-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, R6RXKE6Hrzirl6tv5oAxWJW5TjrmjfizWwLSD6oJ+bJicw9Wj6ZOJ1gEfLTYrvoT wAHayva+cIGKr8l60yEF4g== 0000912057-96-004232.txt : 19960311 0000912057-96-004232.hdr.sgml : 19960311 ACCESSION NUMBER: 0000912057-96-004232 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960308 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ROBERTSON STEPHENS INVESTMENT TRUST CENTRAL INDEX KEY: 0000814232 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 946649069 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-05159 FILM NUMBER: 96533011 BUSINESS ADDRESS: STREET 1: 555 CALIFORNIA ST STE 2600 CITY: SAN FRANCISCO STATE: CA ZIP: 94104 BUSINESS PHONE: 8007663863 MAIL ADDRESS: STREET 1: 555 CALIFORNIA ST. STREET 2: SUITE 2600 CITY: SAN FRANCISCO STATE: CA ZIP: 94104 FORMER COMPANY: FORMER CONFORMED NAME: ROBERTSON STEPHENS EMERGING GROWTH FD DATE OF NAME CHANGE: 19920315 FORMER COMPANY: FORMER CONFORMED NAME: ROBERTSON STEPHENS EMERGING GROWTH FUND DATE OF NAME CHANGE: 19920312 FORMER COMPANY: FORMER CONFORMED NAME: RCS EMERGING GROWTH FUND DATE OF NAME CHANGE: 19910502 N-30D 1 N-30D EMERGING GROWTH ROBERTSON STEPHENS MUTUAL FUNDS The Emerging Growth Fund Annual Report December 31, 1995 THE EMERGING GROWTH FUND ANNUAL RESULTS FUND PHILOSOPHY The Robertson Stephens Emerging Growth Fund seeks capital appreciation by investing in small, rapidly growing companies. The Fund is actively managed, involving hands-on fundamental research that includes extensive travel and visits with company managements. The Fund seeks to invest in companies that are growing at least 20% annually, are market share leaders, and are managed by winning executives who can consistently execute in today's competitive business environment. The Fund is intended for investors with long-term investment goals. CONTENTS Fund Highlights 1 Report to Shareholders 2 Fund Performance 8 Portfolio Summary 9 Schedule of Net Assets 10 Statement of Net Assets 14 Statement of Operations 15 Statement of Changes in Net Assets 16 Independent Accountants' Report 16 Financial Highlights 17 Notes to Financial Statements 18 Administration 21 ROBERTSON, STEPHENS & COMPANY FUND HIGHLIGHTS NEW PORTFOLIO MANAGER Dave Evans, an experienced portfolio manager who has worked closely with Bob Czepiel as a senior investment analyst since 1989, will assume responsibility for managing the Fund (see page 7). TECHNOLOGY -- THE INTERNET EXPLODES Whereas mainframes, minicomputers, and personal computers were essentially self- contained number-crunchers and information processors, the Internet, and ultimately the development of cyberspace, is turning personal computers into information appliances. HEALTH CARE FUNDAMENTALS STRENGTHENING The HMO industry is on the upswing. Enrollment growth is accelerating, largely driven by economics. Premiums are in many cases lower than traditional indemnity health plans, and double-digit increases have been announced by several insurers for 1996. EMERGING CONSUMER TRENDS IDENTIFIED Demand for luxury and value-priced goods has been very strong in the face of a generally weak retail environment. The consumer has been more willing to spend on products and services that increase and/or enhance the quality of time spent at home. We uncovered these trends early. 1996 OUTLOOK OPTIMISTIC We believe the outlook for small- and medium-sized companies is favorable for 1996. We also believe that earnings growth of 15-30% for these companies appears realistic despite the general expectation for an economic slowdown. Computer software, category-dominant retailing, and managed care are sectors we have focused on, and we believe they should continue to expand rapidly. 1 THE EMERGING GROWTH FUND ANNUAL RESULTS DEAR SHAREHOLDER: We are pleased to report that the recovery in relative performance that started in the third quarter continued through the fourth quarter. The Fund's return was - -0.28% versus -1.73% for the NASDAQ Industrials in the fourth quarter. This was primarily due to the Fund's relatively heavy weighting in health care stocks, which continued to gain as the fundamentals steadily improved. We believe these stocks are generally underweighted in most institutional portfolios, and that their potential for increased popularity places the Fund in a good position for 1996. TECHNOLOGY -- THE INTERNET EXPLODES Computer technology is moving at an accelerating pace into its fourth phase -- networking and communications. Whereas mainframes, minicomputers, and personal computers were essentially self-contained number-crunchers and information processors, the Internet, and ultimately the development of cyberspace, is turning personal computers into information appliances. The data and processing power is coming over the wire. The network has become the computer. FUND MANAGER [Photograph] ROBERT CZEPIEL Portfolio Manager The Robertson Stephens Emerging Growth Fund "The INTERNET, and ultimately the DEVELOPMENT OF CYBERSPACE, is turning personal computers into information appliances." 2 ROBERTSON, STEPHENS & COMPANY "The information highway will transform our culture as dramatically as Gutenberg's press did the Middle Ages. Personal computers have already altered work habits, but they haven't really changed our lives much yet. When tomorrow's powerful information machines are connected on the highway, people, machines, entertainment, and information services will all be accessible. You will be able to stay in touch with anyone, anywhere, who wants to stay in touch with you; to browse through any of thousands of libraries, day or night. Your misplaced or stolen camera will send you a message telling you exactly where it is, even if it's in a different city. You'll be able to answer your apartment intercom from your office, or answer any mail from your home. Information that today is difficult to retrieve will be easy to find...." Bill Gates, THE ROAD AHEAD Evolution of the Computer Industry Pervasiveness [Chart] Source: DLJ. If you can visualize communications superior to telephones, mail, radio, and television that are not only cheaper ($0.03 to anywhere in the world) but more convenient, this is what the personal computer can do today on the Internet. From an estimated 37 million this past August, the user population is forecast to grow to 200 million by the year 2000! The impact on our society could be as revolutionary as the railroad, the telephone, or the jet airplane. Needless to say, trying to forecast the future and invest profitably in a technological revolution is not easy or risk-free. Consequently, we have selected a basket of companies that we believe are positioned to benefit from the growth of the Internet. This way, investors can participate in one of the most exciting and dynamic technological sectors while lessening somewhat the inherent risk associated with individual young and start-up companies. 3 THE EMERGING GROWTH FUND ANNUAL RESULTS HEALTH CARE HEALTH CARE FUNDAMENTALS STRENGTHENING The HMO industry is on the upswing. Enrollment growth is accelerating, largely driven by economics. Premiums are, in many cases, lower than traditional indemnity health plans, where double-digit increases have been announced by several insurers for 1996. The relative attractiveness of HMO rates will likely drive enrollment. Also, medical costs are stabilizing and easing the pressure on profit margins, a trend that was apparent in the first half of 1995. In our opinion, this puts the HMO industry in a good position for fourth-quarter and 1996 upside earnings surprises. [Photograph] G. RANDY HECHT President Robertson Stephens Investment Trust INVESTMENT TEAM SENIOR INVESTMENT ANALYST Dave Evans SENIOR TRADER Maureen Basney RESEARCH Rainerio Reyes INVESTMENT MANAGEMENT 4 ROBERTSON, STEPHENS & COMPANY Health care industry consolidation is under way, increasing the takeover attractiveness of the smaller companies, many of which are in the Fund. There were several acquisitions in 1995, including United Healthcare's purchase of Metra-Health, Healthsource's acquisition of Provident Life and Accident's group health insurance business, and HealthSouth's purchase of Advantage Health. We expect more of the same in 1996. Certainly the flow of news from Washington, D.C., increasingly supports the move to managed care. The HMOs offer a practical way to get Medicare health care cost inflation under control. Through managed care, the private sector is filling the need created by the government's desire for change. EMERGING CONSUMER TRENDS IDENTIFIED Demand for luxury and value-priced goods has been very strong in the face of a generally weak retail environment. The consumer also continues to generally feel very pressed for time and has been more willing to spend on products and services that increase and/or enhance the quality of time spent at home. We uncovered these trends early and have been well positioned to benefit from them, with investments in quality companies offering luxury goods, value-priced goods, "home meal replacement," consumer software, and personal computers/home office equipment. For example, Tiffany & Co. (a high-end jewelry and gift company) enjoyed a very strong year, as did Garden Ridge (a value-priced, home accessories superstore concept) and Kohl's Corporation (similar to Wal-Mart, but with a stronger focus on basic apparel). 5 THE EMERGING GROWTH FUND ANNUAL RESULTS CONSUMER TRENDS The restaurant business has generally been very tough over the past year as the accelerated pace of new unit openings over the past few years has outstripped growth in demand. Boston Chicken, Inc., however, has been experiencing quarter after quarter of record sales and earnings, driven by new unit development and its focus on a niche it created -- "home meal replacement" -- to address the lack of time working people have to prepare fresh, home-cooked meals every night. The company's Boston Market stores offer complete, freshly prepared family meals at value prices. Its main competitor is the grocery store. "Computer software, category-dominant retailing, and managed care are sectors we believe should continue to EXPAND rapidly." 6 ROBERTSON, STEPHENS & COMPANY 1996 OUTLOOK OPTIMISTIC We believe the outlook for small- and medium-sized companies is favorable for 1996. Earnings growth of 15-30% appears realistic despite the general expectation for an economic slowdown. The primary criterion in our stock- selection process is above-average growth in the demand for each company's products and services. The young companies we select are serving new and dynamic industries that we believe are generally less sensitive to general economic conditions. Computer software, category-dominant retailing, and managed care are sectors we have focused on, and we believe they should continue to expand rapidly. Finally, valuations are not excessive, and we are finding sufficient opportunities every day. Our objective is to translate this into superior performance. In closing for this quarter, I'd like to announce that I am stepping down as portfolio manager of the Emerging Growth Fund. Since the Fund's inception in 1987, I have taken great pleasure in coming to work each day to pursue growing businesses. My passion for investing has always remained vibrant as I have witnessed both good and bad markets. As most market veterans know, the mystery behind Wall Street remains just as challenging as when I started in the money management business 30 years ago. Dave Evans, who has worked closely with me as a senior investment analyst since 1989, will assume responsibility for managing the Fund. As a fellow shareholder, I have tremendous confidence in Dave's disciplined approach to emerging growth investing. December 28, 1995 Sincerely, /s/BOB CZEIPIEL BOB CZEPIEL Portfolio Manager TO HEAR DAVE EVANS' ONGOING THOUGHTS ON THE FUND, CALL OUR 24-HOUR HOTLINE AT 1-800-766-3863. 7 THE EMERGING GROWTH FUND ANNUAL RESULTS FUND PERFORMANCE Results of a hypothetical $10,000 investment in The Robertson Stephens Emerging Growth Fund and the S&P 500 Index(1) IF INVESTED ON NOVEMBER 30, 1987(2) [Chart] Cumulative Total Returns
EMERGING GROWTH S&P 500 NASDAQ FOR THE PERIODS ENDED 12/31/95 FUND INDEX(1) INDUSTRIALS(3) - -------------------------------------------------------------------------------- Three months (0.28)% 5.99% (1.73)% - -------------------------------------------------------------------------------- Six months 15.69% 14.53% 8.99% - -------------------------------------------------------------------------------- Nine months 13.50% 25.29% 20.33% - -------------------------------------------------------------------------------- One year 20.31% 37.53% 27.97% - -------------------------------------------------------------------------------- Since inception (11/30/87)(2) 390.45% 244.38% 216.71% - -------------------------------------------------------------------------------- Average Annual Total Returns EMERGING GROWTH S&P 500 NASDAQ FOR THE PERIODS ENDED 12/31/95 FUND INDEX(1) INDUSTRIALS(3) - -------------------------------------------------------------------------------- Three years 11.67% 15.32% 9.99% - -------------------------------------------------------------------------------- Five years 16.58% 16.57% 18.89% - -------------------------------------------------------------------------------- Since inception (11/30/87)(2) 21.72% 16.51% 15.31% - --------------------------------------------------------------------------------
(1) The Standard & Poor's Composite Index of 500 Stocks (S&P 500) is a widely recognized, unmanaged index of market activity based on the aggregate performance of a selected portfolio of publicly traded stocks. It is widely recognized as representative of the stock market in general. Investment results assume the reinvestment of dividends paid on the stocks constituting the index. (2) Date that the Fund's shares were first offered to the public. (3) The NASDAQ Industrial Index is an unmanaged index of a subset of the NASDAQ national market system issues, exclusive of warrants, and common stocks traded in NASDAQ that are not part of the NASDAQ National Market System. This index excludes the issues of insurance companies, transportation companies, utilities, banks, and finance-related companies. The results shown are adjusted for stock splits and stock dividends. Investors should realize that all performance data presented is based upon past performance during limited periods of time, and that past performance is no guarantee of future performance. Investors should also realize that both investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. 8 ROBERTSON, STEPHENS & COMPANY PORTFOLIO SUMMARY AS OF DECEMBER 31, 1995 [Chart] Top Ten Holdings 1. MID ATLANTIC MEDICAL SERVICES, INC. A holding company whose subsidiaries are active in managed health care. 2. COVENTRY CORPORATION Provides comprehensive health care services through HMOs. 3. SIERRA HEALTH SERVICES A managed HMO company. Offers comprehensive health care programs. 4. HEALTHSOURCE, INC. Owns and manages HMOs. 5. KOHL'S CORPORATION Operates family-oriented specialty department stores that feature quality, national-brand merchandise at value prices. 6. HBO & COMPANY Designs and sells computerized information systems to the health care industry. 7. SYLVAN LEARNING SYSTEMS, INC. Provides supplemental educational services through franchised and company-owned centers. Also offers tutorial services and administers computer testing on behalf of national organizations. 8. BURR-BROWN CORPORATION Designs, manufactures, and markets standard high-performance analog and mixed-signal circuits primarily used for medical instrumentation, process control, automation, audio, defense guidance, and control applications. 9. PETSMART, INC. Operates superstores specializing in pet food, supplies, and services in the United States. 10. SIERRA ON-LINE, INC. Designs, develops, publishes, and markets interactive entertainment and educational software for personal computers. 9 THE EMERGING GROWTH FUND ANNUAL RESULTS Schedule of Net Assets
DECEMBER 31, 1995 SHARES VALUE - -------------------------------------------------------------------------------- COMMON STOCKS - -------------------------------------------------------------------------------- BIOTECHNOLOGY - 1.6% Cephalon, Inc. 65,300 $ 2,660,975 - -------------------------------------------------------------------------------- 2,660,975 - -------------------------------------------------------------------------------- COMPUTER HARDWARE & COMPONENTS - 2.5% Seagate Technology, Inc. 40,000 1,900,000 Sun Microsystems, Inc. 50,000 2,281,250 - -------------------------------------------------------------------------------- 4,181,250 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- COMPUTER SOFTWARE - 12.2% Adobe Systems, Inc.1 15,400 954,800 Broderbund Software, Inc. 45,000 2,733,750 Citrix Systems, Inc. 7,050 229,125 Davidson & Associates, Inc. 45,000 990,000 FTP Software, Inc. 75,000 2,175,000 Informix Corporation 40,000 1,200,000 Legato Systems, Inc. 13,400 415,400 NetManage, Inc. 20,200 469,650 Number Nine Visual Technology Corporation 52,700 461,125 Premenos Technology Corporation 36,400 960,050 Remedy Corporation 22,400 1,327,200 Sierra On-Line, Inc. 103,300 2,969,875 Spectrum HoloByte, Inc. 216,900 1,409,850 Symantec Corporation 108,900 2,531,925 Tivoli Systems, Inc. 23,600 796,500 Verity, Inc. 18,400 814,200 - -------------------------------------------------------------------------------- 20,438,450 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- CONSUMER & SPECIALTY RETAIL - 10.6% Baby Superstore, Inc. 22,450 1,279,650 Books-A-Million, Inc. 156,400 2,013,650 Cannondale Corporation 91,700 1,455,738 Creative Computers, Inc. 28,700 523,775 Garden Ridge Corp. 25,000 968,750 Gucci 10,000 388,750 Just For Feet, Inc. 25,000 893,750 Kohl's Corporation 74,100 3,890,250 The accompanying notes are an integral part of these financial statements. 10 ROBERTSON, STEPHENS & COMPANY SHARES VALUE - -------------------------------------------------------------------------------- Micro Warehouse, Inc. 47,400 $2,050,050 PETsMART, Inc. 102,150 3,166,650 Tiffany & Co.(1) 23,000 1,158,625 - -------------------------------------------------------------------------------- 17,789,638 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- CONSUMER TECHNOLOGY - 3.4% Acclaim Entertainment, Inc. 176,700 2,186,663 CDW Computer Centers, Inc. 21,200 858,600 Electronic Arts 98,700 2,578,537 - -------------------------------------------------------------------------------- 5,623,800 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- DATA COMMUNICATIONS/TELECOMMUNICATIONS - 8.1% 3Com Corporation 55,400 2,583,025 Ascend Communications, Inc. 5,000 405,625 Bay Networks, Inc. 55,500 2,282,437 Cascade Communications Corporation 10,000 852,500 Colonial Data Technologies 111,600 2,287,800 Netcom On Line Communications 10,000 360,000 Network General Corporation 63,300 2,112,637 P-COM, Inc. 102,600 2,052,000 UUNET Technologies, Inc. 10,000 630,000 - -------------------------------------------------------------------------------- 13,566,024 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- FINANCIAL SERVICES - 1.2% Credit Acceptance Corporation 100,000 2,075,000 - -------------------------------------------------------------------------------- 2,075,000 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- HEALTH CARE SERVICES - 3.2% Emeritus Corporation 60,000 697,500 Express Scripts, Inc., Class A 20,000 1,020,000 Pediatrix Medical Group, Inc. 30,000 825,000 PhyCor, Inc. 46,050 2,328,403 United Dental Care, Inc. 11,500 474,375 - -------------------------------------------------------------------------------- 5,345,278 - -------------------------------------------------------------------------------- The accompanying notes are an integral part of these financial statements. 11 THE EMERGING GROWTH FUND ANNUAL RESULTS Schedule of Net Assets (CONTINUED) SHARES VALUE - -------------------------------------------------------------------------------- HEALTH MAINTENANCE ORGANIZATIONS - 17.3% Coventry Corporation 216,200 $ 4,459,125 Endosonics Corporation 35,000 529,375 Healthsource, Inc. 115,200 4,147,200 Healthwise of America 41,400 1,614,600 Mid Atlantic Medical Services, Inc. 186,800 4,529,900 Oxford Health Plans, Inc. 34,800 2,570,850 PacifiCare Health Systems, Inc. 25,200 2,192,400 Physician Healthcare 71,500 2,645,500 Quintiles Transnational Corporation 46,400 1,902,400 Sierra Health Services 139,800 4,438,650 - -------------------------------------------------------------------------------- 29,030,000 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- LODGING - 1.1% Bristol Hotel Company 74,300 1,811,063 - -------------------------------------------------------------------------------- 1,811,063 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- MEDICAL SERVICES - 5.2% American Oncology Resources, Inc. 19,000 923,875 Compdent Corporation 51,000 2,116,500 Exogen, Inc. 97,400 1,874,950 HBO & Company(1) 49,100 3,762,287 - -------------------------------------------------------------------------------- 8,677,612 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- OTHER SERVICES - 4.0% Corporate Express, Inc. 63,600 1,915,950 Landstar Systems, Inc. 51,800 1,385,650 Sylvan Learning Systems, Inc. 114,700 3,412,325 - -------------------------------------------------------------------------------- 6,713,925 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- RESTAURANTS - 3.3% Boston Chicken, Inc. 63,000 2,023,875 Daka International, Inc. 78,600 2,161,500 Landry's Seafood Restaurants 80,000 1,365,000 - -------------------------------------------------------------------------------- 5,550,375 - -------------------------------------------------------------------------------- The accompanying notes are an integral part of these financial statements. 12 ROBERTSON, STEPHENS & COMPANY SHARES VALUE - -------------------------------------------------------------------------------- SEMICONDUCTORS - 6.1% Act Manufacturing 207,500 $ 2,308,438 Burr-Brown Corporation 124,200 3,167,100 Cypress Semiconductor Corporation 150,000 1,912,500 LSI Logic Corporation 50,000 1,637,500 Synopsys, Inc. 30,800 1,170,400 - -------------------------------------------------------------------------------- 10,195,938 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- TOTAL COMMON STOCKS - 79.8% (Cost: $114,977,657) 133,659,328 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- CONVERTIBLE PREFERRED STOCKS - -------------------------------------------------------------------------------- Applied Micro Circuits Corporation Series 3 - Restricted(2) 2,381 43,953 Managed Health Network, Inc. Series B - Restricted(2) 500 72,930 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- TOTAL CONVERTIBLE PREFERRED STOCKS - 0.1% (Cost: $100,001) 116,883 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- TOTAL INVESTMENTS - 79.9% (Cost: $115,077,658) 133,776,211 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- CASH AND CASH EQUIVALENTS - -------------------------------------------------------------------------------- Cash 408 Repurchase Agreement 29,680,000 State Street Bank and Trust Company, 5.00%, dated 12/29/95, due 01/2/96, maturity value $29,696,489 (collateralized by $22,995,000 par value U.S. Treasury Notes, 8.75%, due 05/15/17). - -------------------------------------------------------------------------------- TOTAL CASH AND CASH EQUIVALENTS - 17.6% 29,680,408 - -------------------------------------------------------------------------------- OTHER ASSETS, NET - 2.5% 4,271,868 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- TOTAL NET ASSETS - 100% $ 167,728,487 - --------------------------------------------------------------------------------
(1)Income-producing security. (2)See 4.d. in Notes to Financial Statements. The accompanying notes are an integral part of these financial statements. 13 THE EMERGING GROWTH FUND ANNUAL RESULTS Statement of Net Assets
DECEMBER 31, 1995 - -------------------------------------------------------------------------------- ASSETS - -------------------------------------------------------------------------------- Investments, at value (Cost: $115,077,658) $ 133,776,211 Cash and cash equivalents 29,680,408 Receivable for investments sold 4,998,114 Receivable for fund shares subscribed 376,473 Dividends/interest receivable 20,330 - -------------------------------------------------------------------------------- TOTAL ASSETS 168,851,536 - -------------------------------------------------------------------------------- LIABILITIES - -------------------------------------------------------------------------------- Payable for investments purchased 114,030 Payable for fund shares redeemed 429,171 Accrued expenses 259,379 Capital gains distribution payable 320,469 - -------------------------------------------------------------------------------- TOTAL LIABILITIES 1,123,049 - -------------------------------------------------------------------------------- TOTAL NET ASSETS $ 167,728,487 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- NET ASSETS CONSIST OF: - -------------------------------------------------------------------------------- Paid-in capital 132,299,996 Accumulated net realized gain from investments 16,729,938 Net unrealized appreciation on investments 18,698,553 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- TOTAL NET ASSETS $ 167,728,487 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PRICING OF SHARES: $ 19.21 Net Asset Value, offering and redemption price per share (net assets of $167,728,487 applicable to 8,732,520 shares of beneficial interest outstanding with no par value) - --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. 14 ROBERTSON, STEPHENS & COMPANY Statement of Operations
FOR THE NINE MONTHS ENDED DECEMBER 31, 1995 - -------------------------------------------------------------------------------- INVESTMENT INCOME - -------------------------------------------------------------------------------- Interest $ 783,216 Dividends 28,264 Other Income 31,441 - -------------------------------------------------------------------------------- TOTAL INVESTMENT INCOME 842,921 - -------------------------------------------------------------------------------- EXPENSES - -------------------------------------------------------------------------------- Investment advisory fees 1,288,465 Distribution fees 322,116 Custodian and transfer agent fees 268,320 Shareholder reports 82,824 Professional fees 80,395 Registration and filing fees 45,702 Trustees' fees and expenses 16,875 Other 14,040 - -------------------------------------------------------------------------------- TOTAL EXPENSES 2,118,737 - -------------------------------------------------------------------------------- NET INVESTMENT LOSS (1,275,816) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- REALIZED GAIN/(LOSS) AND UNREALIZED APPRECIATION/(DEPRECIATION) ON INVESTMENTS - -------------------------------------------------------------------------------- Net realized gain from investments 22,504,993 Net change in unrealized depreciation on investments (731,214) - -------------------------------------------------------------------------------- TOTAL NET REALIZED GAIN AND UNREALIZED DEPRECIATION ON INVESTMENTS 21,773,779 - -------------------------------------------------------------------------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 20,497,963 - --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. 15 THE EMERGING GROWTH FUND ANNUAL RESULTS Statement of Changes in Net Assets
NINE MONTHS ENDED YEAR ENDED 12/31/95 3/31/95 - -------------------------------------------------------------------------------- OPERATIONS - -------------------------------------------------------------------------------- Net investment loss $ (1,275,816) $ (1,654,135) Net realized gain from investments 22,504,993 6,598,824 Net change in unrealized (depreciation)/appreciation on investments (731,214) 15,035,796 - -------------------------------------------------------------------------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 20,497,963 19,980,485 - -------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS - -------------------------------------------------------------------------------- Realized gains on investments (13,460,981) (19,811,863) - -------------------------------------------------------------------------------- TOTAL DISTRIBUTIONS (13,460,981) (19,811,863) - -------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS - -------------------------------------------------------------------------------- Net (decrease)/increase in net assets resulting from capital share transactions (21,583,831) 13,915,017 - -------------------------------------------------------------------------------- TOTAL CAPITAL SHARE TRANSACTIONS (21,583,831) 13,915,017 - -------------------------------------------------------------------------------- TOTAL (DECREASE)/INCREASE IN NET ASSETS (14,546,849) 14,083,639 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- NET ASSETS - -------------------------------------------------------------------------------- Beginning of period 182,275,336 168,191,697 End of period $ 167,728,487 $ 182,275,336 - --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. Independent Accountants' Report To the Shareholders and Board of Trustees of The Robertson Stephens Emerging Growth Fund In our opinion, the accompanying statement of net assets, including the schedule of net assets, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of The Robertson Stephens Emerging Growth Fund (one of the series constituting The Robertson Stephens Investment Trust, hereinafter referred to as the "Fund") at December 31, 1995, the results of its operations for the nine month period then ended and the changes in its net assets and the financial highlights for each of the periods presented, in conformity with generally accepted accounting principles. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audit of these financial statements in accordance with generally accepted auditing standards, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit, which included confirmation of securities at December 31, 1995, by correspondence with the custodian and brokers and the application of alternative auditing procedures where confirmations from brokers were not received, provides a reasonable basis for the opinion expressed above. /s/Price Waterhouse LLP Price Waterhouse LLP San Francisco, California February 15, 1996 16 ROBERTSON, STEPHENS & COMPANY Financial Highlights
THREE-MONTH FOR A SHARE OUTSTANDING PERIOD ENDED YEAR ENDED YEAR ENDED PERIOD ENDED YEAR ENDED YEAR ENDED THROUGHOUT EACH PERIOD: 12/31/95(1) 3/31/95 3/31/94 3/31/93 12/31/92 12/31/91 - ----------------------------------------------------------------------------------------------------------------------------------- Net Asset Value, beginning of period $ 18.36 $ 18.37 $ 14.71 $ 16.77 $ 17.50 $ 11.67 - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Net investment loss (0.15) (0.17) (0.40) (0.02) (0.15) (0.09) - ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain/(loss) and unrealized appreciation/(depreciation) on investments 2.58 2.26 4.06 (2.04) (0.31) 6.82 - ----------------------------------------------------------------------------------------------------------------------------------- Total Increase/(Decrease) in Net Assets Resulting From Operations 2.43 2.09 3.66 (2.06) (0.46) 6.73 - ----------------------------------------------------------------------------------------------------------------------------------- Distribution from realized gains on investments (1.58) (2.10) - - (0.27) (0.90) - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 19.21 $ 18.36 $ 18.37 $ 14.71 $ 16.77 $ 17.50 - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN 13.50% 12.01% 24.88% (12.28)% (2.55)% 58.70% - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - ----------------------------------------------------------------------------------------------------------------------------------- Net Assets, end of period (000s) $ 167,728 $ 182,275 $ 168,192 $ 228,893 $ 277,531 $ 141,929 Ratio of Expenses to Average Net Assets 1.64% 1.56% 1.60% 1.54% 1.49% 1.59% Ratio of Net Investment Loss to Average Net Assets (0.99)% (0.96)% (1.27)% (0.61)% (0.92)% (0.68)% Portfolio Turnover Rate 147% 280% 274% 43% 124% 147% - -----------------------------------------------------------------------------------------------------------------------------------
(1) Represents a 9-month period then ended. Per-share data for each of the periods has been determined by using the average number of shares outstanding throughout each period. Ratios, except for total return and portfolio turnover rate, have been annualized. The accompanying notes are an integral part of these financial statements. 17 THE EMERGING GROWTH FUND ANNUAL RESULTS Notes to Financial Statements The Robertson Stephens Emerging Growth Fund (the "Fund") is a series of the Robertson Stephens Investment Trust (the "Trust"), a Massachusetts business trust organized on May 11, 1987. The Fund is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as a diversified, open-end management investment company. The Fund became effective to offer shares to the public on November 30, 1987. The Trust offers nine series of shares -- The Robertson Stephens Emerging Growth Fund, The Robertson Stephens Value+Growth Fund, The Robertson Stephens Contrarian Fund, The Robertson Stephens Developing Countries Fund, The Robertson Stephens Growth & Income Fund, The Robertson Stephens Partners Fund, The Robertson Stephens Information Age Fund, The Robertson Stephens Global Natural Resources Fund, and The Robertson Stephens Global Low-Priced Stock Fund. The assets for each series are segregated and accounted for separately. The Emerging Growth Fund, for book and tax purposes, has a calendar (12/31) year-end. These financial statements reflect operations for a nine-month period. NOTE 1 SIGNIFICANT ACCOUNTING POLICIES: The following policies are in conformity with generally accepted accounting principles. The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. a. INVESTMENT VALUATIONS: Marketable securities are valued at the last sale price on the principal exchange or market on which they are traded; or, if there were no sales that day, at the mean between the closing bid and asked prices. At December 31, 1995, 99.9% of the Fund's portfolio was valued in this manner. Securities for which market quotations are not readily available are valued at their fair value as determined in accordance with the guidelines and procedures adopted by the Fund's Board of Trustees. The guidelines and procedures use fundamental valuation methods which include, but are not limited to, the analysis of: the effect of any restrictions on the sale of the security, product development and trends of the security's issuer, changes in the industry and other competing companies, significant changes in the issuer's financial position, and any other event which could have a significant impact on the value of the security. At December 31, 1995, approximately 0.1% of the Fund's portfolio was valued using these guidelines and procedures. b. REPURCHASE AGREEMENTS: Repurchase agreements are fully collateralized by U.S. government securities. All collateral is held by the Fund's custodian and is monitored daily to ensure that the collateral's market value equals at least 100% of the repurchase price under the agreement. However, in the event of default or bankruptcy, realization and/or retention of the collateral may be subject to legal proceedings. The Fund's policy is to limit repurchase agreement transactions to those parties deemed by the Fund's Investment Advisor to have satisfactory creditworthiness. c. FEDERAL INCOME TAXES: The Fund has made no provision for federal income tax for the period ended December 31, 1995. The Fund complied with requirements of the Internal Revenue Code for qualifying as a regulated investment company so as not to be subject to federal income tax. d. SECURITIES TRANSACTIONS: Securities transactions are accounted for on the date the securities are purchased and sold (trade date). Realized gains and losses on securities transactions are determined on the basis of specific identification. e. INVESTMENT INCOME: Dividend income is recorded on the ex-dividend date. Interest income is accrued and recorded daily. f. CAPITAL ACCOUNTS: The Fund follows the provisions of the AICPA's Statement of Position 93-2 "Determination, Disclosure and Financial Statement Presentation of Income, Capital 18 ROBERTSON, STEPHENS & COMPANY Gain and Return of Capital Distributions by Investment Companies" ("SOP"). The purpose of this SOP is to report undistributed net investment income and accumulated net realized gain or loss accounts in such a manner as to approximate amounts available for future distributions to shareholders, if any. NOTE 2 CAPITAL SHARES: a. TRANSACTIONS: The Fund has authorized an unlimited number of shares of beneficial interest with no par value. Transactions in capital shares for the nine months ended December 31, 1995, and for the year ended March 31, 1995, were as follows:
4/1/95 - 12/31/95 SHARES AMOUNT - -------------------------------------------------------------------------------- Shares sold 2,181,298 $ 41,669,243 Shares reinvested 686,387 13,000,659 - -------------------------------------------------------------------------------- 2,867,685 54,669,902 - -------------------------------------------------------------------------------- Shares redeemed (4,060,471) (76,253,733) - -------------------------------------------------------------------------------- Net (decrease) (1,192,786) $ (21,583,831) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 4/1/94 - 3/31/95 SHARES AMOUNT - -------------------------------------------------------------------------------- Shares sold 5,163,070 $ 94,127,247 Shares reinvested 1,070,767 18,663,580 - -------------------------------------------------------------------------------- 6,233,837 112,790,827 - -------------------------------------------------------------------------------- Shares redeemed (5,463,027) (98,875,810) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Net increase 770,810 $ 13,915,017 - --------------------------------------------------------------------------------
NOTE 3 TRANSACTIONS WITH AFFILIATES: a. ADVISORY FEES AND EXPENSE LIMITATION: Under the terms of an advisory agreement, which is reviewed and approved annually by the Board of Trustees, the Fund pays Robertson, Stephens Investment Management, Inc. ("RSIM Inc.") an investment advisory fee calculated at an annual rate of 1.00% of the average daily net assets of the Fund. For the nine months ended December 31, 1995, the Fund incurred investment advisory fees of $1,288,465. RSIM Inc. has agreed to reimburse the Fund for any annual operating expenses, including investment advisory fees, but excluding distribution fees that exceed the most stringent limits prescribed by any state in which the Fund's shares are offered for sale. For the nine months ended December 31, 1995, there was no expected reimbursement of the advisory fees and other expenses. b. AFFILIATED PERSONS: Certain officers and Trustees of the Fund are also Members and/or officers of Robertson, Stephens & Company Group, L.L.C. ("RS Group"), the parent of Robertson, Stephens & Company LLC (RS & Co.), the Fund's Distributor and RSIM Inc., the Fund's Adviser. G. Randy Hecht, President, Chief Executive Officer and a Trustee of the Fund, is also a Director of RSIM Inc., a Member of RS Group, and Chief Operating Officer of RS & Co. Terry R. Otton, Chief Financial Officer of the Fund, is a Member of RS Group and Chief Financial Officer of RS & Co. John P. Rohal, a Trustee of the Fund, is a Member of RS Group and Director of Research for RS & Co. All affiliated and access persons, as defined in the 1940 Act, follow strict guidelines and policies on personal trading as outlined in the Fund's Code of Ethics. c. COMPENSATION OF TRUSTEES AND OFFICERS: Trustees and officers of the Fund who are affiliated persons receive no compensation from the Fund. Trustees of the Fund who are not interested persons of the Trust, as defined in the 1940 Act, collectively received compensation and reimbursement of expenses of $16,875 for the nine months ended December 31, 1995. d. DISTRIBUTION FEES: The Fund has entered into an agreement with RS & Co. for distribution services and has adopted a Plan of Distribution pursuant to Rule 12b-1 under the 1940 Act, which is reviewed and approved annually by the Fund's Board of Trustees. Under this Plan, RS & Co. is compensated for services in such capacity including its expenses in connection with the promotion and distribution of the Fund's shares. The distribution fee is calculated at an 19 THE EMERGING GROWTH FUND ANNUAL RESULTS Notes to Financial Statements (CONTINUED) annual rate of 0.25% of the average daily net assets of the Fund. For the nine months ended December 31, 1995, the Fund incurred distribution fees of $322,116. e. BROKERAGE COMMISSIONS: RSIM Inc. may direct orders for investment transactions to RS & Co. as broker-dealer, subject to Fund policies as stated in the prospectus, regulatory constraints, and the ability of RS & Co. to provide competitive prices and commission rates. All investment transactions in which RS & Co. acts as a broker may only be executed on an agency basis. Subject to certain constraints, the Fund may make purchases of securities from offerings or underwritings in which RS & Co. has been retained by the issuer. For the nine months ended December 31, 1995, the Fund paid brokerage commissions of $71,498 to RS & Co. which represented 24% of total commissions paid for the period. NOTE 4 INVESTMENTS: a. PORTFOLIO TURNOVER RATE: The portfolio turnover rate, which is calculated based on the lesser of the cost of investments purchased or the proceeds from investments sold (excluding short-term investments) measured as a percentage of the Fund's average monthly investment portfolio for the nine months ended December 31, 1995, was 147%. b. TAX BASIS OF INVESTMENTS: At December 31, 1995, the cost of investments for federal income tax purposes was $116,066,463. Accumulated net unrealized appreciation on investments was $17,709,748, consisting of gross unrealized appreciation and depreciation of $29,507,196 and $(11,797,448), respectively. c. INVESTMENT PURCHASES AND SALES: For the period ended December 31, 1995, the cost of investments purchased and the proceeds from investments sold (excluding short-term investments) were $219,859,671 and $278,926,405, respectively. d. RESTRICTED SECURITIES: A restricted security is a security which has been purchased through a private offering and cannot be resold to the general public without prior registration under the Securities Act of 1933. If the security is subsequently registered and resold, the issuers would bear the expense of all registrations at no cost to the Fund. At December 31, 1995, the Fund held restricted securities with an aggregate value of $116,883, which represented 0.1% of the Fund's total net assets.
ACQUISITION SECURITY SHARES COST VALUE DATE - -------------------------------------------------------------------------------- Applied Micro Circuits Corporation Convertible Preferred Stock, Series 3 2,381 $50,001 $43,953 9/14/87 - -------------------------------------------------------------------------------- Managed Health Network, Inc. Convertible Preferred Stock, Series B 500 $50,000 $72,930 12/30/87 - --------------------------------------------------------------------------------
Each of the above securities was valued based on its common share price equivalent. Each common share was valued at its fair value according to the guidelines and procedures adopted by the Fund's Board of Trustees as outlined in Note 1.a., paragraph 2. At December 31, 1995, Applied Micro Circuits Corporation Convertible Preferred Stock, Series 3, was valued at the common share price equivalent of $1.75, assuming the 2,381 shares of the Convertible Preferred Stock were converted to 25,116 shares of common stock. Managed Health Network, Inc. Convertible Preferred Stock, Series B, was valued at the common share price equivalent of $1.6336, assuming the 500 shares of the Convertible Preferred Stock were converted to 44,642 shares of common stock. 20 Administration OFFICERS AND TRUSTEES G. Randy Hecht President, Chief Executive Officer Terry R. Otton Chief Financial Officer Leonard B. Auerbach, Trustee Daniel R. Cooney, Trustee James K. Peterson, Trustee John P. Rohal, Trustee Robert I. Goldbaum, Secretary INVESTMENT ADVISER Robertson, Stephens Investment Management, Inc. 555 California Street, Suite 2600 San Francisco, CA 94104 DISTRIBUTOR Robertson, Stephens & Company LLC 555 California Street, Suite 2600 San Francisco, CA 94104 1-800-766-3863 TRANSFER AGENT AND DISBURSING AGENT State Street Bank & Trust Company c/o National Financial Data Services Kansas City, MO 1-800-272-6944 CUSTODIAN State Street Bank & Trust Company Boston, MA AUDITORS Price Waterhouse LLP San Francisco, CA LEGAL COUNSEL Ropes & Gray Boston, MA This report is submitted for the information of shareholders of The Robertson Stephens Emerging Growth Fund. It is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. Published February 27, 1996 The Robertson Stephens Mutual Funds In addition to THE EMERGING GROWTH FUND, Robertson Stephens offers the following mutual funds: THE CONTRARIAN FUND A DEFENSIVE POSITION IN TODAY'S VOLATILE MARKET - Invests in attractively priced, growing companies worldwide that are out of favor or have not been discovered by institutional investors. Adheres to an independent, aggressive, and flexible investment strategy. The Fund may engage in short sales and invests in companies of all sizes. Managed by Paul Stephens. THE DEVELOPING COUNTRIES FUND A PORTFOLIO OF GROWING COMPANIES IN EMERGING MARKETS - Invests in publicly traded equities of developing countries. The Fund may engage in short sales and/or invest in private placement emerging market equity securities. No load. Managed by Michael Hoffman. THE GLOBAL LOW-PRICED STOCK FUND SEEKING OVERLOOKED AND UNDERVALUED COMPANIES - Invests in companies worldwide that are low-priced (stock prices no greater than $10 per share), have future growth potential, but are underappreciated by other investors. No load. Managed by Hannah Sullivan. THE GLOBAL NATURAL RESOURCES FUND PRIMARILY FOCUSING ON ATTRACTIVE HARD ASSET COMPANIES - Invests in equities of companies engaged in the discovery, development, production, or distribution of natural resources, such as energy, metals, and forest products. No load. Managed by Andy Pilara, Jr. THE GROWTH & INCOME FUND SEEKING HIGH GROWTH WHILE MODERATING RISK - Invests primarily in small- and mid-cap company stocks and convertible bonds and preferred stocks. No load. Managed by John Wallace. THE INFORMATION AGE FUND FOCUSING ON INVESTMENTS IN THE INFORMATION TECHNOLOGY SECTOR - Invests in a wide range of technology companies with strong fundamentals, market advantage, and growth potential, including computer hardware and software, telecommunications, and multimedia. No load. Managed by Ron Elijah. THE PARTNERS FUND SMALL-CAP VALUE WITH A CONTRARIAN DISCIPLINE - Invests with a value methodology combining traditional Graham & Dodd balance sheet analysis and cash flow analysis. No load. Managed by Andy Pilara, Jr. THE VALUE+GROWTH FUND A GROWTH FUND FOR VALUE-CONSCIOUS INVESTORS - Invests in mid-cap growth companies with favorable price/earnings ratios in sectors with the potential for above-average growth. Ability to short sell. No load. Managed by Ron Elijah. Design: Broom & Broom, Inc., San Francisco Photography: Jerry Orabona, Bill Zemanek For a discussion of the risks associated with using options, international investing, investing in a few sectors, allocating a large percentage of the portfolio to one security, and short selling, please read the prospectus. ROBERTSON STEPHENS & COMPANY MUTUAL FUNDS 555 California Street, Suite 2600 San Francisco, California 94104 Fund News & Information ROBERTSON STEPHENS INVESTOR SERVICES - -Knowledgeable mutual fund representatives. - -Automated access to daily net asset values. - -Portfolio managers' hotline, 24 hours a day. 1-800-766-3863 ROBERTSON STEPHENS MUTUAL FUND E-MAIL funds@rsco.com ROBERTSON STEPHENS ACCOUNTLINK - -Automated account information, 24 hours a day. 1-800-624-8025 FUND LISTINGS The Fund is listed in THE WALL STREET JOURNAL, USA TODAY, INVESTOR'S BUSINESS DAILY, and most local newspapers as EmGr under the heading Robertson Stephens. Its computer quotation symbol is RSEGX. The views expressed in this report were those of the Fund's portfolio manager as of the date specified, and may not reflect the views of the portfolio manager on the date they are first published or at any other time thereafter. RSIM and its affiliates may buy or sell investments at any time for the Fund or their other clients or for their own accounts, and will not necessarily do so in a manner consistent with the views expressed in this report. The prices at which they buy or sell investments may be affected favorably by the contents of this report or the timing of its publication. THE VIEWS EXPRESSED IN THIS REPORT ARE INTENDED TO ASSIST SHAREHOLDERS OF THE FUND IN UNDERSTANDING THEIR INVESTMENT IN THE FUND AND DO NOT CONSTITUTE INVESTMENT ADVICE; INVESTORS SHOULD CONSULT THEIR OWN INVESTMENT PROFESSIONALS AS TO THEIR INDIVIDUAL INVESTMENT PROGRAMS. -----END PRIVACY-ENHANCED MESSAGE-----