N-CSRS 1 g11557rs_sec.txt RS INVESTMENTS TRUST 2004 SAR 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 811-05159 --------- RS Investment Trust ----------------------------------------------------------------- (Exact name of registrant as specified in charter) 388 Market Street San Francisco, CA 94111 ----------------------------------------------------------------- (Address of principal executive offices) (Zip code) G. Randall Hecht c/o RS Investments 388 Market Street San Francisco, CA 94111 ----------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: 800-766-3863 ------------ Date of fiscal year end: December 31, 2004 ----------------- Date of reporting period: June 30, 2004 ------------- Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507. ITEM 1. REPORTS TO STOCKHOLDERS. The Report to Shareholders is attached herewith. [GRAPHIC OMITTED] RS INVESTMENT TRUST 2004 SEMIANNUAL REPORT GROWTH RS DIVERSIFIED GROWTH FUND RS EMERGING GROWTH FUND RS GROWTH FUND (FORMERLY RS VALUE + GROWTH FUND) THE INFORMATION AGE FUND(R) RS INTERNET AGE FUND(R) RS MIDCAP OPPORTUNITIES FUND RS SMALLER COMPANY GROWTH FUND VALUE RS CONTRARIAN VALUE FUND RS GLOBAL NATURAL RESOURCES FUND RS PARTNERS FUND (LOGO) RS | INVESTMENTS [GRAPHIC OMITTED] RS FUNDS Phone: 1-800-766-FUND (3863) Web: www.RSinvestments.com E-mail: funds@rsinvestments.com 24-HOUR ACCOUNT ACCESS Phone: 1-800-624-8025 Web: Enter MY ACCOUNT on the RS Investments Web site PERFORMANCE UPDATE As of 6/30/04
Average 3-Year 5-Year 10-Year Annual Year-to- 1-Year Average Average Average Return Ticker Inception Date Total Annual Annual Annual Since RS GROWTH FUNDS Symbol Date Return Return Return Return Return Inception RS Diversified Growth Fund+ RSDGX 8/1/96 -0.76% 28.34% -2.71% 4.18% -- 16.38% RS Emerging Growth Fund+ RSEGX 11/30/87 4.41% 27.90% -6.70% -1.16% 13.68% 16.59% RS Growth Fund RSVPX 5/12/92 4.10% 25.67% 0.20% -2.54% 11.22% 11.73% (Formerly RS Value + Growth Fund) The Information Age Fund(R) RSIFX 11/15/95 3.88% 39.73% 1.04% -1.16% -- 10.27% RS Internet Age Fund(R) RIAFX 12/1/99 3.80% 42.29% 4.76% -- -- -7.98% RS MidCap Opportunities Fund RSMOX 7/12/95 4.80% 28.51% 0.39% 3.12% -- 11.92% RS Smaller Company Growth Fund RSSGX 8/15/96 4.47% 37.64% 2.72% 8.53% -- 12.83% RS VALUE FUNDS RS Contrarian Value Fund RSCOX 6/30/93 5.11% 39.63% 16.26% 14.11% 5.46% 6.39% RS Global Natural Resources Fund RSNRX 11/15/95 6.86% 32.32% 18.24% 15.49% -- 9.20% RS Partners Fund+ RSPFX 7/12/95 8.66% 40.43% 20.56% 21.78% -- 15.68% + Offered only to certain investors. See "Other Information About Purchasing Shares" on page 38 of the Prospectus. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. Investment return and principal value will fluctuate, so shares, when redeemed, may be worth more or less than their original cost. Please keep in mind that high double-digit returns are highly unusual and cannot be sustained. Numbers assume reinvestment of dividends and capital gains. Current and month-end performance information, which may be lower or higher than that cited, is available by contacting RS Investments at 1-800-766-FUND or visiting www.RSinvestments.com. Investing in small- and mid-size companies can involve risks such as less publicly available information than larger companies, volatility, and less liquidity. Overweighting investments in certain sectors or industries increases the risk of loss due to general declines in the prices of stocks in those sectors or industries. Investments in high-technology and Internet-related sectors may be highly volatile. Funds that concentrate investments in a certain sector may be subject to greater risk than funds that invest more broadly, as companies in that sector may share common characteristics and may react similarly to market developments or other factors affecting their values. Investments in companies in natural resources industries may involve risks including changes in commodities prices, changes in demand for various natural resources, changes in energy prices, and international political and economic developments. Foreign securities are subject to political, regulatory, economic, and exchange-rate risks not present in domestic investments. The value of a debt security is affected by changes in interest rates and is subject to any credit risk of the issuer or guarantor of the security. THIS REPORT MAY BE USED ONLY WHEN PRECEDED OR ACCOMPANIED BY A PROSPECTUS. YOU SHOULD CONSIDER THE INVESTMENT OBJECTIVES, RISKS, CHARGES, AND EXPENSES OF THE RS FUNDS BEFORE MAKING AN INVESTMENT DECISION. THE PROSPECTUS CONTAINS THIS AND OTHER INFORMATION - PLEASE READ IT CAREFULLY BEFORE INVESTING OR SENDING MONEY. EXCEPT AS NOTED, NUMBERS ARE UNAUDITED.
TABLE OF CONTENTS FINANCIAL INFORMATION SCHEDULES OF INVESTMENTS ..................... 4 STATEMENT OF ASSETS AND LIABILITIES ..........26 STATEMENT OF OPERATIONS ......................28 STATEMENT OF CHANGES IN NET ASSETS ...........30 FINANCIAL HIGHLIGHTS .........................34 NOTES TO FINANCIAL STATEMENTS ................38 SUPPLEMENTAL INFORMATION .....................46 MEETING OF SHAREHOLDERS ....................46 TRUSTEES INFORMATION TABLE .................48 ADMINISTRATION ..................................50 This page left blank intentionally. 2 | Call 1-800-766-FUND FINANCIAL INFORMATION -------------------------------------------------------------------------------- PERIOD ENDED JUNE 30, 2004 SCHEDULE OF INVESTMENTS - RS DIVERSIFIED GROWTH FUND June 30, 2004 (unaudited) Foreign Currency 2 Shares Value -------------------------------------------------------------------------------- COMMON STOCKS -- 98.0% ADVERTISING AGENCIES -- 2.2% 24/7 Real Media, Inc. 8 2,242,800 $ 12,582,108 ValueClick, Inc. 800,000 9,584,000 -------------------------------------------------------------------------------- 22,166,108 AEROSPACE -- 0.6% Orbital Sciences Corp. 451,250 6,231,762 -------------------------------------------------------------------------------- 6,231,762 AIR TRANSPORT -- 1.3% JetBlue Airways Corp. 255,850 7,516,873 Northwest Airlines Corp. 560,910 6,237,319 -------------------------------------------------------------------------------- 13,754,192 BANKS -- OUTSIDE NEW YORK CITY -- 1.6% Cathay General Bancorp 1 100,000 6,670,000 East West Bancorp, Inc. 1 163,000 5,004,100 Southwest Bancorporation of Texas, Inc. 1 108,420 4,783,490 -------------------------------------------------------------------------------- 16,457,590 BIOTECHNOLOGY RESEARCH & PRODUCTION -- 3.5% Axonyx, Inc. 703,820 3,688,017 Digene Corp. 213,860 7,812,306 Discovery Laboratories, Inc. 600,400 5,757,836 Inhibitex, Inc. 297,950 2,160,137 Nabi Biopharmaceuticals 313,840 4,462,805 Oscient Pharmaceuticals Corp. 1,032,537 5,276,264 VaxGen, Inc. 485,320 6,872,131 -------------------------------------------------------------------------------- 36,029,496 BUILDING MATERIALS -- 1.2% Simpson Manufacturing Co., Inc. 1 225,000 12,627,000 -------------------------------------------------------------------------------- 12,627,000 CASINOS & GAMBLING -- 2.4% Multimedia Games, Inc. 402,100 10,784,322 Scientific Games Corp., Class A 743,080 14,222,551 -------------------------------------------------------------------------------- 25,006,873 COMMUNICATIONS TECHNOLOGY -- 6.6% Alvarion Ltd. 589,530 7,828,958 Ditech Communications Corp. 405,044 9,453,727 Inet Technologies, Inc. 962,430 12,001,502 Netopia, Inc. 8 1,880,240 12,409,584 NMS Communications Corp. 1,001,250 7,389,225 Novatel Wireless, Inc. 329,230 8,724,595 Redback Networks, Inc. 604,600 3,875,486 ViaSat, Inc. 246,190 6,142,441 -------------------------------------------------------------------------------- 67,825,518 COMPUTER SERVICES, SOFTWARE & SYSTEMS -- 7.9% BakBone Software, Inc. CAD 2,816,050 6,133,034 Dendrite International, Inc. 282,800 5,254,424 Hyperion Solutions Corp. 117,000 5,115,240 Macromedia, Inc. 456,500 11,207,075 Macrovision Corp. 112,600 2,818,378 Micromuse, Inc. 848,290 5,675,060 June 30, 2004 (unaudited) Shares Value -------------------------------------------------------------------------------- COMPUTER SERVICES, SOFTWARE & SYSTEMS (Continued) National Instruments Corp. 1 226,910 $ 6,954,792 RealNetworks, Inc. 1,214,580 8,307,727 Shanda Interactive Entertainment Ltd., ADR 3 494,400 7,623,648 SupportSoft, Inc. 672,920 5,840,946 TeleCommunication Systems, Inc., Class A 967,550 5,495,684 Viewpoint Corp. 2,279,150 4,489,926 Webzen, Inc., ADR 3 857,610 6,072,736 -------------------------------------------------------------------------------- 80,988,670 COMPUTER TECHNOLOGY -- 1.3% M-Systems Flash Disk Pioneers Ltd. 274,040 4,085,936 palmOne, Inc. 281,930 9,802,706 -------------------------------------------------------------------------------- 13,888,642 CONSTRUCTION -- 1.0% Washington Group International, Inc. 279,100 10,016,899 -------------------------------------------------------------------------------- 10,016,899 CONSUMER ELECTRONICS -- 2.9% Activision, Inc. 485,095 7,713,011 CNET Networks, Inc. 931,275 10,309,214 Netflix, Inc. 319,100 11,471,645 -------------------------------------------------------------------------------- 29,493,870 CONSUMER PRODUCTS -- 1.4% Integrated Alarm Services Group, Inc. 8 1,286,500 6,947,100 RC2 Corp. 218,180 7,745,390 -------------------------------------------------------------------------------- 14,692,490 COSMETICS -- 0.9% Inter Parfums, Inc. 1 421,130 8,780,560 -------------------------------------------------------------------------------- 8,780,560 DRUG & GROCERY STORE CHAINS -- 0.8% Wild Oats Markets, Inc. 584,520 8,224,196 -------------------------------------------------------------------------------- 8,224,196 DRUGS & PHARMACEUTICALS -- 6.9% Able Laboratories, Inc. 559,400 11,501,264 Access Pharmaceuticals, Inc. 405,000 2,652,750 Bradley Pharmaceuticals, Inc. 334,510 9,332,829 Durect Corp. 8 2,732,710 9,537,158 Flamel Technologies S.A., ADR 3 290,000 7,142,700 Impax Laboratories, Inc. 294,950 5,716,131 Noven Pharmaceuticals, Inc. 384,690 8,470,874 Onyx Pharmaceuticals, Inc. 81,920 3,470,131 QLT, Inc. 255,450 5,114,109 Quidel Corp. 1,303,030 7,674,847 -------------------------------------------------------------------------------- 70,612,793 EDUCATION SERVICES -- 0.3% Strayer Education, Inc. 1 30,630 3,417,389 -------------------------------------------------------------------------------- 3,417,389 ELECTRICAL & ELECTRONICS -- 0.7% OSI Systems, Inc. 373,250 7,438,873 -------------------------------------------------------------------------------- 7,438,873 See notes to Schedule of Investments on page 25. The accompanying notes are an integral part of these financial statements. 4 | Call 1-800-766-FUND June 30, 2004 (unaudited) Shares Value -------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT & COMPONENTS -- 1.2% Sonic Solutions 578,660 $ 12,296,525 -------------------------------------------------------------------------------- 12,296,525 ELECTRONICS -- 0.8% California Micro Devices Corp. 538,670 6,210,865 HEI, Inc. 8 872,360 2,041,323 -------------------------------------------------------------------------------- 8,252,188 ELECTRONICS -- MEDICAL SYSTEMS -- 1.4% Possis Medical, Inc. 221,700 7,571,055 TriPath Imaging, Inc. 736,200 6,927,642 -------------------------------------------------------------------------------- 14,498,697 ELECTRONICS -- SEMICONDUCTORS & COMPONENTS -- 2.8% OmniVision Technologies, Inc. 380,200 6,064,190 Pixelworks, Inc. 426,240 6,529,997 Silicon Storage Technology, Inc. 650,410 6,699,223 Skyworks Solutions, Inc. 1,037,320 9,055,803 -------------------------------------------------------------------------------- 28,349,213 ELECTRONICS -- TECHNOLOGY -- 0.3% Trimble Navigation Ltd. 129,110 3,587,967 -------------------------------------------------------------------------------- 3,587,967 FINANCE COMPANIES -- 0.7% Saxon Capital, Inc. 336,282 7,677,318 -------------------------------------------------------------------------------- 7,677,318 FINANCIAL -- MISCELLANEOUS -- 1.4% CapitalSource, Inc. 318,750 7,793,437 New Century Financial Corp. 1 132,730 6,214,419 -------------------------------------------------------------------------------- 14,007,856 FINANCIAL DATA PROCESSING SERVICES & SYSTEMS -- 2.4% Corillian Corp. 8 2,357,558 11,882,092 iPayment Holdings, Inc. 191,050 7,833,050 Kronos, Inc. 113,260 4,666,312 -------------------------------------------------------------------------------- 24,381,454 FINANCIAL INFORMATION SERVICES -- 0.7% HomeStore, Inc. 1,833,000 7,313,670 -------------------------------------------------------------------------------- 7,313,670 FOODS -- 0.8% Provide Commerce, Inc. 402,400 7,931,304 -------------------------------------------------------------------------------- 7,931,304 HEALTH CARE FACILITIES -- 2.0% Kindred Healthcare, Inc. 351,230 9,254,911 LifePoint Hospitals, Inc. 102,620 3,819,516 Pharmaceutical Product Development, Inc. 234,240 7,441,805 -------------------------------------------------------------------------------- 20,516,232 HEALTH CARE MANAGEMENT SERVICES -- 1.0% Centene Corp. 174,700 6,734,685 Cerner Corp. 80,900 3,606,522 Wellcare Group, Inc. 22,450 381,650 -------------------------------------------------------------------------------- 10,722,857 June 30, 2004 (unaudited) Shares Value -------------------------------------------------------------------------------- HEALTH CARE SERVICES -- 0.8% Matria Healthcare, Inc. 322,390 $ 8,082,317 -------------------------------------------------------------------------------- 8,082,317 HOMEBUILDING -- 0.1% Desarrolladora Homex S.A. de C.V., ADR 3 57,350 992,729 -------------------------------------------------------------------------------- 992,729 INSURANCE -- PROPERTY & CASUALTY -- 0.7% Infinity Property & Casualty Corp. 1 229,500 7,573,500 -------------------------------------------------------------------------------- 7,573,500 INVESTMENT MANAGEMENT COMPANIES -- 1.1% Affiliated Managers Group, Inc. 104,830 5,280,287 National Financial Partners Corp. 1 160,325 5,654,663 -------------------------------------------------------------------------------- 10,934,950 LEISURE TIME -- 1.1% K2, Inc. 415,790 6,527,903 SCP Pool Corp. 1 109,380 4,922,100 -------------------------------------------------------------------------------- 11,450,003 MACHINERY -- INDUSTRIAL/SPECIALTY -- 0.3% Nordson Corp. 1 65,190 2,827,290 -------------------------------------------------------------------------------- 2,827,290 MACHINERY -- OIL/WELL EQUIPMENT & SERVICES -- 1.9% Cal Dive International, Inc. 189,000 5,730,480 Pride International, Inc. 530,360 9,074,460 Superior Energy Services, Inc. 468,290 4,706,314 -------------------------------------------------------------------------------- 19,511,254 MACHINERY -- SPECIALTY -- 0.6% Engineered Support Systems, Inc. 1 109,910 6,430,834 -------------------------------------------------------------------------------- 6,430,834 MANUFACTURED HOUSING -- 0.9% Champion Enterprises, Inc. 415,680 3,815,942 Palm Harbor Homes, Inc. 293,020 5,195,245 -------------------------------------------------------------------------------- 9,011,187 MEDICAL & DENTAL INSTRUMENTS & SUPPLIES -- 1.7% Cytyc Corp. 356,550 9,045,674 Mentor Corp. 1 119,070 4,082,910 Molecular Diagnostics, Inc. 4,5,8 4,377,460 525,295 Techne Corp. 91,840 3,990,448 -------------------------------------------------------------------------------- 17,644,327 MEDICAL SERVICES -- 0.6% Magellan Health Services, Inc. 199,280 6,665,916 -------------------------------------------------------------------------------- 6,665,916 METAL FABRICATING -- 2.0% Commercial Metals Co. 1 359,230 11,657,014 Quanex Corp. 1 192,990 9,398,613 -------------------------------------------------------------------------------- 21,055,627 METALS & MINERALS -- MISCELLANEOUS -- 0.8% GrafTech International Ltd. 787,560 8,237,878 -------------------------------------------------------------------------------- 8,237,878 See notes to Schedule of Investments on page 25. The accompanying notes are an integral part of these financial statements. www.RSinvestments.com | 5 SCHEDULE OF INVESTMENTS - RS DIVERSIFIED GROWTH FUND (Continued) June 30, 2004 (unaudited) Shares Value -------------------------------------------------------------------------------- OFFICE FURNITURE & BUSINESS EQUIPMENT-- 0.8% Presstek, Inc. 811,970 $ 8,533,805 -------------------------------------------------------------------------------- 8,533,805 OIL -- CRUDE PRODUCERS -- 2.8% Brigham Exploration Co. 482,850 4,432,563 Comstock Resources, Inc. 579,330 11,273,762 Denbury Resources, Inc. 307,580 6,443,801 The Meridian Resource Corp. 910,000 6,315,400 -------------------------------------------------------------------------------- 28,465,526 OIL -- INTEGRATED DOMESTIC -- 1.0% KCS Energy, Inc. 787,156 10,484,918 -------------------------------------------------------------------------------- 10,484,918 PRODUCTION TECHNOLOGY EQUIPMENT -- 5.2% Axcelis Technologies, Inc. 877,910 10,921,201 Credence Systems Corp. 1,303,440 17,987,472 Electroglas, Inc. 585,000 3,129,750 Kulicke and Soffa Industries, Inc. 1,300,640 14,255,014 Mykrolis Corp. 300,200 5,229,484 Rudolph Technologies, Inc. 104,720 1,904,857 -------------------------------------------------------------------------------- 53,427,778 RETAIL -- 6.4% Aeropostale, Inc. 221,050 5,948,456 Charlotte Russe Holding, Inc. 635,350 13,583,783 Design Within Reach, Inc. 29,400 483,042 Jos. A. Bank Clothiers, Inc. 379,980 11,927,572 PC Mall, Inc. 8 621,710 11,737,885 Restoration Hardware, Inc. 935,640 6,839,528 Stamps.com, Inc. 1 465,675 4,745,228 The Bon-Ton Stores, Inc. 1 729,770 10,698,428 -------------------------------------------------------------------------------- 65,963,922 SAVINGS & LOANS -- 0.4% NewAlliance Bancshares, Inc. 269,800 3,766,408 -------------------------------------------------------------------------------- 3,766,408 SERVICES -- COMMERCIAL -- 0.8% Raindance Communications, Inc. 925,570 1,925,186 Waste Connections, Inc. 197,925 5,870,455 -------------------------------------------------------------------------------- 7,795,641 STEEL -- 2.1% Schnitzer Steel Industries, Inc., Class A 1 356,400 12,103,344 Steel Dynamics, Inc. 343,750 9,841,563 -------------------------------------------------------------------------------- 21,944,907 TELECOMMUNICATIONS EQUIPMENT -- 0.4% Orbimage, Inc. 410,480 4,104,800 -------------------------------------------------------------------------------- 4,104,800 TEXTILE -- APPAREL MANUFACTURERS -- 0.6% Quiksilver, Inc. 243,300 5,792,973 -------------------------------------------------------------------------------- 5,792,973 TRUCKERS -- 1.2% Landstar System, Inc. 233,670 12,354,133 -------------------------------------------------------------------------------- 12,354,133 June 30, 2004 (unaudited) Shares Value -------------------------------------------------------------------------------- UTILITIES -- GAS DISTRIBUTORS -- 1.5% Southern Union Co. 365,740 $ 7,709,799 Southwestern Energy Co. 287,560 8,244,345 -------------------------------------------------------------------------------- 15,954,144 UTILITIES -- GAS PIPELINES -- 0.9% The Williams Cos., Inc. 1 759,000 9,032,100 -------------------------------------------------------------------------------- 9,032,100 UTILITIES -- TELECOMMUNICATIONS -- 2.3% Alamosa Holdings, Inc. 945,770 6,951,410 MDU Communications International, Inc. 8 1,991,000 4,738,580 Nextel Partners, Inc., Class A 779,310 12,406,615 Startec Global Communications Corp., Private Placement 4,5 275,000 0 -------------------------------------------------------------------------------- 24,096,605 -------------------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost $929,974,320) 1,009,323,674 -------------------------------------------------------------------------------- Value -------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS -- 0.8% BlackRock Liquidity Funds TempCash Portfolio 7 8,367,171 -------------------------------------------------------------------------------- TOTAL SHORT-TERM INVESTMENTS (Cost $8,367,171) 8,367,171 -------------------------------------------------------------------------------- TOTAL INVESTMENTS -- 98.8% (Cost $938,341,491) 1,017,690,845 -------------------------------------------------------------------------------- OTHER ASSETS, NET -- 1.2% 12,426,697 -------------------------------------------------------------------------------- TOTAL NET ASSETS -- 100.0% $1,030,117,542 -------------------------------------------------------------------------------- See notes to Schedule of Investments on page 25. The accompanying notes are an integral part of these financial statements. 6 | Call 1-800-766-FUND SCHEDULE OF INVESTMENTS - RS EMERGING GROWTH FUND June 30, 2004 (unaudited) Shares Value -------------------------------------------------------------------------------- COMMON STOCKS -- 97.3% ADVERTISING AGENCIES -- 1.5% ValueClick, Inc. 1,858,900 $ 22,269,622 -------------------------------------------------------------------------------- 22,269,622 AIR TRANSPORT -- 0.5% AirTran Holdings, Inc. 513,400 7,259,476 -------------------------------------------------------------------------------- 7,259,476 BANKS -- OUTSIDE NEW YORK CITY -- 4.3% Boston Private Financial Holdings, Inc. 1 764,850 17,713,926 Nara Bancorp, Inc. 1 449,325 7,696,937 PrivateBancorp, Inc. 1 392,700 10,783,542 Silicon Valley Bancshares 290,000 11,498,500 UCBH Holdings, Inc. 1 183,100 7,236,112 Wintrust Financial Corp. 1 175,800 8,879,658 -------------------------------------------------------------------------------- 63,808,675 BEVERAGE -- SOFT DRINKS -- 0.5% Peet's Coffee & Tea, Inc. 279,800 6,992,202 -------------------------------------------------------------------------------- 6,992,202 BIOTECHNOLOGY RESEARCH & PRODUCTION-- 7.1% Alexion Pharmaceuticals, Inc. 710,250 13,210,650 Angiotech Pharmaceuticals, Inc. 570,000 11,485,500 ArthroCare Corp. 70,200 2,041,416 Charles River Laboratories International, Inc. 250,300 12,232,161 Cypress Bioscience, Inc. 503,000 6,906,190 Digene Corp. 180,900 6,608,277 Discovery Laboratories, Inc. 1,125,900 10,797,381 Dyax Corp. 351,400 4,128,950 Myogen, Inc. 421,300 3,269,288 Nabi Biopharmaceuticals 934,050 13,282,191 Nuvelo, Inc. 726,733 6,991,172 Regeneration Technologies, Inc. 743,400 7,976,682 Rigel Pharmaceuticals, Inc. 477,120 6,779,875 -------------------------------------------------------------------------------- 105,709,733 CASINOS & GAMBLING -- 1.8% Multimedia Games, Inc. 292,400 7,842,168 Scientific Games Corp., Class A 507,300 9,709,722 Station Casinos, Inc. 1 195,900 9,481,560 -------------------------------------------------------------------------------- 27,033,450 COMMERCIAL INFORMATION SERVICES -- 0.9% Ask Jeeves, Inc. 322,600 12,591,078 -------------------------------------------------------------------------------- 12,591,078 COMMUNICATIONS TECHNOLOGY -- 4.2% Alvarion Ltd. 576,800 7,659,904 AudioCodes Ltd. 606,400 7,264,672 Ditech Communications Corp. 548,400 12,799,656 Ixia 598,427 5,888,522 Novatel Wireless, Inc. 73,700 1,953,050 Research In Motion Ltd. 200,600 13,729,064 WebEx Communications, Inc. 595,000 12,947,200 -------------------------------------------------------------------------------- 62,242,068 June 30, 2004 (unaudited) Shares Value -------------------------------------------------------------------------------- COMPUTER SERVICES, SOFTWARE & SYSTEMS-- 10.1% Altiris, Inc. 702,400 $ 19,393,264 Anteon International Corp. 127,500 4,159,050 Blue Coat Systems, Inc. 152,700 5,113,923 Check Point Software Technologies Ltd. 174,600 4,712,454 Chordiant Software, Inc. 1,185,500 5,405,880 Cognizant Technology Solutions Corp. 235,700 5,989,137 Dendrite International, Inc. 832,300 15,464,134 Informatica Corp. 249,400 1,902,922 Macromedia, Inc. 307,500 7,549,125 Magma Design Automation, Inc. 966,400 18,583,872 Mentor Graphics Corp. 759,500 11,749,465 Merge Technologies, Inc. 335,900 4,914,217 Micromuse, Inc. 1,223,600 8,185,884 MicroStrategy, Inc., Class A 274,550 11,723,285 Open Solutions, Inc. 371,800 9,287,564 Quest Software, Inc. 453,200 5,846,280 Salesforce.com, Inc. 64,050 1,029,283 Shanda Interactive Entertainment Ltd., ADR 3 451,100 6,955,962 Verint Systems, Inc. 55,000 1,882,100 -------------------------------------------------------------------------------- 149,847,801 COMPUTER TECHNOLOGY -- 1.5% M-Systems Flash Disk Pioneers Ltd. 523,300 7,802,403 palmOne, Inc. 73,900 2,569,503 Sierra Wireless, Inc. 226,700 8,394,701 Trident Microsystems, Inc. 326,200 3,656,702 -------------------------------------------------------------------------------- 22,423,309 CONSUMER ELECTRONICS -- 3.8% CNET Networks, Inc. 1,557,200 17,238,204 InfoSpace, Inc. 576,100 21,914,844 Netease.com, Inc., ADR 3 100,900 4,169,188 Netflix, Inc. 264,300 9,501,585 SINA Corp. 123,100 4,061,069 -------------------------------------------------------------------------------- 56,884,890 DIVERSIFIED FINANCIAL SERVICES -- 0.7% Euronet Worldwide, Inc. 183,600 4,246,668 Intersections, Inc. 244,110 5,856,199 -------------------------------------------------------------------------------- 10,102,867 DRUGS & PHARMACEUTICALS -- 4.6% Able Laboratories, Inc. 633,500 13,024,760 AtheroGenics, Inc. 354,750 6,750,892 Flamel Technologies S.A., ADR 3 134,050 3,301,652 Impax Laboratories, Inc. 230,900 4,474,842 Inspire Pharmaceuticals, Inc. 569,100 9,515,352 Medicis Pharmaceutical Corp., Class A 1 87,000 3,475,650 QLT, Inc. 509,100 10,192,182 Salix Pharmaceuticals Ltd. 245,600 8,092,520 The Medicines Co. 292,300 8,918,073 -------------------------------------------------------------------------------- 67,745,923 EDUCATION SERVICES -- 0.7% Bright Horizons Family Solutions, Inc. 131,200 7,033,632 See notes to Schedule of Investments on page 25. The accompanying notes are an integral part of these financial statements. www.RSinvestments.com | 7 SCHEDULE OF INVESTMENTS - RS EMERGING GROWTH FUND (Continued) June 30, 2004 (unaudited) Shares Value -------------------------------------------------------------------------------- EDUCATION SERVICES (Continued) Universal Technical Institute, Inc. 98,300 $ 3,929,051 -------------------------------------------------------------------------------- 10,962,683 ELECTRICAL & ELECTRONICS -- 0.8% Power Integrations, Inc. 501,500 12,487,350 -------------------------------------------------------------------------------- 12,487,350 ELECTRICAL EQUIPMENT & COMPONENTS -- 0.9% Littelfuse, Inc. 105,700 4,482,737 Sonic Solutions 426,300 9,058,875 -------------------------------------------------------------------------------- 13,541,612 ELECTRONICS -- 1.4% Aeroflex, Inc. 391,700 5,613,061 BEI Technologies, Inc. 1 271,800 7,694,658 Semtech Corp. 291,400 6,859,556 -------------------------------------------------------------------------------- 20,167,275 ELECTRONICS -- MEDICAL SYSTEMS -- 3.0% EPIX Medical, Inc. 335,100 7,070,610 eResearch Technology, Inc. 648,175 18,148,900 Intuitive Surgical, Inc. 806,200 15,317,800 Possis Medical, Inc. 111,500 3,807,725 -------------------------------------------------------------------------------- 44,345,035 ELECTRONICS -- SEMICONDUCTORS & COMPONENTS -- 6.6% Artisan Components, Inc. 199,600 5,149,680 Cree, Inc. 44,000 1,024,320 ESS Technology, Inc. 479,900 5,139,729 FormFactor, Inc. 787,750 17,684,987 Integrated Silicon Solution, Inc. 463,650 5,661,167 Mindspeed Technologies, Inc. 1,183,900 5,872,144 O2Micro International Ltd. 885,903 15,086,928 PowerDsine Ltd. 90,800 1,097,772 Sigmatel, Inc. 646,450 18,785,837 SiRF Technology Holdings, Inc. 217,770 2,846,254 Tessera Technologies, Inc. 624,200 11,248,084 Virage Logic Corp. 951,900 8,662,290 -------------------------------------------------------------------------------- 98,259,192 FINANCE COMPANIES -- 0.4% Accredited Home Lenders Holding Co. 218,500 6,150,775 -------------------------------------------------------------------------------- 6,150,775 FINANCIAL -- MISCELLANEOUS -- 0.9% First Cash Financial Services, Inc. 504,050 10,726,184 New Century Financial Corp. 1 53,800 2,518,916 -------------------------------------------------------------------------------- 13,245,100 FINANCIAL DATA PROCESSING SERVICES & SYSTEMS -- 1.6% CheckFree Corp. 371,300 11,139,000 Global Payments, Inc. 1 272,100 12,249,942 TradeStation Group, Inc. 69,500 499,705 -------------------------------------------------------------------------------- 23,888,647 FINANCIAL INFORMATION SERVICES -- 0.7% FactSet Research Systems, Inc. 1 220,700 10,432,489 -------------------------------------------------------------------------------- 10,432,489 June 30, 2004 (unaudited) Shares Value -------------------------------------------------------------------------------- HEALTH CARE FACILITIES -- 2.8% American Healthways, Inc. 554,500 $ 14,760,790 Pharmaceutical Product Development, Inc. 282,000 8,959,140 Sunrise Senior Living, Inc. 225,000 8,806,500 United Surgical Partners International, Inc. 218,400 8,620,248 -------------------------------------------------------------------------------- 41,146,678 HEALTH CARE MANAGEMENT SERVICES -- 1.4% AMERIGROUP Corp. 241,800 11,896,560 Centene Corp. 225,500 8,693,025 Wellcare Group, Inc. 32,850 558,450 -------------------------------------------------------------------------------- 21,148,035 HEALTH CARE SERVICES -- 2.1% Inveresk Research Group, Inc. 369,100 11,383,044 LabOne, Inc. 54,000 1,716,120 Matria Healthcare, Inc. 352,500 8,837,175 Symbion, Inc. 473,750 8,271,675 VistaCare, Inc., Class A 19,800 367,290 -------------------------------------------------------------------------------- 30,575,304 HOUSEHOLD FURNISHINGS -- 0.3% Select Comfort Corp. 156,900 4,455,960 -------------------------------------------------------------------------------- 4,455,960 INSURANCE -- MULTI-LINE -- 0.3% HealthExtras, Inc. 262,977 4,357,529 -------------------------------------------------------------------------------- 4,357,529 INSURANCE -- PROPERTY & CASUALTY -- 0.7% Infinity Property & Casualty Corp. 1 132,200 4,362,600 ProAssurance Corp. 157,600 5,375,736 -------------------------------------------------------------------------------- 9,738,336 INVESTMENT MANAGEMENT COMPANIES -- 0.5% Affiliated Managers Group, Inc. 146,200 7,364,094 -------------------------------------------------------------------------------- 7,364,094 LEISURE TIME -- 1.6% K2, Inc. 710,500 11,154,850 Penn National Gaming, Inc. 364,300 12,094,760 -------------------------------------------------------------------------------- 23,249,610 MACHINERY -- OIL/WELL EQUIPMENT & SERVICES -- 2.0% Cal Dive International, Inc. 85,400 2,589,328 Grant Prideco, Inc. 750,000 13,845,000 Patterson-UTI Energy, Inc. 1 380,600 12,715,846 -------------------------------------------------------------------------------- 29,150,174 MACHINERY -- SPECIALTY -- 0.2% Engineered Support Systems, Inc. 1 61,600 3,604,216 -------------------------------------------------------------------------------- 3,604,216 MEDICAL & DENTAL INSTRUMENTS & SUPPLIES -- 3.9% Abaxis, Inc. 226,100 4,291,378 Advanced Medical Optics, Inc. 171,100 7,283,727 Advanced Neuromodulation Systems, Inc. 73,600 2,414,080 Align Technology, Inc. 473,550 8,997,450 Closure Medical Corp. 384,700 9,659,817 See notes to Schedule of Investments on page 25. The accompanying notes are an integral part of these financial statements. 8 | Call 1-800-766-FUND June 30, 2004 (unaudited) Shares Value -------------------------------------------------------------------------------- MEDICAL & DENTAL INSTRUMENTS & SUPPLIES (Continued) Cytyc Corp. 477,600 $ 12,116,712 INAMED Corp. 100,720 6,330,252 Orthovita, Inc. 244,900 1,258,786 Wright Medical Group, Inc. 167,100 5,948,760 -------------------------------------------------------------------------------- 58,300,962 MEDICAL SERVICES -- 0.2% Magellan Health Services, Inc. 91,700 3,067,365 -------------------------------------------------------------------------------- 3,067,365 METAL FABRICATING -- 0.5% Maverick Tube Corp. 276,100 7,250,386 -------------------------------------------------------------------------------- 7,250,386 MISCELLANEOUS MATERIALS & COMMODITIES -- 0.6% Ceradyne, Inc. 233,400 8,348,718 -------------------------------------------------------------------------------- 8,348,718 OIL -- CRUDE PRODUCERS -- 0.7% Patina Oil & Gas Corp. 1 91,600 2,736,092 Quicksilver Resources, Inc. 50,700 3,400,449 Unit Corp. 120,400 3,786,580 -------------------------------------------------------------------------------- 9,923,121 PRODUCTION TECHNOLOGY EQUIPMENT -- 2.8% August Technology Corp. 820,750 10,292,205 Axcelis Technologies, Inc. 609,500 7,582,180 Credence Systems Corp. 786,500 10,853,700 Photon Dynamics, Inc. 343,500 12,046,545 Rudolph Technologies, Inc. 29,800 542,062 -------------------------------------------------------------------------------- 41,316,692 RENTAL & LEASING SERVICES -- COMMERCIAL -- 0.3% Marlin Business Services, Inc. 327,900 4,928,337 -------------------------------------------------------------------------------- 4,928,337 RENTAL & LEASING SERVICES -- CONSUMER -- 0.5% Aaron Rents, Inc. 1 229,800 7,615,572 -------------------------------------------------------------------------------- 7,615,572 RESTAURANTS -- 1.4% P.F. Chang's China Bistro, Inc. 161,600 6,649,840 RARE Hospitality International, Inc. 546,650 13,611,585 -------------------------------------------------------------------------------- 20,261,425 RETAIL -- 4.7% Amazon.com, Inc. 113,100 6,152,640 Bebe Stores, Inc. 565,350 11,307,000 Cabela's, Inc., Class A 18,100 487,795 Design Within Reach, Inc. 43,200 709,776 Jos. A. Bank Clothiers, Inc. 73,900 2,319,721 Pacific Sunwear of California, Inc. 25,300 495,121 Priceline.com, Inc. 433,500 11,674,155 The Sports Authority, Inc. 155,400 5,578,860 Tractor Supply Co. 294,300 12,307,626 Urban Outfitters, Inc. 296,100 18,035,451 -------------------------------------------------------------------------------- 69,068,145 June 30, 2004 (unaudited) Shares Value -------------------------------------------------------------------------------- SECURITIES BROKERAGE & SERVICES -- 0.5% Ameritrade Holding Corp. 693,000 $ 7,865,550 -------------------------------------------------------------------------------- 7,865,550 SERVICES -- COMMERCIAL -- 3.9% Autobytel, Inc. 1,187,600 10,783,408 CoStar Group, Inc. 273,600 12,566,448 Heidrick & Struggles International, Inc. 136,800 4,060,224 MPS Group, Inc. 1,270,500 15,398,460 Navigant Consulting, Inc. 718,300 15,400,352 -------------------------------------------------------------------------------- 58,208,892 SHIPPING -- 1.0% UTI Worldwide, Inc. 1 267,500 14,094,575 -------------------------------------------------------------------------------- 14,094,575 SHOES -- 1.6% Deckers Outdoor Corp. 474,000 13,978,260 Kenneth Cole Productions, Inc., Class A 1 278,700 9,551,049 -------------------------------------------------------------------------------- 23,529,309 STEEL -- 0.7% Schnitzer Steel Industries, Inc., Class A 1 109,875 3,731,355 Steel Dynamics, Inc. 243,000 6,957,090 -------------------------------------------------------------------------------- 10,688,445 TELECOMMUNICATIONS EQUIPMENT -- 0.8% Andrew Corp. 591,600 11,837,916 -------------------------------------------------------------------------------- 11,837,916 TEXTILE -- APPAREL MANUFACTURERS -- 1.4% Guess?, Inc. 564,100 9,082,010 Oxford Industries, Inc. 1 284,100 12,375,396 -------------------------------------------------------------------------------- 21,457,406 TRANSPORTATION -- MISCELLANEOUS -- 0.4% Hub Group, Inc., Class A 153,700 5,241,170 -------------------------------------------------------------------------------- 5,241,170 TRUCKERS -- 1.0% Forward Air Corp. 328,550 12,287,770 Old Dominion Freight Line, Inc. 68,200 2,010,536 -------------------------------------------------------------------------------- 14,298,306 -------------------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost $1,183,056,410) 1,440,483,480 -------------------------------------------------------------------------------- Value -------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS -- 2.5% BlackRock Liquidity Funds TempCash Portfolio 7 36,807,393 -------------------------------------------------------------------------------- TOTAL SHORT-TERM INVESTMENTS (Cost $36,807,393) 36,807,393 -------------------------------------------------------------------------------- TOTAL INVESTMENTS -- 99.8% (Cost $1,219,863,803) 1,477,290,873 -------------------------------------------------------------------------------- OTHER ASSETS, NET -- 0.2% 2,542,959 -------------------------------------------------------------------------------- TOTAL NET ASSETS -- 100.0% $1,479,833,832 -------------------------------------------------------------------------------- See notes to Schedule of Investments on page 25. The accompanying notes are an integral part of these financial statements. www.RSinvestments.com | 9 SCHEDULE OF INVESTMENTS - RS GROWTH FUND June 30, 2004 (unaudited) Shares Value ------------------------------------------------------------------------------- COMMON STOCKS -- 98.7% ADVERTISING AGENCIES -- 1.0% Lamar Advertising Co. 51,850 $ 2,247,697 ------------------------------------------------------------------------------- 2,247,697 AEROSPACE -- 1.0% Northrop Grumman Corp. 1 42,000 2,255,400 ------------------------------------------------------------------------------- 2,255,400 AIR TRANSPORT -- 1.1% Southwest Airlines Co. 1 150,000 2,515,500 ------------------------------------------------------------------------------- 2,515,500 ALUMINUM -- 2.2% Alcan, Inc. 1 56,600 2,343,240 Alcoa, Inc. 1 75,000 2,477,250 ------------------------------------------------------------------------------- 4,820,490 AUTOMOBILES -- 0.9% Ford Motor Co. 1 125,000 1,956,250 ------------------------------------------------------------------------------- 1,956,250 BANKS -- NEW YORK CITY -- 1.1% J.P. Morgan Chase & Co. 1 63,000 2,442,510 ------------------------------------------------------------------------------- 2,442,510 BIOTECHNOLOGY RESEARCH & PRODUCTION -- 3.0% Biogen Idec, Inc. 37,620 2,379,465 Cephalon, Inc. 37,850 2,043,900 Genentech, Inc. 40,000 2,248,000 ------------------------------------------------------------------------------- 6,671,365 CASINOS & GAMBLING -- 1.1% MGM Mirage, Inc. 1 50,000 2,347,000 ------------------------------------------------------------------------------- 2,347,000 COMMUNICATIONS TECHNOLOGY -- 5.2% Avaya, Inc. 142,600 2,251,654 Comverse Technology, Inc. 131,950 2,631,083 Motorola, Inc. 1 90,000 1,642,500 QUALCOMM, Inc. 1 35,500 2,590,790 Tellabs, Inc. 286,220 2,501,563 ------------------------------------------------------------------------------- 11,617,590 COMPUTER SERVICES, SOFTWARE & SYSTEMS -- 2.6% Adobe Systems, Inc. 1 48,530 2,256,645 Microsoft Corp. 1 125,500 3,584,280 ------------------------------------------------------------------------------- 5,840,925 COMPUTER TECHNOLOGY -- 0.8% SanDisk Corp. 81,250 1,762,312 ------------------------------------------------------------------------------- 1,762,312 CONSUMER ELECTRONICS -- 6.3% Electronic Arts, Inc. 59,900 3,267,545 Harman International Industries, Inc. 1 20,000 1,820,000 Netflix, Inc. 93,510 3,361,685 VeriSign, Inc. 90,750 1,805,925 Yahoo! Inc. 101,328 3,681,246 ------------------------------------------------------------------------------- 13,936,401 CONSUMER PRODUCTS -- 0.9% The Gillette Co. 1 46,000 1,950,400 ------------------------------------------------------------------------------- 1,950,400 CONTAINERS & PACKAGING -- PAPER & PLASTIC -- 1.1% Smurfit-Stone Container Corp. 120,530 $ 2,404,573 ------------------------------------------------------------------------------- 2,404,573 COSMETICS -- 0.9% Avon Products, Inc. 1 41,800 1,928,652 ------------------------------------------------------------------------------- 1,928,652 DIVERSIFIED PRODUCTION -- 1.1% Danaher Corp. 1 45,000 2,333,250 ------------------------------------------------------------------------------- 2,333,250 DRUGS & PHARMACEUTICALS -- 6.7% Allergan, Inc. 1 27,700 2,479,704 Gilead Sciences, Inc. 41,230 2,762,410 Merck & Co., Inc. 1 37,730 1,792,175 Pfizer, Inc. 1 71,500 2,451,020 Teva Pharmaceutical Industries Ltd., ADR 1,3 33,800 2,274,402 Valeant Pharmaceuticals International 1 156,300 3,126,000 ------------------------------------------------------------------------------- 14,885,711 EDUCATION SERVICES -- 2.9% Career Education Corp. 74,880 3,411,533 University of Phoenix Online 34,520 3,023,607 ------------------------------------------------------------------------------- 6,435,140 ELECTRONICS -- 2.6% Amphenol Corp., Class A 79,000 2,632,280 Vishay Intertechnology, Inc. 167,450 3,111,221 ------------------------------------------------------------------------------- 5,743,501 ELECTRONICS -- SEMICONDUCTORS & COMPONENTS -- 5.6% Advanced Micro Devices, Inc. 173,020 2,751,018 Altera Corp. 113,500 2,521,970 Broadcom Corp., Class A 42,500 1,987,725 Marvell Technology Group Ltd. 110,900 2,961,030 Microchip Technology, Inc. 1 71,500 2,255,110 ------------------------------------------------------------------------------- 12,476,853 ENTERTAINMENT -- 1.0% The Walt Disney Co. 1 85,000 2,166,650 ------------------------------------------------------------------------------- 2,166,650 FINANCE -- SMALL LOANS -- 1.1% SLM Corp. 1 60,000 2,427,000 ------------------------------------------------------------------------------- 2,427,000 FINANCIAL -- MISCELLANEOUS -- 1.2% MBNA Corp.1 100,000 2,579,000 ------------------------------------------------------------------------------- 2,579,000 FINANCIAL DATA PROCESSING SERVICES & SYSTEMS -- 1.3% First Data Corp. 1 66,000 2,938,320 ------------------------------------------------------------------------------- 2,938,320 HEALTH CARE MANAGEMENT SERVICES -- 1.7% Caremark Rx, Inc. 67,150 2,211,921 UnitedHealth Group, Inc. 1 24,220 1,507,695 ------------------------------------------------------------------------------- 3,719,616 HEALTH CARE SERVICES -- 0.9% Express Scripts, Inc. 26,250 2,079,787 ------------------------------------------------------------------------------- 2,079,787 See notes to Schedule of Investments on page 25. The accompanying notes are an integral part of these financial statements. 10 | Call 1-800-766-FUND June 30, 2004 (unaudited) Foreign Currency 2 Shares Value ------------------------------------------------------------------------------- HOMEBUILDING -- 0.1% Desarrolladora Homex S.A. de C.V., ADR 3 12,400 $ 214,644 ------------------------------------------------------------------------------- 214,644 IDENTIFICATION CONTROL & FILTER DEVICES -- 1.5% Agilent Technologies, Inc. 115,700 3,387,696 ------------------------------------------------------------------------------- 3,387,696 INSURANCE -- MULTI-LINE -- 3.5% Assurant, Inc. 1 115,600 3,049,528 CIGNA Corp. 1 33,850 2,329,218 Genworth Financial, Inc., Class A 105,000 2,409,750 ------------------------------------------------------------------------------- 7,788,496 MACHINERY -- INDUSTRIAL/SPECIALTY -- 1.1% Illinois Tool Works, Inc. 1 24,650 2,363,689 ------------------------------------------------------------------------------- 2,363,689 MACHINERY -- OIL/WELL EQUIPMENT & SERVICES -- 1.0% Smith International, Inc. 40,650 2,266,644 ------------------------------------------------------------------------------- 2,266,644 MEDICAL & DENTAL INSTRUMENTS & SUPPLIES -- 6.1% Biomet, Inc. 1 68,250 3,033,030 Edwards Lifesciences Corp. 70,000 2,439,500 Kinetic Concepts, Inc. 47,000 2,345,300 Stryker Corp. 1 50,000 2,750,000 Zimmer Holdings, Inc. 32,450 2,862,090 ------------------------------------------------------------------------------- 13,429,920 METALS & MINERALS -- MISCELLANEOUS -- 1.0% Noranda, Inc. 1 CAD 134,130 2,294,941 ------------------------------------------------------------------------------- 2,294,941 MULTI-SECTOR COMPANIES -- 1.1% Tyco International Ltd. 1 70,000 2,319,800 ------------------------------------------------------------------------------- 2,319,800 OIL -- CRUDE PRODUCERS -- 1.9% Devon Energy Corp. 1 37,500 2,475,000 EnCana Corp. 1 41,100 1,773,876 ------------------------------------------------------------------------------- 4,248,876 OIL -- INTEGRATED DOMESTIC -- 1.2% Murphy Oil Corp. 1 36,600 2,697,420 ------------------------------------------------------------------------------- 2,697,420 OIL -- INTEGRATED INTERNATIONAL -- 1.2% BP PLC, ADR 1,3 47,500 2,544,575 ------------------------------------------------------------------------------- 2,544,575 PRODUCTION TECHNOLOGY EQUIPMENT -- 2.4% Applied Materials, Inc. 120,750 2,369,115 Teradyne, Inc. 126,000 2,860,200 ------------------------------------------------------------------------------- 5,229,315 RADIO & TV BROADCASTERS -- 2.0% The DIRECTV Group, Inc. 120,000 2,052,000 XM Satellite Radio Holdings, Inc., Class A 90,470 2,468,926 ------------------------------------------------------------------------------- 4,520,926 RAILROADS -- 0.9% Burlington Northern Santa Fe Corp. 1 58,180 2,040,373 ------------------------------------------------------------------------------- 2,040,373 June 30, 2004 (unaudited) Shares Value ------------------------------------------------------------------------------- REAL ESTATE INVESTMENT TRUSTS -- 1.2% Friedman, Billings, Ramsey Group, Inc., Class A 1 139,200 $ 2,754,768 ------------------------------------------------------------------------------- 2,754,768 RESTAURANTS -- 1.8% Starbucks Corp. 49,170 2,137,912 Yum! Brands, Inc. 1 50,000 1,861,000 ------------------------------------------------------------------------------- 3,998,912 RETAIL -- 7.3% Amazon.com, Inc. 31,500 1,713,600 Best Buy Co., Inc. 1 47,500 2,410,150 Costco Wholesale Corp. 1 45,000 1,848,150 Fisher Scientific International, Inc. 37,500 2,165,625 PETsMART, Inc. 1 72,000 2,336,400 Staples, Inc. 1 108,100 3,168,411 Target Corp. 1 60,500 2,569,435 ------------------------------------------------------------------------------- 16,211,771 SERVICES -- COMMERCIAL -- 2.3% Allied Waste Industries, Inc. 250,000 3,295,000 Robert Half International, Inc. 1 58,700 1,747,499 ------------------------------------------------------------------------------- 5,042,499 STEEL -- 1.7% Nucor Corp. 1 50,000 3,838,000 ------------------------------------------------------------------------------- 3,838,000 UTILITIES -- CABLE TV & RADIO -- 0.7% UnitedGlobalCom, Inc., Class A 220,000 1,597,200 ------------------------------------------------------------------------------- 1,597,200 UTILITIES -- GAS DISTRIBUTORS -- 1.0% Questar Corp. 1 57,500 2,221,800 ------------------------------------------------------------------------------- 2,221,800 UTILITIES -- GAS PIPELINES -- 1.1% The Williams Cos., Inc. 1 207,500 2,469,250 ------------------------------------------------------------------------------- 2,469,250 UTILITIES -- TELECOMMUNICATIONS -- 1.3% Nextel Partners, Inc., Class A 184,780 2,941,698 ------------------------------------------------------------------------------- 2,941,698 ------------------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost $189,251,281) 218,905,106 ------------------------------------------------------------------------------- Value ------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS -- 1.1% BlackRock Liquidity Funds TempCash Portfolio 7 2,460,285 ------------------------------------------------------------------------------- TOTAL SHORT-TERM INVESTMENTS (Cost $2,460,285) 2,460,285 ------------------------------------------------------------------------------- TOTAL INVESTMENTS -- 99.8% (Cost $191,711,566) 221,365,391 ------------------------------------------------------------------------------- OTHER ASSETS, NET -- 0.2% 511,915 ------------------------------------------------------------------------------- TOTAL NET ASSETS -- 100.0% $221,877,306 ------------------------------------------------------------------------------- See notes to Schedule of Investments on page 25. The accompanying notes are an integral part of these financial statements. www.RSinvestments.com | 11 SCHEDULE OF INVESTMENTS - THE INFORMATION AGE FUND(R) June 30, 2004 (unaudited) Shares Value ------------------------------------------------------------------------------- COMMON STOCKS -- 97.2% ADVERTISING AGENCIES -- 3.6% Marchex, Inc., Class B 181,500 $ 2,025,540 ValueClick, Inc. 310,750 3,722,785 ------------------------------------------------------------------------------- 5,748,325 AEROSPACE -- 0.3% MTC Technologies, Inc. 18,950 489,289 ------------------------------------------------------------------------------- 489,289 COMMERCIAL INFORMATION SERVICES -- 1.9% Ask Jeeves, Inc. 79,050 3,085,321 ------------------------------------------------------------------------------- 3,085,321 COMMUNICATIONS & MEDIA -- 1.4% Linktone Ltd., ADR 3 67,700 741,315 Time Warner, Inc. 90,300 1,587,474 ------------------------------------------------------------------------------- 2,328,789 COMMUNICATIONS TECHNOLOGY -- 9.7% ADTRAN, Inc. 1 37,000 1,234,690 AudioCodes Ltd. 168,200 2,015,036 Carrier Access Corp. 192,200 2,291,024 Ditech Communications Corp. 65,250 1,522,935 Juniper Networks, Inc. 69,900 1,717,443 Research In Motion Ltd. 36,000 2,463,840 Verisity Ltd. 155,750 934,500 WebEx Communications, Inc. 160,400 3,490,304 ------------------------------------------------------------------------------- 15,669,772 COMPUTER SERVICES, SOFTWARE & SYSTEMS -- 30.2% Agile Software Corp. 50,750 444,062 Akamai Technologies, Inc. 92,200 1,654,990 Altiris, Inc. 205,700 5,679,377 Blue Coat Systems, Inc. 37,900 1,269,271 Check Point Software Technologies Ltd. 42,900 1,157,871 Chordiant Software, Inc. 712,100 3,247,176 Cognizant Technology Solutions Corp. 30,300 769,923 Digital River, Inc. 38,700 1,262,781 Digitas, Inc. 204,850 2,259,495 eCollege.com, Inc. 39,000 624,000 Hyperion Solutions Corp. 13,100 572,732 Informatica Corp. 285,250 2,176,457 Interwoven, Inc. 150,725 1,522,323 Jupitermedia Corp. 129,250 1,830,180 Macromedia, Inc. 88,300 2,167,765 Magma Design Automation, Inc. 233,400 4,488,282 Mamma.com, Inc. 65,800 788,942 Mercury Interactive Corp. 20,750 1,033,973 Micromuse, Inc. 595,600 3,984,564 MicroStrategy, Inc., Class A 37,100 1,584,170 Packeteer, Inc. 97,500 1,574,625 PDF Solutions, Inc. 100,900 854,623 Quest Software, Inc. 177,100 2,284,590 Retek, Inc. 503,000 3,088,420 Salesforce.com, Inc. 6,700 107,669 Shanda Interactive Entertainment Ltd., ADR 3 56,200 866,604 June 30, 2004 (unaudited) Shares Value ------------------------------------------------------------------------------- COMPUTER SERVICES, SOFTWARE & SYSTEMS (Continued) SupportSoft, Inc. 46,800 $ 406,224 Symantec Corp. 16,400 717,992 Tom Online, Inc., ADR 3 450 6,035 VERITAS Software Corp. 16,150 447,355 ------------------------------------------------------------------------------- 48,872,471 COMPUTER TECHNOLOGY -- 3.1% M-Systems Flash Disk Pioneers Ltd. 245,100 3,654,441 Trident Microsystems, Inc. 119,950 1,344,639 ------------------------------------------------------------------------------- 4,999,080 CONSUMER ELECTRONICS -- 13.1% CNET Networks, Inc. 210,950 2,335,216 Electronic Arts, Inc. 33,300 1,816,515 InfoSpace, Inc. 142,650 5,426,406 iVillage, Inc. 122,000 774,700 Netease.com, Inc., ADR 3 20,100 830,532 Netflix, Inc. 107,250 3,855,638 SINA Corp. 23,000 758,770 Yahoo! Inc. 149,898 5,445,794 ------------------------------------------------------------------------------- 21,243,571 ELECTRICAL & ELECTRONICS -- 1.3% Power Integrations, Inc. 87,650 2,182,485 ------------------------------------------------------------------------------- 2,182,485 ELECTRICAL EQUIPMENT & COMPONENTS -- 1.8% Sonic Solutions 140,850 2,993,063 ------------------------------------------------------------------------------- 2,993,063 ELECTRONICS -- 0.5% AU Optronics Corp., ADR 3 48,150 783,401 ------------------------------------------------------------------------------- 783,401 ELECTRONICS -- SEMICONDUCTORS & COMPONENTS -- 11.3% Broadcom Corp., Class A 32,050 1,498,978 FormFactor, Inc. 91,650 2,057,542 Marvell Technology Group Ltd. 38,600 1,030,620 Mindspeed Technologies, Inc. 310,000 1,537,600 O2Micro International Ltd. 317,550 5,407,877 OmniVision Technologies, Inc. 94,150 1,501,693 PowerDsine Ltd. 9,750 117,878 Sigmatel, Inc. 78,600 2,284,116 Tessera Technologies, Inc. 67,050 1,208,241 Virage Logic Corp. 178,050 1,620,255 ------------------------------------------------------------------------------- 18,264,800 ENTERTAINMENT -- 1.2% Pixar 28,400 1,974,084 ------------------------------------------------------------------------------- 1,974,084 FINANCIAL DATA PROCESSING SERVICES & SYSTEMS -- 0.7% TradeStation Group, Inc. 161,700 1,162,623 ------------------------------------------------------------------------------- 1,162,623 FINANCIAL INFORMATION SERVICES -- 1.3% HomeStore, Inc. 529,200 2,111,508 ------------------------------------------------------------------------------- 2,111,508 PRODUCTION TECHNOLOGY EQUIPMENT -- 3.5% August Technology Corp. 102,100 1,280,334 See notes to Schedule of Investments on page 25. The accompanying notes are an integral part of these financial statements. 12 | Call 1-800-766-FUND June 30, 2004 (unaudited) Shares Value ------------------------------------------------------------------------------- PRODUCTION TECHNOLOGY EQUIPMENT (Continued) Axcelis Technologies, Inc. 184,900 $ 2,300,156 Credence Systems Corp. 147,800 2,039,640 ------------------------------------------------------------------------------- 5,620,130 RETAIL -- 3.1% Amazon.com, Inc. 32,200 1,751,680 Overstock.com, Inc. 32,900 1,285,732 Priceline.com, Inc. 72,100 1,941,653 ------------------------------------------------------------------------------- 4,979,065 SERVICES -- COMMERCIAL -- 7.7% Autobytel, Inc. 108,250 982,910 Ctrip.com International Ltd., ADR 3 26,900 910,027 DiamondCluster International, Inc. 38,750 336,737 eBay, Inc. 57,850 5,319,308 InterActiveCorp 64,922 1,956,749 Monster Worldwide, Inc. 117,550 3,023,386 ------------------------------------------------------------------------------- 12,529,117 TELECOMMUNICATIONS EQUIPMENT -- 1.5% Powerwave Technologies, Inc. 176,100 1,355,970 Symmetricom, Inc. 120,850 1,075,565 ------------------------------------------------------------------------------- 2,431,535 ------------------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost $119,884,387) 157,468,429 ------------------------------------------------------------------------------- June 30, 2004 (unaudited) Warrants Value ------------------------------------------------------------------------------- WARRANTS -- 0.3% COMMUNICATIONS TECHNOLOGY -- 0.3% Novatel Wireless, Inc., Strike 18.00, Expires 12/20/05 4,6 33,247 $ 448,446 ------------------------------------------------------------------------------- 448,446 ------------------------------------------------------------------------------- TOTAL WARRANTS (Cost $156,260) 448,446 ------------------------------------------------------------------------------- Value ------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS -- 2.5% BlackRock Liquidity Funds TempCash Portfolio 7 4,001,279 ------------------------------------------------------------------------------- TOTAL SHORT-TERM INVESTMENTS (Cost $4,001,279) 4,001,279 ------------------------------------------------------------------------------- TOTAL INVESTMENTS -- 100.0% (Cost $124,041,926) 161,918,154 ------------------------------------------------------------------------------- OTHER ASSETS, NET -- 0.0% 59,291 ------------------------------------------------------------------------------- TOTAL NET ASSETS -- 100.0% $161,977,445 ------------------------------------------------------------------------------- See notes to Schedule of Investments on page 25. The accompanying notes are an integral part of these financial statements. www.RSinvestments.com | 13 SCHEDULE OF INVESTMENTS - RS INTERNET AGE FUND(R) June 30, 2004 (unaudited) Shares Value ------------------------------------------------------------------------------- COMMON STOCKS -- 95.3% ADVERTISING AGENCIES -- 4.1% Marchex, Inc., Class B - Advertising Agencies 204,300 $ 2,279,988 ValueClick, Inc. 224,600 2,690,708 -------------------------------------------------------------------------------- 4,970,696 AEROSPACE -- 0.3% MTC Technologies, Inc. 13,600 351,152 -------------------------------------------------------------------------------- 351,152 COMMERCIAL INFORMATION SERVICES -- 1.9% Ask Jeeves, Inc. 59,000 2,302,770 -------------------------------------------------------------------------------- 2,302,770 COMMUNICATIONS & MEDIA -- 1.4% Linktone Ltd., ADR 3 49,300 539,835 Time Warner, Inc. 65,800 1,156,764 -------------------------------------------------------------------------------- 1,696,599 COMMUNICATIONS TECHNOLOGY -- 9.0% ADTRAN, Inc. 1 27,600 921,012 AudioCodes Ltd. 125,300 1,501,094 Carrier Access Corp. 137,950 1,644,364 Ditech Communications Corp. 48,600 1,134,324 Research In Motion Ltd. 25,800 1,765,752 Verisity Ltd. 218,000 1,308,000 WebEx Communications, Inc. 119,800 2,606,848 -------------------------------------------------------------------------------- 10,881,394 COMPUTER SERVICES, SOFTWARE & SYSTEMS -- 29.2% Agile Software Corp. 36,400 318,500 Akamai Technologies, Inc. 66,200 1,188,290 Altiris, Inc. 147,500 4,072,475 Blue Coat Systems, Inc. 28,000 937,720 Check Point Software Technologies Ltd. 30,800 831,292 Chordiant Software, Inc. 511,100 2,330,616 Cognizant Technology Solutions Corp. 22,700 576,807 Digital River, Inc. 28,800 939,744 Digitas, Inc. 153,600 1,694,208 eCollege.com, Inc. 29,100 465,600 Hyperion Solutions Corp. 9,900 432,828 Informatica Corp. 204,200 1,558,046 Interwoven, Inc. 108,175 1,092,567 Jupitermedia Corp. 94,650 1,340,244 Macromedia, Inc. 62,500 1,534,375 Magma Design Automation, Inc. 167,300 3,217,179 Mamma.com, Inc. 47,200 565,928 Mercury Interactive Corp. 14,900 742,467 Micromuse, Inc. 426,900 2,855,961 MicroStrategy, Inc., Class A 26,600 1,135,820 Packeteer, Inc. 70,000 1,130,500 PDF Solutions, Inc. 75,600 640,332 Quest Software, Inc. 127,100 1,639,590 Retek, Inc. 360,500 2,213,470 Salesforce.com, Inc. 5,050 81,153 Shanda Interactive Entertainment Ltd., ADR 3 40,900 630,678 June 30, 2004 (unaudited) Shares Value ------------------------------------------------------------------------------- COMPUTER SERVICES, SOFTWARE & SYSTEMS (Continued) SupportSoft, Inc. 35,200 $ 305,536 Symantec Corp. 12,300 538,494 Tom Online, Inc., ADR 3 350 4,694 VERITAS Software Corp. 11,600 321,320 -------------------------------------------------------------------------------- 35,336,434 COMPUTER TECHNOLOGY -- 3.0% M-Systems Flash Disk Pioneers Ltd. 175,900 2,622,669 Trident Microsystems, Inc. 86,100 965,181 -------------------------------------------------------------------------------- 3,587,850 CONSUMER ELECTRONICS -- 12.6% CNET Networks, Inc. 151,400 1,675,998 Electronic Arts, Inc. 23,900 1,303,745 InfoSpace, Inc. 103,100 3,921,924 iVillage, Inc. 91,100 578,485 Netease.com, Inc., ADR 3 14,600 603,272 Netflix, Inc. 77,000 2,768,150 SINA Corp. 16,800 554,232 Yahoo! Inc. 107,580 3,908,381 -------------------------------------------------------------------------------- 15,314,187 ELECTRICAL & ELECTRONICS -- 1.3% Power Integrations, Inc. 63,300 1,576,170 -------------------------------------------------------------------------------- 1,576,170 ELECTRICAL EQUIPMENT & COMPONENTS -- 1.8% Sonic Solutions 101,100 2,148,375 -------------------------------------------------------------------------------- 2,148,375 ELECTRONICS -- 0.5% AU Optronics Corp. ADR 3 36,150 588,161 -------------------------------------------------------------------------------- 588,161 ELECTRONICS -- SEMICONDUCTORS & COMPONENTS -- 11.8% Broadcom Corp., Class A 23,000 1,075,710 Conexant Systems, Inc. 169,600 734,368 FormFactor, Inc. 65,800 1,477,210 Marvell Technology Group Ltd. 28,800 768,960 Mindspeed Technologies, Inc. 224,100 1,111,536 O2Micro International Ltd. 250,100 4,259,203 OmniVision Technologies, Inc. 67,600 1,078,220 PowerDsine Ltd. 7,300 88,257 Sigmatel, Inc. 56,400 1,638,984 Tessera Technologies, Inc. 48,100 866,762 Virage Logic Corp. 127,800 1,162,980 -------------------------------------------------------------------------------- 14,262,190 ENTERTAINMENT -- 1.2% Pixar 21,300 1,480,563 -------------------------------------------------------------------------------- 1,480,563 FINANCIAL DATA PROCESSING SERVICES & SYSTEMS -- 0.7% TradeStation Group, Inc. 120,600 867,114 -------------------------------------------------------------------------------- 867,114 FINANCIAL INFORMATION SERVICES -- 1.3% HomeStore, Inc. 394,200 1,572,858 -------------------------------------------------------------------------------- 1,572,858 See notes to Schedule of Investments on page 25. The accompanying notes are an integral part of these financial statements. 14 | Call 1-800-766-FUND June 30, 2004 (unaudited) Shares Value -------------------------------------------------------------------------------- PRODUCTION TECHNOLOGY EQUIPMENT -- 3.3% August Technology Corp. 73,300 $ 919,182 Axcelis Technologies, Inc. 132,700 1,650,788 Credence Systems Corp. 106,100 1,464,180 -------------------------------------------------------------------------------- 4,034,150 RETAIL -- 3.0% Amazon.com, Inc. 23,100 1,256,640 Overstock.com, Inc. 23,600 922,288 Priceline.com, Inc. 53,700 1,446,141 -------------------------------------------------------------------------------- 3,625,069 SERVICES -- COMMERCIAL -- 7.5% Autobytel, Inc. 77,700 705,516 Ctrip.com International Ltd., ADR 3 19,600 663,068 DiamondCluster International, Inc. 27,800 241,582 eBay, Inc. 41,500 3,815,925 InterActiveCorp 48,305 1,455,913 Monster Worldwide, Inc. 84,400 2,170,768 -------------------------------------------------------------------------------- 9,052,772 TELECOMMUNICATIONS EQUIPMENT -- 1.4% Powerwave Technologies, Inc. 126,400 973,280 Symmetricom, Inc. 88,000 783,200 -------------------------------------------------------------------------------- 1,756,480 -------------------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost $90,304,777) 115,404,984 -------------------------------------------------------------------------------- June 30, 2004 (unaudited) Warrants Value -------------------------------------------------------------------------------- WARRANTS -- 0.2% COMMUNICATIONS TECHNOLOGY -- 0.2% Novatel Wireless, Inc., Strike 18.00, Expires 12/20/05 4,6 18,701 $ 252,252 -------------------------------------------------------------------------------- 252,252 -------------------------------------------------------------------------------- TOTAL WARRANTS (Cost $87,896) 252,252 -------------------------------------------------------------------------------- Value -------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS -- 4.2% BlackRock Liquidity Funds TempCash Portfolio 7 5,069,592 -------------------------------------------------------------------------------- TOTAL SHORT-TERM INVESTMENTS (Cost $5,069,592) 5,069,592 -------------------------------------------------------------------------------- TOTAL INVESTMENTS -- 99.7% (Cost $95,462,265) 120,726,828 -------------------------------------------------------------------------------- OTHER ASSETS, NET -- 0.3% 397,286 -------------------------------------------------------------------------------- TOTAL NET ASSETS -- 100.0% $121,124,114 -------------------------------------------------------------------------------- See notes to Schedule of Investments on page 25. The accompanying notes are an integral part of these financial statements. www.RSinvestments.com | 15 SCHEDULE OF INVESTMENTS - RS MIDCAP OPPORTUNITIES FUND June 30, 2004 (unaudited) Shares Value -------------------------------------------------------------------------------- COMMON STOCKS -- 97.1% ADVERTISING AGENCIES -- 1.1% Lamar Advertising Co. 40,000 $ 1,734,000 -------------------------------------------------------------------------------- 1,734,000 ALUMINUM -- 0.8% Alcan, Inc. 1 30,430 1,259,802 -------------------------------------------------------------------------------- 1,259,802 BANKS -- OUTSIDE NEW YORK CITY -- 1.0% Doral Financial Corp. 1 46,250 1,595,625 -------------------------------------------------------------------------------- 1,595,625 BIOTECHNOLOGY RESEARCH & PRODUCTION -- 3.7% Biogen Idec, Inc. 27,220 1,721,665 Celgene Corp. 22,000 1,259,720 Cephalon, Inc. 21,400 1,155,600 OSI Pharmaceuticals, Inc. 23,650 1,665,906 -------------------------------------------------------------------------------- 5,802,891 BUILDING MATERIALS -- 1.9% Hughes Supply, Inc. 1 23,750 1,399,587 Vulcan Materials Co. 1 33,600 1,597,680 -------------------------------------------------------------------------------- 2,997,267 CASINOS & GAMBLING -- 2.2% MGM Mirage, Inc. 1 30,850 1,448,099 Station Casinos, Inc. 1 40,900 1,979,560 -------------------------------------------------------------------------------- 3,427,659 COAL -- 1.0% Peabody Energy Corp. 1 26,500 1,483,735 -------------------------------------------------------------------------------- 1,483,735 COMMERCIAL INFORMATION SERVICES -- 0.7% Ask Jeeves, Inc. 27,850 1,086,985 -------------------------------------------------------------------------------- 1,086,985 COMMUNICATIONS TECHNOLOGY -- 4.1% Avaya, Inc. 85,700 1,353,203 Comverse Technology, Inc. 85,850 1,711,849 L-3 Communications Holdings, Inc. 1 23,500 1,569,800 Tellabs, Inc. 196,340 1,716,012 -------------------------------------------------------------------------------- 6,350,864 COMPUTER SERVICES, SOFTWARE & SYSTEMS -- 2.3% Adobe Systems, Inc. 1 36,090 1,678,185 Electronics for Imaging 24,600 695,196 Macromedia, Inc. 51,150 1,255,732 -------------------------------------------------------------------------------- 3,629,113 COMPUTER TECHNOLOGY -- 0.8% SanDisk Corp. 56,250 1,220,062 -------------------------------------------------------------------------------- 1,220,062 CONSUMER ELECTRONICS -- 6.1% CNET Networks, Inc. 191,450 2,119,351 Electronic Arts, Inc. 35,600 1,941,980 Harman International Industries, Inc. 1 14,000 1,274,000 Netflix, Inc. 81,060 2,914,107 VeriSign, Inc. 62,950 1,252,705 -------------------------------------------------------------------------------- 9,502,143 June 30, 2004 (unaudited) Shares Value -------------------------------------------------------------------------------- DRUGS & PHARMACEUTICALS -- 7.0% Allergan, Inc. 1 16,450 $ 1,472,604 Gilead Sciences, Inc. 29,800 1,996,600 Ivax Corp. 71,250 1,709,287 Medicis Pharmaceutical Corp., Class A 1 37,400 1,494,130 Shire Pharmaceuticals Group PLC, ADR 3 43,070 1,151,692 Teva Pharmaceutical Industries Ltd., ADR 1,3 17,500 1,177,575 Valeant Pharmaceuticals International 1 94,940 1,898,800 -------------------------------------------------------------------------------- 10,900,688 EDUCATION SERVICES -- 2.5% Career Education Corp. 48,990 2,231,984 University of Phoenix Online 19,190 1,680,852 -------------------------------------------------------------------------------- 3,912,836 ELECTRONICS -- 1.1% Amphenol Corp., Class A 49,100 1,636,012 -------------------------------------------------------------------------------- 1,636,012 ELECTRONICS -- INSTRUMENTS, GAUGES & METERS -- 1.1% Tektronix, Inc. 1 49,650 1,689,093 -------------------------------------------------------------------------------- 1,689,093 ELECTRONICS -- SEMICONDUCTORS & COMPONENTS -- 5.0% Altera Corp. 74,850 1,663,167 Broadcom Corp., Class A 30,350 1,419,470 Marvell Technology Group Ltd. 62,500 1,668,750 Microchip Technology, Inc. 1 43,250 1,364,105 Skyworks Solutions, Inc. 189,000 1,649,970 -------------------------------------------------------------------------------- 7,765,462 ENERGY -- MISCELLANEOUS -- 1.4% Reliant Energy, Inc. 196,880 2,132,210 -------------------------------------------------------------------------------- 2,132,210 FINANCE -- SMALL LOANS -- 1.1% AmeriCredit Corp. 87,300 1,704,969 -------------------------------------------------------------------------------- 1,704,969 FINANCIAL -- MISCELLANEOUS -- 2.3% CapitalSource, Inc. 75,500 1,845,975 Providian Financial Corp. 115,900 1,700,253 -------------------------------------------------------------------------------- 3,546,228 FINANCIAL DATA PROCESSING SERVICES & SYSTEMS -- 2.2% Alliance Data Systems Corp. 39,050 1,649,863 Global Payments, Inc. 1 38,950 1,753,529 -------------------------------------------------------------------------------- 3,403,392 HEALTH CARE FACILITIES -- 2.4% DaVita, Inc. 41,400 1,276,362 HEALTHSOUTH Corp. 205,410 1,232,460 Quest Diagnostics, Inc. 1 14,450 1,227,528 -------------------------------------------------------------------------------- 3,736,350 HEALTH CARE MANAGEMENT SERVICES -- 1.0% Caremark Rx, Inc. 47,250 1,556,415 -------------------------------------------------------------------------------- 1,556,415 HEALTH CARE SERVICES -- 0.9% Express Scripts, Inc. 17,650 1,398,410 -------------------------------------------------------------------------------- 1,398,410 See notes to Schedule of Investments on page 25. The accompanying notes are an integral part of these financial statements. CALL 1-800-766-FUND | 16 June 30, 2004 (unaudited) Foreign Currency 2 Shares Value -------------------------------------------------------------------------------- HOMEBUILDING -- 0.1% Desarrolladora Homex S.A. de C.V., ADR 3 8,650 $ 149,732 -------------------------------------------------------------------------------- 149,732 IDENTIFICATION CONTROL & FILTER DEVICES -- 1.2% Agilent Technologies, Inc. 65,620 1,921,354 -------------------------------------------------------------------------------- 1,921,354 INSURANCE -- MULTI-LINE -- 4.0% Assurant, Inc. 1 70,850 1,869,023 CIGNA Corp. 1 24,030 1,653,504 Genworth Financial, Inc., Class A 70,000 1,606,500 Unitrin, Inc. 1 26,850 1,143,810 -------------------------------------------------------------------------------- 6,272,837 MACHINERY -- OIL/WELL EQUIPMENT & SERVICES -- 1.8% Grant Prideco, Inc. 78,200 1,443,572 Smith International, Inc. 24,450 1,363,332 -------------------------------------------------------------------------------- 2,806,904 MEDICAL & DENTAL INSTRUMENTS & SUPPLIES -- 5.4% Biomet, Inc. 1 30,650 1,362,086 Cytyc Corp. 87,250 2,213,533 Edwards Lifesciences Corp. 44,500 1,550,825 Kinetic Concepts, Inc. 34,100 1,701,590 Zimmer Holdings, Inc. 17,100 1,508,220 -------------------------------------------------------------------------------- 8,336,254 METALS & MINERALS -- MISCELLANEOUS -- 0.8% Noranda, Inc. 1 CAD 75,770 1,296,412 -------------------------------------------------------------------------------- 1,296,412 OIL -- CRUDE PRODUCERS -- 1.0% Newfield Exploration Co. 28,900 1,610,886 -------------------------------------------------------------------------------- 1,610,886 OIL -- INTEGRATED DOMESTIC -- 0.9% Murphy Oil Corp. 1 18,300 1,348,710 -------------------------------------------------------------------------------- 1,348,710 PAINTS & COATINGS -- 0.9% RPM International, Inc. 1 92,300 1,402,960 -------------------------------------------------------------------------------- 1,402,960 PRODUCTION TECHNOLOGY EQUIPMENT -- 2.6% Lam Research Corp. 76,290 2,044,572 Teradyne, Inc. 85,000 1,929,500 -------------------------------------------------------------------------------- 3,974,072 RADIO & TV BROADCASTERS -- 1.1% XM Satellite Radio Holdings, Inc., Class A 63,790 1,740,829 -------------------------------------------------------------------------------- 1,740,829 REAL ESTATE INVESTMENT TRUSTS -- 1.0% Friedman, Billings, Ramsey Group, Inc., Class A 1 76,950 1,522,841 -------------------------------------------------------------------------------- 1,522,841 June 30, 2004 (unaudited) Shares Value -------------------------------------------------------------------------------- RENTAL & LEASING SERVICES -- COMMERCIAL -- 1.0% Ryder System, Inc. 1 37,900 $ 1,518,653 -------------------------------------------------------------------------------- 1,518,653 RESTAURANTS -- 1.0% Starbucks Corp. 34,690 1,508,321 -------------------------------------------------------------------------------- 1,508,321 RETAIL -- 6.0% Best Buy Co., Inc. 1 29,640 1,503,934 Limited Brands, Inc. 1 57,450 1,074,315 Michaels Stores, Inc. 1 24,650 1,355,750 Pacific Sunwear of California, Inc. 55,520 1,086,526 PETsMART, Inc. 1 45,200 1,466,740 Staples, Inc. 1 51,300 1,503,603 Urban Outfitters, Inc. 21,970 1,338,193 -------------------------------------------------------------------------------- 9,329,061 SAVINGS & LOAN -- 0.9% Sovereign Bancorp, Inc. 1 61,600 1,361,360 -------------------------------------------------------------------------------- 1,361,360 SERVICES -- COMMERCIAL -- 4.9% Allied Waste Industries, Inc. 125,250 1,650,795 Monster Worldwide, Inc. 67,620 1,739,186 Robert Half International, Inc. 1 41,550 1,236,943 Sirva, Inc. 68,350 1,572,050 The Corporate Executive Board Co. 1 24,450 1,412,966 -------------------------------------------------------------------------------- 7,611,940 STEEL -- 0.8% Nucor Corp. 1 17,000 1,304,920 -------------------------------------------------------------------------------- 1,304,920 TELECOMMUNICATIONS EQUIPMENT -- 3.7% American Tower Corp., Class A 103,450 1,572,440 Andrew Corp. 66,200 1,324,662 Crown Castle International Corp. 98,200 1,448,450 Polycom, Inc. 62,000 1,389,420 -------------------------------------------------------------------------------- 5,734,972 TEXTILE -- APPAREL MANUFACTURERS -- 1.1% Polo Ralph Lauren Corp. 1 49,500 1,705,275 -------------------------------------------------------------------------------- 1,705,275 UTILITIES -- GAS DISTRIBUTORS -- 0.8% Questar Corp. 1 29,930 1,156,495 -------------------------------------------------------------------------------- 1,156,495 UTILITIES -- GAS PIPELINES -- 1.1% The Williams Cos., Inc. 1 145,980 1,737,162 -------------------------------------------------------------------------------- 1,737,162 UTILITIES -- TELECOMMUNICATIONS -- 1.3% Nextel Partners, Inc., Class A 127,910 2,036,327 -------------------------------------------------------------------------------- 2,036,327 -------------------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost $127,496,264) 150,860,488 -------------------------------------------------------------------------------- See notes to Schedule of Investments on page 25. The accompanying notes are an integral part of these financial statements. www.RSinvestments.com | 17 SCHEDULE OF INVESTMENTS - RS MIDCAP OPPORTUNITIES FUND (Continued) June 30, 2004 (unaudited) Value -------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS -- 1.3% BlackRock Liquidity Funds TempCash Portfolio 7 $ 2,039,737 -------------------------------------------------------------------------------- TOTAL SHORT-TERM INVESTMENTS (Cost $2,039,737) 2,039,737 -------------------------------------------------------------------------------- TOTAL INVESTMENTS -- 98.4% (Cost $129,536,001) 152,900,225 -------------------------------------------------------------------------------- OTHER ASSETS, NET -- 1.6% 2,444,201 -------------------------------------------------------------------------------- TOTAL NET ASSETS -- 100.0% $155,344,426 -------------------------------------------------------------------------------- See notes to Schedule of Investments on page 25. The accompanying notes are an integral part of these financial statements. 18 | Call 1-800-766-FUND SCHEDULE OF INVESTMENTS - RS SMALLER COMPANY GROWTH FUND June 30, 2004 (unaudited) Shares Value -------------------------------------------------------------------------------- COMMON STOCKS -- 96.0% ADVERTISING AGENCIES -- 1.2% ValueClick, Inc. 218,750 $ 2,620,625 -------------------------------------------------------------------------------- 2,620,625 AUTO PARTS -- AFTERMARKET -- 0.6% TBC Corp. 57,300 1,363,740 -------------------------------------------------------------------------------- 1,363,740 AUTO TRUCKS & PARTS -- 1.0% Wabash National Corp. 78,700 2,168,185 -------------------------------------------------------------------------------- 2,168,185 BANKS -- OUTSIDE NEW YORK CITY -- 2.2% Nara Bancorp, Inc. 1 166,200 2,847,006 PrivateBancorp, Inc. 1 69,810 1,916,983 -------------------------------------------------------------------------------- 4,763,989 BEVERAGE -- SOFT DRINKS -- 0.6% Peet's Coffee & Tea, Inc. 51,950 1,298,230 -------------------------------------------------------------------------------- 1,298,230 BIOTECHNOLOGY RESEARCH & PRODUCTION -- 3.5% Alexion Pharmaceuticals, Inc. 81,050 1,507,530 ArthroCare Corp. 42,900 1,247,532 Cypress Bioscience, Inc. 86,500 1,187,645 Discovery Laboratories, Inc. 136,000 1,304,240 Oscient Pharmaceuticals Corp. 265,900 1,358,749 Rigel Pharmaceuticals, Inc. 56,200 798,602 -------------------------------------------------------------------------------- 7,404,298 CASINOS & GAMBLING -- 2.6% Multimedia Games, Inc. 83,300 2,234,106 Scientific Games Corp., Class A 172,300 3,297,822 -------------------------------------------------------------------------------- 5,531,928 COMMUNICATIONS TECHNOLOGY -- 1.9% Carrier Access Corp. 167,200 1,993,024 Ixia 203,300 2,000,472 -------------------------------------------------------------------------------- 3,993,496 COMPUTER SERVICES, SOFTWARE & SYSTEMS -- 11.7% Citadel Security Software, Inc. 320,700 987,756 Digitas, Inc. 227,750 2,512,082 Embarcadero Technologies, Inc. 148,300 1,832,988 Jupitermedia Corp. 36,800 521,088 Keynote Systems, Inc. 203,000 2,791,250 Lionbridge Technologies, Inc. 152,700 1,168,155 LivePerson, Inc. 585,100 1,761,151 Merge Technologies, Inc. 113,550 1,661,236 Open Solutions, Inc. 90,600 2,263,188 RADWARE Ltd. 104,000 1,773,200 SafeNet, Inc. 57,850 1,601,288 Salesforce.com, Inc. 9,000 144,630 Shanda Interactive Entertainment Ltd., ADR 3 69,100 1,065,522 Synplicity, Inc. 222,500 1,334,778 Tumbleweed Communications Corp. 357,800 1,524,228 Zoran Corp. 107,300 1,968,955 -------------------------------------------------------------------------------- 24,911,495 June 30, 2004 (unaudited) Shares Value -------------------------------------------------------------------------------- COMPUTER TECHNOLOGY -- 1.2% M-Systems Flash Disk Pioneers Ltd. 109,650 $ 1,634,881 Trident Microsystems, Inc. 92,900 1,041,409 -------------------------------------------------------------------------------- 2,676,290 CONSUMER ELECTRONICS -- 4.0% CNET Networks, Inc. 254,100 2,812,887 FindWhat.com 78,600 1,818,804 InfoSpace, Inc. 69,650 2,649,486 United Online, Inc. 66,500 1,171,065 -------------------------------------------------------------------------------- 8,452,242 DRUGS & PHARMACEUTICALS -- 4.0% AtheroGenics, Inc. 45,050 857,301 Atrix Laboratories, Inc. 40,000 1,371,200 Bradley Pharmaceuticals, Inc. 72,700 2,028,330 Connetics Corp. 95,100 1,921,020 Durect Corp. 369,100 1,288,159 QLT, Inc. 53,900 1,079,078 -------------------------------------------------------------------------------- 8,545,088 EDUCATION SERVICES -- 1.0% Laureate Education, Inc. 56,110 2,145,646 -------------------------------------------------------------------------------- 2,145,646 ELECTRICAL & ELECTRONICS -- 0.8% Power Integrations, Inc. 66,300 1,650,870 -------------------------------------------------------------------------------- 1,650,870 ELECTRONICS -- 2.7% BEI Technologies, Inc. 1 66,200 1,874,122 Semtech Corp. 90,100 2,120,954 SRS Labs, Inc. 306,500 1,682,378 -------------------------------------------------------------------------------- 5,677,454 ELECTRONICS -- MEDICAL SYSTEMS -- 3.1% Endocardial Solutions, Inc. 71,900 744,165 Hologic, Inc. 83,100 1,932,075 Intuitive Surgical, Inc. 116,650 2,216,350 TriPath Imaging, Inc. 195,550 1,840,125 -------------------------------------------------------------------------------- 6,732,715 ELECTRONICS -- SEMICONDUCTORS & COMPONENTS -- 4.7% Artisan Components, Inc. 70,800 1,826,640 FormFactor, Inc. 30,000 673,500 LogicVision, Inc. 406,350 1,137,780 O2Micro International Ltd. 154,500 2,631,135 Sigmatel, Inc. 69,100 2,008,046 Silicon Image, Inc. 133,200 1,748,916 -------------------------------------------------------------------------------- 10,026,017 ELECTRONICS -- TECHNOLOGY -- 1.2% Sypris Solutions, Inc. 1 130,700 2,508,133 -------------------------------------------------------------------------------- 2,508,133 ENTERTAINMENT -- 0.7% Image Entertainment, Inc. 434,300 1,563,480 -------------------------------------------------------------------------------- 1,563,480 FINANCE COMPANIES -- 0.8% Saxon Capital, Inc. 76,200 1,739,646 -------------------------------------------------------------------------------- 1,739,646 See notes to Schedule of Investments on page 25. The accompanying notes are an integral part of these financial statements. www.RSinvestments.com | 19 SCHEDULE OF INVESTMENTS - RS SMALLER COMPANY GROWTH FUND (Continued) June 30, 2004 (unaudited) Shares Value -------------------------------------------------------------------------------- HEALTH CARE FACILITIES -- 1.3% Kindred Healthcare, Inc. 103,100 $ 2,716,685 -------------------------------------------------------------------------------- 2,716,685 HEALTH CARE MANAGEMENT SERVICES -- 2.4% American Medical Security Group, Inc. 109,050 2,971,613 Providence Service Corp. 109,200 2,051,868 Wellcare Group, Inc. 4,650 79,050 -------------------------------------------------------------------------------- 5,102,531 HEALTH CARE SERVICES -- 2.0% Inveresk Research Group, Inc. 53,300 1,643,772 LabOne, Inc. 81,950 2,604,371 -------------------------------------------------------------------------------- 4,248,143 INSURANCE -- LIFE -- 1.0% Scottish Re Group Ltd. 1 88,050 2,047,163 -------------------------------------------------------------------------------- 2,047,163 INSURANCE -- PROPERTY & CASUALTY -- 2.2% Infinity Property & Casualty Corp. 1 83,800 2,765,400 ProAssurance Corp. 59,550 2,031,251 -------------------------------------------------------------------------------- 4,796,651 LEISURE TIME -- 1.0% K2, Inc. 142,900 2,243,530 -------------------------------------------------------------------------------- 2,243,530 MACHINERY -- OIL/WELL EQUIPMENT & SERVICES -- 4.4% Cal Dive International, Inc. 71,800 2,176,976 Oil States International, Inc. 155,500 2,379,150 Patterson-UTI Energy, Inc. 1 68,000 2,271,880 Superior Energy Services, Inc. 246,800 2,480,340 -------------------------------------------------------------------------------- 9,308,346 MACHINERY -- SPECIALTY -- 1.1% Engineered Support Systems, Inc. 1 39,800 2,328,698 -------------------------------------------------------------------------------- 2,328,698 MEDICAL & DENTAL INSTRUMENTS & SUPPLIES -- 4.2% Abaxis, Inc. 43,200 819,936 Closure Medical Corp. 85,900 2,156,949 I-Flow Corp. 39,900 473,214 North American Scientific, Inc. 53,700 451,080 Orthovita, Inc. 326,000 1,675,640 The Spectranetics Corp. 320,000 1,792,000 ThermoGenesis Corp. 321,300 1,519,749 -------------------------------------------------------------------------------- 8,888,568 MEDICAL SERVICES -- 1.4% America Service Group Inc. 84,150 2,924,213 -------------------------------------------------------------------------------- 2,924,213 METAL FABRICATING -- 1.1% Maverick Tube Corp. 87,600 2,300,376 -------------------------------------------------------------------------------- 2,300,376 MISCELLANEOUS MATERIALS & COMMODITIES -- 0.7% Ceradyne, Inc. 44,300 1,584,611 -------------------------------------------------------------------------------- 1,584,611 June 30, 2004 (unaudited) Shares Value -------------------------------------------------------------------------------- OIL -- CRUDE PRODUCERS -- 2.0% Grey Wolf, Inc. 464,900 $ 1,971,176 Unit Corp. 72,200 2,270,690 -------------------------------------------------------------------------------- 4,241,866 PRODUCTION TECHNOLOGY EQUIPMENT -- 2.8% Axcelis Technologies, Inc. 160,300 1,994,132 Genus, Inc. 387,300 1,324,566 Mykrolis Corp. 107,100 1,865,682 Varian Semiconductor Equipment Associates, Inc. 19,300 744,208 -------------------------------------------------------------------------------- 5,928,588 RADIO & TV BROADCASTERS -- 0.8% NTN Communications, Inc. 515,350 1,618,199 -------------------------------------------------------------------------------- 1,618,199 RENTAL & LEASING SERVICES -- COMMERCIAL -- 1.0% Marlin Business Services, Inc. 142,100 2,135,763 -------------------------------------------------------------------------------- 2,135,763 RENTAL & LEASING SERVICES -- CONSUMER -- 1.6% Aaron Rents, Inc. 1 103,750 3,438,275 -------------------------------------------------------------------------------- 3,438,275 RESTAURANTS -- 0.9% RARE Hospitality International, Inc. 77,150 1,921,035 -------------------------------------------------------------------------------- 1,921,035 RETAIL -- 5.6% Casual Male Retail Group, Inc. 272,600 1,989,980 Charlotte Russe Holding, Inc. 112,600 2,407,388 Cost Plus, Inc. 56,320 1,827,584 Design Within Reach, Inc. 6,050 99,402 EZCORP, Inc. 193,500 1,919,520 Guitar Center, Inc. 41,400 1,841,058 Jos. A. Bank Clothiers, Inc. 57,300 1,798,647 -------------------------------------------------------------------------------- 11,883,579 SERVICES -- COMMERCIAL -- 2.2% Kforce, Inc. 257,800 2,433,632 Navigant Consulting, Inc. 108,100 2,317,664 -------------------------------------------------------------------------------- 4,751,296 TELECOMMUNICATIONS EQUIPMENT -- 0.9% Applied Signal Technology, Inc. 1 52,800 1,850,640 -------------------------------------------------------------------------------- 1,850,640 TEXTILE -- APPAREL MANUFACTURERS -- 2.4% Ashworth, Inc. 220,350 1,831,109 Oxford Industries, Inc. 1 36,220 1,577,743 The Warnaco Group, Inc. 81,900 1,742,013 -------------------------------------------------------------------------------- 5,150,865 TRANSPORTATION -- MISCELLANEOUS -- 1.6% Dynamex, Inc. 116,700 1,623,297 Vitran Corp., Inc. 107,200 1,763,440 -------------------------------------------------------------------------------- 3,386,737 See notes to Schedule of Investments on page 25. The accompanying notes are an integral part of these financial statements. 20 | Call 1-800-766-FUND June 30, 2004 (unaudited) Shares Value -------------------------------------------------------------------------------- TRUCKERS -- 1.9% Forward Air Corp. 56,650 $ 2,118,710 Old Dominion Freight Line, Inc. 64,950 1,914,726 -------------------------------------------------------------------------------- 4,033,436 -------------------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost $168,179,933) 204,603,361 -------------------------------------------------------------------------------- Value -------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS -- 4.4% BlackRock Liquidity Funds TempCash Portfolio 7 9,454,582 -------------------------------------------------------------------------------- TOTAL SHORT-TERM INVESTMENTS (Cost $9,454,582) 9,454,582 -------------------------------------------------------------------------------- TOTAL INVESTMENTS -- 100.4% (Cost $177,634,515) 214,057,943 -------------------------------------------------------------------------------- OTHER LIABILITIES, NET -- (0.4)% (946,806) -------------------------------------------------------------------------------- TOTAL NET ASSETS -- 100.0% $213,111,137 -------------------------------------------------------------------------------- See notes to Schedule of Investments on page 25. The accompanying notes are an integral part of these financial statements. www.RSinvestments.com | 21 SCHEDULE OF INVESTMENTS - RS CONTRARIAN VALUE FUND June 30, 2004 (unaudited) Foreign Currency 2 Shares Value -------------------------------------------------------------------------------- COMMON STOCKS -- 92.0% AGRICULTURE, FISHING & RANCHING -- 3.3% Bunge Ltd. 1 255,000 $ 9,929,700 -------------------------------------------------------------------------------- 9,929,700 AUTO TRUCKS & PARTS -- 2.1% PACCAR, Inc. 1 110,000 6,378,900 -------------------------------------------------------------------------------- 6,378,900 CABLE TELEVISION SERVICES -- 3.1% Liberty Media Corp., Class A 750,000 6,742,500 Liberty Media International, Inc., Class A 70,200 2,604,420 -------------------------------------------------------------------------------- 9,346,920 COAL -- 7.6% Peabody Energy Corp. 1 257,150 14,397,828 XStrata PLC 1 GBP 630,000 8,420,260 -------------------------------------------------------------------------------- 22,818,088 DRUGS & PHARMACEUTICALS -- 2.8% Barr Laboratories, Inc. 165,000 5,560,500 Elan Corp. PLC, ADR 3 122,000 3,018,280 -------------------------------------------------------------------------------- 8,578,780 FINANCE COMPANIES -- 2.6% Assured Guaranty Ltd. 468,700 7,944,465 -------------------------------------------------------------------------------- 7,944,465 FINANCIAL DATA PROCESSING SERVICES & SYSTEMS -- 2.8% SunGard Data Systems, Inc. 326,000 8,476,000 -------------------------------------------------------------------------------- 8,476,000 FOREST PRODUCTS -- 1.7% Canfor Corp. 1 CAD 457,000 5,180,981 -------------------------------------------------------------------------------- 5,180,981 HEALTH CARE FACILITIES -- 7.7% Kindred Healthcare, Inc. 528,000 13,912,800 Triad Hospitals, Inc. 253,000 9,419,190 -------------------------------------------------------------------------------- 23,331,990 HEALTH CARE MANAGEMENT SERVICES -- 2.7% Aetna, Inc. 1 97,000 8,245,000 -------------------------------------------------------------------------------- 8,245,000 HEALTH CARE SERVICES -- 6.3% Anthem, Inc. 91,700 8,212,652 Apria Healthcare Group, Inc. 375,000 10,762,500 -------------------------------------------------------------------------------- 18,975,152 INSURANCE -- MULTI-LINE -- 3.5% Assurant, Inc. 1 404,000 10,657,520 -------------------------------------------------------------------------------- 10,657,520 INSURANCE -- PROPERTY & CASUALTY -- 7.3% Endurance Specialty Holdings Ltd. 1 326,000 11,344,800 W.R. Berkley Corp. 1 246,000 10,565,700 -------------------------------------------------------------------------------- 21,910,500 METALS & MINERALS-- MISCELLANEOUS-- 4.8% Ivanhoe Nickel & Platinum Ltd. 4,5 698,422 4,539,743 Teck Cominco, Ltd., Class B 1 CAD 550,000 9,845,236 -------------------------------------------------------------------------------- 14,384,979 June 30, 2004 (unaudited) Foreign Currency 2 Shares Value -------------------------------------------------------------------------------- MULTI-SECTOR COMPANIES -- 2.8% Brascan Corp., Class A 1 CAD 307,500 $ 8,582,249 -------------------------------------------------------------------------------- 8,582,249 OIL -- CRUDE PRODUCERS -- 5.7% Nexen, Inc. 1 CAD 217,000 8,416,185 Penn West Petroleum Ltd. 1 CAD 188,000 8,707,664 -------------------------------------------------------------------------------- 17,123,849 PUBLISHING -- MISCELLANEOUS -- 3.7% Pearson PLC 1 GBP 925,200 11,241,594 -------------------------------------------------------------------------------- 11,241,594 REAL ESTATE -- 2.5% The St. Joe Co. 1 188,000 7,463,600 -------------------------------------------------------------------------------- 7,463,600 RESTAURANTS -- 2.9% Yum! Brands, Inc. 1 235,000 8,746,700 -------------------------------------------------------------------------------- 8,746,700 RETAIL -- 3.0% Dollar Tree Stores, Inc. 327,000 8,969,610 -------------------------------------------------------------------------------- 8,969,610 SERVICES -- COMMERCIAL -- 1.3% The ServiceMaster Co. 1 309,000 3,806,880 -------------------------------------------------------------------------------- 3,806,880 STEEL -- 4.1% United States Steel Corp. 1 356,000 12,502,720 -------------------------------------------------------------------------------- 12,502,720 UTILITIES -- CABLE TV & RADIO -- 7.7% Cablevision Systems New York Group, Class A 515,000 10,119,750 UnitedGlobalCom, Inc., Class A 1,815,200 13,178,352 -------------------------------------------------------------------------------- 23,298,102 -------------------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost $243,273,835) 277,894,279 -------------------------------------------------------------------------------- Value -------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS -- 6.3% BlackRock Liquidity Funds TempCash Portfolio 7 15,049,764 BlackRock Liquidity Funds TempFund Portfolio 7 4,160,757 -------------------------------------------------------------------------------- TOTAL SHORT-TERM INVESTMENTS (Cost $19,210,521) 19,210,521 -------------------------------------------------------------------------------- TOTAL INVESTMENTS -- 98.3% (Cost $262,484,356) 297,104,800 -------------------------------------------------------------------------------- OTHER ASSETS, NET -- 1.7% 5,051,365 -------------------------------------------------------------------------------- TOTAL NET ASSETS -- 100.0% $302,156,165 -------------------------------------------------------------------------------- See notes to Schedule of Investments on page 25. The accompanying notes are an integral part of these financial statements. 22 | Call 1-800-766-FUND SCHEDULE OF INVESTMENTS - RS GLOBAL NATURAL RESOURCES FUND June 30, 2004 (unaudited) Foreign Currency 2 Shares Value -------------------------------------------------------------------------------- COMMON STOCKS -- 88.4% AGRICULTURE, FISHING & RANCHING -- 2.0% Bunge Ltd. 1 152,250 $ 5,928,615 -------------------------------------------------------------------------------- 5,928,615 ALUMINUM -- 6.6% Alcan, Inc. 1 236,000 9,770,400 Alcoa, Inc. 1 292,000 9,644,760 -------------------------------------------------------------------------------- 19,415,160 CHEMICALS -- 2.9% Methanex Corp. 1 CAD 639,400 8,441,081 -------------------------------------------------------------------------------- 8,441,081 COAL -- 6.9% Fording Canadian Coal Trust 1 CAD 134,900 5,679,735 Peabody Energy Corp. 1 162,300 9,087,177 XStrata PLC 1 GBP 410,000 5,479,852 -------------------------------------------------------------------------------- 20,246,764 COPPER -- 2.6% Phelps Dodge Corp. 1 100,000 7,751,000 -------------------------------------------------------------------------------- 7,751,000 ENERGY - MISCELLANEOUS -- 0.6% Crosstex Energy, Inc. 1 41,950 1,682,195 -------------------------------------------------------------------------------- 1,682,195 FOREST PRODUCTS -- 10.6% Canfor Corp. 1 CAD 750,497 8,508,338 Nexfor, Inc. 1 CAD 683,100 7,734,073 Tembec, Inc. CAD 47,300 365,135 TimberWest Forest Corp. Trust 1 CAD 590,000 5,905,501 West Fraser Timber Co. Ltd. 1 CAD 257,300 8,511,098 -------------------------------------------------------------------------------- 31,024,145 INSURANCE -- MULTI-LINE -- 0.2% PICO Holdings, Inc. 31,600 604,160 -------------------------------------------------------------------------------- 604,160 MACHINERY -- AGRICULTURAL -- 2.0% AGCO Corp. 295,000 6,009,150 -------------------------------------------------------------------------------- 6,009,150 MACHINERY -- OIL/WELL EQUIPMENT & SERVICES -- 2.5% Ensign Resource Service Group, Inc. 1 CAD 459,000 7,254,305 -------------------------------------------------------------------------------- 7,254,305 METALS & MINERALS -- MISCELLANEOUS -- 12.4% Amerigo Resources Ltd. CAD 2,277,000 3,107,895 Aur Resources, Inc. CAD 474,000 2,121,201 BHP Billiton Ltd., ADR 1,3 616,000 10,792,320 Ivanhoe Nickel & Platinum Ltd. 4,5 203,624 1,323,556 JSC MMC Norilsk Nickel, ADR 3 81,000 4,495,500 Sherritt International Corp. CAD 1,315,000 6,914,600 Teck Cominco, Ltd., Class B 1 CAD 423,000 7,571,881 -------------------------------------------------------------------------------- 36,326,953 June 30, 2004 (unaudited) Foreign Currency 2 Shares Value -------------------------------------------------------------------------------- MULTI-SECTOR COMPANIES -- 1.3% Brascan Corp., Class A 1 CAD 133,500 $ 3,725,952 -------------------------------------------------------------------------------- 3,725,952 OIL -- CRUDE PRODUCERS -- 28.0% Brigham Exploration Co. 354,000 3,249,720 Cequel Energy, Inc. CAD 679,100 5,217,028 Compton Petroleum Corp. CAD 1,282,000 7,171,359 Crew Energy, Inc. CAD 294,200 1,141,033 EnCana Corp. 1 CAD 203,400 8,741,307 Energy Partners Ltd. 200,000 3,060,000 EOG Resources, Inc. 1 98,000 5,851,580 Forte Resources, Inc. CAD 460,539 1,064,830 Nexen, Inc. 1 CAD 157,000 6,089,129 Penn West Petroleum Ltd. 1 CAD 138,300 6,405,691 Precision Drilling Corp. 179,500 8,617,795 Progress Energy Ltd. CAD 797,300 8,836,754 Resolute Energy, Inc. CAD 945,000 2,537,386 Talisman Energy, Inc. 1 CAD 222,000 4,818,348 Thunder Energy, Inc. CAD 1,080,000 5,727,242 XTO Energy, Inc. 1 121,350 3,615,017 -------------------------------------------------------------------------------- 82,144,219 OIL -- INTEGRATED DOMESTIC -- 1.7% Occidental Petroleum Corp. 1 100,000 4,841,000 -------------------------------------------------------------------------------- 4,841,000 OIL -- INTEGRATED INTERNATIONAL -- 4.9% BP PLC, ADR 1,3 97,000 5,196,290 Exxon Mobil Corp. 1 132,000 5,862,120 Paramount Resources Ltd. CAD 314,500 3,377,811 -------------------------------------------------------------------------------- 14,436,221 PAPER -- 1.4% SFK Pulp Fund 1 CAD 591,700 4,020,427 -------------------------------------------------------------------------------- 4,020,427 STEEL -- 1.8% Algoma Steel, Inc. CAD 648,300 5,318,889 -------------------------------------------------------------------------------- 5,318,889 -------------------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost $232,915,446) 259,170,236 -------------------------------------------------------------------------------- Value -------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS -- 12.6% BlackRock Liquidity Funds TempCash Portfolio 7 14,584,037 BlackRock Liquidity Funds TempFund Portfolio 7 14,575,037 PNC Bank Money Market Account 7,744,464 -------------------------------------------------------------------------------- TOTAL SHORT-TERM INVESTMENTS (Cost $36,903,538) 36,903,538 -------------------------------------------------------------------------------- TOTAL INVESTMENTS -- 101.0% (Cost $269,818,984) 296,073,774 -------------------------------------------------------------------------------- OTHER LIABILITIES, NET -- (1.0)% (2,986,021) -------------------------------------------------------------------------------- TOTAL NET ASSETS -- 100.0% $293,087,753 -------------------------------------------------------------------------------- See notes to Schedule of Investments on page 25. The accompanying notes are an integral part of these financial statements. www.RSinvestments.com | 23 SCHEDULE OF INVESTMENTS - RS PARTNERS FUND June 30, 2004 (unaudited) Foreign Currency 2 Shares Value -------------------------------------------------------------------------------- COMMON STOCKS -- 81.3% AGRICULTURE, FISHING & RANCHING -- 2.0% Bunge Ltd. 1 757,750 $ 29,506,785 -------------------------------------------------------------------------------- 29,506,785 BANKS - OUTSIDE NEW YORK CITY -- 1.0% Franklin Bank Corp. 921,000 14,570,220 -------------------------------------------------------------------------------- 14,570,220 CABLE TELEVISION SERVICES -- 1.1% Liberty Media International, Inc., Class A 430,100 15,956,710 -------------------------------------------------------------------------------- 15,956,710 CASINOS & GAMBLING -- 1.0% Scientific Games Corp., Class A 771,400 14,764,596 -------------------------------------------------------------------------------- 14,764,596 CHEMICALS -- 1.9% Methanex Corp. 1 CAD 2,144,300 28,308,119 -------------------------------------------------------------------------------- 28,308,119 COAL -- 4.3% Fording Canadian Coal Trust 1 CAD 816,900 34,394,186 Peabody Energy Corp. 1 507,150 28,395,329 -------------------------------------------------------------------------------- 62,789,515 COMMERCIAL INFORMATION SERVICES -- 1.1% Neoforma, Inc. 8 1,360,000 16,510,400 -------------------------------------------------------------------------------- 16,510,400 COMPUTER SERVICES, SOFTWARE & SYSTEMS -- 3.6% Acxiom Corp. 1 1,666,000 41,366,780 BearingPoint, Inc. 1,336,800 11,857,416 -------------------------------------------------------------------------------- 53,224,196 CONSUMER ELECTRONICS -- 1.4% Take-Two Interactive Software, Inc. 667,800 20,461,392 -------------------------------------------------------------------------------- 20,461,392 DIVERSIFIED -- 1.1% Onex Corp. 1 CAD 1,209,100 15,330,748 -------------------------------------------------------------------------------- 15,330,748 DIVERSIFIED FINANCIAL SERVICES -- 1.6% U.S.I. Holdings Corp. 1,485,000 23,463,000 -------------------------------------------------------------------------------- 23,463,000 DRUGS & PHARMACEUTICALS -- 2.1% Elan Corp. PLC, ADR 3 555,100 13,733,174 Par Pharmaceutical Cos., Inc. 500,000 17,605,000 -------------------------------------------------------------------------------- 31,338,174 EDUCATION SERVICES -- 0.5% ITT Educational Services, Inc. 185,000 7,033,700 -------------------------------------------------------------------------------- 7,033,700 ELECTRICAL EQUIPMENT & COMPONENTS -- 0.7% The Genlyte Group, Inc. 159,500 10,029,360 -------------------------------------------------------------------------------- 10,029,360 ELECTRONICS -- MEDICAL SYSTEMS -- 1.0% Zoll Medical Corp. 420,000 14,733,600 -------------------------------------------------------------------------------- 14,733,600 June 30, 2004 (unaudited) Foreign Currency 2 Shares Value -------------------------------------------------------------------------------- ENTERTAINMENT -- 1.4% Alliance Gaming Corp. 1,165,000 $ 19,991,400 -------------------------------------------------------------------------------- 19,991,400 FINANCE COMPANIES -- 1.8% Assured Guaranty Ltd. 1,532,300 25,972,485 -------------------------------------------------------------------------------- 25,972,485 FINANCIAL DATA PROCESSING SERVICES & SYSTEMS -- 1.7% John H. Harland Co. 1 840,000 24,654,000 -------------------------------------------------------------------------------- 24,654,000 FOREST PRODUCTS -- 6.1% Canfor Corp. 1 CAD 3,266,957 37,037,290 Nexfor, Inc. 1 CAD 1,726,000 19,541,809 Tembec, Inc. CAD 121,200 935,610 West Fraser Timber Co. Ltd. 1 CAD 957,800 31,682,588 -------------------------------------------------------------------------------- 89,197,297 HEALTH CARE FACILITIES -- 3.1% Kindred Healthcare, Inc. 1,730,000 45,585,500 -------------------------------------------------------------------------------- 45,585,500 HEALTH CARE MANAGEMENT SERVICES -- 5.0% AMERIGROUP Corp. 732,800 36,053,760 Centene Corp. 620,700 23,927,985 Molina Healthcare, Inc. 346,000 13,210,280 Wellcare Group, Inc. 31,800 540,600 -------------------------------------------------------------------------------- 73,732,625 HEALTH CARE SERVICES -- 1.9% Apria Healthcare Group, Inc. 910,000 26,117,000 VistaCare, Inc., Class A 100,500 1,864,275 -------------------------------------------------------------------------------- 27,981,275 HOMEBUILDING -- 0.5% Desarrolladora Homex S.A. de C.V., ADR 3 432,000 7,477,920 -------------------------------------------------------------------------------- 7,477,920 HOUSEHOLD FURNISHINGS -- 0.2% Tempur-Pedic International, Inc. 150,100 2,102,901 -------------------------------------------------------------------------------- 2,102,901 INSURANCE -- LIFE -- 1.2% Scottish Re Group Ltd. 1 760,000 17,670,000 -------------------------------------------------------------------------------- 17,670,000 INSURANCE -- PROPERTY & CASUALTY -- 2.2% Endurance Specialty Holdings Ltd.1 655,000 22,794,000 W.R. Berkley Corp.1 207,000 8,890,650 -------------------------------------------------------------------------------- 31,684,650 INVESTMENT MANAGEMENT COMPANIES -- 0.2% Apollo Investment Corp. 187,000 2,574,990 -------------------------------------------------------------------------------- 2,574,990 MACHINERY -- AGRICULTURAL -- 2.0% AGCO Corp. 1,439,000 29,312,430 -------------------------------------------------------------------------------- 29,312,430 METALS & MINERALS-- MISCELLANEOUS-- 0.3% Aur Resources, Inc. CAD 968,500 4,334,141 -------------------------------------------------------------------------------- 4,334,141 See notes to Schedule of Investments on page 25. The accompanying notes are an integral part of these financial statements. 24 | Call 1-800-766-FUND June 30, 2004 (unaudited) Foreign Currency 2 Shares Value -------------------------------------------------------------------------------- MULTI-SECTOR COMPANIES -- 1.0% GenCorp, Inc. 1 1,135,000 $ 15,197,650 -------------------------------------------------------------------------------- 15,197,650 OIL -- CRUDE PRODUCERS -- 4.0% Compton Petroleum Corp. CAD 5,311,100 29,709,677 Forte Resources, Inc. CAD 438,177 1,013,127 Penn West Petroleum Ltd. 1 CAD 607,100 28,119,269 -------------------------------------------------------------------------------- 58,842,073 PAPER -- 1.2% SFK Pulp Fund 1 CAD 2,663,900 18,100,413 -------------------------------------------------------------------------------- 18,100,413 REAL ESTATE -- 1.0% MI Developments, Inc., Class A 1 520,000 14,040,000 -------------------------------------------------------------------------------- 14,040,000 REAL ESTATE INVESTMENT TRUSTS -- 2.4% Ventas, Inc. 1 1,524,900 35,606,415 -------------------------------------------------------------------------------- 35,606,415 RESTAURANTS -- 3.4% AFC Enterprises, Inc. 926,000 19,909,000 Triarc Cos., Inc., Class B 1 2,972,000 30,225,240 -------------------------------------------------------------------------------- 50,134,240 RETAIL -- 6.0% Cabela's, Inc., Class A 17,450 470,277 Circuit City Stores, Inc. 1 500,000 6,475,000 Electronics Boutique Holdings Corp. 805,000 21,203,700 GameStop Corp. 1,225,000 18,644,500 Global Imaging Systems, Inc. 445,000 16,313,700 Party City Corp. 335,228 4,186,998 The Gymboree Corp. 1,375,000 21,120,000 -------------------------------------------------------------------------------- 88,414,175 SERVICES -- COMMERCIAL -- 1.2% FTI Consulting, Inc. 834,000 13,761,000 The ServiceMaster Co. 1 337,300 4,155,536 -------------------------------------------------------------------------------- 17,916,536 STEEL -- 3.3% Algoma Steel, Inc. 8 CAD 1,782,600 14,625,098 IPSCO, Inc. 1 CAD 463,600 10,400,961 Steel Dynamics, Inc. 796,000 22,789,480 -------------------------------------------------------------------------------- 47,815,539 June 30, 2004 (unaudited) Shares Value -------------------------------------------------------------------------------- TOYS -- 1.9% Leapfrog Enterprises, Inc. 1,410,000 $ 28,044,900 -------------------------------------------------------------------------------- 28,044,900 UTILITIES -- CABLE TV & RADIO -- 1.9% UnitedGlobalCom, Inc., Class A 3,874,600 28,129,596 -------------------------------------------------------------------------------- 28,129,596 UTILITIES -- TELECOMMUNICATIONS -- 2.0% IDT Corp., Class B 1,615,000 29,780,600 -------------------------------------------------------------------------------- 29,780,600 -------------------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost $1,011,670,681) 1,192,314,266 -------------------------------------------------------------------------------- Value -------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS -- 17.7% BlackRock Liquidity Funds TempCash Portfolio 7 72,834,561 BlackRock Liquidity Funds TempFund Portfolio 7 72,798,561 PNC Bank Money Market Account 114,432,327 -------------------------------------------------------------------------------- TOTAL SHORT-TERM INVESTMENTS (Cost $260,065,449) 260,065,449 -------------------------------------------------------------------------------- TOTAL INVESTMENTS -- 99.0% (Cost $1,271,736,130) 1,452,379,715 -------------------------------------------------------------------------------- OTHER ASSETS, NET -- 1.0% 15,150,804 -------------------------------------------------------------------------------- TOTAL NET ASSETS -- 100.0% $1,467,530,519 -------------------------------------------------------------------------------- 1 Income-producing security. 2 Foreign-denominated security: CAD -- Canadian Dollar, GBP -- British Pound. 3 ADR -- American Depository Receipt. 4 Fair value security. See 1a in Notes to Financial Statements. 5 Restricted security. See 4e in Notes to Financial Statements. 6 See 4f in Notes to Financial Statements. 7 Money market fund registered under the Investment Company Act of 1940. 8 Affiliated issuer. See 3d in Notes to Financial Statements. The accompanying notes are an integral part of these financial statements. www.RSinvestments.com | 25 FINANCIAL INFORMATION STATEMENT OF ASSETS AND LIABILITIES As of June 30, 2004 (unaudited) All numbers in thousands except for Pricing of Shares section
RS RS DIVERSIFIED EMERGING RS GROWTH GROWTH GROWTH ASSETS Investments, at value $ 1,017,691 $ 1,477,291 $ 221,365 Cash -- -- -- Receivable for investments sold 45,965 55,035 3,055 Receivable for fund shares subscribed 2,152 1,491 16 Dividends/interest receivable 300 55 112 Prepaid expenses 62 95 13 Other receivables 94 204 27 ------------------------------------------------------------------------------------------------------------------------------------ TOTAL ASSETS 1,066,264 1,534,171 224,588 ------------------------------------------------------------------------------------------------------------------------------------ LIABILITIES Payable for investments purchased 31,802 22,812 2,232 Payable for fund shares redeemed 2,450 28,640 124 Payable to adviser 823 1,213 163 Payable to distributor 206 303 45 Deferred trustees' compensation 94 204 27 Accrued expenses/other liabilities 771 1,165 120 ------------------------------------------------------------------------------------------------------------------------------------ TOTAL LIABILITIES 36,146 54,337 2,711 ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ TOTAL NET ASSETS $ 1,030,118 $ 1,479,834 $ 221,877 ------------------------------------------------------------------------------------------------------------------------------------ NET ASSETS CONSIST OF: Paid-in capital 1,165,996 2,945,908 161,013 Accumulated undistributed net investment income/(loss) (6,575) (11,890) (812) Accumulated net realized gain/(loss) from investments and from securities sold short and options written, and foreign currency transactions (208,675) (1,711,668) 32,015 Net unrealized appreciation/(depreciation) on investments and on securities sold short and options written, and translation of assets and liabilities in foreign currencies 79,372 257,484 29,661 ------------------------------------------------------------------------------------------------------------------------------------ TOTAL NET ASSETS $ 1,030,118 $ 1,479,834 $ 221,877 ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ INVESTMENTS, AT COST $ 938,341 $ 1,219,864 $ 191,712 ------------------------------------------------------------------------------------------------------------------------------------ PRICING OF SHARES Net Asset Value, offering, and redemption price per share $ 22.19 $ 29.34 $ 18.03 Net Assets $1,030,117,542 $1,479,833,832 $221,877,306 Shares of beneficial interest outstanding with no par value 46,420,337 50,445,468 12,304,512 THE RS INFORMATION RS INTERNET MIDCAP AGE FUND(R) AGE FUND(R) OPPORTUNITIES ASSETS Investments, at value $ 161,918 $ 120,727 $ 152,900 Cash -- -- -- Receivable for investments sold 853 595 3,697 Receivable for fund shares subscribed 724 864 933 Dividends/interest receivable 3 3 46 Prepaid expenses 14 7 8 Other receivables 15 9 15 --------------------------------------------------------------------------------------------------------------------------------- TOTAL ASSETS 163,527 122,205 157,599 --------------------------------------------------------------------------------------------------------------------------------- LIABILITIES Payable for investments purchased 1,048 780 1,830 Payable for fund shares redeemed 167 47 196 Payable to adviser 129 97 114 Payable to distributor 32 24 32 Deferred trustees' compensation 15 9 15 Accrued expenses/other liabilities 159 124 68 --------------------------------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES 1,550 1,081 2,255 --------------------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------------------- TOTAL NET ASSETS $ 161,977 $ 121,124 $ 155,344 --------------------------------------------------------------------------------------------------------------------------------- NET ASSETS CONSIST OF: Paid-in capital 145,080 237,965 172,669 Accumulated undistributed net investment income/(loss) (1,700) (1,103) (638) Accumulated net realized gain/(loss) from investments and from securities sold short and options written, and foreign currency transactions (19,282) (141,004) (40,055) Net unrealized appreciation/(depreciation) on investments and on securities sold short and options written, and translation of assets and liabilities in foreign currencies 37,879 25,266 23,368 --------------------------------------------------------------------------------------------------------------------------------- TOTAL NET ASSETS $ 161,977 $ 121,124 $ 155,344 --------------------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------------------- INVESTMENTS, AT COST $ 124,042 $ 95,462 $ 129,536 --------------------------------------------------------------------------------------------------------------------------------- PRICING OF SHARES Net Asset Value, offering, and redemption price per share $ 15.51 $ 6.83 $ 11.36 Net Assets $161,977,445 $121,124,114 $155,344,426 Shares of beneficial interest outstanding with no par value 10,442,151 17,727,107 13,672,845 RS RS SMALLER RS GLOBAL COMPANY CONTRARIAN NATURAL GROWTH VALUE RESOURCES ASSETS Investments, at value $ 214,058 $ 297,105 $ 296,074 Cash -- -- 9 Receivable for investments sold 1,454 3,674 2,072 Receivable for fund shares subscribed 1,097 1,896 1,416 Dividends/interest receivable 19 115 318 Prepaid expenses 12 21 10 Other receivables 17 17 9 ------------------------------------------------------------------------------------------------------------------------------ TOTAL ASSETS 216,657 302,828 299,908 ------------------------------------------------------------------------------------------------------------------------------ LIABILITIES Payable for investments purchased 3,012 46 6,221 Payable for fund shares redeemed 187 185 166 Payable to adviser 171 203 211 Payable to distributor 43 61 57 Deferred trustees' compensation 17 18 9 Accrued expenses/other liabilities 116 159 156 ------------------------------------------------------------------------------------------------------------------------------ TOTAL LIABILITIES 3,546 672 6,820 ------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------ TOTAL NET ASSETS $ 213,111 $ 302,156 $ 293,088 ------------------------------------------------------------------------------------------------------------------------------ NET ASSETS CONSIST OF: Paid-in capital 161,677 355,153 266,350 Accumulated undistributed net investment income/(loss) (1,528) (495) (515) Accumulated net realized gain/(loss) from investments and from securities sold short and options written, and foreign currency transactions 16,535 (87,126) 1,016 Net unrealized appreciation/(depreciation) on investments and on securities sold short and options written, and translation of assets and liabilities in foreign currencies 36,427 34,624 26,237 ------------------------------------------------------------------------------------------------------------------------------ TOTAL NET ASSETS $ 213,111 $ 302,156 $ 293,088 ------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------ INVESTMENTS, AT COST $ 177,635 $ 262,484 $ 269,819 ------------------------------------------------------------------------------------------------------------------------------ PRICING OF SHARES Net Asset Value, offering, and redemption price per share $ 21.50 $ 17.90 $ 20.55 Net Assets $213,111,137 $302,156,165 $293,087,753 Shares of beneficial interest outstanding with no par value 9,909,928 16,877,023 14,262,903 RS PARTNERS ASSETS Investments, at value $ 1,452,380 Cash 36 Receivable for investments sold 19,733 Receivable for fund shares subscribed 16,355 Dividends/interest receivable 963 Prepaid expenses 53 Other receivables 44 ---------------------------------------------------------------------------------------------- TOTAL ASSETS 1,489,564 ---------------------------------------------------------------------------------------------- LIABILITIES Payable for investments purchased 18,481 Payable for fund shares redeemed 1,687 Payable to adviser 1,011 Payable to distributor 287 Deferred trustees' compensation 44 Accrued expenses/other liabilities 523 ---------------------------------------------------------------------------------------------- TOTAL LIABILITIES 22,033 ---------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------- TOTAL NET ASSETS $ 1,467,531 ---------------------------------------------------------------------------------------------- NET ASSETS CONSIST OF: Paid-in capital 1,218,178 Accumulated undistributed net investment income/(loss) (3,730) Accumulated net realized gain/(loss) from investments and from securities sold short and options written, and foreign currency transactions 72,438 Net unrealized appreciation/(depreciation) on investments and on securities sold short and options written, and translation of assets and liabilities in foreign currencies 180,645 ---------------------------------------------------------------------------------------------- TOTAL NET ASSETS $ 1,467,531 ---------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------- INVESTMENTS, AT COST $ 1,271,736 ---------------------------------------------------------------------------------------------- PRICING OF SHARES Net Asset Value, offering, and redemption price per share $ 30.10 Net Assets $1,467,530,519 Shares of beneficial interest outstanding with no par value 48,755,645
The accompanying notes are an integral part of these financial statements. 26 | Call 1-800-766-FUND www.RSinvestments.com | 27 FINANCIAL INFORMATION STATEMENT OF OPERATIONS For the period ended June 30, 2004 (unaudited) All numbers in thousands
RS RS THE DIVERSIFIED EMERGING RS INFORMATION GROWTH GROWTH GROWTH AGE FUND(R) INVESTMENT INCOME Interest $ 34 $ 172 $ 24 $ 24 Dividends 1,646 560 832 5 Withholding taxes on foreign dividends -- -- (19) -- ---------------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENT INCOME 1,680 732 837 29 ---------------------------------------------------------------------------------------------------------------------------------- EXPENSES Investment advisory fees 5,370 8,000 1,107 1,080 Distribution fees 1,343 2,000 277 270 Transfer agent fees 1,025 1,574 174 187 Custodian fees 81 92 16 27 Accounting/administrative service fees 380 558 80 78 Shareholder reports 192 292 41 42 Professional fees 97 139 22 24 Registration fees 54 39 24 26 Interest expense 8 -- -- 6 Trustees' fees and expenses 22 36 5 4 Other expense 30 53 6 5 ---------------------------------------------------------------------------------------------------------------------------------- TOTAL EXPENSES 8,602 12,783 1,752 1,749 ---------------------------------------------------------------------------------------------------------------------------------- Less: Expense waiver by adviser -- -- (103) -- Expense offsets and other waivers (356) (161) -- (20) ---------------------------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------------------------- TOTAL EXPENSES, NET 8,246 12,622 1,649 1,729 ---------------------------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------------------------- NET INVESTMENT INCOME/(LOSS) (6,566) (11,890) (812) (1,700) ---------------------------------------------------------------------------------------------------------------------------------- REALIZED GAIN/(LOSS) AND CHANGE IN UNREALIZED APPRECIATION/(DEPRECIATION) ON INVESTMENTS Net realized gain/(loss) from investments and foreign currency transactions 68,405 170,308 20,274 17,925 Net change in unrealized appreciation/(depreciation) on investments and on translation of assets and liabilities in foreign currencies (74,373) (92,067) (10,542) (13,486) ---------------------------------------------------------------------------------------------------------------------------------- NET GAIN/(LOSS) ON INVESTMENTS (5,968) 78,241 9,732 4,439 ---------------------------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------------------------- NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $(12,534) $ 66,351 $ 8,920 $ 2,739 ---------------------------------------------------------------------------------------------------------------------------------- RS RS RS SMALLER INTERNET MIDCAP COMPANY AGE FUND(R) OPPORTUNITIES GROWTH INVESTMENT INCOME Interest $ 19 $ 79 $ 46 Dividends 3 465 80 Withholding taxes on foreign dividends -- (5) -- --------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENT INCOME 22 539 126 --------------------------------------------------------------------------------------------------------------------------- EXPENSES Investment advisory fees 659 791 1,061 Distribution fees 165 198 265 Transfer agent fees 178 94 127 Custodian fees 19 16 31 Accounting/administrative service fees 49 59 77 Shareholder reports 24 28 39 Professional fees 14 17 21 Registration fees 24 27 34 Interest expense -- -- -- Trustees' fees and expenses 3 3 4 Other expense 3 4 5 --------------------------------------------------------------------------------------------------------------------------- TOTAL EXPENSES 1,138 1,237 1,664 --------------------------------------------------------------------------------------------------------------------------- Less: Expense waiver by adviser -- (58) -- Expense offsets and other waivers (16) (5) (10) --------------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------------- TOTAL EXPENSES, NET 1,122 1,174 1,654 --------------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------------- NET INVESTMENT INCOME/(LOSS) (1,100) (635) (1,528) --------------------------------------------------------------------------------------------------------------------------- REALIZED GAIN/(LOSS) AND CHANGE IN UNREALIZED APPRECIATION/(DEPRECIATION) ON INVESTMENTS Net realized gain/(loss) from investments and foreign currency transactions 8,135 9,466 18,495 Net change in unrealized appreciation/(depreciation) on investments and on translation of assets and liabilities in foreign currencies (4,434) (2,561) (9,011) --------------------------------------------------------------------------------------------------------------------------- NET GAIN/(LOSS) ON INVESTMENTS 3,701 6,905 9,484 --------------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------------- NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 2,601 $ 6,270 $ 7,956 --------------------------------------------------------------------------------------------------------------------------- RS RS GLOBAL CONTRARIAN NATURAL RS VALUE RESOURCES PARTNERS INVESTMENT INCOME Interest $ 108 $ 128 $ 639 Dividends 1,434 1,182 4,608 Withholding taxes on foreign dividends (91) (131) (344) ------------------------------------------------------------------------------------------------------------------ TOTAL INVESTMENT INCOME 1,451 1,179 4,903 ------------------------------------------------------------------------------------------------------------------ EXPENSES Investment advisory fees 1,833 1,123 5,829 Distribution fees 458 281 1,457 Transfer agent fees 284 177 1,009 Custodian fees 40 46 101 Accounting/administrative service fees 131 81 411 Shareholder reports 67 32 199 Professional fees 37 19 90 Registration fees 39 64 141 Interest expense 1 -- -- Trustees' fees and expenses 7 4 21 Other expense 7 4 17 ------------------------------------------------------------------------------------------------------------------ TOTAL EXPENSES 2,904 1,831 9,275 ------------------------------------------------------------------------------------------------------------------ Less: Expense waiver by adviser (175) (137) (602) Expense offsets and other waivers -- -- -- ------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------ TOTAL EXPENSES, NET 2,729 1,694 8,673 ------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------ NET INVESTMENT INCOME/(LOSS) (1,278) (515) (3,770) ------------------------------------------------------------------------------------------------------------------ REALIZED GAIN/(LOSS) AND CHANGE IN UNREALIZED APPRECIATION/(DEPRECIATION) ON INVESTMENTS Net realized gain/(loss) from investments and foreign currency transactions 24,534 7,259 49,805 Net change in unrealized appreciation/(depreciation) on investments and on translation of assets and liabilities in foreign currencies (10,383) 6,636 34,463 ------------------------------------------------------------------------------------------------------------------ NET GAIN/(LOSS) ON INVESTMENTS 14,151 13,895 84,268 ------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------ NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 12,873 $13,380 $80,498 ------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. 28 | Call 1-800-766-FUND www.RSinvestments.com | 29 FINANCIAL INFORMATION STATEMENT OF CHANGES IN NET ASSETS All numbers in thousands, six-month-ended numbers are unaudited
RS DIVERSIFIED GROWTH ------------------------------- For the Six For the Months Ended Year Ended June 30, 2004 Dec. 31, 2003 OPERATIONS Net investment income/(loss) $ (6,566) $ (6,917) Net realized gain/(loss) from investments and foreign currency transactions 68,405 165,322 Net realized gain/(loss) from securities sold short and options written -- 466 Net change in unrealized appreciation/(depreciation) on investments and on translation of assets and liabilities in foreign currencies (74,373) 197,383 ------------------------------------------------------------------------------------------------------------------- NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (12,534) 356,254 ------------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS Net investment income -- -- Realized gain on investments and securities sold short -- -- ------------------------------------------------------------------------------------------------------------------- TOTAL DISTRIBUTIONS -- -- ------------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS Proceeds from sales of shares 277,449 701,112 Proceeds from shares issued upon merger 1 -- -- Reinvestment of distributions -- -- Cost of shares redeemed (324,395) (538,582) ------------------------------------------------------------------------------------------------------------------- NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS (46,946) 162,530 ------------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------- NET INCREASE/(DECREASE) IN NET ASSETS (59,480) 518,784 ------------------------------------------------------------------------------------------------------------------- NET ASSETS Beginning of Period 1,089,598 570,814 End of Period $1,030,118 $1,089,598 ------------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------- UNDISTRIBUTED NET INVESTMENT INCOME/(LOSS) INCLUDED IN NET ASSETS $ (6,575) $ (9) ------------------------------------------------------------------------------------------------------------------- OTHER INFORMATION: SHARES Sold 12,283 39,922 Issued upon merger 1 -- -- Reinvested -- -- Redeemed (14,591) (31,509) ------------------------------------------------------------------------------------------------------------------- NET INCREASE/(DECREASE) (2,308) 8,413 ------------------------------------------------------------------------------------------------------------------- RS EMERGING GROWTH ------------------------------- For the Six For the Months Ended Year Ended June 30, 2004 Dec. 31, 2003 OPERATIONS Net investment income/(loss) $ (11,890) $ (20,030) Net realized gain/(loss) from investments and foreign currency transactions 170,308 294,616 Net realized gain/(loss) from securities sold short and options written -- -- Net change in unrealized appreciation/(depreciation) on investments and on translation of assets and liabilities in foreign currencies (92,067) 290,547 ------------------------------------------------------------------------------------------------------------------ NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 66,351 565,133 ------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO SHAREHOLDERS Net investment income -- -- Realized gain on investments and securities sold short -- -- ------------------------------------------------------------------------------------------------------------------ TOTAL DISTRIBUTIONS -- -- ------------------------------------------------------------------------------------------------------------------ CAPITAL SHARE TRANSACTIONS Proceeds from sales of shares 176,089 2,199,951 Proceeds from shares issued upon merger 1 -- 38,047 Reinvestment of distributions -- -- Cost of shares redeemed (375,905) (2,497,606) ------------------------------------------------------------------------------------------------------------------ NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS (199,816) (259,608) ------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------ NET INCREASE/(DECREASE) IN NET ASSETS (133,465) 305,525 ------------------------------------------------------------------------------------------------------------------ NET ASSETS Beginning of Period 1,613,299 1,307,774 End of Period $1,479,834 $ 1,613,299 ------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------ UNDISTRIBUTED NET INVESTMENT INCOME/(LOSS) INCLUDED IN NET ASSETS $ (11,890) $ -- ------------------------------------------------------------------------------------------------------------------ OTHER INFORMATION: SHARES Sold 6,021 108,726 Issued upon merger 1 -- 2,176 Reinvested -- -- Redeemed (12,989) (121,797) ------------------------------------------------------------------------------------------------------------------ NET INCREASE/(DECREASE) (6,968) (10,895) ------------------------------------------------------------------------------------------------------------------ RS GROWTH ------------------------------ For the Six For the Months Ended Year Ended June 30, 2004 Dec. 31, 2003 OPERATIONS Net investment income/(loss) $ (812) $ (1,542) Net realized gain/(loss) from investments and foreign currency transactions 20,274 37,704 Net realized gain/(loss) from securities sold short and options written -- 110 Net change in unrealized appreciation/(depreciation) on investments and on translation of assets and liabilities in foreign currencies (10,542) 33,816 ------------------------------------------------------------------------------------------------------------------ NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 8,920 70,088 ------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO SHAREHOLDERS Net investment income -- -- Realized gain on investments and securities sold short -- (6,358) ------------------------------------------------------------------------------------------------------------------ TOTAL DISTRIBUTIONS -- (6,358) ------------------------------------------------------------------------------------------------------------------ CAPITAL SHARE TRANSACTIONS Proceeds from sales of shares 8,485 56,550 Proceeds from shares issued upon merger 1 -- -- Reinvestment of distributions -- 6,192 Cost of shares redeemed (19,254) (73,177) ------------------------------------------------------------------------------------------------------------------ NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS (10,769) (10,435) ------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------ NET INCREASE/(DECREASE) IN NET ASSETS (1,849) 53,295 ------------------------------------------------------------------------------------------------------------------ NET ASSETS Beginning of Period 223,726 170,431 End of Period $ 221,877 $ 223,726 ------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------ UNDISTRIBUTED NET INVESTMENT INCOME/(LOSS) INCLUDED IN NET ASSETS $ (812) $ -- ------------------------------------------------------------------------------------------------------------------ OTHER INFORMATION: SHARES Sold 479 4,277 Issued upon merger 1 -- -- Reinvested -- 370 Redeemed (1,095) (5,503) ------------------------------------------------------------------------------------------------------------------ NET INCREASE/(DECREASE) (616) (856) ------------------------------------------------------------------------------------------------------------------ THE INFORMATION AGE FUND(R) ------------------------------- For the Six For the Months Ended Year Ended June 30, 2004 Dec. 31, 2003 OPERATIONS Net investment income/(loss) $ (1,700) $ (2,204) Net realized gain/(loss) from investments and foreign currency transactions 17,925 33,666 Net realized gain/(loss) from securities sold short and options written -- -- Net change in unrealized appreciation/(depreciation) on investments and on translation of assets and liabilities in foreign currencies (13,486) 49,850 ------------------------------------------------------------------------------------------------------------------- NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 2,739 81,312 ------------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS Net investment income -- -- Realized gain on investments and securities sold short -- -- ------------------------------------------------------------------------------------------------------------------- TOTAL DISTRIBUTIONS -- -- ------------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS Proceeds from sales of shares 70,636 258,736 Proceeds from shares issued upon merger 1 -- -- Reinvestment of distributions -- -- Cost of shares redeemed (153,354) (148,446) ------------------------------------------------------------------------------------------------------------------- NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS (82,718) 110,290 ------------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------- NET INCREASE/(DECREASE) IN NET ASSETS (79,979) 191,602 ------------------------------------------------------------------------------------------------------------------- NET ASSETS Beginning of Period 241,956 50,354 End of Period $ 161,977 $ 241,956 ------------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------- UNDISTRIBUTED NET INVESTMENT INCOME/(LOSS) INCLUDED IN NET ASSETS $ (1,700) $ -- ------------------------------------------------------------------------------------------------------------------- OTHER INFORMATION: SHARES Sold 4,432 21,924 Issued upon merger 1 -- -- Reinvested -- -- Redeemed (10,194) (12,392) ------------------------------------------------------------------------------------------------------------------- NET INCREASE/(DECREASE) (5,762) 9,532 ------------------------------------------------------------------------------------------------------------------- RS INTERNET AGE FUND(R) ------------------------------- For the Six For the Months Ended Year Ended June 30, 2004 Dec. 31, 2003 OPERATIONS Net investment income/(loss) $ (1,100) $ (1,430) Net realized gain/(loss) from investments and foreign currency transactions 8,135 22,823 Net realized gain/(loss) from securities sold short and options written -- 239 Net change in unrealized appreciation/(depreciation) on investments and on translation of assets and liabilities in foreign currencies (4,434) 26,434 ---------------------------------------------------------------------------------------------------------------- NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 2,601 48,066 ---------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS Net investment income -- -- Realized gain on investments and securities sold short -- -- ---------------------------------------------------------------------------------------------------------------- TOTAL DISTRIBUTIONS -- -- ---------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS Proceeds from sales of shares 45,752 140,599 Proceeds from shares issued upon merger 1 -- -- Reinvestment of distributions -- -- Cost of shares redeemed (53,197) (97,756) ---------------------------------------------------------------------------------------------------------------- NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS (7,445) 42,843 ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- NET INCREASE/(DECREASE) IN NET ASSETS (4,844) 90,909 ---------------------------------------------------------------------------------------------------------------- NET ASSETS Beginning of Period 125,968 35,059 End of Period $121,124 $125,968 ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- UNDISTRIBUTED NET INVESTMENT INCOME/(LOSS) INCLUDED IN NET ASSETS $ (1,103) $ (3) ---------------------------------------------------------------------------------------------------------------- OTHER INFORMATION: SHARES Sold 6,497 27,209 Issued upon merger 1 -- -- Reinvested -- -- Redeemed (7,924) (18,768) ---------------------------------------------------------------------------------------------------------------- NET INCREASE/(DECREASE) (1,427) 8,441 ---------------------------------------------------------------------------------------------------------------- 1 RS Aggressive Growth Fund merged with RS Emerging Growth Fund on March 7, 2003. See Note 6 in Notes to Financial Statements.
The accompanying notes are an integral part of these financial statements. 30 | Call 1-800-766-FUND www.RSinvestments.com | 31 FINANCIAL INFORMATION STATEMENT OF CHANGES IN NET ASSETS (Continued) All numbers in thousands, six-month-ended numbers are unaudited
RS MIDCAP OPPORTUNITIES ------------------------------- For the Six For the Months Ended Year Ended June 30, 2004 Dec. 31, 2003 OPERATIONS Net investment income/(loss) $ (635) $ (822) Net realized gain/(loss) from investments and foreign currency transactions 9,466 19,477 Net realized gain from securities sold short and options written -- 50 Net change in unrealized appreciation/(depreciation) on investments and on translation of assets and liabilities in foreign currencies (2,561) 24,375 ------------------------------------------------------------------------------------------------------------------- NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 6,270 43,080 ------------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS Net investment income -- -- Realized gain on investments and securities sold short -- -- ------------------------------------------------------------------------------------------------------------------- TOTAL DISTRIBUTIONS -- -- ------------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS Proceeds from sales of shares 42,795 48,233 Reinvestment of distributions -- -- Cost of shares redeemed (34,868) (38,673) ------------------------------------------------------------------------------------------------------------------- NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS 7,927 9,560 ------------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------- NET INCREASE/(DECREASE) IN NET ASSETS 14,197 52,640 ------------------------------------------------------------------------------------------------------------------- NET ASSETS Beginning of Period 141,147 88,507 End of Period $155,344 $141,147 ------------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------- UNDISTRIBUTED NET INVESTMENT INCOME/(LOSS) INCLUDED IN NET ASSETS $ (638) $ (3) ------------------------------------------------------------------------------------------------------------------- OTHER INFORMATION: SHARES Sold 3,810 5,347 Reinvested -- -- Redeemed (3,160) (4,448) ------------------------------------------------------------------------------------------------------------------- NET INCREASE/(DECREASE) 650 899 ------------------------------------------------------------------------------------------------------------------- RS SMALLER COMPANY GROWTH ------------------------------- For the Six For the Months Ended Year Ended June 30, 2004 Dec. 31, 2003 OPERATIONS Net investment income/(loss) $ (1,528) $ (2,251) Net realized gain/(loss) from investments and foreign currency transactions 18,495 18,759 Net realized gain from securities sold short and options written -- -- Net change in unrealized appreciation/(depreciation) on investments and on translation of assets and liabilities in foreign currencies (9,011) 50,018 ------------------------------------------------------------------------------------------------------------------- NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 7,956 66,526 ------------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS Net investment income -- -- Realized gain on investments and securities sold short -- -- ------------------------------------------------------------------------------------------------------------------- TOTAL DISTRIBUTIONS -- -- ------------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS Proceeds from sales of shares 69,312 181,444 Reinvestment of distributions -- -- Cost of shares redeemed (64,304) (157,164) ------------------------------------------------------------------------------------------------------------------- NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS 5,008 24,280 ------------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------- NET INCREASE/(DECREASE) IN NET ASSETS 12,964 90,806 ------------------------------------------------------------------------------------------------------------------- NET ASSETS Beginning of Period 200,147 109,341 End of Period $213,111 $ 200,147 ------------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------- UNDISTRIBUTED NET INVESTMENT INCOME/(LOSS) INCLUDED IN NET ASSETS $ (1,528) $ -- ------------------------------------------------------------------------------------------------------------------- OTHER INFORMATION: SHARES Sold 3,205 10,702 Reinvested -- -- Redeemed (3,019) (9,524) ------------------------------------------------------------------------------------------------------------------- NET INCREASE/(DECREASE) 186 1,178 ------------------------------------------------------------------------------------------------------------------- RS CONTRARIAN VALUE ------------------------------ For the Six For the Months Ended Year Ended June 30, 2004 Dec. 31, 2003 OPERATIONS Net investment income/(loss) $ (1,278) $ 856 Net realized gain/(loss) from investments and foreign currency transactions 24,534 15,144 Net realized gain from securities sold short and options written -- -- Net change in unrealized appreciation/(depreciation) on investments and on translation of assets and liabilities in foreign currencies (10,383) 65,542 ----------------------------------------------------------------------------------------------------------------- NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 12,873 81,542 ----------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS Net investment income -- -- Realized gain on investments and securities sold short -- -- ----------------------------------------------------------------------------------------------------------------- TOTAL DISTRIBUTIONS -- -- ----------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS Proceeds from sales of shares 131,376 394,397 Reinvestment of distributions -- -- Cost of shares redeemed (215,884) (160,064) ----------------------------------------------------------------------------------------------------------------- NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS (84,508) 234,333 ----------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------------------- NET INCREASE/(DECREASE) IN NET ASSETS (71,635) 315,875 ----------------------------------------------------------------------------------------------------------------- NET ASSETS Beginning of Period 373,791 57,916 End of Period $ 302,156 $ 373,791 ----------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------------------- UNDISTRIBUTED NET INVESTMENT INCOME/(LOSS) INCLUDED IN NET ASSETS $ (495) $ 783 ----------------------------------------------------------------------------------------------------------------- OTHER INFORMATION: SHARES Sold 7,423 28,578 Reinvested -- -- Redeemed (12,495) (12,274) ----------------------------------------------------------------------------------------------------------------- NET INCREASE/(DECREASE) (5,072) 16,304 ----------------------------------------------------------------------------------------------------------------- RS GLOBAL NATURAL RESOURCES ------------------------------- For the Six For the Months Ended Year Ended June 30, 2004 Dec. 31, 2003 OPERATIONS Net investment income/(loss) $ (515) $ (80) Net realized gain/(loss) from investments and foreign currency transactions 7,259 7,064 Net realized gain from securities sold short and options written -- -- Net change in unrealized appreciation/(depreciation) on investments and on translation of assets and liabilities in foreign currencies 6,636 18,343 ------------------------------------------------------------------------------------------------------------------ NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 13,380 25,327 ------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO SHAREHOLDERS Net investment income -- -- Realized gain on investments and securities sold short -- -- ------------------------------------------------------------------------------------------------------------------ TOTAL DISTRIBUTIONS -- -- ------------------------------------------------------------------------------------------------------------------ CAPITAL SHARE TRANSACTIONS Proceeds from sales of shares 229,361 186,204 Reinvestment of distributions -- -- Cost of shares redeemed (92,129) (107,818) ------------------------------------------------------------------------------------------------------------------ NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS 137,232 78,386 ------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------ NET INCREASE/(DECREASE) IN NET ASSETS 150,612 103,713 ------------------------------------------------------------------------------------------------------------------ NET ASSETS Beginning of Period 142,476 38,763 End of Period $293,088 $ 142,476 ------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------ UNDISTRIBUTED NET INVESTMENT INCOME/(LOSS) INCLUDED IN NET ASSETS $ (515) $ -- ------------------------------------------------------------------------------------------------------------------ OTHER INFORMATION: SHARES Sold 11,564 11,670 Reinvested -- -- Redeemed (4,711) (7,125) ------------------------------------------------------------------------------------------------------------------ NET INCREASE/(DECREASE) 6,853 4,545 ------------------------------------------------------------------------------------------------------------------ RS PARTNERS ------------------------------- For the Six For the Months Ended Year Ended June 30, 2004 Dec. 31, 2003 OPERATIONS Net investment income/(loss) $ (3,770) $ 1,057 Net realized gain/(loss) from investments and foreign currency transactions 49,805 69,527 Net realized gain from securities sold short and options written -- -- Net change in unrealized appreciation/(depreciation) on investments and on translation of assets and liabilities in foreign currencies 34,463 138,252 ---------------------------------------------------------------------------------------------------------------- NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 80,498 208,836 ---------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS Net investment income -- (459) Realized gain on investments and securities sold short -- (44,855) ---------------------------------------------------------------------------------------------------------------- TOTAL DISTRIBUTIONS -- (45,314) ---------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS Proceeds from sales of shares 838,357 834,426 Reinvestment of distributions -- 43,014 Cost of shares redeemed (303,939) (301,814) ---------------------------------------------------------------------------------------------------------------- NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS 534,418 575,626 ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- NET INCREASE/(DECREASE) IN NET ASSETS 614,916 739,148 ---------------------------------------------------------------------------------------------------------------- NET ASSETS Beginning of Period 852,615 113,467 End of Period $1,467,531 $ 852,615 ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- UNDISTRIBUTED NET INVESTMENT INCOME/(LOSS) INCLUDED IN NET ASSETS $ (3,730) $ 40 ---------------------------------------------------------------------------------------------------------------- OTHER INFORMATION: SHARES Sold 28,451 35,833 Reinvested -- 1,641 Redeemed (10,476) (13,059) ---------------------------------------------------------------------------------------------------------------- NET INCREASE/(DECREASE) 17,975 24,415 ----------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. 32 | Call 1-800-766-FUND www.RSinvestments.com | 33 FINANCIAL INFORMATION FINANCIAL HIGHLIGHTS Six-month-ended numbers are unaudited
Distributions Distributions Net Net Realized From Net From Net Net Asset Value, Investment and Unrealized Total Investment Realized Beginning of Period Income/(Loss) Gain/(Loss) Operations Income Capital Gains RS DIVERSIFIED GROWTH Six Months Ended 6/30/04 $22.36 $(0.14) $(0.03) $(0.17) $ -- $ -- Year Ended 12/31/03 14.16 (0.14) 8.34 8.20 -- -- Year Ended 12/31/02 23.26 (0.19) (8.91) (9.10) -- -- Year Ended 12/31/01 22.83 (0.18) 0.61 0.43 -- -- Year Ended 12/31/00 32.99 (0.25) (8.69) (8.94) -- (1.22) Year Ended 12/31/99 15.89 -- 22.58 22.58 -- (5.48) -------------------------------------------------------------------------------------------------------------------------------- RS EMERGING GROWTH Six Months Ended 6/30/04 $28.10 $(0.24) $ 1.48 $ 1.24 $ -- $ -- Year Ended 12/31/03 19.15 (0.35) 9.30 8.95 -- -- Year Ended 12/31/02 32.00 (0.34) (12.51) (12.85) -- -- Year Ended 12/31/01 44.02 (0.29) (11.73) (12.02) -- -- Year Ended 12/31/00 60.67 (0.47) (14.74) (15.21) -- (1.44) Year Ended 12/31/99 22.95 0.14 40.89 41.03 -- (3.31) -------------------------------------------------------------------------------------------------------------------------------- RS GROWTH Six Months Ended 6/30/04 $17.32 $(0.07) $ 0.78 $ 0.71 $ -- $ -- Year Ended 12/31/03 12.37 (0.12) 5.57 5.45 -- (0.50) Year Ended 12/31/02 17.07 (0.15) (4.55) (4.70) -- -- Year Ended 12/31/01 24.62 (0.21) (4.80) (5.01) -- (2.54) Year Ended 12/31/00 30.43 (0.33) (3.14) (3.47) -- (2.34) Year Ended 12/31/99 25.92 -- 7.16 7.16 -- (2.65) -------------------------------------------------------------------------------------------------------------------------------- THE INFORMATION AGE FUND(R) Six Months Ended 6/30/04 $14.93 $(0.16) $ 0.74 $ 0.58 $ -- $ -- Year Ended 12/31/03 7.55 (0.14) 7.52 7.38 -- -- Year Ended 12/31/02 14.53 (0.18) (6.80) (6.98) -- -- Year Ended 12/31/01 19.01 (0.14) (4.05) (4.19) -- (0.29) Year Ended 12/31/00 35.79 (0.40) (12.05) (12.45) -- (4.33) Year Ended 12/31/99 17.96 -- 21.72 21.72 -- (3.89) -------------------------------------------------------------------------------------------------------------------------------- RS INTERNET AGE FUND(R) Six Months Ended 6/30/04 $ 6.58 $(0.06) $ 0.31 $ 0.25 $ -- $ -- Year Ended 12/31/03 3.27 (0.07) 3.38 3.31 -- -- Year Ended 12/31/02 5.76 (0.08) (2.41) (2.49) -- -- Year Ended 12/31/01 6.53 (0.05) (0.72) (0.77) -- -- Year Ended 12/31/00 12.18 (0.20) (5.45) (5.65) -- -- Period Ended 12/31/99 3 10.00 -- 2.18 2.18 -- -- Net Ratio Gross Ratio Net Ratio of Net Asset Net Assets, of Expenses of Expenses Net Investment Value, End Total End of to Average to Average Income/(Loss) to of Period Return 1 Period (000s) Net Assets 1,2 Net Assets 1 Average Net Assets 1,2 RS DIVERSIFIED GROWTH Six Months Ended 6/30/04 $22.19 (0.76)% $1,030,118 1.54% 1.60% (1.22)% Year Ended 12/31/03 22.36 57.91% 1,089,598 1.48% 1.63% (0.92)% Year Ended 12/31/02 14.16 (39.12)% 570,814 1.50% 1.69% (1.11)% Year Ended 12/31/01 23.26 1.88% 853,309 1.52% 1.71% (1.03)% Year Ended 12/31/00 22.83 (26.91)% 567,888 1.51% 1.66% (1.01)% Year Ended 12/31/99 32.99 150.21% 304,746 1.84% 1.89% (1.40)% ---------------------------------------------------------------------------------------------------------------------------------- RS EMERGING GROWTH Six Months Ended 6/30/04 $29.34 4.41% $1,479,834 1.58% 1.60% (1.49)% Year Ended 12/31/03 28.10 46.74% 1,613,299 1.49% 1.61% (1.39)% Year Ended 12/31/02 19.15 (40.16)% 1,307,774 1.53% 1.68% (1.35)% Year Ended 12/31/01 32.00 (27.31)% 2,473,783 1.37% 1.59% (0.79)% Year Ended 12/31/00 44.02 (25.04)% 3,867,028 1.29% 1.50% (0.82)% Year Ended 12/31/99 60.67 182.56% 3,579,620 1.51% 1.51% (1.19)% ---------------------------------------------------------------------------------------------------------------------------------- RS GROWTH Six Months Ended 6/30/04 $18.03 4.10% $221,877 1.49% 1.58% (0.74)% Year Ended 12/31/03 17.32 44.24% 223,726 1.58% 1.65% (0.81)% Year Ended 12/31/02 12.37 (27.53)% 170,431 1.62% 1.67% (0.87)% Year Ended 12/31/01 17.07 (20.43)% 297,613 1.60% 1.61% (0.96)% Year Ended 12/31/00 24.62 (11.09)% 482,194 1.53% 1.53% (1.05)% Year Ended 12/31/99 30.43 28.43% 673,900 1.59% 1.59% (1.20)% ---------------------------------------------------------------------------------------------------------------------------------- THE INFORMATION AGE FUND(R) Six Months Ended 6/30/04 $15.51 3.88% $161,977 1.60% 1.62% (1.57)% Year Ended 12/31/03 14.93 97.75% 241,956 1.57% 1.67% (1.52)% Year Ended 12/31/02 7.55 (48.04)% 50,354 1.74% 1.80% (1.59)% Year Ended 12/31/01 14.53 (22.11)% 125,099 1.67% 1.70% (0.87)% Year Ended 12/31/00 19.01 (35.09)% 201,820 1.54% 1.54% (1.22)% Year Ended 12/31/99 35.79 126.22% 354,636 1.68% 1.69% (1.54)% ---------------------------------------------------------------------------------------------------------------------------------- RS INTERNET AGE FUND(R) Six Months Ended 6/30/04 $ 6.83 3.80% $121,124 1.70% 1.72% (1.67)% Year Ended 12/31/03 6.58 101.22% 125,968 1.82% 1.95% (1.77)% Year Ended 12/31/02 3.27 (43.23)% 35,059 2.08% 2.31% (1.96)% Year Ended 12/31/01 5.76 (11.79)% 69,069 1.85% 2.16% (0.81)% Year Ended 12/31/00 6.53 (46.39)% 100,281 1.78% 2.00% (1.52)% Period Ended 12/31/99 3 12.18 21.80% 103,585 1.76% 1.82% (1.34)% Gross Ratio of Net Investment Portfolio Income/(Loss) to Turnover Average Net Assets 1 Rate 1 RS DIVERSIFIED GROWTH Six Months Ended 6/30/04 (1.28)% 115% Year Ended 12/31/03 (1.07)% 305% Year Ended 12/31/02 (1.30)% 223% Year Ended 12/31/01 (1.22)% 255% Year Ended 12/31/00 (1.16)% 383% Year Ended 12/31/99 (1.44)% 473% ---------------------------------------------------------------- RS EMERGING GROWTH Six Months Ended 6/30/04 (1.51)% 91% Year Ended 12/31/03 (1.51)% 190% Year Ended 12/31/02 (1.50)% 166% Year Ended 12/31/01 (1.01)% 148% Year Ended 12/31/00 (1.03)% 157% Year Ended 12/31/99 (1.19)% 177% ---------------------------------------------------------------- RS GROWTH Six Months Ended 6/30/04 (0.83)% 82% Year Ended 12/31/03 (0.88)% 262% Year Ended 12/31/02 (0.92)% 346% Year Ended 12/31/01 (0.97)% 172% Year Ended 12/31/00 (1.05)% 71% Year Ended 12/31/99 (1.20)% 80% ---------------------------------------------------------------- THE INFORMATION AGE FUND(R) Six Months Ended 6/30/04 (1.59)% 81% Year Ended 12/31/03 (1.62)% 194% Year Ended 12/31/02 (1.65)% 219% Year Ended 12/31/01 (0.90)% 318% Year Ended 12/31/00 (1.22)% 185% Year Ended 12/31/99 (1.55)% 182% ---------------------------------------------------------------- RS INTERNET AGE FUND(R) Six Months Ended 6/30/04 (1.69)% 82% Year Ended 12/31/03 (1.90)% 208% Year Ended 12/31/02 (2.19)% 203% Year Ended 12/31/01 (1.12)% 315% Year Ended 12/31/00 (1.74)% 238% Period Ended 12/31/99 3 (1.40)% 2%
See notes to Financial Highlights on page 37. The accompanying notes are an integral part of these financial statements. 34 | Call 1-800-766-FUND www.RSinvestments.com | 35 FINANCIAL INFORMATION FINANCIAL HIGHLIGHTS (Continued) Six-month-ended numbers are unaudited
Distributions Distributions Net Net Realized From Net From Net Net Asset Value, Investment and Unrealized Total Investment Realized Beginning of Period Income/(Loss) Gain/(Loss) Operations Income Capital Gains RS MIDCAP OPPORTUNITIES Six Months Ended 6/30/04 $10.84 $(0.05) $ 0.57 $ 0.52 $ -- $ -- Year Ended 12/31/03 7.30 (0.06) 3.60 3.54 -- -- Year Ended 12/31/02 9.92 (0.06) (2.56) (2.62) -- -- Year Ended 12/31/01 11.65 0.10 (1.73) (1.63) (0.10) -- Year Ended 12/31/00 15.92 (0.02) (1.09) (1.11) (0.02) (3.14) Year Ended 12/31/99 14.04 0.04 6.95 6.99 (0.05) (5.06) ------------------------------------------------------------------------------------------------------------------------------ RS SMALLER COMPANY GROWTH Six Months Ended 6/30/04 $20.58 $(0.15) $ 1.07 $ 0.92 $ -- $ -- Year Ended 12/31/03 12.79 (0.23) 8.02 7.79 -- -- Year Ended 12/31/02 21.78 (0.20) (8.30) (8.50) -- (0.49) Year Ended 12/31/01 20.69 (0.21) 1.90 1.69 -- (0.60) Year Ended 12/31/00 22.34 (0.33) 1.24 0.91 -- (2.56) Year Ended 12/31/99 14.26 -- 8.08 8.08 -- -- ------------------------------------------------------------------------------------------------------------------------------ RS CONTRARIAN VALUE Six Months Ended 6/30/04 $17.03 $(0.07) $ 0.94 $ 0.87 $ -- $ -- Year Ended 12/31/03 10.26 0.04 6.73 6.77 -- -- Year Ended 12/31/02 10.12 (0.05) 0.19 0.14 -- -- Year Ended 12/31/01 11.03 (0.07) (0.84) (0.91) -- -- Year Ended 12/31/00 10.00 0.02 1.01 1.03 -- -- Year Ended 12/31/99 7.23 0.20 2.57 2.77 -- -- ------------------------------------------------------------------------------------------------------------------------------ RS GLOBAL NATURAL RESOURCES Six Months Ended 6/30/04 $19.23 $(0.04) $ 1.36 $ 1.32 $ -- $ -- Year Ended 12/31/03 13.53 (0.01) 5.71 5.70 -- -- Year Ended 12/31/02 11.56 (0.06) 2.03 1.97 -- -- Year Ended 12/31/01 11.49 (0.09) 0.16 0.07 -- -- Year Ended 12/31/00 9.13 (0.06) 2.42 2.36 -- -- Year Ended 12/31/99 7.46 (0.01) 1.68 1.67 -- -- ------------------------------------------------------------------------------------------------------------------------------ RS PARTNERS Six Months Ended 6/30/04 $27.70 $(0.08) $ 2.48 $ 2.40 $ -- $ -- Year Ended 12/31/03 17.82 0.06 11.54 11.60 (0.02) (1.70) Year Ended 12/31/02 17.67 (0.11) 0.33 0.22 -- (0.07) Year Ended 12/31/01 15.72 0.04 2.57 2.61 -- (0.66) Year Ended 12/31/00 11.96 0.09 3.67 3.76 -- -- Year Ended 12/31/99 11.53 (0.04) 0.47 0.43 -- -- Net Ratio Gross Ratio Net Ratio of Net Asset Net Assets, of Expenses of Expenses Net Investment Value, End Total End of to Average to Average Income/(Loss) to of Period Return 1 Period (000s) Net Assets 1,2 Net Assets 1 Average Net Assets 1,2 RS MIDCAP OPPORTUNITIES Six Months Ended 6/30/04 $ 11.36 4.80% $ 155,344 1.48% 1.56% (0.80)% Year Ended 12/31/03 10.84 48.49% 141,147 1.53% 1.63% (0.76)% Year Ended 12/31/02 7.30 (26.41)% 88,507 1.53% 1.67% (0.60)% Year Ended 12/31/01 9.92 (14.01)% 156,326 1.47% 1.67% 0.87% Year Ended 12/31/00 11.65 (6.28)% 197,915 1.39% 1.58% (0.14)% Year Ended 12/31/99 15.92 56.12% 226,529 1.59% 1.67% 0.31% ----------------------------------------------------------------------------------------------------------------------------------- RS SMALLER COMPANY GROWTH Six Months Ended 6/30/04 $ 21.50 4.47% $213,111 1.56% 1.57% (1.44)% Year Ended 12/31/03 20.58 60.91% 200,147 1.73% 1.83% (1.57)% Year Ended 12/31/02 12.79 (39.07)% 109,341 1.81% 1.95% (1.52)% Year Ended 12/31/01 21.78 8.31% 116,490 1.66% 1.97% (1.10)% Year Ended 12/31/00 20.69 4.44% 106,349 1.67% 1.93% (1.41)% Year Ended 12/31/99 22.34 56.66% 103,312 1.92% 1.97% (1.67)% ----------------------------------------------------------------------------------------------------------------------------------- RS CONTRARIAN VALUE Six Months Ended 6/30/04 $ 17.90 5.11% $ 302,156 1.49% 1.58% (0.70)% Year Ended 12/31/03 17.03 65.98% 373,791 1.54% 1.69% 0.54% Year Ended 12/31/02 10.26 1.38% 57,916 1.67% 1.74% (0.40)% Year Ended 12/31/01 10.12 (8.25)% 66,934 2.22% 2.26% (0.59)% Year Ended 12/31/00 11.03 10.30% 91,919 2.22% 2.25% 0.19% Year Ended 12/31/99 10.00 38.31% 115,911 2.17% 2.43% (1.17)% ----------------------------------------------------------------------------------------------------------------------------------- RS GLOBAL NATURAL RESOURCES Six Months Ended 6/30/04 $ 20.55 6.86% $293,088 1.51% 1.63% (0.46)% Year Ended 12/31/03 19.23 42.13% 142,476 1.69% 1.76% (0.13)% Year Ended 12/31/02 13.53 17.04% 38,763 1.77% 1.86% (0.55)% Year Ended 12/31/01 11.56 0.61% 21,777 1.86% 1.97% (0.58)% Year Ended 12/31/00 11.49 25.85% 29,371 1.98% 2.10% (0.53)% Year Ended 12/31/99 9.13 22.39% 22,818 2.09% 2.42% (1.72)% ----------------------------------------------------------------------------------------------------------------------------------- RS PARTNERS Six Months Ended 6/30/04 $ 30.10 8.66% $1,467,531 1.49% 1.59% (0.65)% Year Ended 12/31/03 27.70 65.63% 852,615 1.54% 1.60% 0.27% Year Ended 12/31/02 17.82 1.23% 113,467 1.88% 1.97% (0.90)% Year Ended 12/31/01 17.67 16.72% 71,567 1.88% 2.04% (0.07)% Year Ended 12/31/00 15.72 31.44% 28,297 1.90% 2.22% 0.73% Year Ended 12/31/99 11.96 3.73% 22,374 2.13% 2.79% (1.24)% Gross Ratio of Net Investment Portfolio Income/(Loss) to Turnover Average Net Assets 1 Rate 1 RS MIDCAP OPPORTUNITIES Six Months Ended 6/30/04 (0.88)% 93% Year Ended 12/31/03 (0.86)% 253% Year Ended 12/31/02 (0.74)% 401% Year Ended 12/31/01 0.67% 409% Year Ended 12/31/00 (0.33)% 542% Year Ended 12/31/99 0.23% 408% ----------------------------------------------------------------- RS SMALLER COMPANY GROWTH Six Months Ended 6/30/04 (1.45)% 84% Year Ended 12/31/03 (1.67)% 220% Year Ended 12/31/02 (1.66)% 128% Year Ended 12/31/01 (1.41)% 167% Year Ended 12/31/00 (1.67)% 126% Year Ended 12/31/99 (1.72)% 90% ----------------------------------------------------------------- RS CONTRARIAN VALUE Six Months Ended 6/30/04 (0.79)% 80% Year Ended 12/31/03 0.39% 129% Year Ended 12/31/02 (0.47)% 125% Year Ended 12/31/01 (0.63)% 131% Year Ended 12/31/00 0.16% 117% Year Ended 12/31/99 (1.43)% 86% ----------------------------------------------------------------- RS GLOBAL NATURAL RESOURCES Six Months Ended 6/30/04 (0.58)% 56% Year Ended 12/31/03 (0.20)% 117% Year Ended 12/31/02 (0.64)% 159% Year Ended 12/31/01 (0.69)% 167% Year Ended 12/31/00 (0.65)% 159% Year Ended 12/31/99 (2.05)% 140% ----------------------------------------------------------------- RS PARTNERS Six Months Ended 6/30/04 (0.75)% 48% Year Ended 12/31/03 0.21% 97% Year Ended 12/31/02 (0.99)% 166% Year Ended 12/31/01 (0.23)% 198% Year Ended 12/31/00 0.41% 134% Year Ended 12/31/99 (1.90)% 84% Distributions reflect actual per-share amounts distributed for the period. 1 Ratios for periods less than one year have been annualized, except for total return and portfolio turnover rate. 2 Net Ratio of Expenses to Average Net Assets and Net Ratio of Net Investment Income/(Loss) to Average Net Assets include the effect of fee waivers, expense limitations, and offsets for securities lending fees. See Note 5 to Financial Statements. 3 RS Internet Age Fund(R) shares were first issued on December 1, 1999.
See notes to Financial Highlights on page 37. The accompanying notes are an integral part of these financial statements. 36 | Call 1-800-766-FUND www.RSinvestments.com | 37 NOTES TO FINANCIAL STATEMENTS The RS Mutual Funds (each a "Fund," collectively the "Funds") are series of RS Investment Trust (the "Trust"), a Massachusetts business trust organized on May 11, 1987. The Funds are registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as open-end management investment companies. The Trust currently offers 10 portfolios. All of the Funds are registered as diversified funds, other than the RS Partners Fund which is registered as a nondiversified fund. Each Fund consists of a single class of shares. NOTE 1 SIGNIFICANT ACCOUNTING POLICIES The following policies are in conformity with accounting principles generally accepted in the United States of America. 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 reported 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. Securities traded on the Nasdaq Stock Market, Inc. ("Nasdaq") are valued at the Nasdaq official closing price, which may not be the last sale price. If the Nasdaq official closing price is not available for a security, that security will generally be valued using the last reported sale price, or, if no sales are reported, at the mean between the closing bid and asked prices. Short-term investments that will mature in 60 days or less are valued at amortized cost, which approximates market value. Foreign securities are generally denominated in foreign currencies. The currencies are translated into U.S. dollars by using the exchange rates quoted at the close of the London Stock Exchange prior to when each Fund's net asset value is next determined. Securities whose values have been materially affected by events occuring before the Funds' valuation time but after the close of the securities' principal exchange or market, are fair valued using methods approved by the Board of Trustees. 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 Funds' Board of Trustees. Certain securities held by a Fund may be restricted as to resale. In cases where securities of the same class are publicly traded, the restricted securities are valued based on the market value of the publicly traded securities, subject to discounts at levels approved by the Trustees. Other restricted securities are initially valued at cost. The securities may be revalued periodically based on, among other things, 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 that could have a significant impact on the value of the security. The approximate percentages of the Funds' investments valued using these guidelines and procedures at June 30, 2004, were as follows: -------------------------------------------------------------------------------- Fund Percentage Fund Percentage Diversified Growth 0.1% MidCap Opportunities -- -------------------------------------------------------------------------------- Emerging Growth -- Smaller Company Growth -- -------------------------------------------------------------------------------- Growth -- Contrarian Value 1.5% -------------------------------------------------------------------------------- The Information Age Fund(R) 0.3% Global Natural Resources 0.4% -------------------------------------------------------------------------------- RS Internet Age Fund(R) 0.2% Partners -- -------------------------------------------------------------------------------- In their normal course of business, some of the Funds may invest a significant portion of their assets in companies concentrated within a number of industries. Accordingly, the performance of these Funds may be subject to a greater risk of market fluctuation than that of a fund invested in a wider spectrum of market or industrial sectors. Options and warrants for which market quotations are not readily available are priced using the modified Black-Scholes Valuation Formula. The Black-Scholes Valuation Formula values an option or warrant by determining the differential between the exercise price of the option or warrant and the current price of the underlying stock, based on a number of factors. These factors include, but are not limited to, the current price of the underlying stock, the exercise price of the option or warrant, the time to expiration, the assumed riskless rate of return, the compounded rate of return on the stock, and the standard deviation of the return on the stock. This valuation method is in accordance with the guidelines and procedures adopted by the Funds' Board of Trustees. 38 | Call 1-800-766-FUND B. FEDERAL INCOME TAXES The Funds intend to continue complying with the requirements of the Internal Revenue Code to qualify as regulated investment companies, and to distribute all net investment income and realized net capital gains, if any, to shareholders. Therefore, the Funds do not expect to be subject to income tax, and no provision for such tax has been made. C. SECURITIES TRANSACTIONS Securities transactions are accounted for on the date securities are purchased, sold, or sold short (trade date). Realized gains or losses on securities transactions are determined on the basis of specific identification. D. FOREIGN CURRENCY TRANSLATION The accounting records of the Funds are maintained in U.S. dollars. Investment securities and all other assets and liabilities of the Funds denominated in a foreign currency are translated into U.S. dollars at the exchange rates quoted at the close of the London Stock Exchange on each business day. Purchases and sales of securities, income receipts, and expense payments are translated into U.S. dollars at the exchange rate in effect on the dates of the respective transactions. The Funds do not isolate the portion of the fluctuations on investments resulting from changes in foreign currency exchange rates from the fluctuations in market prices of investments held. Such fluctuations are included with the net realized and unrealized gain or loss from investments. E. INVESTMENT INCOME Dividend income is recorded on the ex-dividend date, except certain cash dividends from foreign securities, which are recorded as soon as the Funds are informed of the ex-dividend date. Interest income, which includes accretion/discount, is accrued and recorded daily. F. EXPENSES Most expenses of the Trust can be directly attributed to a specific Fund. Expenses that cannot be directly attributed to a specific Fund are apportioned among all the Funds in the Trust, based on relative net assets. Expense offsets and other waivers represent expense offsets due to securities lending and the waiver of fees by the Funds' custodian. (See Note 5.) G. DISTRIBUTIONS TO SHAREHOLDERS Dividends to shareholders are recorded on the ex-dividend date. See the chart below for the tax character of distributions paid during the year ended December 31, 2003. Ordinary Long-Term Income Capital Gain Fund Total Total Diversified Growth $ -- $ -- -------------------------------------------------------------------------------- Emerging Growth -- -- -------------------------------------------------------------------------------- Growth 3,760,129 2,598,319 -------------------------------------------------------------------------------- The Information Age Fund(R) -- -- -------------------------------------------------------------------------------- RS Internet Age Fund(R) -- -- -------------------------------------------------------------------------------- MidCap Opportunities -- -- -------------------------------------------------------------------------------- Smaller Company Growth -- -- -------------------------------------------------------------------------------- Contrarian Value -- -- -------------------------------------------------------------------------------- Global Natural Resources -- -- -------------------------------------------------------------------------------- Partners 29,630,220 15,684,105 -------------------------------------------------------------------------------- Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. These differences are primarily due to differing treatments of income and gains on various investment securities held by the Funds, timing differences, and differing characterizations of distributions made by the Funds. Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications to paid-in capital. Undistributed net investment income and accumulated undistributed net realized gain/(loss) on investments and foreign currency transactions may include temporary book and tax differences, which will reverse in a subsequent period. See the chart below for the tax basis of distributable earnings as of December 31, 2003, which is the most recently completed tax year. -------------------------------------------------------------------------------- Undistributed Undistributed Ordinary Long-Term Fund Income Gains Diversified Growth $ -- $ -- -------------------------------------------------------------------------------- Emerging Growth -- -- -------------------------------------------------------------------------------- Growth 10,103,762 2,011,194 -------------------------------------------------------------------------------- The Information Age Fund(R) -- -- -------------------------------------------------------------------------------- RS Internet Age Fund(R) -- -- -------------------------------------------------------------------------------- MidCap Opportunities -- -- -------------------------------------------------------------------------------- Smaller Company Growth -- -- -------------------------------------------------------------------------------- Contrarian Value 782,721 -- -------------------------------------------------------------------------------- Global Natural Resources -- -- -------------------------------------------------------------------------------- Partners 19,282,346 4,439,373 -------------------------------------------------------------------------------- www.RSinvestments.com | 39 NOTES TO FINANCIAL STATEMENTS During any particular year, net realized gains from investment transactions, in excess of available capital loss carryforwards, would be taxable to the Funds if not distributed and, therefore, are normally distributed to shareholders annually. See the chart below for capital loss carryovers available to the Funds at December 31, 2003, which is the most recently completed tax year. During the year ended December 31, 2003, the Funds utilized capital loss carryovers as follows: -------------------------------------------------------------------------------- Fund Diversified Growth $ 93,076,033 -------------------------------------------------------------------------------- Emerging Growth 249,164,746 -------------------------------------------------------------------------------- Growth 12,722,850 -------------------------------------------------------------------------------- The Information Age Fund(R) 29,425,926 -------------------------------------------------------------------------------- RS Internet Age Fund(R) 21,506,624 -------------------------------------------------------------------------------- MidCap Opportunities 15,677,998 -------------------------------------------------------------------------------- Smaller Company Growth 15,074,547 -------------------------------------------------------------------------------- Contrarian Value 15,210,513 -------------------------------------------------------------------------------- Global Natural Resources 7,295,658 -------------------------------------------------------------------------------- Partners 1,927,113 -------------------------------------------------------------------------------- Under the current income tax law, net capital and currency losses realized after October 31 may be deferred and treated as occurring on the first day of the following fiscal year. For the year ended December 31, 2003, the Funds elected to defer net capital and currency losses as follows: -------------------------------------------------------------------------------- Fund Diversified Growth $ 8,858 -------------------------------------------------------------------------------- Emerging Growth -- -------------------------------------------------------------------------------- Growth -- -------------------------------------------------------------------------------- The Information Age Fund(R) -- -------------------------------------------------------------------------------- RS Internet Age Fund(R) -- -------------------------------------------------------------------------------- MidCap Opportunities 2,836 -------------------------------------------------------------------------------- Smaller Company Growth -- -------------------------------------------------------------------------------- Contrarian Value -- -------------------------------------------------------------------------------- Global Natural Resources -- -------------------------------------------------------------------------------- Partners 149,756 -------------------------------------------------------------------------------- H. CAPITAL ACCOUNTS Due to the timing of dividend distributions and the differences in accounting for income and realized gains/(losses) for financial statement and federal income tax purposes, the fiscal year in which amounts are distributed may differ from the year in which the income and realized gains/(losses) were recorded by the Funds. I. TEMPORARY BORROWINGS All Funds within the Trust share in a $25 million committed revolving credit/overdraft protection facility from PNC Bank for temporary purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. In addition, the RS Emerging Growth Fund and RS Diversified Growth Fund have access to a separate $25 million facility from PNC Bank, with the same terms. Interest is calculated based on the market rates at the time of borrowing. Each Fund may borrow up to the lesser of one-third of its total assets (including amounts
----------------------------------------------------------------------------------------------------------------------------- CAPITAL LOSS CARRYOVERS (see Note 1g) Expiring Fund 2005 2006 2007 2008 2009 2010 Total Diversified Growth $ -- $ -- $ -- $ -- $ 70,851,924 $196,495,471 $ 267,347,395 ----------------------------------------------------------------------------------------------------------------------------- Emerging Growth -- -- -- -- 1,127,549,362 722,212,997 1,849,762,359 ----------------------------------------------------------------------------------------------------------------------------- Growth -- -- -- -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------- The Information Age Fund(R) -- -- -- -- 4,041,025 30,992,871 35,033,896 ----------------------------------------------------------------------------------------------------------------------------- RS Internet Age Fund(R) -- -- -- 16,559,005 113,383,070 17,305,520 147,247,595 ----------------------------------------------------------------------------------------------------------------------------- MidCap Opportunities -- -- -- -- 18,005,578 31,192,594 49,198,172 ----------------------------------------------------------------------------------------------------------------------------- Smaller Company Growth -- -- -- -- -- 1,243,642 1,243,642 ----------------------------------------------------------------------------------------------------------------------------- Contrarian Value -- 27,447,424 67,677,287 9,344,761 7,190,816 -- 111,660,288 ----------------------------------------------------------------------------------------------------------------------------- Global Natural Resources -- -- 6,242,893 -- -- -- 6,242,893 ----------------------------------------------------------------------------------------------------------------------------- Partners 478,501 -- -- -- -- -- 478,501 -----------------------------------------------------------------------------------------------------------------------------
40 | Call 1-800-766-FUND borrowed) or any lower limit defined in the Fund's Statement of Additional Information or the Prospectus. -------------------------------------------------------------------------------- Amount Average Outstanding Average Interest Fund at 6/30/04 Borrowing* Rate (%) Diversified Growth $-- $798,829 1.87 -------------------------------------------------------------------------------- Emerging Growth -- 30,228 1.90 -------------------------------------------------------------------------------- Growth -- -- -- -------------------------------------------------------------------------------- The Information Age Fund(R) -- 628,379 1.87 -------------------------------------------------------------------------------- RS Internet Age Fund(R) -- 18,906 1.88 -------------------------------------------------------------------------------- MidCap Opportunities -- 12,357 1.90 -------------------------------------------------------------------------------- Smaller Company Growth -- -- -- -------------------------------------------------------------------------------- Contrarian Value -- 54,747 1.88 -------------------------------------------------------------------------------- Global Natural Resources -- -- -- -------------------------------------------------------------------------------- Partners -- -- -- -------------------------------------------------------------------------------- * For the six months ended June 30, 2004. NOTE 2 CAPITAL SHARES A. TRANSACTIONS The Funds have authorized an unlimited number of shares of beneficial interest with no par value. Transactions in capital shares for the Funds are shown in detail in the STATEMENT OF CHANGES IN NET ASSETS (see pages 30-33). NOTE 3 TRANSACTIONS WITH AFFILIATES A. ADVISORY FEES AND EXPENSE LIMITATION Under the terms of advisory agreements, which are reviewed and approved annually by the Board of Trustees, the Funds pay RS Investment Management, L.P. ("RS Investments"), an investment advisory fee calculated at an annual rate of 1.00% of the average daily net assets of the Funds. For the period ended June 30, 2004, RS Investments agreed to bear operating expenses of certain Funds to the extent they exceed a stated limit, by means of an advisory fee waiver. The expense limitation in effect is to the extent that a Fund's total annual fund operating expenses exceed the following rate: -------------------------------------------------------------------------------- Expense Fund Limitation Growth 1.49% -------------------------------------------------------------------------------- MidCap Opportunities 1.49% -------------------------------------------------------------------------------- Contrarian Value 1.49% -------------------------------------------------------------------------------- Global Natural Resources 1 1.49% -------------------------------------------------------------------------------- Partners 1.49% -------------------------------------------------------------------------------- 1 Effective 2/25/04. B. COMPENSATION OF TRUSTEES AND OFFICERS Trustees and officers of the Funds who are interested persons of RS Investments, as defined in the 1940 Act, receive no compensation from the Funds. Trustees of the Funds who are not interested persons of RS Investments, as defined in the 1940 Act, received compensation and reimbursement of expenses for the period ended June 30, 2004. Each of the disinterested Trustees received compensation from the Trust for the period ended June 30, 2004, in the amount of $30,000; collectively the disinterested Trustees received compensation in the amount of $90,000. Under a Deferred Compensation Plan (the "Plan") adopted May 6, 2002, a disinterested Trustee may elect to defer receipt of all, or a portion, of his annual compensation. The amount of a Fund's deferred compensation obligation to a Trustee is determined by adjusting the amount of the deferred compensation to reflect the investment return of one or more RS Funds designated for the purpose by the Trustee. A Fund may cover its deferred compensation obligation to a Trustee by investing in one or more of such designated Funds. Each Fund's liability for deferred compensation to a Trustee is adjusted periodically to reflect the investment performance of the Funds designated by the Trustee. Deferred amounts remain in a Fund until distributed in accordance with the Plan. Trustees' fees in the accompanying financial statements include the current fees, either paid in cash or deferred, and the net increase or decrease in the value of the deferred amounts. C. DISTRIBUTION FEES PFPC Distributors, Inc. ("PFPC"), a nonaffiliate of RS Investments, is the Funds' distributor. The Funds have entered into agreements with PFPC for distribution services with respect to their shares and have adopted Plans of Distribution pursuant to Rule 12b-1 under the 1940 Act, whose continuance is reviewed annually by the Funds' Board of Trustees. Under these Plans, PFPC is compensated for services in such capacity, including its expenses in connection with the promotion and distribution of each Fund, at an annual rate of 0.25% of the Fund's average daily net assets. RS Investments or its affiliates provide certain services to PFPC in respect of the promotion of the Funds' shares and are compensated by PFPC for those services. www.RSinvestments.com | 41 NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------------------------------------------------------- AFFILIATED ISSUERS (see Note 3d below) Beginning Purchases/ Sales/ Ending Market Value Fund Issuer Shares Additions Reductions Shares Income at 6/30/04 Diversified Growth 24/7 Real Media, Inc. 6,000,000 1,159,800 4,917,000 2,242,800 $-- $12,582,108 Corillian Corp. -- 2,520,600 163,042 2,357,558 -- 11,882,092 Durect Corp. 2,868,400 256,790 392,480 2,732,710 -- 9,537,158 HEI, Inc. 937,570 -- 65,210 872,360 -- 2,041,323 Integrated Alarm Services Group, Inc. 281,200 1,530,050 524,750 1,286,500 -- 6,947,100 MDU Communications International, Inc. -- 1,991,000 -- 1,991,000 -- 4,738,580 Molecular Diagnostics, Inc. 730,000 3,739,920 92,460 4,377,460 -- 525,295 Netopia, Inc. -- 1,898,340 18,100 1,880,240 -- 12,409,584 PC Mall, Inc. 576,170 72,300 26,760 621,710 -- 11,737,885 Partners Algoma Steel, Inc. -- 1,782,600 -- 1,782,600 -- 14,625,098 Neoforma, Inc. 492,800 867,200 -- 1,360,000 -- 16,510,400 --------------------------------------------------------------------------------------------------------------------------------
D. AFFILIATED ISSUERS If a Fund owns 5% or more of the outstanding voting securities of an issuer, the Fund's investment represents an investment in an affiliate as defined by the 1940 Act. A summary of the Funds with transactions in the securities of affiliated issuers for the period ended June 30, 2004 is listed above: NOTE 4 INVESTMENTS A. TAX BASIS OF INVESTMENTS The cost of investments for federal income tax purposes at June 30, 2004, for each Fund is listed below. The net unrealized appreciation on investments, which consists of gross unrealized appreciation and depreciation, is also disclosed in the chart below. -------------------------------------------------------------------------------- Cost of Investments Proceeds from Fund Purchased Investments Sold Diversified Growth $1,218,589,333 $1,293,563,022 -------------------------------------------------------------------------------- Emerging Growth 1,405,989,649 1,634,717,163 -------------------------------------------------------------------------------- Growth 176,418,261 182,461,096 -------------------------------------------------------------------------------- The Information Age Fund(R) 167,781,167 248,997,852 -------------------------------------------------------------------------------- RS Internet Age Fund(R) 102,699,502 114,331,144 -------------------------------------------------------------------------------- MidCap Opportunities 148,877,723 140,440,254 -------------------------------------------------------------------------------- Smaller Company Growth 168,952,319 168,376,051 -------------------------------------------------------------------------------- Contrarian Value 261,618,710 306,321,570 -------------------------------------------------------------------------------- Global Natural Resources 233,098,960 106,313,218 -------------------------------------------------------------------------------- Partners 897,427,969 480,062,463 -------------------------------------------------------------------------------- B. INVESTMENT PURCHASES AND SALES The cost of investments purchased and the proceeds from investments sold (excluding options, securities sold short, and short-term investments) at June 30, 2004, were as follows:
---------------------------------------------------------------------------------------------------------------------------- TAX COST OF INVESTMENTS (see Note 4a above) Net Unrealized Appreciation Gross Unrealized Gross Unrealized Fund Cost of Investments on Investments Appreciation Depreciation Diversified Growth $ 938,341,491 $ 79,349,354 $137,591,556 $58,242,202 ---------------------------------------------------------------------------------------------------------------------------- Emerging Growth 1,219,863,803 257,427,070 294,350,717 36,923,647 ---------------------------------------------------------------------------------------------------------------------------- Growth 191,711,566 29,653,825 31,978,301 2,324,476 ---------------------------------------------------------------------------------------------------------------------------- The Information Age Fund(R) 124,041,926 37,876,228 41,537,832 3,661,604 ---------------------------------------------------------------------------------------------------------------------------- RS Internet Age Fund(R) 95,462,265 25,264,563 28,212,616 2,948,053 ---------------------------------------------------------------------------------------------------------------------------- MidCap Opportunities 129,536,001 23,364,224 24,966,074 1,601,850 ---------------------------------------------------------------------------------------------------------------------------- Smaller Company Growth 177,634,515 36,423,428 40,725,996 4,302,568 ---------------------------------------------------------------------------------------------------------------------------- Contrarian Value 262,484,356 34,620,444 38,376,598 3,756,154 ---------------------------------------------------------------------------------------------------------------------------- Global Natural Resources 269,818,984 26,254,790 30,814,002 4,559,212 ---------------------------------------------------------------------------------------------------------------------------- Partners 1,271,736,130 180,643,585 194,170,409 13,526,824 ----------------------------------------------------------------------------------------------------------------------------
42 | Call 1-800-766-FUND
----------------------------------------------------------------------------------------------------------------------------- RESTRICTED SECURITIES (see Note 4e below) Acquisition % of Funds' Fund Security Shares Cost Value Date Net Assets ----------------------------------------------------------------------------------------------------------------------------- Diversified Growth Startec Global 11/24/00- Communications Corp. 275,000 $ 968,750 $ 0 3/26/01 Molecular Diagnostics, Inc. 4,377,460 2,626,476 525,295 10/26/01 ----------------------------------------------------------------------------------------------------------------------------- 3,595,226 525,295 0.05% ----------------------------------------------------------------------------------------------------------------------------- Contrarian Ivanhoe Nickel 4/25/97- Value & Platinum Ltd. 698,422 2,837,501 4,539,743 5/7/98 (formerly called African Minerals, Ltd.) ----------------------------------------------------------------------------------------------------------------------------- 2,837,501 4,539,743 1.50% ----------------------------------------------------------------------------------------------------------------------------- Global Natural Ivanhoe Nickel 4/25/97- Resources & Platinum Ltd. 203,624 784,997 1,323,556 5/7/98 (formerly called African Minerals, Ltd.) ----------------------------------------------------------------------------------------------------------------------------- 784,997 1,323,556 0.45% -----------------------------------------------------------------------------------------------------------------------------
C. FOREIGN SECURITIES Foreign securities investments involve special risks and considerations not typically associated with those of U.S. origin. These risks include, but are not limited to, revaluation of currencies; adverse political, social, and economic developments; and less reliable information about issuers. Moreover, securities of many foreign companies and markets may be less liquid and their prices more volatile than those of U.S. companies and markets. D. SHORT SALES Short sales are transactions in which a Fund sells a security it does not own, in anticipation of a decline in the market value of that security. To complete such a transaction, the Fund must borrow the security to deliver to the buyer upon the short sale; the Fund then is obligated to replace the security borrowed by purchasing it in the open market at some later date. The Fund will incur a loss if the market price of the security increases between the date of the short sale and the date on which the Fund replaces the borrowed security. The Fund will typically realize a gain if the security declines in value between those dates. All short sales must be collateralized as required by law or agreement with the Fund's broker. The Fund maintains collateral in a segregated account consisting of cash, equities, and/or U.S. government securities sufficient to collateralize the obligation on the short positions. The Fund records the proceeds received as an asset and the obligation to buy back the securities as a liability. The liability side of the transactions is marked to market on a daily basis according to the market price of the securities sold and the asset side according to the value of the proceeds. Only RS Internet Age Fund(R) lists short sales among its principal investment strategies in the Trust's prospectus, which it may enter into up to a value of 25% of the Fund's total assets. During the period ended June 30, 2004, there was no dividend expense on short sales. E. RESTRICTED SECURITIES A restricted security 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 typically bear the expense of all registrations at no cost to the Fund. Restricted securities are valued according to the guidelines and procedures adopted by the Funds' Board of Trustees as outlined in Note 1a, paragraph 2. See table above for restricted securities held at June 30, 2004. F. OPTIONS AND WARRANTS Options and warrants normally entitle the holder to purchase specified securities at a predetermined price during a specific period. The writer of an option grants the buyer of the option the right to purchase from (call option), or sell to (put option), the writer a designated instrument or, in the case of an index www.RSinvestments.com | 43 NOTES TO FINANCIAL STATEMENTS option, a notional index amount at a specified price within a specified period of time. Certain options, including options on indexes, will require cash settlement by the Fund if the option is exercised. Purchased options are recorded as assets and written options as liabilities to the extent of premiums paid or received. When an option is exercised, the proceeds on sales for the written call option, the purchase cost of the written put option or the cost of a security for a purchased put or call option is adjusted by the amount of premium received or paid. NOTE 5 SECURITIES LENDING Certain Funds lend their portfolio securities. The borrower pays fees, at the Funds' direction, to service providers of those Funds, including RS Investments. Those payments are applied to offset amounts owed to the service providers by the Funds. Such amounts are shown as expense offsets and other waivers in the STATEMENT OF OPERATIONS (see pages 28-29). During the period ended June 30, 2004, the following Funds had securities lending fees as described below: -------------------------------------------------------------------------------- Fund Fees Diversified Growth $ 356,363 -------------------------------------------------------------------------------- Emerging Growth 84,354 -------------------------------------------------------------------------------- The Information Age Fund(R) 20,278 -------------------------------------------------------------------------------- RS Internet Age Fund(R) 16,189 -------------------------------------------------------------------------------- MidCap Opportunities 5,306 -------------------------------------------------------------------------------- Smaller Company Growth 10,605 -------------------------------------------------------------------------------- In the absence of the securities lending arrangement, the net ratio of expenses to average net assets for the period ended June 30, 2004 would be as follows: -------------------------------------------------------------------------------- Annualized Net Ratio of Expenses to Average Fund Net Assets Diversified Growth 1.60% -------------------------------------------------------------------------------- Emerging Growth 1.59% -------------------------------------------------------------------------------- The Information Age Fund(R) 1.62% -------------------------------------------------------------------------------- RS Internet Age Fund(R) 1.72% -------------------------------------------------------------------------------- MidCap Opportunities 1.49% -------------------------------------------------------------------------------- Smaller Company Growth 1.57% -------------------------------------------------------------------------------- Funds that lend securities receive cash as collateral in an amount at least equal to 102% of the current market value of the loaned securities. The cash collateral is substantially invested in institutional money market pooled accounts exempt from registration under the Investment Company Act of 1940. The market value of the loaned securities is determined at the close of business of the Funds, and any additional required collateral is delivered to the Funds on the next business day. None of the Funds had loaned securities at June 30, 2004. NOTE 6 FUND MERGER On March 7, 2003, RS Emerging Growth Fund acquired the assets and liabilities of RS Aggressive Growth Fund through a tax-free merger pursuant to a plan of reorganization approved by the Board of Trustees. Shareholders of RSAggressive Growth Fund approved the merger at a meeting held on January 9, 2003, and adjourned through March 3, 2003. The chart below shows a summary of shares outstanding, net assets, net asset value per share, net unrealized appreciation/
-------------------------------------------------------------------------------------------------------------------------------- BEFORE REORGANIZATION AFTER REORGANIZATION --------------------------------------------------- -------------------- Fund RS Aggressive Growth RS Emerging Growth RS Emerging Growth -------------------------------------------------------------------------------------------------------------------------------- Shares outstanding 9,643,511 65,577,435 67,753,098 Net assets $38,046,763 $1,146,660,916 $1,184,707,679 Net asset value per share $3.95 $17.49 $17.49 Net unrealized appreciation/(depreciation) $(630,910) $2,471,161 $1,840,251 Accumulated net realized losses $(124,832,478) $(2,212,045,876) $(2,336,878,354) --------------------------------------------------------------------------------------------------------------------------------
44 | Call 1-800-766-FUND (depreciation), and accumulated net realized losses, before and after the reorganization. NOTE 7 INDEMNIFICATIONS Under the Trust's organizational documents, its officers and trustees are indemnified against certain liability arising out of the performance of their duties to the Funds. In addition, in the normal course of business, the Funds enter into contracts with their vendors and others that provide general indemnifications. The Funds' maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds. However, based on experience, the Funds expect the risk of loss to be remote. NOTE 8 LEGAL MATTERS RS Investments has been contacted by the staff of the United States Securities and Exchange Commission (the "SEC") and the Office of the New York State Attorney General (the "NYAG") in connection with their investigations of "market timing" in mutual fund shares. RS Investments is cooperating with these investigations. The SEC staff has made a preliminary determination to recommend that the SEC bring civil enforcement actions against RS Investments and certain of its officers and employees, some of whom are also officers of the Trust. RS Investments is currently engaged in discussions with the staff of the SEC and NYAG in an effort to reach a satisfactory resolution of these matters. The Trust's management believes that the regulators' concerns relate principally to market timing activities involving the Emerging Growth Fund. At this time, management believes it is not possible to estimate the effect that these matters may have on any Fund's results of operations or financial condition. www.RSinvestments.com | 45 SUPPLEMENTAL INFORMATION - UNAUDITED MEETING OF SHAREHOLDERS A meeting of shareholders of RS Contrarian Value Fund, RS MidCap Opportunities Fund, RS Partners Fund, and RS Growth Fund (formerly RS Value + Growth Fund) was held on April 16, 2004, and adjourned through April 30, 2004. At the meeting, shareholders approved each of the proposals described briefly below: RS CONTRARIAN VALUE FUND PROPOSAL 1: Proposed change to the investment strategies of the RS Contrarian Value Fund. For Against Abstain --------------------------------------- 9,947,990 439,697 738,648 --------------------------------------- RS MIDCAP OPPORTUNITIES FUND PROPOSAL 1: Proposed change to the investment objective of the RS MidCap Opportunities Fund. For Against Abstain --------------------------------------- 6,799,376 548,120 353,392 --------------------------------------- PROPOSAL 2(A): Eliminate the fundamental restriction relating to purchasing securities on margin. For Against Abstain --------------------------------------- 6,228,538 1,110,930 361,420 --------------------------------------- PROPOSAL 2(B): Revise the fundamental restriction relating to borrowings. For Against Abstain --------------------------------------- 6,332,669 994,749 373,470 --------------------------------------- PROPOSAL 2(C): Eliminate the fundamental restriction relating to related party investments. For Against Abstain --------------------------------------- 6,251,220 1,045,684 403,984 --------------------------------------- PROPOSAL 2(D): Revise the fundamental restriction relating to issuance of senior securities. For Against Abstain --------------------------------------- 6,428,383 864,294 408,210 --------------------------------------- RS GROWTH FUND (FORMERLY RS VALUE + GROWTH FUND) PROPOSAL 1: Proposed changes to the investment objective and strategies of the RS Value + Growth Fund. For Against Abstain --------------------------------------- 5,038,190 669,699 897,134 --------------------------------------- PROPOSAL 2(A): Revise the fundamental restriction relating to investments in commodities. For Against Abstain --------------------------------------- 4,825,219 859,334 920,470 --------------------------------------- PROPOSAL 2(B): Revise the fundamental restriction relating to investments in real estate. For Against Abstain --------------------------------------- 4,963,135 733,865 908,022 --------------------------------------- PROPOSAL 2(C): Eliminate the fundamental restriction relating to short sales and purchasing securities on margin. For Against Abstain --------------------------------------- 4,635,136 1,064,284 905,602 --------------------------------------- PROPOSAL 2(D): Revise the fundamental restriction relating to investments in one issuer. For Against Abstain --------------------------------------- 4,786,337 829,350 944,336 --------------------------------------- 46 | CALL 1-800-766-FUND PROPOSAL 2(E): Revise the fundamental restriction relating to concentration of investments in one industry. For Against Abstain --------------------------------------- 4,841,581 878,003 885,438 --------------------------------------- PROPOSAL 2(F): Eliminate the fundamental restriction relating to pledging assets. For Against Abstain --------------------------------------- 4,620,208 1,011,170 973,644 --------------------------------------- PROPOSAL 2(G): Revise the fundamental restriction relating to making loans. For Against Abstain --------------------------------------- 4,694,359 985,787 924,876 --------------------------------------- PROPOSAL 2(H): Revise the fundamental restriction relating to borrowings. For Against Abstain --------------------------------------- 4,664,268 1,008,205 932,549 --------------------------------------- PROPOSAL 2(I): Revise the fundamental restriction relating to underwriting of securities. For Against Abstain --------------------------------------- 4,866,482 809,449 929,091 --------------------------------------- PROPOSAL 2(J): Revise the fundamental restriction relating to issuance of senior securities. For Against Abstain --------------------------------------- 4,816,078 840,693 948,251 --------------------------------------- PROPOSAL 2(K): Eliminate the fundamental restriction relating to the purchase of securities of other investment companies. For Against Abstain --------------------------------------- 4,829,530 871,438 904,054 --------------------------------------- RS PARTNERS FUND PROPOSAL 1: Proposed change to the investment strategies of the RS Partners Fund. For Against Abstain --------------------------------------- 15,754,971 1,208,923 975,724 --------------------------------------- PROPOSAL 2(A): Eliminate the fundamental restriction relating to purchasing securities on margin. For Against Abstain --------------------------------------- 14,441,685 2,447,291 1,050,641 --------------------------------------- PROPOSAL 2(B): Revise the fundamental restriction relating to borrowings. For Against Abstain --------------------------------------- 14,590,272 2,254,422 1,094,924 --------------------------------------- PROPOSAL 2(C): Eliminate the fundamental restriction relating to related party investments. For Against Abstain --------------------------------------- 14,395,090 2,390,045 1,154,483 --------------------------------------- PROPOSAL 2(D): Revise the fundamental restriction relating to issuance of senior securities. For Against Abstain --------------------------------------- 14,527,848 2,172,332 1,239,439 --------------------------------------- www.RSinvestments.com | 47 SUPPLEMENTAL INFORMATION - UNAUDITED TRUSTEES INFORMATION TABLE
Number of Portfolios Term of Office** in Fund complex Name, Address* Position(s) Held and Length of Principal Occupations Overseen by Other Directorships and Age with Trust Time Served During Past 5 Years Trustee Held by Trustee ------------------------------------------------------------------------------------------------------------------------------------ INTERESTED TRUSTEES & PRINCIPAL OFFICERS:*** G. Randall Hecht President, Since June 1987 CEO, RS Investments N/A N/A 53 years old Principal Executive Officer Michael G. McCaffery Trustee Since May 2002 President and CEO 10 N/A 50 years old Stanford Management Company; Formerly, Chairman and CEO, Robertson, Stephens & Company, Inc., an investment banking firm. Terry R. Otton Treasurer Since May 2004 COO and CFO, RS N/A N/A 50 years old Investments; Formerly, Managing Director & Senior Investment Banker, Putnam Lovell; Previously, COO & Managing Director, Robertson Stephens Asset Management; Previously, CFO & Managing Director, Robertson Stephens & Co.; CFO & Managing Director, Robertson Stephens Investment Management. Benjamin L. Douglas Secretary, Chief Since February General Counsel, RS N/A N/A 37 years old Legal Officer, and 2004 Investments; Formerly, Vice President Vice President and Senior Counsel, Charles Schwab Investment Management, Inc.; Previously, Attorney, Shartsis, Friese & Ginsburg LLP. John J. Sanders,Jr. Chief Compliance Since May 2004 Chief Compliance Officer, N/A N/A 59 years old Officer, and RS Investments; Formerly, Anti-Money March 2004 Chief Compliance Officer Laundering and co-COO, Husic Compliance Capital Management; Officer Previously, Compliance Director of the Broker- Dealer, Robertson Stephens & Company, Inc.
48 | Call 1-800-766-FUND SUPPLEMENTAL INFORMATION - UNAUDITED TRUSTEES INFORMATION TABLE (Continued)
Number of Portfolios Term of Office** in Fund complex Name, Address* Position(s) Held and Length of Principal Occupations Overseen by Other Directorships and Age with Trust Time Served During Past 5 Years Trustee Held by Trustee ------------------------------------------------------------------------------------------------------------------------------------ DISINTERESTED TRUSTEES: Leonard B. Auerbach Trustee Since June 1987 Chairman and CEO, L, B, 10 Sequoia 57 years old A&C, Inc., a consulting National Bank firm; Formerly, Managing Director, President, and CEO, AIG-CentreCapital Group, Inc. Jerome S. Contro Trustee Since June 2001 Partner, Tango Group, 10 N/A 47 years old a private investment firm; Formerly, Managing Director, Nuveen, a public investment management firm. John W. Glynn, Jr. Trustee Since July 1997 President, Glynn Capital 10 N/A 63 years old Management, an investment management firm.
* Unless otherwise indicated, the business address of the persons listed is c/o RS Investments, 388 Market Street, 17th Floor, San Francisco, CA 94111. ** Each Trustee shall serve during the continued lifetime of the Trust until he dies, resigns, is declared bankrupt or incompetent by a court of appropriate jurisdiction, or is removed, or, if sooner, until the next meeting of Shareholders called for the purpose of electing Trustees and until the election and qualification of his successor. Officers hold office at the pleasure of the Trustees. *** Interested persons as defined by the 1940 Act. The Statement of Additional Information relating to the Funds include additional information about Trustees and is available, without charge, upon request, by writing to the Funds or calling 1-800-766-FUND (3863). A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities, and information regarding how the Funds voted proxies relating to portfolio securities during the 12-month period ended June 30, 2004, are available (i) without charge, upon request, by calling 1-800-766-FUND [3863]; (ii) on RS Investments' website at HTTP://WWW.RSINVESTMENTS.COM; and (iii) on the Securities and Exchange Commission's website at HTTP://WWW.SEC.GOV. www.RSinvestments.com |49 ADMINISTRATION OFFICERS AND TRUSTEES G. RANDALL HECHT, PRESIDENT AND PRINCIPAL EXECUTIVE OFFICER LEONARD B. AUERBACH, TRUSTEE Chairman and CEO, L,B, A&C, Inc., a consulting firm JEROME S. CONTRO, TRUSTEE Partner, Tango Group JOHN W. GLYNN JR., TRUSTEE President, Glynn Capital Management MICHAEL G. McCAFFERY, TRUSTEE President and CEO of Stanford Management Company TERRY R. OTTON, TREASURER BENJAMIN L. DOUGLAS, SECRETARY, CHIEF LEGAL OFFICER, AND VICE PRESIDENT JOHN J. SANDERS, JR., CHIEF COMPLIANCE OFFICER AND ANTI-MONEY LAUNDERING COMPLIANCE OFFICER INVESTMENT ADVISER RS INVESTMENT MANAGEMENT, L.P. 388 Market Street San Francisco, CA 94111 DISTRIBUTOR PFPC DISTRIBUTORS, INC. 760 Moore Road King of Prussia, PA 19406 TRANSFER AGENT AND DISBURSING AGENT BOSTON FINANCIAL DATA SERVICES Kansas City, MO 1-800-624-8025 CUSTODIAN PFPC TRUST COMPANY Philadelphia, PA INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM PRICEWATERHOUSECOOPERS LLP San Francisco, CA LEGAL COUNSEL ROPES & GRAY LLP Boston, MA 50 | Call 1-800-766-FUND This page left blank intentionally. www.RSinvestments.com | 51 This page left blank intentionally. 52 | Call 1-800-766-FUND RS FUND INVESTMENT STYLES SMALL-CAP GROWTH ---------------- RS DIVERSIFIED GROWTH FUND+ Focusing on small-cap growth companies. Managed by John Wallace and John Seabern. RSDGX RS EMERGING GROWTH FUND+ Seeking to invest in America's most dynamic, growth-oriented companies. Managed by Jim Callinan. RSEGX RS SMALLER COMPANY GROWTH FUND Focusing on companies with market caps of $1.5 billion or less. Managed by Bill Wolfenden. RSSGX SMALL-CAP VALUE --------------- RS PARTNERS FUND+ A small-cap fund using a cash flow value methodology. Managed by Andy Pilara, David Kelley, and Joe Wolf. RSPFX MID-CAP GROWTH -------------- RS MIDCAP OPPORTUNITIES FUND Seeking growth in mid-cap companies while attempting to moderate risk. Managed by John Wallace and Jay Sherwood. RSMOX MULTI-CAP GROWTH ---------------- RS GROWTH FUND Seeking capital appreciation for the long-term investor. Managed by John Wallace and Jay Sherwood. RSVPX MID-CAP VALUE ------------- RS CONTRARIAN VALUE FUND Seeking out-of-favor and new-discovery investments. Managed by Andy Pilara, David Kelley, and Joe Wolf. RSCOX SECTOR ------ THE INFORMATION AGE FUND(R) Targeting investments in the information technology sector. Managed by Steve Bishop, Wendell Laidley, and Allison Thacker. RSIFX RS INTERNET AGE FUND(R) Investing in companies likely to benefit from the development of the Internet. Managed by Steve Bishop, Wendell Laidley, and Allison Thacker. RIAFX RS GLOBAL NATURAL RESOURCES FUND Focusing primarily on hard-asset companies. Managed by Andy Pilara. RSNRX FUND LISTINGS Our Funds are listed in THE WALL STREET JOURNAL, USA TODAY, INVESTOR'S BUSINESS DAILY, and most local newspapers under the heading RS Funds. PLEASE READ THE PROSPECTUS TO LEARN ABOUT THE FUNDS' OBJECTIVES AND INVESTMENT POLICIES AND THE SPECIAL RISKS ASSOCIATED WITH THE RS FUNDS, INCLUDING INVESTING IN SMALL AND MID-SIZED COMPANIES; OVERWEIGHTING INVESTMENTS IN CERTAIN SECTORS OR INDUSTRIES; INVESTING IN THE TECHNOLOGY SECTOR; INVESTING IN A MORE LIMITED NUMBER OF ISSUERS AND SECTORS; INVESTING INTERNATIONALLY; INVESTING IN DEBT SECURITIES; AND INVESTING IN COMPANIES IN NATURAL RESOURCES INDUSTRIES. PLEASE CONTACT RS INVESTMENTS AT 1-800-766-FUND OR VISIT WWW.RSINVESTMENTS.COM FOR CURRENT INFORMATION. SR421-F + Offered only to certain investors. See "Other Information About Purchasing Shares" on page 38 of the Prospectus. (THE INFORMATION ON THIS PAGE IS NOT PART OF THE SEMIANNUAL REPORT) 388 MARKET STREET SAN FRANCISCO CA 94111 | www.RSinvestments.com | Call 1-800-766-FUND (LOGO) RS | INVESTMENTS [GRAPHIC OMITTED] 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 Not applicable. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. The Nominating Committee of the Board of Trustees of the registrant has adopted procedures by which a shareholder of any series of the registrant may submit properly a nominee recommendation for the Committee's consideration. 1. The shareholder must submit any such recommendation (a "Shareholder Recommendation") in writing to the registrant, to the attention of the registrant's Secretary, at the address of the principal executive offices of the registrant. 2. The Shareholder Recommendation must be delivered to, or mailed and received at, the principal executive offices of the registrant not less than forty-five (45) calendar days nor more than seventy-five (75) calendar days prior to the date of the Committee meeting at which the nominee would be considered. 3. The Shareholder Recommendation must include: (i) a statement in writing setting forth (A) the name, age, date of birth, business address, residence address and nationality of the person recommended by the shareholder (the "candidate"); (B) the series (and, if applicable, class) and number of all shares of the registrant owned of record or beneficially by the candidate, as reported to such shareholder by the candidate; (C) any other information regarding the candidate called for with respect to director nominees by paragraphs (a), (d), (e) and (f) of Item 401 of Regulation S-K or paragraph (b) of Item 22 of Rule 14a-101 (Schedule 14A) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), adopted by the Securities and Exchange Commission (or the corresponding provisions of any regulation or rule subsequently adopted by the Securities and Exchange Commission or any successor agency applicable to the registrant); (D) any other information regarding the candidate that would be required to be disclosed if the candidate were a nominee in a proxy statement or other filing required to be made in connection with solicitation of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder; and (E) whether the recommending shareholder believes that the candidate is or will be an "interested person" of the registrant (as defined in the Investment Company Act of 1940, as amended) and, if not an "interested person," information regarding the candidate that will be sufficient for the registrant to make such determination; (ii) the written and signed consent of the candidate to be named as a nominee and to serve as a Trustee if elected; (iii) the recommending shareholder's name as it appears on the registrant's books; (iv) the series (and, if applicable, class) and number of all shares of the registrant owned beneficially and of record by the recommending shareholder; and (v) a description of all arrangements or understandings between the recommending shareholder and the candidate and any other person or persons (including their names) pursuant to which the recommendation is being made by the recommending shareholder. In addition, the Committee may require the candidate to furnish such other information as it may reasonably require or deem necessary to determine the eligibility of such candidate to serve as a Trustee of the registrant. ITEM 10. CONTROLS AND PROCEDURES. (a) The registrant's principal executive officer and principal financial officer have concluded, as of a date within 90 days of the filing of this report, based on their evaluation of 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))), 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 Exchange Act(17 CFR 240.13a-15(b) or 15d-15(b)), that the design and operation of such procedures are effective to provide reasonable assurance that information required to be disclosed by the registrant on Form N-CSR is recorded, processed, summarized, and reported within the time periods specified in the Commission's rules and forms. (b) There was no change 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 last fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 11. 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 18 U.S.C. 1350 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) RS Investment Trust ------------------------------------------------------------------- By (Signature and Title)* /s/ G. Randall Hecht ------------------------------------------------------- G. Randall Hecht, Principal Executive Officer Date September 7, 2004 ---------------------------------------------------------------------------- Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title)* /s/ G. Randall Hecht ------------------------------------------------------- G. Randall Hecht, Principal Executive Officer Date September 7, 2004 ---------------------------------------------------------------------------- By (Signature and Title)* /s/ Terry R. Otton ------------------------------------------------------- Terry R. Otton, Treasurer and Chief Financial Officer Date September 7, 2004 ---------------------------------------------------------------------------- * Print the name and title of each signing officer under his or her signature.