DOMESTIC COMMON STOCK--100.0% AEROSPACE/DEFENSE--0.4% Allied Defense Group, Inc., (The) +* .......... 36,635 $ 441,818 ------------ AGRICULTURE--0.7% Hines Horticulture, Inc. +* ................... 484,514 770,377 ------------ AIR POLLUTION CONTROL EQUIPMENT--0.3% TurboSonic Technologies, Inc.* ............... 286,798 387,177 ------------ APPAREL MANUFACTURERS--1.3% Ashworth, Inc.* ............................... 94,226 755,693 Tandy Brand Accessories, Inc. ................. 58,266 736,482 ------------ 1,492,175 ------------ APPLICATIONS SOFTWARE--2.1% Optio Software, Inc.* ......................... 157,560 258,398 Progress Software Corp.* ...................... 44,800 1,256,640 Quest Software, Inc.* ......................... 58,700 957,984 ------------ 2,473,022 ------------ AUCTION HOUSE/ART DEALER--0.2% Premier Exhibitions, Inc.* .................... 20,500 221,810 ------------ AUTO/TRUCK PARTS & EQUIPMENT - ORIGINAL--0.7% Strattec Security Corp. +* .................... 11,176 515,884 Wescast Industries, Inc. ...................... 29,200 348,794 ------------ 864,678 ------------ BROADCASTING SERVICES/PROGRAMMING--1.1% Global Traffic Network, Inc.* ................. 57,200 241,956 New Frontier Media, Inc. + .................... 118,225 1,072,301 ------------ 1,314,257 ------------ BUILDING - HEAVY CONSTRUCTION--3.0% KHD Humboldt Wedag International Ltd. + ....... 90,404 3,465,185 ------------ BUILDING - RESIDENTIAL/COMMERCIAL--3.0% Comstock Homebuilding Cos., Inc.* ................ 254,300 1,528,343 Toll Brothers, Inc.* .......................... 66,000 1,970,760 ------------ 3,499,103 ------------ CELLULAR TELECOM--0.7% KongZhong Corp.* .............................. 97,440 807,778 ------------ COMMERCIAL SERVICES - FINANCE--0.9% Coinstar, Inc. +* ............................. 35,795 1,056,310 ------------ COMPUTER SERVICES--1.7% Dynamics Research Corp. +* .................... 53,755 542,388 Tier Technologies, Inc., Class B* ............. 173,780 1,370,255 ------------ 1,912,643 ------------ Number of Shares Value --------- ----------- COMPUTER SOFTWARE--0.3% Efuture Information Technology, Inc.* ............................. 11,705 $ 313,811 ------------ COMPUTERS - PERIPHERAL EQUIPMENT--1.2% Electronics For Imaging, Inc.* ............... 59,800 1,364,636 ------------ CONSULTING SERVICES--1.1% Accenture Ltd., Class A + ..................... 36,295 1,295,732 ------------ CONTAINERS - PAPER/PLASTIC--2.0% Graphic Packaging Corp.* ...................... 405,900 1,948,320 Intertape Polymer Group, Inc.* ............... 76,300 360,899 ------------ 2,309,219 ------------ COSMETICS & TOILETRIES--0.4% CCA Industries, Inc. .......................... 33,636 403,632 ------------ DATA PROCESSING MANAGEMENT--0.6% CAM Commerce Solutions, Inc. .................. 27,758 689,786 ------------ DIVERSIFIED OPERATIONS/COMMERCIAL SERVICES--0.4% American Physicians Service Group, Inc. + .................................... 23,150 405,125 ------------ DRUG DELIVERY SYSTEMS--0.4% Matrixx Initiatives, Inc.* .................... 23,055 411,993 ------------ E-COMMERCE/PRODUCTS--0.4% Shutterly, Inc.* .............................. 12,875 212,566 Varsity Group, Inc.* .......................... 151,600 278,944 ------------ 491,510 ------------ ELECTRONIC COMPONENTS - MISCELLANEOUS--1.9% Bel Fuse, Inc., Class A ....................... 57,473 1,683,384 Planar Systems, Inc.* ......................... 56,745 507,300 ------------ 2,190,684 ------------ ELECTRONIC COMPONENTS - SEMICONDUCTORS--1.1% OmniVision Technologies, Inc.* ............... 41,700 540,432 Richardson Electronics Ltd. ................... 80,190 738,550 ------------ 1,278,982 ------------ ELECTRONIC PARTS DISTRIBUTOR--1.0% NU Horizons Electronics Corp.* ................ 115,501 1,141,150 ------------ ELECTRONIC SECURITY DEVICES--0.0% Ituran Location and Control Ltd. .............. 2,445 36,602 ------------ ENTERPRISE SOFTWARE/SERVICES--1.1% Lawson Software, Inc.* ........................ 92,500 732,600 Neoware, Inc.* ................................ 50,200 591,356 ------------ 1,323,956 ------------ THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2007 | 19 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS LONG/SHORT EQUITY FUND (continued) PORTFOLIO OF INVESTMENTS Number of Shares Value --------- ----------- FINANCE - INVESTMENT BANKER/BROKER--1.4% Citigroup, Inc. + ............................. 32,700 $ 1,648,080 ------------ FINANCE - MORTGAGE LOAN/BANKER--2.4% Federal Agricultural Mortgage Corp., Class C +.................................... 43,340 1,109,504 IndyMac Bancorp, Inc. + ....................... 48,300 1,658,139 ------------ 2,767,643 ------------ FINANCIAL GUARANTEE INSURANCE--6.0% AMBAC Financial Group, Inc. + ................. 19,500 1,708,980 Assured Guaranty Ltd. + ....................... 19,192 543,134 MBIA, Inc. + .................................. 41,600 2,765,152 MGIC Investment Corp. ......................... 18,500 1,116,475 PMI Group, Inc., (The) ........................ 18,385 861,705 ------------ 6,995,446 ------------ FOOD-MISCELLANEOUS/DIVERSIFIED--2.1% Nestle S.A. + ................................. 13,700 1,273,297 Overhill Farms, Inc.* ......................... 192,765 1,156,590 ------------ 2,429,887 ------------ FOOTWEAR & RELATED APPAREL--0.6% Crocs, Inc. +* ................................ 13,935 678,913 ------------ HEALTH & PERSONAL CARE--0.2% Female Health Co., (The)* ..................... 142,967 285,934 ------------ HOME FURNISHINGS--1.0% Chromcraft Revington, Inc.* ................... 29,180 245,112 Crown Crafts, Inc.* ........................... 27,064 101,490 Natuzzi S.p.A. - ADR .......................... 88,520 778,976 ------------ 1,125,578 ------------ HOUSEHOLD PRODUCTS--1.6% WD-40 Co. + ................................... 56,430 1,800,117 ------------ INTERNET INFORMATION/NETWORK--0.8% Health Grades, Inc.* .......................... 170,980 950,649 ------------ INTERNET INFRASTRUCTURE SOFTWARE--0.3% Imergent, Inc.* ............................... 19,420 340,627 ------------ INTERNET SECURITY--1.7% Check Point Software Technologies Ltd. +* ..... 35,000 790,300 McAfee, Inc.* ................................. 38,960 1,173,475 ------------ 1,963,775 ------------ INTIMATE APPAREL--0.9% Tefron Ltd. ................................... 116,185 1,087,492 ------------ INVESTMENT MANAGEMENT/ADVISER SERVICES--1.6% Legg Mason, Inc. + ............................ 18,300 1,880,142 ------------ Number of Shares Value --------- ----------- INVESTMENT COMPANY--0.5% Capital Southwest Corp. ....................... 3,900 $ 537,186 ------------ LEISURE & RECREATIONAL PRODUCTS--0.6% Escalade, Inc. + .............................. 68,136 646,611 ------------ LIFE & HEALTH INSURANCE--0.8% Torchmark Corp. ............................... 14,650 936,428 ------------ MACHINERY--0.4% Kadant, Inc. +* ............................... 21,790 510,758 ------------ MANUFACTURING--2.5% Matthews International Corp., Class A + ....... 34,845 1,394,149 Velcro Industries N.V. + ...................... 89,690 1,440,421 ------------ 2,834,570 ------------ MARINE SERVICES--0.2% Conrad Industries, Inc.* ...................... 29,480 173,932 ------------ MEDICAL - BIOMEDICAL/GENETICS--0.2% American BIO Medica Corp.* .................... 159,003 182,853 ------------ MEDICAL - DRUGS--5.4% Hi-Tech Pharmacal Co., Inc.* .................. 80,919 890,918 Pfizer, Inc. + ................................ 159,600 3,983,616 Sanofi-Aventis - ADR .......................... 32,000 1,357,120 ------------ 6,231,654 ------------ MEDICAL - HOSPITALS--1.9% PHC, Inc., Class A* ........................... 571,000 2,141,250 ------------ MEDICAL - OUTPATIENT/HOME MEDICAL CARE--0.5% Pediatric Services of America, Inc. +* ........ 47,415 616,395 ------------ MEDICAL - PRODUCTS--5.3% Alpha Pro Tech Ltd.* .......................... 240,875 732,260 Johnson & Johnson + ........................... 40,700 2,566,135 MTS Medication Technologies +* ................ 105,705 1,183,896 Orthofix International N.V. +* ............... 18,336 900,665 Span-America Medical Systems, Inc. ............ 1,049 16,679 Vital Signs, Inc. + ........................... 14,815 783,417 ------------ 6,183,052 ------------ MEDICAL INFORMATION SYSTEMS--0.2% AMICAS, Inc.* ................................. 67,000 191,620 ------------ MEDICAL INSTRUMENTS--1.0% Conmed Corp. +* ............................... 28,700 785,232 Zevex International, Inc.* .................... 30,625 394,450 ------------ 1,179,682 ------------ THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 20 | SEMI-ANNUAL REPORT 2007 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS LONG/SHORT EQUITY FUND (continued) PORTFOLIO OF INVESTMENTS Number of Shares Value --------- ----------- MULTI-LINE INSURANCE--4.7% Aegon N.V ..................................... 70,800 $ 1,402,548 American International Group, Inc. + .......... 22,000 1,476,200 Loews Corp. + ................................. 58,400 2,536,896 ------------ 5,415,644 ------------ OFFICE AUTOMATION & EQUIPMENT--0.3% TRM Corp.* .................................... 119,500 350,135 ------------ OFFICE SUPPLIES & FORMS--1.7% Ennis, Inc. + ................................. 76,215 1,966,347 ------------ OIL COMPANY - EXPLORATION & PRODUCTION--0.5% Chesapeake Energy Corp. + ..................... 19,900 606,751 ------------ OIL - FIELD SERVICES--0.1% Particle Drilling Technologies* ............... 34,700 138,800 ------------ OPTICAL SUPPLIES--0.5% Escalon Medical Corp.* ........................ 8,505 32,659 Unilens Vision, Inc. .......................... 113,802 551,940 ------------ 584,599 ------------ PHARMACY SERVICES--0.3% National Medical Health Card Systems, Inc.* ... 27,900 392,832 ------------ PHYSICAL THERAPY/REHABILITATION CENTERS--0.0% Health Fitness Corp.* ......................... 14,649 42,482 ------------ PHYSICIANS' PRACTICE MANAGEMENT--1.1% American Dental Partners, Inc. +* ............. 65,332 1,322,973 ------------ PRINTING - COMMERCIAL--1.0% Cadmus Communications Corp. + ................. 47,440 1,172,242 ------------ PRIVATE CORRECTIONS--1.1% Cornell Cos, Inc.* ............................ 62,200 1,276,344 ------------ PROPERTY & CASUALTY INSURANCE--3.1% Bristol West Holdings, Inc. ................... 45,500 739,375 Commerce Group, Inc., (The) + ................. 32,100 920,307 Investors Title Co. + ......................... 10,647 531,924 Quanta Capital Holdings Ltd.* ................. 211,830 468,144 Wesco Financial Corp. + ....................... 1,975 937,039 ------------ 3,596,789 ------------ REAL ESTATE MANAGEMENT/SERVICES--0.8% United Capital Corp. +* ....................... 28,730 894,940 ------------ REINSURANCE--4.1% IPC Holdings Ltd. + ........................... 46,800 1,360,008 PartnerRe Ltd. + .............................. 15,400 1,069,992 Platinum Underwriters Holdings Ltd. + ......... 37,040 1,183,428 RenaissanceRe Holdings Ltd. + ................. 22,200 1,138,416 ------------ 4,751,844 ------------ RESEARCH & DEVELOPMENT--0.5% Albany Molecular Research, Inc. ............... 57,800 $ 546,788 ------------ RETAIL - APPAREL/SHOES--1.8% Genesco, Inc.* ................................ 26,800 1,072,000 Talbots, Inc., (The) .......................... 41,600 1,049,984 ------------ 2,121,984 ------------ RETAIL - FABRIC--0.5% Hancock Fabrics, Inc. ......................... 181,695 585,058 ------------ SEMICONDUCTOR COMPONENTS-INTEGRATED CIRCUITS--2.2% Emulex Corp.* ................................. 132,300 2,368,170 Sigmatel, Inc.* ............................... 42,900 152,295 ------------ 2,520,465 ------------ SOFTWARE--0.2% Innerworkings, Inc. ........................... 21,020 284,821 ------------ TELECOM EQUIPMENT FIBER OPTICS--0.2% Optical Cable Corp. +* ........................ 39,260 206,508 ------------ TELECOMMUNICATIONS EQUIPMENT--0.7% Communications Systems, Inc. + ............... 3,425 36,476 Preformed Line Products Co. + ................. 23,031 769,927 ------------ 806,403 ------------ TOBACCO--1.7% Loews Corp. - Carolina Group + ............... 27,500 1,980,825 ------------ TRANSPORT - SERVICES--1.8% Bristow Group, Inc.* .......................... 11,615 425,689 Excel Maritime Carriers Ltd.* ................. 70,280 1,254,498 Vitran Corp., Inc.* ........................... 19,575 370,555 ------------ 2,050,742 ------------ VITAMINS & NUTRITION PRODUCTS--1.9% Natrol, Inc.* ................................. 270,450 705,874 Nutraceutical International Corp. +* .......... 90,664 1,514,089 ------------ 2,219,963 ------------ WEB PORTALS/INTERNET SERVICE PROVIDER--0.3% Rediff.com India Ltd.* ........................ 19,960 349,300 ------------ WIRELESS EQUIPMENT--0.8% Motorola, Inc. ................................ 50,400 933,408 ------------ TOTAL DOMESTIC COMMON STOCK (Cost $104,044,653) ....................... 115,802,412 ------------ WARRANTS--0.2% DIVERSIFIED OPERATION--0.2% Endeavor Acquisition - Cw09* .................. 40,150 199,545 ------------ TOTAL WARRANTS (Cost $117,848) ........................... 199,545 ------------ THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2007 | 21 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS LONG/SHORT EQUITY FUND (continued) PORTFOLIO OF INVESTMENTS Number of Shares Value --------- ----------- SHORT-TERM INVESTMENTS--7.7% PNC Bank Money Market Deposit Account 4.90% 03/01/07.............................. 8,980,176 $ 8,980,176 ------------ TOTAL SHORT-TERM INVESTMENTS (Cost $8,980,176) ......................... 8,980,176 ------------ TOTAL LONG POSITIONS--107.9% (Cost $113,142,677) ............................ 124,982,133 ------------ SECURITIES SOLD SHORT--(45.1%) AIRLINES--0.0% Northwest Airlines Corp.* ..................... (29,725) (46,074) ------------ APPAREL--(1.9%) Crocs, Inc.* .................................. (45,315) (2,207,747) ------------ APPAREL MANUFACTURERS--(1.3%) Guess?, Inc. .................................. (4,500) (366,660) True Religion Apparel, Inc.* .................. (18,600) (315,828) Volcom, Inc.* ................................. (21,525) (785,232) ------------ (1,467,720) ------------ AUCTION HOUSE/ART DEALER--(1.0%) Escala Group, Inc.* ........................... (11,466) (28,551) Premier Exhibitions, Inc.* .................... (62,782) (679,301) Ritchie Bros. Auctioneers, Inc. ............... (8,200) (470,762) ------------ (1,178,614) ------------ AUTO/TRUCK PARTS & EQUIPMENT -ORIGINAL--(0.1%) China Automotive Systems, Inc.* ............... (17,591) (158,319) ------------ AUTOMOBILE - MANUFACTURING--(0.6%) Force Protection, Inc. +* ..................... (32,670) (532,521) Hybrid Technologies, Inc.* .................... (26,973) (125,423) ------------ (657,944) ------------ BATTERIES/BATTERY SYSTEMS--(0.6%) Medis Technologies Ltd.* ...................... (27,684) (475,611) Valence Technology, Inc.* ..................... (102,015) (176,486) ------------ (652,097) ------------ BEVERAGES--(1.3%) Hansen Natural Corp.* ......................... (30,000) (1,050,000) Jones Soda Co.* ............................... (23,400) (288,054) National Beverage Corp.* ...................... (10,040) (130,922) ------------ (1,468,976) ------------ BUILDING - RESIDENTIAL/COMMERCIAL--(0.4%) Brookfield Homes Corp.* ....................... (14,555) (516,703) ------------ CASINO SERVICES--(0.2%) PokerTek, Inc.* ............................... (18,945) (184,335) ------------ Number of Shares Value --------- ----------- COMMERCIAL SERVICES--(0.5%) Axis Technologies Group, Inc. +* .............. (9,945) $ (12,133) Iron Mountain, Inc.* .......................... (19,050) (530,542) ------------ (542,675) ------------ COMMERCIAL SERVICES - FINANCE--(1.1%) LML Payment Systems, Inc.* .................... (21,008) (65,335) Rewards Network, Inc.* ........................ (234,470) (1,256,759) ------------ (1,322,094) ------------ COMPUTER SERVICES--0.0% Foldera, Inc.* ................................ (19,075) (19,075) ------------ COMPUTER SOFTWARE--(0.3%) Efuture Information Technology, Inc.* ......... (11,705) (313,811) ------------ COMPUTERS--(2.9%) Palm, Inc.* ................................... (57,300) (948,315) Research In Motion Ltd.* ...................... (16,800) (2,362,248) Xybernaut Corp.* .............................. (35,000) (980) ------------ (3,311,543) ------------ COMPUTERS - INTEGRATED SYSTEMS--0.0% Satellite Newspapers Corp.* ................... (8,615) (13) ------------ COMPUTERS - MEMORY DEVICES--(1.1%) Komag, Inc.* .................................. (23,600) (802,164) NetList, Inc. ................................. (56,855) (494,639) ------------ (1,296,803) ------------ COMPUTERS - PERIPHERAL EQUIPMENT--(0.2%) Cambridge Display Technology, Inc.* ........... (31,958) (174,171) ------------ DECISION SUPPORT SOFTWARE--(0.2%) Interactive Intelligence* ..................... (14,100) (208,539) Nestor, Inc.* ................................. (23,200) (26,680) ------------ (235,219) ------------ DENTAL SUPPLIES & EQUIPMENT--(0.8%) Align Technology, Inc.* ....................... (48,700) (799,654) Sirona Dental Systems, Inc. ................... (4,300) (160,046) ------------ (959,700) ------------ DISTRIBUTION--(0.3%) Beacon Roofing Supply, Inc.* .................. (18,300) (304,329) ------------ E-COMMERCE/PRODUCTS--(0.6%) Nutri/System, Inc.* ........................... (16,600) (749,490) ------------ THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 22 | SEMI-ANNUAL REPORT 2007 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS LONG/SHORT EQUITY FUND (continued) PORTFOLIO OF INVESTMENTS Number of Shares Value --------- ----------- ELECTRONIC COMPONENTS - MISCELLANEOUS--(0.2%) Innovative Card Technologies*.................. (13,154) $ (74,978) NVE Corp.* .................................... (7,605) (192,634) ------------ (267,612) ------------ ELECTRONIC COMPONENTS - SEMICONDUCTORS--(3.3%) Ciena Corp. ................................... (16,300) (512,961) Metalink Ltd.* ................................ (31,137) (193,050) Nano-Proprietary, Inc.* ....................... (21,385) (40,418) Neomagic Corp.* ............................... (7,848) (28,959) Supertex, Inc.* ............................... (33,000) (1,354,650) Syntax-Brillian Corp.* ........................ (111,377) (908,836) Volterra Semiconductor Corp.* ................. (56,505) (795,590) ------------ (3,834,464) ------------ ELECTRONIC EQUIPMENT & PRODUCTS--(0.4%) Ionatron, Inc.* ............................... (79,170) (417,226) ------------ ELECTRONIC FORMS--(0.1%) Convera Corp.* ................................ (51,362) (157,168) ------------ ELECTRONIC MEASUREMENT INSTRUMENTS--(1.0%) Garmin Ltd. ................................... (22,040) (1,206,910) ------------ ENERGY - ALTERNATE SOURCES--(0.1%) Bluefire Ethanol Fuels, Inc.* ................. (335) (2,211) Dynamotive Energy Systems* .................... (42,618) (49,437) Ethanex Energy, Inc.* ......................... (12,580) (22,644) ------------ (74,292) ------------ ENERGY EQUIPMENT & SERVICES--(0.4%) Rentech, Inc. +* .............................. (150,485) (514,659) ------------ ENTERPRISE SOFTWARE/SERVICES--(0.9%) Ants Software, Inc.* .......................... (49,384) (99,756) Concur Technologies, Inc.* .................... (34,190) (552,852) Packeteer, Inc.* .............................. (30,800) (369,600) ------------ (1,022,208) ------------ ENTERTAINMENT SOFTWARE--0.0% QSound Labs, Inc.* ............................ (11,240) (57,436) ------------ FINANCE - CONSUMER LOANS--(1.0%) First Marblehead Corp., (The) ................. (25,440) (1,148,362) ------------ FINANCE - INVESTMENT BANKER/BROKER--0.0% Ladenburg Thalmann Financial Services, Inc.* .. (1) (2) ------------ FINANCE - MORTGAGE LOAN/BANKER--(0.1%) Franklin Credit Management Corp.* ............. (29,034) (137,621) ------------ FIREARMS & AMMUNITION--(0.2%) Smith & Wesson Holding Corp.* ................. (17,500) (217,350) ------------ Number of Shares Value --------- ----------- FOOD - MISCELLANEOUS/DIVERSIFIED--(0.6%) Seaboard Corp. ................................ (200) $ (430,000) SunOpta, Inc.* ................................ (26,000) (278,200) ------------ (708,200) ------------ FOODS--(1.2%) Imperial Sugar Co. ............................ (44,315) (1,368,004) ------------ FOOTWEAR & RELATED APPAREL--(0.3%) Heelys, Inc. +* ............................... (7,150) (238,667) Skins, Inc. +* ................................ (35,813) (61,240) ------------ (299,907) ------------ IDENTIFICATION SYSTEMS/DEVELOPMENT--(0.4%) L-1 Identity Solutions, Inc.* ................. (29,610) (470,500) ------------ INDUSTRIAL EQUIPMENT & SUPPLIES--(0.3%) Sun Hydraulics Corp. .......................... (16,450) (361,735) ------------ INTERNET INFORMATION/NETWORK--(0.7%) Baidu.Com - ADR* .............................. (6,500) (693,550) Mamma.Com, Inc. +* ............................ (20,193) (92,080) ------------ (785,630) ------------ INTERNET INFRASTRUCTURE SOFTWARE--(0.6%) Imergent, Inc. ................................ (38,020) (666,871) ------------ INTERNET SERVICES--(0.5%) Shutterly, Inc.* .............................. (32,535) (537,153) ------------ INTERNET TELEPHONY--(0.3%) j2 Global Communications, Inc.* ............... (14,200) (341,368) ------------ LASERS - SYSTEMS/COMPONENTS--0.0% Neutron Enterprises, Inc.* .................... (3,523) (7,231) ------------ LIGHTING PRODUCTS & SYSTEMS--(0.3%) Research Frontiers, Inc.* ..................... (8,016) (74,869) Universal Display Corp.* ...................... (23,200) (302,064) ------------ (376,933) ------------ MACHINERY--(0.5%) Intevac, Inc.* ................................ (10,100) (275,427) Raser Technologies, Inc.* ..................... (12,709) (64,435) TurboChef Technologies, Inc.* ................. (18,233) (273,677) ------------ (613,539) ------------ MANUFACTURING--(0.8%) Ceradyne, Inc. +* ............................. (10,700) (552,120) Freightcar America, Inc. ...................... (6,500) (322,010) Nanophase Technologies Corp.* ................. (10,625) (63,325) ------------ (937,455) ------------ MARINE SERVICES--(0.1%) Odyssey Marine Exploration, Inc.* ............. (55,500) (159,285) ------------ THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2007 | 23 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS LONG/SHORT EQUITY FUND (continued) PORTFOLIO OF INVESTMENTS Number of Shares Value --------- ----------- MEDIA & ENTERTAINMENT--(0.2%) Genius Products, Inc.*......................... (95,700) $ (284,229) ------------ MEDICAL - BIOMEDICAL/GENETICS--(0.7%) Crucell N.V. - ADR* ........................... (13,100) (331,037) Diversa Corp. ................................. (21,100) (158,461) InterMune, Inc.* .............................. (11,600) (351,712) ReGeneRx Biopharmaceuticals, Inc.* ............ (1,200) (2,556) ------------ (843,766) ------------ MEDICAL - DRUGS--(0.1%) Pain Therapeutics, Inc.* ...................... (16,200) (127,818) ------------ MEDICAL - PRODUCTS--(0.7%) BSD Medical Corp.* ............................ (25,335) (199,893) Cyberonics, Inc.* ............................. (21,400) (438,272) ThermoGenesis Corp.* .......................... (67,810) (208,177) ------------ (846,342) ------------ MEDICAL IMAGING SYSTEMS--(0.2%) Microvision, Inc.* ............................ (75,800) (259,236) ------------ MEDICAL INFORMATION SYSTEMS--(0.7%) Eclipsys Corp.* ............................... (17,500) (366,100) Medefile International, Inc.* ................. (1,902) (970) Quality Systems, Inc.* ........................ (9,900) (405,207) ------------ (772,277) ------------ MEDICAL INSTRUMENTS--(0.9%) Conceptus, Inc.* .............................. (16,300) (306,114) CPC of America, Inc.* ......................... (4,745) (73,548) Intuitive Surgical, Inc.* ..................... (5,600) (622,160) ------------ (1,001,822) ------------ NETWORKING PRODUCTS--(0.8%) NETGEAR, Inc.* ................................ (20,165) (545,060) ParkerVision, Inc.* ........................... (35,407) (386,290) ------------ (931,350) ------------ OIL & GAS - REFINING & MARKETING--(0.3%) SulphCo, Inc.* ................................ (94,425) (302,160) ------------ PRINTING - COMMERCIAL--(0.3%) Document Securities Systems, Inc.* ............ (35,840) (404,992) ------------ RESEARCH & DEVELOPMENT--(0.1%) Altair Nanotechnologies, Inc.* ............... (24,239) (82,897) ------------ RETAIL - APPAREL/SHOES--(0.6%) Under Armour, Inc., Class A* .................. (14,900) (684,655) ------------ RETAIL - COMPUTER EQUIPMENT--(0.4%) PC Mall, Inc.* ................................ (40,200) (494,460) ------------ RETAIL - MUSIC STORE--(0.6%) Guitar Center, Inc.* .......................... (14,600) (639,626) ------------ Number of Shares Value --------- ----------- RETAIL - PAWN SHOPS--(0.4%) Ezcorp, Inc.*.................................. (27,345) $ (406,073) ------------ RETAIL - VIDEO RENTAL--(0.6%) Blockbuster, Inc., Class A + .................. (71,300) (473,432) Hibbett Sports, Inc. .......................... (7,000) (218,260) ------------ (691,692) ------------ RETAIL - MISCELLANEOUS/DIVERSIFIED--0.0% Dark Dynamite, Inc.* .......................... (13,984) (1,958) ------------ RUBBER AND PLASTIC--(0.1%) Amerityre Corp.* .............................. (41,515) (161,493) ------------ SEISMIC DATA COLLECTION--(0.2%) TGC Industries, Inc.* ......................... (24,445) (194,582) ------------ SEMICONDUCTORS COMPONENTS - INTEGRATED CIRCUITS--(0.6%) Anadigics Inc. +* ............................. (52,300) (638,583) ------------ SOFTWARE--(0.5%) Innerworkings, Inc. ........................... (46,489) (629,926) ------------ STEEL - PRODUCERS--(1.1%) Carpenter Technology Corp. .................... (4,400) (521,620) IPSCO, Inc. ................................... (6,800) (741,608) ------------ (1,263,228) ------------ STEEL - SPECIALTY--(0.6%) Allegheny Technologies, Inc. .................. (7,100) (727,395) ------------ TELECOMMUNICATION SERVICES--(0.1%) Choice One Communications, Inc.* .............. (37,790) (4) CTC Communications Group, Inc.* ............... (98,900) (10) FiberTower Corp.* ............................. (27,949) (148,968) ------------ (148,982) ------------ TELECOMMUNICATIONS EQUIPMENT--(2.0%) JDS Uniphase Corp.* ........................... (23,100) (374,451) Network Equipment Technologies, Inc.* ......... (28,900) (228,599) Telefonaktiebolaget LM Ericsson ............... (47,400) (1,695,024) Zingo, Inc.* .................................. (3,035) (1,912) ------------ (2,299,986) ------------ TOBACCO--(0.1%) Star Scientific, Inc. +* ...................... (143,137) (137,412) ------------ VITAMINS & NUTRITION PRODUCTS--(0.3%) USANA Health Sciences, Inc.* .................. (5,800) (336,806) ------------ WEB HOSTING/DESIGN--(0.4%) Interliant, Inc.* ............................. (600) (1) Terremark Worldwide, Inc.* .................... (56,865) (451,508) ------------ (451,509) ------------ THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 24 | SEMI-ANNUAL REPORT 2007 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS LONG/SHORT EQUITY FUND (concluded) PORTFOLIO OF INVESTMENTS Number of Shares Value --------- ----------- WEB PORTALS/INTERNET SERVICE PROVIDER--(1.3%) DigitalFX International, Inc. ................. (906) $ (2,673) GigaMedia Ltd.* ............................... (50,000) (608,000) Quepasa Corp* ................................. (34,915) (266,052) Rediff.com India Ltd.* ........................ (19,960) (349,300) Sify Ltd. - ADR* .............................. (29,100) (249,387) ------------ (1,475,412) ------------ WIRELESS EQUIPMENT--(0.5%) Sierra Wireless, Inc.* ........................ (40,100) (544,959) Tiger Telematics, Inc.* ....................... (16,610) (33) ------------ (544,992) ------------ TOTAL SECURITIES SOLD SHORT (Proceeds $49,940,672) .................... (52,242,232) ------------ OTHER ASSETS IN EXCESS OF LIABILITIES--37.2% ..... 43,088,622 ------------ NET ASSETS--100.0% ............................... $115,828,523 ============ -------------- * -- Non-income producing. + -- Security position is either entirely or partially held in a segregated account as collateral for securities sold short. ADR -- American Depository Receipt. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2007 | 25 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS LARGE CAP VALUE FUND PORTFOLIO OF INVESTMENTS Number of Shares Value --------- ----------- COMMON STOCK--98.5% AEROSPACE & DEFENSE--2.3% Lockheed Martin Corp. ......................... 15,400 $ 1,498,112 ------------ APPAREL--1.5% NIKE, Inc., Class B ........................... 9,600 1,002,912 ------------ BANKS - MAJOR--1.5% Bank of New York Co., Inc., (The) ............. 15,700 637,734 Comerica, Inc. ................................ 5,209 314,572 ------------ 952,306 ------------ BANKS - REGIONAL--0.7% Commerce Bancorp, Inc. ........................ 12,800 427,776 ------------ CHEMICALS - COMMODITY--1.0% PPG Industries, Inc. .......................... 9,700 642,625 ------------ COMPUTER EQUIPMENT & SERVICES--5.7% CGI Group, Inc., Class A* ..................... 55,300 468,391 First Data Corp. .............................. 29,300 748,029 Hewlett-Packard Co. ........................... 32,953 1,297,689 Ingram Micro, Inc., Class A* .................. 21,900 425,517 International Business Machines Corp. ......... 9,000 837,090 ------------ 3,776,716 ------------ COMPUTER SOFTWARE--2.9% McAfee, Inc.* ................................. 11,500 346,380 Microsoft Corp. ............................... 34,479 971,273 Oracle Corp.* ................................. 35,400 581,622 ------------ 1,899,275 ------------ CONSULTING SERVICES--0.9% Accenture Ltd., Class A ....................... 17,200 614,040 ------------ ELECTRONICS--2.4% Arrow Electronics, Inc.* ...................... 15,600 597,792 Emerson Electric Co. .......................... 7,400 318,866 Koninklijke (Royal) Philips Electronics N.V ... 17,300 635,256 ------------ 1,551,914 ------------ ENERGY--0.6% Dominion Resources, Inc. ...................... 4,800 410,544 ------------ FINANCIAL SERVICES--13.7% Ameriprise Financial, Inc. .................... 6,200 362,452 Citigroup, Inc. ............................... 51,333 2,587,183 Countrywide Financial Corp. ................... 13,906 532,322 Federated Investors, Inc., Class B ............ 18,500 661,745 Freddie Mac ................................... 17,727 1,137,719 Goldman Sachs Group, Inc., (The) .............. 3,272 659,635 JPMorgan Chase & Co. .......................... 55,100 2,721,940 Western Union Co. ............................. 18,500 400,895 ------------ 9,063,891 ------------ Number of Shares Value --------- ----------- FOODS--2.3% Coca-Cola Co., (The) .......................... 10,100 $ 471,468 Molson Coors Brewing Co., Class B ............. 12,000 1,013,280 ------------ 1,484,748 ------------ HEALTH & PERSONAL CARE--1.3% Johnson & Johnson ............................. 13,456 848,401 ------------ HEALTH CARE - DRUGS--4.7% Abbott Laboratories ........................... 6,700 365,954 Pfizer, Inc. .................................. 81,582 2,036,287 Wyeth ......................................... 14,700 719,124 ------------ 3,121,365 ------------ HEALTH CARE - SERVICES--2.7% Aetna, Inc. ................................... 14,900 659,623 Coventry Health Care, Inc.* ................... 9,500 516,990 DaVita, Inc.* ................................. 6,200 338,210 Medco Health Solutions, Inc.* ................. 3,700 250,157 ------------ 1,764,980 ------------ INSURANCE - OTHER--18.3% ACE Ltd. ...................................... 17,139 962,526 AMBAC Financial Group, Inc. ................... 11,215 982,883 American International Group, Inc. ............ 17,898 1,200,956 Berkshire Hathaway, Inc., Class B* ............ 553 1,948,219 CIGNA Corp. ................................... 5,300 755,250 CNA Financial Corp.* .......................... 8,300 340,798 Conseco, Inc.* ................................ 32,700 652,365 Genworth Financial, Inc., Class A ............. 15,400 544,698 Lincoln National Corp. ........................ 7,400 504,310 Loews Corp. ................................... 17,000 738,480 MBIA, Inc. .................................... 18,136 1,205,500 MGIC Investment Corp. ......................... 5,100 307,785 Nationwide Financial Services, Inc., Class A .. 6,144 329,318 Radian Group, Inc. ............................ 10,876 624,826 St. Paul Travelers Companies, Inc., (The) ..... 19,344 981,902 ------------ 12,079,816 ------------ MANUFACTURING--3.3% Honeywell International, Inc. ................. 16,100 747,684 Mettler-Toledo International, Inc.* ........... 4,500 388,620 Tomkins PLC - ADR ............................. 16,800 339,864 Tyco International Ltd. ....................... 23,623 728,297 ------------ 2,204,465 ------------ MEDIA & ENTERTAINMENT--4.1% Clear Channel Communications, Inc. ............ 16,200 586,116 Liberty Media Holding Corp., Capital Series A*........................... 4,957 534,761 Liberty Media Holding Corp., Interactive Class A*.................................... 12,486 294,295 ------------ THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 26 | SEMI-ANNUAL REPORT 2007 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS LARGE CAP VALUE FUND (continued) PORTFOLIO OF INVESTMENTS Number of Shares Value --------- ----------- MEDIA & ENTERTAINMENT--(CONTINUED) Time Warner, Inc. ............................. 62,066 $ 1,263,043 ------------ 2,678,215 ------------ OIL & GAS - EXPLORATION--2.8% Anadarko Petroleum Corp. ...................... 25,700 1,033,911 Chesapeake Energy Corp. ....................... 27,000 823,230 ------------ 1,857,141 ------------ OIL & GAS - INTEGRATED MAJORS--7.7% Chevron Corp. ................................. 21,616 1,483,074 ConocoPhillips ................................ 22,930 1,500,081 Exxon Mobil Corp. ............................. 29,614 2,122,731 Valero Energy Corp. ........................... -- 0 ------------ 5,105,886 ------------ OIL SERVICES--0.7% Helix Energy Solutions Group, Inc.* ........... 14,600 490,122 ------------ PUBLISHING & INFORMATION SERVICES--2.1% Gannett Co., Inc. ............................. 5,400 330,804 Idearc, Inc.* ................................. 7,700 261,800 R. R. Donnelley & Sons Co. .................... 21,700 785,106 ------------ 1,377,710 ------------ RETAIL - HARD GOODS--2.2% Home Depot, Inc., (The) ....................... 24,300 962,280 Ross Stores, Inc. ............................. 14,400 471,888 ------------ 1,434,168 ------------ SEMICONDUCTOR EQUIPMENT & PRODUCTS--1.3% Taiwan Semiconductor Manufacturing Co., Ltd. - ADR.................................. 32,400 359,640 Teradyne, Inc.* ............................... 32,300 520,676 ------------ 880,316 ------------ TECHNOLOGY--1.5% United Technologies Corp. ..................... 14,800 971,324 ------------ TELECOMMUNICATION SERVICES--1.6% Telecom Corp. New Zealand Ltd. ................ 19,300 526,311 Windstream Corp. .............................. 34,788 523,559 ------------ 1,049,870 ------------ Number of Shares Value --------- ----------- TELECOMMUNICATIONS--1.7% AT&T, Inc. .................................... 20,100 $ 739,680 Vodafone Group PLC - ADR ...................... 14,297 398,886 ------------ 1,138,566 ------------ TELECOMMUNICATIONS EQUIPMENT--2.8% Harris Corp. .................................. 14,400 706,752 Motorola, Inc. ................................ 23,900 442,628 Nokia Oyj ..................................... 32,500 709,475 ------------ 1,858,855 ------------ TOBACCO--3.0% Altria Group, Inc. ............................ 19,192 1,617,502 Loews Corp. - Carolina Group .................. 5,100 367,353 ------------ 1,984,855 ------------ TRANSPORTATION - ROAD & RAIL--0.5% Avis Budget Group, Inc.* ...................... 13,300 353,647 ------------ UTILITIES - ELECTRIC--0.7% DTE Energy Co. ................................ 9,200 425,960 ------------ TOTAL COMMON STOCK (Cost $57,209,358) ........................ 64,950,521 ------------ SHORT-TERM INVESTMENTS--1.5% PNC Bank Money Market Deposit Account 4.900% 03/01/07............................. 1,012,250 1,012,250 ------------ TOTAL SHORT-TERM INVESTMENTS (Cost $1,012,250) ......................... 1,012,250 ------------ TOTAL INVESTMENTS--100.0% (Cost $58,221,608) ............................. 65,962,771 ------------ OTHER ASSETS IN EXCESS OF LIABILITIES--0.0% ...... 110 ------------ NET ASSETS--100.0% ............................... $ 65,962,881 ============ * -- Non-income producing. ADR-- American Depository Receipt. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2007 | 27 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS MID CAP VALUE FUND PORTFOLIO OF INVESTMENTS Number of Shares Value --------- ----------- COMMON STOCK--96.1% APPAREL--2.8% Foot Locker, Inc. ............................. 20,700 $ 470,304 NIKE, Inc., Class B ........................... 1,650 172,375 Polo Ralph Lauren Corp. ....................... 4,000 347,920 VF Corp. ...................................... 2,700 215,487 ------------ 1,206,086 ------------ AUTOMOTIVE PARTS & EQUIPMENT--0.9% BorgWarner, Inc. .............................. 5,500 405,020 ------------ BANKS - MAJOR--2.3% Comerica, Inc. ................................ 7,200 434,808 Mellon Financial Corp. ........................ 12,900 560,247 ------------ 995,055 ------------ BANKS - REGIONAL--1.8% Commerce Bancorp, Inc. ........................ 23,900 798,738 ------------ BUILDING PRODUCTS--0.7% Masco Corp. ................................... 10,600 316,410 ------------ CHEMICALS - SPECIALTY--3.5% Lubrizol Corp., (The) ......................... 10,605 551,460 PPG Industries, Inc. .......................... 5,500 364,375 Valspar Corp., (The) .......................... 22,300 604,553 ------------ 1,520,388 ------------ COMPUTER EQUIPMENT & SERVICES--2.0% CACI International, Inc., Class A* ............ 3,500 162,750 Diebold, Inc. ................................. 4,700 222,639 Ingram Micro, Inc., Class A* .................. 16,900 328,367 SRA International, Inc., Class A* ............. 7,300 173,010 ------------ 886,766 ------------ COMPUTER SOFTWARE--2.2% McAfee, Inc.* ................................. 18,087 544,780 Sybase, Inc.* ................................. 8,645 216,039 Take-Two Interactive Software, Inc.* .......... 12,300 218,940 ------------ 979,759 ------------ CONSULTING SERVICES--1.7% Accenture Ltd., Class A ....................... 9,700 346,290 Hewitt Associates, Inc., Class A* ............. 12,900 387,258 ------------ 733,548 ------------ CONTAINERS--1.2% Crown Holdings, Inc.* ......................... 23,100 527,604 ------------ DATA PROCESSING SERVICES--2.2% Dun & Bradstreet Corp., (The) ................. 4,300 379,604 First Data Corp. .............................. 23,700 605,061 ------------ 984,665 ------------ DISTRIBUTION--1.2% W.W. Grainger, Inc. ........................... 6,695 516,519 ------------ Number of Shares Value --------- ----------- ELECTRONIC COMPONENTS & INSTRUMENTS--0.5% Thermo Fisher Scientific, Inc.* ............... 5,300 $ 239,931 ------------ ELECTRONICS--3.5% Amphenol Corp., Class A ....................... 2,900 187,166 Arrow Electronics, Inc.* ...................... 17,000 651,440 Avnet, Inc.* .................................. 18,400 672,888 ------------ 1,511,494 ------------ ENERGY--0.8% Peabody Energy Corporation .................... 8,400 339,360 ------------ FINANCIAL SERVICES--6.8% A.G. Edwards, Inc. ............................ 4,900 314,629 Affiliated Managers Group, Inc.* .............. 2,750 312,125 E*TRADE Financial Corp.* ...................... 10,900 251,681 Federated Investors, Inc., Class B ............ 19,200 686,784 IndyMac Bancorp, Inc. ......................... 6,400 219,712 SLM Corporation ............................... 10,400 443,248 State Street Corp. ............................ 5,000 327,550 Student Loan Corp., (The) ..................... 1,010 193,425 Western Union Co. ............................. 10,000 216,700 ------------ 2,965,854 ------------ FOODS--1.1% Kroger Co., (The) ............................. 18,800 482,596 ------------ GAS UTILITIES--1.0% Energen Corp. ................................. 8,800 426,624 ------------ HEALTH CARE - SERVICES--5.7% Coventry Health Care, Inc.* ................... 13,600 740,112 DaVita, Inc.* ................................. 10,100 550,955 Kindred Healthcare, Inc.* ..................... 13,300 437,836 Lincare Holdings, Inc.* ....................... 19,200 749,760 ------------ 2,478,663 ------------ INSURANCE - LIFE--2.9% Lincoln National Corp. ........................ 9,100 620,165 Unum Group .................................... 29,500 631,595 ------------ 1,251,760 ------------ INSURANCE - OTHER--14.6% AMBAC Financial Group, Inc. ................... 7,300 639,772 Assurant, Inc. ................................ 8,000 427,600 Assured Guaranty Ltd. ......................... 14,000 396,200 CIGNA Corp. ................................... 3,700 527,250 CNA Financial Corp.* .......................... 7,700 316,162 Everest Re Group Ltd. ......................... 2,900 281,909 First American Corp. .......................... 7,600 358,340 Hanover Insurance Group, Inc. (The) ........... 10,270 482,382 LandAmerica Financial Group, Inc. ............. 5,200 361,764 Marsh & McLennan Companies, Inc. .............. 10,500 308,910 MBIA, Inc. .................................... 5,300 352,291 Nationwide Financial Services, Inc., Class A .. 9,600 514,560 PMI Group, Inc., (The) ........................ 15,500 726,485 ------------ THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 28 | SEMI-ANNUAL REPORT 2007 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS MID CAP VALUE FUND (continued) PORTFOLIO OF INVESTMENTS Number of Shares Value --------- ----------- INSURANCE - OTHER--(CONTINUED) Radian Group, Inc. ............................ 9,300 $ 534,285 White Mountains Insurance Group Ltd. .......... 285 163,835 ------------ 6,391,745 ------------ INTERNET SERVICES--0.8% Symantec Corp.* ............................... 20,600 352,260 ------------ LEISURE & LODGING--2.5% Hilton Hotels Corp. ........................... 13,600 480,080 Scientific Games Corp., Class A* .............. 18,800 614,760 ------------ 1,094,840 ------------ MACHINERY--0.7% Terex Corp.* .................................. 4,540 298,914 ------------ MANUFACTURING--4.6% Dover Corp. ................................... 12,400 592,596 Ingersoll-Rand Co. Ltd., Class A .............. 7,100 307,501 Knoll, Inc. ................................... 25,100 581,065 Stanley Works, (The) .......................... 9,600 533,472 ------------ 2,014,634 ------------ MEDIA--1.6% Meredith Corp. ................................ 12,100 707,487 ------------ MEDICAL EQUIPMENT & SUPPLIES--0.8% C.R. Bard, Inc. ............................... 4,400 351,120 ------------ OIL & GAS - EXPLORATION--6.2% Anadarko Petroleum Corp. ...................... 16,900 679,887 Chesapeake Energy Corp. ....................... 19,100 582,359 Murphy Oil Corp. .............................. 6,500 336,830 Newfield Exploration Co.* ..................... 5,000 216,100 Pioneer Natural Resources Co. ................. 8,300 319,135 Pogo Producing Co. ............................ 12,300 587,817 ------------ 2,722,128 ------------ PUBLISHING & INFORMATION SERVICES--1.9% McGraw-Hill Companies, Inc., (The) ............... 6,400 413,504 R. R. Donnelley & Sons Co. .................... 11,900 430,542 ------------ 844,046 ------------ REAL ESTATE INVESTMENT TRUST (REIT)--2.2% AvalonBay Communities, Inc. ................... 1,650 226,974 Equity Residential ............................ 3,400 172,686 SL Green Realty Corp. ......................... 1,850 269,841 Ventas, Inc. .................................. 6,825 312,790 ------------ 982,291 ------------ RECREATIONAL PRODUCTS - TOYS--1.6% Hasbro, Inc. .................................. 9,700 274,413 Mattel, Inc. .................................. 16,300 423,963 ------------ 698,376 ------------ RESTAURANTS--1.7% Burger King Holdings, Inc. .................... 34,100 726,330 ------------ Number of Shares Value --------- ----------- RETAIL - HARD GOODS--0.4% Sherwin-Williams Co., (The) ................... 2,600 $ 173,030 ------------ SAVINGS & LOANS--0.3% Hudson City Bancorp, Inc. ..................... 11,300 151,420 ------------ SEMICONDUCTOR EQUIPMENT & PRODUCTS--1.4% Emulex Corp.* ................................. 17,000 304,300 Teradyne, Inc.* ............................... 19,700 317,564 ------------ 621,864 ------------ TELECOMMUNICATION SERVICES--1.2% Amdocs Ltd.* .................................. 8,400 290,724 Windstream Corp. .............................. 15,100 227,255 ------------ 517,979 ------------ TELECOMMUNICATIONS--1.4% CenturyTel, Inc. .............................. 7,300 326,675 Embarq Corp. .................................. 5,500 304,425 ------------ 631,100 ------------ TELECOMMUNICATIONS EQUIPMENT--2.7% Comverse Tecnology, Inc.* ..................... 23,300 512,134 Harris Corp. .................................. 13,700 672,396 ------------ 1,184,530 ------------ TOBACCO--0.7% Loews Corp. - Carolina Group .................. 4,300 309,729 ------------ TRANSPORT - SERVICES--0.6% Laidlaw International, Inc. ................... 8,100 276,858 ------------ TRANSPORTATION - ROAD & RAIL--1.3% Hertz Global Holdings, Inc.* .................. 26,300 559,138 ------------ TRAVEL SERVICES--1.2% Expedia, Inc.* ................................ 10,264 218,213 Sabre Holdings Corp., Class A ................. 9,200 297,436 ------------ 515,649 ------------ UTILITIES - ELECTRIC--0.9% Sierra Pacific Resources* ..................... 22,500 390,600 ------------ TOTAL COMMON STOCK (Cost $36,614,984) ........................ 42,082,908 ------------ SHORT-TERM INVESTMENTS--4.0% PNC Bank Money Market Deposit Account 4.90% 03/01/07.............................. 1,752,529 1,752,529 ------------ TOTAL SHORT-TERM INVESTMENTS (Cost $1,752,529) ......................... 1,752,529 ------------ TOTAL INVESTMENTS--100.1% (Cost $38,367,513) ............................. 43,835,437 ------------ LIABILITIES IN EXCESS OF OTHER ASSETS--(0.1)% .... (50,667) ------------ NET ASSETS--100.0% ............................... $ 43,784,770 ============ * -- Non-income producing. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2007 | 29 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS ALL-CAP VALUE FUND PORTFOLIO OF INVESTMENTS Number of Shares Value --------- ----------- COMMON STOCK--98.4% APPAREL--5.1% Jones Apparel Group, Inc. ..................... 4,435 $ 146,000 Liz Claiborne, Inc. ........................... 4,325 194,625 NIKE, Inc., Class B ........................... 2,040 213,119 Oxford Industries, Inc. ....................... 1,255 61,985 Pacific Sunwear of California, Inc.* .......... 11,910 214,380 VF Corp. ...................................... 1,515 120,912 ------------ 951,021 ------------ COMPUTER EQUIPMENT & SERVICES--5.1% Agilysys, Inc. ................................ 6,845 143,745 Hewlett-Packard Co. ........................... 9,720 382,774 International Business Machines Corp. ......... 4,635 431,101 ------------ 957,620 ------------ COMPUTER SOFTWARE--2.3% Microsoft Corp. ............................... 12,080 340,294 Sybase, Inc.* ................................. 3,860 96,461 ------------ 436,755 ------------ CONSUMER NON-CYCLICAL--0.5% National Presto Industries, Inc. .............. 1,625 102,733 ------------ CONSUMER PRODUCTS--1.1% Tupperware Brands Corp. ....................... 8,415 196,995 ------------ DATA PROCESSING SERVICES--1.0% First Data Corp. .............................. 7,510 191,730 ------------ DISTRIBUTION--1.8% Avnet, Inc.* .................................. 4,440 162,371 W.W. Grainger, Inc. ........................... 2,390 184,388 ------------ 346,759 ------------ DIVERSIFIED OPERATION--6.0% Aeroflex, Inc. ................................ 3,210 36,690 Leggett & Platt, Inc. ......................... 2,875 68,482 Loews Corp. ................................... 20,870 906,593 Rent-A-Center, Inc.* .......................... 3,715 105,209 ------------ 1,116,974 ------------ ELECTRONIC COMPONENTS & INSTRUMENTS--0.7% Bel Fuse, Inc., Class B ....................... 1,415 44,983 Parker-Hannifin Corp. ......................... 1,105 91,041 ------------ 136,024 ------------ FINANCIAL SERVICES--6.1% Castlepoint Holdings Ltd. 144A ++* ............ 3,725 40,044 Citigroup, Inc. ............................... 3,565 179,676 Countrywide Financial Corp. ................... 4,429 169,542 Fannie Mae .................................... 2,510 142,392 Freddie Mac ................................... 6,835 438,670 Highland Financial Trust 144A ++* ............. 2,755 45,458 ------------ Number of Shares Value --------- ----------- FINANCIAL SERVICES--(CONTINUED) Peoples Choice Financial Corp. 144A ++* ....... 1,465 $ 2,198 SLM Corporation ............................... 2,905 123,811 Tac Acquisition Corp.* ........................ 7,355 0 ------------ 1,141,791 ------------ FOODS--1.1% Constellation Brands, Inc., Class A* .......... 697 16,351 Nestle S.A. - ADR ............................. 2,120 197,036 ------------ 213,387 ------------ HEALTH & PERSONAL CARE--2.4% Johnson & Johnson ............................. 7,230 455,851 ------------ HEALTH CARE - DRUGS--7.0% AstraZeneca PLC ............................... 4,265 239,394 Pfizer, Inc. .................................. 22,826 569,737 Sanofi-Aventis - ADR .......................... 7,545 319,984 Wyeth ......................................... 3,750 183,450 ------------ 1,312,565 ------------ HEALTH CARE - SERVICES--2.4% DaVita, Inc.* ................................. 4,185 228,291 Lincare Holdings, Inc.* ....................... 5,515 215,361 ------------ 443,652 ------------ INFORMATION SERVICE--0.6% Fidelity National Information ................. 2,300 105,685 ------------ INSURANCE - LIFE--1.7% Torchmark Corp. ............................... 1,945 124,324 Unum Group .................................... 9,046 193,675 ------------ 317,999 ------------ INSURANCE - OTHER--23.6% ACE Ltd. ...................................... 12,450 699,192 Alleghany Corp.* .............................. 1,591 621,476 AMBAC Financial Group, Inc. ................... 1,280 112,179 American International Group, Inc. ............ 3,585 240,554 Assured Guaranty Ltd. ......................... 7,073 200,166 CNA Financial Corp.* .......................... 5,500 225,830 First American Corp. .......................... 1,295 61,059 Hanover Insurance Group, Inc. ................. 4,520 212,304 Hartford Financial Services Group, Inc. ....... 349 33,002 Marsh & McLennan Companies, Inc. .............. 4,655 136,950 MBIA, Inc. .................................... 7,525 500,187 Millea Holdings, Inc. - ADR .................. 1,675 62,109 National Atlantic Holdings Corp., Class A* .... 4,005 50,783 Quanta Capital Holdings Ltd.* ................. 23,520 51,979 Radian Group, Inc. ............................ 3,840 220,608 RAM Holdings Ltd.* ............................ 3,635 59,578 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 30 | SEMI-ANNUAL REPORT 2007 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS ALL-CAP VALUE FUND (continued) PORTFOLIO OF INVESTMENTS Number of Shares Value --------- ----------- INSURANCE - OTHER--(CONTINUED) Security Capital Assurance .................... 5,740 $ 170,708 Specialty Underwriters' Alliance, Inc.* ....... 3,170 22,983 St. Paul Travelers Companies, Inc., (The) ..... 5,520 280,195 Wesco Financial Corp. ......................... 185 87,773 White Mountains Insurance Group Ltd. .......... 665 382,282 ------------ 4,431,897 ------------ INTERNET SERVICES--2.0% Expedia, Inc.* ................................ 4,399 93,523 IAC/InterActiveCorp* .......................... 2,585 101,332 Symantec Corp.* ............................... 11,000 188,100 ------------ 382,955 ------------ INVESTMENT COMPANY--0.3% Kohlberg Capital Corp.* ....................... 3,170 50,530 ------------ LEISURE & LODGING--0.5% International Speedway Corp., Class A ......... 1,790 95,228 ------------ MANUFACTURING--3.8% Dover Corp. ................................... 4,035 192,833 Makita Corp. - ADR ............................ 5,925 216,144 Tyco International Ltd. ....................... 9,720 299,667 ------------ 708,644 ------------ MEDIA & ENTERTAINMENT--0.5% Clear Channel Communications, Inc. ............ 2,580 93,344 ------------ MEDICAL EQUIPMENT AND SUPPLIES--1.0% Becton, Dickinson and Co. ..................... 2,490 189,215 ------------ OFFICE EQUIPMENT & SUPPLIES--0.5% Avery Dennison Corp. .......................... 1,480 98,361 Xerox Corp.* .................................. -- 0 ------------ 98,361 ------------ OIL & GAS - EXPLORATION--3.9% Anadarko Petroleum Corp. ...................... 5,210 209,598 Apache Corp. .................................. 1,605 109,991 Devon Energy Corp. ............................ 2,510 164,932 Pioneer Natural Resources Co. ................. 3,935 151,301 Quest Resource Corp.* ......................... 2,263 19,054 Quest Resource Corp. 144A ++* ................. 2,430 20,461 Rosetta Resources, Inc. 144A ++* .............. 2,035 37,383 Rosetta Resources, Inc.* ...................... 670 12,308 ------------ 725,028 ------------ Number of Shares Value --------- ----------- OIL & GAS - INTEGRATED MAJORS--3.7% Chevron Corp. ................................. 4,250 $ 291,592 ConocoPhillips ................................ 4,911 321,278 Royal Dutch Shell PLC, Class A - ADR .......... 1,170 76,062 ------------ 688,932 ------------ REAL ESTATE--0.2% Meruelo Maddux Properties, Inc.* .............. 3,255 31,215 ------------ REAL ESTATE INVESTMENT TRUST (REIT)--2.1% Alesco Financial, Inc. 144A ++ ................ 5,472 59,043 Ashford Hospitality Trust ..................... 4,075 50,530 CBRE Realty Finance, Inc. 144A ++ ............. 4,520 58,805 CBRE Realty Finance, Inc. ..................... 2,350 30,738 KKR Financial Corp. ........................... 1,320 36,472 Luminent Mortgage Capital, Inc. ............... 3,330 30,703 National Health Investors, Inc. ............... 3,595 109,289 Rait Investment Trust ......................... 363 12,142 ------------ 387,722 ------------ RECREATIONAL PRODUCTS - TOYS--2.7% Hasbro, Inc. .................................. 9,160 259,137 Mattel, Inc. .................................. 9,730 253,077 ------------ 512,214 ------------ RETAIL - HARD GOODS--0.6% Claire's Stores, Inc. ......................... 3,430 110,240 ------------ SERVICES - BUSINESS--1.2% Dun & Bradstreet Corp., (The) ................. 2,460 217,169 ------------ TELECOMMUNICATION SERVICES--2.5% Embarq Corp. .................................. 2,125 117,619 Vodafone Group PLC ............................ 12,838 358,180 ------------ 475,799 ------------ TELECOMMUNICATIONS EQUIPMENT--2.0% Motorola, Inc. ................................ 13,210 244,649 Nokia Oyj ..................................... 6,110 133,381 ------------ 378,030 ------------ TRANSPORTATION - SHIPPING--0.3% Danaos Corp. .................................. 2,495 59,007 ------------ TRAVEL SERVICES--0.6% Sabre Holdings Corp., Class A ................. 3,760 121,561 ------------ UTILITIES - ELECTRIC--1.5% Korea Electric Power Corp. - ADR .............. 13,020 273,550 ------------ TOTAL COMMON STOCK (Cost $15,992,469) ........................ 18,458,182 ------------ THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2007 | 31 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS ALL-CAP VALUE FUND (concluded) PORTFOLIO OF INVESTMENTS Par (000) Value --------- ----------- INVESTMENT COMPANY--0.1% Morgan Stanley Asia-Pacific Fund, Inc. ........ $ 620 $ 11,656 ------------ TOTAL INVESTMENT COMPANY (Cost $6,643) ............................. 11,656 ------------ Number of Shares Value --------- ----------- SHORT-TERM INVESTMENTS--2.0% PNC Bank Money Market Deposit Account 4.900% 03/01/07 ............................ 381,653 381,653 ------------ TOTAL SHORT-TERM INVESTMENTS (Cost $381,653) ........................... 381,653 ------------ TOTAL INVESTMENTS--100.5% (Cost $16,380,764) ............................ 18,851,491 ------------ OPTIONS WRITTEN--(0.3%) Anadarko Petroleum Corp. CalL Options Expire 08/18/07 $40.00 ............................ (26) (9,376) Motorola, Inc. Call Options Expire 07/21/07 $17.50 ..................... (62) (13,039) Pacific Sunwear of California, Inc. Call Options Expire 03/17/07 $15.00 ........ (48) (14,880) Pacific Sunwear of California, Inc. Call Options Expire 06/16/07 $20.00 ........ (43) (3,014) Symantec Corp. Call Options Expire 04/21/07 $17.00 ............................ (53) (3,906) Symantec Corp. Call Options Expire 07/21/07 $16.50 ............................ (57) (9,764) ------------ TOTAL OPTIONS WRITTEN (Cost $(76,886)) .......................... (53,979) ------------ TOTAL INVESTMENTS, NET OF OPTIONS WRITTEN--100.2% (Cost $16,303,878) ............................. $18,797,512 ------------ LIABIITIES IN EXCESS OF OTHER ASSETS--(0.2)% ..... (46,121) ------------ NET ASSETS--100.0% ............................... $ 18,751,391 ============ * -- Non-income producing. ++ -- -Security has been valued at fair market value as determined in good faith by or under the direction of The RBB Fund, Inc.'s Board of Directors. ADR -- American Depository Receipt. 144 A -- -Security was purchased pursuant to Rule 144A under Securities Act of 1933 and may not be resold subject to that rule except to qualified institutional buyers. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 32 | SEMI-ANNUAL REPORT 2007 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- ROBECO WPG SMALL CAP VALUE FUND (formerly Robeco WPG Tudor Fund) PORTFOLIO OF INVESTMENTS Number of Shares Value --------- ----------- COMMON STOCK--92.4% AIRLINES--1.5% JetBlue Airways Corp. * ....................... 30,100 $ 370,531 Republic Airways Holdings, Inc.* .............. 14,580 288,976 World Air Holdings, Inc.* ..................... 14,400 146,160 ------------ 805,667 ------------ APPAREL--2.4% Genesco, Inc.* ................................ 6,800 272,000 Lakeland Industries, Inc. #* .................. 56,914 767,197 Quiksilver, Inc.* ............................. 18,000 250,920 ------------ 1,290,117 ------------ BANKS - REGIONAL--6.1% Bank Mutual Corp. ............................. 55,200 645,288 Berkshire Hills Bancorp, Inc. ................. 10,900 376,813 Citizens Banking Corp. ........................ 22,100 501,670 First Financial Bankshares, Inc. .............. 1 42 First State Bancorporation .................... 15,600 348,192 PFF Bancorp, Inc. ............................. 7,500 237,150 Synergy Financial Group, Inc. ................. 44,300 713,673 Westfield Financial, Inc. ..................... 49,700 525,329 ------------ 3,348,157 ------------ BUILDING & CONSTRUCTION--0.5% WCI Communities, Inc.#* ....................... 12,100 251,922 ------------ CHEMICALS - COMMODITY--0.9% Methanex Corp. ................................ 18,500 467,865 ------------ CHEMICALS - SPECIALTY--0.6% Omnova Solutions, Inc.* ....................... 55,300 336,224 ------------ COMMERCIAL SERVICES--0.7% LECG Corp.* ................................... 29,400 395,136 ------------ COMPUTER EQUIPMENT & SERVICES--4.3% Foundry Networks, Inc.* ....................... 27,000 394,200 Neoware, Inc. #* .............................. 72,800 857,584 Rackable Systems, Inc.* ....................... 33,500 583,235 WidePoint Corp.* .............................. 238,700 501,270 ------------ 2,336,289 ------------ CONSULTING SERVICES--4.2% BearingPoint, Inc.* ........................... 38,900 311,200 First Consulting Group, Inc.* ................. 13,060 157,765 FTI Consulting, Inc.* ......................... 13,900 466,623 ICF International, Inc.* ...................... 53,800 794,626 Navigant Consulting, Inc.* .................... 29,300 567,541 ------------ 2,297,755 ------------ CONSUMER PRODUCTS--2.9% Flanders Corp.* ............................... 28,000 218,680 Jarden Corp.* ................................. 17,700 648,351 Libbey, Inc.# ................................. 57,900 717,960 ------------ 1,584,991 ------------ Number of Shares Value --------- ----------- DATA PROCESSING SERVICES--0.7% MoneyGram International, Inc. ................. 13,430 $ 403,706 ------------ ELECTRONIC EQUIPMENT & PRODUCTS--0.8% Measurement Specialties, Inc.* ............... 13,200 304,392 SonoSite, Inc.* ............................... 4,300 129,344 ------------ 433,736 ------------ ENGINE MANUFACTURING--0.5% Briggs & Stratton Corp. ....................... 8,900 260,236 ------------ FINANCIAL SERVICES--2.1% Technology Investment Capital Corp. ........... 30,645 501,659 WSFS Financial Corp. .......................... 9,400 630,740 ------------ 1,132,399 ------------ FOODS--1.7% Chiquita Brands International, Inc. ........... 18,500 268,250 Del Monte Foods Co. ........................... 58,300 670,450 ------------ 938,700 ------------ GAS UTILITIES--1.6% New Jersey Resources Corp. .................... 4,800 237,072 UGI Corp. ..................................... 13,100 342,041 Vectren Corp. ................................. 11,100 310,911 ------------ 890,024 ------------ HEALTH CARE - DRUGS--0.1% Matrixx Initiatives, Inc.* .................... 3,100 55,397 ------------ HEALTH CARE - SERVICES--0.7% LifePoint Hospitals, Inc.* .................... 11,100 406,260 ------------ HOUSEHOLD PRODUCTS--3.4% Lifetime Brands, Inc. # ....................... 96,930 1,875,595 ------------ INSURANCE - OTHER--7.3% AmCOMP, Inc.* ................................. 59,540 626,956 Amerisafe, Inc.* .............................. 16,560 306,029 Aspen Insurance Holdings Ltd. ................. 15,100 400,150 Assured Guaranty Ltd. ......................... 26,900 761,270 Darwin Professional Underwriters, Inc.* ....... 23,100 554,400 Employers Holdings, Inc.* ..................... 400 8,160 Endurance Specialty Holdings Ltd. ............. 10,300 365,238 Hallmark Financial Services, Inc.* ............ 63,100 697,255 Hooper Holmes, Inc.* .......................... 76,740 295,449 ------------ 4,014,907 ------------ INTERNET SERVICES--1.6% SafeNet, Inc.* ................................ 31,800 872,910 ------------ MACHINERY - GENERAL INDUSTRY--0.7% Altra Holdings, Inc.* ......................... 26,600 400,596 ------------ THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2007 | 33 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- ROBECO WPG SMALL CAP VALUE FUND (formerly Robeco WPG Tudor Fund) (continued) PORTFOLIO OF INVESTMENTS Number of Shares Value --------- ----------- MANUFACTURING--0.6% Olin Corp. .................................... 20,300 $ 351,190 ------------ MEDICAL EQUIPMENT AND SUPPLIES--1.0% Dexcom, Inc. #* ............................... 28,200 228,138 Digital Angel Corp.#* ......................... 24,500 61,005 Foxhollow Technologies, Inc.* ................. 12,400 277,264 ------------ 566,407 ------------ METALS & MINING--2.3% Uranium Resources, Inc.* ...................... 227,277 1,261,387 ------------ OIL & GAS - EXPLORATION--6.9% Aurora Oil & Gas Corp.* ....................... 197,200 485,112 Bronco Drilling Co., Inc.* .................... 24,020 360,780 Edge Petroleum Corp.* ......................... 28,700 360,759 Endeavor International Corp.* ................. 88,200 182,574 Geomet, Inc.* ................................. 132,900 1,095,096 InterOil Corp.#* .............................. 25,100 611,938 Rosetta Resources, Inc.* ...................... 17,700 325,149 Rosetta Resources, Inc. 144A ++* .............. 18,000 330,660 Warren Resources, Inc.* ....................... 4,900 54,929 ------------ 3,806,997 ------------ OIL SERVICES--2.2% Hanover Compressor Co.* ....................... 19,300 423,635 Newpark Resources, Inc.* ...................... 125,400 764,940 ------------ 1,188,575 ------------ PAPER, FOREST PRODUCTS & PACKAGING--0.4% Schweitzer-Mauduit International, Inc. ........ 9,210 219,751 ------------ PUBLISHING & INFORMATION SERVICES--7.0% MDC Partners, Inc.* ........................... 286,610 2,201,165 Princeton Review, Inc., (The) #* .............. 239,999 1,243,195 Valassis Communications, Inc.* ............... 22,000 366,080 ------------ 3,810,440 ------------ REAL ESTATE INVESTMENT TRUST (REIT)--10.0% Annaly Capital Management, Inc. ............... 25,800 361,716 Anworth Mortgage Asset Corp. .................. 54,300 482,727 Capital Lease Funding, Inc. .................. 75,500 801,055 CBRE Realty Finance, Inc. .................... 33,400 436,872 Colonial Properties Trust ................... 4,400 202,180 Federal Realty Investment Trust ............... 3,100 280,519 KKR Financial Corp. ........................... 14,100 389,583 Luminent Mortgage Capital, Inc. ............... 132,800 1,224,416 MFA Mortgage Investments, Inc. ................ 106,800 791,388 Sun Communities, Inc. ......................... 16,300 500,084 ------------ 5,470,540 ------------ Number of Shares Value --------- ----------- RESTAURANTS--2.0% Carrols Restaurant Group, Inc.* ............... 61,400 $ 816,620 Cheesecake Factory, Inc., (The)* .............. 10,200 278,358 ------------ 1,094,978 ------------ SAVINGS & LOANS--1.8% Dearborn Bancorp, Inc.* ....................... 26,250 507,937 Newalliance Bancshares, Inc. .................. 31,800 502,440 ------------ 1,010,377 ------------ SEMICONDUCTOR EQUIPMENT & PRODUCTS--0.5% OmniVision Technologies, Inc.#* ............... 20,900 270,864 ------------ SERVICES - BUSINESS--4.0% Macquarie Infrastucture Co. Trust ............. 10,100 388,850 Marlin Business Services Corp.* ............... 24,000 550,320 Pre-Paid Legal Services, Inc. # ............... 13,280 549,526 The Providence Service Corp.#* ................ 31,200 686,400 ------------ 2,175,096 ------------ TELECOMMUNICATIONS EQUIPMENT--3.3% Axesstel, Inc.* ............................... 300,760 622,573 CPI International, Inc.* ...................... 43,450 761,679 Plantronics, Inc. ............................. 21,100 431,706 ------------ 1,815,958 ------------ TOBACCO--0.5% Universal Corp. ............................... 5,300 279,151 ------------ TRANSPORT - SERVICES--1.7% Navios Maritime Holdings, Inc. ................ 116,000 919,880 ------------ TRUCKING--0.9% Marten Transport Ltd.* ........................ 29,410 490,853 ------------ UTILITIES - ELECTRIC--2.0% El Paso Electric Co.* ......................... 21,800 513,172 Great Plains Energy, Inc. ..................... 9,700 301,573 Hawaiian Electric Industries, Inc. ............ 10,200 266,934 ------------ 1,081,679 ------------ TOTAL COMMON STOCK (Cost $45,157,701)......................... 50,612,712 ------------ THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 34 | SEMI-ANNUAL REPORT 2007 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- ROBECO WPG SMALL CAP VALUE FUND (formerly Robeco WPG Tudor Fund) (concluded) PORTFOLIO OF INVESTMENTS Number of Shares Value --------- ----------- RIGHTS/WARRANTS--0.7% TRANSPORT - SERVICES--0.7% Navios Maritime Holdings, Inc. Expires 12/09/08 $5.00* ............................ 130,850 $ 392,550 ------------ TOTAL RIGHTS/WARRANTS (Cost $0) ................................. 392,550 ------------ SHORT-TERM INVESTMENTS--8.0% Dreyfus Government Cash Management Fund 5.139% 03/01/07............................. 4,344,833 4,344,833 ------------ TOTAL SHORT-TERM INVESTMENTS (Cost $4,344,833) ......................... 4,344,833 ------------ TOTAL INVESTMENTS--101.1% (Cost $49,502,534) ............................. 55,350,095 ------------ LIABILITIES IN EXCESS OF OTHER ASSETS--(1.1)% ............................. (583,488) ------------ NET ASSETS--100.0% ............................... $ 54,766,607 ------------ --------------- * -- Non-income producing. # -- Portion of security out on loan. ++ -- Security has been valued at fair market value as determined in good faith by or under the direction of The RBB Fund, Inc.'s Board of Directors. 144A -- Security was purchased pursuant to Rule 144A under Securities Act of 1933 and may not be resold subject to that rule except to qualified institutional buyers. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2007 | 35 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- ROBECO WPG LARGE CAP GROWTH FUND PORTFOLIO OF INVESTMENTS Number of Shares Value --------- ----------- COMMON STOCK--100.6% AEROSPACE/DEFENSE--2.0% General Dynamics Corp. ........................ 4,750 $ 363,185 ------------ AIRLINES--0.8% US Airways Group, Inc.* ....................... 2,800 146,412 ------------ BIOTECHNOLOGY--0.6% Genentech, Inc.* .............................. 1,400 118,118 ------------ CHEMICALS - COMMODITY--2.3% Lyondell Chemical Co. ......................... 13,300 423,738 ------------ CHEMICALS - SPECIALTY--1.1% Celanese Corp., Series A ...................... 7,050 201,489 ------------ COMPUTER EQUIPMENT & SERVICES--6.2% Hewlett-Packard Co. ........................... 15,650 616,297 International Business Machines Corp. ......... 5,500 511,555 ------------ 1,127,852 ------------ COMPUTER SOFTWARE--3.2% Microsoft Corp. ............................... 20,500 577,485 ------------ CONSUMER CYCLICAL SERVICES--1.7% Coach, Inc.* .................................. 4,250 200,600 Wal-Mart Stores, Inc. ......................... 2,300 111,090 ------------ 311,690 ------------ CONSUMER NON-CYCLICAL--5.1% Energizer Holdings, Inc.* ..................... 6,400 549,888 Procter & Gamble Co., (The) ................... 5,950 377,765 ------------ 927,653 ------------ DIVERSIFIED OPERATIONS--1.2% General Electric Co. .......................... 6,050 211,266 ------------ ENERGY--1.5% Sempra Energy ................................. 4,550 273,228 ------------ FINANCIAL SERVICES--6.8% American Express Co. .......................... 6,850 389,559 Ameriprise Financial, Inc. .................... 1,760 102,890 Goldman Sachs Group, Inc., (The) .............. 2,150 433,440 JPMorgan Chase & Co. .......................... 6,200 306,280 ------------ 1,232,169 ------------ FOODS--5.2% Altria Group, Inc. ............................ 2,300 193,844 General Mills, Inc. ........................... 9,200 518,512 Safeway, Inc. ................................. 6,650 229,890 ------------ 942,246 ------------ HEALTH & PERSONAL CARE--1.2% Becton, Dickinson and Co. ..................... 2,900 220,371 ------------ Number of Shares Value --------- ----------- HEALTH CARE - SERVICES--6.1% Express Scripts, Inc.* ........................ 2,950 $ 222,459 Humana, Inc.* ................................. 3,550 212,432 McKesson Corp. ................................ 6,200 345,712 UnitedHealth Group, Inc. ...................... 6,250 326,250 ------------ 1,106,853 ------------ HEALTHCARE FACILITIES/SUPPLIES--6.1% Gilead Sciences, Inc.* ........................ 8,850 633,306 GlaxoSmithKline PLC - ADR ..................... 3,250 182,552 Pfizer, Inc. .................................. 11,900 297,024 ------------ 1,112,882 ------------ INSURANCE - OTHER--3.1% Allstate Corp., (The) ......................... 4,300 258,258 Principal Financial Group, Inc. (The) ......... 2,050 124,824 St. Paul Travelers Companies, Inc., (The) ..... 3,650 185,274 ------------ 568,356 ------------ INTERNET SERVICES--1.8% Expedia, Inc.* ................................ 15,150 322,089 ------------ INTERNET SOFTWARE--1.8% Google, Inc., Class A* ........................ 300 134,835 Novell, Inc.* ................................. 29,600 195,952 ------------ 330,787 ------------ MACHINERY--1.0% Terex Corp.* .................................. 2,800 184,352 ------------ MEDIA & ENTERTAINMENT--2.3% CBS Corp., Class B ............................ 13,550 411,243 ------------ MEDICAL EQUIPMENT AND SUPPLIES--3.7% AstraZeneca PLC - ADR ......................... 4,500 252,585 Waters Corp.* ................................. 7,600 412,376 ------------ 664,961 ------------ METALS--0.6% Phelps Dodge Corp. ............................ 900 112,419 ------------ OIL & GAS - EXPLORATION--1.6% Marathon Oil Corp. ............................ 3,250 294,905 ------------ OIL & GAS - REFINING & MARKETING--1.1% Frontier Oil Corp. ............................ 6,950 205,373 ------------ OIL SERVICES--1.0% SEACOR Holdings, Inc.* ........................ 1,900 183,920 ------------ PUBLISHING & INFORMATION SERVICES--1.8% McGraw-Hill Companies, Inc., (The) ............... 5,150 332,742 ------------ RESTAURANTS--1.7% Yum! Brands, Inc. ............................. 5,250 304,185 ------------ THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 36 | SEMI-ANNUAL REPORT 2007 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- ROBECO WPG LARGE CAP GROWTH FUND (concluded) PORTFOLIO OF INVESTMENTS Number of Shares Value --------- ----------- RETAIL--5.0% AutoZone, Inc.* ............................... 2,600 $ 325,754 J.C. Penney Co., Inc. ......................... 7,300 592,103 ------------ 917,857 ------------ RETAIL - FOOD & DRUG--2.2% CVS Corp. ..................................... 12,450 391,055 ------------ RETAIL - HARD GOODS--2.5% Nordstrom, Inc. ............................... 8,500 451,265 ------------ SEMICONDUCTOR EQUIPMENT & PRODUCTS--6.1% Advanced Micro Devices, Inc.* ................. 4,050 60,993 Intel Corp. ................................... 28,450 564,732 Intersil Corp., Class A ....................... 9,850 260,533 Micron Technology, Inc.* ...................... 19,250 228,305 ------------ 1,114,563 ------------ SERVICES - BUSINESS--2.5% Accenture Ltd., Class A ....................... 12,500 446,250 ------------ TECHNOLOGY--2.6% Seagate Technology, Inc. ...................... 17,350 466,715 ------------ TELECOMMUNICATIONS--0.8% AT&T, Inc. .................................... 4,150 152,720 ------------ TELECOMMUNICATIONS EQUIPMENT--3.3% Motorola, Inc. ................................ 16,450 304,654 Nokia Oyj - ADR ............................... 13,200 288,156 ------------ 592,810 ------------ TRANSPORTATION - ROAD & RAIL--1.1% Ryder System, Inc. ............................ 3,950 203,188 ------------ TRANSPORTATION - SHIPPING--1.9% Burlington Northern Santa Fe Corp. ............ 4,400 348,436 ------------ TOTAL COMMON STOCK (Cost $15,379,021) ........................ 18,296,828 ------------ Number of Shares Value --------- ----------- INVESTMENT COMPANY--0.3% INVESTMENT COMPANY--0.3% iShares Russell 1000 Growth Index Fund ....................................... 850 $ 47,167 ------------ TOTAL INVESTMENT COMPANY (Cost $47,731) ............................ 47,167 ------------ TOTAL INVESTMENTS--100.9% (Cost $15,426,752) ............................. 18,343,995 ------------ LIABILITIES IN EXCESS OF OTHER ASSETS--(0.9)% .... (159,426) ------------ NET ASSETS--100.0% ............................... $ 18,184,569 ------------ --------------- * -- Non-income producing. ADR -- American Depository Receipt. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2007 | 37 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- ROBECO WPG CORE BOND FUND PORTFOLIO OF INVESTMENTS Moody's/ S&P Par (Unaudited) (000's) Value ----------- ------- ----- GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS--33.4% FEDERAL HOME LOAN MORTGAGE CORP.--10.0% 5.500% 09/01/19 .... Aaa/AAA $ 2,205 $ 2,209,716 6.000% 01/01/36 .... Aaa/AAA 2,830 2,856,397 6.500% 10/01/36 .... Aaa/AAA 1,555 1,584,808 6.500% 10/01/36 .... Aaa/AAA 4,157 4,236,379 6.000% 01/01/37 .... Aaa/AAA 4,540 4,582,316 6.500% 01/01/37 .... Aaa/AAA 1,697 1,729,163 ----------- 17,198,779 ----------- FEDERAL NATIONAL MORTGAGE ASSOCIATION--20.0% 9.000% 11/01/10 ...... Aaa/AAA 33 35,304 6.500% 12/01/14 ...... Aaa/AAA 372 380,287 5.000% 05/01/20 ...... Aaa/AAA 1,123 1,108,427 5.000% 06/01/20 ...... Aaa/AAA 584 576,340 7.500% 02/01/31 ...... Aaa/AAA 30 30,590 7.500% 02/01/31 .... Aaa/AAA 23 23,600 7.500% 02/01/31..... Aaa/AAA 19 19,535 5.500% 07/01/34..... Aaa/AAA 3,918 3,886,460 5.000% 03/15/35 (TBA) ............ Aaa/AAA 2,505 2,431,416 5.500% 03/15/35 (TBA) ............ Aaa/AAA 3,460 3,431,887 6.500% 03/15/35 (TBA) ............ Aaa/AAA 2,195 2,237,528 5.000% 03/01/36..... Aaa/AAA 10,822 10,505,687 5.500% 12/01/36..... Aaa/AAA 3,197 3,171,854 6.500% 03/01/37 (TBA) ............ Aaa/AAA 6,770 6,679,025 ----------- 34,517,940 ----------- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION--3.4% 7.500% 09/15/07..... Aaa/AAA 3 2,928 6.500% 02/15/24..... Aaa/AAA 217 222,358 6.500% 04/15/24..... Aaa/AAA 96 98,547 6.500% 10/15/24..... Aaa/AAA 332 340,678 5.000% 09/15/36..... Aaa/AAA 2,444 2,389,220 5.500% 02/15/37..... Aaa/AAA 2,915 2,911,105 ----------- 5,964,836 ----------- TOTAL GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS (Cost $57,550,266)........ 57,681,555 ----------- GOVERNMENT AGENCY OBLIGATIONS--5.9% FEDERAL HOME LOAN MORTGAGE CORP.--0.3% 3.350% 04/01/08..... Aaa/AAA 570 560,171 ----------- FEDERAL NATIONAL MORTGAGE ASSOCIATION--4.6% 5.090% 03/13/07..... Aaa/AAA 787 785,665 5.100% 03/13/07..... Aaa/AAA 2,645 2,640,504 5.120% 03/13/07..... Aaa/AAA 1,323 1,320,742 5.200% 03/13/07..... Aaa/AAA 740 738,742 5.000% 02/13/17..... Aaa/AAA 2,405 2,418,273 ----------- 7,903,926 ----------- Moody's/ S&P Par (Unaudited) (000's) Value ----------- ------- ----- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION--1.0% 3.999% 05/16/27..... Aaa/AAA $ 1,683 $ 1,640,328 ----------- TOTAL GOVERNMENT AGENCY OBLIGATIONS (Cost $10,063,125)......... 10,104,425 ----------- ASSET BACKED SECURITIES--12.5% AUTOMOBILES--5.4% BMW Vehicle Owner Trust Series 2006-A Class A3 5.130% 09/27/10(c) ...... Aaa/AAA 350 350,619 Daimler Chrysler Auto Trust Series 2006-C A4 4.980% 11/08/11(c) ...... Aaa/AAA 510 510,579 Honda Auto Receivables Owner Trust Series 2006-2 Class A4 5.280% 01/23/12 ......... Aaa/AAA 1,460 1,471,860 Honda Auto Receivables Owner Trust Series 2006-3 Class A4 5.110% 04/15/12(c) (d) .. Aaa/AAA 1,850 1,851,837 Nissan Auto Receivables Owner Trust Series 2006-C Class A3 5.440% 04/15/10 .. Aaa/AAA 1,840 1,851,226 USAA Auto Owner Trust Series 2006-3 Class A4 5.360% 06/15/12 ......... Aaa/AAA 645 652,195 USAA Auto Owner Trust Series 2006-4 Class A4 4.980% 10/15/12(c) ...... Aaa/AAA 1,890 1,891,641 Volkswagen Auto Lease Trust Series 2006-A Class A3 5.500% 09/21/09 .. Aaa/AAA 795 799,572 ----------- 9,379,529 ----------- CREDIT CARDS--3.9% Chase Issuance Trust Series 2005-A10 Class A10 4.650% 12/17/12 ......... Aaa/AAA 1,470 1,457,970 Citibank Credit Card Issuance Trust Series 2003-A11 Class A11 5.424% 10/15/09(a) ...... Aaa/AAA 1,200 1,200,493 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 38 | SEMI-ANNUAL REPORT 2007 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- ROBECO WPG CORE BOND FUND (continued) PORTFOLIO OF INVESTMENTS Moody's/ S&P Par (Unaudited) (000's) Value ----------- ------- ----- Citibank Credit Card Issuance Trust Series 2003-A3 Class A3 3.100% 03/10/10 ......... Aaa/AAA $ 1,750 $ 1,713,983 Citibank Credit Card Issuance Trust Series 2003-A6 Class A6n 2.900% 05/17/10 ......... Aaa/AAA 1,000 974,044 Citibank Credit Card Issuance Trust Series 2006-A5 Class A5 5.300% 05/20/11 ......... Aaa/AAA 790 795,305 MBNA Credit Card Master Note Trust Series 2005-A1 Class A1 4.200% 09/15/10 ......... Aaa/AAA 670 663,507 ----------- 6,805,302 ----------- MORTGAGE BACKED SECURITIES--3.2% AEGIS Asset Backed Securities Trust Series 2005-4 Class 1A1 5.460% 10/25/35(a) ...... Aaa/AAA 49 48,975 Centex Home Equity Series 2006-A Class AV1 5.400% 06/25/36(a) ...... Aaa/AAA 376 375,787 GE-WMC Mortgage Securities Series 2005-1 Class A2A 5.470% 10/25/35(a) ...... Aaa/AAA 394 393,917 GSAMP Trust Series 2005-HE4 Class A2A 5.440% 08/25/35(a) ...... Aaa/AAA 14 13,985 IXIS Real Estate Capital Trust Series 2006-HE2 Class A1 5.380% 08/25/36(a) ...... Aaa/AAA 497 496,592 JP Morgan Mortgage Acquisition Corp. Series 2005-WMC1 Class A2 5.470% 09/25/35(a) ...... Aaa/AAA 165 164,520 Long Beach Mortgage Loan Trust Series 2006-4 Class 2A1 5.370% 05/25/36(a) ...... Aaa/AAA 217 217,467 Moody's/ S&P Par (Unaudited) (000's) Value ----------- ------- ----- Merrill Lynch Mortgage Investors Trust Series 2006 WMC1 Class A2A 5.400% 01/25/37(a) ...... Aaa/AAA $ 208 $ 207,757 Morgan Stanley Capital I Series 2006-HE4 Class A1 5.360% 06/25/36(a) ...... Aaa/AAA 899 899,253 Morgan Stanley Home Equity Loans Series 2006-3 Class A1 5.370% 04/25/36(a) ...... Aaa/AAA 483 482,573 Residential Asset Mortgage Products, Inc. Series 2005-EFC4 Class A1 5.430% 09/25/35(a) ..... Aaa/AAA 316 316,354 Securitized Asset Backed Receivables LLC Series 2006-FR1 Class A2A 5.390% 11/25/35(a) ...... Aaa/AAA 583 583,056 Soundview Home Equity Loan Trust Series 2006-OPT3 Class 2A1 5.380% 06/25/36(a) ...... Aaa/AAA 425 425,316 Soundview Home Equity Loan Trust Series 2006-OPT5 Class 2A1 5.350% 07/25/36(a) ...... Aaa/AAA 843 842,699 ----------- 5,468,251 ----------- TOTAL ASSET BACKED SECURITIES (Cost $21,619,879)......... 21,653,082 ----------- COLLATERALIZED MORTGAGE OBLIGATIONS--14.5% American Home Mortgage Investment Trust Series 2005-3 Class 2A1 5.500% 09/25/35(a) ...... Aaa/AAA 593 593,205 Banc of America Commercial Mortgage, Inc. Series 2005-5 Class A4 5.115% 10/10/45(a) ...... Aaa/AAA 1,500 1,485,467 Banc of America Commercial Mortgage, Inc. Series 2005-6 Class A4 5.181% 09/10/47(a) ...... Aaa/AAA 820 820,954 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2007 | 39 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- ROBECO WPG CORE BOND FUND (continued) PORTFOLIO OF INVESTMENTS Moody's/ S&P Par (Unaudited) (000's) Value ----------- ------- ----- Banc of America Funding Corp. .... Series 2005-E Class 4A1 4.106% 03/20/35(a) ...... Aaa/AAA $ 1,663 $ 1,647,135 Citigroup/Deutsche Bank Commercial Mortgage Trust Series 2005-CD1 Class A4 5.226% 07/15/44(a) ...... Aaa/AAA 1,500 1,507,132 Commercial Mortgage Asset Trust Series 1999-C2 Class A2 7.546% 11/17/32(a) ...... Aaa/AAA 325 338,856 CS First Boston Mortgage Securities Corp. Series 2005-C4 Class A5 5.104% 08/15/38(a) ...... Aaa/AAA 810 801,546 First Union-Lehman Brothers-Bank of America Series 1998-C2 Class A2 6.560% 11/18/35 .. Aaa/AAA 475 479,562 GE Capital Commercial Mortgage Corp. ... Series 2005-C4 Class A4 5.333% 11/10/45(a) ...... Aaa/AAA 790 797,676 Greenwich Capital Commercial Funding Corp. Series 2005-GG5 Class A5 5.224% 04/10/37(a) ...... Aaa/AAA 400 399,585 GSR Mortgage Loan Trust Series 2005-AR6 Class 3A1 4.561% 09/25/35(a) (d) .. Aaa/AAA 1,707 1,684,229 JP Morgan Alternative Loan Trust Series 2006-S2 Class A1B 5.400% 05/25/36(a) ...... Aaa/AAA 980 980,283 JP Morgan Chase Commercial Mortgage Securities Corp. . Series 2005-CB13 Class A4 5.294% 01/12/43(a) (d) .. Aaa/AAA 1,370 1,378,509 JP Morgan Chase Commercial Mortgage Securities Corp. . Series 2005-LDP5 Class A4 5.179% 12/15/44(a) ...... Aaa/AAA 1,600 1,604,210 Moody's/ S&P Par (Unaudited) (000's) Value ----------- ------- ----- JP Morgan Mortgage Trust Series 2004-S2 Class 4A5 6.000% 11/25/34 .. Aaa/AAA $ 1,157 $ 1,165,203 Merrill Lynch Mortgage Trust Series 2005-CKI1 Class A6 5.244% 11/12/37(a) ...... Aaa/AAA 710 712,709 Morgan Stanley Capital I Series 2005-HQ7 Class A4 5.204% 11/14/42(a) ...... Aaa/AAA 1,590 1,590,822 Morgan Stanley Capital I Series 2006-HQ8 Class A4 5.388% 03/12/44(a) ...... Aaa/AAA 1,300 1,319,510 Specialty Underwriting & Residential Finance Series 2005-AB2 Class A1A 5.430% 06/25/36(a) ...... Aaa/AAA 227 227,493 Wachovia Bank Commercial Mortgage Trust Series 2005-C21 Class A1 5.058% 10/15/44 ......... Aaa/AAA 217 215,916 Washington Mutual Series 2005-AR12 Class 1A8 4.840% 10/25/35(a) (d) .. Aaa/AAA 1,533 1,522,071 Wells Fargo Mortgage Backed Securities Trust Series 2004-EE Class 2A1 3.989% 01/25/35(a) ...... Aaa/AAA 1,488 1,459,549 Wells Fargo Mortgage Backed Securities Trust Series 2005-AR16 Class 6A3 5.000% 10/25/35(a) ...... Aaa/AAA 2,266 2,245,747 TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $25,011,749)....... . 24,977,369 ----------- CORPORATE BONDS--27.8% AEROSPACE/DEFENSE--0.5% Northrop Grumman Corp. 7.125% 02/15/11 .. Baa2/BBB+ 780 836,830 ----------- BANKING--3.3% Barclays Bank PLC 6.860% 06/15/32(a) (b) .. Aa3/A+ 1,265 1,394,856 First Tennessee Bank NA 5.316% 12/08/08 ......... A1/A 560 558,962 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 40 | SEMI-ANNUAL REPORT 2007 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- ROBECO WPG CORE BOND FUND (continued) PORTFOLIO OF INVESTMENTS Moody's/ S&P Par (Unaudited) (000's) Value ----------- ------- ----- HBOS PLC 6.413% 09/29/49(a) (b) .. A1/A $ 630 $ 652,910 Lloyds TSB Group PLC 6.267% 11/14/16(a) (b) .. Aa3/A 785 791,470 Popular North America, Inc. 4.700% 06/30/09(d) ...... A2/A 835 821,524 Santander Central Hispano Issuances, Ltd. 7.625% 11/03/09(d) ...... A1/A+ 1,000 1,061,154 Standard Chartered Bank 6.409% 01/30/17(a) (b) (d) Baa2/A 380 380,991 ----------- 5,661,867 ----------- BEVERAGES--0.1% Diageo Capital PLC 3.375% 03/20/08(d) ...... A3/A 95 93,165 ----------- BUILDING & CONSTRUCTION--0.7% Owens Corning, Inc. 7.000% 12/01/36(b) ...... Baa3/BBB- 1,230 1,286,842 ----------- BUILDING MATERIALS--0.3% C8 Capital SPV Ltd. 6.640% 12/31/49(a) (b) (d) Bbb/BBB- 465 468,883 ----------- COMPUTERS--0.3% Hewlett-Packard Co. 3.625% 03/15/08 ......... A2/A 485 477,029 ----------- ELECTRIC--0.2% Energy East Corp. 6.750% 07/15/36 .. Baa2 /BBB 375 409,112 ----------- FINANCE--12.5% American Express Co. 5.250% 09/12/11 .. A1/A+ 920 928,694 American General Finance Corp. .... 4.875% 05/15/10 .. A1/A+ 1,985 1,976,250 Ameriprise Financial, Inc. 7.518% 06/01/16 ......... Baa2/BBB 200 219,600 ANZ Capital Trust II 5.360% 12/29/49(b) ...... A2/A 905 895,716 Bear Stearns & Co., Inc. 4.550% 06/23/10 ......... A1/A+ 745 733,510 Bear Stearns & Co., Inc. 5.550% 01/22/17 ......... A2/A 630 629,056 C10 Capital SPV Ltd 6.722% 12/31/49(a) (b) (d) Bbb/BBB- $ 680 $ 685,352 Caterpillar Financial Services Corp. ... 4.300% 06/01/10 .. A2/A 1,185 1,160,258 CIT Group Funding Co. of Canada 4.650% 07/01/10 .. A2/A 1,045 1,029,162 CIT Group, Inc. 4.750% 08/15/08 .. A2/A 715 710,573 Citigroup, Inc. 5.250% 02/27/12 .. Aa1/AA 540 544,477 Comerica Capital Trust II 6.576% 02/20/37(c) ...... Baa1/BBB+ 800 804,337 Genworth Global Funding Trusts 5.375% 09/15/11 .. Aa3/AA- 1,500 1,515,585 International Lease Finance Corp. .... 6.375% 03/15/09 .. A1/AA- 1,610 1,649,551 Lehman Brothers Holdings, Inc. ... 5.250% 02/06/12 .. A1/A+ 920 922,168 Merrill Lynch & Co. 6.110% 01/29/37 .. Al/A+ 1,035 1,033,625 Morgan Stanley 4.000% 01/15/10 .. Aa3/A+ 900 874,579 Morgan Stanley 5.050% 01/21/11 .. Aa3/A+ 715 713,913 Morgan Stanley 5.625% 01/09/12 .. Aa3/A+ 955 973,366 Morgan Stanley 5.450% 01/09/17 .. Aa3/A+ 500 496,663 SLM Corp. 4.000% 01/15/09 .. A2/A 2,410 2,364,984 Swiss Reinvestment Capital I LP 6.854% 05/25/16(a) (b) .. A2/A 735 778,807 ----------- 21,640,226 ----------- INSURANCE - LIFE--1.7% Great West Life & Annuity Insurance Co. 7.153% 05/16/46(a) (b) .. Baa2/A- 625 672,915 Hartford Life Global Funding Trusts 5.200% 02/15/11 .. Aa3/AA- 595 598,108 Lincoln National Corp. 7.000% 05/17/16(a) ...... Baa2/A- 485 518,779 Monumental Global Funding II 5.650% 07/14/11(b) ...... Aa3/AA 1,090 1,113,463 ----------- 2,903,265 ----------- THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2007 | 41 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- ROBECO WPG CORE BOND FUND (continued) PORTFOLIO OF INVESTMENTS Moody's/ S&P Par (Unaudited) (000's) Value ----------- ------- ----- INSURANCE - OTHER--3.5% AON Capital Trust 8.205% 01/01/27 .. Baa3/BBB-$ 585 $ 687,106 AXA SA 6.379% 12/14/36(a)(b) ... Baa1/BBB 265 263,850 AXA SA 6.463% 12/14/49(a) (b) .. Baa1/BBB 250 248,370 Catlin Insurance Co. Ltd. 7.249% 12/19/49(a) (b) .. Na /BBB 1,115 1,142,244 Chubb Corp. 4.934% 11/16/07 .. A2/A 980 977,921 Genworth Financial, Inc. 6.150% 11/15/16(a) ...... A3/BBB+ 80 80,443 ING Groep NV 5.775% 12/29/49(a) ...... A1/A 605 612,127 Liberty Mutual Group, Inc. 7.500% 08/15/36(b) ...... Baa3/BBB 660 732,030 Metropolitan Life Global Funding I 5.750% 07/25/11(b) ...... Aa2/AA 1,330 1,364,992 ----------- 6,109,083 ----------- MEDIA--0.3% Time Warner Entertainment Co. 8.375% 07/15/33 ......... Baa2/BBB+ 375 473,755 ----------- MINING & METALS--0.4% BHP Billiton Finance USA Ltd. 5.000% 12/15/10 ......... A1/A+ 710 708,398 ----------- OIL & GAS - EXPLORATION--1.3% Encana Corp. 6.300% 11/01/11 .. Baa2/A- 1,045 1,086,652 Norsk Hydro ASA 6.360% 01/15/09 .. A2/A- 1,185 1,209,285 ----------- 2,295,937 ----------- PHARMACEUTICALS & BIOTECHNOLOGY--0.6% Abbott Laboratories 3.750% 03/15/11 .. A1/AA 1,090 1,041,600 ----------- REAL ESTATE--0.6% Duke Realty LP 5.625% 08/15/11 .. Baa1/BBB+ 380 386,965 Westfield Group 5.400% 10/01/12(b) ...... A2/A- 610 616,486 ----------- 1,003,451 ----------- TELECOMMUNICATIONS--1.5% AT&T, Inc. 4.125% 09/15/09 .. A2/A $ 1,220 $ 1,192,556 BellSouth Corp. 4.200% 09/15/09 .. A2/A 865 847,463 Telecom Italia Capital SA 6.375% 11/15/33 ......... Baa2/BBB+ 595 581,070 ----------- 2,621,089 ----------- TOTAL CORPORATE BONDS (Cost $47,354,875)......... 48,030,532 ----------- U.S. TREASURY OBLIGATIONS--11.7% U.S. TREASURY BONDS--0.2% 5.375% 02/15/31 .... Aaa/AAA 160 174,450 4.500% 02/15/36 .... Aaa/AAA 165 160,024 ----------- 334,474 ----------- U.S. TREASURY NOTES--11.5% 4.875% 08/31/08+ ... Aaa/AAA 60 60,103 4.875% 08/15/16# ... Aaa/AAA 2,550 2,609,168 4.750% 01/31/12 .... Aaa/AAA 1,035 1,045,471 3.875% 02/15/13# ... Aaa/AAA 2,920 2,825,897 4.625% 11/15/16# ... Aaa/AAA 11,445 11,495,518 4.625% 02/15/17 .... Aaa/AAA 1,755 1,765,146 ----------- 19,801,303 ------------ TOTAL U.S. TREASURY OBLIGATIONS (Cost $19,873,535)......... 20,135,777 ------------ Shares ------ SHORT-TERM INVESTMENTS--2.1% SHORT-TERM INVESTMENTS--2.1% Dreyfus Government Cash Management 5.139% 03/01/07............ 3,542,170 3,542,170 ------------ TOTAL SHORT-TERM INVESTMENTS (Cost $3,542,170)........... 3,542,170 ------------ TOTAL INVESTMENTS--107.9% (Cost $185,015,599)............ 186,124,910 ------------ LIABILITIES IN EXCESS OF OTHER ASSETS--(7.9)%........ (13,586,074) ------------ NET ASSETS--100.0%................. $172,538,836 ============ # -- Portion of security out on loan. TBA -- To Be Announced. (a) Adjustable rate security. (b) -Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may not be resold subject to that rule except to qualified institutional buyers. (c) Callable security. (d) Fitch rating. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 42 | SEMI-ANNUAL REPORT 2007 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- ROBECO WPG CORE BOND FUND (concluded) PORTFOLIO OF INVESTMENTS + All or a portion of the security was held as collateral for the following Futures contracts open at February 28, 2007:
NUMBER VALUE VALUE UNREALIZED OF EXPIRATION AT TRADE AT APPRECIATION CONTRACTS TYPE MONTH DATE 2/28/07 (DEPRECIATION) ---------- ----------------------- ----------- --------- ------------ --------------- Long Positions: 54 U.S. Treasury 30 Year Bond March 2007 $ 6,170,344 $ 6,098,625 $ 71,719 107 U.S. Treasury 2 Year Note April 2007 22,005,218 21,929,984 75,234 -------- $146,953 -------- Short Positions: (104) U.S. Treasury 10 Year Note June 2007 $(11,206,000) $(11,293,750) $(87,750) --------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2007 | 43 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- STATEMENTS OF ASSETS AND LIABILITIES
PARTNERS PARTNERS PARTNERS PARTNERS PARTNERS SMALL CAP LONG/SHORT LARGE CAP MID CAP ALL-CAP VALUE FUND II EQUITY FUND VALUE FUND VALUE FUND VALUE FUND ------------- ------------ ----------- ----------- ----------- ASSETS Investments, at value (cost--$269,455,465, $113,142,677, $58,221,608, $38,367,513 and $16,380,764, respectively) .......................... $332,295,162 $124,982,133 $65,962,771 $43,835,437 $18,851,490 Receivable from investment adviser ......................... -- -- -- -- 7,547 Deposits with brokers for securities sold short ............ -- 39,583,697 -- -- -- Receivable for investments sold ............................ 428,844 4,153,779 513,696 135,952 75,402 Receivable for capital shares sold ......................... 181,123 554 900 209,560 1,700 Dividends and interest receivable .......................... 258,324 167,902 135,743 46,890 31,874 Prepaid expenses and other assets .......................... 35,847 21,678 18,970 10,750 11,059 ------------ ------------ ----------- ----------- ----------- Total assets ........................................ 333,199,300 168,909,743 66,632,080 44,238,589 18,979,072 ------------ ------------ ----------- ----------- ----------- LIABILITIES Payable for investments purchased .......................... 1,026,218 577,092 575,602 398,416 143,139 Securities sold short, at fair value (proceeds received $52,242,232) ................................... -- 49,940,672 -- -- -- Options written, at value (premiums received $76,886) ...... -- -- -- -- 53,979 Payable for capital shares redeemed ........................ 828,397 17,852 30,960 3,771 -- Payable to investment adviser .............................. 322,716 189,168 15,097 6,104 -- Other accrued expenses and liabilities ..................... 189,507 54,876 47,540 45,528 30,563 Payable for dividends on securities sold short ............. -- 2,301,560 -- -- -- ------------ ------------ ----------- ----------- ----------- Total liabilities ................................... 2,366,838 53,081,220 669,199 453,819 227,681 ------------ ------------ ----------- ----------- ----------- NET ASSETS Capital stock, $0.001 par value ............................ 15,212 6,416 4,499 3,975 1,176 Paid-in capital ............................................ 243,217,511 100,495,715 56,188,920 36,418,263 15,906,617 Undistributed net investment income/(accumulated loss) ..... (765,569) (830,340) 113,630 9,136 9,026 Accumulated net realized gain/(loss) from investments and foreign exchange transactions ....................... 25,525,611 6,618,835 1,914,669 1,885,472 340,939 Net unrealized appreciation on investments and foreign exchange transactions ................................... 62,839,697 11,839,456 7,741,163 5,467,924 2,493,633 Net unrealized appreciation on investments sold short ...... -- (2,301,559) -- -- -- ------------ ------------ ----------- ----------- ----------- Net assets .......................................... $330,832,462 $115,828,523 $65,962,881 $43,784,770 $18,751,391 ============ ============ =========== =========== =========== INSTITUTIONAL CLASS Net assets ................................................. $113,247,280 $96,873,930 $41,187,460 $33,986,069 $14,172,680 ------------ ------------ ----------- ----------- ----------- Shares outstanding ......................................... 5,139,388 5,354,092 2,829,536 3,068,529 888,295 ------------ ------------ ----------- ----------- ----------- Net asset value, offering and redemption price per share ... $22.04 $18.09 $14.56 $11.08 $15.95 ============ ============ =========== =========== =========== INVESTOR CLASS Net assets ................................................. $217,585,182 $18,954,593 $24,775,421 $9,798,701 $4,578,711 ------------ ------------ ----------- ----------- ----------- Shares outstanding ......................................... 10,072,296 1,062,457 1,669,863 906,505 287,771 ------------ ------------ ----------- ----------- ----------- Net asset value, offering and redemption price per share ... $21.60 $17.84 $14.84 $10.81 $15.91 ============ ============ =========== =========== ===========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 44 | SEMI-ANNUAL REPORT 2007 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- STATEMENTS OF ASSETS AND LIABILITIES
ROBECO ROBECO WPG WPG ROBECO SMALL CAP LARGE CAP WPG VALUE FUND* GROWTH FUND CORE BOND FUND ----------- ----------- ------------- ASSETS Investments, at value (cost--$49,502,534, $15,426,752, and $185,015,599, respectively) ................................... $55,350,095 $18,343,995 $186,124,910 Cash ................................................................. -- -- 483,911 Receivable from investment adviser ................................... -- 35 -- Receivable for investments sold ...................................... 744,446 1,443,013 3,384,666 Receivable for capital shares sold ................................... -- 6,004 -- Dividends and interest receivable .................................... 42,630 29,084 1,194,795 Prepaid expenses and other assets .................................... 11,401 8,810 26,802 ----------- ----------- ------------ Total assets ...................................................... 56,148,572 19,830,941 191,215,084 ----------- ----------- ------------ LIABILITIES Cash Overdraft ....................................................... -- 103,684 -- Payable for investments purchased .................................... 1,301,466 1,290,085 18,540,943 Payable for capital shares redeemed .................................. 1,061 217,380 7,017 Payable to investment adviser ........................................ 37,031 2,463 10,295 Payable for distribution ............................................. -- -- 22,848 Other accrued expenses and liabilities ............................... 42,407 32,760 95,145 ----------- ----------- ------------ Total liabilities ................................................. 1,381,965 1,646,372 18,676,248 ----------- ----------- ------------ NET ASSETS Capital stock, $0.001 par value ...................................... 3,197 830 16,247 Paid-in capital ...................................................... 46,624,017 14,593,679 177,336,594 Undistributed net investment income/(accumulated loss) ............... 43,755 (9,894) 1,156 Accumulated net realized gain/(loss) from investments and foreign exchange transactions ................................. 2,248,077 682,711 (5,983,679) Net unrealized appreciation on investments and foreign exchange transactions ............................................. 5,847,561 2,917,243 1,168,518 ----------- ----------- ------------ Net assets ........................................................ $54,766,607 $18,184,569 $172,538,836 =========== =========== ============ INSTITUTIONAL CLASS Net assets ........................................................... $54,766,607 $18,184,569 $172,497,131 ----------- ----------- ------------ Shares outstanding ................................................... 3,197,409 829,974 16,243,049 ----------- ----------- ------------ Net asset value, offering and redemption price per share .................................................. $ 17.13 $ 21.91 $ 10.62 =========== =========== ============ INVESTOR CLASS Net assets .......................................................... N/A N/A $ 20,846 ----------- ----------- ------------ Shares outstanding .................................................. N/A N/A 1,963 ----------- ----------- ------------ Net asset value, offering and redemption price per share .................................................. N/A N/A $ 10.62 =========== =========== ============ RETIREMENT CLASS Net assets .......................................................... N/A N/A $ 20,858 ----------- ----------- ------------ Shares outstanding .................................................. N/A N/A 1,964 ----------- ----------- ------------ Net asset value, offering and redemption price per share .................................................. N/A N/A $ 10.62 =========== =========== ============
* Formerly Robeco WPG Tudor Fund (name changed 1/1/2007) THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2007 | 45 44 | SEMI-ANNUAL REPORT 2007 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- STATEMENTS OF OPERATIONS
PARTNERS PARTNERS PARTNERS PARTNERS PARTNERS SMALL CAP LONG/SHORT LARGE CAP MID CAP ALL-CAP VALUE FUND II EQUITY FUND VALUE FUND VALUE FUND VALUE FUND ------------- ------------ ------------ ------------ ------------ INVESTMENT INCOME Dividends1 .......................................... $ 2,453,371 $ 630,364 $ 566,315 $ 208,697 $ 142,797 Interest ............................................ 250,432 416,089 32,387 25,667 15,561 ------------ ------------ ------------ ------------ ------------ 2,703,803 1,046,453 598,702 234,364 158,358 ------------ ------------ ------------ ------------ ------------ EXPENSES Advisory fees ....................................... 2,130,955 1,264,574 186,084 144,216 69,195 Distribution fees ................................... 282,305 23,621 28,875 8,152 5,116 Administration and accounting fees .................. 209,050 75,444 45,689 44,723 42,343 Printing and shareholder reporting fees ............. 74,369 15,694 9,080 7,477 1,837 Transfer agent fees ................................. 70,980 57,142 37,887 38,614 39,190 Professional fees ................................... 40,688 22,487 15,996 13,664 11,464 Directors' and officers' fees ....................... 37,415 16,043 10,192 8,903 6,856 Custodian fees ...................................... 28,081 20,209 11,482 11,848 10,985 Administrative services fees ........................ 18,732 6,177 3,408 1,983 950 Registration and filing fees ........................ 17,106 14,390 11,227 12,440 12,448 Dividend expense on securities sold short ........... -- 83,246 -- -- -- Interest expense .................................... -- 364,844 -- -- -- Other expenses ...................................... 14,535 4,971 2,480 1,968 1,025 ------------ ------------ ------------ ------------ ------------ Total expenses before waivers and reimbursements ............................... 2,924,216 1,968,842 362,400 293,988 201,409 Less: waivers and reimbursements ................ (5,739) (92,049) (100,919) (105,566) (114,127) ------------ ------------ ------------ ------------ ------------ Net expenses after waivers and reimbursements ............................... 2,918,477 1,876,793 261,481 188,422 87,282 ------------ ------------ ------------ ------------ ------------ Net investment income/(loss) ........................... (214,674) (830,340) 337,221 45,942 71,076 ------------ ------------ ------------ ------------ ------------ NET REALIZED AND UNREALIZED GAIN/(LOSS) FROM INVESTMENTS Net realized gain/(loss) from: Investments ..................................... 34,955,353 8,177,171 2,515,598 2,743,950 657,729 Investments sold short .......................... -- 2,713,286 -- -- -- Written options ................................. -- -- -- -- 6,707 Net change in unrealized appreciation/(depreciation) on: Investments ........................................ 8,468,837 4,193,902 2,749,037 2,857,556 1,005,990 Investments sold short ............................. -- (5,800,411) -- -- -- Written options .................................... -- -- -- -- 9,171 ------------ ------------ ------------ ------------ ------------ Net realized and unrealized gain/(loss) from investments ................................. 43,424,190 9,283,948 5,264,635 5,601,506 1,679,597 ------------ ------------ ------------ ------------ ------------ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ..................................... $ 43,209,516 $ 8,453,608 $ 5,601,856 $ 5,647,448 $ 1,750,673 ============ ============ ============ ============ ============
1 Net of foreign taxes of $1,746, $4,750, $1,305, and $360 for the Robeco Boston Partners Small Cap Value Fund II, Robeco Boston Partners Long/Short Equity Fund, Robeco Boston Partners Large Cap Value Fund and Robeco Boston Partners All-Cap Value Fund, respectively. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 46 | SEMI-ANNUAL REPORT 2007 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- STATEMENTS OF OPERATIONS
ROBECO ROBECO WPG WPG ROBECO SMALL CAP LARGE CAP WPG CORE VALUE FUND* GROWTH FUND BOND FUND ----------- ----------- ----------- INVESTMENT INCOME Dividends 1 ........................................................... $ 418,091 $ 122,837 $ -- Interest .............................................................. -- 4,340,335 Income from securities loaned--Note 6 ................................. 6,807 -- 3,635 ----------- ----------- ----------- 424,898 122,837 4,343,970 ----------- ----------- ----------- EXPENSES Advisory fees ......................................................... 228,735 71,085 385,882 Transfer agent fees ................................................... 54,772 30,826 59,636 Administration and accounting fees .................................... 43,369 45,116 119,035 Professional fees ..................................................... 14,318 11,689 26,013 Directors' and officers' fees ......................................... 10,154 7,536 21,069 Registration and filing fees .......................................... 8,971 6,560 29,363 Custodian fees ........................................................ 7,922 4,658 21,595 Distribution fees ..................................................... 3,359 2,125 838 Administrative services fees .......................................... 2,500 2,500 2,500 Printing and shareholder reporting fees ............................... 1,790 438 23,570 Other expenses ........................................................ 2,615 1,688 8,149 ----------- ----------- ----------- Total expenses before waivers and reimbursements .................................................... 378,505 184,221 697,650 Less: waivers and reimbursements .................................... -- (51,490) (328,882) ----------- ----------- ----------- Net expenses after waivers and reimbursements ....................... 378,505 132,731 368,768 ----------- ----------- ----------- Net investment income/(loss) .......................................... 46,393 (9,894) 3,975,202 NET REALIZED AND UNREALIZED GAIN FROM INVESTMENTS Net realized gain from investments .................................... 4,578,741 828,943 1,283,139 Net change in unrealized appreciation on investments .................. 2,336,782 711,087 659,559 ----------- ----------- ----------- Net realized and unrealized gain from investments ....................... 6,915,523 1,540,030 1,942,698 ----------- ----------- ----------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ....................................................... $ 6,961,916 $ 1,530,136 $ 5,917,900 =========== =========== ===========
1 Net of foreign taxes of $932 for the Robeco WPG Small Cap Value Fund. * Formerly Robeco WPG Tudor Fund (name changed 1/1/2007) THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2007 | 47 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS
ROBECO BOSTON PARTNERS ROBECO BOSTON PARTNERS SMALL CAP VALUE FUND II LONG/SHORT EQUITY FUND --------------------------------- --------------------------------- FOR THE SIX FOR THE FOR THE SIX FOR THE MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED FEBRUARY 28, 2007 AUGUST 31, 2006 FEBRUARY 28, 2007 AUGUST 31, 2006 --------------------------------- --------------------------------- (UNAUDITED) (UNAUDITED) ------------- ------------- ------------- ------------- INCREASE/(DECREASE) IN NET ASSETS FROM OPERATIONS Net investment income/(loss) .................... $ (214,674) $ (1,979,222) $ (830,340) $ (1,779,467) Net realized gain from investments and foreign currency related transactions ........ 34,955,353 54,269,230 10,890,457 13,242,415 Net change in unrealized appreciation/(depreciation) from investments and foreign currency related transactions ................................. 8,468,837 (28,189,951) (1,606,509) 929,617 ------------- ------------- ------------- ------------- Net increase/(decrease) in net assets resulting from operations ...................................... 43,209,516 24,100,057 8,453,608 12,392,565 ------------- ------------- ------------- ------------- SHAREHOLDERS FROM: Net investment income Institutional shares ......... (391,961) -- -- -- Net investment income Investor shares .............. (158,934 -- -- -- Net realized capital gains Institutional shares .... (16,867,927) (17,432,693) (9,144,393) (8,173,605) Net realized capital gains Investor shares ......... (34,020,717) (37,687,563) (1,852,903) (1,912,801) ------------- ------------- ------------- ------------- Total dividends and distributions to shareholders .. (51,439,539) (55,120,256) (10,997,296) (10,086,406) ------------- ------------- ------------- ------------- INCREASE/(DECREASE) IN NET ASSETS DERIVED FROM CAPITAL SHARE TRANSACTIONS (NOTE 5) ............. (5,452,931) (37,255,744) 7,352,733 (15,750,794) ------------- ------------- ------------- ------------- Total increase/(decrease) in net assets ............ (13,682,954) (68,275,943) 4,809,045 (13,444,635) ------------- ------------- ------------- ------------- NET ASSETS Beginning of period ................................ 344,515,416 412,791,359 111,019,478 124,464,113 ------------- ------------- ------------- ------------- End of period* ..................................... $ 330,832,462 $ 344,515,416 $ 115,828,523 $ 111,019,478 ============= ============= ============= =============
*Includes undistributed net investment income/(loss) as follows: FOR THE SIX FOR THE MONTHS ENDED YEAR ENDED FEBRUARY 28, 2007 AUGUST 31, 2006 ----------------- --------------- (UNAUDITED) Robeco Boston Partners Small Cap Value Fund II ..... $(765,569) $ -- Robeco Boston Partners Long/Short Equity Fund ...... (830,340) -- Robeco Boston Partners Large Cap Value Fund ........ 113,630 398,926 Robeco Boston Partners Mid Cap Value Fund .......... 9,136 30,129 Robeco Boston Partners All-Cap Value Fund .......... 9,026 64,802
48 | SEMI-ANNUAL REPORT 2007 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS (continued)
ROBECO BOSTON PARTNERS ROBECO BOSTON PARTNERS LARGE CAP VALUE FUND MID CAP VALUE FUND ---------------------------------- ---------------------------------- FOR THE SIX FOR THE FOR THE SIX FOR THE MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED FEBRUARY 28, 2007 AUGUST 31, 2006 FEBRUARY 28, 2007 AUGUST 31, 2006 ---------------------------------- ---------------------------------- (UNAUDITED) (UNAUDITED) ------------- ------------- ------------- ------------- INCREASE/(DECREASE) IN NET ASSETS FROM OPERATIONS Net investment income/(loss) .................... $ 337,221 $ 513,758 $ 45,942 $ 109,793 Net realized gain from investments and foreign currency related transactions ........ 2,515,598 5,873,442 2,743,950 11,341,607 Net change in unrealized appreciation/(depreciation) from investments and foreign currency related transactions ................................. 2,749,037 (389,329) 2,857,556 (8,093,974) ------------- ------------- ------------- ------------- Net increase/(decrease) in net assets resulting from operations ...................................... 5,601,856 5,997,871 5,647,448 3,357,426 ------------- ------------- ------------- ------------- SHAREHOLDERS FROM: Net investment income Institutional shares ......... (424,566) (302,304) (65,744) (79,664) Net investment income Investor shares .............. (197,951) (138,363) (1,191) -- Net realized capital gains Institutional shares .... (3,114,117) (3,892,863) (8,391,078) (6,614,827) Net realized capital gains Investor shares ......... (1,837,246) (2,200,756) (1,834,532) (661,661) ------------- ------------- ------------- ------------- Total dividends and distributions to shareholders .. (5,573,880) (6,534,286) (10,292,545) (7,356,152) ------------- ------------- ------------- ------------- INCREASE/(DECREASE) IN NET ASSETS DERIVED FROM CAPITAL SHARE TRANSACTIONS (NOTE 5) ............. 8,826,746 17,645,734 15,557,852 (21,778,232) ------------- ------------- ------------- ------------- Total increase/(decrease) in net assets ............ 8,854,722 17,109,319 10,912,755 (25,776,958) ------------- ------------- ------------- ------------- NET ASSETS Beginning of period ................................ 57,108,159 39,998,840 32,872,015 58,648,973 ------------- ------------- ------------- ------------- End of period* ..................................... $ 65,962,881 $ 57,108,159 $ 43,784,770 $ 32,872,015 ============= ============= ============= =============
ROBECO BOSTON PARTNERS ALL-CAP VALUE FUND --------------------------------- FOR THE SIX FOR THE MONTHS ENDED YEAR ENDED FEBRUARY 28, 2007 AUGUST 31, 2006 --------------------------------- (UNAUDITED) ------------- ------------- INCREASE/(DECREASE) IN NET ASSETS FROM OPERATIONS Net investment income/(loss) .................... $ 71,076 $ 104,902 Net realized gain from investments and foreign currency related transactions ........ 664,436 1,138,420 Net change in unrealized appreciation/(depreciation) from investments and foreign currency related transactions ................................. 1,015,161 (283,425) ------------- ------------- Net increase/(decrease) in net assets resulting from operations ...................................... 1,750,673 959,897 ------------- ------------- SHAREHOLDERS FROM: Net investment income Institutional shares ......... (104,775) (42,593) Net investment income Investor shares .............. 22,077) (12,566) Net realized capital gains Institutional shares .... (1,060,815) (498,306) Net realized capital gains Investor shares ......... (321,372) (217,331) ------------- ------------- Total dividends and distributions to shareholders .. (1,509,039) (770,796) ------------- ------------- INCREASE/(DECREASE) IN NET ASSETS DERIVED FROM CAPITAL SHARE TRANSACTIONS (NOTE 5) ............. 5,396,305 2,769,018 ------------- ------------- Total increase/(decrease) in net assets ............ 5,637,393 2,958,119 ------------- ------------- NET ASSETS Beginning of period ................................ 13,113,452 10,155,333 ------------- ------------- End of period* ..................................... $ 18,751,391 $ 13,113,452 ============= =============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2007 | 49 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS (continued)
ROBECO ROBECO WPG SMALL CAP VALUE FUND* WPG LARGE CAP GROWTH FUND ---------------------------------- ---------------------------------- FOR THE SIX FOR THE FOR THE SIX FOR THE MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED FEBRUARY 28, 2007 AUGUST 31, 2006 FEBRUARY 28, 2007 AUGUST 31, 2006 ---------------------------------- ---------------------------------- (UNAUDITED) (UNAUDITED) ------------- ------------- ------------- ------------- INCREASE/(DECREASE) IN NET ASSETS FROM OPERATIONS Net investment income/(loss) .................... $ 46,393 $ 10,059 $ (9,894) $ (11,477) Net realized gain from investments and foreign currency related transactions ........ 4,578,741 4,377,236 828,943 1,822,426 Net change in unrealized appreciation/(depreciation) from investments and foreign currency related transactions ................................. 2,336,782 (867,418) 711,087 (579,777) ------------- ------------- ------------- ------------- Net increase/(decrease) in net assets resulting from operations ...................................... 6,961,916 3,519,877 1,530,136 1,231,172 ------------- ------------- ------------- ------------- LESS DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income Institutional shares ......... (12,697) -- -- -- Net investment income Investor shares .............. -- -- -- -- Net investment income Retirement shares ............ -- -- -- -- Net realized capital gains Institutional shares .... (3,054,007) (5,701,181) (1,120,050) (2,136,641) Net realized capital gains Investor shares ......... (2,038,577) -- (650,613) -- ------------- ------------- ------------- ------------- Total dividends and distributions to shareholders .. (5,105,281) (5,701,181) (1,770,663) (2,136,641) ------------- ------------- ------------- ------------- INCREASE/(DECREASE) IN NET ASSETS DERIVED FROM CAPITAL SHARE TRANSACTIONS (NOTE 5) ............. 4,302,638 (1,579,130) (509,460) (785,662) ------------- ------------- ------------- ------------- Total increase/(decrease) in net assets ............ 6,159,273 (3,760,434) (749,987) (1,691,131) ------------- ------------- ------------- ------------- NET ASSETS Beginning of period ................................ 48,607,334 52,367,768 18,934,556 20,625,687 ------------- ------------- ------------- ------------- End of period* ..................................... $ 54,766,607 $ 48,607,334 $ 18,184,569 $ 18,934,556 ============= ============= ============= =============
* Formerly Robeco WPG Tudor Fund (name changed 1/1/2007) ** Includes undistributed net investment income (loss) as follows:
FOR THE SIX FOR THE MONTHS ENDED YEAR ENDED FEBRUARY 28, 2007 AUGUST 31, 2006 ----------------- --------------- (UNAUDITED) Robeco WPG Small Cap Value Fund*....................... $43,755 $10,059 Robeco WPG Large Cap Growth Fund....................... (9,894) -- Robeco WPG Core Bond Fund.............................. 1,156 1,156
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 50 | SEMI-ANNUAL REPORT 2007 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS (concluded)
ROBECO WPG CORE BOND FUND ---------------------------------- FOR THE SIX FOR THE MONTHS ENDED YEAR ENDED FEBRUARY 28, 2007 AUGUST 31, 2006 ---------------------------------- (UNAUDITED) ------------- ------------- INCREASE/(DECREASE) IN NET ASSETS FROM OPERATIONS Net investment income/(loss) .................... $ 3,975,202 $ 6,907,525 Net realized gain from investments and foreign currency related transactions ........ 1,283,139 (4,367,742) Net change in unrealized appreciation/(depreciation) from investments and foreign currency related transactions ................................. 659,559 (437,931) ------------- ------------- Net increase/(decrease) in net assets resulting from operations ...................................... 5,917,900 2,101,852 ------------- ------------- LESS DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income Institutional shares ......... (3,974,297) (6,921,517) Net investment income Investor shares .............. (445) (633) Net investment income Retirement shares ............ (460) (830) Net realized capital gains Institutional shares .... -- -- Net realized capital gains Investor shares ......... -- -- ------------- ------------- Total dividends and distributions to shareholders .. (3,975,202) (6,922,980) ------------- ------------- INCREASE/(DECREASE) IN NET ASSETS DERIVED FROM CAPITAL SHARE TRANSACTIONS (NOTE 5) ............. (7,934,778) 21,591,046 ------------- ------------- Total increase/(decrease) in net assets ............ (5,992,080) 16,769,918 ------------- ------------- NET ASSETS Beginning of period ................................ 178,530,916 161,760,998 ------------- ------------- End of period* ..................................... $ 172,538,836 $178,530,916 ============= =============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2007 | 51 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS -------------------------------------------------------------------------------- Contained below is per share operating performance data for each class of shares outstanding, total investment return, ratios to average net assets and other supplemental data for the respective periods. This information has been derived from information provided in the financial statements. --------------------------------------------------------------------------------
DISTRIBUTIONS DISTRIBUTIONS NET NET DIVIDENDS TO TO TO NET ASSET NET REALIZED SHAREHOLDERS SHAREHOLDERS SHAREHOLDERS ASSET VALUE, INVESTMENT AND UNREALIZED FROM NET FROM NET FROM VALUE, BEGINNING INCOME/ GAIN/(LOSS) ON INVESTMENT REALIZED TAX RETURN REDEMPTION END OF OF YEAR (LOSS) INVESTMENTS INCOME GAINS OF CAPITAL FEES PERIOD ------------------------------------------------------------------------------------------------------------------------------------ ROBECO BOSTON PARTNERS SMALL CAP VALUE FUND II ---------------------------------------------- INSTITUTIONAL CLASS 9/1/06 through 2/28/07+ $22.82 $ 0.02** $ 2.96 $(0.09) $(3.67) $ -- $ --(3) $22.04 8/31/06 24.75 (0.08)** 1.57 -- (3.42) -- --(3) 22.82 8/31/05 22.80 (0.10) 5.07 -- (3.03) -- 0.01 24.75 8/31/04 20.19 (0.12)** 2.92 -- (0.20) -- 0.01 22.80 8/31/03 15.71 (0.09)** 4.55 -- --(3) -- 0.02 20.19 8/31/02 17.17 (0.13)** (1.23) -- (0.21) -- 0.11 15.71 INVESTOR CLASS 9/1/06 through 2/28/07+ $22.40 $(0.02)** $ 2.91$ (0.02) $(3.67) $ -- $ --(3) $21.60 8/31/06 24.35 (0.13)** 1.54 -- (3.36) -- --(3) 22.40 8/31/05 22.53 (0.17) 5.01 -- (3.03) -- 0.01 24.35 8/31/04 20.00 (0.18)** 2.90 -- (0.20) -- 0.01 22.53 8/31/03 15.61 (0.12)** 4.49 -- --(3) -- 0.02 20.00 8/31/02 17.09 (0.17)** (1.21) -- (0.21) -- 0.11 15.61 ---------------------------------------------------------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS LONG/SHORT EQUITY FUND --------------------------------------------- INSTITUTIONAL CLASS 9/1/06 through 2/28/07+ $18.57 $(0.13)** $ 1.51 $ -- $(1.86) $ -- $ --(3) $18.09 8/31/06 17.89 (0.26)** 2.40 -- (1.47) -- 0.01 18.57 8/31/05 14.70 (0.25) 3.43 -- -- -- 0.01 17.89 8/31/04 14.31 (0.32)** 0.69 -- -- -- 0.02 14.70 8/31/03 15.17 (0.28)** 0.10 -- (0.51) (0.20) 0.03 14.31 8/31/02 15.88 0.05** (0.31) (0.02) (0.50) -- 0.07 15.17 INVESTOR CLASS 9/1/06 through 2/28/07+ $18.36 $(0.15)** $ 1.49 $ -- $(1.86) $ -- $ --(3) $17.84 8/31/06 17.74 (0.30)** 2.38 -- (1.47) -- 0.01 18.36 8/31/05 14.62 (0.28) 3.39 -- -- -- 0.01 17.74 8/31/04 14.27 (0.36)** 0.69 -- -- -- 0.02 14.62 8/31/03 15.13 (0.31)** 0.10 -- (0.51) (0.17) 0.03 14.27 8/31/02 15.87 0.04** (0.33) (0.01) (0.50) -- 0.06 15.13 ---------------------------------------------------------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS LARGE CAP VALUE FUND ------------------------------------------- INSTITUTIONAL CLASS 9/1/06 through 2/28/07+ $14.53 $ 0.10** $ 1.34 $(0.17) $(1.24) $ -- $ -- $14.56 8/31/06 15.00 0.16** 1.55 (0.16) (2.02) -- -- 14.53 8/31/05 12.67 0.11** 2.33 (0.11) -- -- -- 15.00 8/31/04 10.84 0.09** 1.84 (0.10) -- -- -- 12.67 8/31/03 10.33 0.09** 0.57 (0.06) (0.09) -- -- 10.84 8/31/02 13.52 0.08** (1.54) (0.12) (1.61) -- -- 10.33
----------------------------------- ** Calculated based on average shares outstanding for the period. + Unaudited. 1 Total return is calculated by assuming a purchase of shares on the first day and a sale of shares on the last day of each period reported and includes reinvestments of dividends and distributions, if any. 2 Redemption fees are reflected in total return calculations. 3 Amount is less than $0.01 per share. 4 Annualized. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 52 | SEMI-ANNUAL REPORT 2007 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS
RATIO OF EXPENSES TO RATIO OF NET AVERAGE WITH INVESTMENT RATIO OF ASSETS WITH RATIO OF INCOME TO NET EXPENSES TO WAIVERS AND EXPENSES TO AVERAGE ASSETS, AVERAGE NET REIMBURSEMENTS AVERAGE NET NET ASSETS TOTAL END OF ASSETS WITH (EXCLUDING ASSETS WITHOUT WITH WAIVERS PORTFOLIO INVESTMENT PERIOD WAIVERS AND DIVIDEND AND WAIVERS AND AND TURNOVER RETURN(1,2) (000) REIMBURSEMENTS INTEREST EXPENSE) REIMBURSEMENTS REIMBURSEMENTS RATE ------------------------------------------------------------------------------------------------------------------------------------ ROBECO BOSTON PARTNERS SMALL CAP VALUE FUND II ---------------------------------------------- INSTITUTIONAL CLASS 9/1/06 through 2/28/07+ 13.47% $113,247 1.55%(4) --% 1.55%(4) 0.04%(4) 22.45% 8/31/06 6.39 114,153 1.52 -- 1.53 (0.34) 33.60 8/31/05 22.65 138,143 1.53 -- 1.54 (0.42) 37.61 8/31/04 13.96 133,060 1.49 -- 1.49 (0.53) 47.06 8/31/03 28.55 98,383 1.55 -- 1.79 (0.54) 72.72 8/31/02 (7.39) 40,475 1.55 -- 1.71 (0.76) 119.30 INVESTOR CLASS 9/1/06 through 2/28/07+ 13.35% $217,585 1.80%(4) --% 1.80%(4) (0.21)%(4) 22.45% 8/31/06 6.12 230,362 1.77 -- 1.78 (0.58) 33.60 8/31/05 22.32 274,648 1.78 -- 1.79 (0.64) 37.61 8/31/04 13.69 327,569 1.74 -- 1.74 (0.77) 47.06 8/31/03 28.16 279,593 1.80 -- 2.04 (0.77) 72.72 8/31/02 (7.54) 253,838 1.79 -- 1.92 (1.00) 119.30 ------------------------------------------------------------------------------------------------------------------------------------ ROBECO BOSTON PARTNERS LONG/SHORT EQUITY FUND --------------------------------------------- INSTITUTIONAL CLASS 9/1/06 through 2/28/07+ 7.73% $96,874 3.29%(4) 2.50%(4) 3.46%(4) (1.58)%(4) 47.27% 8/31/06 12.93 90,313 3.24 2.50 3.40 (1.51) 108.59 8/31/05 21.70 99,748 3.13 2.50 3.30 (1.82) 107.14 8/31/04 2.73 58,293 3.02 2.50 3.20 (2.26) 239.06 8/31/03 (1.13) 57,351 3.05 2.50 3.44 (1.94) 282.36 8/31/02 (1.17) 65,951 3.04 2.50 3.39 0.30 219.52 INVESTOR CLASS 9/1/06 through 2/28/07+ 7.60% $18,955 3.54%(4) 2.75%(4) 3.71%(4) (1.83)%(4) 47.27% 8/31/06 12.69 20,706 3.48 2.75 3.65 (1.77) 108.59 8/31/05 21.34 24,716 3.37 2.75 3.55 (2.07) 107.14 8/31/04 2.45 14,322 3.27 2.75 3.45 (2.50) 239.06 8/31/03 (1.32) 15,381 3.32 2.75 3.69 (2.13) 282.36 8/31/02 (1.44) 49,284 3.29 2.75 3.60 0.27 219.52 ------------------------------------------------------------------------------------------------------------------------------------ ROBECO BOSTON PARTNERS LARGE CAP VALUE FUND ------------------------------------------- INSTITUTIONAL CLASS 9/1/06 through 2/28/07+ 9.81% $41,188 0.75%(4) --% 1.08%(4) 1.18%(4) 27.11% 8/31/06 12.43 35,994 0.86 -- 1.22 1.11 58.04 8/31/05 19.30 27,172 1.00 -- 1.35 0.83 76.91 8/31/04 17.87 42,066 1.00 -- 1.22 0.73 47.21 8/31/03 6.54 43,722 1.00 -- 1.41 0.94 81.13 8/31/02 (12.67) 45,067 1.00 -- 1.40 0.62 88.65
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2007 | 53 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS (continued) PER SHARE OPERATING PERFORMANCE -------------------------------------------------------------------------------- Contained below is per share operating performance data for each class of shares outstanding, total investment return, ratios to average net assets and other supplemental data for the respective periods. This information has been derived from information provided in the financial statements. --------------------------------------------------------------------------------
DISTRIBUTIONS DISTRIBUTIONS NET NET DIVIDENDS TO TO TO NET ASSET NET REALIZED SHAREHOLDERS SHAREHOLDERS SHAREHOLDERS ASSET VALUE, INVESTMENT AND UNREALIZED FROM NET FROM NET FROM VALUE, BEGINNING INCOME/ GAIN/(LOSS) ON INVESTMENT REALIZED TAX RETURN REDEMPTION END OF OF PERIOD (LOSS) INVESTMENTS INCOME GAINS OF CAPITAL FEES PERIOD ------------------------------------------------------------------------------------------------------------------------------------ ROBECO BOSTON PARTNERS SMALL CAP VALUE FUND II ---------------------------------------------- ------------------------------------------------------------------------------------------------------------------------------------ ROBECO BOSTON PARTNERS LARGE CAP VALUE FUND (CONTINUED) ------------------------------------------------------- INVESTOR CLASS 9/1/06 through 2/28/07+ $14.77 $ 0.19** $ 1.25 $(0.13) $(1.24) $ -- $ -- $14.84 8/31/06 15.22 0.13** 1.57 (0.13) (2.02) -- -- 14.77 8/31/05 12.86 0.08** 2.36 (0.08) -- -- -- 15.22 8/31/04 11.01 0.05** 1.88 (0.08) -- -- -- 12.86 8/31/03 10.50 0.07** 0.57 (0.04) (0.09) -- -- 11.01 8/31/02 13.73 0.04** (1.56) (0.10) (1.61) -- -- 10.50 ------------------------------------------------------------------------------------------------------------------------------------ ROBECO BOSTON PARTNERS MID CAP VALUE FUND ----------------------------------------- INSTITUTIONAL CLASS 9/1/06 through 2/28/07+ $13.05 $ 0.02** $ 2.10 $(0.03) $(4.06) $ -- $ -- $11.08 8/31/06 14.02 0.04** 0.86 (0.02) (1.85) -- -- 13.05 8/31/05 13.16 --(2) 3.22 (0.01) (2.35) -- -- 14.02 8/31/04 11.57 0.01** 1.65 (0.07) -- -- -- 13.16 8/31/03 9.69 0.05** 1.83 --(2) -- -- -- 11.57 8/31/02 12.55 --(2)** (0.94) (0.06) (1.86) -- -- 9.69 INVESTOR CLASS 9/1/06 through 2/28/07+ $12.81 $ --(2) $ 2.06 $ -- $(4.06) $ -- $ -- $10.81 8/31/06 13.80 (0.01)(2)** 0.87 -- (1.85) -- -- 12.81 8/31/05 13.02 --(2) 3.13 -- (2.35) -- -- 13.80 8/31/04 11.43 (0.02)** 1.65 (0.04) -- -- -- 13.02 8/31/03 9.58 0.02** 1.83 -- -- -- -- 11.43 8/31/02 12.43 (0.02)** (0.94) (0.03) (1.86) -- -- 9.58 ------------------------------------------------------------------------------------------------------------------------------------ ROBECO BOSTON PARTNERS ALL-CAP VALUE FUND ----------------------------------------- INSTITUTIONAL CLASS 9/1/06 through 2/28/07+ $15.69 $ 0.07** $ 1.62 $(0.13) $(1.30) $ -- $ -- $15.95 8/31/06 15.54 0.15** 1.03 (0.08) (0.95) -- -- 15.69 8/31/05 13.29 0.07 2.83 (0.05) (0.60) -- -- 15.54 8/31/04 10.82 0.06 2.48 (0.07) -- -- -- 13.29 8/31/03 9.45 0.06 1.34 (0.03) -- -- -- 10.82 7/1/02* to 8/31/02 10.00 -- (0.55) -- -- -- -- 9.45 INVESTOR CLASS 9/1/06 through 2/28/07+ $15.63 $ 0.05** $ 1.62 $(0.09) $(1.30) $ -- $ -- $15.91 8/31/06 15.49 0.11** 1.03 (0.05) (0.95) -- -- 15.63 8/31/05 13.26 0.03 2.83 (0.03) (0.60) -- -- 15.49 8/31/04 10.80 0.02 2.48 (0.04) -- -- -- 13.26 8/31/03 9.44 0.04 1.34 (0.02) -- -- -- 10.80 7/1/02* to 8/31/02 10.00 -- (0.56) -- -- -- -- 9.44
--------------------- * Commencement of operations. ** Calculated based on average shares outstanding for the period. + Unaudited. 1 Total return is calculated by assuming a purchase of shares on the first day and a sale of shares on the last day of each period reported and includes reinvestments of dividends and distributions, if any. 2 Amount is less than $0.01 per share. 3 Annualized. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 54 | SEMI-ANNUAL REPORT 2007 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS (continued) PER SHARE OPERATING PERFORMANCE
RATIO OF NET INVESTMENT RATIO OF RATIO OF INCOME TO NET EXPENSES TO EXPENSES TO AVERAGE ASSETS, AVERAGE NET AVERAGE NET NET ASSETS TOTAL END OF ASSETS WITH SSETS WITHOUT WITH WAIVERS PORTFOLIO INVESTMENT PERIOD WAIVERS AND WAIVERS AND AND TURNOVER RETURN(1) (000) REIMBURSEMENTS REIMBURSEMENTS REIMBURSEMENTS RATE ------------------------------------------------------------------------------------------------------------------------------------ ROBECO BOSTON PARTNERS SMALL CAP VALUE FUND II ---------------------------------------------- ------------------------------------------------------------------------------------------------------------------------------------ ROBECO BOSTON PARTNERS LARGE CAP VALUE FUND (CONTINUED) ------------------------------------------------------- INVESTOR CLASS 9/1/06 through 2/28/07+ 9.68% $24,775 1.00%(3) 1.33%(3) 0.93%(3) 27.11% 8/31/06 12.14 21,114 1.11 1.46 0.87 58.04 8/31/05 19.04 12,827 1.25 1.61 0.53 76.91 8/31/04 17.53 8,112 1.25 1.47 0.43 47.21 8/31/03 6.22 5,116 1.25 1.66 0.66 81.13 8/31/02 (12.87) 7,893 1.25 1.61 0.37 88.65 ---------------------------------------------------------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS MID CAP VALUE FUND ----------------------------------------- INSTITUTIONAL CLASS 9/1/06 through 2/28/07+ 17.40% $33,986 1.00%(3) 1.58%(3) 0.30%(3) 39.84% 8/31/06 6.82 27,538 1.00 1.38 0.28 97.30 8/31/05 25.97 54,187 1.00 1.31 0.03 74.08 8/31/04 14.39 42,240 1.00 1.26 0.07 67.40 8/31/03 19.41 57,052 1.00 1.40 0.55 77.87 8/31/02 (8.97) 50,073 1.00 1.33 0.01 99.23 INVESTOR CLASS 9/1/06 through 2/28/07+ 17.22% $ 9,799 1.25%(3) 1.83%(3) 0.05%(3) 39.84% 8/31/06 6.59 5,334 1.25 1.70 (0.04) 97.30 8/31/05 25.47 4,462 1.25 1.56 (0.22) 74.08 8/31/04 14.08 2,819 1.25 1.51 (0.18) 67.40 8/31/03 19.31 3,159 1.25 1.65 0.21 77.87 8/31/02 (9.26) 6,232 1.25 1.57 (0.18) 99.23 ---------------------------------------------------------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS ALL-CAP VALUE FUND ----------------------------------------- INSTITUTIONAL CLASS 9/1/06 through 2/28/07+ 10.77% $14,172 0.95%(3) 2.27%(3) 0.88%(3) 15.21% 8/31/06 7.95 9,374 1.09 2.93 0.94 51.10 8/31/05 22.33 7,315 1.25 3.90 0.53 28.72 8/31/04 23.50 5,177 1.25 5.82 0.51 27.40 8/31/03 14.84 2,890 1.25 9.49 0.62 38.36 7/1/02* to 8/31/02 (5.50) 1,810 1.25(3) 14.54(3) 0.16(3) 6.61 INVESTOR CLASS 9/1/06 through 2/28/07+ 10.68% $ 4,579 1.20%(3) 2.52%(3) 0.63%(3) 15.21% 8/31/06 7.72 3,739 1.34 3.19 0.69 51.10 8/31/05 22.06 2,840 1.50 4.04 0.20 28.72 8/31/04 23.13 649 1.50 5.84 0.14 27.40 8/31/03 14.63 106 1.50 9.88 0.41 38.36 7/1/02* to 8/31/02 (5.60) 84 1.50(3) 15.34(3) (0.01)(3) 6.61
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2007 | 55 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS (continued) PER SHARE OPERATING PERFORMANCE -------------------------------------------------------------------------------- Contained below is per share operating performance data for each class of shares outstanding, total investment return, ratios to average net assets and other supplemental data for the respective periods. This information has been derived from information provided in the financial statements. --------------------------------------------------------------------------------
DISTRIBUTIONS NET NET DIVIDENDS TO TO NET ASSET NET REALIZED SHAREHOLDERS SHAREHOLDERS ASSET VALUE, INVESTMENT AND UNREALIZED FROM NET FROM NET VALUE, BEGINNING INCOME/ GAIN/(LOSS) ON INVESTMENT REALIZED REDEMPTION END OF OF PERIOD (LOSS) INVESTMENTS INCOME GAINS FEES PERIOD ------------------------------------------------------------------------------------------------------------------------------------ ROBECO WPG SMALL CAP VALUE FUND (FORMERLY ROBECO WPG TUDOR FUND) ---------------------------------------------------------------- INSTITUTIONAL CLASS 9/1/06 through 2/28/07+ $16.54 $ 0.02 $ 2.38 $ -- $(1.81) $ -- $17.13 8/31/06 17.42 -- 1.10 -- (1.98) -- 16.54 8/31/05 2 17.55 (0.04) (0.09) -- -- -- 17.42 12/31/04 16.34 -- 3.11 -- (1.90) -- 17.55 12/31/03 11.24 -- 5.10 -- -- -- 16.34 12/31/02 15.21 -- (3.97) -- -- -- 11.24 12/31/01 18.41 -- (2.73) -- (0.47) -- 15.21 ------------------------------------------------------------------------------------------------------------------------------------ ROBECO WPG LARGE CAP GROWTH FUND -------------------------------- INSTITUTIONAL CLASS 9/1/06 through 2/28/07+ $22.27 $(0.01) $ 1.86 $ -- $(2.21) $ -- $21.91 8/31/06 23.36 (0.01) 1.42 -- (2.50) -- 22.27 8/31/05 2 23.10 (0.07) 0.33 -- -- -- 23.36 12/31/04 25.27 -- 0.93 -- (3.10) -- 23.10 12/31/03 19.16 -- 6.11 -- -- -- 25.27 12/31/02 26.46 -- (7.30) -- -- -- 19.16 12/31/01 33.60 (0.01) (6.86) -- (0.27) -- 26.46 ------------------------------------------------------------------------------------------------------------------------------------ ROBECO WPG CORE BOND FUND ------------------------- INSTITUTIONAL CLASS 9/1/06 through 2/28/07+ $10.50 $ 0.24** $ 0.12 $(0.24) $ -- $ --(6) $10.62 8/31/06 10.84 0.45** (0.34) (0.45) -- --(6) 10.50 8/31/05 2 10.81 0.25 0.03 (0.25) -- --(6) 10.84 12/31/04 10.66 0.31 0.15 (0.31) -- -- 10.81 12/31/03 10.44 0.30 0.22 (0.30) -- -- 10.66 12/31/02 9.80 0.40 0.64 (0.40) -- -- 10.44 12/31/01 9.40 0.49 0.40 (0.49) -- -- 9.80 INVESTOR CLASS 9/1/06 through 2/28/07+ $10.50 $ 0.23** $ 0.12 $(0.23) $ -- $ -- $10.62 1/17/06* to 8/31/06 10.69 0.28** (0.19) (0.28) -- -- 10.50 RETIREMENT CLASS 9/1/06 through 2/28/07+ $10.50 $ 0.24** $ 0.12 $(0.24) $ -- $ -- $10.62 9/01/05* to 8/31/06 10.86 0.44** (0.36) (0.44) -- -- 10.50
---------------------------------- * Commencement of operations. ** Calculated based on average shares outstanding for the period. + Unaudited. 1 Total return is calculated by assuming a purchase of shares on the first day and a sale of shares on the last day of each period reported and includes reinvestments of dividends and distributions, if any. 2 For the period January 1, 2005 through August 31, 2005. 3 Excludes the effects of fees paid indirectly. Had such offsets been included, the ratio would not differ. 4 The portfolio turnover rates excluding mortgage dollar roll transactions were 116.45%, 295.59%, 295.21% and 573.60% for the period ended February 28, 2007, for the year ended August 31, 2006, for the period ended August 31, 2005 and the year ended December 31, 2004, respectively. 5 Annualized. 6 Amount is less than $0.01 per share. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 56 | SEMI-ANNUAL REPORT 2007 ROBECO INVESTMENT FUNDS -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS (concluded) PER SHARE OPERATING PERFORMANCE
RATIO OF NET INVESTMENT RATIO OF RATIO OF INCOME TO NET EXPENSES TO EXPENSES TO AVERAGE ASSETS, AVERAGE NET AVERAGE NET NET ASSETS TOTAL END OF ASSETS WITH SSETS WITHOUT WITH WAIVERS PORTFOLIO INVESTMENT PERIOD WAIVERS AND WAIVERS AND AND TURNOVER RETURN(1) (000) REIMBURSEMENTS REIMBURSEMENTS REIMBURSEMENTS RATE ------------------------------------------------------------------------------------------------------------------------------------ ROBECO WPG SMALL CAP VALUE FUND (FORMERLY ROBECO WPG TUDOR FUND) ---------------------------------------------------------------- INSTITUTIONAL CLASS 9/1/06 through 2/28/07+ 14.82% $ 57,767 1.49%(5) 1.49%(5) 0.18%(5) 64.81% 8/31/06 7.16 48,607 1.43(3) 1.43 0.02 139.15 8/31/05 2 (0.74) 52,368 1.57(3,5) 1.57(5) (0.35)(5) 135.85 12/31/04 19.35 57,787 1.55 1.55 (0.55) 159.20 12/31/03 45.37 58,282 1.68 1.68 0.83 228.30 12/31/02 (26.10) 47,705 1.54 1.54 (0.81) 105.60 12/31/01 (14.78) 71,324 1.38 1.38 0.11 128.10 ------------------------------------------------------------------------------------------------------------------------------------ ROBECO WPG LARGE CAP GROWTH FUND -------------------------------- INSTITUTIONAL CLASS 9/1/06 through 2/28/07+ 8.28% $ 18,185 1.40%(5) 1.94%(5) (0.10)%(5) 46.30% 8/31/06 6.10 18,935 1.40(3) 1.79 (0.06) 93.80 8/31/05 2 1.13 20,626 1.40(3,5) 2.08(5) (0.42)(5) 100.01 12/31/04 3.82 26,222 1.40 1.50 (0.06) 138.70 12/31/03 31.89 52,355 1.44 1.44 (0.52) 126.80 12/31/02 (27.59) 43,412 1.25 1.25 (0.42) 107.90 12/31/01 (20.45) 74,931 1.14 1.14 (0.11) 56.40 ------------------------------------------------------------------------------------------------------------------------------------ ROBECO WPG CORE BOND FUND ------------------------- INSTITUTIONAL CLASS 9/1/06 through 2/28/07+ 3.49% $172,497 0.43%(5) 0.81%(5) 4.64%(5) 206.86%(4) 8/31/06 1.11 178,491 0.43(3) 0.79 4.29 626.69(4) 8/31/05 2 2.65 161,761 0.43(3,5) 0.75(5) 3.52(5) 602.95(4) 12/31/04 4.38 144,349 0.43 0.71 2.90 805.80(4) 12/31/03 5.04 145,818 0.45 0.75 2.81 561.80 12/31/02 10.87 105,261 0.50 0.83 4.02 539.20 12/31/01 9.64 123,797 0.50 0.81 5.04 431.50 INVESTOR CLASS 9/1/06 through 2/28/07+ 3.36% $ 21 0.68%(5) 1.06%(5) 4.39%(5) 206.86%(4) 1/17/06* to 8/31/06 0.84 20 0.66(3,5) 1.04(5) 4.23(5) 626.69(4) RETIREMENT CLASS 9/1/06 through 2/28/07+ 3.43% $ 21 0.53%(5) 0.91%(5) 4.54%(5) 206.86%(4) 9/01/05* to 8/31/06 0.84 20 0.50(3,5) 0.86(5) 4.21(5) 626.69(4)
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2007 | 57 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES The RBB Fund, Inc. ("RBB" or "Company") was incorporated under the laws of the State of Maryland on February 29, 1988 and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company. RBB is a "series fund," which is a mutual fund divided into separate portfolios. Each portfolio is treated as a separate entity for certain matters under the 1940 Act, and for other purposes, and a shareholder of one portfolio is not deemed to be a shareholder of any other portfolio. Currently, RBB has eighteen active investment portfolios, including Robeco Boston Partners Small Cap Value Fund II ("BP Small Cap Value Fund II"), Robeco Boston Partners Long/Short Equity Fund ("BP Long/Short Equity Fund"), Robeco Boston Partners Large Cap Value Fund ("BP Large Cap Value Fund"), Robeco Boston Partners Mid Cap Value Fund ("BP Mid Cap Value Fund"), Robeco Boston Partners All-Cap Value Fund ("BP All-Cap Value Fund") (collectively "BP Funds"), Robeco WPG Small Cap Value Fund, formerly Robeco WPG Tudor Fund, ("WPG Small Cap Value Fund"), Robeco WPG Large Cap Growth Fund ("WPG Large Cap Growth Fund") and Robeco WPG Core Bond Fund ("WPG Core Bond Fund") (collectively "WPG Funds") (each a "Fund," collectively the "Funds"). As of February 28, 2007, the BP Funds each offer two classes of shares, Institutional Class and Investor Class. The WPG Small Cap Value and WPG Large Cap Growth Funds are single class funds offering only the Institutional Class of shares. The WPG Core Bond Fund offers three classes of shares, Institutional Class, Investor Class and Retirement Class. RBB has authorized capital of one hundred billion shares of common stock of which 76.673 billion shares are currently classified into one hundred and six classes of common stock. Each class represents an interest in an active or inactive RBB investment portfolio. The active classes have been grouped into eight separate "families." On December 16, 2004, the Board of Trustees of the WPG Small Cap Value Fund, WPG Large Cap Growth Fund and WPG Core Bond Fund, a series of Weiss, Peck and Greer Funds Trust (each a "WPG Fund" and collectively, the "WPG Funds"), approved an Agreement and Plan of Reorganization between each Fund and the Company, that provided for the tax-free reorganization of the Funds into newly created portfolios of the Company (the "New Funds"). The Agreement and Plan of Reorganization was approved by the shareholders, and, effective after the close of business on April 29, 2005, all of the assets and liabilities of the WPG Funds have been transferred, in a tax-free exchange, to the New Funds and the shareholders of the WPG Funds have become shareholders of the New Funds. PORTFOLIO VALUATION -- The Fund's net asset value ("NAV") is calculated once daily at the close of regular trading hours on the New York Stock Exchange ("NYSE") (generally 4:00 p.m. Eastern time) on each day the NYSE is open. Securities held by the Fund are valued using the closing price or the last sale price on a national securities exchange or the National Association of Securities Dealers Automatic Quotation System ("NASDAQ") market system where they are primarily traded. Equity securities traded in the over-the-counter market are valued at their closing prices. If there were no transactions on that day, securities traded principally on an exchange or on NASDAQ will be valued at the mean of the last bid and ask prices prior to the market close. Fixed income securities having a remaining maturity of greater than 60 days are valued using an independent pricing service. Fixed income securities having a remaining maturity of 60 days or less are amortized to maturity based on their cost. Foreign securities are valued based on prices from the primary market in which they are traded, and are translated from the local currency into U.S. dollars using current exchange rates. Investments in other open-end investment companies are valued based on the NAV of the investment companies (which may use fair value pricing as discussed in their prospectuses). If market quotations are unavailable or deemed unreliable, securities will be valued in accordance with procedures adopted by the Company's Board of Directors. Relying on prices supplied by pricing services or dealers or using fair valuation may result in values that are higher or lower than the values used by other investment companies and investors to price the same investments. USE OF ESTIMATES -- The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. INVESTMENT TRANSACTIONS, INVESTMENT INCOME AND EXPENSES -- THE FUNDS RECORD SECURITY TRANSACTIONS BASED ON TRADE DATE. THE COST OF INVESTMENTS SOLD IS DETERMINED BY USE OF THE SPECIFIC IDENTIFICATION METHOD FOR BOTH FINANCIAL REPORTING AND INCOME TAX PURPOSES IN DETERMINING REALIZED GAINS AND LOSSES ON INVESTMENTS. INTEREST INCOME IS ACCRUED WHEN EARNED. DIVIDEND INCOME IS RECORDED ON THE EX-DIVIDEND DATE. DISTRIBUTIONS RECEIVED ON SECURITIES THAT REPRESENT A RETURN OF CAPITAL OR CAPITAL GAINS ARE RECORDED AS A REDUCTION OF COST OF INVESTMENTS AND/OR AS A REALIZED GAIN. THE FUNDS ESTIMATE THE COMPONENTS OF DISTRIBUTIONS RECEIVED THAT MAY BE CONSIDERED RETURN OF CAPITAL DISTRIBUTIONS OR CAPITAL GAIN DISTRIBUTIONS. 58 | SEMI-ANNUAL REPORT 2007 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (unaudited) (continued) The Funds' investment income, expenses (other than class specific distribution fees) and unrealized and realized gains and losses are allocated daily to each class of shares based upon the relative proportion of net assets of each class at the beginning of the day. Expenses incurred on behalf of a specific class, fund or fund family are charged directly to the class, fund or fund family (in proportion to net assets). Expenses incurred for all of the RBB families (such as director or professional fees) are charged to all funds in proportion to their net assets of the RBB Funds, or in such other manner as the Board of Directors deems fair or equitable. Expenses and fees, including investment advisory and administration fees are accrued daily and taken into account for the purpose of determining the net asset value of the Funds. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net investment income and distributions from net realized capital gains, if any, are declared and paid at least annually to shareholders and recorded on ex-dividend date for all Funds with the exception of the WPG Core Bond Fund which declares daily and pays monthly dividends from net investment income. Income dividends and capital gain distributions are determined in accordance with U.S. federal income tax regulations which may differ from generally accepted accounting principles. These differences include the treatment of non-taxable dividends, expiring capital loss carryforwards, foreign currency gain/loss, and losses deferred due to wash sales and excise tax regulations. Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications within the components of net assets. U.S. TAX STATUS -- No provision is made for U.S. income taxes as it is the Funds' intention to continue to qualify for and elect the tax treatment applicable to regulated investment companies under Subchapter M of the Internal Revenue Code of 1986, as amended, and make the requisite distributions to its shareholders which will be sufficient to relieve it from U.S. income and excise taxes. OTHER -- In the normal course of business, the Funds may enter into contracts that provide general indemnifications. The Funds' maximum exposure under these arrangements is dependent on claims that may be made against the Funds in the future, and, therefore, cannot be estimated; however, based on experience, the risk of material loss for such claims is considered remote. FOREIGN CURRENCY TRANSLATION -- The books and records of the portfolios are maintained in U.S. dollars as follows: (1) the foreign currency market value of investment securities and other assets and liabilities stated in foreign currencies are translated at the exchange rate prevailing at the end of the period; and (2) purchases, sales, income and expenses are translated at the rate of exchange prevailing on the respective dates of such transactions. The resulting exchange gains and losses are included in the Statement of Operations. FOREIGN SECURITIES -- There are certain risks resulting from investing in foreign securities in addition to the usual risks inherent in domestic investments. Such risks include future political, economic and currency exchange developments including investment restrictions and changes in foreign laws. FORWARD CURRENCY CONTRACTS -- The Funds may enter into forward currency contracts. Such contracts may be utilized in connection with planned purchases or sales of securities or to hedge the U.S. dollar value of portfolios denominated in foreign currencies. Fluctuations in the value of the forward contracts are recorded as unrealized gains or losses by the Funds. Risks may arise upon entering into these contracts from the potential inability of counterparties to meet the terms of their contracts and from unanticipated movements in the value of the foreign currency relative to the U.S. dollar. Upon entering into such a contract, a Fund is required to segregate assets with its custodian at least equal to the value of the Fund's assets committed to fulfilling the forward currency contract. At February 28, 2007, the Funds did not hold any forward currency contracts. FUTURES -- The WPG Small Cap Value Fund and the WPG Core Bond Fund may enter into futures contracts. A futures contract is an agreement between two parties to buy and sell a security at a set price on a future date. Upon entering into such a contract, a Fund is required to pledge to the broker an amount of cash and/or securities equal to the minimum "initial margin" requirements of the exchange on which such contract is traded. Pursuant to the contract, the Fund agrees to receive from, or pay to the broker, an amount of cash equal to the daily fluctuation in value of the contract. Such a receipt of payment is known as a "variation margin" and is recorded by each Fund as an unrealized gain or loss. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The Fund is also required to fully collateralize futures contracts purchased. The Funds only enter into futures contracts that are traded on exchanges. SEMI-ANNUAL REPORT 2007 | 59 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (unaudited) (continued) LINE OF CREDIT -- Each Robeco Boston Partners Fund may borrow an amount up to its prospectus-defined limitations, from a committed line of credit of 10% of the Fund's net assets through Custodial Trust Company available to the Funds in the Robeco Boston Partners Fund Family. Borrowings from the line of credit will bear interest at the Federal Funds Rate plus 125 basis points. The Funds had no outstanding borrowings at February 28, 2007 or at any time during the six months ended February 28, 2007. MORTGAGE DOLLAR ROLLS (WPG CORE BOND FUND) -- The WPG Core Bond Fund may enter into mortgage dollar rolls in which the WPG Core Bond Fund sells mortgage securities for delivery in the current month and simultaneously contracts to repurchase similar, but not identical, securities at an agreed upon price on a fixed date. The WPG Core Bond Fund accounts for such dollar rolls as purchases and sales and records an unrealized gain or loss each day equal to the difference between the original value of the purchase and the current market value. The WPG Core Bond Fund must maintain liquid securities having a value not less than the repurchase price (including accrued interest) for such dollar rolls. Losses may arise due to changes in value of the securities or if the counterparty does not perform under the terms of the agreement. If the counterparty files for bankruptcy or becomes insolvent, the WPG Core Bond Fund's right to repurchase or sell securities may be limited. OPTIONS -- The BP All-Cap Value Fund, WPG Small Cap Value Fund, WPG Large Cap Growth Fund and WPG Core Bond Fund may buy put and call options and write covered call and secured put options. Such options may relate to particular securities or domestic stock indices, and may or may not be listed on a domestic securities exchange or issued by the Options Clearing Corporation. The risk in writing a call option is that a Fund gives up the opportunity for profit if the market price of the security increases. The risk in writing a put option is that a Fund may incur a loss if the market price of the security decreases and the option is exercised. The risk in purchasing an option is that a Fund pays a premium whether or not the option is exercised. A Fund also has the additional risk of being unable to enter into a closing transaction at an acceptable price if a liquid secondary market does not exist. A Fund also may write over-the-counter options where completing the obligation depends upon the credit standing of the other party. Option contracts also involve the risk that they may result in loss due to unanticipated developments in market conditions or other causes. Options purchased are recorded as an asset and written options are recorded as liabilities to the extent of premiums paid or received. Gains or losses are realized when the option transaction expires or closes. When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option or the cost of a security for a purchased put or call option is adjusted by the amount of the premium received or paid. The BP All-Cap Value Fund had transactions in options written during the six month period ended February 28, 2007 as follows: NUMBER OF PREMIUMS CONTRACTS RECEIVED ---- -------- Options outstanding at August 31, 2006 247 $ 83,679 Options written 222 62,522 Options terminated in closing purchase transactions (24) (8,328) Options exercised (156) (60,987) -------- Options outstanding at February 28, 2007 289 $ 76,886 ---- -------- SHORT SALES -- When the investment adviser believes that a security is overvalued, the BP Long/Short Equity Fund and the BP All-Cap Value Fund may sell the security short by borrowing the same security from a broker or other institution and selling the security. A Fund will incur a loss as a result of a short sale if the price of the borrowed security increases between the date of the short sale and the date on which the Fund buys and replaces such borrowed security. A Fund will realize a gain if there is a decline in price of the security between those dates where the decline in price exceeds the costs of borrowing the security and other transaction costs. There can be no assurance that a Fund will be able to close out a short position at any particular time or at an acceptable price. Although a Fund's gain is limited to the amount at which it sold a security short, its potential loss is unlimited in size. Until a Fund replaces a borrowed security, it will maintain at all times cash, U.S. Government securities, or other liquid securities in an amount which, when added to any amount deposited with a broker as collateral, will at least equal the current market value of the security sold short. Depending on arrangements made with brokers, a Fund may not receive any payments (including interest) on collateral deposited with them. 60 | SEMI-ANNUAL REPORT 2007 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (unaudited) (continued) 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES Effective January 1, 2007, Boston Partners Asset Management, L.L.C. and Robeco USA, L.L.C. (formerly known as Weiss, Peck and Greer Investments), ("WPG"), the former entities that provided investment advisory services to the BP Funds and the WPG Funds, respectively, merged into and with Robeco USA, Inc., with Robeco USA, Inc. remaining as the surviving entity. In addition, effective January 1, 2007, Robeco USA, Inc., which had been doing business under the name Robeco Investment Management, officially changed its name to Robeco Investment Management, Inc. For its advisory services with respect to the BP Funds, Robeco Investment Management, Inc. ("Robeco") is entitled to receive 1.25% of the BP Small Cap Value Fund II's average daily net assets, 2.25% of the BP Long/Short Equity Fund's average daily net assets, 0.60% of the BP Large Cap Value Fund's average daily net assets, 0.80% of the BP Mid Cap Value Fund's average daily net assets and 0.80% of the BP All-Cap Value Fund's average daily net assets, each accrued daily and payable monthly. Prior to March 1, 2006 the Advisory fees for the BP Large Cap Value Fund and the BP All-Cap Value Fund were 0.75% and 1.00% of average daily net assets, respectively. Robeco has contractually agreed to limit the Funds' total operating expenses to the extent that such expenses exceed the ratios in the table below. This limit is calculated daily based on each Fund's average daily net assets. This limitation is effected in waivers of advisory fees and reimbursements of expenses exceeding the advisory fee as necessary. The BP Funds will not pay Robeco at a later time for any amounts waived or any amounts assumed. INSTITUTIONAL INVESTOR ------------- -------- BP Small Cap Value Fund II 1.55% 1.80% BP Long/Short Equity Fund 2.50%* 2.75%* BP Large Cap Value Fund 0.75% 1.00% BP Mid Cap Value Fund 1.00% 1.25% BP All-Cap Value Fund 0.95% 1.20% * Excluding short sale dividend expense. For its advisory services with respect to the WPG Funds, Robeco is entitled to receive advisory fees, accrued daily and paid monthly, as follows: WPG Small Cap Value Fund 0.90% of net assets up to $300 million 0.80% of net assets $300 million to $500 million 0.75% of net assets in excess of $500 million WPG Large Cap Growth Fund 0.75% of net assets WPG Core Bond Fund 0.45% of net assets Robeco has contractually agreed to cap the Funds' operating expenses. The WPG Small Cap Value Fund's expenses are capped at 1.70%, WPG Large Cap Growth Fund's expenses are capped at 1.40%, and WPG Core Bond Fund, Institutional Class, Investor Class, and Retirement Class expenses are capped at 0.43%, 0.68% and 0.53%, respectively. Pursuant to an agreement, beginning in 2004, Robeco may seek reimbursement from the WPG Small Cap Value Fund and WPG Large Cap Growth Fund for expenses waived by WPG during the prior two years to the extent that such recovery would not cause the affected Fund to exceed the expense limitations in effect at the time of recovery. At February 28, 2007, the amount potentially recoverable by Robeco from the WPG Large Cap Growth Fund pursuant to this agreement is $54,529 expiring April 29, 2007. Robeco has agreed to not recover any fees waived after April 29, 2005. For the six months ended February 28, 2007, investment advisory fees, waivers and reimbursements of expenses were as follows:
GROSS NET EXPENSE ADVISORY FEES WAIVERS ADVISORY FEES REIMBURSEMENT ------------- ------- ------------- ------------- BP Small Cap Value Fund II $2,130,955 $ (5,739) $2,125,216 $ -- BP Long/Short Equity Fund 1,264,574 (92,049) 1,172,525 -- BP Large Cap Value Fund 186,084 (100,919) 85,165 -- BP Mid Cap Value Fund 144,216 (105,566) 38,650 -- BP All-Cap Value Fund 69,195 (69,195) -- (44,932) WPG Small Cap Value Fund 228,735 -- 228,735 -- WPG Large Cap Growth Fund 71,085 (51,490) 19,595 -- WPG Core Bond Fund 385,882 (328,882) 57,000 --
SEMI-ANNUAL REPORT 2007 | 61 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (unaudited) (continued) PFPC Inc. ("PFPC"), a wholly-owned subsidiary of PFPC Worldwide Inc., an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc., serves as administrator for the Funds. For providing administration and accounting services, PFPC is entitled to receive a monthly fee equal to an annual rate of 0.1125% of each Fund's first $200 million of average net assets; and 0.095% of each Fund's average net assets in excess of $200 million with a minimum monthly fee of $5,333 for each Fund. For the six month period ended February 28, 2007, PFPC administration and accounting services fees were as follows: ADMINISTRATION AND ACCOUNTING SERVICE FEES -------------- BP Small Cap Value Fund II $209,050 BP Long/Short Equity Fund 75,444 BP Large Cap Value Fund 45,689 BP Mid Cap Value Fund 44,723 BP All-Cap Value Fund 42,343 WPG Small Cap Value Fund 43,369 WPG Large Cap Growth Fund 45,116 WPG Core Bond Fund 119,035 Included in the administration and accounting service fees, shown above, are fees for providing regulatory administrative services to RBB. For providing these services, PFPC is entitled to receive compensation as agreed to by the Company and PFPC. This fee is allocated to each Fund in proportion to its net assets of the RBB funds. In addition, PFPC serves as the Funds' transfer and dividend disbursing agent. For providing transfer agency services, PFPC is entitled to receive a monthly fee, subject to a minimum monthly fee of $3,000 per class plus per account charges and out of pocket expenses. For providing custodial services to the BP Funds, PFPC Trust Company, a wholly-ownd subsidary of PFPC Worldwide Inc., an indirect wholly-owned subsidary of the PNC Financial Services Group, Inc. is entitled to receive a monthly fee equal to an annual rate of 0.01% of the Funds' average daily gross assets or a minimum monthly fee of $1,000. PFPC Distributors, Inc., provides certain administrative services to the Funds. As compensation for such administrative services, PFPC Distributors, Inc. is entitled to receive an annual fee of $62,500 from the BP Funds, which is allocated to the BP Funds in proportion to their net assets. PFPC Distributors, Inc. is entitled to receive an annual fee of $5,000 per Fund from the WPG Funds. The Board of Directors of the Company has approved a Distribution Agreement and adopted a separate Plan of Distribution for the Investor Shares (the "Plan") pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the Plan, PFPC Distributors, Inc. (the "Distributor") is entitled to receive from the Funds a distribution fee with respect to the Investor Shares, which is accrued daily and paid monthly, of up to 0.25% on an annualized basis of the average daily net assets of the Shares. Amounts paid to the Distributor under the Plan may be used by the Distributor to cover expenses that are related to (i) the sale of the Shares, (ii) ongoing servicing and/or maintenance of the accounts of shareholders, and (iii) sub-transfer agency services, subaccounting services or administrative services related to the sale of the Investor Shares, all as set forth in the Funds' 12b-1 Plan. Ongoing servicing and/or maintenance of the accounts of shareholders may include updating and mailing prospectuses and shareholder reports, responding to inquiries regarding shareholder accounts and acting as agent or intermediary between shareholders and the Funds or their service providers. The Board of Directors of the Company has adopted a Shareholder Services Plan (the "Plan") for the WPG Core Bond Fund's Retirement Class Shares authorizing the WPG Core Bond Fund to pay securities dealers, plan administrators or other service organizations ("Service Organizations") who agree to provide certain shareholder and administrative services to plans or plan participants holding Retirement Class Shares of the WPG Core Bond Fund a service fee at an annual rate of up to 0.10% of the average daily net asset value of WPG Core Bond Fund's Retirement Class Shares. At February 28, 2007, PFPC and its affiliates were due fees for their services of $58,364, $49,689, $18,230, $22,340, $15,575, $26,026, $15,368 and $28,509 from the BP Small Cap Value Fund II, BP Long/Short Equity Fund, BP Large Cap Value Fund, BP Mid Cap Value Fund, BP All-Cap Value Fund, WPG Small Cap Value Fund, WPG Large Cap Growth Fund and WPG Core Bond Fund, respectively. 62 | SEMI-ANNUAL REPORT 2007 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (unaudited) (continued) 3. CUSTODIAN FEES (WPG SMALL CAP VALUE FUND, WPG LARGE CAP GROWTH FUND AND WPG CORE BOND FUND) Boston Safe Deposit and Trust provides custodial services to the WPG Funds. Each WPG Fund has entered into an expense offset agreement with Boston Safe Deposit and Trust Company, wherein it receives a credit toward the reduction of custodian fees whenever there are uninvested cash balances. For the six month period ended February 28, 2007 there were no custodian offset fees. For the six month period ended February 28, 2007, the Funds' custodian fees were as follows: CUSTODIAN FEE ------------- WPG Small Cap Value Fund $ 7,922 WPG Large Cap Growth Fund 4,658 WPG Core Bond Fund 21,595 4. INVESTMENT IN SECURITIES For the six month period ended February 28, 2007, aggregate purchases and sales of investment securities (excluding short-term investments and U.S. government obligations) were as follows: INVESTMENT SECURITIES ----------------------------- PURCHASES SALES -------------- ------------ BP Small Cap Value Fund II $ 73,828,563 $134,239,843 BP Long/Short Equity Fund 53,197,605 62,701,783 BP Large Cap Value Fund 20,382,707 16,541,110 BP Mid Cap Value Fund 18,865,820 14,245,888 BP All-Cap Value Fund 7,217,541 2,483,958 WPG Small Cap Value Fund 30,736,671 31,815,370 WPG Large Cap Growth Fund 8,785,132 10,875,934 WPG Core Bond Fund 246,253,029 272,351,325 Purchases and sales of long-term U.S. government obligations were: PURCHASES SALES -------------- ------------ WPG Core Bond Fund $ 155,946,425 $150,023,186 5. CAPITAL SHARE TRANSACTIONS As of February 28, 2007, each class of each Fund has 100,000,000 shares of $0.001 par value common stock authorized except for the Institutional Class of the WPG Small Cap Value Fund, WPG Large Cap Growth Fund and WPG Core Bond Fund, each of which has 50,000,000 shares of $0.001 par value common stock authorized. Transactions in capital shares for the respective periods were as follows:
BP SMALL CAP VALUE FUND II --------------------------------------------------------- FOR THE FOR THE SIX MONTH PERIOD ENDED YEAR ENDED FEBRUARY 28, 2007 AUGUST 31, 2006 --------------------------------------------------------- SHARES VALUE SHARES VALUE ---------- ------------ ---------- ------------ INSTITUTIONAL CLASS Sales..................................................... 603,746 $ 13,868,429 578,461 $ 13,652,888 Repurchases ............................................... (1,168,339) (27,353,497) (1,858,219) (43,364,503) Redemption Fees*.......................................... -- 5,526 -- 17,806 Reinvestments............................................. 702,290 15,127,331 699,447 15,555,696 ---------- ------------ ---------- ------------ Net Increase / (Decrease)................................. 137,697 $ 1,647,789 (580,311) $(14,138,113) ========== ============ ========== ============ INVESTOR CLASS Sales..................................................... 303,834 $ 6,844,478 1,601,378 $ 37,613,254 Repurchases............................................... (2,106,309) (47,596,166) (4,293,955) (97,878,085) Redemption Fees*.......................................... -- 10,945 -- 36,512 Reinvestments............................................. 1,592,045 33,640,023 1,696,876 37,110,688 ---------- ------------ ---------- ------------ Net Increase / (Decrease)................................. (210,430) $ (7,100,720) (995,701) $(23,117,631) ========== ============ ========== ============
SEMI-ANNUAL REPORT 2007 | 63 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (unaudited) (continued)
BP LONG/SHORT EQUITY FUND --------------------------------------------------------- FOR THE FOR THE SIX MONTH PERIOD ENDED YEAR ENDED FEBRUARY 28, 2007 AUGUST 31, 2006 --------------------------------------------------------- SHARES VALUE SHARES VALUE ---------- ------------ ---------- ------------ INSTITUTIONAL CLASS Sales ..................................................... 140,567 $ 2,591,493 125,886 $ 2,126,079 Repurchases ............................................... (165,882) (3,018,271) (1,323,512) (21,652,614) Redemption Fees* .......................................... -- 110 -- 46,371 Reinvestments ............................................. 516,071 9,062,211 484,194 8,105,408 ---------- ------------ ---------- ------------ Net Increase / (Decrease) ................................. 490,756 $ 8,635,543 (713,432) $(11,374,756) ========== ============ ========== ============ INVESTOR CLASS Sales ..................................................... 7,999 $ 147,577 12,505 $ 215,550 Repurchases ............................................... (179,783) (3,272,056) (390,664) (6,473,943) Redemption Fees* .......................................... -- 22 -- 10,786 Reinvestments ............................................. 106,330 1,841,647 112,881 1,871,569 ---------- ------------ ---------- ------------ Net Increase / (Decrease) ................................. (65,454) $ (1,282,810) (265,278) $ (4,376,038) ========== ============ ========== ============
BP LARGE CAP VALUE FUND --------------------------------------------------------- FOR THE FOR THE SIX MONTH PERIOD ENDED YEAR ENDED FEBRUARY 28, 2007 AUGUST 31, 2006 --------------------------------------------------------- SHARES VALUE SHARES VALUE ---------- ------------ ---------- ------------ INSTITUTIONAL CLASS Sales ..................................................... 202,190 $ 3,014,757 646,767 $ 9,254,760 Repurchases ............................................... (9,491) (1,332,577) (288,561) (4,191,539) Reinvestments ............................................. 240,188 3,518,750 307,357 4,164,692 ---------- ------------ ---------- ------------ Net Increase / (Decrease) ................................. 352,887 $ 5,200,930 665,563 $ 9,227,913 ========== ============ ========== ============ INVESTOR CLASS Sales ..................................................... 226,176 $ 3,440,328 782,378 $ 11,308,245 Repurchases ............................................... (120,799) (1,837,466) (364,636) (5,219,721) Reinvestments ............................................. 135,405 2,022,954 168,790 2,329,297 ---------- ------------ ---------- ------------ Net Increase / (Decrease) ................................. 240,782 $ 3,625,816 586,532 $ 8,417,821 ========== ============ ========== ============
BP MID CAP VALUE FUND --------------------------------------------------------- FOR THE FOR THE SIX MONTH PERIOD ENDED YEAR ENDED FEBRUARY 28, 2007 AUGUST 31, 2006 --------------------------------------------------------- SHARES VALUE SHARES VALUE ---------- ------------ ---------- ------------ INSTITUTIONAL CLASS Sales ..................................................... 353,251 $ 4,151,529 342,353 $ 4,464,259 Repurchases ............................................... (156,156) (2,027,766) (2,612,779) (33,998,155) Reinvestments ............................................. 761,214 8,129,767 516,918 6,544,181 ---------- ------------ ---------- ------------ Net Increase / (Decrease) ................................. 958,309 $ 10,253,530 (1,753,508) $(22,989,715) ========== ============ ========== ============ INVESTOR CLASS Sales ..................................................... 419,364 $ 4,709,632 173,429 $ 2,258,578 Repurchases ............................................... (104,573) (1,233,857) (133,206) (1,706,074) Reinvestments ............................................. 175,316 1,828,547 52,930 658,979 ---------- ------------ ---------- ------------ Net Increase / (Decrease) ................................. 490,107 $ 5,304,322 93,153 $ 1,211,483 ========== ============ ========== ============
64 | SEMI-ANNUAL REPORT 2007 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (unaudited) (continued)
BP ALL-CAP VALUE FUND --------------------------------------------------------- FOR THE FOR THE SIX MONTH PERIOD ENDED YEAR ENDED FEBRUARY 28, 2007 AUGUST 31, 2006 --------------------------------------------------------- SHARES VALUE SHARES VALUE ---------- ------------ ---------- ------------ INSTITUTIONAL CLASS Sales ..................................................... 240,518 $ 3,808,525 266,146 $ 4,018,137 Repurchases ............................................... (22,548) (370,900) (171,528) (2,587,589) Reinvestments ............................................. 72,940 1,165,589 31,915 476,166 ---------- ------------ ---------- ------------ Net Increase / (Decrease) ................................. 290,910 $ 4,603,214 126,533 $ 1,906,714 ========== ============ ========== ============ ------------ INVESTOR CLASS Sales ..................................................... 69,582 $ 1,138,187 90,797 $ 1,401,095 Repurchases ............................................... (40,349) (653,082) (48,842) (746,935) Reinvestments ............................................. 19,309 307,986 13,979 208,144 ---------- ------------ ---------- ------------ Net Increase / (Decrease) ................................. 48,542 $ 793,091 55,934 $ 862,304 ========== ============ ========== ============
WPG SMALL CAP VALUE FUND --------------------------------------------------------- FOR THE FOR THE SIX MONTH PERIOD ENDED YEAR ENDED FEBRUARY 28, 2007 AUGUST 31, 2006 --------------------------------------------------------- SHARES VALUE SHARES VALUE ---------- ------------ ---------- ------------ INSTITUTIONAL CLASS Sales ..................................................... 166,849 $ 2,874,224 77,517 $ 1,234,067 Repurchases ............................................... (188,720) (3,268,375) (483,726) (8,013,166) Reinvestments ............................................. 279,752 4,696,789 338,981 5,199,969 ---------- ------------ ---------- ------------ Net Increase / (Decrease) ................................. 257,881 $ 4,302,638 (67,228) $ (1,579,130) ========== ============ ========== ============
WPG LARGE CAP GROWTH FUND --------------------------------------------------------- FOR THE FOR THE SIX MONTH PERIOD ENDED YEAR ENDED FEBRUARY 28, 2007 AUGUST 31, 2006 --------------------------------------------------------- SHARES VALUE SHARES VALUE ---------- ------------ ---------- ------------ INSTITUTIONAL CLASS Sales ..................................................... 5,241 $ 124,796 23,820 $ 534,282 Repurchases ............................................... (92,526) (2,109,004) (135,322) (3,056,426) Reinvestments ............................................. 67,218 1,474,748 78,538 1,736,482 ---------- ------------ ---------- ------------ Net Increase / (Decrease) ................................. (20,067) $ (509,460) (32,964) $ (785,662) ========== ============ ========== ============
SEMI-ANNUAL REPORT 2007 | 65 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (unaudited) (continued)
WPG CORE BOND FUND --------------------------------------------------------- FOR THE FOR THE SIX MONTH PERIOD ENDED YEAR ENDED FEBRUARY 28, 2007 AUGUST 31, 2006 --------------------------------------------------------- SHARES VALUE SHARES VALUE ---------- ------------ ---------- ------------ INSTITUTIONAL CLASS Sales ..................................................... 363,096 $ 3,851,701 3,490,182 $ 36,295,041 Repurchases ............................................... (1,471,349) (15,517,097) (2,023,134) (21,207,704) Redemption Fees* .......................................... -- 140 -- 3,747 Reinvestments ............................................. 352,997 3,729,573 615,292 6,458,337 ---------- ------------ ---------- ------------ Net Increase / (Decrease) ................................. (755,256) $ (7,935,683) 2,082,340 $ 21,549,421 ========== ============ ========== ============ INVESTOR CLASS Sales ..................................................... 42 $ 445 3,113 $ 33,164 Repurchases ............................................... -- -- (1,251) (12,979) Reinvestments ............................................. -- -- 59 617 ---------- ------------ ---------- ------------ Net Increase .............................................. 42 $ 445 1,921 $ 20,802 ========== ============ ========== ============ RETIREMENT CLASS Sales ..................................................... 43 $ 460 1,842 $ 20,000 Repurchases ............................................... -- -- -- -- Reinvestments ............................................. -- -- 79 823 ---------- ------------ ---------- ------------ Net Increase .............................................. 43 $ 460 1,921 $ 20,823 ========== ============ ========== ============
* There is a 1.00% redemption fee on shares redeemed which have been held 365 days or less on the BP Small Cap Value Fund II. There is a 2.00% redemption fee on shares redeemed which have been held 365 days or less on the BP Long/Short Equity Fund. The redemption fees are retained by the Funds for the benefit of the remaining shareholders and recorded as paid-in capital. The WPG Core Bond Fund has a 2.00% redemption fee on shares redeemed within 60 days of purchase. As of February 28, 2007, the following shareholders held 10% or more of the outstanding shares of the Funds. These shareholders may be omnibus accounts which are comprised of many underlying shareholders. BP Small Cap Value Fund II (4 shareholders) 73% BP Long/Short Equity Fund (3 shareholders) 70% BP Large Cap Value Fund (3 shareholders) 75% BP Mid Cap Value Fund (3 shareholders) 90% BP All-Cap Value Fund (4 shareholders) 83% WPG Small Cap Value Fund -- WPG Large Cap Growth Fund (1 shareholder) 12% WPG Core Bond Fund (4 shareholders) 68% 6. SECURITIES LENDING (WPG SMALL CAP VALUE FUND AND WPG CORE BOND FUND) At February 28, 2007, the WPG Small Cap Value Fund loaned securities valued at $5,922,181 (including accrued interest). For collateral, the WPG Small Cap Value Fund received a letter of credit from Banco Santander Bank in an amount equal to $6,000,000. At February 28, 2007, the WPG Core Bond Fund loaned securities with maturity dates ranging from 02/15/13 to 11/15/16 and interest rates ranging from 3.875% to 4.625% valued at $16,025,994 (including accrued interest). For collateral, the WPG Core Bond Fund received U.S. Treasury securities which were valued at $16,656,053. For the six month period ended February 28, 2007, the WPG Small Cap Value Fund earned $6,807 and the WPG Core Bond Fund earned $3,635 in securities lending fees, net of custodian expenses. Securities may be loaned to financial institutions, such as broker-dealers, and are required to be secured continuously by collateral in cash, cash equivalents or U.S. government securities maintained on a current basis at an amount at least equal to the market value of the securities loaned. 66 | SEMI-ANNUAL REPORT 2007 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (unaudited) (continued) 7. FEDERAL INCOME TAX INFORMATION At February 28, 2007, federal tax cost and aggregate gross unrealized appreciation and depreciation of securities held by each Fund were as follows:
NET UNREALIZED FEDERAL TAX UNREALIZED UNREALIZED APPRECIATION/ FUND COST APPRECIATION DEPRECIATION DEPRECIATION ---- ------------ ------------ ------------ ------------ BP Small Cap Value Fund II $269,455,465 $74,177,332 $(11,337,635) $62,839,697 BP Long/Short Equity Fund 63,202,005 15,331,005 (5,793,108) 9,537,897 BP Large Cap Value Fund 58,221,608 8,220,531 (479,368) 7,741,163 BP Mid Cap Value Fund 38,367,513 5,693,253 (225,329) 5,467,924 BP All-Cap Value Fund 16,303,878 2,815,146 (321,513) 2,493,633 WPG Small Cap Value Fund 49,502,534 6,851,905 (1,004,344) 5,847,561 WPG Large Cap Growth Fund 15,426,752 3,195,271 (278,028) 2,917,243 WPG Core Bond Fund 185,015,599 1,494,939 (326,421) 1,168,518
As of August 31, 2006, the components of distributable earning on a tax basis were as follows: UNDISTRIBUTED UNDISTRIBUTED ORDINARY LONG-TERM FUND INCOME GAINS ---- ----------- ------------- BP Small Cap Value Fund II $3,979,425 $38,297,165 BP Long/Short Equity Fund 4,224,746 3,311,024 BP Large Cap Value Fund 1,915,251 2,911,389 BP Mid Cap Value Fund 1,568,228 8,074,201 BP All-Cap Value Fund 180,373 967,690 WPG Small Cap Value Fund 2,048,636 2,453,128 WPG Large Cap Growth Fund 650,613 1,020,893 WPG Core Bond Fund 28,784 -- At August 31, 2006, the WPG Core Bond Fund had capital loss carryforwards of $3,212,690 available to offset future capital gains which expire in 2007 ($2,731,098) and in 2014 ($481,592). Under federal tax law, foreign currency and capital losses realized after October 31 may be deferred and treated as having arisen on the first day of the following fiscal year. For the year ended August 31, 2006, WPG Core Bond Fund expects to elect to treat post-October capital losses of $3,888,094 incurred in the period November 1, 2005 through August 31, 2006 as having been incurred in the following fiscal year. The differences between the book and tax basis components of distributable earnings relate principally to the timing of recognition of income and gains for federal income tax purposes. Short-term and foreign currency gains are reported as ordinary income for federal tax purposes. 8. NEW ACCOUNTING PRONOUNCEMENTS In July 2006, the Financial Accounting Standards Board ("FASB") issued Interpretation No. 48, "Accounting for Uncertainty in Income Taxes - an Interpretation of FASB Statement No. 109" (the "Interpretation"). The Interpretation establishes for all entities, a minimum threshold for financial statement recognition of the benefit of positions taken in filing tax returns (including whether an entity is taxable in a particular jurisdiction), and requires certain expanded tax disclosures. The Interpretation is effective for fiscal years beginning after December 15, 2006, and is required to be implemented by calendar year funds by no later than June 29, 2007. Robeco has recently begun to evaluate the application of the Interpretation to the Funds, and is not in a position at this time to estimate the significance of its impact, if any, on the Funds' financial statements. In September 2006, FASB issued Statement of Financial Accounting Standards ("SFAS") 157, Fair Value Measurements, which clarifies the definition of fair valuation and requires companies to expand their disclosure about the use of fair valuation to measure assets and liabilities in interim and annual periods subsequent to initial recognition. Adoption of SFAS 157 requires the use of the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. At this time, the Funds are in the process of reviewing the impact, if any, of the SFAS on the Funds' financial statements. SEMI-ANNUAL REPORT 2007 | 67 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (unaudited) (continued) 9. CHANGE OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM PricewaterhouseCoopers LLP ("PwC") resigned as the Funds' registered public accounting firm on November 21, 2006 due to PwC's business relationship with certain affiliates of Robeco. As a result of PwC's engagement to provide certain contemplated services to Robeco affiliates in the future, PwC will no longer be independent with respect to the Funds. On December 20, 2006, RBB, by action of the Board of Directors and upon the recommendation of its Audit Committee, engaged Ernst & Young LLP to serve as the independent registered public accounting firm to audit the Funds' financial statements for the fiscal year ending August 31, 2007. PwC's reports on the Funds' financial statements for each of the fiscal years ended August 31, 2006 and August 31, 2005 contained no adverse opinion or disclaimer of opinion nor were they qualified or modified as to uncertainty, audit scope or accounting principles. During the Funds' fiscal years ended August 31, 2006 and August 31, 2005 and the interim period September 1, 2006 through December 20, 2006, ("Interim Period"), (i) there were no disagreements with PwC on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of PwC, would have caused it to make reference to the subject matter of the disagreements in connection with its reports on the Funds' financial statements for such years, and (ii) there were no "reportable events" of the kind described in Item 304(a)(1)(v) of Regulation S-K under the Securities Exchange Act of 1934, as amended. During the Funds' fiscal year ended August 31, 2006 and August 31, 2005 and Interim Period, neither RBB, the Funds nor anyone on their behalf has consulted Ernst & Young LLP on items which (i) concerned the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Funds' financial statements or (ii) concerned the subject of a disagreement (as defined in paragraph (a)(1)(iv) of Item 304 of Regulation S-K and related instructions) or reportable events (as described in paragraph (a)(1)(v) of said Item 304). 68 | SEMI-ANNUAL REPORT 2007 ROBECO INVESTMENT FUNDS FEBRUARY 28, 2007 (unaudited) -------------------------------------------------------------------------------- OTHER INFORMATION (unaudited) PROXY VOTING Policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities as well as information regarding how the Funds voted proxies relating to portfolio securities for the most recent 12-month period ended June 30 are available without charge, upon request, by calling (888) 261-4073 and on the Securities and Exchange Commission's ("SEC") website at http://www.sec.gov. QUARTERLY PORTFOLIO SCHEDULE The Company files a complete schedule of portfolio holdings with the SEC for the first and third fiscal quarters of each fiscal year (quarters ended November 30 and May 31) on Form N-Q. The Company's Form N-Q will be available on the SEC website at http://www.sec.gov and may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. Information on the operation of the SEC Public Reference Room may be obtained by calling 1-800-SEC-0330. INVESTMENT ADVISERS --------------------------------- Robeco Investment Management Inc. 909 Third Avenue New York, NY 10022 ADMINISTRATOR ------------------ PFPC Inc. 301 Bellevue Parkway Wilmington, DE 19809 TRANSFER AGENT ----------------------- PFPC Inc. 101 Sabin Street Pawtucket, RI 02860 DISTRIBUTOR ----------------------- PFPC Distributors, Inc. 760 Moore Rd. King of Prussia, PA 19406 CUSTODIANS ----------------------- PFPC Trust Company 8800 Tinicum Blvd. Suite 200 Philadelphia, PA 19153 Boston Safe Deposit and Trust Company One Exchange Place Boston, MA 02109 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM -------------------------------------- Ernst & Young LLP Two Commerce Square 2001 Market Street, Suite 4000 Philadelphia, PA 19103 COUNSEL ---------------------------- Drinker Biddle & Reath LLP One Logan Square 18th and Cherry Streets Philadelphia, PA 19103-6996 --------- THE SCHNEIDER FUNDS --------- OF THE RBB FUND, INC. SCHNEIDER SMALL CAP VALUE FUND SCHNEIDER VALUE FUND ----------------- SEMI-ANNUAL REPORT FEBRUARY 28, 2007 (UNAUDITED) ----------------- [GRAPHIC OMITTED] -------------------------------------------------------------------------------- SCHNEIDER CAPITAL MANAGEMENT This report is submitted for the general information of the shareholders of the Funds. It is not authorized for distribution unless preceded or accompanied by a current prospectus for the Funds. THE SCHNEIDER FUNDS ANNUAL INVESTMENT ADVISER'S REPORT FEBRUARY 28, 2007 (UNAUDITED) Dear Fellow Shareholder: We are pleased to provide you with the semi-annual report for the Schneider Funds for the six months ended February 28, 2007. INVESTMENT APPROACH The investment staff at Schneider Capital Management employs fundamental research to identify both depressed companies and industries in a rough patch where the raw material exists to stage a strong earnings recovery. We typically invest in companies going through management changes or strategy shifts or that have implemented programs to reduce operating costs to improve profitability. We also invest in companies in cyclical industries when profits are depressed, but where the self-correcting forces of supply and demand can eventually stage an earnings rebound. Each holding has a price target based on our bottom-up analysis. INVESTMENT CLIMATE AND OUTLOOK U.S. equities posted healthy overall results during the reporting period, although they retreated in late February. The Russell 3000(R) Index, which represents the broad market, rose 9.8% during the period. The strong performance for U.S. stocks was influenced by continued healthy corporate profit growth in 2006, although a weaker picture for 2007 appears to have dampened some enthusiasm. The period ended with a late-February sell-off amid accumulating worries that the slumping housing sector and subprime mortgage mess might become a serious drag on the broader economy. Corporate profit growth has risen sharply during the past five years, especially in many cyclical industries, leading to historically high margins and returns on capital. We believe those outsized gains will measurably slow in 2007, with growth decelerating to the mid single-digits. While investors are digesting this unpleasant news, a downshifting in the economy and corporate profits might deliver the tame inflation data and softness in employment that gives the Fed room to start a modest easing of rates later in the year. SCHNEIDER SMALL CAP VALUE FUND - INVESTMENT REVIEW AND PORTFOLIO STRATEGY The Small Cap Value Fund produced favorable results during the six months ended February 28, 2007, returning 18.9% versus 10.4% for the benchmark Russell 2000(R) Value Index. Since inception on September 2, 1998, the Fund has produced exceptionally strong long-term performance relative to the benchmark (see table on page 3). A number of the Fund's non-financial holdings made a favorable contribution to returns during the period. We were able to identify companies that are in restructuring mode such as Hudson Highland Group and American Axle. We also experienced success in several industries that will benefit from a cyclical upturn in the midst of an overall slowdown in corporate profit growth, such as commercial aerospace, agricultural machinery and semiconductor capital equipment. The Fund's positioning is little changed from six months ago. There is a significant weighting in financials that are temporarily impacted by the inverted yield curve and weakness in mortgage finance, and a creative effort to uncover individual company opportunities where profits are depressed, investor expectations are low, and the potential exists for significant business improvement. The Fund has minimal exposure to industrial commodities and oil & gas, which in our judgment are unappealing from both a valuation perspective and business outlook. 1 THE SCHNEIDER FUNDS ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED) FEBRUARY 28, 2007 (UNAUDITED) SCHNEIDER VALUE FUND - INVESTMENT REVIEW AND PORTFOLIO STRATEGY Results for the Value Fund exceeded the benchmark during the six months ended February 28, 2007, returning 15.0% versus 9.8% for the Russell 1000(R) Value Index. Since inception on September 30, 2002, the Fund's performance compares very favorably to the benchmark (see table on page 4). Investments in diverse industries contributed to the favorable returns. Long-time holdings Reliant Energy and Navistar International staged a strong rebound. There appears to be greater confidence in their long-term business prospects, and investors have taken note of their attractive valuations. Farm equipment manufacturer AGCO has a promising long-term business outlook. The company has the largest market share in the rapidly growing Brazilian market, which should begin to recover soon from its current slump. AGCO is also working on a number of cost-cutting opportunities inside their European operations. In addition, the fairly tight supply conditions in global grain markets are favorable for future demand for agricultural equipment. We established a significant position in coal producers during the period. Last year's cool summer and warm winter, among other factors, contributed to excess supplies and plummeting coal prices. We believe the bad news is largely reflected in the companies' depressed earnings and stock prices. Recent production cuts should eventually lead to a drawdown in inventories and improved pricing. Coal is well positioned in the next few years to gain market share. It is cost competitive versus natural gas, and it enjoys the advantage of huge domestic reserves while neither nuclear nor hydro power can ramp up to satisfy demand growth. A number of utilities plan to build new coal-fired power plants, which should maintain coal's appeal. The Fund is modestly underweighted in financials relative to the benchmark index. However, we believe there are promising opportunities in select sub-sectors where profits are under pressure from the inverted yield curve and weakness in mortgage underwriting. Fund holdings are oriented toward higher-quality and well-capitalized firms that we believe can successfully weather the current housing and mortgage slump. We appreciate the confidence you have placed in us to manage your assets. /s/ Arnold C. Schneider III --------------------------------------------- Arnold C. Schneider III, CFA Chief Investment Officer & Portfolio Manager Schneider Capital Management 2 THE SCHNEIDER FUNDS SCHNEIDER SMALL CAP VALUE FUND ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED) FEBRUARY 28, 2007 (UNAUDITED) Comparison of Change in Value of $10,000 Investment in Schneider Small Cap Value Fund vs. Russell 2000(R) Value IndeX [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA USED IN PRINTED GRAPHIC AS FOLLOWS: Schneider Small Cap Value Fund Russell 2000(R) Value Index ------------------------------ ---------------------------- 9/2/98 $10,000 $10,000 9/30/98 10,000 10,363 10/31/98 11,930 10,670 11/30/98 12,410 10,959 12/31/98 12,471 11,303 1/31/99 13,786 11,046 2/28/99 12,531 10,292 3/31/99 13,007 10,207 4/30/99 15,222 11,139 5/31/99 16,233 11,481 6/30/99 18,044 11,897 7/31/99 18,731 11,615 8/31/99 18,246 11,190 9/30/99 17,518 10,966 10/31/99 16,759 10,747 11/30/99 17,457 10,803 12/31/99 18,341 11,134 1/31/00 17,833 10,843 2/29/00 18,069 11,506 3/31/00 19,392 11,560 4/30/00 19,392 11,628 5/31/00 19,770 11,451 6/30/00 19,841 11,786 7/31/00 19,734 12,178 8/31/00 20,750 12,723 9/30/00 20,845 12,651 10/31/00 20,490 12,606 11/30/00 19,416 12,349 12/31/00 21,495 13,676 1/31/01 24,178 14,053 2/28/01 23,127 14,034 3/31/01 22,034 13,809 4/30/01 23,326 14,448 5/31/01 24,547 14,820 6/30/01 25,101 15,416 7/31/01 24,874 15,070 8/31/01 24,888 15,018 9/30/01 20,856 13,360 10/31/01 21,864 13,709 11/30/01 23,951 14,694 12/31/01 25,657 15,594 1/31/02 25,477 15,801 2/28/02 25,447 15,897 3/31/02 28,415 17,088 4/30/02 29,389 17,689 5/31/02 29,089 17,104 6/30/02 27,785 16,725 7/31/02 22,825 14,240 8/31/02 22,210 14,177 9/30/02 19,767 13,164 10/31/02 19,887 13,362 11/30/02 23,484 14,429 12/31/02 21,848 13,812 1/31/03 20,912 13,423 2/28/03 20,293 12,972 3/31/03 20,127 13,111 4/30/03 23,011 14,356 5/31/03 26,665 15,822 6/30/03 27,314 16,090 7/31/03 30,469 16,892 8/31/03 34,003 17,534 9/30/03 33,202 17,333 10/31/03 38,366 18,746 11/30/03 42,292 19,466 12/31/03 45,017 20,170 1/31/04 46,405 20,867 2/29/04 47,518 21,271 3/31/04 47,743 21,565 4/30/04 46,114 20,450 5/31/04 46,388 20,697 6/30/04 48,985 21,748 7/31/04 47,340 20,748 8/31/04 46,921 20,952 9/30/04 48,469 21,781 10/31/04 48,582 22,119 11/30/04 54,082 24,081 12/31/04 57,277 24,657 1/31/05 54,010 23,702 2/28/05 56,089 24,174 3/31/05 54,851 23,676 4/30/05 50,420 22,454 5/31/05 54,010 23,824 6/30/05 56,980 24,877 7/31/05 62,104 26,293 8/31/05 61,732 25,688 9/30/05 62,128 25,644 10/31/05 60,223 25,001 11/30/05 62,079 26,016 12/31/05 62,904 25,815 1/31/06 66,116 27,950 2/28/06 67,752 27,947 3/31/06 71,933 29,300 4/30/06 72,418 29,379 5/31/06 68,812 28,163 6/30/06 68,176 28,509 7/31/06 65,328 28,113 8/31/06 66,540 28,953 9/30/06 68,509 29,237 10/31/06 71,449 30,725 11/30/06 75,660 31,601 12/31/06 76,162 31,876 1/31/07 78,905 32,354 2/28/07 79,116 31,956 The chart assumes a hypothetical $10,000 initial investment in the Fund made on September 2, 1998 (inception) and reflects Fund expenses. Investors should note that the Fund is a professionally managed mutual fund while the Russell 2000(R) Value Index is unmanaged, does not incur sales charges and/or expenses and is not available for investment. -------------------------------------------------------------------------------- Total Returns For the Period Ended February 28, 2007 AVERAGE ANNUAL ----------------------- SIX SINCE MONTHS ONE YEAR FIVE YEARS INCEPTION* -------- -------- ------------ ---------- SCHNEIDER SMALL CAP VALUE 18.90% 16.77% 25.48% 27.58% RUSSELL (2000)(R) VALUE INDEX 9.30% 14.34% 14.99% 14.65% * Inception date: 9/2/98 -------------------------------------------------------------------------------- THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE. 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. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER. SCHNEIDER CAPITAL MANAGEMENT CONTRACTUALLY AGREED TO WAIVE A PORTION OF ITS ADVISORY FEE AND REIMBURSE A PORTION OF THE FUND'S OPERATING EXPENSES, AS NECESSARY, TO MAINTAIN THE EXPENSE LIMITATION, AS SET FORTH IN THE NOTES TO THE FINANCIAL STATEMENTS. TOTAL RETURNS SHOWN INCLUDE FEE WAIVERS AND EXPENSE REIMBURSEMENTS, IF ANY; TOTAL RETURNS WOULD HAVE BEEN LOWER HAD THERE BEEN NO WAIVER OR REIMBURSEMENT OF FEES AND EXPENSES IN EXCESS OF EXPENSE LIMITATIONS. RETURNS SHOWN INCLUDE THE REINVESTMENT OF ALL DIVIDENDS AND OTHER DISTRIBUTIONS AND DO NOT REFLECT TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR ON THE REDEMPTION OF FUND SHARES. THE FUND HAS EXPERIENCED RELATIVELY HIGH PERFORMANCE WHICH MAY NOT BE REPEATED. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH-END, PLEASE CALL 1-888-520-3277. THE FUND'S GROSS ANNUAL OPERATING EXPENSES, AS STATED IN THE CURRENT PROSPECTUS IS 1.56%. The Fund's annualized total return since inception is based on an increase in net asset value from $10.00 per share on September 2, 1998 (inception) to $22.50 per share on February 28, 2007, adjusted for dividends and distributions totaling $28.54 per share paid from net investment income and realized gains. Small company stocks are generally riskier than large company stocks due to greater volatility and less liquidity. Portfolio composition is subject to change. 3 THE SCHNEIDER FUNDS SCHNEIDER VALUE FUND ANNUAL INVESTMENT ADVISER'S REPORT (CONCLUDED) FEBRUARY 28, 2007 (UNAUDITED) Comparison of Change in Value of $10,000 Investment in Schneider Value Fund vs. Russell 1000(R) Value Index [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA USED IN PRINTED GRAPHIC AS FOLLOWS: Schneider Small Cap Value Fund Russell 1000(R) Value Index ------------------------------ ---------------------------- 30-Sep-02 $10,000 $10,000 10/31/02 10,660 10,620 11/30/02 11,950 11,289 12/31/02 11,237 10,799 1/31/03 10,636 10,537 2/28/03 10,566 10,256 3/31/03 10,796 10,274 4/30/03 11,638 11,178 5/31/03 13,042 11,899 6/30/03 13,252 12,048 7/31/03 13,984 12,228 8/31/03 14,846 12,418 9/30/03 14,495 12,297 10/31/03 15,628 13,049 11/30/03 16,430 13,226 12/31/03 17,738 14,042 1/31/04 18,396 14,289 2/29/04 18,929 14,595 3/31/04 18,950 14,467 4/30/04 18,438 14,114 5/31/04 19,044 14,258 6/30/04 19,775 14,594 7/31/04 19,023 14,389 8/31/04 19,034 14,594 9/30/04 19,431 14,820 10/31/04 19,713 15,066 11/30/04 21,290 15,828 12/31/04 22,123 16,358 1/31/05 21,305 16,067 2/28/05 21,769 16,599 3/31/05 21,647 16,372 4/30/05 20,354 16,079 5/31/05 21,481 16,466 6/30/05 22,067 16,645 7/31/05 22,897 17,127 8/31/05 22,720 17,053 9/30/05 22,742 17,292 10/31/05 21,913 16,852 11/30/05 22,576 17,403 12/31/05 23,102 17,510 1/31/06 23,495 18,189 2/28/06 23,900 18,300 3/31/06 24,530 18,547 4/30/06 25,542 19,018 5/31/06 24,971 18,537 6/30/06 25,054 18,656 7/31/06 24,435 19,109 8/31/06 25,185 19,428 9/30/06 26,006 19,815 10/31/06 26,887 20,463 11/30/06 28,160 20,929 12/31/06 28,494 21,400 1/31/07 29,094 21,674 2/28/07 28,969 21,336 The chart assumes a hypothetical $10,000 initial investment in the Fund made on September 30, 2002 (inception) and reflects Fund expenses. Investors should note that the Fund is a professionally managed mutual fund while the Russell 1000(R) Value Index is unmanaged, does not incur sales charges and/or expenses and is not available for investment. -------------------------------------------------------------------------------- Total Returns For the Period Ended February 28, 2007 AVERAGE ANNUAL ---------------- SIX SINCE MONTHS ONE YEAR INCEPTION* -------- -------- ------------- SCHNEIDER VALUE 15.03% 21.21% 27.25% RUSSELL (1000)(R) VALUE INDEX 7.68% 16.61% 18.72% * Inception date: 9/30/02 -------------------------------------------------------------------------------- THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE. 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. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER. SCHNEIDER CAPITAL MANAGEMENT CONTRACTUALLY AGREED TO WAIVE A PORTION OF ITS ADVISORY FEE AND REIMBURSE A PORTION OF THE FUND'S OPERATING EXPENSES, AS NECESSARY, TO MAINTAIN THE EXPENSE LIMITATION, AS SET FORTH IN THE NOTES TO THE FINANCIAL STATEMENTS. TOTAL RETURNS SHOWN INCLUDE FEE WAIVERS AND EXPENSE REIMBURSEMENTS, IF ANY; TOTAL RETURNS WOULD HAVE BEEN LOWER HAD THERE BEEN NO WAIVER OR REIMBURSEMENT OF FEES AND EXPENSES IN EXCESS OF EXPENSE LIMITATIONS. RETURNS SHOWN INCLUDE THE REINVESTMENT OF ALL DIVIDENDS AND OTHER DISTRIBUTIONS AND DO NOT REFLECT TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR ON THE REDEMPTION OF FUND SHARES. THE FUND HAS EXPERIENCED RELATIVELY HIGH PERFORMANCE WHICH MAY NOT BE REPEATED. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH-END, PLEASE CALL 1-888-520-3277. THE FUND'S GROSS ANNUAL OPERATING EXPENSES, AS STATED IN THE CURRENT PROSPECTUS IS 1.27%. The Fund's aggregate total return since inception is based on an increase in net asset value from $10.00 per share on September 30, 2002 (inception) to $23.16 per share on February 27, 2007, adjusted for dividends and distributions totaling $4.50 per share paid from net investment income and realized gains. Portfolio composition is subject to change. 4 SCHNEIDER CAPITAL MANAGEMENT FUND EXPENSE EXAMPLES (UNAUDITED) As a shareholder of the Fund(s), you incur two types of costs: (1) transaction costs, including redemption fees; and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund(s) and to compare these costs with the ongoing costs of investing in other mutual funds. These examples are based on an investment of $1,000 invested at the beginning of the six-month period from September 1, 2006 through February 28, 2007, and held for the entire period. ACTUAL EXPENSES The first line of the accompanying tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second line of the accompanying tables provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not your Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare these 5% hypothetical examples with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that the expenses shown in the accompanying tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees. Therefore, the second line of the accompanying tables is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. 5 SCHNEIDER CAPITAL MANAGEMENT FUND EXPENSE EXAMPLES (CONCLUDED) (UNAUDITED)
SCHNEIDER SMALL CAP VALUE FUND --------------------------------------------------------------------- BEGINNING ACCOUNT VALUE ENDING ACCOUNT VALUE EXPENSES PAID SEPTEMBER 1, 2006 FEBRUARY 28, 2007 DURING PERIOD* ------------------------- --------------------- ----------------- Actual $1,000.00 $ 1,189.00 $5.97 Hypothetical (5% return before expenses) 1,000.00 1,019.27 5.52
SCHNEIDER VALUE FUND --------------------------------------------------------------------- BEGINNING ACCOUNT VALUE ENDING ACCOUNT VALUE EXPENSES PAID SEPTEMBER 1, 2006 FEBRUARY 28, 2007 DURING PERIOD* ------------------------- --------------------- ----------------- Actual $1,000.00 $1,150.30 $4.53 Hypothetical (5% return before expenses) 1,000.00 1,020.53 4.27
* Expenses are equal to an annualized expense ratio of 1.10% for the Schneider Small Cap Value Fund and 0.85% for the Schneider Value Fund, which includes waived fees or reimbursed expenses, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year (181), then divided by 365 to reflect the one-half year period. The Fund's ending account values on the first line in each table are based on the actual total return for each Fund of 18.90% for the Schneider Small Cap Value Fund and 15.03% for the Schneider Value Fund. 6 THE SCHNEIDER FUNDS SCHNEIDER SMALL CAP VALUE FUND PORTFOLIO HOLDINGS SUMMARY TABLE FEBRUARY 28, 2007 (UNAUDITED) % OF NET ASSETS VALUE ------- ------------ Domestic Common Stocks: Real Estate Investment Trust .............. 13.9% $ 17,118,986 Energy & Utilities ........................ 6.9% 8,520,880 Banks ..................................... 6.5% 8,093,925 Computer Software ......................... 5.6% 6,869,041 Semiconductors & Related .................. 3.6% 4,472,096 Manufacturing ............................. 3.5% 4,335,680 Pipes Lines (No Natural Gas) .............. 3.4% 4,157,505 Semiconductor Equipment ................... 3.1% 3,826,500 Aerospace & Defense ....................... 2.9% 3,529,825 Savings & Loan Associations ............... 2.7% 3,324,051 Transportation ............................ 2.6% 3,257,952 Insurance ................................. 2.4% 2,979,653 Manufactured Housing ...................... 2.3% 2,854,060 Automobile Parts & Equipment .............. 2.1% 2,611,261 Real Estate ............................... 1.8% 2,280,999 Retail - Specialty Stores ................. 1.8% 2,257,188 Farm Machinery & Equipment ................ 1.8% 2,256,562 Residential Construction .................. 1.7% 2,080,959 Computer Components ....................... 1.5% 1,797,892 Electrical Work ........................... 1.4% 1,702,106 Healthcare ................................ 1.3% 1,623,601 Homebuilding .............................. 1.3% 1,620,694 Restaurants ............................... 1.3% 1,556,891 Electronic Components ..................... 1.2% 1,460,414 Distributors .............................. 1.2% 1,448,543 Airlines .................................. 1.1% 1,415,036 Property & Casualty Insurance ............. 1.1% 1,398,316 Food-Meat Processing ...................... 1.0% 1,185,628 Schools ................................... 1.0% 1,184,355 Leisure & Entertainment ................... 0.9% 1,165,238 Aircraft Parts & Auxiliary Equipment ............................... 0.9% 1,151,275 Electronics ............................... 0.9% 1,053,773 Services - Computer Processing & Data Preparation ........................ 0.8% 1,024,361 Footwear .................................. 0.7% 924,488 Internet Software ......................... 0.7% 906,372 Fertilizers ............................... 0.6% 801,806 Health Care Equipment ..................... 0.6% 723,087 Home Furnishings .......................... 0.6% 710,572 % OF NET ASSETS VALUE ------- ------------ Diversified ............................... 0.3% $ 414,740 Household Products ........................ 0.3% 315,637 Paper & Forestry Products ................. 0.2% 230,798 Food ...................................... 0.2% 208,343 Technology ................................ 0.1% 144,372 Temporary Investment ........................ 8.9% 10,961,879 Exchange Traded Fund ........................ 2.5% 3,048,903 Mexican Common Stocks: Broadcasting & Cable Television ........... 0.3% 385,599 Liabilities In Excess of Other Assets .............................. (1.5)% (1,827,102) ----- ------------ NET ASSETS .................................. 100.0% $123,564,740 ===== ============ The accompanying notes are an integral part of the financial statements. 7 THE SCHNEIDER FUNDS SCHNEIDER VALUE FUND PORTFOLIO HOLDINGS SUMMARY TABLE FEBRUARY 28, 2007 (UNAUDITED) % OF NET ASSETS VALUE ------- ------------ Domestic Common Stocks: Financial Services ........................ 18.0% $ 51,020,611 Energy & Utilities ........................ 13.4% 38,149,595 Computers, Software & Servicing ............................... 4.4% 12,584,885 Homebuilding .............................. 4.2% 12,017,368 Manufacturing ............................. 4.0% 11,461,457 Medical & Medical Services ................ 3.9% 11,052,784 Insurance ................................. 3.9% 10,901,609 Farm Machinery & Equipment ................ 3.1% 8,877,625 Real Estate Investment Trust .............. 2.8% 7,993,152 Industrial Goods & Materials .............. 2.7% 7,762,994 Aerospace & Defense ....................... 2.7% 7,721,958 Property & Casualty Insurance ............. 2.6% 7,448,767 Electronic Components & Accessories ............................. 2.4% 6,875,485 Radio Broadcasting ........................ 2.4% 6,855,105 Broadcasting & Cable Television ........... 2.2% 6,073,148 Telecommunications & Equipment ............................... 2.1% 5,992,659 Semiconductors & Related .................. 1.4% 3,988,341 Banks ..................................... 1.3% 3,630,808 Metals & Mining ........................... 1.3% 3,598,056 Automobile Parts & Equipment .............. 1.1% 3,212,611 Transportation ............................ 1.1% 3,157,688 Retail - Consumer Electronics Stores .................................... 1.0% 2,828,059 Food ...................................... 1.0% 2,668,940 Leisure & Entertainment ................... 0.8% 2,273,420 Chemicals - Specialty ..................... 0.7% 1,854,301 Electronic Components ..................... 0.7% 1,831,644 Mining Quarrying Nonmetallic .............. 0.6% 1,801,449 Surety Insurance .......................... 0.5% 1,444,868 Paper & Forestry Products ................. 0.1% 282,768 Airlines .................................. 0.1% 272,340 Temporary Investment ........................ 9.4% 26,635,655 Exchange Traded Fund ........................ 3.3% 9,274,862 Canadian Common Stocks ...................... 1.3% 3,765,000 Preferred Stocks ............................ 0.2% 733,222 Liabilities In Excess of Other Assets ....... (0.7)% (2,008,489) ---- ------------ NET ASSETS .................................. 100.0% $284,034,745 ===== ============ The accompanying notes are an integral part of the financial statements. 8 THE SCHNEIDER FUNDS SCHNEIDER SMALL CAP VALUE FUND PORTFOLIO OF INVESTMENTS FEBRUARY 28, 2007 (UNAUDITED) SHARES VALUE -------- ------------ DOMESTIC COMMON STOCKS -- 89.8% AEROSPACE & DEFENSE -- 2.9% AAR Corp.* ....................................... 114,880 $ 3,344,157 BE Aerospace, Inc.* .............................. 6,150 185,668 ------------ 3,529,825 ------------ AIRCRAFT PARTS & AUXILIARY EQUIPMENT -- 0.9% Triumph Group, Inc. .............................. 21,475 1,151,275 ------------ AIRLINES -- 1.1% AirTran Holdings, Inc.* .......................... 135,800 1,415,036 ------------ AUTOMOBILE PARTS & EQUIPMENT -- 2.1% American Axle & Manufacturing Holdings, Inc. ................................. 96,150 2,358,560 Visteon Corp.* ................................... 29,625 252,701 ------------ 2,611,261 ------------ BANKS -- 6.5% First BanCorp .................................... 471,875 5,634,187 W. Holding Co., Inc. ............................. 460,625 2,459,738 ------------ 8,093,925 ------------ COMPUTER COMPONENTS -- 1.5% Silicon Storage Technology, Inc.* ................ 339,225 1,797,892 ------------ COMPUTER SOFTWARE -- 5.6% Dendrite International, Inc.* .................... 42,850 545,909 Insight Enterprises, Inc.* ....................... 46,975 907,557 Internet Capital Group, Inc.* .................... 182,000 2,082,080 Take-Two Interactive Software, Inc.* ............. 187,275 3,333,495 ------------ 6,869,041 ------------ DISTRIBUTORS -- 1.2% Building Materials Holding Corp. ................. 69,675 1,448,543 ------------ DIVERSIFIED -- 0.3% Viad Corp. ....................................... 11,125 414,740 ------------ ELECTRICAL WORK -- 1.4% Integrated Electrical Services, Inc.* ............ 72,584 1,702,106 ------------ ELECTRONIC COMPONENTS -- 1.2% Celestica, Inc.* ................................. 232,550 1,460,414 ------------ ELECTRONICS -- 0.9% Curtiss-Wright Corp. ............................. 30,125 1,053,773 ------------ SHARES VALUE -------- ------------ ENERGY & UTILITIES -- 6.9% Massey Energy Co. ................................ 99,150 $ 2,405,379 Reliant Energy, Inc.* ............................ 361,650 6,115,501 ------------ 8,520,880 ------------ FARM MACHINERY & EQUIPMENT -- 1.8% AGCO Corp.* ...................................... 62,250 2,256,562 ------------ FERTILIZERS -- 0.6% LESCO, Inc.* ..................................... 55,875 801,806 ------------ FOOD -- 0.2% Interstate Bakeries Corp.* ....................... 32,650 109,541 Lance, Inc. ...................................... 4,950 98,802 ------------ 208,343 ------------ FOOD-MEAT PROCESSING -- 1.0% Sanderson Farms, Inc. ............................ 36,650 1,185,628 ------------ FOOTWEAR -- 0.7% Barry (R.G.) Corp.* .............................. 103,875 924,488 ------------ HEALTHCARE -- 1.3% Amedisys, Inc.* .................................. 32,900 1,052,142 Matria Healthcare, Inc.* ......................... 22,525 571,459 ------------ 1,623,601 ------------ HEALTHCARE EQUIPMENT -- 0.6% American Medical Systems Holdings, Inc. ................................. 35,550 723,087 ------------ HOME FURNISHINGS -- 0.6% Furniture Brands International, Inc. ............. 44,300 710,572 ------------ HOMEBUILDING -- 1.3% Standard-Pacific Corp. ........................... 57,200 1,460,316 Technical Olympic USA, Inc. ...................... 17,800 160,378 ------------ 1,620,694 ------------ HOUSEHOLD PRODUCTS -- 0.3% Central Garden and Pet Co.* ...................... 7,350 102,533 Central Garden and Pet Co., Class A* ............. 15,200 213,104 ------------ 315,637 ------------ INSURANCE -- 2.4% Assured Guaranty, Ltd. ........................... 11,125 314,838 IPC Holdings, Ltd. ............................... 17,525 509,276 The accompanying notes are an integral part of the financial statements. 9 THE SCHNEIDER FUNDS SCHNEIDER SMALL CAP VALUE FUND PORTFOLIO OF INVESTMENTS (CONTINUED) FEBRUARY 28, 2007 (UNAUDITED) SHARES VALUE -------- ------------ INSURANCE -- CONTINUED ProAssurance Corp.* .............................. 30,406 $ 1,565,909 Ram Holdings, Ltd. ............................... 35,975 589,630 ------------ 2,979,653 ------------ INTERNET SOFTWARE -- 0.7% Openwave Systems, Inc.* .......................... 111,075 906,372 ------------ LEISURE & ENTERTAINMENT -- 0.9% Nautilus, Inc. ................................... 67,550 1,165,238 ------------ MANUFACTURED HOUSING -- 2.3% Champion Enterprises, Inc.* ...................... 46,825 371,322 Fleetwood Enterprises, Inc.* ..................... 267,825 2,482,738 ------------ 2,854,060 ------------ MANUFACTURING -- 3.5% Griffon Corp.* ................................... 29,600 695,304 Navistar International Corp.* .................... 89,775 3,640,376 ------------ 4,335,680 ------------ PAPER & FORESTRY PRODUCTS -- 0.2% Neenah Paper, Inc. ............................... 4,575 169,733 Norbord, Inc. .................................... 6,900 61,065 ------------ 230,798 ------------ PIPES LINES (NO NATURAL GAS) -- 3.4% Hudson Highland Group, Inc.* ..................... 255,375 4,157,505 ------------ PROPERTY & CASUALTY INSURANCE -- 1.1% Employers Holdings, Inc.* ........................ 8,950 182,580 Landamerica Financial Group, Inc. ................ 17,475 1,215,736 ------------ 1,398,316 ------------ REAL ESTATE -- 1.8% MI Developments, Inc., Class A ................... 61,950 2,280,999 ------------ REAL ESTATE INVESTMENT TRUST -- 13.9% American Home Mortgage Investment Corp. ............................... 229,775 6,284,346 Anworth Mortgage Asset Corp. ..................... 613,625 5,455,126 Arbor Realty Trust, Inc. ......................... 28,775 885,982 Luminent Mortgage Capital, Inc. .................. 283,600 2,614,792 Maguire Properties, Inc. ......................... 10,350 404,271 Republic Property Trust .......................... 86,950 1,019,924 SHARES VALUE -------- ------------ REAL ESTATE INVESTMENT TRUST -- CONTINUED Winthrop Realty Trust ............................ 68,250 $ 454,545 ------------ 17,118,986 ------------ RESIDENTIAL CONSTRUCTION -- 1.7% WCI Communities, Inc.* ........................... 99,950 2,080,959 ------------ RESTAURANTS -- 1.3% Triarc Companies, Inc., Class A* ................. 86,350 1,556,891 ------------ RETAIL - SPECIALTY STORES -- 1.8% Eddie Bauer Holdings, Inc.* ...................... 18,050 159,201 MarineMax, Inc.* ................................. 48,375 1,102,950 Sonic Automotive, Inc. Class A ................... 1,350 39,690 Stein Mart, Inc. ................................. 65,750 955,347 ------------ 2,257,188 ------------ SAVINGS & LOAN ASSOCIATIONS -- 2.7% First Niagara Financial Group, Inc. .............. 63,000 894,600 FirstFed Financial Corp.* ........................ 12,850 735,020 Flagstar Bancorp, Inc. ........................... 53,200 736,288 Partners Trust Financial Group, Inc. ............. 20,725 235,021 Provident Financial Services, Inc. ............... 15,450 271,302 Washington Federal, Inc. ......................... 19,000 451,820 ------------ 3,324,051 ------------ SCHOOLS -- 1.0% Corinthian Colleges, Inc.* ....................... 84,900 1,184,355 ------------ SEMICONDUCTOR EQUIPMENT -- 3.1% Alliance Semiconductor Corp.* .................... 214,325 938,744 Axcelis Technologies, Inc.* ...................... 49,375 359,450 BE Semiconductor Industries N.V.* ................ 386,668 2,528,306 ------------ 3,826,500 ------------ SEMICONDUCTORS & RELATED -- 3.6% ASM International N.V.* .......................... 110,200 2,534,600 STATS ChipPAC, Ltd. -- ADR* ...................... 151,225 1,462,346 ZiLOG, Inc.* ..................................... 111,800 475,150 ------------ 4,472,096 ------------ SERVICES - COMPUTER PROCESSING & DATA PREPARATION -- 0.8% Source Interlink Companies, Inc.* ................ 142,075 1,024,361 ------------ The accompanying notes are an integral part of the financial statements. 10 THE SCHNEIDER FUNDS SCHNEIDER SMALL CAP VALUE FUND PORTFOLIO OF INVESTMENTS (CONCLUDED) FEBRUARY 28, 2007 (UNAUDITED) SHARES VALUE -------- ------------ TECHNOLOGY -- 0.1% Mercury Computer Systems, Inc.* .................. 11,350 $ 144,372 ------------ TRANSPORTATION -- 2.6% Aegean Marine Petroleum Network, Inc.* ................................. 30,850 472,005 Alexander & Baldwin, Inc. ........................ 26,500 1,309,630 Florida East Coast, Inc. ......................... 7,250 441,162 Genesee & Wyoming, Inc.* ......................... 39,875 1,035,155 ------------ 3,257,952 ------------ TOTAL DOMESTIC COMMON STOCKS (Cost $95,073,882) ............................ 110,995,461 ------------ MEXICAN COMMON STOCKS -- 0.3% BROADCASTING & CABLE TELEVISION -- 0.3% TV Azteca, S.A. de C.V ........................... 480,900 385,599 ------------ TOTAL MEXICAN COMMON STOCKS (Cost $231,133) ............................... 385,599 ------------ EXCHANGE TRADED FUND -- 2.5% FINANCE -- 2.5% iShares Russell 2000 Value Index Fund ..................................... 37,950 3,048,903 ------------ TOTAL EXCHANGE TRADED FUND (Cost $2,986,357) ............................. 3,048,903 ------------ TEMPORARY INVESTMENT -- 8.9% PNC Bank Money Market Account - 4.90%, 03/01/07 ........................ 10,961,879 10,961,879 ------------ TOTAL TEMPORARY INVESTMENT (Cost $10,961,879) ............................ 10,961,879 ------------ TOTAL INVESTMENTS -- 101.5% (Cost $109,253,251) ........................... 125,391,842 ------------ LIABILITIES IN EXCESS OF OTHER ASSETS -- (1.5)% ............................... (1,827,102) ------------ NET ASSETS -- 100.0% ............................. $123,564,740 ============ * Non-income producing. ADR -- American Depository Receipt. The accompanying notes are an integral part of the financial statements. 11 THE SCHNEIDER FUNDS SCHNEIDER VALUE FUND PORTFOLIO OF INVESTMENTS FEBRUARY 28, 2007 (UNAUDITED) SHARES VALUE -------- ------------ DOMESTIC COMMON STOCKS -- 86.5% AEROSPACE & DEFENSE -- 2.7% Boeing Co., (The) ................................ 52,400 $ 4,572,948 Goodrich Corp. ................................... 64,200 3,149,010 ------------ 7,721,958 ------------ AIRLINES -- 0.1% Southwest Airlines Co. ........................... 18,000 272,340 ------------ AUTOMOBILE PARTS & EQUIPMENT -- 1.1% Visteon Corp.* ................................... 376,625 3,212,611 ------------ BANKS -- 1.3% Capital One Financial Corp. ...................... 31,075 2,395,261 Hudson City Bancorp, Inc. ........................ 92,205 1,235,547 ------------ 3,630,808 ------------ BROADCASTING & CABLE TELEVISION -- 2.2% Liberty Global, Inc., Series C* .................. 38,373 1,046,048 Liberty Media Holding Corp. - Capital, Series A* ............................. 46,599 5,027,100 ------------ 6,073,148 ------------ CHEMICALS - SPECIALTY -- 0.7% Cytec Industries, Inc. ........................... 31,525 1,854,301 ------------ COMPUTERS, SOFTWARE & SERVICING -- 4.4% BearingPoint, Inc.* .............................. 487,370 3,898,960 Dell, Inc.* ...................................... 380,128 8,685,925 ------------ 12,584,885 ------------ ELECTRONIC COMPONENTS -- 0.7% Celestica, Inc.* ................................. 291,663 1,831,644 ------------ ELECTRONIC COMPONENTS & ACCESSORIES -- 2.4% AU Optronics Corp. ............................... 485,900 6,875,485 ------------ ENERGY & UTILITIES -- 13.4% CONSOL Energy, Inc. .............................. 248,800 8,874,696 Massey Energy Co. ................................ 389,218 9,442,428 Reliant Energy, Inc.* ............................ 1,172,825 19,832,471 ------------ 38,149,595 ------------ SHARES VALUE -------- ------------ FARM MACHINERY & EQUIPMENT -- 3.1% AGCO Corp.* ...................................... 244,900 $ 8,877,625 ------------ FINANCIAL SERVICES -- 18.0% Countrywide Financial Corp. ...................... 366,850 14,043,018 Fannie Mae ....................................... 242,350 13,748,515 Freddie Mac ...................................... 96,950 6,222,251 IndyMac Bancorp, Inc. ............................ 127,550 4,378,792 JPMorgan Chase & Co. ............................. 238,950 11,804,130 Washington Mutual, Inc. .......................... 19,125 823,905 ------------ 51,020,611 ------------ FOOD -- 1.0% Smithfield Foods, Inc.* .......................... 15,100 441,071 Tyson Foods, Inc. ................................ 122,075 2,227,869 ------------ 2,668,940 ------------ HOMEBUILDING -- 4.2% Centex Corp. ..................................... 141,530 6,561,331 Pulte Homes, Inc. ................................ 184,575 5,456,037 ------------ 12,017,368 ------------ INDUSTRIAL GOODS & MATERIALS -- 2.7% Tyco International Ltd. .......................... 251,800 7,762,994 ------------ INSURANCE -- 3.9% Genworth Financial, Inc., Class A ................ 190,275 6,730,027 RenaissanceRe Holdings, Ltd. ..................... 55,025 2,821,682 Unum Group ....................................... 63,050 1,349,900 ------------ 10,901,609 ------------ LEISURE & ENTERTAINMENT -- 0.8% Carnival Corp. ................................... 48,975 2,273,420 ------------ MANUFACTURING -- 4.0% Navistar International Corp.* .................... 282,650 11,461,457 ------------ MEDICAL & MEDICAL SERVICES -- 3.9% Boston Scientific Corp.* ......................... 84,750 1,382,272 Omnicare, Inc. ................................... 232,800 9,670,512 ------------ 11,052,784 ------------ The accompanying notes are an integral part of the financial statements. 12 THE SCHNEIDER FUNDS SCHNEIDER VALUE FUND PORTFOLIO OF INVESTMENTS (CONCLUDED) FEBRUARY 28, 2007 (UNAUDITED) SHARES VALUE -------- ------------ METALS & MINING -- 1.3% Cameco Corp. ..................................... 97,350 $ 3,598,056 ------------ MINING QUARRYING NONMETALLIC -- 0.6% Arch Coal, Inc. .................................. 57,850 1,801,449 ------------ PAPER & FORESTRY PRODUCTS -- 0.1% Louisiana-Pacific Corp. .......................... 13,700 282,768 ------------ PROPERTY & CASUALTY INSURANCE -- 2.6% Fidelity National Financial, Inc. ................ 18,330 439,920 First American Corp. ............................. 148,650 7,008,847 ------------ 7,448,767 ------------ RADIO BROADCASTING -- 2.4% XM Satellite Radio Holdings, Inc.* ............... 477,375 6,855,105 ------------ REAL ESTATE INVESTMENT TRUST -- 2.8% Annaly Capital Management, Inc. .................. 570,125 7,993,152 ------------ RETAIL - CONSUMER ELECTRONICS STORES -- 1.0% GameStop Corp., Class A* ......................... 53,950 2,828,059 ------------ SEMI-CONDUCTORS & RELATED -- 1.4% International Rectifier Corp.* ................... 92,925 3,988,341 ------------ SURETY INSURANCE -- 0.5% Radian Group, Inc. ............................... 25,150 1,444,868 ------------ TELECOMMUNICATIONS & EQUIPMENT -- 2.1% Motorola, Inc. ................................... 81,875 1,516,325 Sprint Nextel Corp. .............................. 232,175 4,476,334 ------------ 5,992,659 ------------ TRANSPORTATION -- 1.1% CSX Corp. ........................................ 83,825 3,157,688 ------------ TOTAL DOMESTIC COMMON STOCKS (Cost $224,066,120) .......................... 245,634,495 ------------ CANADIAN COMMON STOCKS -- 1.3% MANUFACTURING -- 1.3% Bombardier, Inc., Class B* ....................... 968,125 3,765,000 ------------ SHARES VALUE -------- ------------ TOTAL CANADIAN COMMON STOCK (Cost $2,955,611) ............................. $ 3,765,000 ------------ PREFERRED STOCKS -- 0.2% AUTOMOBILE PARTS & EQUIPMENT -- 0.2% General Motors Corp., 6.25% 07/15/33 ................................. 31,550 733,222 ------------ TOTAL PREFERRED STOCKS (Cost $548,178) .............................. 733,222 ------------ EXCHANGE TRADED FUND -- 3.3% FINANCE -- 3.3% iShares Russell 1000 Value Index Fund ..................................... 112,600 9,274,862 ------------ TOTAL EXCHANGE TRADED FUND (Cost $9,309,948) ............................ 9,274,862 ------------ TEMPORARY INVESTMENT -- 9.4% PNC Bank Money Market Account - 4.90%, 03/01/07 ................................ 26,635,655 26,635,655 ------------ TOTAL TEMPORARY INVESTMENT (Cost $26,635,655) ........................... 26,635,655 ------------ TOTAL INVESTMENTS -- 100.7% (Cost $263,515,512) .......................... 286,043,234 ------------ LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.7)% ................................. (2,008,489) ------------ NET ASSETS -- 100.0% ............................. $284,034,745 ============ * Non-income producing. The accompanying notes are an integral part of the financial statements. 13 THE SCHNEIDER FUNDS STATEMENT OF ASSETS AND LIABILITIES FEBRUARY 28, 2007 (UNAUDITED)
SCHNEIDER SCHNEIDER SMALL CAP VALUE FUND VALUE FUND --------------------- ------------ ASSETS Investment securities at value (cost -- $109,253,251 and $263,515,512, respectively) ........................ $125,391,842 $286,043,234 Receivable for investments sold ...................... 1,261,959 748,247 Receivable for capital shares sold ................... 38,136 1,279,784 Dividends and interest receivable .................... 67,805 207,064 Prepaid expenses and other assets .................... 11,928 31,331 ------------ ------------ Total Assets ....................................... 126,771,670 288,309,660 ------------ ------------ LIABILITIES Payable for investments purchased .................... 3,042,941 3,816,945 Payable to the Investment Adviser .................... 73,775 121,598 Payable for capital shares redeemed .................. 38,000 274,489 Accrued expenses payable and other liabilities ....... 52,214 61,883 ------------ ------------ Total Liabilities .................................. 3,206,930 4,274,915 ------------ ------------ NET ASSETS Capital stock, $0.001 par value ...................... $ 5,492 $ 12,262 Additional paid-in capital ........................... 103,942,574 253,620,799 Undistributed net investment income .................. 215,487 306,268 Accumulated net realized gain from investments and foreign exchange transactions ...................... 3,262,195 7,567,698 Net unrealized appreciation (depreciation) on foreign exchange transactions .............................. 401 (4) Net unrealized appreciation on investments ........... 16,138,591 22,527,722 ------------ ------------ Net assets applicable to shares outstanding .......... $123,564,740 $284,034,745 ============ ============ Shares outstanding ..................................... 5,491,727 12,262,060 ============ ============ Net asset value, offering and redemption price per share ............................................ $ 22.50 $ 23.16 ============ ============
The accompanying notes are an integral part of the financial statements. 14 THE SCHNEIDER FUNDS STATEMENT OF OPERATIONS
SCHNEIDER SCHNEIDER SMALL CAP VALUE FUND VALUE FUND --------------------- ----------------- THE SIXTHE SIX THE SIXTHE SIX MONTHS ENDED MONTHS ENDED FEBRUARY 28, 2007 FEBRUARY 28, 2007 (UNAUDITED) (UNAUDITED) --------------------- ----------------- INVESTMENT INCOME Dividends* ............................................ $ 1,352,895 $ 1,051,099 Interest .............................................. 171,632 387,857 ----------- ----------- Total investment income ............................. 1,524,527 1,438,956 ----------- ----------- EXPENSES Advisory fees ......................................... 571,858 708,835 Administration services fees .......................... 85,779 151,893 Administration and accounting fees .................... 83,891 142,042 Custodian fees ........................................ 22,333 33,142 Printing and shareholder reporting fees ............... 21,033 24,525 Professional fees ..................................... 20,250 25,194 Transfer agent fees ................................... 20,111 26,014 Registration and filing fees .......................... 15,803 18,248 Directors' and officers' fees ......................... 14,763 16,630 Other expenses ........................................ 3,682 2,455 ----------- ----------- Total expenses before waivers ....................... 859,503 1,148,978 Less: waivers ......................................... (230,460) (288,250) ----------- ----------- Net expenses after waivers ............................ 629,043 860,728 ----------- ----------- Net investment income ................................... 895,484 578,228 ----------- ----------- NET REALIZED AND UNREALIZED GAIN/(LOSS) FROM INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS: Net realized gain/(loss) from: Investments ......................................... 7,033,984 11,265,122 Foreign currency transactions ....................... (3,190) 559 Net change in unrealized appreciation (depreciation) on: Investments ......................................... 11,616,200 12,919,502 Foreign currency transactions ....................... (30) (70) ----------- ----------- Net realized and unrealized gain from investments and foreign currency transactions ................... 18,646,964 24,185,113 ----------- ----------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .... $19,542,448 $24,763,341 =========== ===========
------------------ * Net of foreign withholding taxes of $15,294 and $9,978, for the Small Cap Value Fund and Value Fund, respectively. The accompanying notes are an integral part of the financial statements. 15 THE SCHNEIDER FUNDS STATEMENT OF CHANGES INNET ASSETS
SCHNEIDER SMALL CAP VALUE FUND ------------------------------------ FOR THE SIX MONTHS ENDED FOR THE FEBRUARY 28, 2007 YEAR ENDED (UNAUDITED) AUGUST 31, 2006 ---------------- ----------------- INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS Net investment income ................................................... $ 895,484 $ 245,826 Net realized gain from investments and foreign currency transactions ..... 7,030,794 14,842,122 Net change in unrealized appreciation/(depreciation) on investments and foreign currency transactions .......................................... 11,616,170 (9,646,598) ------------ ------------- Net increase in net assets resulting from operations ..................... 19,542,448 5,441,350 ------------ ------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income .................................................... (925,644) -- Net realized capital gains ............................................... (15,428,130) (9,923,966) ------------ ------------- Total dividends and distributions to shareholders ...................... (16,353,774) (9,923,966) ------------ ------------- INCREASE IN NET ASSETS DERIVED FROM CAPITAL SHARE TRANSACTIONS (SEE NOTE 4) ............................................................ 15,284,295 54,411,324 ------------ ------------- Total increase in net assets ........................................... 18,472,969 49,928,708 NET ASSETS Beginning of period ...................................................... 105,091,771 55,163,063 ------------ ------------- End of period* .......................................................... $123,564,740 $ 105,091,771 -=========== =============
------------------ * Includes undistributed net investment income of $215,487 and $245,647 for the six months ended February 28, 2007 and for the year ended August 31, 2006, respectively. The accompanying notes are an integral part of the financial statements. 16 THE SCHNEIDER FUNDS STATEMENT OF CHANGES INNET ASSETS
SCHNEIDER VALUE FUND ------------------------------------- FOR THE SIX MONTHS ENDED FOR THE FEBRUARY 28, 2007 YEAR ENDED (UNAUDITED) AUGUST 31, 2006 ----------------- ----------------- INCREASE IN NET ASSETS RESULTING FROM OPERATIONS Net investment income .................................................. $ 578,228 $ 556,972 Net realized gain from investments and foreign currency transactions ... 11,265,681 7,473,955 Net change in unrealized appreciation on investments and foreign currency transactions ........................................ 12,919,432 559,672 ------------ ------------ Net increase in net assets resulting from operations ................... 24,763,341 8,590,599 ------------ ------------ DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income .................................................. (736,868) (252,120) Net realized capital gains ............................................. (9,518,612) (4,199,642) ------------ ------------ Total dividends and distributions to shareholders .................... (10,255,480) (4,451,762) ------------ ------------ INCREASE IN NET ASSETS DERIVED FROM CAPITAL SHARE TRANSACTIONS (SEE NOTE 4) ........................................................... 130,238,913 74,002,970 ------------ ------------ Total increase in net assets ......................................... 144,746,774 78,141,807 NET ASSETS Beginning of period .................................................... 139,287,971 61,146,164 ------------ ------------ End of period* ......................................................... $284,034,745 $139,287,971 ============ ============
------------------ * Includes undistributed net investment income of $306,268 and $464,908 for the six months ended February 28, 2007 and for the year ended August 31, 2006, respectively. The accompanying notes are an integral part of the financial statements. 17 THE SCHNEIDER FUNDS SCHNEIDER SMALL CAP VALUE FUND FINANCIAL HIGHLIGHTS -------------------------------------------------------------------------------- Contained below is per share operating performance data for each share outstanding, total investment return, ratios to average net assets and other supplemental data for the respective periods. This information has been derived from information provided in the financial statements. --------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEARS ENDED AUGUST 31, FEBRUARY 28, 2007 ----------------------------------------------------------- (UNAUDITED) 2006 2005 2004 2003 2002 ------------------- ------- ------- ------- ------- ------- PER SHARE OPERATING PERFORMANCE* Net asset value, beginning of period ............ $ 21.96 $ 24.94 $ 29.09 $ 22.52 $ 14.82 $ 17.53 Net investment income/(loss) .................... 0.18 0.05 (0.10) (0.13) 0.10 0.03 Net realized and unrealized gain/(loss) on investments and foreign currency transactions ......................... 3.84 1.66 8.01 8.50 7.71 (1.83) ------- ------- ------- ------- ------- ------- Net increase/(decrease) in net assets resulting from operations ..................... 4.02 1.71 7.91 8.37 7.81 (1.80) ------- ------- ------- ------- ------- ------- Dividends and distributions to shareholders from: Net investment income ........................... (0.20) -- -- (0.11) (0.03) (0.07) Net realized capital gains ...................... (3.28) (4.69) (12.06) (1.69) (0.08) (0.84) ------- ------- ------- ------- ------- ------- Total dividends and distributions to shareholders .................................. (3.48) (4.69) (12.06) (1.80) (0.11) (0.91) ------- ------- ------- ------- ------- ------- Redemption fees (Note 4)+ ....................... -- -- -- -- -- -- ------- ------- ------- ------- ------- ------- Net asset value, end of period .................. $ 22.50 $ 21.96 $ 24.94 $ 29.09 $ 22.52 $ 14.82 ======= ======= ======= ======= ======= ======= Total investment return(1) ...................... 18.90% 7.79% 31.57% 37.99% 53.10% (10.76)% ======= ======= ======= ======= ======= ======= RATIO/SUPPLEMENTAL DATA Net assets, end of period (000's omitted) ....... $123,565 $105,092 $55,163 $48,845 $48,920 $45,268 Ratio of expenses to average net assets(2) ...... 1.10%(3) 1.10% 1.10% 1.10% 1.10% 1.10% Ratio of expenses to average net assets without waivers and expense reimbursements ................................ 1.50%(3) 1.56% 1.71% 1.74% 1.85% 1.65% Ratio of net investment income to average net assets(2) ................................. 1.57%(3) 0.29% (0.41)% (0.49)% 0.53% 0.34% Portfolio turnover rate ......................... 28.48% 91.45% 68.87% 110.69% 85.33% 102.46%
------------------ * Calculated based on shares outstanding on the first and last day of the respective period, except for dividends and distributions, if any, which are based on actual shares outstanding on the dates of distributions. + Amount is less than $0.01 per share. (1) Total investment return is calculated by assuming a purchase of shares on the first day and a sale of shares on the last day of each period reported and includes reinvestments of dividends and distributions, if any. (2) Reflects waivers and reimbursements. (3) Annualized. The accompanying notes are an integral part of the financial statements. 18 THE SCHNEIDER FUNDS SCHNEIDER VALUE FUND FINANCIAL HIGHLIGHTS -------------------------------------------------------------------------------- Contained below is per share operating performance data for each share outstanding, total investment return, ratios to average net assets and other supplemental data for the respective periods. This information has been derived from information provided in the financial statements. --------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEARS ENDED AUGUST 31, FOR THE PERIOD FEBRUARY 28, 2007 --------------------------------- SEPTEMBER 30, 2002* (UNAUDITED) 2006 2005 2004 THROUGH AUGUST 31, 2003 ------------------ ------- ------- ------- ------------------------ PER SHARE OPERATING PERFORMANCE** Net asset value, beginning of period ............ $ 21.16 $ 20.55 $ 18.22 $ 14.81 $ 10.00 Net investment income ........................... 0.04 0.10 0.07 0.04 0.07 Net realized and unrealized gain from investments and foreign currency transactions, if any .......................... 3.12 1.99 3.40 4.05 4.77 ------- ------- ------- ------- ------- Net increase in net assets resulting from operations .................................... 3.16 2.09 3.47 4.09 4.84 ------- ------- ------- ------- ------- Dividends and distributions to shareholders from: Net investment income ........................... (0.08) (0.08) (0.05) (0.06) (0.03) Net realized capital gains ...................... (1.08) (1.40) (1.09) (0.62) 0.00 ------- ------- ------- ------- ------- Total dividends and distributions to shareholders .................................. (1.16) (1.48) (1.14) (0.68) (0.03) ------- ------- ------- ------- ------- Redemption fees (Note 4)+ ....................... -- -- -- -- -- ------- ------- ------- ------- ------- Net asset value, end of period .................. $ 23.16 $ 21.16 $ 20.55 $ 18.22 $ 14.81 ======= ======= ======= ======= ======= Total investment return(1) ...................... 15.03% 10.85% 19.37% 28.21% 48.46% ======= ======= ======= ======= ======= RATIO/SUPPLEMENTAL DATA Net assets, end of period (000's omitted) ....... $284,035 $139,288 $61,146 $38,406 $11,788 Ratio of expenses to average net assets(2) ...... 0.85%(3) 0.85% 0.85% 0.85% 0.85%(3) Ratio of expenses to average net assets without waivers and expense reimbursements ................................ 1.13%(3) 1.27% 1.38% 1.96% 4.01%(3) Ratio of net investment income to average net assets(2) ................................. 0.57%(3) 0.69% 0.41% 0.35% 0.72%(3) Portfolio turnover rate ......................... 68.30% 104.92% 76.66% 116.60% 98.06%
------------------ * Commencement of operations. ** Calculated based on shares outstanding on the first and last day of the respective period, except for dividends and distributions, if any, which are based on actual shares outstanding on the dates of distributions. + Amount is less than $0.01 per share. (1) Total investment return is calculated by assuming a purchase of shares on the first day and a sale of shares on the last day of each period reported and includes reinvestments of dividends and distributions, if any. (2) Reflects waivers and reimbursements. (3) Annualized. The accompanying notes are an integral part of the financial statements. 19 THE SCHNEIDER FUNDS NOTES TO FINANCIAL STATEMENTS FEBRUARY 28, 2007 (UNAUDITED) 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES The RBB Fund, Inc. ("RBB" or "Company") was incorporated under the laws of the State of Maryland on February 29, 1988 and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company. RBB is a "series fund," which is a mutual fund divided into separate portfolios. Each portfolio is treated as a separate entity for certain matters under the 1940 Act, and for other purposes, and a shareholder of one portfolio is not deemed to be a shareholder of any other portfolio. Currently, RBB has eighteen active investment portfolios, including the Schneider Small Cap Value Fund (the "Small Cap Value Fund") and the Schneider Value Fund (the "Value Fund") (each a "Fund," collectively the "Funds"), which commenced investment operations on September 2, 1998 and September 30, 2002, respectively. As of the date hereof, each Fund offers the Institutional Class of shares. RBB has authorized capital of one hundred billion shares of common stock of which 76.673 billion shares are currently classified into one hundred and six classes of Common Stock. Each class represents an interest in an active or inactive RBB investment portfolio. The active classes have been grouped into eight separate "families." PORTFOLIO VALUATION -- Each Fund's net asset value ("NAV") is calculated once daily at the close of regular trading hours on the New York Stock Exchange ("NYSE") (generally 4:00 p.m. Eastern time) on each day the NYSE is open. Securities held by the Funds are valued using the closing price or the last sale price on a national securities exchange or the National Association of Securities Dealers Automatic Quotation System (NASDAQ) market system where they are primarily traded. Equity securities traded in the over-the-counter market are valued at their closing prices. If there were no transactions on that day, securities traded principally on an exchange or on NASDAQ will be valued at the mean of the last bid and ask prices prior to the market close. Fixed Income securities having a remaining maturity of greater than 60 days are valued using an independent pricing service. Fixed Income securities having a remaining maturity of 60 days or less are amortized to maturity based on their cost. Foreign securities are valued based on prices from the primary market in which they are traded, and are translated from the local currency into U.S. dollars using current exchange rates. Investments in other open-end investment companies are valued based on the NAV of the investment companies (which may use Fair Value Pricing as discussed in their prospectuses). If market quotations are unavailable or deemed unreliable, securities will be valued in accordance with procedures adopted by the Board of Directors. Relying on prices supplied by pricing services or dealers or using fair valuation may result in values that are higher or lower than the values used by other investment companies and investors to price the same investments. USE OF ESTIMATES -- The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. INVESTMENT TRANSACTIONS, INVESTMENT INCOME, AND EXPENSES -- Transactions are accounted for on the trade date. The cost of investments sold is determined by use of the specific identification method for both financial reporting and income tax purposes in determining realized gains and losses on investments. Interest income is accrued as earned. Dividend income is recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Expenses incurred on behalf of a specific class, fund or fund family are charged directly to the class, fund or fund family (in proportion 20 THE SCHNEIDER FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2007 (UNAUDITED) to net assets). Expenses incurred for all of the RBB families (such as director or professional fees) are charged to all funds in proportion to their average net assets of the RBB Funds, or in such other manner as the Board of Directors deems fair or equitable. Expenses and fees, including investment advisory and administration fees, are accrued daily and taken into account for the purpose of determining the net asset value of the Funds. FOREIGN CURRENCY TRANSLATION -- Foreign securities and other foreign assets and liabilities are valued using the foreign currency exchange rate effective at the end of the reporting period. The books and records of the Funds are maintained in U.S. dollars. Cost of investments is translated at the currency exchange rate effective at the trade date. The gain or loss resulting from a change in currency exchange rates between the trade and settlement dates of a portfolio transaction is treated as a gain or loss on foreign currency. Likewise, the gain or loss resulting from a change in currency exchange rates, between the date income is accrued and paid, is treated as a gain or loss on foreign currency. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net investment income and distributions from net realized capital gains, if any, are declared, recorded on ex-date and paid at least annually to shareholders. Income dividends and capital gain distributions are determined in accordance with U.S. federal income tax regulations, which may differ from generally accepted accounting principles. These differences include the treatment of non-taxable dividends, expiring capital loss carryforwards, foreign currency gain/loss, partnerships, and losses deferred due to wash sales and excise tax regulations. Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications within the components of net assets. U.S. TAX STATUS -- No provision is made for U.S. income taxes as it is each Fund's intention to continue to qualify for and elect the tax treatment applicable to regulated investment companies under Subchapter M of the Internal Revenue Code of 1986, as amended, and make the requisite distributions to its shareholders which will be sufficient to relieve it from U.S. income and excise taxes. OTHER -- In the normal course of business, the Funds may enter into contracts that provide general indemnifications. The Funds' maximum exposure under these arrangements is dependent on claims that may be made against the Funds in the future, and, therefore, cannot be estimated; however, based on experience, the risk of material loss for such claims is considered remote. 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES Schneider Capital Management Company ("SCM"or the "Adviser") serves as each Fund's investment adviser. For its advisory services, SCM is entitled to receive 1.00% of the Small Cap Value Fund's average daily net assets and 0.70% of the Value Fund's average daily net assets, computed daily and payable monthly. The Adviser contractually agreed to limit the Small Cap Value Fund's and the Value Fund's total operating expenses for the current fiscal year to the extent that such expenses exceed 1.10% and 0.85%, respectively, of the Fund's average daily net assets. As necessary, this limitation is effected in waivers of advisory fees and reimbursements of other Fund expenses. For the six months ended February 28, 2007, investment advisory fees and waivers of expenses were as follows: GROSS ADVISORY FEES WAIVERS NET ADVISORY FEES -------------------- ----------- ----------------- Schneider Small Cap Value Fund $571,858 $(152,619) $419,239 Schneider Value Fund 708,835 (166,736) 542,099 21 THE SCHNEIDER FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2007 (UNAUDITED) The Funds will not pay SCM at a later time for any amounts it may waive or any amounts that SCM has assumed. PFPC Inc. ("PFPC"), a wholly-owned subsidiary of PFPC Worldwide, Inc. and an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc., serves as administrator for the Funds. For providing administration and accounting services, PFPC is entitled to receive a monthly fee equal to an annual rate of 0.125% of each Fund's average daily net assets, subject to a minimum monthly fee of $8,333 per Fund plus out of pocket expenses. PFPC voluntarily agreed to waive a portion of its administration and accounting services fees for the Funds. For the six months ended February 28, 2007, PFPC's administration and accounting services fees and waivers of the Funds' expenses were as follows:
GROSS ADMINISTRATION NET ADMINISTRATION AND ACCOUNTING AND ACCOUNTING SERVICES FEES WAIVERS SERVICES FEES --------------- ----------- ------------------ Schneider Small Cap Value Fund $ 83,891 $(3,500) $ 80,391 Schneider Value Fund 142,042 -- 142,042
Included in the administration and accounting services fees and expenses, shown above, are fees for providing regulatory administration services to RBB. For providing these services, PFPC is entitled to receive compensation as agreed to by the Company and PFPC. This fee is allocated to each portfolio of the Company in proportion to its net assets of the RBB Funds. In addition, PFPC serves as the Funds' transfer and dividend disbursing agent. For providing transfer agent services, PFPC is entitled to receive a monthly fee, subject to a minimum monthly fee of $2,000 per Fund, plus out of pocket expenses. For the six months ended February 28, 2007, transfer agency fees for the Funds were as follows: TRANSFER AGENT FEES -------------- Schneider Small Cap Value Fund $20,111 Schneider Value Fund 20,014 For providing custodian services, PFPC Trust Company, a wholly-owned subsidiary of PFPC Worldwide, Inc. and an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc., is entitled to receive a monthly fee equal to an annual rate of 0.015% of each Fund's average daily gross assets, subject to a minimum monthly fee of $1,000 per Fund, excluding transaction changes and out-of-pocket expenses. For the six months ended February 28, 2007, custodial fees for the Funds were as follows: CUSTODIAN FEES ------------ Schneider Small Cap Value Fund $22,333 Schneider Value Fund 33,142 PFPC Distributors, Inc. ("PFPC Distributors"), a wholly-owned subsidiary of PFPC Worldwide, Inc. and an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc., provides certain administrative services to the Funds. As compensation for such administrative services, PFPC Distributors receives a monthly fee equal to an annual rate of 0.15% of 22 THE SCHNEIDER FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2007 (UNAUDITED) each Fund's average daily net assets. PFPC Distributors voluntarily agreed to waive a portion of its administrative services fees for the Funds. For the six months ended February 28, 2007, administrative services fees and related waivers for the Funds were as follows:
GROSS ADMINISTRATIVE NET ADMINISTRATIVE SERVICES FEES WAIVERS SERVICES FEES --------------- ----------- ------------------- Schneider Small Cap Value Fund $ 85,779 $ (74,341) $11,438 Schneider Value Fund 151,893 (121,514) 30,379
As of February 28, 2007, the Small Cap Value Fund and Value Fund owed PFPC and affiliates $24,824 and $47,361, respectively, for their services. 3. INVESTMENT IN SECURITIES For the six months ended February 28, 2007, aggregate purchases and sales of investment securities (excluding short-term investments) were as follows: PURCHASES SALES ----------- ------------ Schneider Small Cap Value Fund $ 30,609,930 $ 36,853,601 Schneider Value Fund 233,407,447 129,993,838 4. CAPITAL SHARE TRANSACTIONS As of February 28, 2007, each Fund has 100,000,000 shares of $0.001 par value common stock authorized. Transactions in capital shares for the respective periods were as follows:
SCHNEIDER SMALL CAP VALUE FUND ---------------------------------------------------------------- FOR THE SIX MONTHS ENDED FOR THE FISCAL YEAR ENDED -------------------------- ------------------------------- FEBRUARY 28, 2007 AUGUST 31, 2006 ------------------------- ------------------------------- SHARES AMOUNT SHARES AMOUNT -------- ----------- ---------- ------------- Sales ................... 193,796 $ 4,366,693 2,429,768 $52,132,162 Reinvestments ........... 734,073 15,907,358 465,188 9,727,086 Redemption Fees* ........ -- 14,855 -- 20,792 Repurchases ............. (220,840) (5,004,611) (322,165) (7,468,716) -------- ----------- ---------- ----------- Net increase/(decrease) . 707,029 $15,284,295 2,572,791 $54,411,324 ======== =========== ========== ===========
23 THE SCHNEIDER FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2007 (UNAUDITED)
SCHNEIDER SMALL CAP VALUE FUND ---------------------------------------------------------------- FOR THE SIX MONTHS ENDED FOR THE FISCAL YEAR ENDED -------------------------- ------------------------------- FEBRUARY 28, 2007 AUGUST 31, 2006 ------------------------- ------------------------------- SHARES AMOUNT SHARES AMOUNT -------- ----------- ---------- ------------- Sales ................... 5,686,578 $130,362,902 4,443,203 $ 91,030,986 Reinvestments ........... 425,249 9,755,495 207,467 4,014,476 Redemption Fees* ........ -- 17,424 -- 14,610 Repurchases ............. (433,723) (9,896,908) (1,041,833) (21,057,102) --------- ------------ ---------- ------------ Net increase ............ 5,678,104 $130,238,913 3,608,837 $ 74,002,970 ========= ============ ========== ============
* There is a 1.75% redemption fee on shares redeemed which have been held less than one year in the Schneider Small Cap Value Fund. There is a 1.00% redemption fee on shares redeemed which have been held less than 90 days in the Schneider Value Fund. The redemption fees are retained by the Funds for the benefit of the remaining shareholders and recorded as paid-in capital. As of February 28, 2007, the following shareholders held 10% or more of the outstanding shares of the Fund. These shareholders may be omnibus accounts which are comprised of many individual shareholders. Schneider Small Cap Value Fund (2 shareholders) 30% 5. FEDERAL INCOME TAX INFORMATION At February 28, 2007, Federal tax cost, aggregate gross unrealized appreciation and depreciation of securities held by the Funds were as follows:
NET UNREALIZED FEDERAL TAX UNREALIZED UNREALIZED APPRECIATION/ COST APPRECIATION DEPRECIATION DEPRECIATION ---------------- ------------- ------------- ----------------- Schneider Small Cap Value Fund $109,253,251 $19,337,484 $(3,198,893) $16,138,591 Schneider Value Fund 263,515,512 26,927,119 (4,399,397) 22,527,722
At August 31, 2006, the components of distributable earnings on a tax basis were as follows:
UNDISTRIBUTED ORDINARY INCOME LONG-TERM GAINS -------------------- -------------------- Schneider Small Cap Value Fund $4,661,340 $9,313,012 Schneider Value Fund 1,449,025 5,908,723
At August 31, 2006, the Funds had no capital loss carryforwards available to offset future capital gains. 24 THE SCHNEIDER FUNDS NOTES TO FINANCIAL STATEMENTS (CONCLUDED) FEBRUARY 28, 2007 (UNAUDITED) Under Federal tax law, foreign currency and capital losses realized after October 31 may be deferred and treated as having arisen on the first day of the following fiscal year. For the year ended August 31, 2006, there were no post-October losses incurred in the Funds. The differences between the book and tax basis components of distributable earnings relate principally to the timing of recognition of income and gains for federal income tax purposes. Short-term and foreign currency gains are reported as ordinary income for federal tax purposes. 6. NEW ACCOUNTING PRONOUNCEMENTS In July 2006, the Financial Accounting Standards Board ("FASB") issued Interpretation No. 48, "Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109" (the "Interpretation"). The Interpretation establishes for all entities, a minimum threshold for financial statement recognition of the benefit of positions taken in filing tax returns (including whether an entity is taxable in a particular jurisdiction), and requires certain expanded tax disclosures. The Interpretation is effective for fiscal years beginning after December 15, 2006 and is required to be implemented by calendar year funds by no later than June 29, 2007. The Adviser has recently begun to evaluate the application of the Interpretation to the Funds, and is not in a position at this time to estimate the significance of its impact, if any, on the Fund's financial statements. In September 2006, FASB issued Statement of Financial Accounting Standards ("SFAS") 157, Fair Value Measurements, which clarifies the definition of fair value and requires companies to expand their disclosure about the use of fair value to measure assets and liabilities in interim and annual periods subsequent to initial recognition. Adoption of SFAS 157 requires the use of the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. At this time, the Fund is in the process of reviewing the impact, if any, of the SFAS on the Fund's financial statements. 25 THE SCHNEIDER FUNDS OTHER INFORMATION (UNAUDITED) PROXY VOTING Policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities as well as information regarding how the Funds voted proxies relating to portfolio securities for the most recent 12-month period ended June 30 are available without charge, upon request, by calling (888) 520-3277 and on the Securities and Exchange Commission's ("SEC") website at http://www.sec.gov. QUARTERLY PORTFOLIO SCHEDULES The Company will file a complete schedule of portfolio holdings with the SEC for the first and third fiscal quarters of each fiscal year (quarters ended November 30 and May 31) on Form N-Q. The Company's Form N-Q will be available on the SEC website at http://www.sec.gov and may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. Information on the operation of the SEC Public Reference Room may be obtained by calling 1-800-SEC-0330. [THIS PAGE INTENTIONALLY LEFT BLANK.] INVESTMENT ADVISER Schneider Capital Management 460 E. Swedesford Road Suite 1080 Wayne, PA 19087 ADMINISTRATOR PFPC Inc. 301 Bellevue Parkway Wilmington, DE 19809 TRANSFER AGENT PFPC Inc. 101 Sabin Street Pawtucket, RI 02860 DISTRIBUTOR PFPC Distributors, Inc. 760 Moore Road King of Prussia, PA 19406 CUSTODIAN PFPC Trust Company 8800 Tinicum Blvd. Suite 200 Philadelphia, PA 19153 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM PricewaterhouseCoopers LLP Two Commerce Square, Suite 1700 2001 Market Street Philadelphia, PA 19103-7042 COUNSEL Drinker Biddle & Reath LLP One Logan Square 18th and Cherry Streets Philadelphia, PA 19103-6996 ================================================================================ BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND OF THE RBB FUND, INC. SEMIANNUAL REPORT FEBRUARY 28, 2007 (UNAUDITED) This report is submitted for the general information of the shareholders of the Fund. It is not authorized for distribution unless preceded or accompanied by a current prospectus for the Fund. ================================================================================ BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND SEMIANNUAL REPORT FOR THE SIX-MONTH PERIOD ENDED FEBRUARY 28, 2007 -------------------------------------------------------------------------------- Fellow Shareholder: The Bogle Small Cap Growth Fund (the "Fund") advanced +11.60% for the Investor shares and +11.67% for the Institutional shares in the semiannual period ended February 28, 2007, outperforming by +0.84% and +0.91%, respectively, the Russell 2000(R) benchmark return of +10.76%. The Fund has outperformed its benchmark in all multi-year periods since inception in 1999. The Fund trailed the benchmark for the one year ended February 28, 2007, in an environment characterized by macroeconomic uncertainty and anti-momentum investing. In an anti-momentum environment, investors shun recent strong performers and stocks with positive earnings trends, either because of or in anticipation of a shift in those trends. The anti-momentum environment was most acute from May through August last year, but persisted through the latest semiannual period. The Fund's positive relative performance over the last six months highlights the benefits and importance of a diversified investment process in which historical earnings trends are just one piece of an overall investment mosaic. The recent market environment is addressed in more detail in the next section of this letter. This discussion is followed by performance attribution analysis, which explains the results generated by our investment models during the semiannual period, illustrating sources of value added with a few stock specific examples. We then present key fundamental characteristics of the Fund and benchmark, highlighting the Fund's characteristics' likeness to the Russell 2000(R) due to our risk controls. Finally, we close with an update on developments at Bogle Investment Management, L.P. [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA USED IN PRINTED GRAPHIC AS FOLLOWS: INVESTMENT PERFORMANCE -- MULTI-PERIODS BOGLE FUND VS. RUSSELL(R) BENCHMARK AS OF 2/28/07
Semiannual Period One-Year Period Two-Year Period Five-Year Period Since Inception (9/1/06-2/28/07) (3/1/06-2/28/07) (3/1/05-2/28/07) (3/1/02-2/28/07) (10/1/99-2/28/07) ----------------- ---------------- ---------------- ----------------- ----------------- Bogle Investor Class 11.60% 5.50% 16.58% 14.71% 18.05% Bogle Institutional Class 11.67% 5.20% 16.71% 14.81% 18.15% Russell 2000(R) Index 10.76% 9.87% 13.18% 12.44% 10.06% Investor Class Net Value Added 0.84% (4.82)% 3.40% 2.27% 7.99%
---------------- RETURNS SHOWN REPRESENT PAST PERFORMANCE AND DO NOT GUARANTEE FUTURE RESULTS. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE RETURNS SHOWN ABOVE. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. RETURNS CURRENT TO THE MOST RECENT MONTH-END MAY BE OBTAINED AT 1-877-264-5346. THE PERFORMANCE QUOTED REFLECTS FEE WAIVERS IN EFFECT AND WOULD HAVE BEEN LESS IN THEIR ABSENCE. THE FUND'S ANNUAL OPERATING EXPENSES, AS STATED IN THE CURRENT PROSPECTUS, ARE 1.43% FOR THE INSTITUTIONAL CLASS AND 1.53% FOR THE INVESTOR CLASS, PRIOR TO FEE WAIVERS. 1 MARKET ENVIRONMENT. After poor performance from May through mid-August last year, U.S. equity market returns were robust in the semiannual reporting period, as equity markets rallied strongly from September 2006 through most of February 2007. In the last four months of 2006, investors' macroeconomic concerns appeared to subside, giving way to year-end optimism. 2007 got off to a strong start, against a backdrop of declining oil prices, generally positive earnings reports, and low volatility. The period ended on a negative note, as U.S. equity markets dropped sharply at the end of February and volatility spiked. Small capitalization stocks beat large capitalization stocks for the latest semiannual period, as they have for each of the six prior semiannual reporting periods since Fund inception. The Russell 2000(R) Index returned +10.76% for the six months ended February 28, 2007, compared with a +9.68% return for the larger cap Russell 1000(R). Within small capitalization stocks, growth modestly outperformed value, by about eighty basis points. For the semiannual period, the Russell 2000(R) Growth advanced +11.18%, while the Russell 2000(R) Value gained +10.37%. PERFORMANCE ATTRIBUTION. Our return attribution analysis shows that positive stock selection, as usual, accounted for the majority of the Fund's outperformance relative to its benchmark in the semiannual period. Recall that our three primary models seek to identify the following: 1) stocks that have demonstrated an ability to produce unexpected earnings growth (the earnings expectations model); 2) companies that do not have to "manufacture" earnings growth through aggressive accounting (financial quality model); and 3) stocks that trade at attractive valuations relative to their most similar peers (relative valuation model). In the most recent period, the Fund benefited from positive contribution from the relative valuation model, while the financial quality model helped us avoid stocks with poor earnings and operational trends. The earnings expectations model produced negative results during this period. As we have stated in previous letters, it is not unusual for this model to struggle when there is a real or anticipated shift in the Fed's interest rate policy. Indeed, the Fed's interest rate increase in June 2006 was its last, after 17 consecutive increases totaling 4.25% over two years. Over the six-month period, stock selection was strongest in energy stocks and was also robust in financial, industrial and technology stocks. With its significant weighting in the portfolio, the largest contribution to return came from stock selection within the financial sector. Note that the financial sector currently represents about 19% of the Fund's assets (and 22% of the benchmark). At the end of the semiannual period, the Fund held 178 stocks and the largest holding represented just 1.1% of portfolio assets. As you know, this diversification limits the impact any single stock can have on total Fund performance. Despite this lack of portfolio concentration, we use this letter to provide stock-specific illustrations of investment performance during the reporting period. One of our top performing stocks for the semiannual period was Jack in the Box, Inc., a restaurant chain operator that entered the Fund portfolio in late 2004 because of its strong relative valuation ranking. In early 2006, the stock began to rank favorably according to our earnings expectations signal. In February 2007, the company announced that fiscal first-quarter profit grew 48 percent as sales at established locations rose, and shares hit a new high. Another strong performer was container shipping company Horizon Lines Inc., which looked attractive from both earnings expectations and financial quality perspectives when the position was established at the beginning of the semiannual period. The company reported record earnings for the fourth quarter 2006 and full year 2006. Boosting energy sector performance, Tesoro Corp. is a West Coast company that refines and markets petroleum products in the United States. This stock has been in the Fund portfolio since late 2003, when it ranked positively according to all three models. The stock outperformed peers over the semiannual period, particularly in the last two months of the period. An example of an underperforming investment in the semiannual period is Spansion, a technology company providing memory chips for consumer electronics. We recently established this position based on the stock's strong financial quality score and attractive relative valuation. In the few months that we have held the stock, earnings trends have remained negative; however, the continued strength of the financial quality signal provides some indication that there is potential for future earnings improvement. 2 INVESTMENT POSITIONING. As has been the case for much of the Fund's history, Fund characteristics remain very much in line with the Fund's benchmark. Note that small deviations from the benchmark reflected in both sector exposures and the fundamental characteristics of the Fund arise purely from the bottom up stock selection process, and do not reflect any attempt to time the overall market, style preferences, or sector rotation. As of the end of February, our median market capitalization was modestly below benchmark. By continuing to keep the size of the Fund controlled, we benefit from the ability to maintain exposure to the smaller companies within the small cap market. The Fund maintains a bias to companies with modestly higher long-term earnings growth rates; price-to-earnings ratios are currently quite close to benchmark; and the Fund's median price-to-sales ratio continues to be lower than the benchmark's, as the ratio is a significant part of our relative valuation model. ------------------------------------------------------------ FUNDAMENTAL CHARACTERISTICS FEBRUARY 28, 2007 RUSSELL 2000(R) MEDIAN BOGLX INDEX -------- ------- -------- Market Cap. (mil.) $877 $1,169 Estimated Long-Term Earnings Growth Rate 16.5% 14.6% Price/Historical Earnings 21.9x 21.1x Price/Forward Earnings 17.8x 18.1x Price/Sales 1.6x 1.9x ------------------------------------------------------------ PROGRESS AT BOGLE INVESTMENT MANAGEMENT, L.P. Our team did not change during the semiannual period, remaining at twelve full-time professionals, five dedicated to portfolio management and research and seven focused on client service, compliance, and operations. One new operations professional joined the firm after the close of the semiannual period, in mid-March. At the end of February 2007, assets in the Fund were a little over $359 million and the Fund remains closed to new investors. As a reminder, information about the Fund, including historical NAVs, sector allocation, fundamental characteristics, and top ten holdings, can be viewed on our website, www.boglefunds.com. The NAVs are updated daily while the other Fund information is updated quarterly. Please feel free to call on us at any time with questions you may have about the portfolio. Respectfully, Bogle Investment Management, L.P. Management Office: 781-283-5000 Shareholder Services Toll Free: 1-877-BOGLEIM (264-5346) ---------- ALL FIGURES SHOWN REPRESENT TOTAL RETURN, WHICH IS BASED ON NET CHANGE IN NAV WITH REINVESTMENT OF ALL DISTRIBUTIONS. FIGURES FOR PERIODS GREATER THAN ONE YEAR ARE ANNUALIZED. "NET VALUE ADDED" EQUALS THE FUND'S NET RETURN MINUS THE RETURN FOR THE BENCHMARK. THE RUSSELL 2000(R) INDEX IS AN UNMANAGED INDEX OF SMALL-CAP STOCKS. UNLIKE A MUTUAL FUND, THE PERFORMANCE OF AN INDEX IS NOT AFFECTED BY TRANSACTION COSTS, MANAGEMENT FEES, TAXES OR OTHER EXPENSES. A DIRECT INVESTMENT IN AN INDEX IS NOT POSSIBLE. INVESTING IN SMALL COMPANIES CAN INVOLVE MORE VOLATILITY, LESS LIQUIDITY, AND LESS PUBLICLY AVAILABLE INFORMATION THAN INVESTING IN LARGE COMPANIES. 3 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND FUND EXPENSE EXAMPLES (UNAUDITED) As a shareholder of the Fund, you incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees, shareholder servicing fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. These examples are based on an investment of $1,000 invested at the beginning of the six-month period from September 1, 2006 through February 28, 2007, and held for the entire period. ACTUAL EXPENSES The first line of the accompanying tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second line of the accompanying tables provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare these 5% hypothetical examples with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that the expenses shown in the accompanying tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees. Therefore, the second line of the accompanying tables is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
INSTITUTIONAL CLASS ------------------------------------------------------------------------------- BEGINNING ACCOUNT VALUE ENDING ACCOUNT VALUE EXPENSES PAID DURING SEPTEMBER 1, 2006 FEBRUARY 28, 2007 PERIOD* ----------------------- -------------------- -------------------- Actual $1,000.00 $1,116.70 $6.56 Hypothetical (5% return before expenses) 1,000.00 1,018.52 6.28
4 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND FUND EXPENSE EXAMPLES (CONCLUDED) (UNAUDITED)
INVESTOR CLASS ------------------------------------------------------------------------------- BEGINNING ACCOUNT VALUE ENDING ACCOUNT VALUE EXPENSES PAID DURING SEPTEMBER 1, 2006 FEBRUARY 28, 2007 PERIOD* ----------------------- -------------------- -------------------- Actual $1,000.00 $1,116.00 $7.08 Hypothetical (5% return before expenses) 1,000.00 1,018.02 6.78 ---------- * Expenses are equal to the Fund's annualized expense ratio of 1.25% for the Institutional Class and 1.35% for the Investor Class, which includes waived fees or reimbursed expenses, multiplied by the average account value over the period, multiplied by the number of days (181) in the most recent fiscal half-year, then divided by 365 to reflect the one-half year period. The Fund's ending account values on the first line in each table are based on the actual total return for each class of (11.67)% for the Institutional Class and (11.60)% for the Investor Class.
5 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND PORTFOLIO HOLDINGS SUMMARY TABLE FEBRUARY 28, 2007 (UNAUDITED) % OF NET SECURITY TYPE & SECTOR CLASSIFICATION ASSETS VALUE ------------------------------------------------------------------------------- COMMON STOCKS: Technology 25.8% $ 92,785,685 Consumer Growth 18.4 66,057,646 Financial 17.6 63,147,832 Industrial 15.9 56,880,201 Consumer Cyclical 15.6 56,059,499 Energy 3.7 13,393,126 Basic Industry 2.1 7,612,871 SHORT-TERM INVESTMENTS 1.1 3,988,728 LIABILITIES IN EXCESS OF OTHER ASSETS (0.2) (804,103) ----- ------------ NET ASSETS 100.0% $359,121,485 ===== ============ ---------- Portfolio holdings are subject to change at any time. The accompanying notes are an integral part of the financial statements. 6 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND PORTFOLIO OF INVESTMENTS FEBRUARY 28, 2007 (UNAUDITED) NUMBER OF SHARES VALUE --------- ------------ COMMON STOCKS--99.1% BASIC INDUSTRY--2.1% Chaparral Steel Co. ......................... 16,400 $ 817,212 H.B. Fuller Co. ............................. 14,600 364,562 Landec Corp.* ............................... 133,700 1,788,906 Methanex Corp. .............................. 79,900 2,020,671 Spartech Corp. .............................. 99,000 2,621,520 ------------ 7,612,871 ------------ CONSUMER CYCLICAL--15.6% Allegiant Travel Co.* ....................... 54,800 1,871,968 Ameristar Casinos, Inc. ..................... 46,200 1,497,804 Charlotte Russe Holding, Inc.* .............. 71,600 2,090,004 CKE Restaurants, Inc. ....................... 117,400 2,268,168 Dress Barn, Inc.* ........................... 39,900 838,698 Group 1 Automotive, Inc. .................... 15,300 707,931 Interstate Hotels & Resorts, Inc.* .......... 274,800 1,868,640 J. Crew Group, Inc.* ........................ 67,200 2,421,888 Jack in the Box, Inc.* ...................... 59,100 4,038,894 John Wiley & Sons, Inc., Class A ............ 53,400 2,056,434 K2, Inc.* ................................... 177,900 2,081,430 Kimball International, Inc., Class B ........ 97,700 2,054,631 Leapfrog Enterprises, Inc., Class A* ........ 218,900 2,263,426 Lions Gate Entertainment Corp.* ............. 194,300 2,141,186 LodgeNet Entertainment Corp.* ............... 94,300 2,410,308 Longs Drug Stores Corp. ..................... 23,200 1,068,592 Maidenform Brands, Inc. ..................... 81,100 1,484,941 Midwest Air Group, Inc.* .................... 182,700 2,375,100 Mothers Work, Inc.* ......................... 69,800 2,412,986 Movado Group, Inc. .......................... 25,400 749,554 Netflix Inc.* ............................... 52,900 1,191,837 Oxford Industries, Inc. ..................... 29,400 1,452,066 PC Connection, Inc.* ........................ 130,200 2,145,696 PC Mall, Inc.* .............................. 159,800 1,965,540 Ryder System, Inc. .......................... 55,300 2,844,632 Steven Madden Ltd. .......................... 90,050 2,661,878 NUMBER OF SHARES VALUE --------- ------------ CONSUMER CYCLICAL--(CONTINUED) Town Sports International Holdings Club, Inc.* ...................... 120,500 $ 2,366,620 WMS Industries, Inc.* ....................... 72,900 2,728,647 ------------ 56,059,499 ------------ CONSUMER GROWTH--18.4% AMERIGROUP Corp.* ........................... 69,300 2,292,444 Apria Healthcare Group, Inc. ................ 71,300 2,270,905 Aspreva Pharmaceuticals Corp.* .............. 129,100 2,832,454 Axcan Pharma, Inc.* ......................... 122,500 1,950,200 Chemed Corp. ................................ 26,800 1,240,572 Cholestech Corp. ............................ 113,200 1,850,820 CorVel Corp. ................................ 67,000 2,018,040 Cynosure, Inc., Class A* .................... 78,900 1,742,112 Dade Behring Holdings, Inc. ................. 72,200 2,957,312 DeVry, Inc. ................................. 19,300 533,452 Elizabeth Arden, Inc.* ...................... 116,900 2,546,082 Emergency Medical Services Corp., Class A* .. 92,000 2,431,560 Endo Pharmaceuticals Holdings, Inc.* ........ 37,000 1,154,770 Healthspring, Inc.* ......................... 77,100 1,629,123 Herbalife Ltd.* ............................. 67,100 2,526,315 ICT Group, Inc.* ............................ 52,500 1,420,650 Imperial Sugar Co. .......................... 78,500 2,423,295 Kinetic Concepts, Inc.* ..................... 61,800 3,037,470 MedCath Corp.* .............................. 95,400 2,768,508 Medicines Co., (The)* ....................... 72,300 1,949,931 Mentor Corp. ................................ 44,500 2,136,445 NBTY, Inc.* ................................. 80,900 3,938,212 NutriSystem, Inc.* .......................... 3,800 171,570 PerkinElmer, Inc. ........................... 79,800 1,891,260 Savient Pharmaceuticals, Inc.* .............. 152,600 2,066,204 Spartan Stores, Inc. ........................ 91,300 2,153,767 Viasys Healthcare Inc.* ..................... 69,600 2,152,728 Visicu, Inc.* ............................... 20,100 141,303 Volcano Corp. ............................... 123,400 2,345,834 West Pharmaceutical Services, Inc. .......... 48,500 2,195,110 The accompanying notes are an integral part of the financial statements. 7 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND PORTFOLIO OF INVESTMENTS (CONTINUED) FEBRUARY 28, 2007 (UNAUDITED) NUMBER OF SHARES VALUE --------- ------------ CONSUMER GROWTH--(CONTINUED) Wimm-Bill-Dann Foods OJSC - ADR ............. 48,200 $ 3,181,200 Zoll Medical Corp.* ......................... 75,800 2,107,998 ------------ 66,057,646 ------------ ENERGY--3.7% Advanced Energy Industries, Inc.* ........... 83,400 1,679,676 Core Laboratories N.V.* ..................... 35,900 2,831,792 Harvest Natural Resources, Inc.* ............ 70,300 664,335 NATCO Group, Inc., Class A* ................. 65,900 2,283,435 Tesoro Corp. ................................ 36,400 3,317,496 Trico Marine Services, Inc.* ................ 71,800 2,616,392 ------------ 13,393,126 ------------ FINANCIAL--17.6% Allied World Assurance Holdings Ltd. ........ 55,600 2,317,964 Arch Capital Group Ltd.* .................... 44,600 2,876,254 Argonaut Group, Inc. ........................ 89,800 3,161,858 Calamos Asset Management, Inc., Class A ..... 103,700 2,698,274 Commerce Group, Inc., (The) ................. 98,600 2,826,862 Cowen Group, Inc.* .......................... 28,100 557,504 Dollar Financial Corp.* ..................... 90,900 2,328,858 Endurance Specialty Holdings, Ltd. .......... 69,200 2,453,832 EZCORP, Inc., Class A* ...................... 163,696 2,430,886 Interactive Data Corp. ...................... 108,700 2,614,235 International Securities Exchange Holdings, Inc. ........................... 35,500 1,641,875 Investment Technology Group, Inc.* .......... 65,000 2,660,450 Meadowbrook Insurance Group, Inc.* .......... 276,200 2,908,386 Navigators Group, Inc.* ..................... 52,100 2,589,370 Nelnet, Inc., Class A ....................... 96,700 2,497,761 Odyssey Re Holdings Corp. ................... 80,000 3,116,800 Phoenix Companies, Inc., (The) .............. 202,000 2,884,560 NUMBER OF SHARES VALUE --------- ------------ FINANCIAL--(CONTINUED) Platinum Underwriters Holdings Ltd. ......... 92,900 $ 2,968,155 Preferred Bank Los Angeles .................. 47,700 1,966,671 Reinsurance Group of America, Inc. .......... 53,900 3,076,612 Safety Insurance Group, Inc. ................ 51,400 2,182,958 Seabright Insurance Holdings* ............... 159,500 2,997,005 Selective Insurance Group, Inc. ............. 102,800 2,512,432 SWS Group, Inc. ............................. 118,300 3,118,388 Zenith National Insurance Corp. ............. 36,550 1,759,882 ------------ 63,147,832 ------------ INDUSTRIAL--15.9% Acuity Brands, Inc. ......................... 41,300 2,288,020 ASE Test Ltd.* .............................. 164,900 1,833,688 Con-Way Inc. ................................ 43,100 2,116,210 Consolidated Graphics, Inc.* ................ 44,200 3,149,692 Diamond Management & Technology Consultants, Inc. .............. 105,900 1,598,031 Gardner Denver, Inc.* ....................... 55,800 1,889,946 General Cable Corp. ......................... 39,600 1,978,020 Gevity HR, Inc. ............................. 115,100 2,292,792 H&E Equipment Services, Inc.* ............... 60,200 1,589,882 Horizon Lines, Inc., Class A ................ 92,900 2,693,171 HUB Group, Inc., Class A* ................... 71,900 2,277,073 Hudson Highland Group, Inc.* ................ 118,800 1,934,064 Interface, Inc., Class A .................... 90,300 1,428,546 Intevac, Inc. ............................... 102,900 2,806,083 Mueller Industries, Inc. .................... 36,700 1,093,660 On Assignment, Inc.* ........................ 225,400 2,763,404 Pacer International, Inc. ................... 65,900 1,781,277 Robbins & Myers, Inc. ....................... 65,100 2,549,967 RTI International Metals, Inc.* ............. 28,300 2,441,724 Saia, Inc.* ................................. 79,900 2,176,476 SAIC, Inc.* ................................. 96,400 1,738,092 The accompanying notes are an integral part of the financial statements. 8 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND PORTFOLIO OF INVESTMENTS (CONTINUED) FEBRUARY 28, 2007 (UNAUDITED) NUMBER OF SHARES VALUE --------- ------------ INDUSTRIAL--(CONTINUED) Snap-On, Inc. ............................... 21,900 $ 1,097,190 Steelcase, Inc., Class A .................... 135,100 2,623,642 TeleTech Holdings, Inc.* .................... 82,900 2,609,692 Tennant Co. ................................. 28,000 861,840 Thomas & Betts Corp.* ....................... 47,600 2,419,032 Tredegar Corp. .............................. 127,700 2,848,987 ------------ 56,880,201 ------------ TECHNOLOGY--25.8% 24/7 Real Media, Inc.* ...................... 91,500 882,060 Actel Corp.* ................................ 76,600 1,282,284 Altiris, Inc.* .............................. 60,400 1,965,416 Amkor Technology, Inc.* ..................... 188,500 2,173,405 ANADIGICS, Inc.* ............................ 127,200 1,553,112 Ansoft Corp.* ............................... 67,800 2,101,122 Ariba, Inc.* ................................ 198,600 1,848,966 Arris Group, Inc.* .......................... 152,300 2,001,222 ASM International N.V.* ..................... 91,200 2,097,600 Aspen Technology, Inc.* ..................... 214,800 2,577,600 Asyst Technologies, Inc.* ................... 222,700 1,572,262 Avici Systems, Inc.* ........................ 124,200 1,089,234 Brocade Communications Systems, Inc.* ....... 177,475 1,599,050 C-COR, Inc.* ................................ 179,000 2,443,350 Captaris, Inc.* ............................. 324,000 2,012,040 Covansys Corp.* ............................. 48,600 1,198,476 Cray, Inc.* ................................. 121,400 1,623,118 Credence Systems Corp.* ..................... 365,100 1,657,554 Datalink Corp.* ............................. 148,500 1,307,542 DealerTrack Holdings, Inc.* ................. 42,800 1,239,060 ECI Telecom Ltd.* ........................... 88,000 705,760 Embarcadero Technologies, Inc.* ............. 171,100 1,050,554 Forrester Research, Inc.* ................... 6,800 182,444 Gigamedia Ltd.* ............................. 197,300 2,399,168 Global Sources Ltd.* ........................ 128,800 2,064,664 Hyperion Solutions Corp.* ................... 64,250 2,752,470 InfoSpace, Inc.* ............................ 76,900 1,753,320 Interactive Intelligence, Inc.* ............. 133,400 1,972,986 Interwoven, Inc.* ........................... 133,700 2,034,914 Kronos, Inc.* ............................... 42,300 1,670,850 Liquidity Services, Inc.* ................... 87,500 1,579,375 NUMBER OF SHARES VALUE --------- ------------ TECHNOLOGY--(CONTINUED) Manhattan Associates, Inc.* ................. 91,100 $ 2,534,402 Mindspeed Technologies, Inc.* ............... 319,100 775,413 Nam Tai Electronics, Inc. ................... 61,000 808,860 Newport Corp.* .............................. 49,400 882,284 Omnicell, Inc.* ............................. 113,500 2,203,035 Orbotech Ltd.* .............................. 32,400 724,140 RADVision Ltd.* ............................. 43,500 978,315 RF Micro Devices, Inc.* ..................... 232,100 1,852,158 Rogers Corp.* ............................... 14,800 716,468 Shanda Interactive Entertaiment Ltd. - ADR* .............................. 105,000 2,482,200 Silicon Motion Technology Corp. - ADR* ...... 94,800 1,977,528 SkillSoft PLC - ADR* ........................ 55,700 393,242 SonicWALL, Inc.* ............................ 189,300 1,650,696 Spansion, Inc., Class A* .................... 168,300 2,046,528 Synchronoss Technologies, Inc.* ............. 141,000 2,539,410 Techwell, Inc.* ............................. 166,300 1,998,926 TheStreet.com, Inc. ......................... 96,800 1,079,320 TIBCO Software, Inc* ........................ 245,500 2,221,775 TradeStation Group, Inc.* ................... 128,300 1,516,506 TriQuint Semiconductor, Inc.* ............... 188,300 941,500 ValueClick, Inc.* ........................... 97,900 2,594,350 Verigy Ltd.* ................................ 118,000 2,771,820 Vignette Corp.* ............................. 133,700 2,385,208 Zoran Corp.* ................................ 140,900 2,320,623 ------------ 92,785,685 ------------ TOTAL COMMON STOCKS (Cost $315,269,728) ................................. 355,936,860 ------------ SHORT-TERM INVESTMENTS--1.1% Columbia Prime Reserves Fund 5.24% 03/01/07 ............................ 3,988,728 3,988,728 ------------ TOTAL SHORT-TERM INVESTMENTS (Cost $3,988,728) ................................... 3,988,728 The accompanying notes are an integral part of the financial statements. 9 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND PORTFOLIO OF INVESTMENTS (CONCLUDED) FEBRUARY 28, 2007 (UNAUDITED) VALUE TOTAL INVESTMENTS--100.2% (Cost $319,258,456) $359,925,588 ------------ LIABILITIES IN EXCESS OF OTHER ASSETS--(0.2)% (804,103) ------------ NET ASSETS--100.0% $359,121,485 ============ ---------- * Non-income producing. ADR -- American Depository Receipt. The accompanying notes are an integral part of the financial statements. 10 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND STATEMENT OF ASSETS AND LIABILITIES FEBRUARY 28, 2007 (UNAUDITED) ASSETS Investments, at value (cost - $319,258,456) ............ $359,925,588 Receivable for investments sold ........................ 5,493,596 Receivable for capital shares sold ..................... 705,627 Dividends and interest receivable ...................... 258,714 Prepaid expenses and other assets ...................... 31,856 ------------ Total assets ......................................... 366,415,381 ------------ LIABILITIES Payable for investments purchased ...................... 6,604,637 Payable for capital shares redeemed .................... 283,338 Payable to the Adviser ................................. 282,158 Accrued expenses and other liabilities ................. 123,763 ------------ Total liabilities .................................... 7,293,896 ------------ NET ASSETS Capital stock, $0.001 par value ........................ 14,464 Paid-in capital ........................................ 292,410,806 Accumulated net investment loss ........................ (896,098) Accumulated net realized gain from investments ......... 26,925,181 Net unrealized appreciation on investments ............. 40,667,132 ------------ Net assets ........................................... $359,121,485 ============ INSTITUTIONAL CLASS Net assets ............................................. $206,420,003 ------------ Shares outstanding ..................................... 8,282,950 ------------ Net asset value, offering and redemption price per share $ 24.92 ============ INVESTOR CLASS Net assets ............................................. $152,701,482 ------------ Shares outstanding ..................................... 6,181,161 ------------ Net asset value, offering and redemption price per share $ 24.70 ============ The accompanying notes are an integral part of the financial statements. 11 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND STATEMENT OF OPERATIONS (UNAUDITED) FOR THE SIX MONTHS ENDED FEBRUARY 28, 2007 ----------------- INVESTMENT INCOME Dividends (Net of foreign withholding taxes of $3,641) .. $ 1,369,541 ----------- Total investment income ................................. 1,369,541 ----------- EXPENSES Advisory fees ........................................... 1,751,406 Administrative service fees ............................. 262,711 Administration and accounting fees ...................... 246,751 Shareholder servicing fees .............................. 76,381 Transfer agent fees ..................................... 65,105 Custodian fees .......................................... 52,542 Professional fees ....................................... 44,907 Directors' and officers' fees ........................... 38,770 Printing and shareholder reporting fees ................. 25,528 Registration and filing fees ............................ 21,233 Other expenses .......................................... 13,156 ----------- Total expenses before waivers ......................... 2,598,490 Less: waivers ......................................... (332,851) ----------- Net expenses .......................................... 2,265,639 ----------- Net investment loss ..................................... (896,098) ----------- NET REALIZED AND UNREALIZED GAIN FROM INVESTMENTS Net realized gain from investments ...................... 27,473,655 Net change in unrealized appreciation on investments .... 11,992,589 ----------- Net realized and unrealized gain from investments ....... 39,466,244 ----------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ....... $38,570,146 =========== The accompanying notes are an integral part of the financial statements. 12 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND STATEMENT OF CHANGES IN NET ASSETS
FOR THE FOR THE SIX MONTHS ENDED YEAR ENDED FEBRUARY 28, 2007 AUGUST 31, 2006 ----------------- --------------- (UNAUDITED) INCREASE/(DECREASE) IN NET ASSETS FROM OPERATIONS Net investment loss ....................................................... $ (896,098) $ (2,060,076) Net realized gain from investments ........................................ 27,473,655 71,973,578 Net change in unrealized appreciation/(depreciation) on investments ............................................................. 11,992,589 (31,952,428) ------------ ------------ Net increase in net assets resulting from operations ...................... 38,570,146 37,961,074 ------------ ------------ LESS DISTRIBUTIONS TO SHAREHOLDERS FROM: Net realized capital gains--Institutional shares .......................... (39,206,310) (24,436,958) Net realized capital gains--Investor shares ............................... (30,588,835) (18,402,660) ------------ ------------ Total distributions to shareholders ..................................... (69,795,145) (42,839,618) ------------ ------------ INCREASE IN NET ASSETS DERIVED FROM CAPITAL SHARE TRANSACTIONS(1) ............................................. 52,955,270 30,856,922 ------------ ------------ Total increase in net assets .............................................. 21,730,271 25,978,378 ------------ ------------ NET ASSETS Beginning of period ....................................................... 337,391,214 311,412,836 ------------ ------------ End of period* ............................................................ $359,121,485 $337,391,214 ============ ============ ---------- * Includes accumulated net investment loss of $(896,098) and $0 for the six months ended February 28, 2007 and for the year ended August 31, 2006, respectively. (1) See Note 4 in the Notes to Financial Statements.
The accompanying notes are an integral part of the financial statements. 13 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND FINANCIAL HIGHLIGHTS -------------------------------------------------------------------------------- Contained below is per share operating performance data for each class of shares outstanding, total investment return, ratios to average net assets and other supplemental data for the respective periods. This information has been derived from information provided in the financial statements. --------------------------------------------------------------------------------
INSTITUTIONAL CLASS ------------------------------------------------------------------------------------ FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE SIX MONTHS YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED ENDED 2/28/07 8/31/06 8/31/05 8/31/04 8/31/03 8/31/02 ----------- ------- ------- ------- ------- ------- (UNAUDITED) PER SHARE OPERATING PERFORMANCE Net asset value, beginning of period ....... $27.74 $28.78 $24.99 $22.71 $17.83 $19.52 ------ ------ ------ ------ ------ ------ Net investment loss ........................ (0.06)* (0.16)* (0.22) (0.16)* (0.11)* (0.02) Net realized and unrealized gain/(loss) from investments ........................ 3.03 3.08 6.49 2.44 4.99 (1.67) ------ ------ ------ ------ ------ ------ Net increase/(decrease) in net assets resulting from operations ............... 2.97 2.92 6.27 2.28 4.88 (1.69) ------ ------ ------ ------ ------ ------ Distributions to shareholders from: Net realized capital gains ................. (5.79) (3.96) (2.48) -- -- -- ------ ------ ------ ------ ------ ------ Net asset value, end of period ............. $24.92 $27.74 $28.78 $24.99 $22.71 $17.83 ====== ====== ====== ====== ====== ====== Total investment return(1) ................. 11.67% 12.46% 27.34% 10.04% 27.37% (8.66)% ====== ====== ====== ====== ====== ====== RATIOS/SUPPLEMENTAL DATA Net assets, end of period (000's omitted) ......................... $206,420 $189,920 $177,359 $175,642 $132,845 $80,639 Ratio of expenses to average net assets with waivers and reimbursements ......... 1.25%(2) 1.25% 1.25% 1.25% 1.25% 1.25% Ratio of expenses to average net assets without waivers and reimbursements ...... 1.44%(2) 1.43% 1.46% 1.44% 1.50% 1.50% Ratio of net investment loss to average net assets .............................. (0.47)%(2) (0.55)% (0.73)% (0.61)% (0.60)% (0.11)% Portfolio turnover rate .................... 75.49% 126.64 % 129.18% 129.18% 122.39% 140.27% ---------------- * Calculated based on average shares outstanding for the period. (1) Total investment return is calculated by assuming a purchase of shares on the first day and a sale of shares on the last day of each period reported and includes reinvestments of dividends and distributions, if any. (2) Annualized.
The accompanying notes are an integral part of the financial statements. 14 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND FINANCIAL HIGHLIGHTS -------------------------------------------------------------------------------- Contained below is per share operating performance data for each class of shares outstanding, total investment return, ratios to average net assets and other supplemental data for the respective periods. This information has been derived from information provided in the financial statements. --------------------------------------------------------------------------------
INVESTOR CLASS ------------------------------------------------------------------------------------ FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE SIX MONTHS YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED ENDED 2/28/07 8/31/06 8/31/05 8/31/04 8/31/03 8/31/02 ----------- ------- ------- ------- ------- ------- (UNAUDITED) PER SHARE OPERATING PERFORMANCE Net asset value, beginning of period ....... $27.56 $ 28.65 $24.91 $22.65 $17.80 $19.49 ------ ------ ------ ------ ------ ------ Net investment loss ........................ (0.07)* (0.18)* (0.23) (0.18)* (0.12)* (0.03) Net realized and unrealized gain/(loss) from investments ........................ 3.00 3.05 6.45 2.44 4.97 (1.66) ------ ------ ------ ------ ------ ------ Net increase/(decrease) in net assets resulting from operations ............... 2.93 2.87 6.22 2.26 4.85 (1.69) ------ ------ ------ ------ ------ ------ Distributions to shareholders from: Net realized capital gains ................. (5.79) (3.96) (2.48) -- -- -- ------ ------ ------ ------ ------ ------ Net asset value, end of period ............. $24.70 $27.56 $28.65 $24.91 $22.65 $17.80 ====== ====== ====== ====== ====== ====== Total investment return(1) ................. 11.60% 12.33% 27.22% 9.98% 27.25% (8.67)% ====== ====== ====== ====== ====== ====== RATIOS/SUPPLEMENTAL DATA Net assets, end of period (000's omitted) ......................... $152,701 $147,471 $134,054 $124,031 $112,508 $88,920 Ratio of expenses to average net assets with waivers and reimbursements ......... 1.35%(2) 1.35% 1.35% 1.35% 1.35% 1.27% Ratio of expenses to average net assets without waivers and reimbursements ...... 1.54%(2) 1.53% 1.56% 1.54% 1.60% 1.60% Ratio of net investment loss to average net assets .............................. (0.57)%(2) (0.65)% (0.83)% (0.70)% (0.69)% (0.20)% Portfolio turnover rate .................... 75.49% 126.64% 129.18% 129.18% 122.39% 140.27% ---------- * Calculated based on average shares outstanding for the period. (1) Total investment return is calculated by assuming a purchase of shares on the first day and a sale of shares on the last day of each period reported and includes reinvestments of dividends and distributions, if any. (2) Annualized.
The accompanying notes are an integral part of the financial statements. 15 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND NOTES TO FINANCIAL STATEMENTS (UNAUDITED) 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES The RBB Fund, Inc. ("RBB" or "Company") was incorporated under the laws of the State of Maryland on February 29, 1988 and is registered under the Investment Company Act of 1940, as amended, (the "Investment Company Act") as an open-end management investment company. RBB is a "series fund," which is a mutual fund divided into separate portfolios. Each portfolio is treated as a separate entity for certain matters under the Investment Company Act, and for other purposes, and a shareholder of one portfolio is not deemed to be a shareholder of any other portfolio. Currently, RBB has eighteen active investment portfolios, including the Bogle Investment Management Small Cap Growth Fund (the "Fund"), which commenced investment operations on October 1, 1999. As of the date hereof, the Fund offers two classes of shares, Institutional Class and Investor Class. RBB has authorized capital of one hundred billion shares of common stock of which 76.673 billion shares are currently classified into one hundred and six classes of common stock. Each class represents an interest in an active or inactive RBB investment portfolio. The active classes have been grouped into eight separate "families." PORTFOLIO VALUATION -- The Fund's net asset value ("NAV") is calculated once daily at the close of regular trading hours on the New York Stock Exchange ("NYSE") (generally 4:00 p.m. Eastern time) on each day the NYSE is open. Securities held by the Fund are valued using the closing price or the last sale price on a national securities exchange or the National Association of Securities Dealers Automatic Quotation System (NASDAQ) market system where they are primarily traded. Equity securities traded in the over-the-counter market are valued at their closing prices. If there were no transactions on that day, securities traded principally on an exchange or on NASDAQ will be valued at the mean of the last bid and ask prices prior to the market close. Fixed income securities having a remaining maturity of greater than 60 days are valued using an independent pricing service. Fixed income securities having a remaining maturity of 60 days or less are amortized to maturity based on their cost. Investments in other open-end investment companies are valued based on the NAV of those investment companies (which may use fair value pricing as discussed in their prospectuses). If market quotations are unavailable or deemed unreliable, securities will be valued in accordance with procedures adopted by the Board of Directors. Relying on prices supplied by pricing services or dealers or using fair valuation may result in values that are higher or lower than the values used by other investment companies and investors to price the same investments. USE OF ESTIMATES -- The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. REPURCHASE AGREEMENTS -- The Fund may purchase securities from financial institutions subject to the seller's agreement to repurchase them at an agreed-upon time and price ("repurchase agreements"). The financial institutions with whom the Fund enters into repurchase agreements are banks and broker-dealers 16 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) that Bogle Investment Management, L.P. (the "Adviser" or "Bogle") considers creditworthy. The seller, under a repurchase agreement, will be required to maintain the value of the securities as collateral, subject to the agreement at not less than the repurchase price plus accrued interest. The Adviser marks to market daily the value of the collateral, and, if necessary, requires the seller to deposit additional collateral by the next day of business, to ensure that the value is not less than the repurchase price. Default by or bankruptcy of the seller would, however, expose the Fund to possible loss because of adverse market action or delays in connection with the disposition of the underlying securities. For the six months ended February 28, 2007, the Fund did not enter into any repurchase agreements. INVESTMENT TRANSACTIONS, INVESTMENT INCOME AND EXPENSES -- The Fund records security transactions based on trade date. The cost of investments sold is determined by use of the specific identification method for both financial reporting and income tax purposes in determining realized gains and losses on investments. Interest income is accrued when earned. Dividend income is recorded on the ex-dividend date. The Fund's net investment income (other than class specific shareholder servicing fees) and unrealized and realized gains and losses are allocated daily to each class of shares based upon the relative proportion of net assets of each class at the beginning of the day. Expenses incurred on behalf of a specific class, fund or fund family are charged directly to the class, fund or fund family (in proportion to net assets). Expenses incurred for all of the RBB families (such as director or professional fees) are charged to all funds in proportion to their net assets of the RBB Funds, or in such other manner as the Board of Directors deems fair or equitable. Expenses and fees, including investment advisory and administration fees, are accrued daily for the purpose of determining the net asset value of the Fund. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net investment income and distributions from net realized capital gains, if any, will be declared and paid at least annually to shareholders and recorded on ex-date. Income dividends and capital gain distributions are determined in accordance with U.S. federal income tax regulations which may differ from accounting principles generally accepted in the United States. These differences include the treatment of non-taxable dividends, expiring capital loss carryforwards, foreign currency gain/loss, and losses deferred due to wash sales and excise tax regulations. Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications within the components of net assets. U.S. TAX STATUS -- No provision is made for U.S. income taxes as it is the Fund's intention to qualify for and elect the tax treatment applicable to regulated investment companies under Subchapter M of the Internal Revenue Code of 1986, as amended, and make the requisite distributions to its shareholders which will be sufficient to relieve it from U.S. income and excise taxes. OTHER -- In the normal course of business, the Fund may enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is dependent on claims that may be made against the Fund in the future, and, therefore, cannot be estimated; however, based on experience, the risk of material loss for such claims is considered remote. 17 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES For its advisory services, the Adviser is entitled to receive 1.00% of the Fund's average daily net assets, computed daily and payable monthly. The Adviser has contractually agreed to limit the Fund's total operating expenses for the current fiscal year to the extent that such expenses exceed 1.25% of the average daily net assets of the Fund's Institutional Class and 1.35% of the average daily net assets of the Fund's Investor Class. As necessary, this limitation is effected in waivers of advisory fees and reimbursements of expenses exceeding the advisory fee. The contractual fee waiver does not provide for recoupment of fees that were waived or expenses that were reimbursed. For the six months ended February 28, 2007, investment advisory fees and waivers of the Fund were as follows: GROSS NET ADVISORY FEES WAIVERS ADVISORY FEES ------------- --------- ------------- $1,751,406 $(83,276) $1,668,130 The Fund will not pay the Adviser at a later time for any amounts waived or any amounts assumed. In addition to serving as the Fund's investment adviser, Bogle provides certain shareholder services to the Investor Class of the Fund. As compensation for such services, the Adviser receives a monthly fee equal to an annual rate of 0.10% of the average daily net assets of the Fund's Investor Class. PFPC Inc. ("PFPC"), a wholly-owned subsidiary of PFPC Worldwide Inc. and an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc., serves as administrator for the Fund. For providing administrative and accounting services, PFPC is entitled to receive a monthly fee equal to an annual rate of 0.115% of the Fund's average daily net assets, subject to a minimum of $6,250 per month. The Fund also pays a monthly multiple class fee of $1,875 per additional class. In addition, PFPC serves as the Fund's transfer and dividend disbursing agent. PFPC voluntarily agreed to waive a portion of its administration and accounting services fees for the Fund. For the six months ended February 28, 2007, administration and accounting services fees and waivers of the Fund were as follows: GROSS ADMINISTRATION NET ADMINISTRATION AND ACCOUNTING AND ACCOUNTING SERVICES FEES WAIVERS SERVICES FEES -------------------- --------- ------------------ $246,751 $(21,892) $224,859 18 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) Included in the administration and accounting services fees and expenses, shown on the previous page, are fees for providing regulatory administration services to RBB. For providing these services, PFPC is entitled to receive compensation as agreed to by the Company and PFPC. This fee is allocated to each portfolio in proportion to its net assets of the RBB Funds. In addition, PFPC serves as the Fund's transfer and dividend disbursing agent. For providing transfer agent services, PFPC is entitled to receive a monthly fee subject to a minimum monthly fee of $6,000 plus out of pocket expenses.For the six months ended February 28, 2007, PFPC transfer agency fees were $65,105. PFPC Trust Company provides certain custodial services to the Fund. PFPC Trust Company is a wholly-owned subsidiary of PFPC Worldwide, Inc. and an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc. As compensation for such custodial services, PFPC Trust Company is entitled to receive a monthly fee equal to an annual rate of 0.03% of the Fund's average daily net assets subject to a minimum monthly fee of $1,500. PFPC Distributors, Inc., ("PFPC Distributors") a wholly-owned subsidiary of PFPC Worldwide, Inc. and an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc., provides certain administrative services to the Fund. As compensation for such administrative services, PFPC Distributors receives a monthly fee equal to an annual rate of 0.15% of the Fund's average daily net assets. PFPC Distributors voluntarily agreed to waive a portion of its administrative services fees for the Fund. For the six months ended February 28, 2007, administrative services fees and waivers of the Fund were as follows: GROSS ADMINISTRATIVE NET ADMINISTRATIVE SERVICES FEES WAIVERS SERVICES FEES -------------------- --------- ------------------ $262,711 $(227,683) $35,028 The Fund will not pay PFPC or PFPC's affiliates at a later time for any amounts waived or any amounts assumed. As of February 28, 2007, the Fund owed PFPC and its affiliates $63,331 for their services. 3. INVESTMENT IN SECURITIES For the six months ended February 28, 2007, aggregate purchases and sales of investment securities (excluding short-term investments) of the Fund were as follows: INVESTMENT SECURITIES ------------------------------- PURCHASES SALES ------------ ------------ $262,524,295 $278,876,278 19 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) 4. CAPITAL SHARE TRANSACTIONS As of February 28, 2007, the Fund has 100,000,000 shares of $0.001 par value common stock authorized for the Institutional Class and 100,000,000 shares of $0.001 par value common stock authorized for the Investor Class. Transactions in capital shares were as follows:
INSTITUTIONAL CLASS ---------------------------------------------------------------- FOR THE SIX MONTHS ENDED FOR THE FEBRUARY 28, 2007 YEAR ENDED (UNAUDITED) AUGUST 31, 2006 ----------------------------- ---------------------------- SHARES VALUE SHARES VALUE --------- ------------ ---------- ------------ Sales ......................................... 840,185 $ 20,735,429 942,943 $ 27,031,546 Reinvestments ................................. 1,580,281 37,610,697 990,224 23,507,922 Redemptions ................................... (982,766) (24,388,891) (1,249,516) (35,240,729) --------- ------------ ---------- ------------ Net Increase .................................. 1,437,700 $ 33,957,235 683,651 $ 15,298,739 ========= ============ ========== ============ INVESTOR CLASS ---------------------------------------------------------------- FOR THE SIX MONTHS ENDED FOR THE FEBRUARY 28, 2007 YEAR ENDED (UNAUDITED) AUGUST 31, 2006 ----------------------------- ---------------------------- SHARES VALUE SHARES VALUE --------- ------------ ---------- ------------ Sales ......................................... 235,544 $ 5,887,496 524,556 $ 14,633,758 Reinvestments ................................. 1,229,987 29,027,689 737,505 17,412,498 Redemptions ................................... (634,781) (15,917,150) (591,148) (16,488,073) --------- ------------ ---------- ------------ Net Increase .................................. 830,750 $ 18,998,035 670,913 $ 15,558,183 ========= ============ ========== ============
5. FEDERAL INCOME TAX INFORMATION At February 28, 2007, federal tax cost, aggregate gross unrealized appreciation and depreciation of securities held by the Fund were as follows: FEDERAL TAX UNREALIZED UNREALIZED NET UNREALIZED COST APPRECIATION DEPRECIATION APPRECIATION ------------ ------------ ------------ -------------- $319,258,456 $50,949,411 $(10,282,279) $40,667,132 20 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND NOTES TO FINANCIAL STATEMENTS (CONCLUDED) (UNAUDITED) As of August 31, 2006, the components of distributable earnings on a tax basis were as follows: UNDISTRIBUTED UNDISTRIBUTED ORDINARY LONG-TERM INCOME GAINS ------------- ------------- $22,923,470 $46,871,677 At August 31, 2006, the Fund had no capital loss carryforwards available to offset future capital gains. Under Federal tax law, foreign currency and capital losses realized after October 31 may be deferred and treated as having arisen on the first day of the following fiscal year. For the year ended August 31, 2006, the Fund incurred no post-October capital losses. The differences between the book and tax basis components of distributable earnings relate principally to the timing of recognition of income and gains for federal income tax purposes. Short-term and foreign currency gains are reported as ordinary income for federal tax purposes. 6. NEW ACCOUNTING PRONOUNCEMENTS In July 2006, the Financial Accounting Standards Board ("FASB") issued Interpretation No. 48, "Accounting for Uncertainty in Income Taxes - an Interpretation of FASB Statement No. 109" (the "Interpretation"). The Interpretation establishes for all entities, a minimum threshold for financial statement recognition of the benefit of positions taken in filing tax returns (including whether an entity is taxable in a particular jurisdiction), and requires certain expanded tax disclosures. The Interpretation is effective for fiscal years beginning after December 15, 2006, and is required to be implemented by calendar year funds by no later than June 29, 2007. The Adviser has recently begun to evaluate the application of the Interpretation to the Fund, and is not in a position at this time to estimate the significance of its impact, if any, on the Fund's financial statements. In September 2006, FASB issued Statement of Financial Accounting Standards ("SFAS") 157, Fair Value Measurements, which clarifies the definition of fair value and requires companies to expand their disclosure about the use of fair value to measure assets and liabilities in interim and annual periods subsequent to initial recognition. Adoption of SFAS 157 requires the use of the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. At this time, the Fund is in the process of reviewing the impact, if any, of the SFAS on the Fund's financial statements. 21 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND OTHER INFORMATION (UNAUDITED) PROXY VOTING Policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities as well as information regarding how the Fund voted proxies relating to portfolio securities for the most recent 12-month period ended June 30 are available without charge, upon request, by calling (877) 264-5346 and on the Securities and Exchange Commission's ("SEC") website at http://www.sec.gov. QUARTERLY PORTFOLIO SCHEDULES The Company will file its complete schedule of portfolio holdings with the SEC for the first and third fiscal quarters of each fiscal year (quarters ended November 30 and May 31) on Form N-Q. The Company's Form N-Q will be available on the SEC website at http://www.sec.gov and may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. Information on the operation of the SEC Public Reference Room may be obtained by calling 1-800-SEC-0330. 22 [THIS PAGE INTENTIONALLY LEFT BLANK] INVESTMENT ADVISER Bogle Investment Management, L.P. 2310 Washington Street Suite 310 Newton Lower Falls, MA 02462 ADMINISTRATOR PFPC Inc. 301 Bellevue Parkway Wilmington, DE 19809 TRANSFER AGENT PFPC Inc. 101 Sabin Street Pawtucket, RI 02860 DISTRIBUTOR PFPC Distributors, Inc. 760 Moore Road King of Prussia, PA 19406 CUSTODIAN PFPC Trust Company 8800 Tinicum Blvd. Suite 200 Philadelphia, PA 19153 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM PricewaterhouseCoopers LLP Two Commerce Square 2001 Market Street Philadelphia, PA 19103-7042 COUNSEL Drinker Biddle & Reath LLP One Logan Square 18th and Cherry Streets Philadelphia, PA 19103-6996 [GRAPHIC OMITTED] HILLIARD LYONS SENBANC FUND -------------------------- SENBANC -------------------------- OF THE RBB FUND, INC. SEMI-ANNUAL REPORT FEBRUARY 28, 2007 (UNAUDITED) This report is submitted for the general information of the shareholders of the Fund. It is not authorized for distribution unless preceded or accompanied by a current prospectus for the Fund. Shares of Senbanc Fund are distributed by PFPC Distributors, Inc., 760 Moore Road King of Prussia, PA 19406. SIX MONTHS ENDED FEBRUARY 28, 2007 TO: SHAREHOLDERS OF SENBANC FUND Senbanc Fund's 9.4% return for the calendar year ended December 31, 2006 was a welcome recovery from the 4.1% decline in the Fund's return for calendar year 2005. One year of loss in the last six calendar years versus three years of loss for the S&P 500 in the same period has kept Senbanc's long term performance viable. It was not until the last month of the last quarter of 2006 that Senbanc Fund outperformed its two comparative indexes, but we see this small increment as a sign of change for bank stock valuation. Seventeen consecutive months of interest rate rises, ended in mid-2006, forced bank stock investors into a defensive position. They jettisoned bank stocks with no regard for underlying value, assuming that rising rates are detrimental to net interest margins. Investors were wrong in this assumption, but correct in the actions they took: bank values rose, but bank stock prices did not. Money center and super-regional banks increased earnings and profitability faster, as their stock prices declined further, than their smaller brethren. From the point of view of an objective investor, their valuations rose. Large banks are favored with high premiums when sentiment toward them is favorable, and bear the brunt of investor sentiment when the tide turns. The most profitable banks were reduced to a range of valuation rarely seen by them, and indistinguishable from valuations accorded to the mediocre. But the weight of nine consecutive quarters of strong earnings for large banks began to be felt by investors in late 2005. Between October 2005 and October 2006, large cap bank stock prices rose 18%. Senbanc Fund added large cap banks to its portfolio between May 2004 and July 2005. In December 2006 these banks represented 42% of the total portfolio. So in 2004 and 2005 your fund added the most out of favor bank stocks as values were rising and prices were falling. As the perception of bank stocks recovers, we expect the rising tide to lift all boats, over time. Money center bank price to earnings ratios are at a 20% discount to all banks; we expect to see this imbalance at least partially corrected before the large regional banks, then smaller regional banks, are recognized as the severely undervalued group they appear to be. Recent revelations about sub-prime lending has had a negative impact on bank stock prices, but your portfolio includes only one bank where this has been an issue, and that stock represents less than one third of one percent of your fund's portfolio. We expect the largest percentage gains for our portfolio of banks to be driven by a delamination of performance driven valuations, separating the valuations of banks with dissimilar records of performance. We expect this process to begin when the upward valuation of all banks begins to lift the lowest tiers. Very truly yours, /s/ Alan F. Morel Alan F. Morel Portfolio Manager
------------------------------------------------------------------------------------------------------------------- SINCE TOTAL RETURNS (%) SIX 1 3 YEAR 5 YEAR INCEPTION* AS OF 2/28/07 MONTHS YEAR ANNUALIZED ANNUALIZED ANNUALIZED --------------------------------------------------------------------------------------------------------------- Senbanc Fund 3.23 3.17 3.26 11.93 11.93 ------------------------------------------------------------------------------------------------------------------- *Inception Date -- 7/8/99 THE PERFORMANCE SHOWN ABOVE REPRESENTS PAST PERFORMANCE. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS AND CURRENT PERFORMANCE MAY BE HIGHER OR LOWER THAN THE PERFORMANCE SHOWN ABOVE. INVESTMENT RESULTS AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. TO OBTAIN PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH-END, VISIT WWW.HILLIARD.COM OR CALL 1-800-444-1854. THE FUND'S GROSS ANNUAL OPERATING EXPENSES, AS STATED IN THE CURRENT PROSPECTUS IS 1.38%. TOTAL RETURNS SHOWN INCLUDE FEE WAIVERS AND EXPENSE REIMBURSEMENTS. RETURNS COULD HAVE BEEN LOWER IF THESE WAIVERS WERE NOT IN EFFECT. THE MAXIMUM SALES CHARGE, AS STATED IN THE PROSPECTUS IS 2.25%.
1 SENBANC FUND FUND EXPENSE EXAMPLES (UNAUDITED) As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments; and (2) ongoing costs, including management fees; distribution (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the six-month period from September 1, 2006 to February 28, 2007, and held for the entire period. ACTUAL EXPENSES The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use the information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads). Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning Account Ending Account Value Value Expenses Paid 9/01/06 2/28/07 During Period* ----------------- -------------- -------------- Actual ................................... $1,000 $1,032.30 $7.71 Hypothetical (5% return before expenses) . 1,000 1,017.11 7.68 --------------------- * Expenses are equal to the Fund's annualized expense ratio of 1.53% multiplied by the average account value over the period, multiplied by the number of days (181) in the most recent fiscal half-year, then divided by 365 to reflect the one-half year period. The Fund's ending account value is based on the actual six-month total return of 3.23%.
PORTFOLIO HOLDINGS SUMMARY TABLE FEBRUARY 28, 2007 (UNAUDITED) % of Industry Classification Net Assets -------------------------- ------------ Savings, Credit & Other Financial Institutions ......... 92.6% State & National Banks ................................. 0.3 U.S. Government Agency Obligations ..................... 7.4 ------ 100.3 Liabilities in Excess of Other Assets .................. (0.3) ------ Net Assets ............................................. 100.0% ====== Portfolio holdings are subject to change at any time. 2 SENBANC FUND SCHEDULE OF INVESTMENTS FEBRUARY 28, 2007 (UNAUDITED)
COMMON STOCK -- 92.9% --------------------------------------------------------------------------------------------------- MARKET SHARES DESCRIPTION VALUE ------ ----------- -------- SAVINGS, CREDIT & OTHER FINANCIAL INSTITUTIONS -- 92.6% ------------------------------------------------------- 26,900 Associated Banc-Corp. .............................................. $ 930,202 176,400 Bank of America Corp. .............................................. 8,973,468 39,200 BB&T Corp. ......................................................... 1,665,216 47,000 C&F Financial Corp. ................................................ 2,070,350 23,200 Camden National Corp. .............................................. 1,029,616 34,800 Capital Bank Corp. ................................................. 634,752 15,400 Central Pacific Financial Corp. .................................... 580,426 22,700 Citigroup, Inc. .................................................... 1,144,080 12,300 Citizens Banking Corp. ............................................. 279,210 37,000 City Holding Co. ................................................... 1,455,580 35,700 Comerica, Inc. ..................................................... 2,155,923 11,800 Community Banks, Inc. .............................................. 296,180 59,600 Corus Bankshares, Inc. ............................................. 1,106,176 31,481 Dearborn Bancorp, Inc.* ............................................ 609,159 16,300 Desert Community Bank* ............................................. 301,550 13,800 Financial Institutions, Inc. ....................................... 295,458 27,100 First United Corp. ................................................. 606,769 37,600 FNB Corp. .......................................................... 1,359,240 40,600 Fremont General Corp. .............................................. 357,686 342,400 Greater Bay Bancorp ................................................ 9,176,320 294,000 JPMorgan Chase & Co. ............................................... 14,523,600 360,400 KeyCorp ............................................................ 13,601,496 13,000 Leesport Financial Corp. ........................................... 299,390 65,197 MainSource Financial Group, Inc. ................................... 1,095,310 260,400 National Bankshares, Inc. .......................................... 6,246,996 246,300 National City Corp. ................................................ 9,322,455 302,943 Northrim BanCorp, Inc. ............................................. 8,839,877 339,600 Oriental Financial Group, Inc.(a) .................................. 4,350,276 442,200 PAB Bankshares, Inc. ............................................... 8,105,526 145,100 Pacific Premier Bancorp, Inc.* ..................................... 1,661,395 117,840 Penns Woods Bancorp, Inc. .......................................... 4,153,860 9,900 Pinnacle Financial Partners, Inc.* ................................. 306,801 31,594 Premier Financial Bancorp .......................................... 511,823 229,800 Regions Financial Corp. ............................................ 8,231,436 37,485 Royal Bancshares of Pennsylvania, Inc., Class A .................... 911,635 3 SENBANC FUND SCHEDULE OF INVESTMENTS (CONTINUED) FEBRUARY 28, 2007 (UNAUDITED) COMMON STOCK (CONTINUED) MARKET SHARES DESCRIPTION VALUE ------ ----------- -------- 359,343 Sun Bancorp, Inc. (NJ)* ............................................ $ 6,780,802 246,000 U.S. Bancorp ....................................................... 8,772,360 11,700 Umpqua Holdings Corp. .............................................. 316,017 102,900 UnionBanCal Corp. .................................................. 6,294,393 21,395 United Security Bancshares, Inc. ................................... 614,250 238,942 Wachovia Corp. ..................................................... 13,230,219 ------------ 153,197,278 ------------ STATE & NATIONAL BANKS -- 0.3% ----------------------------- 25,500 Huntington Bancshares, Inc. ........................................ 590,325 ------------ 590,325 ------------ TOTAL COMMON STOCK (COST $130,721,849) .......................... 153,787,603 ------------ PRINCIPAL --------- U.S. GOVERNMENT AGENCY OBLIGATION -- 7.4% ----------------------------------------- $12,220,000 Federal Home Loan Bank Discount Note 5.14%, 03/01/07(b) ................................................. 12,220,000 ------------ TOTAL U.S. GOVERNMENT AGENCY OBLIGATION (COST $12,220,000) ......... 12,220,000 ------------ TOTAL INVESTMENTS -- 100.3% (COST $142,941,849) ................................................ 166,007,603 ------------ LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.3%) .................... (494,992) ------------ NET ASSETS -- 100% ................................................. $165,512,611 ============ ------------------------- The percentage shown for each investment category is the value of that category as a percentage of the total net assets of the Fund. *Non-income producing security. (a)Incorporated in Puerto Rico. (b)Rate shown is the effective yield at purchase.
See Notes to Financial Statements. 4 SENBANC FUND STATEMENT OF ASSETS AND LIABILITIES FEBRUARY 28, 2007 (UNAUDITED) ASSETS: Investments in securities, at value (Cost $142,941,849) ............................. $166,007,603 Cash ................................................................................ 2,464 Receivable for: Dividends ........................................................................ 424,998 Capital shares sold .............................................................. 151,160 Prepaid expenses .................................................................... 12,539 ------------ Total Assets ................................................................ 166,598,764 ------------ LIABILITIES: Payables for: Capital shares redeemed .......................................................... 765,031 Advisory fees .................................................................... 79,315 Distribution fees ................................................................ 164,975 Professional fees ................................................................ 20,252 Administration and accounting fees ............................................... 20,047 Directors' and officers' fees .................................................... 6,634 Custodian fees ................................................................... 3,210 Accrued expenses and other liabilities .............................................. 26,689 ------------ Total Liabilities ........................................................... 1,086,153 ------------ NET ASSETS .......................................................................... $165,512,611 ============ NET ASSETS CONSISTED OF: Paid-in capital ..................................................................... $139,373,720 Undistributed net investment income ................................................. 1,477,628 Accumulated net realized gain on investments ........................................ 1,595,509 Net unrealized appreciation of investments .......................................... 23,065,754 ------------ NET ASSETS .......................................................................... $165,512,611 ============ NET ASSET VALUE, OFFERING, AND REDEMPTION PRICE PER SHARE ($165,512,611/10,096,615 outstanding shares of common stock, $0.001 par value, 50,000,000 shares authorized) .................... $ 16.39 ============ Maximum offering price per share (100/97.75 of $16.39) .............................. $ 16.77 ============
See Notes to Financial Statements. 5 SENBANC FUND STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED FEBRUARY 28, 2007 (UNAUDITED) ----------------- INVESTMENT INCOME: Dividends (Net of foreign withholding taxes of $9,509) ...................... $2,637,603 Interest income ............................................................. 201,140 ---------- Total income ........................................................... 2,838,743 ---------- EXPENSES: Advisory fees ............................................................... 535,327 Distribution fees ........................................................... 535,327 Administration and accounting fees .......................................... 105,713 Transfer agent fees ......................................................... 60,977 Printing and shareholder reporting fees ..................................... 40,582 Professional fees ........................................................... 25,085 Registration and filing fees ................................................ 20,661 Custodian fees .............................................................. 16,140 Directors' and officers' fees ............................................... 15,659 Other expenses .............................................................. 5,644 ---------- Total expenses ......................................................... 1,361,115 ---------- NET INVESTMENT INCOME ............................................................ 1,477,628 ---------- REALIZED AND UNREALIZED GAIN FROM INVESTMENTS: Net realized gain on investments ............................................ 1,983,547 Net change in unrealized appreciation on investments ........................ 2,682,589 ---------- Net realized and unrealized gain from investments ........................... 4,666,136 ---------- Net increase in net assets resulting from operations ........................ $6,143,764 ==========
See Notes to Financial Statements. 6 SENBANC FUND STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS FOR THE ENDED FISCAL YEAR FEBRUARY 28, 2007 ENDED (UNAUDITED) AUGUST 31, 2006 ----------------- --------------- INCREASE/(DECREASE) IN NET ASSETS: OPERATIONS: Net investment income ....................................................... $ 1,477,628 $ 3,190,506 Net realized gain from investments .......................................... 1,983,547 4,304,498 Net change in unrealized appreciation on investments ........................ 2,682,589 1,529,299 ------------ ------------ Net increase in net assets resulting from operations .................................................... 6,143,764 9,024,303 ------------ ------------ DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Net investment income ....................................................... (3,190,506) (1,518,443) Net realized capital gain ................................................... (4,336,731) (4,067,335) ------------ ------------ Total distributions .................................................... (7,527,237) (5,585,778) ------------ ------------ CAPITAL SHARE TRANSACTIONS (NOTE 4): Proceeds from shares sold ................................................... 2,780,949 10,542,359 Reinvestment of distributions ............................................... 6,961,407 5,203,018 Shares redeemed ............................................................. (28,438,958) (63,841,566) ------------ ------------ Net decrease in net assets derived from capital share transactions .................................... (18,696,602) (48,096,189) ------------ ------------ TOTAL DECREASE IN NET ASSETS ..................................................... (20,080,075) (44,657,664) ------------ ------------ NET ASSETS: Beginning of period ......................................................... 185,592,686 230,250,350 ------------ ------------= End of period ............................................................... $165,512,611 $185,592,686 ============ ============ Undistributed net investment income, end of period .......................... $ 1,477,628 $ 3,190,506 ============ ============
See Notes to Financial Statements. 7 SENBANC FUND FINANCIAL HIGHLIGHTS
FOR THE FOR THE FOR THE PERIOD SIX MONTHS FISCAL YEAR JULY 1, 2005 FOR THE FISCAL YEARS ENDED ENDED ENDED THROUGH -------------------------------------------------- FEBRUARY 28, 2007 AUGUST 31, AUGUST 31, JUNE 30, JUNE 30, JUNE 30, JUNE 30, (UNAUDITED) 2006 2005* 2005 2004 2003 2002 ----------------- ----------- -------------- ----------- ----------- ----------- ----------- PER SHARE OPERATING PERFORMANCE Net asset value: Beginning of period ............ $ 16.57 $ 16.27 $ 16.13 $ 16.54 $ 14.86 $ 13.47 $ 12.05 -------- -------- -------- -------- -------- -------- ------- Net investment income/(loss) ...... 0.15 0.29 0.03 0.15 0.04 (0.01) 0.03+ Net realized and unrealized gain on investments ............ 0.40 0.44 0.11 0.78 2.59 2.05 2.38 -------- -------- -------- -------- -------- -------- ------- Total from investment operations .. 0.55 0.73 0.14 0.93 2.63 2.04 2.41 -------- -------- -------- -------- -------- -------- ------- Less distributions from: Net investment income ............. (0.31) (0.12) -- (0.10) (0.02) (0.01) (0.11) Net realized gain on investments .. (0.42) (0.31) -- (1.24) (0.93) (0.64) (0.88) -------- -------- -------- -------- -------- -------- ------- Total distributions ............... (0.73) (0.43) -- (1.34) (0.95) (0.65) (0.99) -------- -------- -------- -------- -------- -------- ------- Net asset value: End of period .................. $ 16.39 $ 16.57 $ 16.27 $ 16.13 $ 16.54 $ 14.86 $ 13.47 ======== ======== ======== ======== ======== ======== ======= Total investment return (excludes sales charge) ........ 3.23% 4.52%** 0.87%** 5.25% 17.84% 15.87% 21.64% RATIOS/SUPPLEMENTAL DATA Net assets, end of period (000's omitted) ................ $165,513 $185,593 $230,250 $231,651 $217,494 $104,837 $49,638 Ratio of operating expenses to average net assets, including waivers .............. 1.53%*** 1.38% 1.43%*** 1.40% 1.25% 1.64% 1.75% Ratio of operating expenses to average net assets, excluding waivers .............. 1.53%*** 1.38% 1.43%*** 1.40% 1.25% 1.64% 2.01% Ratio of net investment income/(loss) to average net assets, including waivers .. 1.66%*** 1.53% 0.93%*** 0.91% 0.29% (0.13)% 0.13% Ratio of net investment income/(loss) to average net assets, excluding waivers .. 1.66%*** 1.53% 0.93%*** 0.91% 0.29% (0.13)% (0.13)% Portfolio turnover rate ........... 3.49%** 7.47% 0.94% 19.90% 51.01% 60.14% 40.27% ----------------------- * As a result of a reorganization that was effective August 31, 2005, the Fund changed its fiscal year end from June 30 to August 31. ** Not annualized. *** Annualized. + Calculated based on average shares outstanding.
See Notes to Financial Statements. 8 SENBANC FUND NOTES TO FINANCIAL STATEMENTS FEBRUARY 28, 2007 (UNAUDITED) 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES The RBB Fund, Inc. ("RBB" or "Company") was incorporated under the laws of the State of Maryland on February 29, 1988 and is registered under the Investment Company Act of 1940, as amended (the "Investment Company Act"), as an open-end management investment company. RBB is a "series fund", which is a mutual fund divided into separate portfolios. Each portfolio is treated as a separate entity for certain matters under the Investment Company Act, and for other purposes, and a shareholder of one portfolio is not deemed to be a shareholder of any other portfolio. Currently, RBB has eighteen active investment portfolios, including the Senbanc Fund (the "Fund"). As of the date hereof, the Fund offers one class of shares. RBB has authorized capital of one hundred billion shares of common stock of which 76.673 billion shares are currently classified into one hundred and six classes of common stock. Each class represents an interest in an active or inactive RBB investment portfolio. The active classes have been grouped into eight separate "families." The Fund commenced operations on July 8, 1999, as a separate portfolio (the "Predecessor Fund") of the Hilliard Lyons Research Trust. After the close of business on August 31, 2005, all of the assets and liabilities of the Predecessor Fund were transferred to the Fund, a newly-created portfolio of the Company, that is continuing the business, including carrying forward the financial and performance history, of the Predecessor Fund. PORTFOLIO VALUATION -- The Fund's net asset value ("NAV") is calculated once daily at the close of regular trading hours on the New York StockExchange ("NYSE") (generally 4:00 p.m. Eastern time) on each day the NYSE is open. Securities held by the Fund are valued using the closing price or the last sale price on a national securities exchange or the National Association of Securities Dealers Automatic Quotation System (NASDAQ) market system where they are primarily traded. Equity securities traded in the over-the-counter market are valued at their closing prices. If there were no transactions on that day, securities traded principally on an exchange or on NASDAQ will be valued at the mean of the last bid and ask prices prior to the market close. Fixed income securities having a remaining maturity of greater than 60 days are valued using an independent pricing service. Fixed income securities having a remaining maturity of 60 days or less are amortized to maturity based on their cost. Investments in other open-end investment companies are valued based on the NAV of the investment companies (which may use fair value pricing as discussed in their prospectuses). If market quotations are unavailable or deemed unreliable, securities will be valued in accordance with procedures adopted by the Board of Directors. Relying on prices supplied by pricing services or dealers or using Fair Valuation may result in values that are higher or lower than the values used by other investment companies and investors to price the same investments. USE OF ESTIMATES --The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. 9 SENBANC FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2007 (UNAUDITED) INVESTMENT TRANSACTIONS, INVESTMENT INCOME AND EXPENSES -- The Fund records security transactions based on trade date. The cost of investments sold is determined by use of the specific identification method for both financial reporting and income tax purposes in determining realized gains and losses on investments. Interest income is accrued when earned. Dividend income is recorded on the ex-dividend date. Expenses incurred on behalf of a specific class, fund or fund family are charged directly to the class, fund or fund family (in proportion to net assets). Expenses incurred for all of the RBB families (such as director or professional fees) are charged to all funds in proportion to their net assets of the RBB Funds, or in such other manner as the Board of Directors deems fair or equitable. Expenses and fees, including investment advisory and administration fees, are accrued daily and taken into account for the purpose of determining the net asset value of the Fund. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net investment income and distributions from net realized capital gains, if any, will be declared and paid at least annually to shareholders and recorded on ex-date. Income dividends and capital gain distributions are determined in accordance with U.S. federal income tax regulations which may differ from accounting principles generally accepted in the United States. These differences include the treatment of non-taxable dividends, expiring capital loss carryforwards, foreign currency gain/loss, and losses deferred due to wash sales and excise tax regulations. Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications within the components of net assets. U.S. TAX STATUS -- No provision is made for U.S. income taxes as it is the Fund's intention to qualify for and elect the tax treatment applicable to regulated investment companies under Subchapter M of the Internal Revenue Code of 1986, as amended, and make the requisite distributions to its shareholders which will be sufficient to relieve it from U.S. income and excise taxes. OTHER -- In the normal course of business, the Fund may enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is dependent on claims that may be made against the Fund in the future, and, therefore, cannot be estimated; however, based on experience, the risk of material loss for such claims is considered remote. 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES Hilliard Lyons Research Advisors (the "Adviser"), a division of J.J.B. Hilliard, W.L. Lyons, Inc., provides management and investment advisory services to the Fund pursuant to an investment advisory agreement with the Company. For its services, the Adviser is paid a monthly fee at the annual rate of 0.60% of the Fund's average daily net assets. For the six months ended February 28, 2007, investment advisory fees were $535,327. As of February 28, 2007, the Fund owed the Adviser $79,315. PFPC Inc. ("PFPC"), a wholly-owned subsidiary of PFPC Worldwide Inc., an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc., and an affiliate of the Adviser serves as administrator for the Fund. For providing administrative and accounting services, PFPC is entitled to receive a monthly fee equal to an annual rate of 0.095% of the Fund's first $250 million of average daily net assets; 0.080% of the next $250 million of average daily net assets; 0.060% of the next $250 million of average daily net assets; and 0.040% of the average daily net assets in excess of $750 million, subject to a minimum of $7,500 per month. For the six months ended February 28, 2007, PFPC's administration and accounting fees were $105,713. 10 SENBANC FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2007 (UNAUDITED) in the administration and accounting fees shown above are fees for providing regulatory administration services to RBB. For providing those services, PFPC is entitled to receive compensation as agreed to by the Company and PFPC. This fee is allocated to the Fund in proportion to its net assets of the RBB Funds. In addition, PFPC serves as the Fund's transfer and dividend disbursing agent. For providing transfer agent services, PFPC is entitled to receive a monthly fee, subject to a minimum monthly fee of $3,000, plus out of pocket expenses. For the six months ended February 28, 2007, PFPC's transfer agency fees were $60,977. PFPC Trust Company provides certain custodial services to the Fund. PFPC Trust Company is a wholly-owned subsidiary of PFPC Worldwide, Inc., an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc. and an affiliate of the Adviser. As compensation for such custodial services, PFPC Trust Company is entitled to receive a monthly fee equal to an annual rate of 0.015% of the first $100 million of the Fund's average gross assets; 0.01% of the next $400 million of average gross assets; and 0.008% of average gross assets over $500 million, subject to a minimum monthly fee of $1,500. For the six months ended February 28, 2007, PFPC Trust Company's fees were $16,140. PFPC Distributors, Inc. ("PFPC Distributors"), a wholly-owned subsidiary of PFPC Worldwide, Inc., an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc., and an affiliate of the Adviser, provides certain administrative services to the Fund. The Board of Directors has adopted a distribution plan pursuant to Rule 12b-1 under the Investment Company Act, to allow the Fund to reimburse PFPC Distributors for certain expenses incurred in connection with distribution activities. The Directors have authorized a payment of up to 0.60% of the Fund's average net assets annually to reimburse the Distributor for such expenses. For the six months ended February 28, 2007, the Distributor earned $5,632 in underwriting fees and $543,327 for commissions on sales of the Fund's shares. As of February 28, 2007, the Fund owed PFPC and its affiliates $23,257. 3. INVESTMENT IN SECURITIES For the six months ended February 28, 2007, aggregate purchases and sales of investment securities (excluding short-term investments) were as follows: Investment Securities Purchases Sales ------------- ------------- $5,911,112 $34,390,424 11 SENBANC FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 28, 2007 (UNAUDITED) 4. CAPITAL SHARE TRANSACTIONS As of February 28, 2007, the Fund has 100,000,000 shares of $0.001 par value common stock authorized. Transactions in capital shares were as follows:
For the Six Months For the Fiscal Year Ended Ended February 28, 2007 August 31, 2006 -------------------------- -------------------------- Shares Value Shares Value ---------- ------------ ---------- ------------ Sales 165,426 $ 2,780,949 645,428 $ 10,542,359 Reinvestments 418,103 6,961,407 322,958 5,203,018 Redemptions (1,687,358) (28,438,958) (3,916,426) (63,841,566) ---------- ------------ ---------- ------------ Net Decrease (1,103,829) $(18,696,602) (2,948,040) $(48,096,189) ========== ============ ========== ============
5. FEDERAL INCOME TAX INFORMATION At February 28, 2007, federal tax cost, aggregate gross unrealized appreciation and depreciation of securities held by the Fund were as follows: Cost of investments for tax purposes ................... $142,941,849 ------------- Gross tax unrealized appreciation ...................... $ 25,106,232 Gross tax unrealized depreciation ...................... (2,040,478) ------------= Net tax unrealized appreciation on investments ......... $ 23,065,754 ============
At August 31, 2006, the Fund had no capital loss carryforwards available to offset future capital gains. Under federal tax law, foreign currency and capital losses realized after October 31 may be deferred and treated as having arisen on the first day of the following fiscal year. For the year ended August 31, 2006, the Fund incurred no post-October capital losses. The differences between the book and tax basis components of distributable earnings relate principally to the timing of recognition of income and gains for federal income tax purposes. Short-term and foreign currency gains are reported as ordinary income for federal tax purposes. 6. INDUSTRY CONCENTRATION RISK Since the Fund's investments are concentrated in the banking industry, they are subject to risks in addition to those that apply to the general equity market. Events may occur that significantly affect the entire banking industry; therefore, the Fund's share value may at times increase or decrease at a faster rate than the share value of a mutual fund with investments in many industries. 12 SENBANC FUND NOTES TO FINANCIAL STATEMENTS (CONCLUDED) FEBRUARY 28, 2007 (UNAUDITED) 7. NEW ACCOUNTING PRONOUNCEMENTS In July 2006, the Financial Accounting Standards Board ("FASB") issued Interpretation No. 48, "Accounting for Uncertainty in Income Taxes - an Interpretation of FASB Statement No. 109" (the "Interpretation"). The Interpretation establishes for all entities a minimum threshold for financial statement recognition of the benefit of positions taken in filing tax returns (including whether an entity is taxable in a particular jurisdiction), and requires certain expanded tax disclosures. The Interpretation is effective for fiscal years beginning after December 15, 2006, and is required to be implemented by calendar year funds by no later than June 29, 2007. The Adviser has recently begun to evaluate the application of the Interpretation to the Fund, and is not in a position at this time to estimate the significance of its impact, if any, on the Fund's financial statements. In September 2006, FASB issued Statement of Financial Accounting Standards ("SFAS") 157, Fair Value Measurements, which clarifies the definition of fair value and requires companies to expand their disclosure about the use of fair value to measure assets and liabilities in interim and annual periods subsequent to initial recognition. Adoption of SFAS 157 requires the use of the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. At this time, the Fund is in the process of reviewing the impact, if any, of the SFAS on the Fund's financial statements. 13 SENBANC FUND OTHER INFORMATION FEBRUARY 28, 2007 (UNAUDITED) PROXY VOTING A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities and information regarding how the Fund voted proxies relating to portfolio securities for the most recent 12-month period ended June 30 is available without charge, upon request by calling 800-444-1854, at www.hilliard.com and on the SEC's website at http://www.sec.gov. QUARTERLY PORTFOLIO SCHEDULES The Fund files its complete schedule of portfolio holdings with the SEC for the first and third fiscal quarters of each fiscal year on Form N-Q. The Fund's Forms N-Q are available on the SEC's website at http://www.sec.gov and may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information on the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. 14 [THIS PAGE INTENTIONALLY LEFT BLANK] -------------------------------------------------------------------------------- INVESTMENT ADVISER Hilliard, Lyons Research Advisors 500 West Jefferson Street Louisville, KY 40202 ADMINISTRATOR PFPC Inc. 301 Bellevue Parkway Wilmington, DE 19809 TRANSFER AGENT PFPC Inc. 101 Sabin Street Pawtucket, RI 02866 DISTRIBUTOR PFPC Distributors, Inc. 760 Moore Road King of Prussia, PA 19406 CUSTODIAN PFPC Trust Company 8800 Tinicum Boulevard Suite 200 Philadelphia, PA 19153 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Deloitte & Touche LLP 1700 Market Street Philadelphia, PA 19103 LEGAL COUNSEL Drinker Biddle & Reath LLP One Logan Square 18th and Cherry Streets Philadelphia, PA 19103 -------------------------------------------------------------------------------- BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO OF THE RBB FUND, INC. SEMI-ANNUAL REPORT FEBRUARY 28, 2007 (UNAUDITED) [GRAPHIC OMITTED] BEAR STEARNS ------------------------------------------------------ This report is submitted for the general information of the shareholders of the Portfolio. It is not authorized for distribution unless preceded or accompanied by a current prospectus for the Portfolio. ------------------------------------------------------ BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO SEMI-ANNUAL REPORT FOR THE PERIOD ENDED FEBRUARY 28, 2007 -------------------------------------------------------------------------------- Dear Shareholder: We are pleased to present the Bear Stearns CUFS(R) Managed Leverage Program ("MLP") Mortgage Portfolio's (the "Portfolio") semi-annual report covering the period from December 19, 2006 through February 28, 2007. Enclosed you will find a market commentary for the period, ending February 28, 2007. We look forward to bringing you additional commentary in the Portfolio's annual report which will be dated as of August 31, 2007. We encourage you to review the enclosed information to stay informed. We are available to assist you in-person Monday through Friday during normal business hours by calling 1-800-519-CUFS. In addition, general information about the CUFS(R) MLP Mortgage Portfolio is available online at WWW.BSAMONLINE.COM. Click under the Additional Products and Services navigation bar to reach the CUFS(R) MLP Mortgage Portfolio section of the website. Thank you for participating in the Bear Stearns CUFS(R) MLP Mortgage Portfolio and for helping to make it a reality. CUFS(R): HELPING CREDIT UNIONS DO WELL SO THAT THEY CAN DO GOOD Sincerely, Wade Charles Barnett Senior Managing Director, CUFS(R) Bear Stearns & Co, Inc. 1 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO MANAGEMENT COMMENTARY PERFORMANCE The Portfolio's total return from inception on December 19, 2006 through February 28, 2007 was 1.34%, net of all fees and expenses. The Portfolio's benchmark, the Lehman Brothers 1-3 Month U.S. Treasury Bill Index2, returned 0.95% for the same period and one-month LIBOR3 returned 1.05%. [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA USED IN PRINTED GRAPHIC AS FOLLOWS:
From Inception From Inception YTD (12/19/06) (12/19/06) 1 Month (2/28/07) to 2/28/07 to 12/31/06 ------- --------- -------------- -------------- CUFS(R) MLP Mortgage Portfolio(1) 0.45 0.95 1.34 0.38 1-3 Month Components of the Lehman Brothers U.S. Treasury Bills Index(2) 0.38 0.79 0.95 0.17 1-Month LIBOR(3) 0.41 0.87 1.05 0.18
PERFORMANCE QUOTED IS PAST PERFORMANCE AND DOES NOT GUARANTEE FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE RETURNS QUOTED ABOVE. CALL CUFS(R) AT 1-800-519-CUFS (2837) FOR RETURNS CURRENT TO THE MOST RECENT MONTH-END. THE PORTFOLIO'S GROSS ANNUAL OPERATING EXPENSES, AS STATED IN THE CURRENT PROSPECTUS, IS 0.60%. THE PERFORMANCE DATA REFLECTS FEE WAIVERS AND EXPENSE REIMBURSEMENTS. THE RETURNS COULD HAVE BEEN LOWER IF THESE WAIVERS AND EXPENSE REIMBURSEMENTS WERE NOT IN EFFECT. PORTFOLIO COMPOSITION IS SUBJECT TO CHANGE. ---------- 1 Net of fees and expenses. 2 The Lehman Brothers U.S. Treasury Bills 1-3 Month Index is the 1-3 Month component of the Lehman Brothers U.S. Treasury Bills Index. The Lehman Brothers Treasury Bill Index includes U.S. Treasury bills with a remaining maturity from 1 up to (but not including) 12 months. It excludes zero coupon strips. Source: Lehman Live. 3 The 1-Month LIBOR is a constant maturity index of the London Interbank Offering Rate established to reflect the total return of the 1-Month LIBOR rate. Source: Merrill Lynch. 2 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO MANAGEMENT COMMENTARY (CONTINUED) INVESTMENT ENVIRONMENT The reporting period was characterized by rising interest rates and lowering risk premiums during most of December and January. These trends reversed in February as renewed economic concerns moved to the forefront. Throughout February, reports of slowing manufacturing output persisted while inflation indicators stabilized. This environment, coupled with increasing scrutiny on subprime mortgage lenders, pushed interest rates lower and increased volatility, both of which adversely affected the mortgage-backed securities sector. From a macro perspective, we believe that the Portfolio was positioned to take advantage of ongoing demand for U.S. fixed income assets, including mortgage-backed securities, by the global investment community. At the same time, our forecast for ongoing weakness in the domestic housing markets was expressed by holding very high-quality assets with limited credit exposure. We specifically avoided subprime mortgage-backed loans during the period. We focused our allocations on high quality (primarily agency-backed or AAA rated) securities, structured collateralized mortgage obligations and adjustable rate mortgage securities ("ARMs"). We incorporated geographic prepayment themes into our positions, including our belief that slower than average mortgage refinancing would occur in states like New York and Texas, which we believe is due in part to tax and refinancing restrictions. THE PORTFOLIO'S SUCCESSES In addition to having attractive valuations, we believed that the ARM sector would benefit from index-related buying associated with their introduction into the Lehman Brothers Aggregate Bond Index in April. Our ARM holdings performed well for most of the period before facing some pressure, along with most mortgage-related securities, during the February spread widening triggered by subprime mortgage concerns. Yield curve inversion during the period benefited the Portfolio's holdings of floating rate collateralized mortgage obligations ("CMOs"). Near-term stability of mortgage prepayments was another theme expressed in the Portfolio's holdings. Given tightening lending standards and softness in many housing markets, along with a general lack of mortgage refinancing incentive for borrowers, we sought to add stripped mortgage securities to the Portfolio. The Interest Only ("IO") and Principal Only ("PO") positions in the Portfolio performed well in this environment. THE PORTFOLIO'S SHORTFALLS The Portfolio's holdings of fixed rate CMOs underperformed during the period. These assets recovered some value during February, but not enough for the net performance during the period to be positive. The inverse IO positions performed well during the beginning of the period, but in February reversed course. 3 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO MANAGEMENT COMMENTARY (CONCLUDED) PORTFOLIO POSITIONING We expect these themes will continue to evolve in the coming months. Spillover from the subprime mortgage market into prime mortgages could present an opportunity to increase exposure to certain components of that sector. In the short term, however, we believe focus on the subprime market may keep volatility elevated. We will continue to use treasury futures and interest rate swaps as well as options on those instruments to try to mitigate the Portfolio's interest rate risk. Shares of the Bear Stearns CUFS MLP Mortgage Portfolio are distributed by PFPCDistributors, Inc., King of Prussia, PA 19406. 4 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO FUND EXPENSE EXAMPLE (UNAUDITED) As a shareholder of the Portfolio, you incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees and other Portfolio expenses. The example is intended to help you understand your ongoing costs (in dollars) of investing in the Portfolio and to compare these costs with the ongoing costs of investing in other mutual funds. These examples are based on an investment of $1,000 invested at the beginning of the period from December 19, 2006 through February 28, 2007, and held for the entire period. ACTUAL EXPENSES The first line of the accompanying tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second line of the accompanying tables provides information about hypothetical account values and hypothetical expenses based on the Portfolio's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare these 5% hypothetical examples with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that the expenses shown in the accompanying tables are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the second line of the accompanying tables is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if any transactional costs were included, your costs would have been higher.
-------------------------------------------------------------------------------- BEGINNING ACCOUNT VALUE ENDING ACCOUNT VALUE EXPENSES PAID DURING DECEMBER 19, 2006* FEBRUARY 28, 2007 PERIOD** ----------------------- -------------------- -------------------- Actual $1,000.00 $1,013.40 $1.19 Hypothetical (5% return before expenses) 1,000.00 1,008.67 1.19 ---------- * Commencement of operations. ** Expenses are equal to the Portfolio's annualized expense ratio of 0.60%, which includes waived fees or reimbursed expenses, multiplied by the number of days (72) in the most recent fiscal half-year, then divided by 365 to reflect the one-half year period. The Portfolio's ending account value on the first line is based on the actual total return of 1.34%.
5 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO PORTFOLIO HOLDINGS SUMMARY TABLE FEBRUARY 28, 2007 (UNAUDITED) % OF NET SECURITY TYPE CLASSIFICATION ASSETS VALUE ------------------------------------------------------------------------------ GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS 83.4% $133,465,189 MORTGAGE DERIVATIVES 13.4 21,391,592 COLLATERALIZED MORTGAGE OBLIGATIONS 27.5 43,954,659 OPTIONS -- 48,437 U.S. TREASURY OBLIGATIONS 2.6 4,216,656 SHORT-TERM INVESTMENTS 0.3 492,219 REVERSE REPURCHASE AGREEMENTS (5.6) (9,035,000) LIABILITIES IN EXCESS OF OTHER ASSETS (21.6) (34,597,646) ----- ------------ NET ASSETS 100.0% $159,936,106 ===== ============ ---------- Portfolio holdings are subject to change at any time. 6 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO PORTFOLIO OF INVESTMENTS FEBRUARY 28, 2007 (UNAUDITED) MOODY'S/ PAR S&P (000'S) VALUE ------- ------- ------------ GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS--83.4% FEDERAL HOME LOAN MORTGAGE CORPORATION--32.8% 5.971% 03/01/07 (a) Aaa/AAA $ 4,000 $ 4,051,371 5.720% 07/15/23 (a) Aaa/AAA 9,390 9,435,205 5.720% 06/15/35 (a) Aaa/AAA 2,788 2,799,390 5.964% 08/01/36 (a) Aaa/AAA 9,203 9,285,898 6.500% 10/01/36 Aaa/AAA 2,058 2,099,265 6.500% 11/01/36 Aaa/AAA 1,215 1,238,988 5.570% 11/15/36 (a) Aaa/AAA 23,589 23,615,044 ------------ 52,525,161 ------------ FEDERAL NATIONAL MORTGAGE ASSOCIATION--50.6% 5.670% 04/25/35 (a) Aaa/AAA 2,662 2,668,035 5.000% 02/01/36 Aaa/AAA 14,016 13,612,082 5.000% 05/01/36 Aaa/AAA 8,935 8,677,973 6.104% 10/01/36 (a) Aaa/AAA 3,651 3,713,813 6.124% 10/01/36 (a) Aaa/AAA 1,894 1,928,180 5.500% 12/01/36 Aaa/AAA 14,799 14,691,979 5.000% 03/01/37 TBA Aaa/AAA 3,000 2,910,937 5.500% 03/01/37 TBA Aaa/AAA 33,000 32,737,029 ------------ 80,940,028 ------------ TOTAL GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS (Cost $133,006,131) ................................. 133,465,189 ------------ MORTGAGE DERIVATIVES--13.4% FANNIE MAE (IO)--10.4% 5.500% 04/01/36 Aaa/AAA 15,237 3,462,889 5.500% 04/01/36 Aaa/AAA 9,139 1,989,392 5.500% 01/25/36 Aaa/AAA 13,640 3,068,952 5.000% 02/01/35 (a) Aaa/AAA 2,344 498,160 5.000% 02/01/35 Aaa/AAA 3,900 832,923 5.000% 10/01/33 Aaa/AAA 12,302 2,668,467 5.500% 07/25/28 Aaa/AAA 42,262 3,618,309 5.500% 05/25/23 Aaa/AAA 1,640 502,087 ------------ 16,641,179 ------------ MOODY'S/ PAR S&P (000'S) VALUE ------- ------- ------------ FANNIE MAE (PO)--2.4% 0.000% 05/25/36 Aaa/AAA $ 4,605 $ 3,766,473 FREDDIE MAC (IO)--0.6% 1.730% 10/15/34 (a) Aaa/AAA 10,277 587,720 5.000% 02/15/20 Aaa/AAA 950 175,936 5.500% 07/15/16 Aaa/AAA 1,377 220,284 ------------ 983,940 ------------ TOTAL MORTGAGE DERIVATIVES (Cost $21,581,709) .................................. 21,391,592 ------------ COLLATERALIZED MORTGAGE OBLIGATIONS--27.5% CWALT Series 2006-J2 6.000% 04/25/36 Aaa/AAA 9,564 9,649,333 CWALT Series 2006-2CB 5.500% 03/25/36 Aaa/AAA 1,005 1,005,740 CWALT Series 2006-43CB 0.000% 02/25/37 Aaa/AAA 5,113 1,687,152 CWALT Series 2006-43CB 6.000% 02/25/37 Aaa/AAA 1,946 1,963,981 CWALT Series 2006-43CB (a) 5.820% 04/25/18 Aaa/AAA 1,882 1,887,193 CWALT Series 2006-HY13 (a) 5.932% 02/25/37 Aaa/AAA 13,480 13,584,105 CWALT Series 2007-2CB 5.750% 03/25/37 Aaa/AAA 5,383 5,429,919 First Horizon Asset Securities, Inc. Series 2006-AR1 (a) 5.876% 05/25/36 Aaa/AAA 4,727 4,752,229 The accompanying notes are an integral part of the financial statements. 7 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO PORTFOLIO OF INVESTMENTS FEBRUARY 28, 2007 (UNAUDITED) MOODY'S/ PAR S&P (000'S) VALUE ------- ------- ------------ COLLATERALIZED MORTGAGE OBLIGATIONS--(CONTINUED) JP Morgan Mortgage Trust Series 2005-A4 (a) 5.176% 07/25/35 Aaa/AAA $ 1,505 $ 1,492,184 JP Morgan Mortgage Trust Series 2005-A6 (a) 4.977% 08/25/35 Aaa/AAA 1,023 1,014,073 Washington Mutual, Inc. Series 2007-HY3 (a) 5.362% 05/26/37 Aa/AA 1,500 1,488,750 ------------ TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $43,887,689) .................................. 43,954,659 ------------ CONTRACTS/ NOTIONAL AMOUNT (000'S) ----------- OPTIONS PURCHASED--0.0% CALL OPTIONS--0.0% U.S. Treasury 10 year Note 06/2007 109 Call Option Expire 05/25/07 ................................. 50 35,937 U.S. Treasury 10 year Note 6/2007 110 Call Option Expire 03/23/07 ................................. 100 12,500 ------------ TOTAL OPTIONS PURCHASED (Cost $34,975) ...................................... 48,437 ------------ PAR (000'S) ----------- U.S. TREASURY OBLIGATIONS--2.6% U.S. TREASURY BILLS--0.1% U.S. Treasury Bill + 5.020% 05/17/07 $ 195 192,906 ------------ MOODY'S/ PAR S&P (000'S) VALUE ------- ------- ------------ U.S. TREASURY NOTES--2.5% U.S. Treasury Note 4.625% 02/15/17 Aaa/AAA $ 4,000 $ 4,023,750 ------------ TOTAL U.S. TREASURY OBLIGATIONS (Cost $4,159,264) ................................... 4,216,656 ------------ SHORT-TERM INVESTMENTS--0.3% PNC Bank Money Market 4.900% 03/01/07 .......................... 492 492,219 ------------ TOTAL SHORT-TERM INVESTMENTS (Cost $492,219) ..................................... 492,219 ------------ REVERSE REPURCHASE AGREEMENTS--(5.6%) Lehman Brothers 4.200% 03/01/07 .......................... (4,035) (4,035,000) Lehman Brothers 5.350% 03/01/07 .......................... (5,000) (5,000,000) ------------ TOTAL REVERSE REPURCHASE AGREEMENTS (Cost $(9,035,000)) ................................. (9,035,000) ------------ TOTAL INVESTMENTS--121.6% (Cost $194,126,987) ..................................... 194,533,752 ------------ LIABILITIES IN EXCESS OF OTHER ASSETS--(21.6)% ................................... (34,597,646) ------------ NET ASSETS--100.0% ......................................... $159,936,106 ============ ---------- (a) Adjustable rate security. CWALT -- Countrywide Alternative Loan Trust IO -- Interest Only PO -- Principal Only TBA -- To Be Announced The accompanying notes are an integral part of the financial statements. 8 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO PORTFOLIO OF INVESTMENTS FEBRUARY 28, 2007 (UNAUDITED) + All or a portion of the security was held as collateral for the following Futures contracts open at February 28, 2007: NUMBER VALUE VALUE UNREALIZED OF EXPIRATION AT TRADE AT APPRECIATION CONTRACTS TYPE MONTH DATE 2/28/07 (DEPRECIATION) ---------- ------- ----------- --------- ---------- --------------- Long Positions: 114 U.S. Treasury 10 Year Note 6/2007 $12,337,660 $12,379,688 $ 42,028 Short Positions: 142 U.S. Treasury 2 Year Note 3/2007 29,175,879 29,045,656 (130,223) 142 U.S. Treasury 2 Year Note 6/2007 29,205,974 29,103,344 (102,630) 118 U.S. Treasury 5 Year Note 6/2007 12,593,503 12,502,469 (91,034) --------- $(281,859) ========= The accompanying notes are an integral part of the financial statements. 9 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES FEBRUARY 28, 2007 (UNAUDITED) ASSETS Investments, at value (cost $203,161,987) ................................... $203,568,752 Receivable for investments sold ............................................. 21,193,907 Receivable for capital shares sold .......................................... 10 Dividends and interest receivable ........................................... 877,710 Due from broker-variation margin ............................................ 38,509 Prepaid expenses and other assets ........................................... 13,012 ------------ Total assets .............................................................. 225,691,900 ------------ LIABILITIES Payable for investments purchased ........................................... 56,495,385 Reverse Repurchase Agreements at value ...................................... 9,035,000 Payable to the Adviser ...................................................... 44,049 Dividends and Distributions ................................................. 135,691 Accrued expenses and other liabilities ...................................... 45,669 ------------ Total liabilities ......................................................... 65,755,794 ------------ NET ASSETS Capital stock, $0.001 par value ............................................. $ 159,354 Paid-in capital ............................................................. 159,611,972 Accumulated net realized gain from investments and futures transactions ..... 39,874 Net unrealized appreciation on investments and futures transactions ......... 124,906 ------------ Net assets ................................................................ $159,936,106 ============ Net assets value, offering and redemption price per share ($159,936,106 / 15,935,420 outstanding shares) ............................ $ 10.04 ============
The accompanying notes are an integral part of the financial statements. 10 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE PERIOD DECEMBER 19, 2006* TO FEBRUARY 28, 2007 --------------------- INVESTMENT INCOME Interest income ............................................................. $1,023,517 ---------- Total investment income ..................................................... 1,023,517 ---------- EXPENSES Advisory fees ............................................................... 92,288 Administration and accounting fees .......................................... 21,710 Professional fees ........................................................... 12,694 Directors' and officers' fees ............................................... 9,783 Custodian fees .............................................................. 7,507 Registration and filing fees ................................................ 6,964 Transfer agent fees ......................................................... 6,608 Printing and shareholder reporting fees ..................................... 6,519 Other expenses .............................................................. 139 ---------- Total expenses before waivers ............................................. 164,212 Less: waivers ............................................................. (48,852) ---------- Net expenses .............................................................. 115,360 ---------- Net investment income ....................................................... 908,157 ---------- NET REALIZED AND UNREALIZED GAIN FROM INVESTMENTS AND FUTURES TRANSACTIONS Net realized gain from investments and futures transactions ................. 39,874 Net change in unrealized appreciation on investments and futures transactions .................................................. 124,906 ---------- Net realized and unrealized gain from investments and futures transactions .. 164,780 ---------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ........................... $1,072,937 ==========
---------- * Commencement of Operations. The accompanying notes are an integral part of the financial statements. 11 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD DECEMBER 19, 2006* TO FEBRUARY 28, 2007 --------------------- (UNAUDITED) INCREASE IN NET ASSETS FROM OPERATIONS Net investment income ....................................................... $ 908,157 Net realized gain from investments and futures transactions ................. 39,874 Net change in unrealized appreciation on investments and futures transactions .................................................. 124,906 ------------ Net increase in net assets resulting from operations ........................ 1,072,937 ------------ LESS DIVIDENDS TO SHAREHOLDERS: Net investment income ....................................................... (908,157) ------------ INCREASE IN NET ASSETS DERIVED FROM CAPITAL SHARE TRANSACTIONS(1) ............................................... 159,771,326 ------------ Total increase in net assets ................................................ 159,936,106 ------------ NET ASSETS Beginning of period ......................................................... -- ------------ End of period ............................................................... $159,936,106 ============ ---------- * Commencement of Operations. (1) See Note 4 in the Notes to Financial Statements.
The accompanying notes are an integral part of the financial statements. 12 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO FINANCIAL HIGHLIGHTS -------------------------------------------------------------------------------- Contained below is per share operating performance data for shares outstanding, total investment return, ratios to average net assets and other supplemental data for the respective period. This information has been derived from information provided in the financial statements. --------------------------------------------------------------------------------
FOR THE PERIOD DECEMBER 19, 2006* TO FEBRUARY 28, 2007 (UNAUDITED) --------------------- PER SHARE OPERATING PERFORMANCE Net asset value, beginning of period ........................................... $10.00 Net investment income .......................................................... 0.09 Net realized and unrealized gain on investments and futures transactions ....... 0.04 ------ Net increase in net assets resulting from operations. .......................... 0.13 ------ Dividends to shareholders from: Net investment income .......................................................... (0.09) Net realized capital gains ..................................................... -- ------ Net asset value, end of period ................................................. $10.04 ====== Total investment return(1) ..................................................... 1.34% RATIOS/SUPPLEMENTAL DATA Net assets, end of period (000's omitted) ...................................... $159,936 Ratio of expenses to average net assets(2) ..................................... 0.60% Ratio of expenses to average net assets without waivers and expense reimbursements(2) ................................................... 0.85% Ratio of net investment income to average net assets(2) ........................ 4.70% Portfolio turnover rate ........................................................ 103.52%(3) ---------- * Commencement of operations. (1) Total investment return is calculated by assuming a purchase of shares on the first day and a sale of shares on the last day of each period reported and includes reinvestments of dividends and distributions, if any. (2) Annualized. (3) The portfolio turnover rate excluding TBA transactions is 56.55% for the period December 19, 2006 to February 28, 2007.
The accompanying notes are an integral part of the financial statements. 13 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO NOTES TO FINANCIAL STATEMENTS FOR THE PERIOD ENDED FEBRUARY 28, 2007 (UNAUDITED) 1. ORGANIZATIONS AND SIGNIFICANT ACCOUNTING POLICIES The RBB Fund, Inc. ("RBB" or "Company") was incorporated under the laws of the State of Maryland on February 29, 1988 and is registered under the Investment Company Act of 1940, as amended, (the "Investment Company Act") as an open-end management investment company. RBB is a "series fund," which is a mutual fund divided into separate portfolios. Each portfolio is treated as a separate entity for certain matters under the Investment Company Act, and for other purposes, and a shareholder of one portfolio is not deemed to be a shareholder of any other portfolio. Currently, RBB has eighteen active investment portfolios, including the Bear Stearns CUFS MLP Mortgage Portfolio (the "Portfolio"), which commenced investment operations on December 19, 2006. RBB has authorized capital of one hundred billion shares of common stock of which 76.673 billion shares are currently classified into one hundred and six classes of common stock. Each class represents an interest in an active or inactive RBB investment portfolio. The active classes have been grouped into eight separate "families." PORTFOLIO VALUATION -- The Portfolio's net asset value ("NAV") is calculated once daily at the close of regular trading hours on the New York Stock Exchange ("NYSE") (generally 4:00 p.m. Eastern time) on each day the NYSE is open. Fixed income securities having a remaining maturity of greater than 60 days are valued using an independent pricing service. Fixed income securities having a remaining maturity of 60 days or less are amortized to maturity based on their cost. Investments in other open-end investment companies are valued based on the NAV of the investment companies (which may use fair value pricing as discussed in their prospectuses). If price quotes are unavailable or deemed unreliable, securities will be fair valued in accordance with procedures adopted by the Company's Board of Directors. Relying on prices supplied by pricing services or dealers or using fair valuation may result in values that are higher or lower than the values used by other investment companies and investors to price the same investments. USE OF ESTIMATES --The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. INVESTMENT TRANSACTIONS, INVESTMENT INCOME AND EXPENSES -- The Portfolio records security transactions based on trade date. The cost of investments sold is determined by use of the specific identification method for both financial reporting and income tax purposes in determining realized gains and losses on investments. Interest income is accrued when earned. Dividend income is recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gains are recorded as a reduction of cost of investments and/or as a realized gain. The Portfolio estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. The Portfolio's investment income, expenses and unrealized and realized gains and losses are allocated daily. Expenses incurred for all of the RBB families (such as director or professional fees) are charged to all funds in 14 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO NOTES TO FINANCIAL STATEMENTS FOR THE PERIOD ENDED FEBRUARY 28, 2007 (UNAUDITED) (CONTINUED) proportion to their net assets of the RBB Funds, or in such other manner as the Board of Directors deems fair or equitable. Expenses and fees, including investment advisory and administration fees are accrued daily and taken into account for the purpose of determining the net asset value of the Portfolio. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net investment income are declared daily and paid monthly. Distributions from net realized capital gains, if any, are declared and paid at least annually to shareholders and recorded on ex-date for the Portfolio. Income dividends and capital gain distributions are determined in accordance with U.S. federal income tax regulations which may differ from generally accepted accounting principles. These differences include the treatment of non-taxable dividends, expiring capital loss carryforwards and losses deferred due to wash sales and excise tax regulations. Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications within the components of net assets. U.S. TAX STATUS -- No provision is made for U.S. income taxes as it is the Portfolio's intention to qualify for and elect the tax treatment applicable to regulated investment companies under Subchapter M of the Internal Revenue Code of 1986, as amended, and make the requisite distributions to its shareholders which will be sufficient to relieve it from U.S. income and excise taxes. OTHER -- In the normal course of business, the Portfolio may enter into contracts that provide general indemnifications. The Portfolio's maximum exposure under these arrangements is dependent on claims that may be made against the Portfolio in the future, and, therefore, cannot be estimated; however, based on experience, the risk of material loss for such claims is considered remote. MORTGAGE-RELATED SECURITIES GENERALLY -- The Portfolio may invest in mortgage pass-through securities and multiple-class pass-through securities, such as collateralized mortgage obligations ("CMOs") and Real Estate Mortgage Investment Conduit ("REMIC") pass-through or participation certificates as well as other securities collateralized by or representing a direct or indirect interest in mortgage-related securities or mortgage loans. The Portfolio may also invest in certain stripped mortgage-backed securities. Some of these securities may contain "embedded leverage" which can make them more sensitive to small movements in interest rates. The types of mortgage-related securities in which the Portfolio may invest include: mortgage pass-through securities, including CMOs and REMICs, which may or may not be U.S. Government guaranteed, privately-issued mortgage related securities, stripped mortgage backed securities, including interest only ("IO") or principal only ("PO") class securities, and floating rate and inverse floating rate securities. Payments received for IOs are included in interest income on the Statement of Operations. Because principal will not be received at the maturity of an IO, adjustments are made to the book value of the security on a daily basis until maturity. These adjustments are included in interest income on the Statement of Operations. Payments received for POs are treated as reductions to the cost and par value of the securities. TBA'S -- The Portfolio may purchase securities on a to-be-announced ("TBA") basis, with payment and delivery scheduled for a future date. These transactions are subject to market fluctuations and are subject to 15 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO NOTES TO FINANCIAL STATEMENTS FOR THE PERIOD ENDED FEBRUARY 28, 2007 (UNAUDITED) (CONTINUED) the risk that their value at delivery may be more or less than the trade date purchase price. Although the Portfolio may purchase securities on a when-issued or forward commitment basis with the intention of acquiring the securities for its portfolio, the Portfolio may dispose of when-issued securities or forward commitments prior to settlement if the Adviser deems it appropriate. FUTURES CONTRACTS -- The Portfolio may enter into futures contracts to increase total return, hedge against changes in interest rates and securities prices, or to otherwise manage its term structure, sector selections and duration. Upon entering into a futures contract, the Portfolio is required to deposit with the broker an amount of cash or cash equivalents equal to a certain percentage of the contract amount. This is known as the "initial margin." Subsequent payments ("variation margin") are made or received by the Portfolio each day, depending on the daily fluctuation of the value of the contract. The daily changes in the contract are recorded as unrealized gain or loss. The Portfolio recognizes a realized gain or loss when the contract is closed. There are several risks in connection with the use of futures contracts including the risk of loss in excess of the amount recognized in the Statement of Changes in Net Assets to the extent of total notional value. The change in value of futures contracts primarily corresponds with the value of their underlying instruments, which may not correlate with the change in value of the investments held by the Portfolio. In addition, there is the risk that the Portfolio may not be able to enter into a closing transaction because of an illiquid secondary market. OPTIONS CONTRACTS -- The Portfolio may write call and put options on futures, or securities it owns or in which it may invest. Writing put options tends to increase the Portfolio's exposure to the underlying instrument. Writing call options tends to decrease the Portfolio's exposure to the underlying instrument. When the Portfolio writes a call or put option, an amount equal to the premium received is recorded as a liability and subsequently marked to market to reflect the current value of the option written. These liabilities are reflected as written options outstanding in the Statement of Assets and Liabilities. Payments received or made, if any, from writing options with premiums to be determined on a future date are reflected as such on the Statement of Assets and Liabilities. Premiums received from writing options that expire are treated as realized gains. Premiums received from writing options that are exercised or closed are added to the proceeds or offset against amounts paid on the underlying future or security transaction to determine the realized gain or loss. The Portfolio, as a writer of an option, has no control over whether the underlying future or security may be sold (call) or purchased (put), and as a result bears the market risk of an unfavorable change in the price of the future or security underlying the written option. The Portfolio may not be able to enter into a closing transaction because of an illiquid market. The Portfolio may also purchase put and call options. Purchasing call options tends to increase the Portfolio's exposure to the underlying instrument. Purchasing put options tends to decrease the Portfolio's exposure to the underlying instrument. The Portfolio pays a premium which is included in the Portfolio's Statement of Assets and Liabilities as an investment and subsequently marked to market to reflect the current value of the option. Premiums paid for purchasing options that expire are treated as realized losses. The risk associated with purchasing put and call options is limited to the premium paid. Premiums paid for 16 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO NOTES TO FINANCIAL STATEMENTS FOR THE PERIOD ENDED FEBRUARY 28, 2007 (UNAUDITED) (CONTINUED) purchasing options that are exercised or closed are added to the amounts paid or offset against the proceeds on the underlying future or security transaction to determine the realized gain or loss. REVERSE REPURCHASE AGREEMENTS -- The Portfolio may borrow money by entering into transactions called reverse repurchase agreements. Under these arrangements, the Portfolio will sell portfolio securities to dealers in U.S. Government securities or members of the Federal Reserve System, with an agreement to repurchase the security on an agreed date, price and interest payment. Reverse repurchase agreements involve the possible risk that the value of portfolio securities the Portfolio relinquishes may decline below the price the Portfolio must pay when the transaction closes. Borrowings may magnify the potential for gain or loss on amounts invested resulting in an increase in the speculative character of the Portfolio's outstanding shares. When the Portfolio enters into a reverse repurchase agreement, it places in a separate custodial account either liquid assets or other high grade debt securities that have a value equal to or greater than the repurchase price. The account is monitored to make sure that an appropriate value is maintained. Reverse repurchase agreements are considered to be borrowings under the Investment Company Act. 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES Bear Stearns Asset Management Inc. ("BSAM" or the "Adviser"), a wholly-owned subsidiary of The Bear Stearns Companies, Inc. ("Bear Stearns"), serves as investment adviser to the Portfolio pursuant to an investment advisory agreement with the Company (the "Advisory Agreement"). For its services, the Adviser is paid a monthly fee at the annual rate of 0.48% of the Portfolio's average daily net assets. BSAM is voluntarily waiving a portion of its advisory fee and reimbursing certain expenses in order to limit the Portfolio's total annual portfolio operating expenses to 0.60% of the Portfolio's average daily net assets. The fee waiver and expense reimbursement are not contractual, and can be terminated at any time. For the period ended February 28, 2007, investment advisory fees were $92,288 and $41,161 was waived by the Adviser. As of February 28, 2007, the Portfolio owed the Adviser $44,049. PFPC Inc. ("PFPC"), a wholly-owned subsidiary of PFPC Worldwide Inc., an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc., serves as administrator for the Portfolio. For providing administration and accounting services, PFPC is entitled to receive a monthly fee equal to an annual rate of 0.08% of the Portfolio's first $250 million of average daily net assets; 0.06% of the next $250 million of average daily net assets; 0.04% of the average daily net assets in excess of $500 million. For the period ended February 28, 2007, PFPC's administration and accounting fees were $21,710. PFPC voluntarily agreed to waive a portion of its administration and accounting service fees for the Portfolio. For the period ended February 28, 2007, $7,691 was waived by PFPC. Included in the administration and accounting fees, shown above, are fees for providing regulatory administration services to RBB. For providing these services, PFPC is entitled to receive compensation as agreed to by the Company and PFPC. This fee is allocated to each portfolio in proportion to its net assets of the RBB Funds. 17 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO NOTES TO FINANCIAL STATEMENTS FOR THE PERIOD ENDED FEBRUARY 28, 2007 (UNAUDITED) (CONTINUED) In addition, PFPC serves as the Portfolio's transfer and dividend disbursing agent. For providing transfer agent services, PFPC is entitled to receive an annual fee of $25,000, paid monthly, plus out of pocket expenses. For the period ended February 28, 2007, PFPC transfer agency fees were $6,608. PFPC Trust Company provides certain custodial services to the Portfolio. PFPC Trust Company is a wholly-owned subsidiary of PFPC Worldwide, Inc. and an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc. As compensation for such custodial services, PFPC Trust Company is entitled to receive a monthly fee equal to an annual rate of 0.01% of the first $250 million of the Portfolio's average daily gross assets; 0.0075% of the next $250 million of the Portfolio's average daily gross assets; and 0.005% of the Portfolio's average daily gross assets over $500 million. There is a minimum monthly fee of $1,200 for the Portfolio, exclusive of transaction charges and out of pocket expenses charged to the Portfolio. PFPC Distributors, Inc., ("PFPC Distributors") a wholly-owned subsidiary of PFPC Worldwide, Inc. and an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc., provides certain administrative services to the Portfolio. As compensation for such administrative services, PFPC Distributors is entitled to receive a fee paid by PFPC from the fees PFPC receives from the Portfolio pursuant to the Administration and Accounting Services Agreement. The Portfolio will not pay PFPC or PFPC's affiliates at a later time for any amounts waived or any amounts assumed. As of February 28, 2007, the Portfolio owed PFPC and its affiliates $23,591 for their services. 3. INVESTMENT IN SECURITIES For the period ended February 28, 2007, aggregate purchases and sales of investment securities (excluding short-term investments) of the Portfolio were as follows: PURCHASES SALES ------------ ------------ Investment Securities $367,436,195 $156,175,539 4. CAPITAL SHARE TRANSACTIONS As of February 28, 2007, the Portfolio has 100,000,000 shares of $0.001 par value common stock authorized. Transactions in capital shares were as follows: FOR THE PERIOD ENDED FEBRUARY 28, 2007 (UNAUDITED) ----------------------------- SHARES VALUE ---------- ------------ Sales .................................... 15,858,652 $159,001,000 Reinvestments ............................ 76,768 770,326 Redemptions .............................. -- -- ---------- ------------ Net Increase ............................. 15,935,420 $159,771,326 ========== ============ 18 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO NOTES TO FINANCIAL STATEMENTS FOR THE PERIOD ENDED FEBRUARY 28, 2007 (UNAUDITED) (CONCLUDED) 5. FEDERAL INCOME TAX INFORMATION At February 28, 2007, federal tax cost, aggregate gross unrealized appreciation and depreciation of securities held by the Portfolio were as follows: FEDERAL TAX UNREALIZED UNREALIZED NET UNREALIZED COST APPRECIATION DEPRECIATION APPRECIATION ------------ ------------ ------------ -------------- $203,162,308 $1,158,053 $(1,033,147) $124,906 6. NEW ACCOUNTING PRONOUNCEMENTS In July 2006, the Financial Accounting Standards Board ("FASB") issued Interpretation No. 48, "Accounting for Uncertainty in Income Taxes - an Interpretation of FASB Statement No. 109" (the "Interpretation"). The Interpretation establishes for all entities a minimum threshold for financial statement recognition of the benefit of positions taken in filing tax returns (including whether an entity is taxable in a particular jurisdiction), and requires certain expanded tax disclosures. The Interpretation is effective for fiscal years beginning after December 15, 2006, and is required to be implemented by calendar year funds by no later than June 29, 2007. The Adviser has recently begun to evaluate the application of the Interpretation to the Portfolio, and is not in a position at this time to estimate the significance of its impact, if any, on the Portfolio's financial statements. In September 2006, FASB issued Statement of Financial Accounting Standards ("SFAS") 157, Fair Value Measurements, which clarifies the definition of fair value and requires companies to expand their disclosure about the use of fair value to measure assets and liabilities in interim and annual periods subsequent to initial recognition. Adoption of SFAS 157 requires the use of the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. At this time, the Portfolio is in the process of reviewing the impact, if any, of the SFAS on the Portfolio's financial statements. 19 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO OTHER INFORMATION (UNAUDITED) PROXY VOTING Policies and procedures that the Portfolio uses to determine how to vote proxies relating to portfolio securities as well as information regarding how the Portfolio voted proxies relating to portfolio securities for the most recent 12-month period ended June 30 are available without charge, upon request, by calling (800) 519-CUFS (2837) and on the Securities and Exchange Commission's ("SEC") website at http://www.sec.gov. QUARTERLY PORTFOLIO SCHEDULES The Company will file its complete schedule of portfolio holdings with the SEC for the first and third fiscal quarters of each fiscal year (quarters ended November 30 and May 31) on Form N-Q. The Company's Form N-Q will be available on the SEC website at http://www.sec.gov and may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. Information on the operation of the SEC Public Reference Room may be obtained by calling 1-800-SEC-0330. APPROVAL OF ADVISORY AGREEMENT As required by the Investment Company Act, the Company's Board of Directors (the "Board"), including all of the Directors who are not "interested persons" of the Company, as that term is defined in the Investment Company Act (the "Independent Directors"), considered the approval of the Advisory Agreement between BSAM and the Company on behalf of the Portfolio at meetings of the Board held on May 25, 2006, September 6, 2006 and November 8, 2006. At these Meetings, the Board approved the Advisory Agreement for an initial term ending August 16, 2007. The Board's decision to approve the Advisory Agreement reflects the exercise of its business judgment to engage BSAM to provide advisory services to the Portfolio pursuant to the terms of the Advisory Agreement and based upon the information provided to the Directors in connection with the Meetings. In approving the Advisory Agreement, the Board considered information provided by the Adviser with the assistance and advice of counsel to the Independent Directors and the Company. In considering the approval of the Advisory Agreement, the Directors took into account all the materials provided prior to and during the Meetings, the presentations made during the Meetings, and the discussions during the Meetings. The Directors discussed the materials from BSAM mailed in advance of the Meetings that addressed most, if not all, of the factors listed below. BSAM also made presentations during the Meetings and responded to questions from the Directors. Among other things, the Directors considered (i) the nature, extent, and quality of BSAM's services to be provided to the Portfolio; (ii) descriptions of the experience and qualifications of BSAM's personnel providing those services; (iii) BSAM's investment philosophies and processes; (iv) BSAM's assets under management and client descriptions; (v) BSAM's soft dollar commission and trade allocation policies, including information on the types of research and services obtained in connection with soft dollar commissions; (vi) BSAM's proposed advisory fee arrangements with the Company as compared to another mutual fund with a similar investment objective and policies as the Portfolio (the "Comparative Fund"); (vii) BSAM's compliance procedures; (viii) BSAM's financial information and insurance coverage; and (ix) the extent to which economies of scale are relevant to the Portfolio. No one factor was determinative in the Board's consideration of the Advisory Agreement. 20 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO OTHER INFORMATION (UNAUDITED) (CONCLUDED) The Directors met in executive session with counsel to discuss and consider information presented, as well as the Directors' responsibilities and duties in connection with approving the Advisory Agreement. The Directors considered that the Portfolio's proposed advisory fee was higher than the advisory fee of its Comparative Fund. However, the Directors noted that BSAM is voluntarily waiving a portion of its advisory fee and reimbursing expenses of the Portfolio. The Directors further considered that the costs associated with executing the Portfolio's investment strategy are higher due to the type of derivative securities in which the Portfolio invests. The Directors recognized that because the Portfolio had not yet commenced investment operations that the effect of any economies of scale due to asset growth could not currently be evaluated, nor could BSAM's expected profitability from providing advisory services to the Portfolio. The Directors also considered that the Advisory Agreement permitted BSAM to use sub-advisers in the future to manage one or more portions of the Portfolio's assets. The Directors noted that the Advisory Agreement requires that any fee or compensation payable to any sub-adviser is to be paid by BSAM. Further, the Directors, including a majority of the Independent Directors, and the Portfolio's shareholders would have to approve the appointment of any sub-advisers recommended by BSAM. The Directors concluded that the nature, extent and quality of services to be provided by BSAM in advising the Portfolio was satisfactory; and the benefits expected to be derived by BSAM from managing the Portfolio, including its use of soft dollars and its method for selecting brokers, seemed reasonable. Based on all of the information presented to the Board and its consideration of relevant factors, the Board concluded that the proposed advisory fee was reasonable and determined that BSAM's Advisory Agreement be approved for an initial term ending August 16, 2007. 21 [THIS PAGE INTENTIONALLY LEFT BLANK] BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO -------------------------------------------------------------------------------- INVESTMENT ADVISERS ------------------- Bear Stearns Asset Management Inc. 383 Madison Avenue New York, New York 10179 ADMINISTRATOR ------------- PFPC Inc. 301 Bellevue Parkway Wilmington, DE 19809 TRANSFER AGENT -------------- PFPC Inc. 301 Bellevue Parkway Wilmington, DE 19809 DISTRIBUTOR ----------- PFPC Distributors, Inc. 760 Moore Road King of Prussia, PA 19406 CUSTODIAN --------- PFPC Trust Company 8800 Tinicum Blvd. Suite 200 Philadelphia, PA 19153 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM --------------------------------------------- Deloitte & Touche LLP 1700 Market Street Philadelphia, PA 19103 LEGAL COUNSEL ------------- Drinker Biddle & Reath LLP One Logan Square 18th and Cherry Streets Philadelphia, PA 19103 ITEM 2. CODE OF ETHICS. Not applicable. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. ITEM 6. SCHEDULE OF INVESTMENTS. Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the report to shareholders filed under Item 1 of this Form. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. There have been no material changes to the procedures by which the shareholders may recommend nominees to the registrant's board of directors, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)), or this Item. ITEM 11. CONTROLS AND PROCEDURES. (a) The registrant's principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the "1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)). (b) There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the registrant's second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS. (a)(1) Not applicable. (a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto. (a)(3) Not applicable. (b) Certifications pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) The RBB Fund, Inc. --------------------------------- By (Signature and Title)* /s/ Edward J. Roach ----------------------------------------------------- Edward J. Roach, President & Treasurer (principal executive officer) Date April 25, 2007 ---------------------------------------------------------------------------- Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title)* /s/ Edward J. Roach ----------------------------------------------------- Edward J. Roach, President & Treasurer (principal executive officer & principal financial officer) Date April 25, 2007 ---------------------------------------------------------------------------- * Print the name and title of each signing officer under his or her signature.