-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SvX0KASFnE4grd3yE7PJAa/3jyY0OcKaRNgnNzHzlqJIqkP3Fte6LTvTzUKtNk1q GORls70t/SvnlxL6jGW5iw== 0000935069-08-001115.txt : 20080502 0000935069-08-001115.hdr.sgml : 20080502 20080502170215 ACCESSION NUMBER: 0000935069-08-001115 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20080229 FILED AS OF DATE: 20080502 DATE AS OF CHANGE: 20080502 EFFECTIVENESS DATE: 20080502 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RBB FUND INC CENTRAL INDEX KEY: 0000831114 IRS NUMBER: 510312196 STATE OF INCORPORATION: MD FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-05518 FILM NUMBER: 08799826 BUSINESS ADDRESS: STREET 1: 400 BELLEVUE PKWY STE 100 CITY: WILMINGTON STATE: DE ZIP: 19809 BUSINESS PHONE: 3027911700 MAIL ADDRESS: STREET 1: 400 BELLEVUE PKWY STREET 2: SUITE 152 CITY: WILMINGTON STATE: DE ZIP: 19809 FORMER COMPANY: FORMER CONFORMED NAME: FUND INC /DE/ DATE OF NAME CHANGE: 19600201 0000831114 S000001093 RBB MONEY MARKET PORTFOLIO C000002980 BEDFORD BDMXX C000002981 SANSOM SANXX 0000831114 S000001094 ROBECO BP SMALL CAP VALUE II C000002982 INSTITUTIONAL BPSIX C000002983 INVESTOR BPSCX 0000831114 S000001095 ROBECO WPG 130/30 LARGE CAP CORE FUND (Formerly Robeco WPG Large Cap Growth Fund) C000002984 INSTITUTIONAL WPGLX 0000831114 S000001096 ROBECO WPG CORE BOND FUND C000002985 INSTITUTIONAL WPGCX C000002986 RETIREMENT WPGIX C000010816 INVESTOR WPGBX 0000831114 S000001097 ROBECO WPG SMALL CAP VALUE FUND C000002987 INSTITUTIONAL WPGTX 0000831114 S000001098 SENBANC FUND C000002988 SENBANC FUND SENBX 0000831114 S000001099 SCHNEIDER SMALL CAP VALUE FUND C000002989 SCHNEIDER SMALL CAP VALUE FUND SCMVX 0000831114 S000001100 SCHNEIDER VALUE FUND C000002990 SCHNEIDER VALUE FUND SCMLX 0000831114 S000001101 BOGLE SMALL CAP GROWTH C000002991 INSTITUTIONAL BOGIX C000002992 INVESTOR BOGLX 0000831114 S000001106 ROBECO BP ALL-CAP C000002997 INSTITUTIONAL BPAIX C000002998 INVESTOR BPAVX 0000831114 S000001107 ROBECO BP LARGE CAP VALUE C000002999 INSTITUTIONAL BPLAX C000003000 INVESTOR BPLIX 0000831114 S000001108 ROBECO BP LONG/SHORT EQUITY C000003001 INSTITUTIONAL BPLSX C000003002 INVESTOR BPLEX 0000831114 S000001109 ROBECO BP MID CAP VALUE FUND C000003003 INSTITUTIONAL BPMIX C000003004 INVESTOR BPMCX 0000831114 S000013665 Bear Stearns CUFS MLP Mortgage Portfolio C000037423 Bear Stearns CUFS MLP Mortgage Portfolio 0000831114 S000015912 Bear Stearns Ultra Short Income Fund C000043699 Bear Stearns Ultra Short Income Fund 0000831114 S000015913 Marvin & Palmer Large Cap Growth Fund C000043700 Marvin & Palmer Large Cap Growth Fund MPAUX 0000831114 S000019098 SAM Sustainable Water Fund C000052814 INSTITUTIONAL C000052815 INVESTOR C000052816 CLASS A C000052817 CLASS C 0000831114 S000019099 SAM Sustainable Climate Fund C000052818 INSTITUTIONAL C000052819 INVESTOR C000052820 CLASS A C000052821 CLASS C N-CSRS 1 g44401combined_ncsr.txt RBB FUNDS NCSRS 02_08 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-05518 --------- THE RBB FUND, INC. --------------------------------------------------- (Exact name of registrant as specified in charter) 103 Bellevue Parkway, 4th Floor Wilmington, DE 19809 --------------------------------------------------- (Address of principal executive offices) (Zip code) Edward J. Roach, President & Treasurer 103 Bellevue Parkway, 4th Floor Wilmington, DE 19809 --------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: 302-791-1112 ------------ Date of fiscal year end: August 31 --------- Date of reporting period: February 29, 2008 ----------------- Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507. ITEM 1. REPORTS TO STOCKHOLDERS. The Report to Shareholders is attached herewith. ============================================================= THE BEDFORD CLASS OF THE RBB FUND, INC. MONEY MARKET PORTFOLIO SEMI-ANNUAL REPORT FEBRUARY 29, 2008 (UNAUDITED) This report is submitted for the general information of the shareholders of the Portfolio. It is not authorized for distribution unless preceded or accompanied by a prospectus for the Fund. ============================================================= THE RBB FUND, INC. MONEY MARKET PORTFOLIO FUND EXPENSE EXAMPLES (UNAUDITED) As a shareholder of the Portfolio, you incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees, distribution fees, and other Portfolio expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Portfolio and to compare these costs with the ongoing costs of investing in other mutual funds. These examples are based on an investment of $1,000 invested at the beginning of the six-month period from September 1, 2007 through February 29, 2008 and held for the entire period. ACTUAL EXPENSES The first line of the accompanying tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second line of the accompanying tables provides information about hypothetical account values and hypothetical expenses based on the Portfolio's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare these 5% hypothetical examples with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that the expenses shown in the accompanying tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees that may be incurred by shareholders of other funds. Therefore, the second line of the accompanying tables is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
MONEY MARKET PORTFOLIO - BEDFORD CLASS ----------------------------------------------------------- BEGINNING ENDING EXPENSES PAID ACCOUNT VALUE ACCOUNT VALUE DURING SEPTEMBER 1, 2007 FEBRUARY 29, 2008 PERIOD* ----------------- ----------------- ------------- Actual $1,000.00 $1,020.60 $4.53 Hypothetical (5% return before expenses) 1,000.00 1,020.32 4.54 MONEY MARKET PORTFOLIO - SANSOM STREET CLASS ----------------------------------------------------------- BEGINNING ENDING EXPENSES PAID ACCOUNT VALUE ACCOUNT VALUE DURING SEPTEMBER 1, 2007 FEBRUARY 29, 2008 PERIOD* ----------------- ----------------- ------------- Actual $1,000.00 $1,023.40 $1.66 Hypothetical (5% return before expenses) 1,000.00 1,023.20 1.66
* Expenses are equal to the Portfolio's annualized expense ratio of 0.90% for the Bedford Class shares and 0.33% for the Sansom Street Class shares, which includes waived fees or reimbursed expenses, multiplied by the average account value over the period, multiplied by the number of days (182) in the most recent fiscal half-year, then divided by 366 to reflect the one-half year period. The Portfolio's ending account value on the first line in each table is based on the actual six-month total return of 2.06% for the Bedford Class shares and 2.34% for the Sansom Street Class shares. 1 THE RBB FUND, INC. MONEY MARKET PORTFOLIO PORTFOLIO HOLDINGS SUMMARY TABLE FEBRUARY 29, 2008 (UNAUDITED) SECURITY % OF NET FAIR TYPE ASSETS VALUE -------- -------- ------------ Short Term Investments: Commercial Paper........................... 47.4% $151,695,231 Certificates of Deposit.................... 36.2 115,681,251 Variable Rate Obligations.................. 7.7 24,474,667 Agency Obligations......................... 4.3 13,770,129 Repurchase Agreements...................... 3.1 9,906,000 Master Notes............................... 1.2 4,000,000 Other Assets In Excess of Liabilities...... 0.1 226,228 ----- ------------ NET ASSETS -- 100.0% ......................... 100.0% $319,753,506 ===== ============ Portfolio holdings are subject to change at any time. 2 THE RBB FUND, INC. MONEY MARKET PORTFOLIO SCHEDULE OF INVESTMENTS FEBRUARY 29, 2008 (UNAUDITED) PAR FAIR (000) VALUE ------- ------------ CERTIFICATES OF DEPOSIT--36.2% DOMESTIC CERTIFICATES OF DEPOSIT--8.9% American Express Centurion Bank 3.090%, 03/24/08 ............................... $ 2,000 $ 2,000,000 Branch Banking and Trust Co. 2.960%, 03/10/08 ............................... 5,000 5,000,000 Chase Bank USA 4.700%, 05/07/08 ............................... 2,765 2,765,000 State Street Bank and Trust Co. 4.890%, 03/17/08 ............................... 8,500 8,500,000 Wells Fargo Bank NA 2.950%, 03/04/08 ............................... 10,000 10,000,000 ------------ 28,265,000 ------------ YANKEE DOLLAR CERTIFICATES OF DEPOSIT--27.3% Banco Bilbao Vizcaya Argentina S.A., New York(a) 5.065%, 04/02/08 ............................... 935 935,004 Bank of Montreal, Chicago(a) 5.100%, 04/01/08 ............................... 910 910,000 4.870%, 06/02/08 ............................... 750 750,000 Bank of Scotland PLC, New York(a) 3.270%, 03/25/08 ............................... 4,000 4,000,000 Banque Nationale de Paris, New York(a) 4.940%, 03/19/08 ............................... 7,000 7,000,000 4.800%, 06/05/08 ............................... 3,155 3,155,000 Barclays Bank PLC(a) 4.400%, 04/08/08 ............................... 10,000 10,000,000 Canadian Imperial Bank of Commerce, New York(a) 5.090%, 04/01/08 ............................... 2,585 2,585,000 4.870%, 06/10/08 ............................... 2,295 2,295,000 Deutsche Bank AG, New York(a) 5.385%, 03/11/08 ............................... 2,600 2,600,000 Lloyds Tsb Bank PLC, New York(a) 3.060%, 03/25/08 ............................... 10,000 10,000,000 Natixis, New York(a) 5.420%, 07/10/08 ............................... 775 776,046 Nordea Bank Finland PLC, New York(a) 4.910%, 06/23/08 ............................... 835 835,025 4.820%, 10/17/08 ............................... 2,820 2,820,172 Rabobank Nederland NV, New York(a) 3.070%, 03/03/08 ............................... 5,000 5,000,000 Svenska Handelsbanken, New York(a) 4.140%, 03/17/08 ............................... 1,500 1,500,000 3.020%, 04/28/08 ............................... 10,000 10,000,000 PAR FAIR (000) VALUE ------- ------------ CERTIFICATES OF DEPOSIT--(CONTINUED) YANKEE DOLLAR CERTIFICATES OF DEPOSIT--(CONTINUED) Toronto Dominion Bank, New York(a) 5.000%, 03/25/08 ............................... $ 5,000 $ 5,000,000 5.050%, 03/25/08 ............................... 5,000 5,000,000 4.860%, 05/30/08 ............................... 300 300,000 4.850%, 06/06/08 ............................... 2,265 2,265,000 UBS AG, Stamford(a) 5.050%, 03/20/08 ............................... 2,500 2,500,000 4.895%, 06/04/08 ............................... 755 755,000 Unicredito Italiano, New York(a) 5.385%, 03/20/08 ............................... 1,435 1,435,004 5.015%, 03/27/08 ............................... 5,000 5,000,000 ------------ 87,416,251 ------------ TOTAL CERTIFICATES OF DEPOSIT (COST $115,681,251) ........................ 115,681,251 ------------ COMMERCIAL PAPER--47.4% ASSET BACKED SECURITIES--23.0% Amstel Funding Corp. 5.650%, 03/11/08 ............................... 2,000 1,996,861 Atlantis One Funding Corp. 4.580%, 04/02/08 ............................... 5,000 4,979,644 CAFCO LLC 4.950%, 03/14/08 ............................... 10,000 9,982,125 3.030%, 05/01/08 ............................... 3,500 3,482,030 Ciesco LLC 3.050%, 05/02/08 ............................... 8,500 8,455,351 Falcon Asset Securitization Company LLC 3.170%, 04/24/08 ............................... 7,000 6,966,715 3.080%, 05/20/08 ............................... 3,000 2,979,467 Govco LLC 3.850%, 04/14/08 ............................... 5,000 4,976,472 Park Avenue Receivables Corp. 3.150%, 04/22/08 ............................... 10,000 9,954,500 Ranger Funding Company LLC 3.950%, 04/18/08 ............................... 5,000 4,973,667 Windmill Funding Corp. 3.210%, 04/21/08 ............................... 3,000 2,986,358 Yorktown Capital LLC 3.820%, 04/11/08 ............................... 5,000 4,978,247 3.250%, 04/21/08 ............................... 7,000 6,967,771 ------------ 73,679,208 ------------ 3 THE RBB FUND, INC. MONEY MARKET PORTFOLIO SCHEDULE OF INVESTMENTS (CONTINUED) FEBRUARY 29, 2008 (UNAUDITED) PAR FAIR (000) VALUE ------- ------------ COMMERCIAL PAPER--(CONTINUED) BANKS--17.4% Banco Santander Puerto Rico(b) 3.850%, 04/15/08 ............................... $ 5,000 $ 4,975,938 Bank of America Corp. 2.980%, 05/07/08 ............................... 5,000 4,972,269 4.690%, 05/27/08 ............................... 1,000 988,666 3.673%, 06/12/08 ............................... 1,515 1,499,079 2.840%, 07/07/08 ............................... 1,000 989,902 3.800%, 07/11/08 ............................... 2,040 2,011,576 Danske Corp.(b) 3.130%, 03/31/08 ............................... 5,000 4,986,958 3.500%, 04/18/08 ............................... 6,512 6,481,611 Dexia Delaware LLC(b) 4.920%, 03/19/08 ............................... 6,000 5,985,240 ING US Funding LLC(b) 3.010%, 05/06/08 ............................... 3,000 2,983,445 JPMorgan Chase & Co. 2.860%, 07/07/08 ............................... 4,000 3,959,324 Raiffeisen Zentralbank Osterreich AG(b) 4.560%, 04/07/08 ............................... 5,000 4,976,567 3.200%, 04/23/08 ............................... 4,000 3,981,156 Royal Bank of Scotland PLC(b) 4.790%, 06/04/08 ............................... 2,790 2,754,734 Societe Generale North America, Inc.(b) 4.060%, 04/11/08 ............................... 3,000 2,986,128 Unicredito Italiano Banks Ireland PLC(b) 5.245%, 03/20/08 ............................... 1,200 1,196,678 ------------ 55,729,271 ------------ FINANCE SERVICES--5.4% Citigroup Funding, Inc. 4.730%, 05/02/08 ............................... 1,160 1,150,550 General Electric Capital Corp. 4.780%, 03/17/08 ............................... 5,000 4,989,378 3.830%, 07/10/08 ............................... 1,700 1,676,307 UBS Finance Delaware LLC 5.250%, 03/18/08 ............................... 9,500 9,476,448 ------------ 17,292,683 ------------ PAR FAIR (000) VALUE ------- ------------ COMMERCIAL PAPER--(CONTINUED) LIFE INSURANCE--1.6% Prudential Funding LLC 2.970%, 03/12/08 ............................... $ 3,000 $ 2,997,278 3.040%, 03/20/08 ............................... 2,000 1,996,791 ------------ 4,994,069 ------------ TOTAL COMMERCIAL PAPER (COST $151,695,231) ........................ 151,695,231 ------------ VARIABLE RATE OBLIGATIONS--7.7% ASSET BACKED SECURITIES--0.4% Cullinan Finance Corp.(c)(d)(e) 3.115%, 06/25/08 ............................... 1,115 1,114,965 ------------ BANKS--5.7% Bank of Montreal Chicago(a)(c) 3.196%, 11/10/08 ............................... 2,425 2,425,000 Bank of Nova Scotia, New York(a)(c) 3.089%, 07/03/08 ............................... 2,200 2,199,702 Deutsche Bank AG, New York(a)(c) 4.753%, 01/21/09 ............................... 2,135 2,135,000 HBOS Treasury Services PLC(b)(c)(d) 4.954%, 06/24/08 ............................... 8,000 8,000,000 Wachovia Bank NA(c) 4.753%, 02/04/09 ............................... 1,600 1,600,000 Westpac Banking Corp.(c)(d) 5.201%, 10/10/08 ............................... 2,000 2,000,000 ------------ 18,359,702 ------------ LIFE INSURANCE--1.6% MetLife Global Funding I(c)(d) 3.235%, 04/28/08 ............................... 5,000 5,000,000 ------------ TOTAL VARIABLE RATE OBLIGATIONS (COST $24,474,667) ......................... 24,474,667 ------------ AGENCY OBLIGATIONS--4.3% Federal Home Loan Bank 2.560%, 02/13/09 ............................... 2,260 2,260,000 4.746%, 03/20/09(c) ............................ 1,605 1,606,575 3.064%, 08/13/09(c) ............................ 1,600 1,600,000 3.146%, 08/14/09(c) ............................ 2,495 2,494,637 See Accompanying Notes to Financial Statements. 4 THE RBB FUND, INC. MONEY MARKET PORTFOLIO SCHEDULE OF INVESTMENTS (CONCLUDED) FEBRUARY 29, 2008 (UNAUDITED) PAR FAIR (000) VALUE ------- ------------ AGENCY OBLIGATIONS--(CONTINUED) Federal Home Loan Bank Discount Note 2.500%, 08/06/08 ............................... $ 2,160 $ 2,136,300 Federal Home Loan Mortgage Corp. Discount Note 2.500%, 08/18/08 ............................... 725 716,441 Federal National Mortgage Assoc. Discount Note 2.495%, 08/20/08 ............................... 670 662,013 2.490%, 09/08/08 ............................... 1,440 1,420,977 2.490%, 09/10/08 ............................... 885 873,186 ------------ TOTAL AGENCY OBLIGATIONS (COST $13,770,129) ......................... 13,770,129 ------------ MASTER NOTES--1.2% Bank of America Securities LLC(c) 3.205%, 01/22/09 ............................... 4,000 4,000,000 ------------ TOTAL MASTER NOTES (COST $4,000,000) .......................... 4,000,000 ------------ REPURCHASE AGREEMENTS--3.1% Deutsche Bank Securities, Inc. (Tri-Party Agreement dated 02/29/08 to be repurchased at $9,908,559, collateralized by $9,969,000 par value, Federal Home Loan Mortgage Corp., 5.52%, due 06/30/10; $53,000 par value, Federal National Mortgage Association, 4.40%, due 04/07/08; Market Value of the collateral is $10,203,608) 3.100%, 03/03/08 ............................... 9,906 9,906,000 ------------ TOTAL REPURCHASE AGREEMENTS (COST $9,906,000) .......................... 9,906,000 ------------ TOTAL INVESTMENTS AT VALUE--99.9% (COST $319,527,278*) ........................... 319,527,278 ------------ OTHER ASSETS IN EXCESS OF LIABILITIES --0.1% ............................. 226,228 ------------ FAIR VALUE ------------ NET ASSETS (APPLICABLE TO 303,339,276 BEDFORD SHARES AND 16,412,790 SANSOM STREET SHARES)--100.0% ......................... $319,753,506 ============ * Aggregate cost is the same for financial reporting and Federal tax purposes. (a) Security is a foreign domiciled issuer which is registered with the Securities and Exchange Commission. (b) U.S. dollar denominated security issued by foreign domiciled entity. (c) Variable Rate Obligations -- The interest rate shown is the rate as of February 29, 2008 and the maturity date shown is the next interest rate readjustment date or the maturity date. (d) Security is exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional investors. (e) Security is illiquid. See Accompanying Notes to Financial Statements. 5 THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES FEBRUARY 29, 2008 (UNAUDITED) ASSETS Investments, at fair value (cost $309,621,278)................ $309,621,278 Repurchase agreements at cost................................. 9,906,000 Cash.......................................................... 933 Interest receivable........................................... 1,274,540 Prepaid expenses and other assets............................. 26,623 ------------ Total assets........................................... 320,829,374 ------------ LIABILITIES Payables for: Dividends.................................................. 812,485 Distribution fees.......................................... 136,685 Advisory fees.............................................. 57,745 Custodian fees............................................. 20,520 Directors' and officer's fees.............................. 9,625 Transfer agent fees........................................ 6,320 Administration and accounting fees......................... 4,636 Service organization fees.................................. 162 Accrued expenses and other liabilities........................ 27,690 ------------ Total liabilities...................................... 1,075,868 ------------ NET ASSETS.................................................... $319,753,506 ============ NET ASSETS CONSISTED OF: Paid-in capital............................................... $319,752,065 Undistributed net investment income........................... 831 Accumulated net realized gain from investments................ 610 ------------ NET ASSETS.................................................... $319,753,506 ============ NET ASSET VALUE, Offering and Redemption Price Per Bedford Share ($303,342,345/303,339,276)...................... $1.00 ===== NET ASSET VALUE, Offering and Redemption Price Per Sansom Street Share ($16,411,161/16,412,790).................. $1.00 ===== See Accompanying Notes to Financial Statements. 6 THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED FEBRUARY 29, 2008 (UNAUDITED) Investment Income Interest................................................... $6,731,268 ---------- Expenses Distribution fees(1)....................................... 820,493 Investment advisory and administration fees................ 603,582 Custodian fees............................................. 37,570 Professional fees.......................................... 28,508 Directors' and officer's fees.............................. 27,039 Printing and shareholder reporting fees.................... 26,389 Registration and filing fees............................... 26,322 Regulatory administration fees............................. 17,894 Transfer agent fees........................................ 10,295 Insurance fees............................................. 8,560 Service organization fees (Sansom Class)................... 500 Other expenses............................................. 15,636 ---------- Total expenses......................................... 1,622,788 Less fees waived........................................... (456,613) ---------- Net total expenses..................................... 1,166,175 ---------- Net investment income......................................... 5,565,093 Realized gain on investments.................................. 8,104 ---------- Net increase in net assets resulting from operations.......... $5,573,197 ========== (1) See Note 2 in Notes to Financial Statements. See Accompanying Notes to Financial Statements. 7 THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED FOR THE FEBRUARY 29, 2008 YEAR ENDED (UNAUDITED) AUGUST 31, 2007 ----------------- --------------- Increase (decrease) in net assets: Operations: Net investment income........................................ $ 5,565,093 $ 9,566,330 Net realized gain (loss) on investments...................... 8,104 (1,885) ------------ ------------ Net increase in net assets resulting from operations......... 5,573,197 9,564,445 ------------ ------------ Dividends to shareholders from Net investment income: Bedford shares............................................. (5,127,619) (8,491,001) Sansom Street shares....................................... (437,474) (1,075,329) ------------ ------------ Total dividends to shareholders............................ (5,565,093) (9,566,330) ------------ ------------ Net capital share transactions (See Note 3).................... 85,479,665 68,085,811 ------------ ------------ Total increase in net assets .................................. 85,487,769 68,083,926 Net Assets: Beginning of period ......................................... 234,265,737 166,181,811 ------------ ------------ End of period ............................................... $319,753,506 $234,265,737 ============ ============ Undistributed net investment income, end of period........... $ 831 $ 831 ============ ============
See Accompanying Notes to Financial Statements. 8 THE RBB FUND, INC. MONEY MARKET PORTFOLIO FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
THE BEDFORD CLASS ------------------------------------------------------------------------------------------ FOR THE SIX MONTHS FOR THE FOR THE FOR THE FOR THE FOR THE ENDED YEAR YEAR YEAR YEAR YEAR FEBRUARY 29, ENDED ENDED ENDED ENDED ENDED 2008 AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, (UNAUDITED) 2007 2006 2005 2004 2003 ------------ ---------- ---------- ----------- ----------- ---------- Net asset value, beginning of period ... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 -------- -------- -------- -------- -------- -------- Income from investment operations: Net investment income ............... 0.0204 0.0447 0.0388 0.0162 0.0025 0.0046 Net gains on securities ............. --(b) --(b) --(b) --(b) --(b) 0.0005 -------- -------- -------- -------- -------- -------- Total net income from investment operations................... 0.0204 0.0447 0.0388 0.0162 0.0025 0.0051 -------- -------- -------- -------- -------- -------- Less dividends and distributions: Dividends (from net investment income) ........................... (0.0204) (0.0447) (0.0388) (0.0162) (0.0025) (0.0046) Distributions (from capital gains) .. -- -- -- -- -- (0.0005) -------- -------- -------- -------- -------- -------- Total dividends and distributions . (0.0204) (0.0447) (0.0388) (0.0162) (0.0025) (0.0051) -------- -------- -------- -------- -------- -------- Net asset value, end of period ......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======== ======== ======== ======== ======== ======== Total Return ...................... 2.06% 4.56% 3.95% 1.63% 0.25% 0.53% Ratios/Supplemental Data Net assets, end of period (000's omitted) ................... $303,342 $218,914 $150,657 $109,495 $ 72,001 $ 80,406 Ratios of expenses to average net assets(a) ..................... 0.90%(c) 0.90% 0.85% 0.97% 0.94% 0.98% Ratios of net investment income to average net assets ............. 4.07%(c) 4.47% 3.81% 1.68% 0.24% 0.46%
(a) Without the waiver of advisory fees and reimbursement of certain operating expenses, the ratios of expenses to average net assets for the Bedford Class of the Money Market Portfolio would have been 1.24% for the six months ended February 29, 2008 and 1.29%,1.34%, 1.23%, 1.34% and 1.30% for the years ended August 31, 2007, 2006, 2005, 2004 and 2003, respectively. (b) Amount is less than ($0.0005) per share. (c) Annualized. See Accompanying Notes to Financial Statements. 9 THE RBB FUND, INC. MONEY MARKET PORTFOLIO FINANCIAL HIGHLIGHTS (CONCLUDED) (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
THE SANSOM STREET CLASS ------------------------------------------------------------------------------------------ FOR THE SIX MONTHS FOR THE FOR THE FOR THE FOR THE FOR THE ENDED YEAR YEAR YEAR YEAR YEAR FEBRUARY 29, ENDED ENDED ENDED ENDED ENDED 2008 AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, (UNAUDITED) 2007 2006 2005 2004 2003 ------------ ---------- ---------- ----------- ----------- ---------- Net asset value, beginning of period ... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 -------- -------- -------- -------- -------- -------- Income from investment operations: Net investment income ............... 0.0232 0.0502 0.0434 0.0239 0.0100 0.0114 Net gains on securities ............. --(b) --(b) --(b) --(b) --(b) 0.0005 -------- -------- -------- -------- -------- -------- Total net income from investment operations ...................... 0.0232 0.0502 0.0434 0.0239 0.0100 0.0119 -------- -------- -------- -------- -------- -------- Less dividends and distributions: Dividends (from net investment income) ........................... (0.0232) (0.0502) (0.0434) (0.0239) (0.0100) (0.0114) Distributions (from capital gains) .. -- -- -- -- -- (0.0005) -------- -------- -------- -------- -------- -------- Total dividends and distributions . (0.0232) (0.0502) (0.0434) (0.0239) (0.0100) (0.0119) -------- -------- -------- -------- -------- -------- Net asset value, end of period ......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======== ======== ======== ======== ======== ======== Total Return ...................... 2.34% 5.14% 4.42% 2.41% 1.00% 1.21% Ratios/Supplemental Data Net assets, end of period (000's omitted) ................... $ 16,411 $ 15,352 $ 15,525 $ 87,304 $141,372 $198,373 Ratios of expenses to average net assets(a) ..................... 0.33%(c) 0.35% 0.26% 0.20% 0.20% 0.30% Ratios of net investment income to average net assets ................ 4.55%(c) 5.02% 4.25% 2.39% 0.98% 1.14%
(a) Without the waiver of advisory fees and reimbursement of certain operating expenses, the ratios of expenses to average net assets for the Sansom Street Class of the Money Market Portfolio would have been 0.61% for the six months ended February 29, 2008 and 0.69%, 0.67%, 0.67%, 0.59% and 0.57% for the years ended August 31, 2007, 2006, 2005, 2004 and 2003, respectively. (b) Amount is less than ($0.0005) per share. (c) Annualized. See Accompanying Notes to Financial Statements. 10 THE RBB FUND, INC. MONEY MARKET PORTFOLIO NOTES TO FINANCIAL STATEMENTS FEBRUARY 29, 2008 (UNAUDITED) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The RBB Fund, Inc. ("RBB" or the "Company") was incorporated under the laws of the State of Maryland on February 29, 1988, and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company. RBB is a "series fund," which is a mutual fund divided into separate portfolios. Each portfolio is treated as a separate entity for certain matters under the 1940 Act, and for other purposes, and a shareholder of one portfolio is not deemed to be a shareholder of any other portfolio. Currently, RBB has twenty-one active investment portfolios, including the Money Market Portfolio ("Portfolio"), which comprise the RBB family of funds. RBB has authorized capital of one hundred billion shares of common stock of which 78.073 billion shares are currently classified into one hundred and twenty classes of common stock. The Portfolio has issued shares with a par value of $0.001. Each class represents an interest in an active or inactive RBB investment portfolio. The active classes have been grouped into ten separate "families." SECURITY VALUATION -- Securities held in the Portfolio are valued under the amortized cost method, which approximates current market value. Under this method, securities are valued at cost when purchased and thereafter a constant accretion of discount or amortization of premium is recorded until maturity of the security. Regular review and monitoring of the valuation is performed to ensure that cost continues to approximate market value and to avoid dilution or other unfair results to shareholders. The Portfolio seeks to maintain net asset value per share at $1.00. SECURITY TRANSACTIONS, INVESTMENT INCOME, AND EXPENSES -- Security transactions are accounted for on the trade date. The cost of investments sold is determined by use of the specific identification method for both financial reporting and income tax purposes. Interest income is accrued when earned. Certain expenses, such as distribution, transfer agency and printing, are class specific expenses and vary by class. Expenses not directly attributable to a specific portfolio or class are allocated based on relative net assets of each portfolio and class. Expenses incurred on behalf of a specific class, fund or fund family are charged directly to the class, fund or fund family (in proportion to net assets). Expenses incurred for all portfolios within the Company (such as director or professional fees) are charged to all portfolios in proportion to their average net assets. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net investment income are declared daily, recorded on the ex-date and paid monthly. All dividends from net investment income are taxed as ordinary income. Any net realized capital gains are distributed at least annually. Income subject to dividends and capital gain subject to distributions are determined in accordance with income tax regulations, which may differ from accounting principles generally accepted in the United States of America. FEDERAL INCOME TAXES -- No provision is made for federal income taxes. It is the Company's intention to have each portfolio continue to qualify for and elect the tax treatment applicable to regulated investment companies under Subchapter M of the Internal Revenue Code and make the requisite distributions to its shareholders which will be sufficient to relieve it from federal income and excise taxes. 11 THE RBB FUND, INC. MONEY MARKET PORTFOLIO NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 29, 2008 (UNAUDITED) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) REPURCHASE AGREEMENTS -- Money market instruments may be purchased subject to the seller's agreement to repurchase them at an agreed-upon date and price. The seller will be required on a daily basis to maintain the value of the securities as collateral, subject to the agreement at not less than the repurchase price plus accrued interest. If the value of the collateral falls below 102% of the value of the repurchase price plus accrued interest, the Portfolio will require the seller to deposit additional collateral by the next Portfolio business day. In the event that the seller under the agreement defaults on its repurchase obligation or fails to deposit sufficient collateral, the Portfolio has the contractual right, subject to the requirements of applicable bankruptcy and insolvency laws, to sell the underlying securities and may claim any resulting loss from the seller. The agreements are conditioned upon the collateral being deposited under the Federal Reserve Book Entry System or with the Portfolio's custodian or a third party sub-custodian. USE OF ESTIMATES -- The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. OTHER -- In the normal course of business, the Portfolio may enter into contracts that provide general indemnifications. The Portfolio's maximum exposure under these arrangements is dependent on claims that may be made against the Portfolio in the future, and, therefore, cannot be estimated; however, based on experience, the risk of material loss for such claims is considered remote. 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES Pursuant to an Investment Advisory and Administration Agreement, BlackRock Institutional Management Corp. (the "Adviser" or "BIMC"), an indirect subsidiary of The PNC Financial Services Group, Inc., serves as investment adviser and administrator for the Portfolio. BIMC and PFPC Inc. ("PFPC"), a wholly-owned subsidiary of PFPC Worldwide Inc. and an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc., entered into a delegation agreement on behalf of the Portfolio, wherein PFPC has agreed to perform administration and accounting services for an annual fee of 0.10% of the average net assets of the Portfolio, paid out of the fee paid to BIMC. For its advisory services, BIMC is entitled to receive the following fees, computed daily and payable monthly, and based on the Portfolio's average daily net assets: ANNUAL RATE ---------------------------------------------- 0.45% of first $250 million of net assets; 0.40% of next $250 million of net assets; and 0.35% of net assets in excess of $500 million. 12 THE RBB FUND, INC. MONEY MARKET PORTFOLIO NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 29, 2008 (UNAUDITED) 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONTINUED) BIMC may, at its discretion, voluntarily waive all or any portion of its advisory fee for the Portfolio. For each class of shares within the Portfolio, the net advisory fee charged to each class is the same on a relative basis. For the six months ended February 29, 2008, advisory fees and waivers for the investment portfolio were as follows: GROSS NET ADVISORY ADVISORY FEE WAIVER FEE -------- ---------- -------- $603,582 $(393,702) $209,880 As of February 29, 2008, the Portfolio owed BIMC $57,745 in advisory fees. BIMC may voluntarily waive and/or reimburse a portion of its fees. PFPC may also voluntarily waive a portion of its fees and/or reimburse expenses. The Portfolio will not pay BIMC or PFPC at a later time for any amounts waived or assumed. For providing regulatory administration services to RBB, PFPC is entitled to receive compensation as agreed to by the Company and PFPC. This fee is allocated to each portfolio in proportion to their net assets. The Portfolio's portion of this fee for the six months ended February 29, 2008 was $17,894. PFPC serves as the transfer and dividend disbursing agent for each class. Both PFPC Trust Company and PFPC are wholly-owned subsidiaries of PFPC Worldwide Inc., an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc. For providing transfer agent services, PFPC is entitled to receive fees from the Portfolio. PFPC may, at its discretion, voluntarily waive all or any portion of its transfer agency fee for any class of shares. For the six months ended February 29, 2008, transfer agency fees for the Portfolio were $10,295. PFPC Trust Company provides certain custodial services to the Portfolio. As compensation for such custodial services, PFPC Trust Company is entitled to receive the following fees, computed daily and payable monthly, and based on the Portfolio's average gross assets: ANNUAL RATE ------------------------------------------------- 0.025% of first $50 million of gross assets; 0.020% of next $50 million of gross assets; 0.015% of gross assets in excess of $100 million. The Portfolio, on behalf of each class of shares of the Portfolio, has adopted Distribution Plans pursuant to Rule 12b-1 under the 1940 Act (the "Plans"). The Portfolio has entered into a Distribution Agreement with PFPC Distributors, Inc. ("PFPC Distributors"). PFPC Distributors is a wholly-owned subsidiary of PFPC Worldwide Inc. and an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc. 13 THE RBB FUND, INC. MONEY MARKET PORTFOLIO NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 29, 2008 (UNAUDITED) 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONTINUED) The Plans provide for each class to make monthly payments, based on average net assets, to PFPC Distributors of up to 0.65% on an annualized basis for the Bedford Class and up to 0.05% on an annualized basis for the Sansom Street Class. Effective December 31, 2007, the Plan was terminated with respect to the Sansom Street Class. For the six months ended February 29, 2008, distribution fees paid to PFPC Distributors for each class were as follows:
GROSS NET DISTRIBUTION DISTRIBUTION FEE WAIVER FEE ------------ --------- ------------ Bedford Class $817,844 $(62,911) $754,933 Sansom Street Class 2,649 -- 2,649 -------- -------- --------- Total Money Market Portfolio $820,493 $(62,911) $757,582 ======== ======== =========
The Portfolio has entered into service agreements with banks affiliated with PNC who render support services to customers who are the beneficial owners of the Sansom Street Class in consideration of the payment of 0.10% of the daily net asset value of such shares. For the six months ended February 29, 2008, service organization fees were $500 for the Portfolio. As of February 29, 2008, the Portfolio owed PFPC and its affiliates $168,161 for their services. 3. CAPITAL SHARES Transactions in capital shares (at $1 per capital share) for each year were as follows:
BEDFORD CLASS ------------------------------------ FOR THE SIX MONTHS ENDED FOR THE FEBRUARY 29, 2008 YEAR ENDED (UNAUDITED) AUGUST 31, 2007 ----------------- --------------- VALUE VALUE ----------------- --------------- Shares sold $ 353,526,258 $ 540,563,896 Shares issued on reinvestment of dividends 4,698,705 8,204,137 Shares repurchased (273,803,995) (480,513,295) -------------- -------------- Net Increase $ 84,420,968 $ 68,254,738 -------------- -------------- Bedford Shares authorized 1,500,000,000 1,500,000,000 ============== ==============
SANSOM STREET CLASS ------------------------------------ FOR THE SIX MONTHS ENDED FOR THE FEBRUARY 29, 2008 YEAR ENDED (UNAUDITED) AUGUST 31, 2007 ----------------- --------------- VALUE VALUE ----------------- --------------- Shares sold $ 74,474,753 $ 207,692,244 Shares issued on reinvestment of dividends 60,914 136,709 Shares repurchased (73,476,970) (207,997,880) -------------- -------------- Net Increase/Decrease $ 1,058,697 $ (168,927) -------------- -------------- Sansom Street Shares authorized 1,500,000,000 1,500,000,000 ============== ==============
14 THE RBB FUND, INC. MONEY MARKET PORTFOLIO NOTES TO FINANCIAL STATEMENTS (CONCLUDED) FEBRUARY 29, 2008 (UNAUDITED) 4. FEDERAL INCOME TAX INFORMATION The Portfolio intends to continue to qualify as a regulated investment company and distribute all of its taxable income. Therefore, no federal tax provision is required. For federal income tax purposes, realized capital losses may be carried forward and applied against future realized gains. At August 31, 2007, the Portfolio had capital loss carryforwards of $5,533 of which $3,587 will expire on August 31, 2013, $917 will expire on August 31, 2014 and $1,029 will expire on August 31, 2015. 5. NEW ACCOUNTING PRONOUNCEMENTS Effective February 29, 2008, the Portfolio adopted FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes" ("FIN 48"). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Fund's tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax positions not deemed to meet the "more-likely-than-not" threshold would be recorded as a tax benefit or expense in the current year. The adoption of FIN 48 did not result in the recording of any tax benefits or expenses. In September 2006, FASB issued Statement of Financial Accounting Standards ("SFAS") 157, Fair Value Measurements, which clarifies the definition of fair value and requires companies to expand their disclosure about the use of fair value to measure assets and liabilities in interim and annual periods subsequent to initial recognition. Adoption of SFAS 157 requires the use of the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Although we are still in the process of evaluating the impact, if any, of SFAS 157 on the Portfolio, management believes that there will be no material impact on the Portfolio's financial statements other than enhanced disclosures. 15 ADDITIONAL INFORMATION (UNAUDITED) PROXY VOTING Policies and procedures that the Portfolio uses to determine how to vote proxies relating to portfolio securities as well as information regarding how the Portfolio voted proxies relating to portfolio securities for the most recent 12-month period ended June 30 are available without charge, upon request, by calling the number shown below and on the Securities and Exchange Commission's ("SEC") website at http://www.sec.gov. Bedford (800) 888-9723 Sansom Street (888) 261-4073 QUARTERLY PORTFOLIO SCHEDULES The Company files its complete schedule of portfolio holdings with the SEC for the first and third fiscal quarter of each fiscal year (quarters ended November 30 and May 31) on Form N-Q. The Company's Form N-Q is available on the SEC website at http://www.sec.gov and may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. Information on the operation of the SEC Public Reference Room may be obtained by calling (202) 551-8090. 16 [THIS PAGE INTENTIONALLY LEFT BLANK.] [THIS PAGE INTENTIONALLY LEFT BLANK.] [THIS PAGE INTENTIONALLY LEFT BLANK.] INVESTMENT ADVISER BlackRock Institutional Management Corporation 100 Bellevue Parkway Wilmington, DE 19809 TRANSFER AGENT PFPC Inc. 101 Sabin Street Pawtucket, RI 02866 PRINCIPAL UNDERWRITER PFPC Distributors, Inc. 760 Moore Road King of Prussia, PA 19406 CUSTODIAN PFPC Trust Company 8800 Tinicum Blvd. Suite 200 Philadelphia, PA 19153 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Deloitte & Touche LLP 1700 Market Street Philadelphia, PA 19103-3984 COUNSEL Drinker Biddle & Reath LLP One Logan Square 18th and Cherry Streets Philadelphia, PA 19103-6996 ================================================================================ THE SANSOM STREET CLASS OF THE RBB FUND, INC. MONEY MARKET PORTFOLIO Semi-Annual Report February 29, 2008 (Unaudited) This report is submitted for the general information of the shareholders of the Portfolio. It is not authorized for distribution unless preceded or accompanied by a prospectus for the Fund. ================================================================================ THE RBB FUND, INC. MONEY MARKET PORTFOLIO FUND EXPENSE EXAMPLES (UNAUDITED) As a shareholder of the Portfolio, you incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees, distribution fees, and other Portfolio expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Portfolio and to compare these costs with the ongoing costs of investing in other mutual funds. These examples are based on an investment of $1,000 invested at the beginning of the six-month period from September 1, 2007 through February 29, 2008 and held for the entire period. ACTUAL EXPENSES The first line of the accompanying tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second line of the accompanying tables provides information about hypothetical account values and hypothetical expenses based on the Portfolio's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare these 5% hypothetical examples with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that the expenses shown in the accompanying tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees that may be incurred by shareholders of other funds. Therefore, the second line of the accompanying tables is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
MONEY MARKET PORTFOLIO - BEDFORD CLASS - ----------------------------------------------------------------------------------------------------------------- BEGINNING ENDING EXPENSES PAID ACCOUNT VALUE ACCOUNT VALUE DURING SEPTEMBER 1, 2007 FEBRUARY 29, 2008 PERIOD* ----------------- ----------------- ------------- Actual $1,000.00 $1,020.60 $4.53 Hypothetical (5% return before expenses) 1,000.00 1,020.32 4.54 MONEY MARKET PORTFOLIO - SANSOM STREET CLASS - ----------------------------------------------------------------------------------------------------------------- BEGINNING ENDING EXPENSES PAID ACCOUNT VALUE ACCOUNT VALUE DURING SEPTEMBER 1, 2007 FEBRUARY 29, 2008 PERIOD* ----------------- ----------------- ------------- Actual $1,000.00 $1,023.40 $1.66 Hypothetical (5% return before expenses) 1,000.00 1,023.20 1.66 * Expenses are equal to the Portfolio's annualized expense ratio of 0.90% for the Bedford Class shares and 0.33% for the Sansom Street Class shares, which includes waived fees or reimbursed expenses, multiplied by the average account value over the period, multiplied by the number of days (182) in the most recent fiscal half-year, then divided by 366 to reflect the one-half year period. The Portfolio's ending account value on the first line in each table is based on the actual six-month total return of 2.06% for the Bedford Class shares and 2.34% for the Sansom Street Class shares.
1 THE RBB FUND, INC. MONEY MARKET PORTFOLIO PORTFOLIO HOLDINGS SUMMARY TABLE FEBRUARY 29, 2008 (UNAUDITED)
SECURITY % OF NET FAIR TYPE ASSETS VALUE -------- -------- ------------ Short Term Investments: Commercial Paper.............................................................. 47.4% $151,695,231 Certificates of Deposit....................................................... 36.2 115,681,251 Variable Rate Obligations..................................................... 7.7 24,474,667 Agency Obligations............................................................ 4.3 13,770,129 Repurchase Agreements......................................................... 3.1 9,906,000 Master Notes.................................................................. 1.2 4,000,000 Other Assets In Excess of Liabilities......................................... 0.1 226,228 ----- ------------ NET ASSETS -- 100.0%.............. 100.0% $319,753,506 ===== ============
Portfolio holdings are subject to change at any time. 2 THE RBB FUND, INC. MONEY MARKET PORTFOLIO SCHEDULE OF INVESTMENTS FEBRUARY 29, 2008 (UNAUDITED) PAR FAIR (000) VALUE ------- ------------ CERTIFICATES OF DEPOSIT--36.2% DOMESTIC CERTIFICATES OF DEPOSIT--8.9% American Express Centurion Bank 3.090%, 03/24/08 .......................... $ 2,000 $ 2,000,000 Branch Banking and Trust Co. 2.960%, 03/10/08 .......................... 5,000 5,000,000 Chase Bank USA 4.700%, 05/07/08 .......................... 2,765 2,765,000 State Street Bank and Trust Co. 4.890%, 03/17/08 .......................... 8,500 8,500,000 Wells Fargo Bank NA 2.950%, 03/04/08 .......................... 10,000 10,000,000 ------------ 28,265,000 ------------ YANKEE DOLLAR CERTIFICATES OF DEPOSIT--27.3% Banco Bilbao Vizcaya Argentina S.A., New York(a) 5.065%, 04/02/08 .......................... 935 935,004 Bank of Montreal, Chicago(a) 5.100%, 04/01/08 .......................... 910 910,000 4.870%, 06/02/08 .......................... 750 750,000 Bank of Scotland PLC, New York(a) 3.270%, 03/25/08 .......................... 4,000 4,000,000 Banque Nationale de Paris, New York(a) 4.940%, 03/19/08 .......................... 7,000 7,000,000 4.800%, 06/05/08 .......................... 3,155 3,155,000 Barclays Bank PLC(a) 4.400%, 04/08/08 .......................... 10,000 10,000,000 Canadian Imperial Bank of Commerce, New York(a) 5.090%, 04/01/08 .......................... 2,585 2,585,000 4.870%, 06/10/08 .......................... 2,295 2,295,000 Deutsche Bank AG, New York(a) 5.385%, 03/11/08 .......................... 2,600 2,600,000 Lloyds Tsb Bank PLC, New York(a) 3.060%, 03/25/08 .......................... 10,000 10,000,000 Natixis, New York(a) 5.420%, 07/10/08 .......................... 775 776,046 Nordea Bank Finland PLC, New York(a) 4.910%, 06/23/08 .......................... 835 835,025 4.820%, 10/17/08 .......................... 2,820 2,820,172 Rabobank Nederland NV, New York(a) 3.070%, 03/03/08 .......................... 5,000 5,000,000 Svenska Handelsbanken, New York(a) 4.140%, 03/17/08 .......................... 1,500 1,500,000 3.020%, 04/28/08 .......................... 10,000 10,000,000 PAR FAIR (000) VALUE ------- ------------ CERTIFICATES OF DEPOSIT--(CONTINUED) YANKEE DOLLAR CERTIFICATES OF DEPOSIT--(CONTINUED) Toronto Dominion Bank, New York(a) 5.000%, 03/25/08 .......................... $ 5,000 $ 5,000,000 5.050%, 03/25/08 .......................... 5,000 5,000,000 4.860%, 05/30/08 .......................... 300 300,000 4.850%, 06/06/08 .......................... 2,265 2,265,000 UBS AG, Stamford(a) 5.050%, 03/20/08 .......................... 2,500 2,500,000 4.895%, 06/04/08 .......................... 755 755,000 Unicredito Italiano, New York(a) 5.385%, 03/20/08 .......................... 1,435 1,435,004 5.015%, 03/27/08 .......................... 5,000 5,000,000 ------------ 87,416,251 ------------ TOTAL CERTIFICATES OF DEPOSIT (COST $115,681,251)....................... 115,681,251 ------------ COMMERCIAL PAPER--47.4% ASSET BACKED SECURITIES--23.0% Amstel Funding Corp. 5.650%, 03/11/08 .......................... 2,000 1,996,861 Atlantis One Funding Corp. 4.580%, 04/02/08 .......................... 5,000 4,979,644 CAFCO LLC 4.950%, 03/14/08 .......................... 10,000 9,982,125 3.030%, 05/01/08 .......................... 3,500 3,482,030 Ciesco LLC 3.050%, 05/02/08 .......................... 8,500 8,455,351 Falcon Asset Securitization Company LLC 3.170%, 04/24/08 .......................... 7,000 6,966,715 3.080%, 05/20/08 .......................... 3,000 2,979,467 Govco LLC 3.850%, 04/14/08 .......................... 5,000 4,976,472 Park Avenue Receivables Corp. 3.150%, 04/22/08 .......................... 10,000 9,954,500 Ranger Funding Company LLC 3.950%, 04/18/08 .......................... 5,000 4,973,667 Windmill Funding Corp. 3.210%, 04/21/08 .......................... 3,000 2,986,358 Yorktown Capital LLC 3.820%, 04/11/08 .......................... 5,000 4,978,247 3.250%, 04/21/08 .......................... 7,000 6,967,771 ------------ 73,679,208 ------------ 3 THE RBB FUND, INC. MONEY MARKET PORTFOLIO SCHEDULE OF INVESTMENTS (CONTINUED) FEBRUARY 29, 2008 (UNAUDITED) PAR FAIR (000) VALUE ------- ------------ COMMERCIAL PAPER--(CONTINUED) BANKS--17.4% Banco Santander Puerto Rico(b) 3.850%, 04/15/08 .......................... $ 5,000 $ 4,975,938 Bank of America Corp. 2.980%, 05/07/08 .......................... 5,000 4,972,269 4.690%, 05/27/08 .......................... 1,000 988,666 3.673%, 06/12/08 .......................... 1,515 1,499,079 2.840%, 07/07/08 .......................... 1,000 989,902 3.800%, 07/11/08 .......................... 2,040 2,011,576 Danske Corp.(b) 3.130%, 03/31/08 .......................... 5,000 4,986,958 3.500%, 04/18/08 .......................... 6,512 6,481,611 Dexia Delaware LLC(b) 4.920%, 03/19/08 .......................... 6,000 5,985,240 ING US Funding LLC(b) 3.010%, 05/06/08 .......................... 3,000 2,983,445 JPMorgan Chase & Co. 2.860%, 07/07/08 .......................... 4,000 3,959,324 Raiffeisen Zentralbank Osterreich AG(b) 4.560%, 04/07/08 .......................... 5,000 4,976,567 3.200%, 04/23/08 .......................... 4,000 3,981,156 Royal Bank of Scotland PLC(b) 4.790%, 06/04/08 .......................... 2,790 2,754,734 Societe Generale North America, Inc.(b) 4.060%, 04/11/08 .......................... 3,000 2,986,128 Unicredito Italiano Banks Ireland PLC(b) 5.245%, 03/20/08 .......................... 1,200 1,196,678 ------------ 55,729,271 ------------ FINANCE SERVICES--5.4% Citigroup Funding, Inc. 4.730%, 05/02/08 .......................... 1,160 1,150,550 General Electric Capital Corp. 4.780%, 03/17/08 .......................... 5,000 4,989,378 3.830%, 07/10/08 .......................... 1,700 1,676,307 UBS Finance Delaware LLC 5.250%, 03/18/08 .......................... 9,500 9,476,448 ------------ 17,292,683 ------------ PAR FAIR (000) VALUE ------- ------------ COMMERCIAL PAPER--(CONTINUED) LIFE INSURANCE--1.6% Prudential Funding LLC 2.970%, 03/12/08 .......................... $ 3,000 $ 2,997,278 3.040%, 03/20/08 .......................... 2,000 1,996,791 ------------ 4,994,069 ------------ TOTAL COMMERCIAL PAPER (COST $151,695,231)....................... 151,695,231 ------------ VARIABLE RATE OBLIGATIONS--7.7% ASSET BACKED SECURITIES--0.4% Cullinan Finance Corp.(c)(d)(e) 3.115%, 06/25/08 .......................... 1,115 1,114,965 ------------ BANKS--5.7% Bank of Montreal Chicago(a)(c) 3.196%, 11/10/08 .......................... 2,425 2,425,000 Bank of Nova Scotia, New York(a)(c) 3.089%, 07/03/08 .......................... 2,200 2,199,702 Deutsche Bank AG, New York(a)(c) 4.753%, 01/21/09 .......................... 2,135 2,135,000 HBOS Treasury Services PLC(b)(c)(d) 4.954%, 06/24/08 .......................... 8,000 8,000,000 Wachovia Bank NA(c) 4.753%, 02/04/09 .......................... 1,600 1,600,000 Westpac Banking Corp.(c)(d) 5.201%, 10/10/08 .......................... 2,000 2,000,000 ------------ 18,359,702 ------------ LIFE INSURANCE--1.6% MetLife Global Funding I(c)(d) 3.235%, 04/28/08 .......................... 5,000 5,000,000 ------------ TOTAL VARIABLE RATE OBLIGATIONS (COST $24,474,667)........................ 24,474,667 ------------ AGENCY OBLIGATIONS--4.3% Federal Home Loan Bank 2.560%, 02/13/09 .......................... 2,260 2,260,000 4.746%, 03/20/09(c) ....................... 1,605 1,606,575 3.064%, 08/13/09(c) ....................... 1,600 1,600,000 3.146%, 08/14/09(c) ....................... 2,495 2,494,637 See Accompanying Notes to Financial Statements. 4 THE RBB FUND, INC. MONEY MARKET PORTFOLIO SCHEDULE OF INVESTMENTS (CONCLUDED) FEBRUARY 29, 2008 (UNAUDITED) PAR FAIR (000) VALUE ------- ------------ AGENCY OBLIGATIONS--(CONTINUED) Federal Home Loan Bank Discount Note 2.500%, 08/06/08 .......................... $ 2,160 $ 2,136,300 Federal Home Loan Mortgage Corp. Discount Note 2.500%, 08/18/08 .......................... 725 716,441 Federal National Mortgage Assoc. Discount Note 2.495%, 08/20/08 .......................... 670 662,013 2.490%, 09/08/08 .......................... 1,440 1,420,977 2.490%, 09/10/08 .......................... 885 873,186 ------------ TOTAL AGENCY OBLIGATIONS (COST $13,770,129)........................ 13,770,129 ------------ MASTER NOTES--1.2% Bank of America Securities LLC(c) 3.205%, 01/22/09 .......................... 4,000 4,000,000 ------------ TOTAL MASTER NOTES (COST $4,000,000)......................... 4,000,000 ------------ REPURCHASE AGREEMENTS--3.1% Deutsche Bank Securities, Inc. (Tri-Party Agreement dated 02/29/08 to be repurchased at $9,908,559, collateralized by $9,969,000 par value, Federal Home Loan Mortgage Corp., 5.52%, due 06/30/10; $53,000 par value, Federal National Mortgage Association, 4.40%, due 04/07/08; Market Value of the collateral is $10,203,608) 3.100%, 03/03/08............................ 9,906 9,906,000 ------------ TOTAL REPURCHASE AGREEMENTS (COST $9,906,000)......................... 9,906,000 ------------ TOTAL INVESTMENTS AT VALUE--99.9% (COST $319,527,278*)........................ 319,527,278 ------------ OTHER ASSETS IN EXCESS OF LIABILITIES --0.1%.......................... 226,228 ------------ FAIR VALUE ------------ NET ASSETS (APPLICABLE TO 303,339,276 BEDFORD SHARES AND 16,412,790 SANSOM STREET SHARES)--100.0%...................... $319,753,506 ============ * Aggregate cost is the same for financial reporting and Federal tax purposes. (a) Security is a foreign domiciled issuer which is registered with the Securities and Exchange Commission. (b) U.S. dollar denominated security issued by foreign domiciled entity. (c) Variable Rate Obligations -- The interest rate shown is the rate as of February 29, 2008 and the maturity date shown is the next interest rate readjustment date or the maturity date. (d) Security is exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional investors. (e) Security is illiquid. See Accompanying Notes to Financial Statements. 5 THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES FEBRUARY 29, 2008 (UNAUDITED) ASSETS Investments, at fair value (cost $309,621,278) ......... $309,621,278 Repurchase agreements at cost .......................... 9,906,000 Cash ................................................... 933 Interest receivable .................................... 1,274,540 Prepaid expenses and other assets ...................... 26,623 ------------ Total assets ..................................... 320,829,374 ------------ LIABILITIES Payables for: Dividends ........................................... 812,485 Distribution fees ................................... 136,685 Advisory fees ....................................... 57,745 Custodian fees ...................................... 20,520 Directors' and officer's fees ....................... 9,625 Transfer agent fees ................................. 6,320 Administration and accounting fees .................. 4,636 Service organization fees ........................... 162 Accrued expenses and other liabilities ................. 27,690 ------------ Total liabilities ................................ 1,075,868 ------------ NET ASSETS ............................................. $319,753,506 ============ NET ASSETS CONSISTED OF: Paid-in capital ........................................ $319,752,065 Undistributed net investment income .................... 831 Accumulated net realized gain from investments ......... 610 ------------ NET ASSETS ............................................. $319,753,506 ============ NET ASSET VALUE, Offering and Redemption Price Per Bedford Share ($303,342,345/303,339,276) ............... $ 1.00 ============ NET ASSET VALUE, Offering and Redemption Price Per Sansom Street Share ($16,411,161/16,412,790) ........... $ 1.00 ============ See Accompanying Notes to Financial Statements. 6 THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED FEBRUARY 29, 2008 (UNAUDITED) Investment Income Interest ............................................. $6,731,268 ---------- Expenses Distribution fees(1) ................................. 820,493 Investment advisory and administration fees .......... 603,582 Custodian fees ....................................... 37,570 Professional fees .................................... 28,508 Directors' and officer's fees ........................ 27,039 Printing and shareholder reporting fees .............. 26,389 Registration and filing fees ......................... 26,322 Regulatory administration fees ....................... 17,894 Transfer agent fees .................................. 10,295 Insurance fees ....................................... 8,560 Service organization fees (Sansom Class) ............. 500 Other expenses ....................................... 15,636 ---------- Total expenses .......................................... 1,622,788 Less fees waived ..................................... (456,613) ---------- Net total expenses ...................................... 1,166,175 ---------- Net investment income ................................... 5,565,093 Realized gain on investments ............................ 8,104 ---------- Net increase in net assets resulting from operations .... $5,573,197 ========== (1) See Note 2 in Notes to Financial Statements. See Accompanying Notes to Financial Statements. 7 THE RBB FUND, INC. MONEY MARKET PORTFOLIO STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED FOR THE FEBRUARY 29, 2008 YEAR ENDED (UNAUDITED) AUGUST 31, 2007 ----------------- --------------- Increase (decrease) in net assets: Operations: Net investment income .............................. $ 5,565,093 $ 9,566,330 Net realized gain (loss) on investments ............ 8,104 (1,885) ------------ ------------ Net increase in net assets resulting from operations 5,573,197 9,564,445 ------------ ------------ Dividends to shareholders from Net investment income: Bedford shares ................................... (5,127,619) (8,491,001) Sansom Street shares ............................. (437,474) (1,075,329) ------------ ------------ Total dividends to shareholders .................. (5,565,093) (9,566,330) ------------ ------------ Net capital share transactions (See Note 3) .......... 85,479,665 68,085,811 ------------ ------------ Total increase in net assets ......................... 85,487,769 68,083,926 Net Assets: Beginning of period ................................ 234,265,737 166,181,811 ------------ ------------ End of period ...................................... $319,753,506 $234,265,737 ============ ============ Undistributed net investment income, end of period . $ 831 $ 831 ============ ============
See Accompanying Notes to Financial Statements. 8 THE RBB FUND, INC. MONEY MARKET PORTFOLIO FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
THE BEDFORD CLASS - ----------------------------------------------------------------------------------------------------------------------------------- FOR THE SIX MONTHS FOR THE FOR THE FOR THE FOR THE FOR THE ENDED YEAR YEAR YEAR YEAR YEAR FEBRUARY 29, ENDED ENDED ENDED ENDED ENDED 2008 AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, (UNAUDITED) 2007 2006 2005 2004 2003 ------------ ---------- ---------- ---------- ---------- ---------- Net asset value, beginning of period ...... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 -------- -------- -------- -------- -------- -------- Income from investment operations: Net investment income .................. 0.0204 0.0447 0.0388 0.0162 0.0025 0.0046 Net gains on securities ................ --(b) --(b) --(b) --(b) --(b) 0.0005 -------- -------- -------- -------- -------- -------- Total net income from investment operations ......................... 0.0204 0.0447 0.0388 0.0162 0.0025 0.0051 -------- -------- -------- -------- -------- -------- Less dividends and distributions: Dividends (from net investment income) .............................. (0.0204) (0.0447) (0.0388) (0.0162) (0.0025) (0.0046) Distributions (from capital gains) ..... -- -- -- -- -- (0.0005) -------- -------- -------- -------- -------- -------- Total dividends and distributions .... (0.0204) (0.0447) (0.0388) (0.0162) (0.0025) (0.0051) -------- -------- -------- -------- -------- -------- Net asset value, end of period ............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======== ======== ======== ======== ======== ======== Total Return 2.06% 4.56% 3.95% 1.63% 0.25% 0.53% Ratios/Supplemental Data Net assets, end of period (000's omitted) ...................... $303,342 $218,914 $150,657 $109,495 $ 72,001 $ 80,406 Ratios of expenses to average net assets(a) ........................ 0.90%(c) 0.90% 0.85% 0.97% 0.94% 0.98% Ratios of net investment income to average net assets ................ 4.07%(c) 4.47% 3.81% 1.68% 0.24% 0.46% (a) Without the waiver of advisory fees and reimbursement of certain operating expenses, the ratios of expenses to average net assets for the Bedford Class of the Money Market Portfolio would have been 1.24% for the six months ended February 29, 2008 and 1.29%,1.34%, 1.23%, 1.34% and 1.30% for the years ended August 31, 2007, 2006, 2005, 2004 and 2003, respectively. (b) Amount is less than ($0.0005) per share. (c) Annualized.
See Accompanying Notes to Financial Statements. 9 THE RBB FUND, INC. MONEY MARKET PORTFOLIO FINANCIAL HIGHLIGHTS (CONCLUDED) (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
THE SANSOM STREET CLASS - ----------------------------------------------------------------------------------------------------------------------------------- FOR THE SIX MONTHS FOR THE FOR THE FOR THE FOR THE FOR THE ENDED YEAR YEAR YEAR YEAR YEAR FEBRUARY 29, ENDED ENDED ENDED ENDED ENDED 2008 AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31, (UNAUDITED) 2007 2006 2005 2004 2003 ------------ ---------- ---------- ---------- ---------- ---------- Net asset value, beginning of period ...... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 -------- -------- -------- -------- -------- -------- Income from investment operations: Net investment income .................. 0.0232 0.0502 0.0434 0.0239 0.0100 0.0114 Net gains on securities ................ --(b) --(b) --(b) --(b) --(b) 0.0005 -------- -------- -------- -------- -------- -------- Total net income from investment operations ......................... 0.0232 0.0502 0.0434 0.0239 0.0100 0.0119 -------- -------- -------- -------- -------- -------- Less dividends and distributions: Dividends (from net investment income) .............................. (0.0232) (0.0502) (0.0434) (0.0239) (0.0100) (0.0114) Distributions (from capital gains) ..... -- -- -- -- -- (0.0005) -------- -------- -------- -------- -------- -------- Total dividends and distributions .... (0.0232) (0.0502) (0.0434) (0.0239) (0.0100) (0.0119) -------- -------- -------- -------- -------- -------- Net asset value, end of period ............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======== ======== ======== ======== ======== ======== Total Return ......................... 2.34% 5.14% 4.42% 2.41% 1.00% 1.21% Ratios/Supplemental Data Net assets, end of period (000's omitted) ...................... $ 16,411 $ 15,352 $ 15,525 $ 87,304 $141,372 $198,373 Ratios of expenses to average net assets(a) ........................ 0.33%(c) 0.35% 0.26% 0.20% 0.20% 0.30% Ratios of net investment income to average net assets ................... 4.55%(c) 5.02% 4.25% 2.39% 0.98% 1.14% (a) Without the waiver of advisory fees and reimbursement of certain operating expenses, the ratios of expenses to average net assets for the Sansom Street Class of the Money Market Portfolio would have been 0.61% for the six months ended February 29, 2008 and 0.69%, 0.67%, 0.67%, 0.59% and 0.57% for the years ended August 31, 2007, 2006, 2005, 2004 and 2003, respectively. (b) Amount is less than ($0.0005) per share. (c) Annualized.
See Accompanying Notes to Financial Statements. 10 THE RBB FUND, INC. MONEY MARKET PORTFOLIO NOTES TO FINANCIAL STATEMENTS FEBRUARY 29, 2008 (UNAUDITED) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The RBB Fund, Inc. ("RBB" or the "Company") was incorporated under the laws of the State of Maryland on February 29, 1988, and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company. RBB is a "series fund," which is a mutual fund divided into separate portfolios. Each portfolio is treated as a separate entity for certain matters under the 1940 Act, and for other purposes, and a shareholder of one portfolio is not deemed to be a shareholder of any other portfolio. Currently, RBB has twenty-one active investment portfolios, including the Money Market Portfolio ("Portfolio"), which comprise the RBB family of funds. RBB has authorized capital of one hundred billion shares of common stock of which 78.073 billion shares are currently classified into one hundred and twenty classes of common stock. The Portfolio has issued shares with a par value of $0.001. Each class represents an interest in an active or inactive RBB investment portfolio. The active classes have been grouped into ten separate "families." SECURITY VALUATION -- Securities held in the Portfolio are valued under the amortized cost method, which approximates current market value. Under this method, securities are valued at cost when purchased and thereafter a constant accretion of discount or amortization of premium is recorded until maturity of the security. Regular review and monitoring of the valuation is performed to ensure that cost continues to approximate market value and to avoid dilution or other unfair results to shareholders. The Portfolio seeks to maintain net asset value per share at $1.00. SECURITY TRANSACTIONS, INVESTMENT INCOME, AND EXPENSES -- Security transactions are accounted for on the trade date. The cost of investments sold is determined by use of the specific identification method for both financial reporting and income tax purposes. Interest income is accrued when earned. Certain expenses, such as distribution, transfer agency and printing, are class specific expenses and vary by class. Expenses not directly attributable to a specific portfolio or class are allocated based on relative net assets of each portfolio and class. Expenses incurred on behalf of a specific class, fund or fund family are charged directly to the class, fund or fund family (in proportion to net assets). Expenses incurred for all portfolios within the Company (such as director or professional fees) are charged to all portfolios in proportion to their average net assets. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net investment income are declared daily, recorded on the ex-date and paid monthly. All dividends from net investment income are taxed as ordinary income. Any net realized capital gains are distributed at least annually. Income subject to dividends and capital gain subject to distributions are determined in accordance with income tax regulations, which may differ from accounting principles generally accepted in the United States of America. FEDERAL INCOME TAXES -- No provision is made for federal income taxes. It is the Company's intention to have each portfolio continue to qualify for and elect the tax treatment applicable to regulated investment companies under Subchapter M of the Internal Revenue Code and make the requisite distributions to its shareholders which will be sufficient to relieve it from federal income and excise taxes. 11 THE RBB FUND, INC. MONEY MARKET PORTFOLIO NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 29, 2008 (UNAUDITED) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) REPURCHASE AGREEMENTS -- Money market instruments may be purchased subject to the seller's agreement to repurchase them at an agreed-upon date and price. The seller will be required on a daily basis to maintain the value of the securities as collateral, subject to the agreement at not less than the repurchase price plus accrued interest. If the value of the collateral falls below 102% of the value of the repurchase price plus accrued interest, the Portfolio will require the seller to deposit additional collateral by the next Portfolio business day. In the event that the seller under the agreement defaults on its repurchase obligation or fails to deposit sufficient collateral, the Portfolio has the contractual right, subject to the requirements of applicable bankruptcy and insolvency laws, to sell the underlying securities and may claim any resulting loss from the seller. The agreements are conditioned upon the collateral being deposited under the Federal Reserve Book Entry System or with the Portfolio's custodian or a third party sub-custodian. USE OF ESTIMATES -- The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. OTHER -- In the normal course of business, the Portfolio may enter into contracts that provide general indemnifications. The Portfolio's maximum exposure under these arrangements is dependent on claims that may be made against the Portfolio in the future, and, therefore, cannot be estimated; however, based on experience, the risk of material loss for such claims is considered remote. 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES Pursuant to an Investment Advisory and Administration Agreement, BlackRock Institutional Management Corp. (the "Adviser" or "BIMC"), an indirect subsidiary of The PNC Financial Services Group, Inc., serves as investment adviser and administrator for the Portfolio. BIMC and PFPC Inc. ("PFPC"), a wholly-owned subsidiary of PFPC Worldwide Inc. and an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc., entered into a delegation agreement on behalf of the Portfolio, wherein PFPC has agreed to perform administration and accounting services for an annual fee of 0.10% of the average net assets of the Portfolio, paid out of the fee paid to BIMC. For its advisory services, BIMC is entitled to receive the following fees, computed daily and payable monthly, and based on the Portfolio's average daily net assets: ANNUAL RATE ---------------------------------------------- 0.45% of first $250 million of net assets; 0.40% of next $250 million of net assets; and 0.35% of net assets in excess of $500 million. 12 THE RBB FUND, INC. MONEY MARKET PORTFOLIO NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 29, 2008 (UNAUDITED) 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONTINUED) BIMC may, at its discretion, voluntarily waive all or any portion of its advisory fee for the Portfolio. For each class of shares within the Portfolio, the net advisory fee charged to each class is the same on a relative basis. For the six months ended February 29, 2008, advisory fees and waivers for the investment portfolio were as follows: GROSS NET ADVISORY ADVISORY FEE WAIVER FEE -------- ---------- -------- $603,582 $(393,702) $209,880 As of February 29, 2008, the Portfolio owed BIMC $57,745 in advisory fees. BIMC may voluntarily waive and/or reimburse a portion of its fees. PFPC may also voluntarily waive a portion of its fees and/or reimburse expenses. The Portfolio will not pay BIMC or PFPC at a later time for any amounts waived or assumed. For providing regulatory administration services to RBB, PFPC is entitled to receive compensation as agreed to by the Company and PFPC. This fee is allocated to each portfolio in proportion to their net assets. The Portfolio's portion of this fee for the six months ended February 29, 2008 was $17,894. PFPC serves as the transfer and dividend disbursing agent for each class. Both PFPC Trust Company and PFPC are wholly-owned subsidiaries of PFPC Worldwide Inc., an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc. For providing transfer agent services, PFPC is entitled to receive fees from the Portfolio. PFPC may, at its discretion, voluntarily waive all or any portion of its transfer agency fee for any class of shares. For the six months ended February 29, 2008, transfer agency fees for the Portfolio were $10,295. PFPC Trust Company provides certain custodial services to the Portfolio. As compensation for such custodial services, PFPC Trust Company is entitled to receive the following fees, computed daily and payable monthly, and based on the Portfolio's average gross assets: ANNUAL RATE ------------------------------------------------ 0.025% of first $50 million of gross assets; 0.020% of next $50 million of gross assets; 0.015% of gross assets in excess of $100 million. The Portfolio, on behalf of each class of shares of the Portfolio, has adopted Distribution Plans pursuant to Rule 12b-1 under the 1940 Act (the "Plans"). The Portfolio has entered into a Distribution Agreement with PFPC Distributors, Inc. ("PFPC Distributors"). PFPC Distributors is a wholly-owned subsidiary of PFPC Worldwide Inc. and an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc. 13 THE RBB FUND, INC. MONEY MARKET PORTFOLIO NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 29, 2008 (UNAUDITED) 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONTINUED) The Plans provide for each class to make monthly payments, based on average net assets, to PFPC Distributors of up to 0.65% on an annualized basis for the Bedford Class and up to 0.05% on an annualized basis for the Sansom Street Class. Effective December 31, 2007, the Plan was terminated with respect to the Sansom Street Class. For the six months ended February 29, 2008, distribution fees paid to PFPC Distributors for each class were as follows: GROSS NET DISTRIBUTION DISTRIBUTION FEE WAIVER FEE ------------ -------- ------------ Bedford Class $817,844 $(62,911) $754,933 Sansom Street Class 2,649 -- 2,649 -------- -------- -------- Total Money Market Portfolio $820,493 $(62,911) $757,582 ======== ======== ======== The Portfolio has entered into service agreements with banks affiliated with PNC who render support services to customers who are the beneficial owners of the Sansom Street Class in consideration of the payment of 0.10% of the daily net asset value of such shares. For the six months ended February 29, 2008, service organization fees were $500 for the Portfolio. As of February 29, 2008, the Portfolio owed PFPC and its affiliates $168,161 for their services. 3. CAPITAL SHARES Transactions in capital shares (at $1 per capital share) for each year were as follows:
BEDFORD CLASS - ------------------------------------------------------------------------------------------ FOR THE SIX MONTHS ENDED FOR THE FEBRUARY 29, 2008 YEAR ENDED (UNAUDITED) AUGUST 31, 2007 ----------------- --------------- VALUE VALUE ----------------- --------------- Shares sold $ 353,526,258 $ 540,563,896 Shares issued on reinvestment of dividends 4,698,705 8,204,137 Shares repurchased (273,803,995) (480,513,295) -------------- -------------- Net Increase $ 84,420,968 $ 68,254,738 -------------- -------------- Bedford Shares authorized 1,500,000,000 1,500,000,000 ============== ============== SANSOM STREET CLASS - ------------------------------------------------------------------------------------------ FOR THE SIX MONTHS ENDED FOR THE FEBRUARY 29, 2008 YEAR ENDED (UNAUDITED) AUGUST 31, 2007 ----------------- --------------- VALUE VALUE ----------------- --------------- Shares sold $ 74,474,753 $ 207,692,244 Shares issued on reinvestment of dividends 60,914 136,709 Shares repurchased (73,476,970) (207,997,880) -------------- -------------- Net Increase/Decrease $ 1,058,697 $ (168,927) -------------- -------------- Sansom Street Shares authorized 1,500,000,000 1,500,000,000 ============== ==============
14 THE RBB FUND, INC. MONEY MARKET PORTFOLIO NOTES TO FINANCIAL STATEMENTS (CONCLUDED) FEBRUARY 29, 2008 (UNAUDITED) 4. FEDERAL INCOME TAX INFORMATION The Portfolio intends to continue to qualify as a regulated investment company and distribute all of its taxable income. Therefore, no federal tax provision is required. For federal income tax purposes, realized capital losses may be carried forward and applied against future realized gains. At August 31, 2007, the Portfolio had capital loss carryforwards of $5,533 of which $3,587 will expire on August 31, 2013, $917 will expire on August 31, 2014 and $1,029 will expire on August 31, 2015. 5. NEW ACCOUNTING PRONOUNCEMENTS Effective February 29, 2008, the Portfolio adopted FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes" ("FIN 48"). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Fund's tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax positions not deemed to meet the "more-likely-than-not" threshold would be recorded as a tax benefit or expense in the current year. The adoption of FIN 48 did not result in the recording of any tax benefits or expenses. In September 2006, FASB issued Statement of Financial Accounting Standards ("SFAS") 157, Fair Value Measurements, which clarifies the definition of fair value and requires companies to expand their disclosure about the use of fair value to measure assets and liabilities in interim and annual periods subsequent to initial recognition. Adoption of SFAS 157 requires the use of the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Although we are still in the process of evaluating the impact, if any, of SFAS 157 on the Portfolio, management believes that there will be no material impact on the Portfolio's financial statements other than enhanced disclosures. 15 ADDITIONAL INFORMATION (UNAUDITED) PROXY VOTING Policies and procedures that the Portfolio uses to determine how to vote proxies relating to portfolio securities as well as information regarding how the Portfolio voted proxies relating to portfolio securities for the most recent 12-month period ended June 30 are available without charge, upon request, by calling the number shown below and on the Securities and Exchange Commission's ("SEC") website at http://www.sec.gov. Bedford (800) 888-9723 Sansom Street (888) 261-4073 QUARTERLY PORTFOLIO SCHEDULES The Company files its complete schedule of portfolio holdings with the SEC for the first and third fiscal quarter of each fiscal year (quarters ended November 30 and May 31) on Form N-Q. The Company's Form N-Q is available on the SEC website at http://www.sec.gov and may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. Information on the operation of the SEC Public Reference Room may be obtained by calling (202) 551-8090. 16 [THIS PAGE INTENTIONALLY LEFT BLANK.] [THIS PAGE INTENTIONALLY LEFT BLANK.] [THIS PAGE INTENTIONALLY LEFT BLANK.] INVESTMENT ADVISER BlackRock Institutional Management Corporation 100 Bellevue Parkway Wilmington, DE 19809 TRANSFER AGENT PFPC Inc. 101 Sabin Street Pawtucket, RI 02866 PRINCIPAL UNDERWRITER PFPC Distributors, Inc. 760 Moore Road King of Prussia, PA 19406 CUSTODIAN PFPC Trust Company 8800 Tinicum Blvd. Suite 200 Philadelphia, PA 19153 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Deloitte & Touche LLP 1700 Market Street Philadelphia, PA 19103-3984 COUNSEL Drinker Biddle & Reath LLP One Logan Square 18th and Cherry Streets Philadelphia, PA 19103-6996 [GRAPHICS OMITTED] Hilliard Lyons SENBANC FUND SENBANK of THE RBB FUND, INC. SEMI-ANNUAL REPORT FEBRUARY 29, 2008 (UNAUDITED) This report is submitted for the general information of the shareholders of the Fund. It is not authorized for distribution unless preceded or accompanied by a current prospectus for the Fund. Shares of Senbanc Fund are distributed by PFPC Distributors, Inc., 760 Moore Road, King of Prussia, PA 19406. SIX MONTHS ENDED FEBRUARY 29, 2008 TO: SHAREHOLDERS OF SENBANC FUND Fortune favors the prepared mind. We have met redemptions by systematically liquidating illiquid and relatively overvalued bank stocks from the Fund's portfolio. Now, the Fund's top ten holdings represent 67% of the total portfolio, with large regional and money-center banks representing 70% of that amount. With some exceptions, we have maintained a portfolio by attrition, which reflects the ranking of banks by our software that reflects value versus price. The current period has not been without its challenges. Our portfolio of investments at the end of the period has the same profile of undervaluation as that at the beginning of the period, but with greater emphasis on large-cap brand name companies. The trend of declining bank stock prices shifted toward large-cap banks in 2007, because of ownership volume and demographics, visibility, and their connection in investors' minds with well-publicized problems in the broader financial sector. The Fund's drop in net asset value is the largest in its eight year history, and its second annual decrease. The drop in the Fund's Morningstar rating, though we are ranked in the `Financial Services' sector and included in our sector are funds other than our bank fund peers, is attributable to a collapse in recent performance severe enough to negate the benefits of our out-performance in prior periods. Redemptions from the Fund are directly attributable to this under-performance. The banks the Fund owns provide capital and liquidity to sub-prime mortgage lenders, but for the most part are not directly involved in such lending activity. We do not analyze the business lines of banks PER SE; we are focused on the long term relationship of business mix to profitability. The long term success of a business strategy is determined by a preponderance of business mix decisions that, over time, result in consistently improving earnings and profitability. The collapse of bank stock prices has not changed the fact of strong underlying value for banks. Additional reserves set aside by banks represent an insurance against future earnings, but have fuelled further retrenchment of bank stock prices. Bank stock valuations have been squeezed into a narrow band and detached from relative underlying performance, and we view this as an indication that the limits of downside risk may be in sight. Assumptions of a recession following on from a slowed housing market, lower household net worth and consequent contraction in consumer spending cannot be dismissed. But the drop in bank stock prices in the fourth quarter of 2007 and in the first quarter of 2008 places financial stocks firmly in the lead as the most depressed industry group, and is an indication that any recession may already be priced into these stocks. If this is the case, then several positive aspects may be brought to bear on the bank group as a whole. If the general market continues to be weak, a flight to quality and value makes banks look attractive to investors. Limited downside risk reduces price volatility relative to the general market, and this makes banks look attractive. If banks are conservatively building reserves for loan losses, then excess reserves will be available to boost earnings when the housing market recovers, and banks will be more attractive. We have suffered `the slings and arrows of outrageous fortune....' But our basic premise is that proper value, properly measured, will be properly realized, over time. We believe that time is near. Very truly yours, /s/ Alan F. Morel ------------------------------ Alan F. Morel Portfolio Manager Senbanc Fund 1 - -------------------------------------------------------------------------------- SINCE TOTAL RETURNS (%) SIX 1 3 YEAR 5 YEAR INCEPTION* AS OF 2/29/08 MONTHS YEAR ANNUALIZED ANNUALIZED ANNUALIZED - -------------------------------------------------------------------------------- Senbanc Fund (22.28) (30.34) (9.32) 0.44 5.95 - -------------------------------------------------------------------------------- *Inception Date -- 7/8/99 THE PERFORMANCE SHOWN ABOVE REPRESENTS PAST PERFORMANCE. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS AND CURRENT PERFORMANCE MAY BE HIGHER OR LOWER THAN THE PERFORMANCE SHOWN ABOVE. INVESTMENT RESULTS AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. TO OBTAIN PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH-END, VISIT WWW.HILLIARD.COM OR CALL 1-800-444-1854. THE FUND'S GROSS ANNUAL OPERATING EXPENSES, AS STATED IN THE CURRENT PROSPECTUS IS 1.62%. TOTAL RETURNS SHOWN INCLUDE FEE WAIVERS AND EXPENSE REIMBURSEMENTS. RETURNS COULD HAVE BEEN LOWER IF THESE WAIVERS WERE NOT IN EFFECT. THE MAXIMUM SALES CHARGE, AS STATED IN THE PROSPECTUS, IS 2.25%. 2 SENBANC FUND FUND EXPENSE EXAMPLES (UNAUDITED) As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments; and (2) ongoing costs, including management fees; distribution (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the six-month period from September 1, 2007 to February 29, 2008, and held for the entire period. ACTUAL EXPENSES The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use the information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads). Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. Beginning Account Ending Account Value Value Expenses Paid 9/01/07 2/29/08 During Period* ------------------ -------------- -------------- Actual ........................ $1,000.00 $ 777.20 $7.51 Hypothetical (5% return before expenses). 1,000.00 1,016.30 8.56 - ---------------- * Expenses are equal to the Fund's annualized expense ratio of 1.70% multiplied by the average account value over the period, multiplied by the number of days (182) in the most recent fiscal half-year, then divided by 366 to reflect the one-half year period. The Fund's ending account value is based on the actual six-month total return of (22.28%). PORTFOLIO HOLDINGS SUMMARY TABLE FEBRUARY 29, 2008 (UNAUDITED) % of Industry Classification Net Assets - -------------------------- ------------ Savings, Credit & Other Financial Institutions ....... 95.5% State & National Banks ............................... 1.4 U.S. Government Agency Obligation .................... 3.1 Temporary Investment ................................. 0.0 ------ 100.0 Other Assets in Excess of Liabilities ................ 0.0 ------ Net Assets ........................................... 100.0% ====== Portfolio holdings are subject to change at any time. 3 SENBANC FUND SCHEDULE OF INVESTMENTS FEBRUARY 29, 2008 (UNAUDITED) COMMON STOCK -- 96.9% - ------------------------------------------------------------------------- FAIR SHARES DESCRIPTION VALUE - ------ ----------- --------- SAVINGS, CREDIT & OTHER FINANCIAL INSTITUTIONS -- 95.5% ------------------------------------------------------- 26,900 Associated Banc-Corp. ................ $ 670,348 116,400 Bank of America Corp. ................ 4,625,736 42,478 C&F Financial Corp. .................. 1,273,915 3,600 Camden National Corp. ................ 114,228 86,000 Capital Bank Corp. ................... 863,440 40,400 Central Pacific Financial Corp. ...... 746,996 22,700 Citigroup, Inc. ...................... 538,217 12,300 Citizens Banking Corp. ............... 136,899 37,000 City Holding Co. ..................... 1,377,880 35,700 Comerica, Inc. ....................... 1,293,768 19,400 Community Bankshares, Inc. ........... 244,440 109,900 Corus Bankshares, Inc. ............... 1,135,267 42,600 Financial Institutions, Inc. ......... 788,526 40,500 First United Corp. ................... 785,700 139,900 Fremont General Corp.* ............... 139,914 234,000 JPMorgan Chase & Co. ................. 9,512,100 180,400 KeyCorp .............................. 3,977,820 3,917 MainSource Financial Group, Inc. ..... 51,352 172,111 National Bankshares, Inc. ............ 3,514,507 246,300 National City Corp. .................. 3,906,318 186,199 Northrim BanCorp, Inc. ............... 4,010,727 272,103 PAB Bankshares, Inc. ................. 3,216,257 122,900 Pacific Premier Bancorp, Inc.* ....... 1,000,406 12,000 Peoples Financial Corp. .............. 291,000 50,194 Premier Financial Bancorp ............ 615,880 186,800 Regions Financial Corp. .............. 3,960,160 5,000 StellarOne Corp. ..................... 86,500 156,000 U.S. Bancorp ......................... 4,995,120 11,700 Umpqua Holdings Corp. ................ 165,789 102,900 UnionBanCal Corp. .................... 4,792,053 238,942 Wachovia Corp. ....................... 7,316,404 ------------ 66,147,667 ------------ See Notes to Financial Statements. 4 SENBANC FUND SCHEDULE OF INVESTMENTS (CONCLUDED) FEBRUARY 29, 2008 (UNAUDITED) COMMON STOCK (CONTINUED) - ------------------------------------------------------------------------- FAIR SHARES DESCRIPTION VALUE - ------ ----------- --------- STATE & NATIONAL BANKS -- 1.4% 25,500 Huntington Bancshares, Inc. .......... $ 311,610 31,884 Rurban Financial Corp. ............... 357,101 18,600 Taylor Capital Group, Inc. ........... 303,180 ------------ 971,891 ------------ TOTAL COMMON STOCK (COST $86,311,732) ................ 67,119,558 ------------ PRINCIPAL - --------- U.S. GOVERNMENT AGENCY OBLIGATION -- 3.1% $2,139,000 Federal Home Loan Bank Discount Note 2.00%, 03/03/08(a) ................... 2,138,762 ------------ TOTAL U.S. GOVERNMENT AGENCY OBLIGATION (COST $2,138,762) ................. 2,138,762 ------------ SHARES - ------ TEMPORARY INVESTMENT -- 0.0% 381 PNC Bank Money Market 2.51%, 03/03/08 ................... 381 ------------ TOTAL TEMPORARY INVESTMENT (COST $381) ....................... 381 ------------ TOTAL INVESTMENTS -- 100.0% (COST $88,450,875) ................ 69,258,701 ------------ OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.0% ............... 6,250 ------------ NET ASSETS -- 100% .................. $ 69,264,951 ============ - ----------------------- * Non-income producing security. (a) Rate shown is the effective yield at purchase. See Notes to Financial Statements. 5 SENBANC FUND STATEMENT OF ASSETS AND LIABILITIES FEBRUARY 29, 2008 (UNAUDITED) ASSETS Investments in securities, at fair value (Cost $88,450,875) ........................................ $ 69,258,701 Receivable for: Dividends and interest .................................... 231,268 Capital shares sold ....................................... 220,584 Prepaid expenses .............................................. 24,291 ------------ Total Assets .................................................. 69,734,844 ------------ LIABILITIES Payable for: Capital shares redeemed ................................... 243,734 Distribution fees ......................................... 58,634 Transfer agent fees ....................................... 37,094 Advisory fees ............................................. 24,637 Administration and accounting fees ........................ 20,648 Directors' and officer's fees ............................. 15,606 Professional fees ......................................... 15,494 Custodian fees ............................................ 9,375 Accrued expenses and other liabilities ........................ 44,671 ------------ Total Liabilities ............................................. 469,893 ------------ NET ASSETS .................................................... $ 69,264,951 ============ NET ASSETS CONSISTED OF: Paid-in capital ............................................... $ 88,219,217 Undistributed net investment income ........................... 276,346 Accumulated net realized loss on investments .................. (38,438) Net unrealized depreciation of investments .................... (19,192,174) ------------ NET ASSETS .................................................... $ 69,264,951 ============ NET ASSET VALUE, OFFERING, AND REDEMPTION PRICE PER SHARE ($69,264,951/6,798,407 outstanding shares of common stock, $0.001 par value, $50,000,000 shares authorized) ........................................ $ 10.19 ============ Maximum offering price per share (100/97.75 of $10.19) ........ $ 10.42 ============ See Notes to Financial Statements. 6 SENBANC FUND STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED FEBRUARY 29, 2008 (UNAUDITED) ------------------ INVESTMENT INCOME: Dividends ................................................. $ 2,018,147 Interest income ........................................... 12,113 ------------ Total income .................................................. 2,030,260 ------------ EXPENSES: Advisory fees ............................................. 261,798 Distribution fees ......................................... 261,798 Transfer agent fees ....................................... 79,836 Administration and accounting fees ........................ 60,842 Printing and shareholder reporting fees ................... 26,759 Professional fees ......................................... 22,863 Directors' and officer's fees ............................. 14,743 Registration and filing fees .............................. 14,721 Custodian fees ............................................ 14,069 Other expenses ............................................ 4,859 ------------ Total expenses before waivers ........................ 762,288 Less: waivers ........................................ (20,040) ------------ Net expenses ......................................... 742,248 ------------ NET INVESTMENT INCOME ......................................... 1,288,012 ------------ REALIZED AND UNREALIZED GAIN/(LOSS) FROM INVESTMENTS: Net realized gain from investments ........................ 734,232 Net change in unrealized depreciation on investments ...... (24,062,748) ------------ Net realized and unrealized loss from investments ......... (23,328,516) ------------ Net decrease in net assets resulting from operations ...... $(22,040,504) ============ See Notes to Financial Statements. 7 SENBANC FUND STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS FOR THE ENDED FISCAL YEAR FEBRUARY 29, 2008 ENDED (UNAUDITED) AUGUST 31, 2007 ----------------- --------------- INCREASE/(DECREASE) IN NET ASSETS: OPERATIONS: Net investment income ..................................... $ 1,288,012 $ 2,957,822 Net realized gain from investments ........................ 734,232 4,114,280 Net change in unrealized depreciation on investments ...... (24,062,748) (15,512,591) ------------ -------------- Net decrease in net assets resulting from operations .................................... (22,040,504) (8,440,489) ------------ -------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Net investment income ..................................... (3,969,488) (3,190,506) Net realized capital gain ................................. (4,498,912) (4,336,731) ------------ -------------- Total dividends and distributions .................... (8,468,400) (7,527,237) ------------ -------------- CAPITAL SHARE TRANSACTIONS (NOTE 4): Proceeds from shares sold ................................. 2,674,147 4,578,577 Reinvestment of distributions ............................. 7,947,115 6,961,407 Shares redeemed ........................................... (21,966,508) (70,045,843) ------------ -------------- Net decrease in net assets derived from capital share transactions ......................... (11,345,246) (58,505,859) ------------ -------------- TOTAL DECREASE IN NET ASSETS .................................. (41,854,150) (74,473,585) NET ASSETS: Beginning of period ....................................... 111,119,101 185,592,686 ------------ -------------- End of period ............................................. $ 69,264,951 $ 111,119,101 ============ ============== Undistributed net investment income, end of period $ 276,346 $ 2,957,822 ============ ==============
See Notes to Financial Statements. 8 SENBANC FUND FINANCIAL HIGHLIGHTS
FOR THE FOR THE FOR THE FOR THE PERIOD SIX MONTHS FISCAL YEAR FISCAL YEAR JULY 1, 2005 FOR THE FISCAL YEARS ENDED ENDED ENDED ENDED THROUGH ---------------------------------- FEBRUARY 29, 2008 AUGUST 31, AUGUST 31, AUGUST 31, JUNE 30, JUNE 30, JUNE 30, (UNAUDITED) 2007 2006 2005* 2005 2004 2003 ------------------ ----------- ----------- -------------- --------- -------- -------- PER SHARE OPERATING PERFORMANCE Net asset value: Beginning of period $ 14.69 $ 16.57 $ 16.27 $ 16.13 $ 16.54 $ 14.86 $ 13.47 ------- -------- -------- -------- -------- -------- -------- Net investment income/(loss) 0.23 0.41 0.29 0.03 0.15 0.04 (0.01) Net realized and unrealized gain (loss) on investments (3.42) (1.56) 0.44 0.11 0.78 2.59 2.05 ------- -------- -------- -------- -------- -------- -------- Total from investment operations (3.19) (1.15) 0.73 0.14 0.93 2.63 2.04 ------- -------- -------- -------- -------- -------- -------- Less distributions from: Net investment income (0.61) (0.31) (0.12) -- (0.10) (0.02) (0.01) Net realized gain on investments (0.70) (0.42) (0.31) -- (1.24) (0.93) (0.64) ------- -------- -------- -------- -------- -------- -------- Total distributions (1.31) (0.73) (0.43) -- (1.34) (0.95) (0.65) ------- -------- -------- -------- -------- -------- -------- Net asset value: End of period $ 10.19 $ 14.69 $ 16.57 $ 16.27 $ 16.13 $ 16.54 $ 14.86 ======= ======== ======== ======== ======== ======== ======== Total investment return (excludes sales charge) (22.28)%** (7.47)% 4.52% 0.87%** 5.25% 17.84% 15.87% RATIOS/SUPPLEMENTAL DATA Net assets, end of period (000's omitted) $69,265 $111,119 $185,593 $230,250 $231,651 $217,494 $104,837 Ratio of operating expenses to average net assets, including waivers 1.70%*** 1.53% 1.38% 1.43%*** 1.40% 1.25% 1.64% Ratio of operating expenses to average net assets, excluding waivers 1.75%*** 1.53% 1.38% 1.43%*** 1.40% 1.25% 1.64% Ratio of net investment income/(loss) to average net assets, including waivers 2.95%*** 1.84% 1.53% 0.93%*** 0.91% 0.29% (0.13)% Ratio of net investment income/(loss) to average net assets, excluding waivers 2.91%*** 1.84% 1.53% 0.93% 0.91% 0.29% (0.13)% Portfolio turnover rate 0.17%*** 9.74% 7.47% 0.94% 19.90% 51.01% 60.14%
- ----------------------- * As a result of a reorganization that was effective August 31, 2005, the Fund changed its fiscal year end from June 30 to August 31. ** Not annualized. *** Annualized. See Notes to Financial Statements. 9 SENBANC FUND NOTES TO FINANCIAL STATEMENTS FEBRUARY 29, 2008 (UNAUDITED) 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES The RBB Fund, Inc. ("RBB" or the "Company") was incorporated under the laws of the State of Maryland on February 29, 1988 and is registered under the Investment Company Act of 1940, as amended (the "Investment Company Act"), as an open-end management investment company. RBB is a "series fund," which is a mutual fund divided into separate portfolios. Each portfolio is treated as a separate entity for certain matters under the Investment Company Act, and for other purposes, and a shareholder of one portfolio is not deemed to be a shareholder of any other portfolio. Currently, RBB has twenty-one active investment portfolios, including the Senbanc Fund (the "Fund"). As of the date hereof, the Fund offers one class of shares and is a non-diversified fund. RBB has authorized capital of one hundred billion shares of common stock of which 78.073 billion shares are currently classified into one hundred and twenty classes of common stock. Each class represents an interest in an active or inactive RBB investment portfolio. The active classes have been grouped into ten separate "families." The Fund commenced operations on July 8, 1999, as a separate portfolio (the "Predecessor Fund") of the Hilliard Lyons Research Trust. After the close of business on August 31, 2005, all of the assets and liabilities of the Predecessor Fund were transferred to the Fund, a newly created portfolio of the Company, that is continuing the business, including carrying forward the financial and performance history, of the Predecessor Fund. PORTFOLIO VALUATION -- The Fund's net asset value ("NAV") is calculated once daily at the close of regular trading hours on the New York StockExchange ("NYSE") (generally 4:00 p.m. Eastern time) on each day the NYSE is open. Securities held by the Fund are valued using the closing price or the last sale price on a national securities exchange or the National Association of Securities Dealers Automatic Quotation System ("NASDAQ") market system where they are primarily traded. Equity securities traded in the over-the-counter market are valued at their closing prices. If there were no transactions on that day, securities traded principally on an exchange or on NASDAQ will be valued at the mean of the last bid and ask prices prior to the market close. Fixed income securities having a remaining maturity of greater than 60 days are valued using an independent pricing service. Fixed income securities having a remaining maturity of 60 days or less are amortized to maturity based on their cost. Investments in other open-end investment companies are valued based on the NAV of the investment companies (which may use fair value pricing as discussed in their prospectuses). If market quotations are unavailable or deemed unreliable, securities will be valued in accordance with procedures adopted by the Board of Directors. Relying on prices supplied by pricing services or dealers or using Fair Valuation may result in values that are higher or lower than the values used by other investment companies and investors to price the same investments. USE OF ESTIMATES -- The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. 10 SENBANC FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 29, 2008 (UNAUDITED) INVESTMENT TRANSACTIONS, INVESTMENT INCOME AND EXPENSES -- The Fund records security transactions based on trade date. The cost of investments sold is determined by use of the specific identification method for both financial reporting and income tax purposes in determining realized gains and losses on investments. Interest income is accrued when earned. Dividend income is recorded on the ex-dividend date. Expenses incurred on behalf of a specific class, fund or fund family are charged directly to the class, fund or fund family (in proportion to net assets). Expenses incurred for all of the RBB fund families (such as director or professional fees) are charged to all funds in proportion to their net assets of the RBB Funds, or in such other manner as the Board of Directors deems fair or equitable. Expenses and fees, including investment advisory and administration fees, are accrued daily and taken into account for the purpose of determining the net asset value of the Fund. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net investment income and distributions from net realized capital gains, if any, will be declared and paid at least annually to shareholders and recorded on ex-date. Income dividends and capital gain distributions are determined in accordance with U.S. federal income tax regulations which may differ from accounting principles generally accepted in the United States of America. Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications within the components of net assets. U.S. TAX STATUS -- No provision is made for U.S. income taxes as it is the Fund's intention to qualify for and elect the tax treatment applicable to regulated investment companies under Subchapter M of the Internal Revenue Code of 1986, as amended, and make the requisite distributions to its shareholders which will be sufficient to relieve it from U.S. income and excise taxes. OTHER -- In the normal course of business, the Fund may enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is dependent on claims that may be made against the Fund in the future, and, therefore, cannot be estimated; however, based on experience, the risk of material loss for such claims is considered remote. 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES Hilliard Lyons Research Advisors (the "Adviser"), a division of J.J.B. Hilliard, W.L. Lyons, LLC., the successor to J.J.B. Hilliard, W.L. Lyons, Inc., and an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc. ("PNC"), provides management and investment advisory services to the Fund pursuant to an investment advisory agreement with the Company. For its services, the Adviser is paid a monthly fee at the annual rate of 0.60% of the Fund's average daily net assets. For the six months ended February 29, 2008, investment advisory fees were $261,798 and $20,040 was waived by the Adviser. As of February 29, 2008, the Fund owed the Adviser $24,637. On November 16, 2007, Houchens Industries, Inc. ("Houchens") signed a purchase agreement with PNC to acquire J.J.B. Hilliard, W.L. Lyons, LLC (the "Transaction"). This Transaction, which is expected to occur on or about March 30, 2008, will result in a change in control of the Adviser and therefore will be considered to be an assignment of the Fund's Advisory Agreement with the Adviser, resulting in the automatic termination of the Advisory Agreement. At a meeting held on February 14, 2008, the Board of Directors of the Company approved both an Interim Advisory Agreement and a new Advisory Agreement 11 SENBANC FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 29, 2008 (UNAUDITED) between the Company, on behalf of the Fund, and the Adviser. Pursuant to the Interim Advisory Agreement, the Adviser will continue to provide investment advisory services to the Fund until August 16, 2009 or until shareholders of the Fund approve the new Advisory Agreement at a meeting to be held on April 29, 2008. See Note 8 for additional information on the Board's approval of the Interim Advisory Agreement and the new Advisory Agreement. PFPC Inc. ("PFPC"), a wholly-owned subsidiary of PFPC Worldwide, Inc., an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc., and an affiliate of the Adviser serves as administrator for the Fund. For providing administrative and accounting services, PFPC is entitled to receive a monthly fee equal to an annual rate of 0.095% of the Fund's first $250 million of average daily net assets; 0.080% of the next $250 million of average daily net assets; 0.060% of the next $250 million of average daily net assets; and 0.040% of the average daily net assets in excess of $750 million, subject to a minimum of $7,500 per month. For the six months ended February 29, 2008, PFPC's administration and accounting fees were $60,842. Included in the administration and accounting fees shown above are fees for providing regulatory administration services to RBB. For providing those services, PFPC is entitled to receive compensation as agreed to by the Company and PFPC. This fee is allocated to the Fund in proportion to its net assets of the RBB Funds. In addition, PFPC serves as the Fund's transfer and dividend disbursing agent. For providing transfer agent services, PFPC is entitled to receive a monthly fee, subject to a minimum monthly fee of $3,000, plus out of pocket expenses. For the six months ended February 29, 2008, PFPC's transfer agency fees were $79,836. PFPC Trust Company provides certain custodial services to the Fund. PFPC Trust Company is a wholly-owned subsidiary of PFPC Worldwide, Inc., an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc. and an affiliate of the Adviser. As compensation for such custodial services, PFPC Trust Company is entitled to receive a monthly fee equal to an annual rate of 0.015% of the first $100 million of the Fund's average gross assets; 0.01% of the next $400 million of average gross assets; and 0.008% of average gross assets over $500 million, subject to a minimum monthly fee of $1,500. For the six months ended February 29, 2008, PFPC Trust Company's fees were $14,069. PFPC Distributors, Inc. ("PFPC Distributors"), a wholly-owned subsidiary of PFPC Worldwide, Inc., an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc., and an affiliate of the Adviser, provides certain administrative services to the Fund. The Board of Directors has adopted a distribution plan pursuant to Rule 12b-1 under the Investment Company Act, to allow the Fund to reimburse PFPC Distributors for certain expenses incurred in connection with distribution activities. The Directors have authorized a payment of up to 0.60% of the Fund's average net assets annually to reimburse PFPC Distributors for such expenses. For the six months ended February 29, 2008, PFPC Distributors earned $4,187 in underwriting fees and $37,090 for commissions on sales of the Fund's shares. As of February 29, 2008, the Fund owed PFPC and its affiliates $125,751. 12 SENBANC FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 29, 2008 (UNAUDITED) 3. INVESTMENT IN SECURITIES For the six months ended February 29, 2008, aggregate purchases and sales of investment securities (excluding short-term investments) were as follows: Investment Securities Purchases Sales ------------ ------------- $153,899 $19,889,829 4. CAPITAL SHARE TRANSACTIONS As of February 29, 2008, the Fund has 50,000,000 shares of $0.001 par value common stock authorized. Transactions in capital shares were as follows: For the Six Months For the Fiscal Year Ended Ended February 29, 2008 August 31, 2007 ----------------------------- --------------------------- Shares Value Shares Value ----------- ------------ ----------- ------------- Sales 240,699 $ 2,674,147 277,877 $ 4,578,577 Reinvestments 732,453 7,947,115 418,102 6,961,407 Redemptions (1,738,179) (21,966,508) (4,332,989) (70,045,843) ----------- ------------ ----------- ------------ Net Decrease (765,027) $(11,345,246) (3,637,010) $(58,505,859) =========== ============ =========== ============ 5. FEDERAL INCOME TAX INFORMATION At February 29, 2008, federal tax cost, aggregate gross unrealized appreciation and depreciation of securities held by the Fund were as follows: Cost of investments for tax purposes ............. $ 88,450,875 ------------ Gross tax unrealized appreciation ................ $ 1,308,902 Gross tax unrealized depreciation ................ (20,501,076) ------------ Net tax unrealized depreciation on investments ... $(19,192,174) ============ On August 31, 2007, the Fund had no capital loss carryforwards available to offset future capital gains. Under federal tax law, foreign currency and capital losses realized after October 31 may be deferred and treated as having arisen on the first day of the following fiscal year. For the year ended August 31, 2007, the Fund incurred no post-October capital losses. The differences between the book and tax basis components of distributable earnings relate principally to the timing of recognition of income and gains for federal income tax purposes. Short-term and foreign currency gains are reported as ordinary income for federal tax purposes. Dividends paid from short-term capital gains are treated as ordinary income dividends for federal tax purposes. 13 SENBANC FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 29, 2008 (UNAUDITED) 6. INDUSTRY CONCENTRATION RISK Since the Fund's investments are concentrated in the banking industry, they are subject to risks in addition to those that apply to the general equity market. Events may occur that significantly affect the entire banking industry; therefore, the Fund's share value may at times increase or decrease at a faster rate than the share value of a mutual fund with investments in many industries. 7. NEW ACCOUNTING PRONOUNCEMENTS Effective February 29, 2008, the Funds adopted FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes" (FIN 48). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Fund's tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax positions not deemed to meet the "more-likely-than-not" threshold would be recorded as a tax benefit or expense in the current year. The adoption of FIN 48 did not result in the recording of any tax benefits or expenses. In September 2006, FASB issued Statement of Financial Accounting Standards ("SFAS") 157, Fair Value Measurements, which clarifies the definition of fair value and requires companies to expand their disclosure about the use of fair value to measure assets and liabilities in interim and annual periods subsequent to initial recognition. Adoption of SFAS 157 requires the use of the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Although still in the process of evaluating the impact, if any of SFAS 157 on the Fund, upon adoption of the standard, management believes that there will be no material impact on the Fund's financial statements other than enhanced disclosures. 8. SUBSEQUENT EVENT On March 30, 2008, Houchens' acquisition of J.J.B. Hilliard, W.L. Lyons, LLC was effected, and the Company entered into the Interim Advisory Agreement with the Adviser. Additionally, a special meeting of the Fund's shareholders will be held on April 29, 2008 at which shareholder approval of a new investment advisory agreement between the Company, on behalf of the Fund, and the Adviser was sought. More detailed information on the voting results of the special meeting of shareholders will be included in the Fund's annual report dated August 31, 2008. 14 SENBANC FUND OTHER INFORMATION FEBRUARY 29, 2008 (UNAUDITED) PROXY VOTING A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities and information regarding how the Fund voted proxies relating to portfolio securities for the most recent 12-month period ended June 30 is available without charge, upon request by calling Senbanc Fund at (877) 264-5346, at WWW.HILLIARD.COM and on the SEC's website at HTTP://WWW.SEC.GOV. QUARTERLY PORTFOLIO SCHEDULES The Fund files its complete schedule of portfolio holdings with the SEC for the first and third fiscal quarters of each fiscal year on Form N-Q. The Fund's Forms N-Q are available on the SEC's website at http://www.sec.gov and may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information on the operation of the SEC's Public Reference Room may be obtained by calling (202) 551-8090. CONSIDERATION OF INTERIM AND NEW INVESTMENT ADVISORY AGREEMENTS HILLIARD LYONS RESEARCH ADVISORS In connection with the proposed change in control of the Adviser described in Notes 2 and 8, the Company's Board of Directors (the "Board"), including all of the Directors who are not "interested persons" of the Company, as that term is defined in the Investment Company Act (the "Independent Directors"), considered the approval of both an Interim Investment Advisory Agreement and a new Investment Advisory Agreement between the Adviser and the Company (collectively, the "Agreements") on behalf of the Fund at a meeting of the Board held on February 14, 2007 (the "Meeting"). At this meeting, the Board approved the Interim Investment Advisory Agreement for a term ending on either the effective date of the new Investment Advisory Agreement if and when it has been approved by a majority of the Portfolio's outstanding voting securities, or the 150th calendar day following the date of its effectiveness, and the new Investment Advisory Agreement, subject to shareholder approval, for a term ending August 16, 2009. The Board's decision to approve the Agreements reflects the exercise of its business judgment and was based upon the information provided to the Board in connection with the Meeting. In approving the Agreements, the Board considered information provided by the Adviser with the assistance and advice of counsel to the Independent Directors and the Company. In the course of their review, the Directors, with the assistance of independent counsel, considered their legal responsibilities with regard to all factors deemed to be relevant to the Fund, including, but not limited to the following: (1) the quality of services provided to the Fund and its predecessor fund since the Adviser first became investment adviser to the predecessor fund since its inception in 1999; (2) the performance of the Fund and its predecessor fund since the Adviser became the investment adviser to the predecessor fund; (3) the fact that the proposed transaction between Houchens and PNC is not expected to affect the manner in which the Fund is advised; (4) the fact that the current investment management team will continue to manage the Fund; (5) the fact that the fee structure under the Agreements would be identical to the fee structure under the current advisory agreement; and (6) other factors deemed relevant. 15 SENBANC FUND OTHER INFORMATION (CONTINUED) FEBRUARY 29, 2008 (UNAUDITED) The Directors also evaluated the Agreements in light of information they had requested and received from the Adviser prior to the February 14, 2008 meeting. The Directors reviewed these materials with management of the Adviser, legal counsel to Houchens and independent counsel to the Directors. The Independent Directors also discussed the Agreements with counsel in an executive session, at which no representatives of the Adviser or Houchens were present. The Directors considered whether the Agreements would be in the best interests of the Fund and its shareholders and the overall fairness of the Agreements. Among other things, the Directors reviewed information concerning: (1) the nature, extent and quality of the services provided by the Adviser; (2) the Fund's investment performance; (3) the cost of the services provided and the profits realized by the Adviser and its affiliates from their relationship with the Fund; (4) the extent to which economies of scale have been or will be realized as the Fund grows; and (5) the extent to which fee levels reflect the economies of scale, if any, for the benefit of the Fund's shareholders. In their deliberations, the Directors did not rank the importance of any particular piece of information or factor considered, and it is presumed that each Director attributed different weights to the various factors. During the course of its deliberations, the Board reached the following conclusions, among others, regarding the Adviser and the Agreements. The Board noted that the amount of advisory fees that the Fund currently pays to the Adviser will not change under the Agreements. The Directors considered that the Fund's gross and net advisory fee is lower in comparison to that of its peer group median. It was noted that the Adviser does not manage any other accounts similar to the Fund. In addition, the Directors discussed that the Fund's gross and net expense ratio were lower than the peer group average. It was further considered by the Directors that the Adviser has voluntarily agreed to waive its advisory fee and reimburse expenses to limit annual operating expenses of the Fund to 1.75%. The Directors then determined that the nature, extent and quality of services provided by the Adviser in advising the Fund was satisfactory; the profits earned by the Adviser seemed adequate; and the benefits derived by the Adviser from managing the Fund, including the process it uses to select brokers, seemed reasonable. Based on all of the information presented to the Board and its consideration of relevant factors, the Board concluded that the proposed advisory fee in the Agreements was reasonable, and in the exercise of its business judgment, determined that the Interim Investment Advisory Agreement and the new Investment Advisory Agreement be approved. 16 [THIS PAGE INTENTIONALLY LEFT BLANK] [THIS PAGE INTENTIONALLY LEFT BLANK] [THIS PAGE INTENTIONALLY LEFT BLANK] INVESTMENT ADVISER Hilliard, Lyons Research Advisors 500 West Jefferson Street Louisville, KY 40202 ADMINISTRATOR PFPC Inc. 301 Bellevue Parkway Wilmington, DE 19809 TRANSFER AGENT PFPC Inc. 101 Sabin Street Pawtucket, RI 02866 UNDERWRITER PFPC Distributors, Inc. 760 Moore Road King of Prussia, PA 19406 CUSTODIAN PFPC Trust Company 8800 Tinicum Boulevard Suite 200 Philadelphia, PA 19153 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Deloitte & Touche LLP 1700 Market Street Philadelphia, PA 19103 LEGALCOUNSEL Drinker Biddle & Reath LLP One Logan Square 18th and Cherry Streets Philadelphia, PA 19103 [GRAPHIC OMITTED] ROBECO ROBECO INVESTMENT FUNDS OF THE RBB FUND, INC. SEMI-ANNUAL REPORT FEBRUARY 29, 2008 (UNAUDITED) - -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS SMALL CAP VALUE FUND II ROBECO BOSTON PARTNERS LONG/SHORT EQUITY FUND ROBECO BOSTON PARTNERS LARGE CAP VALUE FUND ROBECO BOSTON PARTNERS MID CAP VALUE FUND ROBECO BOSTON PARTNERS ALL-CAP VALUE FUND ROBECO WPG SMALL CAP VALUE FUND ROBECO WPG 130/30 LARGE CAP CORE FUND (FORMERLY WPG LARGE CAP GROWTH FUND) ROBECO WPG CORE BOND FUND SAM SUSTAINABLE CLIMATE FUND SAM SUSTAINABLE WATER FUND This report is submitted for the general information of the shareholders of the Funds. It is not authorized for distribution unless preceded or accompanied by a current prospectus for the Funds. Shares of Robeco Investment Funds are distributed by PFPC Distributors, Inc., 760 Moore Road, King of Prussia, PA 19406. ROBECO INVESTMENT FUNDS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- GENERAL MARKET COMMENTARY - -------------------------------------------------------------------------------- Dear Shareholder: The headlines and nightly news appear bleak indeed: Melting home prices. Rising foreclosures. Spiking oil prices. A falling US Dollar. Recession. All have taken a punishing toll on investor psychology and there have been few places to wait out a market storm brought on by a complex mix of cyclical forces that have undermined the confidence of consumers, investors and business executives. When will this storm end? Predicting market direction really is for show, as few can accurately forecast the future path of stock prices. We can, however, offer some observations and advice based on our own cumulative investing experience. Over the past 25 years, we have experienced first hand some severe market dislocations: the crash of October 1987, the collapse of commercial real estate in the late 1980's, the consequent recession and bear market of 1990-1991, the 1998 Russian debt crisis and the failure of Long-Term Capital Management, the bursting of the technology/internet bubble from 2000-2002 and the damaging aftermath of 9/11. There were unique circumstances to each downturn, but all shared two common features: First, the stock market and economy eventually recovered, and in all instances rebounded quite strongly from periods of depressed prices. Second, it was during these periods of stress, when prospects appeared bleakest, that the best investment opportunities were created as prices fell to levels that allowed investors to capture attractive returns. Market cyclicality is a fact of economic life. The recent violent swings in stock prices are a likely signal that the market is in a bottoming process as it sorts through the negative news and looks through to eventual recovery. Stocks are a leading economic indicator; they have historically bottomed out around the mid-point of the recession and are on a well established upward path by the time the fundamentals of the real economy (output and employment) begin to turn upward some months later. During turbulent periods, when sorting out the future seems hopelessly complicated, we hold fast to some simple, common sense rules that we believe govern successful investing. First, valuation is paramount, since the price paid for an investment is the key determinant of the ultimate rate of return. Falling prices create the best opportunity to lock in higher future returns and valuations have recently been driven down to very attractive levels. Second, stick to your guns. That is, during volatile times following a disciplined investment approach is absolutely essential; deviating from one's key principles produces even greater volatility of results and disappointment. This is perhaps best captured by a famous quote: "Set your course by the stars, not by the lights of every passing ship". Third, diversify and take a long term view. Finally, set your emotions aside, and take a balanced view of the facts during stressful times. While the media is prone to obsess over the negative news affecting today's market, there are some significant positive influences which are setting a very strong foundation for a recovery in stock prices: Aggressive intervention by the Federal Reserve, falling mortgage rates, federal tax relief, and perhaps most important, low valuations are very powerful forces which we believe will ultimately lead to recovery in financial markets, housing and the real economy. The investment strategies outlined on the following pages each target a different segment of the equity and fixed income markets, but they all share a common trait in that they are managed by highly experienced, long tenured professionals, all of whom have successfully weathered some very challenging markets during the course of their long careers. We are also pleased to announce two new Funds that were added during the past 6 months. The SAM Sustainable Climate Fund and the SAM Sustainable Water Fund utilize innovative investment strategies that seek to capture investment returns derived from companies dealing with many of the environmental and resource challenges that face the world today. Please take a minute to review and please contact us with questions. As always, we thank you for your business. Warm regards, Robeco Investment Funds SEMI-ANNUAL REPORT 2008 | 1 ROBECO INVESTMENT FUNDS - -------------------------------------------------------------------------------- TOTAL RETURNS FOR THE PERIOD ENDED FEBRUARY 29, 2008 (UNAUDITED)
AVERAGE ANNUAL ---------------------------------------------- SINCE SIX-MONTH 1 YEAR 5 YEAR 10 YEAR INCEPTION ------------- ---------- ---------- ----------- ------------- ROBECO BOSTON PARTNERS SMALL CAP VALUE FUND II Institutional Class(1) -12.50% -14.76% 15.87% N/A 12.10% Investor Class(1) -12.59% -14.98% 15.58% N/A 11.86% Russell 2000(R) Value Index -13.22% -17.13% 15.35% N/A 7.97% Russell 2000(R) Index(2) -11.83% -12.44% 15.10% N/A 5.61% (1) Inception date July 1, 1998 (2) This is not a primary benchmark of the Fund. Results of index performance are presented for general comparative purposes. ROBECO BOSTON PARTNERS LONG/SHORT EQUITY FUND Institutional Class(1) -3.98% -8.55% 6.63% N/A 8.97% Investor Class(1) -4.11% -8.78% 6.38% N/A 8.73% S&P 500(R) Index -8.79% -3.60% 11.62% N/A 3.10% (1) Inception date November 17, 1998 ROBECO BOSTON PARTNERS LARGE CAP VALUE FUND Institutional Class -9.22% -4.35% 14.22% 6.07% N/A Investor Class -9.30% -4.53% 13.96% 5.83% N/A S&P 500(R) Index -8.79% -3.60% 11.62% 4.06% N/A Russell 1000(R) Value Index(1) -9.41% -7.91% 13.89% 6.24% N/A (1) This is not a primary benchmark of the Fund. Results of index performance are presented for general comparative purposes. ROBECO BOSTON PARTNERS MID CAP VALUE FUND Institutional Class(1) -8.51% -5.46% 16.81% 6.68% N/A Investor Class(1) -8.58% -5.62% 16.54% 6.45% N/A Russell 2500(R) Index -9.35% -9.74% 16.07% 7.43% N/A Russell 2500(R) Value Index(2) -11.56% -15.50% 15.76% 8.40% N/A Russell Midcap(R) Value Index(2) -9.98% -12.26% 17.09% 8.81% N/A (1) Inception date June 2, 1997 (2) This is not a primary benchmark of the Fund. Results of index performance are presented for general comparative purposes. ROBECO BOSTON PARTNERS ALL-CAP VALUE FUND Institutional Class(1) -7.34% -4.32% 16.70 N/A 11.74% Investor Class(1) -7.54% -4.63% 16.45 N/A 11.46% Russell 3000(R) Value Index -9.72% -8.72% 13.98 N/A 8.78% Russell 3000(R) Index(2) -7.73% -4.52% 12.44 N/A 7.94% (1) Inception date July 1, 2002 (2) This is not a primary benchmark of the Fund. Results of index performance are presented for general comparative purposes. ROBECO WPG SMALL CAP VALUE FUND Institutional Class -14.56% -14.96% 13.78% 2.69% N/A Russell 2000(R) Value Index -13.22% -17.13% 15.35% 7.73% N/A ROBECO WPG 130/30 LARGE CAP CORE FUND(1) Institutional Class -10.11% -3.91% 9.05% 1.44% N/A S&P 500(R) Index(2) -8.79% -3.60% 11.62% 4.06% N/A Russell 1000(R) Growth Index(2) -6.56% 0.40% 10.50% 1.74% N/A (1) Formerly Robeco WPG Large Cap Growth Fund (2) Effective September 4, 2004, the Robeco WPG 130/30 Large Cap Core Fund changed its benchmark from the Russell 1000(R) Growth Index to the S&P 500(R) Index.
2 | SEMI-ANNUAL REPORT 2008 ROBECO INVESTMENT FUNDS - -------------------------------------------------------------------------------- TOTAL RETURNS FOR THE PERIOD ENDED FEBRUARY 29, 2008 (UNAUDITED)
AVERAGE ANNUAL ---------------------------------------------- SINCE SIX-MONTH 1 YEAR 5 YEAR 10 YEAR INCEPTION ------------- ---------- ---------- ----------- ------------- ROBECO WPG CORE BOND FUND Institutional Class 6.38% 7.77% 4.49% 6.25% N/A Investor Class(1) 6.25% 7.51% N/A N/A 5.53% Retirement Class(1) 6.33% 7.66% N/A N/A 4.76% Lehman Brothers Aggregate Index 5.68% 7.30% 4.89% 6.24% N/A (1) Inception date January 17, 2006 for Investor Class and September 1, 2005 for Retirement Class SAM SUSTAINABLE CLIMATE FUND Institutional Class(1) N/A N/A N/A N/A -12.80% Investor Class(1) N/A N/A N/A N/A -12.80% MSCI World Index N/A N/A N/A N/A -10.40% (1) Inception date October 1, 2007. SAM SUSTAINABLE WATER FUND Institutional Class(1) N/A N/A N/A N/A -8.50% Investor Class(1) N/A N/A N/A N/A -8.50% MSCI World Index N/A N/A N/A N/A -10.40% (1) Inception date October 1, 2007.
- ---------------------------------- THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH-END, PLEASE CALL 1-888-261-4073 OR VISIT OUR WEBSITE AT WWW.ROBECOINVEST.COM. ROBECO INVESTMENT MANAGEMENT, INC. CONTRACTUALLY AGREED TO WAIVE A PORTION OF ITS ADVISORY FEE AND REIMBURSE A PORTION OF THE FUNDS' OPERATING EXPENSES, IF NECESSARY, TO MAINTAIN THE EXPENSE LIMITATIONS, IF ANY, AS SET FORTH IN THE NOTES TO THE FINANCIAL STATEMENTS. TOTAL RETURNS SHOWN INCLUDE FEE WAIVERS AND EXPENSE REIMBURSEMENTS, IF ANY; TOTAL RETURNS WOULD HAVE BEEN LOWER HAD THERE BEEN NO WAIVER OR REIMBURSEMENT OF FEES AND EXPENSES IN EXCESS OF EXPENSE LIMITATIONS. RETURNS SHOWN INCLUDE THE REINVESTMENT OF ALL DIVIDENDS AND OTHER DISTRIBUTIONS AND DO NOT REFLECT TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR ON THE REDEMPTION OF FUND SHARES. INVESTORS SHOULD NOTE THAT THE FUNDS ARE ACTIVELY MANAGED MUTUAL FUNDS WHILE THE INDICES ARE UNMANAGED, DO NOT INCUR EXPENSES AND ARE NOT AVAILABLE FOR INVESTMENT. SMALL COMPANY STOCKS ARE GENERALLY RISKIER THAN LARGE COMPANY STOCKS DUE TO GREATER VOLATILITY AND LESS LIQUIDITY. THE SAM FUNDS ARE NON-DIVERSIFIED. GAINS OR LOSSES IN A SINGLE SECURITY OR SECTOR MAY HAVE A GREATER IMPACT ON THE FUNDS. The following are the Funds' gross annual operating expense ratios as stated in the most recent prospectus:
INSTITUTIONAL INVESTOR RETIREMENT CLASS CLASS CLASS ------------- -------- ---------- Robeco Boston Partners Small Cap Value Fund II ............................... 1.56%* 1.81%* N/A Robeco Boston Partners Long/Short Equity Fund ................................ 3.60% 3.85% N/A Robeco Boston Partners Large Cap Value Fund .................................. 1.07% 1.32% N/A Robeco Boston Partners Mid Cap Value Fund .................................... 1.48% 1.73% N/A Robeco Boston Partners All-Cap Value Fund .................................... 2.24% 2.49% N/A Robeco WPG Small Cap Value Fund .......................... 1.47% N/A N/A Robeco WPG 130/30 Large Cap Core Fund (formerly Robeco Large Cap Growth Fund) ............... 2.73% 2.98% N/A Robeco WPG Core Bond Fund ................................ 0.83% 1.08% 0.94% SAM Sustainable Climate Fund ............................. 1.49% 1.74% N/A SAM Sustainable Water Fund ............................... 1.49% 1.74% N/A
* Effective March 3, 2008, the expenses are decreased to 1.31% for the Institutional Class and 1.56% for the Investor Class. SEMI-ANNUAL REPORT 2008 | 3 ROBECO INVESTMENT FUNDS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- FUND EXPENSE EXAMPLES (unaudited) - -------------------------------------------------------------------------------- As a shareholder of the Fund(s), you incur two types of costs: (1) transaction costs, redemption fees; and (2) ongoing costs, including management fees, distribution fees and other Fund expenses. The examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund(s) and to compare these costs with the ongoing costs of investing in other mutual funds. The examples are based on an investment of $1,000 invested at the beginning of the six-month period from September 1, 2007 (October 1, 2007 for the SAM Sustainable Climate Fund and SAM Sustainable Water Fund) through February 29, 2008, and held for the entire period. ACTUAL EXPENSES The first line of the accompanying tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second line of the accompanying tables provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare these 5% hypothetical examples with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that the expenses shown in the accompanying tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees. Therefore, the second line of the accompanying tables is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
ROBECO BOSTON PARTNERS SMALL CAP VALUE FUND II -- INSTITUTIONAL CLASS --------------------------------------------------------------------- BEGINNING ACCOUNT ENDING ACCOUNT VALUE VALUE EXPENSES PAID DURING SEPTEMBER 1, 2007 FEBRUARY 29, 2008 PERIOD* ------------------ ----------------- -------------------- Actual..................................................... $1,000.00 $ 907.80 $ 7.35 Hypothetical (5% return before expenses)................... 1,000.00 1,017.06 7.80 ROBECO BOSTON PARTNERS SMALL CAP VALUE FUND II -- INVESTOR CLASS --------------------------------------------------------------------- BEGINNING ACCOUNT ENDING ACCOUNT VALUE VALUE EXPENSES PAID DURING SEPTEMBER 1, 2007 FEBRUARY 29, 2008 PERIOD* ------------------ ----------------- -------------------- Actual..................................................... $1,000.00 $ 907.00 $ 8.53 Hypothetical (5% return before expenses)................... 1,000.00 1,015.80 9.06 - ------------------------------------------------------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS LONG/SHORT EQUITY FUND -- INSTITUTIONAL CLASS --------------------------------------------------------------------- BEGINNING ACCOUNT ENDING ACCOUNT VALUE VALUE EXPENSES PAID DURING SEPTEMBER 1, 2007 FEBRUARY 29, 2008 PERIOD* ------------------ ----------------- -------------------- Actual..................................................... $1,000.00 $ 960.20 $12.18 Hypothetical (5% return before expenses)................... 1,000.00 1,012.28 12.59
4 | SEMI-ANNUAL REPORT 2008 ROBECO INVESTMENT FUNDS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- FUND EXPENSE EXAMPLES (unaudited) (continued) - --------------------------------------------------------------------------------
ROBECO BOSTON PARTNERS LONG/SHORT EQUITY FUND -- INVESTOR CLASS --------------------------------------------------------------------- BEGINNING ACCOUNT ENDING ACCOUNT VALUE VALUE EXPENSES PAID DURING SEPTEMBER 1, 2007 FEBRUARY 29, 2008 PERIOD* ------------------ ----------------- -------------------- Actual..................................................... $1,000.00 $ 958.90 $13.39 Hypothetical (5% return before expenses)................... 1,000.00 1,011.02 13.84 - ------------------------------------------------------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS LARGE CAP VALUE FUND -- INSTITUTIONAL CLASS --------------------------------------------------------------------- BEGINNING ACCOUNT ENDING ACCOUNT VALUE VALUE EXPENSES PAID DURING SEPTEMBER 1, 2007 FEBRUARY 29, 2008 PERIOD* ------------------ ----------------- -------------------- Actual..................................................... $1,000.00 $ 907.80 $ 3.56 Hypothetical (5% return before expenses)................... 1,000.00 1,021.09 3.78 ROBECO BOSTON PARTNERS LARGE CAP VALUE FUND -- INVESTOR CLASS --------------------------------------------------------------------- BEGINNING ACCOUNT ENDING ACCOUNT VALUE VALUE EXPENSES PAID DURING SEPTEMBER 1, 2007 FEBRUARY 29, 2008 PERIOD* ------------------ ----------------- -------------------- Actual..................................................... $1,000.00 $ 907.00 $ 4.74 Hypothetical (5% return before expenses)................... 1,000.00 1,019.83 5.03 - ------------------------------------------------------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS MID CAP VALUE FUND -- INSTITUTIONAL CLASS --------------------------------------------------------------------- BEGINNING ACCOUNT ENDING ACCOUNT VALUE VALUE EXPENSES PAID DURING SEPTEMBER 1, 2007 FEBRUARY 29, 2008 PERIOD* ------------------ ----------------- -------------------- Actual..................................................... $1,000.00 $ 914.90 $ 4.76 Hypothetical (5% return before expenses)................... 1,000.00 1,019.83 5.03 ROBECO BOSTON PARTNERS MID CAP VALUE FUND -- INVESTOR CLASS --------------------------------------------------------------------- BEGINNING ACCOUNT ENDING ACCOUNT VALUE VALUE EXPENSES PAID DURING SEPTEMBER 1, 2007 FEBRUARY 29, 2008 PERIOD* ------------------ ----------------- -------------------- Actual..................................................... $1,000.00 $ 914.20 $ 5.95 Hypothetical (5% return before expenses)................... 1,000.00 1,018.57 6.29 - ------------------------------------------------------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS ALL-CAP VALUE FUND -- INSTITUTIONAL CLASS --------------------------------------------------------------------- BEGINNING ACCOUNT ENDING ACCOUNT VALUE VALUE EXPENSES PAID DURING SEPTEMBER 1, 2007 FEBRUARY 29, 2008 PERIOD* ------------------ ----------------- -------------------- Actual..................................................... $1,000.00 $ 926.60 $ 4.55 Hypothetical (5% return before expenses)................... 1,000.00 1,020.08 4.78 ROBECO BOSTON PARTNERS ALL-CAP VALUE FUND -- INVESTOR CLASS --------------------------------------------------------------------- BEGINNING ACCOUNT ENDING ACCOUNT VALUE VALUE EXPENSES PAID DURING SEPTEMBER 1, 2007 FEBRUARY 29, 2008 PERIOD* ------------------ ----------------- -------------------- Actual..................................................... $1,000.00 $ 924.60 $ 5.74 Hypothetical (5% return before expenses)................... 1,000.00 1,018.82 6.04 - -------------------------------------------------------------------------------------------------------------------------------
SEMI-ANNUAL REPORT 2008 | 5 ROBECO INVESTMENT FUNDS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- FUND EXPENSE EXAMPLES (unaudited) (continued) - --------------------------------------------------------------------------------
ROBECO WPG SMALL CAP VALUE FUND -- INSTITUTIONAL CLASS --------------------------------------------------------------------- BEGINNING ACCOUNT ENDING ACCOUNT VALUE VALUE EXPENSES PAID DURING SEPTEMBER 1, 2007 FEBRUARY 29, 2008 PERIOD* ------------------ ----------------- -------------------- Actual..................................................... $1,000.00 $ 854.40 $ 7.15 Hypothetical (5% return before expenses)................... 1,000.00 1,017.06 7.80 - ------------------------------------------------------------------------------------------------------------------------------- ROBECO WPG 130/30 LARGE CAP CORE FUND (FORMERLY ROBECO WPG LARGE CAP GROWTH FUND) -- INSTITUTIONAL CLASS --------------------------------------------------------------------- BEGINNING ACCOUNT ENDING ACCOUNT VALUE VALUE EXPENSES PAID DURING SEPTEMBER 1, 2007 FEBRUARY 29, 2008 PERIOD* ------------------ ----------------- -------------------- Actual..................................................... $1,000.00 $ 898.90 $ 6.56 Hypothetical (5% return before expenses)................... 1,000.00 1,017.87 7.00 - ------------------------------------------------------------------------------------------------------------------------------- ROBECO WPG CORE BOND FUND -- INSTITUTIONAL CLASS --------------------------------------------------------------------- BEGINNING ACCOUNT ENDING ACCOUNT VALUE VALUE EXPENSES PAID DURING SEPTEMBER 1, 2007 FEBRUARY 29, 2008 PERIOD* ------------------ ----------------- -------------------- Actual..................................................... $1,000.00 $1,063.80 $ 2.21 Hypothetical (5% return before expenses)................... 1,000.00 1,022.70 2.16 ROBECO WPG CORE BOND FUND -- INVESTOR CLASS --------------------------------------------------------------------- BEGINNING ACCOUNT ENDING ACCOUNT VALUE VALUE EXPENSES PAID DURING SEPTEMBER 1, 2007 FEBRUARY 29, 2008 PERIOD* ------------------ ----------------- -------------------- Actual..................................................... $1,000.00 $1,062.50 $ 3.49 Hypothetical (5% return before expenses)................... 1,000.00 1,021.44 3.42 ROBECO WPG CORE BOND FUND -- RETIREMENT CLASS --------------------------------------------------------------------- BEGINNING ACCOUNT ENDING ACCOUNT VALUE VALUE EXPENSES PAID DURING SEPTEMBER 1, 2007 FEBRUARY 29, 2008 PERIOD* ------------------ ----------------- -------------------- Actual..................................................... $1,000.00 $1,063.30 $ 2.77 Hypothetical (5% return before expenses)................... 1,000.00 1,022.14 2.72 - ------------------------------------------------------------------------------------------------------------------------------- SAM SUSTAINABLE CLIMATE FUND -- INSTITUTIONAL CLASS --------------------------------------------------------------------- BEGINNING ACCOUNT ENDING ACCOUNT VALUE VALUE EXPENSES PAID DURING OCTOBER 1, 2007 FEBRUARY 29, 2008 PERIOD* ------------------ ----------------- -------------------- Actual..................................................... $1,000.00 $ 878.10 $ 5.85 Hypothetical (5% return before expenses)................... 1,000.00 1,014.33 6.29 SAM SUSTAINABLE CLIMATE FUND -- INVESTOR CLASS --------------------------------------------------------------------- BEGINNING ACCOUNT ENDING ACCOUNT VALUE VALUE EXPENSES PAID DURING OCTOBER 1, 2007 FEBRUARY 29, 2008 PERIOD* ------------------ ----------------- -------------------- Actual..................................................... $1,000.00 $ 878.10 $ 6.36 Hypothetical (5% return before expenses)................... 1,000.00 1,013.79 6.84 - -------------------------------------------------------------------------------------------------------------------------------
6 | SEMI-ANNUAL REPORT 2008 ROBECO INVESTMENT FUNDS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- FUND EXPENSE EXAMPLES (unaudited) (concluded) - --------------------------------------------------------------------------------
SAM SUSTAINABLE WATER FUND -- INSTITUTIONAL CLASS --------------------------------------------------------------------- BEGINNING ACCOUNT ENDING ACCOUNT VALUE VALUE EXPENSES PAID DURING OCTOBER 1, 2007 FEBRUARY 29, 2008 PERIOD* ------------------ ----------------- -------------------- Actual..................................................... $1,000.00 $ 927.00 $ 6.00 Hypothetical (5% return before expenses)................... 1,000.00 1,014.33 6.29 SAM SUSTAINABLE WATER FUND -- INVESTOR CLASS --------------------------------------------------------------------- BEGINNING ACCOUNT ENDING ACCOUNT VALUE VALUE EXPENSES PAID DURING OCTOBER 1, 2007 FEBRUARY 29, 2008 PERIOD* ------------------ ----------------- -------------------- Actual..................................................... $1,000.00 $ 927.00 $ 6.60 Hypothetical (5% return before expenses)................... 1,000.00 1,013.71 6.92 - -------------------------------------------------------------------------------------------------------------------------------
* Expenses are equal to the Fund's annualized six-month expense ratios in the table below, which include waived fees or reimbursed expenses, multiplied by the average account value over the period, multiplied by the number of days (182) in the most recent fiscal half-year, then divided by 366 to reflect the one-half year period.
INSTITUTIONAL INVESTOR RETIREMENT ------------- -------- ------------ Robeco Boston Partners Small Cap Value Fund II............. 1.55%* 1.80%* N/A Robeco Boston Partners Long/Short Equity Fund.............. 3.73%(1) 3.98%(1) N/A Robeco Boston Partners Large Cap Value Fund ............... 0.75% 1.00% N/A Robeco Boston Partners Mid Cap Value Fund.................. 1.00% 1.25% N/A Robeco Boston Partners All-Cap Value Fund.................. 0.95% 1.20% N/A Robeco WPG Small Cap Value Fund............................ 1.55% N/A N/A Robeco WPG 130/30 Large Cap Core Fund (formerly Robeco WPG Large Cap Growth Fund)............. 1.40% N/A N/A Robeco WPG Core Bond Fund.................................. 0.43% 0.68% 0.53% SAM Sustainable Climate Fund .............................. 1.50% 1.75% N/A SAM Sustainable Water Fund ................................ 1.50% 1.75% N/A
* Effective March 5, 2008, Robeco has agreed to reduce the contractually agreed limit on BP Small Cap Value Fund II to 1.30% for the Institutional Class and 1.55% for the Investor Class. (1) These amounts include dividends paid on securities which the Fund has sold short ("short-sale dividends") and related interest expense. The amount of short-sale dividends and related interest expense was 1.23% of average net assets for the most recent fiscal half-year. SEMI-ANNUAL REPORT 2008 | 7 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS SMALL CAP VALUE FUND II PORTFOLIO HOLDINGS SUMMARY TABLE - -------------------------------------------------------------------------------- % of Net Security Type/Sector Classification Assets Value ----------------------------------- -------- ------------ COMMON STOCK Consumer Services ...................... 21.9% $ 31,617,345 Finance ................................ 16.2 23,387,732 Health Care ............................ 13.3 19,169,008 Technology ............................. 9.8 14,176,451 Capital Goods .......................... 8.6 12,312,260 Other .................................. 6.5 9,373,920 Consumer Non-Durables .................. 6.0 8,673,026 Energy ................................. 4.6 6,576,193 Consumer Durables ...................... 3.8 5,513,413 Basic Industries ....................... 3.7 5,385,046 Transportation ......................... 1.0 1,448,338 Utilities .............................. 0.9 1,301,358 Communications ......................... 0.4 606,561 SHORT-TERM INVESTMENTS .................... 3.5 5,050,091 LIABILITIES IN EXCESS OF OTHER ASSETS ........................... (0.2) (339,265) ----- ------------ NET ASSETS ................................ 100.0% $144,251,477 ===== ============ - -------------------- Portfolio holdings are subject to change at any time. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 8 | SEMI-ANNUAL REPORT 2008 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS LONG/SHORT EQUITY FUND PORTFOLIO HOLDINGS SUMMARY TABLE - -------------------------------------------------------------------------------- % of Net Security Type/Sector Classification Assets Value ----------------------------------- -------- ------------ DOMESTIC COMMON STOCK Technology ............................. 23.4% $ 11,283,951 Finance ................................ 20.7 10,001,878 Health Care ............................ 19.4 9,379,052 Consumer Services ...................... 15.4 7,439,120 Capital Goods .......................... 9.0 4,361,333 Consumer Non-Durables .................. 7.3 3,496,528 Communications ......................... 5.0 2,419,925 Energy ................................. 3.2 1,534,260 Basic Industries ....................... 3.1 1,486,777 Other .................................. 2.3 1,082,846 Consumer Durables ...................... 1.3 620,501 SHORT-TERM INVESTMENTS .................... 8.1 3,900,637 WARRANTS .................................. 0.1 79,727 RIGHTS .................................... -- -- SECURITIES SOLD SHORT ..................... (35.4) (17,073,662) OTHER ASSETS IN EXCESS OF LIABILITIES ......................... 17.1 8,226,761 ----- ------------ NET ASSETS ................................ 100.0% $ 48,239,634 ===== ============ - -------------------- Portfolio holdings are subject to change at any time. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2008 | 9 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS LARGE CAP VALUE FUND PORTFOLIO HOLDINGS SUMMARY TABLE - -------------------------------------------------------------------------------- % of Net Security Type/Sector Classification Assets Value ----------------------------------- -------- ------------ COMMON STOCK Finance ................................ 25.5% $ 16,583,439 Energy ................................. 15.5 10,076,454 Health Care ............................ 14.2 9,224,231 Technology ............................. 10.9 7,077,752 Consumer Services ...................... 9.6 6,244,495 Consumer Non-Durables .................. 8.1 5,237,668 Capital Goods .......................... 6.9 4,520,350 Communications ......................... 3.3 2,166,110 Basic Industries ....................... 1.7 1,075,793 Transportation ......................... 1.0 684,840 Utilities .............................. 1.0 630,059 SHORT-TERM INVESTMENTS .................... 11.4 7,407,778 LIABILITIES IN EXCESS OF OTHER ASSETS ........................... (9.1) (5,912,629) ----- ------------ NET ASSETS ................................ 100.0% $ 65,016,340 ===== ============ - -------------------- Portfolio holdings are subject to change at any time. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 10 | SEMI-ANNUAL REPORT 2008 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS MID CAP VALUE FUND PORTFOLIO HOLDINGS SUMMARY TABLE - -------------------------------------------------------------------------------- % of Net Security Type/Sector Classification Assets Value ----------------------------------- -------- ------------ COMMON STOCK Finance ................................ 21.9% $ 10,323,434 Consumer Services ...................... 16.9 7,977,378 Technology ............................. 14.3 6,751,077 Capital Goods .......................... 7.5 3,548,551 Health Care ............................ 7.5 3,528,915 Energy ................................. 6.9 3,253,822 Basic Industries ....................... 5.3 2,498,094 Consumer Non-Durables .................. 4.4 2,069,149 Other .................................. 4.1 1,919,508 Utilities .............................. 3.3 1,536,676 Communications ......................... 2.6 1,214,932 Consumer Durables ...................... 1.8 847,689 Transportation ......................... 0.9 437,400 SHORT-TERM INVESTMENTS .................... 5.3 2,516,844 LIABILITIES IN EXCESS OF OTHER ASSETS ........................... (2.7) (1,280,229) ----- ------------ NET ASSETS ................................ 100.0% $ 47,143,240 ===== ============ - -------------------- Portfolio holdings are subject to change at any time. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2008 | 11 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS ALL-CAP VALUE FUND PORTFOLIO HOLDINGS SUMMARY TABLE - -------------------------------------------------------------------------------- % of Net Security Type/Sector Classification Assets Value ----------------------------------- -------- ------------ COMMON STOCK Finance ................................ 28.4% $ 4,793,614 Health Care ............................ 14.4 2,431,177 Technology ............................. 13.2 2,223,918 Energy ................................. 10.1 1,708,846 Consumer Services ...................... 8.6 1,456,502 Consumer Non-Durables .................. 8.3 1,409,360 Communications ......................... 3.3 563,173 Capital Goods .......................... 3.1 520,866 Consumer Durables ...................... 2.8 479,553 Other .................................. 2.6 443,082 Utilities .............................. 1.3 213,346 SHORT-TERM INVESTMENTS .................... 4.2 714,271 CORPORATE BONDS ........................... 0.3 46,920 OPTIONS WRITTEN ........................... (0.5) (95,136) LIABILITIES IN EXCESS OF OTHER ASSETS ........................... (0.1) (12,875) ----- ------------ NET ASSETS ................................ 100.0% $ 16,896,617 ===== ============ - -------------------- Portfolio holdings are subject to change at any time. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 12 | SEMI-ANNUAL REPORT 2008 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ROBECO WPG SMALL CAP VALUE FUND PORTFOLIO HOLDINGS SUMMARY TABLE - -------------------------------------------------------------------------------- % of Net Security Type/Sector Classification Assets Value ----------------------------------- -------- ------------ COMMON STOCK Finance 28.4% $ 12,971,004 Commercial Services 13.6 6,210,804 Consumer Non-Cyclical 12.4 5,653,769 Health Care 10.2 4,672,617 Technology 8.4 3,838,389 Consumer Cyclical 8.0 3,664,357 Consumer Services 6.0 2,733,246 Utilities 4.9 2,230,258 Industrial 2.3 1,063,245 Energy 1.8 821,008 Transportation 1.3 577,125 Basic Materials 0.8 356,650 SHORT-TERM INVESTMENTS 1.3 609,845 OTHER ASSETS IN EXCESS OF LIABILITIES 0.6 277,640 ----- ------------ NET ASSETS 100.0% $ 45,679,957 ===== ============ - -------------------- Portfolio holdings are subject to change at any time. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2008 | 13 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ROBECO WPG 130/30 LARGE CAP CORE FUND PORTFOLIO HOLDINGS SUMMARY TABLE (FORMERLY ROBECO WPG LARGE CAP GROWTH FUND) - -------------------------------------------------------------------------------- % of Net Security Type/Sector Classification Assets Value ----------------------------------- -------- ------------ COMMON STOCK Technology ............................. 24.1% $ 3,701,645 Finance ................................ 21.1 3,230,181 Energy ................................. 15.1 2,311,484 Health Care ............................ 14.7 2,252,735 Consumer Non-Cyclical .................. 10.6 1,622,364 Consumer Cyclical ...................... 8.3 1,280,239 Basic Materials ........................ 7.4 1,133,064 Industrial ............................. 7.3 1,125,764 Consumer Services ...................... 5.5 843,790 Utilities .............................. 4.4 668,844 Telecommunications ..................... 3.4 520,531 Transportation ......................... 2.5 376,240 Commercial Services .................... 2.4 364,040 Investment Company ..................... 1.1 174,635 SECURITIES SOLD SHORT ..................... (29.3) (4,483,527) OTHER ASSETS IN EXCESS OF LIABILITIES ......................... 1.4 208,909 ----- ------------ NET ASSETS ................................ 100.0% $ 15,330,938 ===== ============ - -------------------- Portfolio holdings are subject to change at any time. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 14 | SEMI-ANNUAL REPORT 2008 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ROBECO WPG CORE BOND FUND PORTFOLIO OF INVESTMENTS - -------------------------------------------------------------------------------- % of Net Security Type/Sector Classification Assets Value ----------------------------------- -------- ------------ Government Agency Mortgage-Backed Obligations ......................... 47.0% $ 40,569,885 Corporate Bonds ........................ 25.1 21,666,701 Asset Backed Securities ................ 8.9 7,719,921 U.S. Treasury Obligations .............. 7.4 6,426,173 Government Agency Obligations .......... 5.4 4,677,813 Collateralized Mortgage Obligations ......................... 4.5 3,927,663 Foreign Government Bonds .................. 0.8 645,370 SHORT-TERM INVESTMENTS .................... 3.1 2,664,733 LIABILITIES IN EXCESS OF OTHER ASSETS ........................... (2.2) (1,881,555) ----- ------------ NET ASSETS ................................ 100.0% $ 86,416,704 ===== ============ - -------------------- Portfolio holdings are subject to change at any time. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2008 | 15 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SAM SUSTAINABLE CLIMATE FUND PORTFOLIO OF INVESTMENTS - -------------------------------------------------------------------------------- % of Net Security Type/Sector Classification Assets Value ----------------------------------- -------- ------------ COMMON STOCK Capital Goods .......................... 27.6% $ 993,308 Utilities .............................. 17.1 615,495 Technology ............................. 16.9 606,699 Basic Industries ....................... 8.8 314,614 Energy ................................. 8.6 308,360 Consumer Durables ...................... 4.9 174,942 Consumer Non-Durables .................. 3.0 107,460 Consumer Services ...................... 2.1 75,480 Transportation ......................... 1.3 46,924 Health Care ............................ 1.2 44,011 SHORT-TERM INVESTMENTS .................... 8.2 292,770 OTHER ASSETS IN EXCESS OF LIABILITIES ......................... 0.30 12,802 ----- ------------ NET ASSETS ................................ 100.0% $ 3,592,865 ===== ============ - -------------------- Portfolio holdings are subject to change at any time. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 16 | SEMI-ANNUAL REPORT 2008 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SAM SUSTAINABLE WATER FUND PORTFOLIO OF INVESTMENTS - -------------------------------------------------------------------------------- % of Net Security Type/Sector Classification Assets Value ----------------------------------- -------- ------------ COMMON STOCK Industrial 55.7% $ 2,246,440 Consumer Non-Cyclical 16.2 655,020 Utilities 15.3 617,174 Basic Materials 3.3 131,003 Diversified Operation 2.0 80,080 Consumer Cyclical 1.6 63,366 SHORT-TERM INVESTMENTS 7.4 296,648 LIABILITIES IN EXCESS OF OTHER ASSETS (1.4) (55,189) ----- ------------ NET ASSETS 100.0% $ 4,034,542 ===== ============ - -------------------- Portfolio holdings are subject to change at any time. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2008 | 17 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS SMALL CAP VALUE FUND II PORTFOLIO OF INVESTMENTS - -------------------------------------------------------------------------------- Number of Shares Value --------- ------------ COMMON STOCK--96.7% BASIC INDUSTRIES--3.7% Neenah Paper, Inc. ........................... 18,830 $ 490,521 Olin Corp. ................................... 20,865 401,025 Rock-Tenn Co., Class A ....................... 31,260 838,706 Schweitzer-Mauduit International, Inc. ....................................... 12,340 283,450 Silgan Holdings, Inc. ........................ 14,290 667,915 UAP Holding Corp. ............................ 26,535 1,021,597 USEC, Inc.* .................................. 263,610 1,681,832 ------------ 5,385,046 ------------ CAPITAL GOODS--8.6% Actuant Corp., Class A ....................... 19,320 519,322 Acuity Brands, Inc. .......................... 30,985 1,376,044 Beacon Roofing Supply, Inc.* ................. 144,860 1,240,001 Brady Corp., Class A ......................... 28,738 878,808 CIRCOR International, Inc. ................... 10,110 460,510 Drew Industries, Inc.* ....................... 36,425 982,018 DRS Technologies, Inc. ....................... 24,541 1,376,505 Gardner Denver, Inc.* ........................ 12,100 446,611 Griffon Corp.* ............................... 38,305 338,999 Lennox International, Inc. ................... 40,975 1,542,299 LSI Industries, Inc. ......................... 35,170 467,409 NN, Inc. ..................................... 61,040 594,530 RBC Bearings, Inc.* .......................... 13,175 442,680 Rofin-Sinar Technologies, Inc.* .............. 10,805 425,393 Trimas Corp.* ................................ 41,720 322,496 WD-40 Co. .................................... 15,310 475,835 Wesco International, Inc. .................... 10,570 422,800 ------------ 12,312,260 ------------ COMMUNICATIONS--0.4% EarthLink, Inc.* ............................. 83,895 606,561 ------------ CONSUMER DURABLES--3.8% Champion Enterprises, Inc.* .................. 143,585 1,275,035 MDC Holdings, Inc. ........................... 25,835 1,081,970 Natuzzi S.p.A. - ADR* ........................ 43,355 166,917 Sealy Corp. .................................. 75,595 688,670 Tempur-Pedic International, Inc. ............. 73,200 1,275,144 Winnebago Industries, Inc. ................... 51,105 1,025,677 ------------ 5,513,413 ------------ Consumer Non-Durables--6.0% Alliance One International, Inc.* ............ 93,505 458,175 Brown Shoe Co., Inc. ......................... 24,027 352,716 Matthews International Corp., Class A .................................... 14,555 652,937 Nu Skin Enterprises, Inc., Class A ........... 111,695 1,849,669 Oxford Industries, Inc. ...................... 32,475 686,522 Pilgrim's Pride Corp. ........................ 28,145 660,282 RC2 Corp.* ................................... 17,075 316,741 Skechers U.S.A., Inc., Class A* .............. 21,950 467,316 Tupperware Brands Corp. ..................... 21,205 773,558 Universal Corp. .............................. 6,590 375,037 Warnaco Group, Inc., (The)* .................. 55,380 2,080,073 ------------ 8,673,026 ------------ Number of Shares Value --------- ------------ CONSUMER SERVICES--21.9% ABM Industries, Inc. ......................... 38,430 $ 763,220 ACCO Brands Corp.* ........................... 49,905 692,182 Asbury Automative Group, Inc. ................ 40,135 562,693 Asset Acceptance Capital Corp. ............... 44,980 438,555 Bowne & Co., Inc. ............................ 45,295 601,065 Build-A-Bear-Workshop, Inc.* ................. 43,110 500,938 CBIZ, Inc.* .................................. 45,825 407,842 Charlotte Russe Holding, Inc.* ............... 44,595 868,265 Charming Shoppes, Inc.* ...................... 134,410 740,599 Cornell Companies, Inc.* ..................... 20,755 431,911 Domino's Pizza, Inc. ......................... 62,745 831,371 Dress Barn, Inc. (The)* ...................... 40,390 532,340 Ennis, Inc. .................................. 35,085 559,957 G&K Services, Inc., Class A .................. 23,255 889,736 Gevity HR, Inc. .............................. 81,320 567,614 Golfsmith International Holdings, Inc.* ...................................... 83,560 250,680 Group 1 Automotive, Inc. ..................... 29,460 721,770 Gymboree Corp. (The)* ........................ 13,470 533,277 IKON Office Solutions, Inc. .................. 79,535 566,289 infoUSA, Inc. ................................ 80,675 613,937 Jamba, Inc.* ................................. 127,760 319,400 Kforce, Inc.* ................................ 31,901 272,754 Knoll, Inc. .................................. 142,483 2,006,161 Lithia Motors, Inc., Class A ................. 19,080 196,142 Live Nation, Inc.* ........................... 120,670 1,432,353 MAXIMUS, Inc. ................................ 19,915 723,313 Mothers Work, Inc.* .......................... 28,885 579,433 MPS Group, Inc.* ............................. 59,955 683,487 Performance Food Group Co.* .................. 42,375 1,377,187 PetMed Express, Inc.* ........................ 42,626 488,068 Regis Corp. .................................. 56,475 1,414,699 Rent-A-Center, Inc.* ......................... 77,880 1,335,642 Restoration Hardware, Inc.* .................. 237,375 1,027,834 Schawk, Inc. ................................. 37,450 589,837 Scholastic Corp.* ............................ 32,985 1,150,187 School Specialty, Inc.* ...................... 14,605 445,745 Spherion Corp.* .............................. 50,490 327,175 Steiner Leisure Ltd.* ........................ 12,980 426,004 Universal Technical Institute, Inc.* ......... 34,160 427,000 Valassis Communications, Inc.* ............... 119,605 1,341,968 Watson Wyatt Worldwide, Inc., Class A .................................... 20,615 1,093,626 World Fuel Services Corp. .................... 60,265 1,885,089 ------------ 31,617,345 ------------ ENERGY--4.6% Bristow Group, Inc.* ......................... 18,565 979,490 Compton Petroleum Corp.* ..................... 71,510 845,963 Comstock Resources, Inc.* .................... 20,260 735,438 Hornbeck Offshore Services, Inc.* ............ 13,655 613,519 Newpark Resources, Inc.* ..................... 122,095 540,881 PetroHawk Energy Corp.* ...................... 38,550 696,984 Rosetta Resources, Inc.* ..................... 24,780 506,999 Whiting Petroleum Corp.* ..................... 27,065 1,656,919 ------------ 6,576,193 ------------ THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 18 | SEMI-ANNUAL REPORT 2008 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS SMALL CAP VALUE FUND II (continued) PORTFOLIO OF INVESTMENTS - -------------------------------------------------------------------------------- Number of Shares Value --------- ------------ FINANCE--16.2% Advanta Corp., Class B ....................... 57,517 $ 444,031 American Equity Investment Life Holding Co. ................................ 61,220 584,651 Amerisafe, Inc.* ............................. 57,905 761,451 Apollo Investment Corp. ...................... 55,595 861,723 Aspen Insurance Holdings Ltd. ................ 32,865 951,113 BankUnited Financial Corp., Class A .................................... 120,673 588,884 CNA Surety Corp.* ............................ 23,520 331,867 Cowen Group., Inc.* .......................... 45,080 338,100 FBR Capital Markets Corp.* ................... 23,890 166,991 Federal Agricultural Mortgage Corp., Class C ............................. 53,515 1,286,501 Hanmi Financial Corp. ........................ 48,705 371,619 Hanover Insurance Group, Inc., (The) ...................................... 9,075 396,487 Hilb, Rogal & Hobbs Co. ...................... 10,505 321,663 Horace Mann Educators Corp. .................. 41,980 729,612 Infinity Property & Casualty Corp. ........... 10,505 421,986 IPC Holdings Ltd. ............................ 57,930 1,571,062 JMP Group, Inc. .............................. 66,135 463,606 LandAmerica Financial Group, Inc. ............ 23,655 870,977 Max Re Capital Ltd. .......................... 72,290 2,005,325 National Financial Partners Corp. ............ 57,100 1,357,267 Navigators Group, Inc., (The)* ............... 14,615 799,879 PHH Corp.* ................................... 67,635 1,368,932 Platinum Underwriters Holdings Ltd. ....................................... 65,895 2,273,377 ProAssurance Corp.* .......................... 22,850 1,214,934 Quanta Capital Holdings Ltd.* ................ 95,200 278,936 Safety Insurance Group, Inc. ................. 24,410 905,367 Seabright Insurance Holdings, Inc.* .......... 29,815 444,244 State Auto Financial Corp. ................... 30,050 815,557 United America Indemnity Ltd., Class A* ................................... 24,605 461,590 ------------ 23,387,732 ------------ HEALTH CARE--13.3% Alpharma, Inc., Class A* ..................... 47,825 1,204,233 Conmed Corp.* ................................ 44,600 1,202,416 Haemonetics Corp.* ........................... 7,460 433,426 Healthspring, Inc.* .......................... 69,685 1,222,972 Home Diagnostics, Inc.* ...................... 122,000 885,720 ICU Medical, Inc.* ........................... 12,845 344,760 Invacare Corp. ............................... 24,605 614,141 Kindred Healthcare, Inc.* .................... 58,190 1,227,227 LifePoint Hospitals, Inc.* ................... 55,595 1,393,211 Lincare Holdings, Inc.* ...................... 69,545 2,260,212 Medical Action Industries, Inc.* ............. 33,440 629,341 Mentor Corp. ................................. 34,860 1,033,948 Odyssey HealthCare, Inc.* .................... 66,160 578,238 Omnicare, Inc. ............................... 36,015 755,595 Owens & Minor, Inc. .......................... 17,050 732,638 Perrigo Co. .................................. 21,115 705,663 Res-Care, Inc.* .............................. 20,715 446,201 Symmetry Medical, Inc.* ...................... 81,070 1,443,046 U.S. Physical Therapy, Inc.* ................. 117,715 1,559,724 Number of Shares Value --------- ------------ HEALTH CARE--(continued) Vital Signs, Inc. ............................ 9,760 $ 496,296 ------------ 19,169,008 ------------ OTHER--6.5% Anworth Mortgage Asset Corp. (REIT) ............................... 196,982 1,869,359 Ares Capital Corp. ........................... 59,570 763,687 Friedman, Billings, Ramsey Group, Inc., Class A ....................... 302,085 752,192 Gladstone Capital Corp. ...................... 25,730 432,264 Gladstone Commercial Corp. (REIT) ..................................... 29,670 512,104 KKR Financial Holdings LLC ................... 47,277 680,316 Lexington Realty Trust (REIT) ................ 41,695 603,327 Meruelo Maddux Properties, Inc.* ............. 86,240 366,520 MFA Mortgage Investments, Inc. (REIT) ..................................... 162,465 1,553,165 Origen Financial, Inc. (REIT) ................ 104,275 302,398 Redwood Trust, Inc. (REIT) ................... 28,090 938,768 St. Joe Co., (The) ........................... 15,600 599,820 ------------ 9,373,920 ------------ TECHNOLOGY--9.8% Acxiom Corp. ................................. 87,605 1,113,460 Bel Fuse, Inc., Class B ...................... 14,410 392,961 Belden, Inc. ................................. 9,045 355,468 Benchmark Electronics, Inc.* ................. 22,420 376,656 Brocade Communications Systems, Inc.* ............................. 64,470 495,774 CIBER, Inc.* ................................. 72,845 335,087 Electronics For Imaging, Inc.* ............... 46,600 701,796 Emulex Corp.* ................................ 61,255 911,474 EnerSys* ..................................... 21,815 501,527 Gilat Satellite Networks Ltd.* ............... 57,545 617,458 Goldleaf Financial Solutions, Inc.* .......... 99,460 264,564 Ikanos Communications, Inc.* ................. 58,130 265,073 Imation Corp. ................................ 50,350 1,135,392 Insight Enterprises, Inc.* ................... 32,150 563,589 Mercury Computer Systems, Inc.* .............. 28,990 185,826 Ness Technologies, Inc.* ..................... 43,020 400,946 OmniVision Technologies, Inc.* ............... 57,495 911,871 PAR Technology Corp.* ........................ 64,525 511,038 Photronics, Inc.* ............................ 49,560 499,069 Planar Systems, Inc.* ........................ 72,445 337,594 Smart Modular Technologies* .................. 86,820 576,485 Sycamore Networks, Inc.* ..................... 145,265 506,975 Technitrol, Inc. ............................. 59,480 1,309,155 Verigy Ltd.* ................................. 45,135 907,213 ------------ 14,176,451 ------------ TRANSPORTATION--1.0% Pacer International, Inc. .................... 83,110 1,277,401 Quality Distribution, Inc.* .................. 55,680 170,937 ------------ 1,448,338 ------------ THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2008 | 19 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS SMALL CAP VALUE FUND II (concluded) PORTFOLIO OF INVESTMENTS - -------------------------------------------------------------------------------- Number of Shares Value --------- ------------ UTILITIES--0.9% Puget Energy, Inc. ........................... 48,740 $ 1,301,358 ------------ TOTAL COMMON STOCK (Cost $149,214,617) ...................... 139,540,651 ------------ SHORT-TERM INVESTMENTS--3.5% PNC Bank Money Market Deposit Account ............................ 5,050,091 5,050,091 ------------ TOTAL SHORT-TERM INVESTMENTS (Cost $5,050,091) ........................ 5,050,091 ------------ TOTAL INVESTMENTS--100.2% (Cost $154,264,708) .......................... 144,590,742 LIABILITIES IN EXCESS OF OTHER ASSETS--(0.2)% ......................... (339,265) ------------ NET ASSETS--100.0% ............................. $144,251,477 ============ - ---------------- *--Non-income Producing ADR--American Depository Receipt. REIT--Real Estate Investment Trust THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 20 | SEMI-ANNUAL REPORT 2008 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS LONG/SHORT EQUITY FUND PORTFOLIO OF INVESTMENTS - -------------------------------------------------------------------------------- Number of Shares Value --------- ------------ LONG POSITIONS--118.3% DOMESTIC COMMON STOCK--110.1% BASIC INDUSTRIES--3.1% Graphic Packaging Corp.* ..................... 204,865 $ 630,984 Innospec, Inc. ............................... 17,005 318,674 Kapstone Paper and Packaging Corp.* ..................................... 72,960 485,184 Kapstone Paper and Packaging Corp. ...................................... 30,195 51,935 ------------ 1,486,777 ------------ CAPITAL GOODS--9.0% Dynamics Research Corp.* ..................... 47,932 463,023 EMCOR Group, Inc.* ........................... 13,180 317,506 Graham Corp. ................................. 4,850 186,628 Hubbell, Inc., Class B ....................... 7,560 342,997 KHD Humboldt Wedag International Ltd.* ........................ 20,585 547,973 Lockheed Martin Corp. ........................ 3,930 405,576 LSB Industries, Inc.* ........................ 14,680 350,118 Research Frontiers, Inc.* .................... 14,811 111,823 Sulphco, Inc.* ............................... 23,325 98,198 Superior Essex, Inc. +* ...................... 10,575 300,118 Thermadyne Holdings Corp.* ................... 62,652 626,520 TurboSonic Technologies, Inc.* ............... 207,003 124,202 WD-40 Co. .................................... 15,658 486,651 ------------ 4,361,333 ------------ COMMUNICATIONS--5.0% Check Point Software Technologies Ltd.* ......................... 29,510 646,859 Copernic, Inc.* .............................. 24,948 30,936 Embarq Corp. ................................. 6,350 266,319 HireRight, Inc.* ............................. 50,898 452,992 Imergent, Inc. ............................... 11,999 131,989 Optio Software, Inc.* ........................ 57,135 71,419 Quepasa Corp.* ............................... 15,015 40,090 Vodafone Group PLC - ADR ..................... 24,180 779,321 ------------ 2,419,925 ------------ CONSUMER DURABLES--1.3% Strattec Security Corp. ...................... 3,221 120,337 Toll Brothers, Inc.* ......................... 17,830 378,174 Wescast Industries, Inc. ..................... 15,335 121,990 ------------ 620,501 ------------ CONSUMER NON-DURABLES--7.3% Brown Shoe Co., Inc. ......................... 32,085 471,008 CCA Industries, Inc. ......................... 29,713 276,331 Coca-Cola Femsa S.A. de C.V. - ADR ................................. 8,855 464,356 Female Health Co., (The)* .................... 72,710 187,228 Mattel, Inc. ................................. 25,415 491,018 Movado Group, Inc. ........................... 31,235 601,586 Overhill Farms, Inc.* ........................ 88,345 378,117 Skechers U.S.A., Inc., Class A* .............. 29,445 626,884 ------------ 3,496,528 ------------ Number of Shares Value --------- ------------ CONSUMER SERVICES--15.4% Alloy, Inc.* ................................. 41,015 $ 315,405 China Finance Online Co., Ltd - ADR* ....................................... 11,302 240,394 Coinstar, Inc.* .............................. 16,915 493,241 Cornell Companies, Inc.* ..................... 24,430 508,388 CRA International, Inc.* ..................... 7,610 289,028 Dollar Tree Stores, Inc.* .................... 11,565 310,289 eBay, Inc.* .................................. 15,050 396,718 Gmarket, Inc. - ADR* ......................... 16,940 387,418 H&R Block, Inc. .............................. 18,805 350,713 Hiedrick & Struggles International, Inc. ....................................... 23,930 819,124 Kenexa Corp.* ................................ 24,555 497,484 LECG Corp.* .................................. 27,360 259,920 Local.Com Corp.* ............................. 27,691 119,625 Lululemon Athletica, Inc.* ................... 4,912 132,133 McGraw-Hill Companies, Inc., (The) ...................................... 4,805 196,669 Moody's Corp. ................................ 6,945 263,771 PetMed Express, Inc.* ........................ 43,335 496,186 Schawk, Inc. ................................. 28,525 449,269 Steiner Leisure Ltd. +* ...................... 10,520 345,266 SumTotal Systems, Inc.* ...................... 109,345 496,426 Thermoenergy Corp.* .......................... 89,566 71,653 ------------ 7,439,120 ------------ ENERGY--3.2% CE Franklin Ltd.* ............................ 38,785 283,131 Particle Drilling Technologies, Inc.* ...................................... 30,575 59,621 PetroHawk Energy Corp.* ...................... 33,315 602,335 Total SA ..................................... 7,815 589,173 ------------ 1,534,260 ------------ FINANCE--20.7% Aegon N.V. ................................... 26,535 394,045 American International Group, Inc. ....................................... 10,775 504,916 Bear Stearns Companies, Inc. (The) + .................................... 2,960 236,386 Capital One Financial Corp. .................. 10,205 469,736 Fidelity National Financial, Inc., Class A .................................... 36,645 645,318 Freddie Mac .................................. 9,825 247,394 Genworth Financial, Inc., Class A ............ 19,025 441,000 Investors Title Co. .......................... 4,380 209,846 IPC Holdings Ltd. ............................ 10,810 293,167 JPMorgan Chase & Co. ......................... 21,580 877,227 Legg Mason, Inc. ............................. 4,100 270,764 Lehman Brothers Holdings, Inc. ............... 5,765 293,957 Merrill Lynch & Co., Inc. .................... 4,395 217,816 Old Republic International Corp. ............. 24,235 332,504 PHH Corp.* ................................... 28,420 575,221 Platinum Underwriters Holdings Ltd. ....................................... 11,170 385,365 Reinsurance Group of America, Inc. ....................................... 13,510 739,132 SLM Corp.* ................................... 11,585 227,182 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2008 | 21 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS LONG/SHORT EQUITY FUND (continued) PORTFOLIO OF INVESTMENTS - -------------------------------------------------------------------------------- Number of Shares Value --------- ------------ FINANCE--(CONTINUED) State Street Corp. ........................... 7,065 $ 554,956 Stewart Information Services Corp. ...................................... 12,455 370,785 TFS Financial Corp.* ......................... 66,560 825,344 Torchmark Corp. .............................. 8,085 487,202 Wesco Financial Corp. ........................ 1,035 402,615 ------------ 10,001,878 ------------ HEALTH CARE--19.4% Alpha Pro Tech Ltd.* ......................... 389,360 545,104 American BIO Medica Corp.* ................... 194,905 148,128 Health Grades, Inc.* ......................... 70,407 384,422 Health Net, Inc.* ............................ 11,130 489,052 Home Diagnostics, Inc.* ...................... 80,260 582,688 iLinc Communications, Inc.* .................. 128,845 45,096 Johnson & Johnson ............................ 11,970 741,661 LHC Group, Inc.* ............................. 30,040 510,680 Lincare Holdings, Inc.* ...................... 9,420 306,150 McKesson Corp. ............................... 10,715 629,613 MEDecision, Inc.* ............................ 71,340 149,101 MTS Medication Technologies, Inc.* ...................................... 56,280 700,686 Orthofix International N.V.* ................. 22,171 887,949 Osteotech, Inc.* ............................. 107,555 470,015 Pfizer, Inc. ................................. 21,570 480,580 Pharsight Corp.* ............................. 37,558 190,419 PHC, Inc., Class A* .......................... 320,195 867,728 RemoteMDX, Inc.* ............................. 72,530 121,125 Sanofi-Aventis - ADR ......................... 16,150 599,004 Span-America Medical Systems, Inc. ....................................... 10,965 135,527 Unilens Vision, Inc. ......................... 113,802 394,324 ------------ 9,379,052 ------------ OTHER--2.3% Friedman, Billings, Ramsey Group, Inc., Class A .............................. 118,675 295,501 Keystone Consolidated Industries, Inc.* ...................................... 9,543 118,142 KKR Financial Holdings LLC ................... 23,745 341,691 SWA Ltd.* .................................... 55,850 0 United Capital Corp.* ........................ 13,790 327,512 ------------ 1,082,846 ------------ TECHNOLOGY--23.4% Accenture Ltd., Class A ...................... 14,435 508,834 ACI Worldwide, Inc.* ......................... 16,880 298,101 Advanced Battery Technologies, Inc.* ...................................... 11,435 53,058 Akeena Solar, Inc.* .......................... 6,875 40,012 Avnet, Inc.* ................................. 10,005 337,269 Brocade Communications Systems, Inc.* ............................. 97,375 748,814 CAM Commerce Solutions, Inc. ................. 26,596 1,002,137 Captaris, Inc.* .............................. 76,751 266,326 CGI Group, Inc. Class A* ..................... 47,075 521,591 Coherent, Inc.* .............................. 13,865 394,321 Number of Shares Value --------- ------------ TECHNOLOGY--(CONTINUED) Digi International, Inc.* .................... 79,251 $ 834,513 DivX, Inc. ................................... 36,625 360,024 McAfee, Inc.* ................................ 20,550 683,698 Metalink Ltd.* ............................... 14,475 43,714 MIPS Technologies, Inc.* ..................... 130,035 482,430 MoneyGram International, Inc. ................ 42,850 156,831 NetList, Inc.* ............................... 74,912 104,128 NU Horizons Electronics Corp.* ............... 58,291 346,249 PLATO Learning, Inc.* ........................ 68,709 261,094 Richardson Electronics Ltd. .................. 69,710 301,147 Sigmatel, Inc.* .............................. 21,655 63,016 SourceForge, Inc.* ........................... 242,690 417,427 Sykes Enterprises, Inc.* ..................... 50,460 847,223 Symantec Corp.* .............................. 30,165 507,979 Telular Corp.* ............................... 265,863 935,838 Tier Technologies, Inc., Class B* ............ 80,455 647,663 Wireless Ronin Technologies, Inc.* ........... 26,545 120,514 ------------ 11,283,951 ------------ TOTAL DOMESTIC COMMON STOCK (Cost $58,419,258) ....................... 53,106,171 ------------ RIGHTS--0.0% BASIC INDUSTRIES--0.0% Keystone Consolidated Industries, Inc.++* ........................ 2,943 0 ------------ TOTAL RIGHTS (Cost $0) ................................. 0 ------------ WARRANTS--0.1% OTHER--0.1% American Apparel, Inc.* ...................... 12,880 79,727 ------------ TOTAL WARRANTS (Cost $37,805) ........................... 79,727 ------------ SHORT-TERM INVESTMENTS--8.1% MONEY MARKET ACCOUNT--8.1% PNC Bank Money Market Deposit Account ............................ 3,900,637 3,900,637 ------------ TOTAL SHORT-TERM INVESTMENTS (Cost $3,900,637) ........................ 3,900,637 ------------ TOTAL LONG POSITIONS--118.3% (Cost $62,357,951) ........................... 57,086,535 ------------ SECURITIES SOLD SHORT--(35.4%) BASIC INDUSTRIES--(3.6%) Allegheny Technologies, Inc.* ................ (4,575) (353,876) Carpenter Technology Corp.* .................. (5,290) (332,371) Century Aluminum Co.* ........................ (6,590) (435,797) Ethanex Energy, Inc.* ........................ (648) (641) Foundation Coal Holdings, Inc.* .............. (2,685) (155,112) Hybrid Technologies, Inc.* ................... -- (1) Synthesis Energy Systems, Inc.* .............. (5,796) (47,817) Terra Industries, Inc.* ...................... (3,060) (138,343) Titanium Metals Corp.* ....................... (11,515) (237,439) THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 22 | SEMI-ANNUAL REPORT 2008 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS LONG/SHORT EQUITY FUND (continued) PORTFOLIO OF INVESTMENTS - -------------------------------------------------------------------------------- Number of Shares Value --------- ------------ BASIC INDUSTRIES--(CONTINUED) Uranium Energy Corp.* ........................ (12,625) $ (44,819) ------------ (1,746,216) ------------ CAPITAL GOODS--(4.7%) Applied Energetics, Inc.* .................... (46,770) (109,909) Bucyrus International, Inc. .................. (2,075) (207,251) Dynamic Materials Corp. ...................... (4,515) (257,310) DynaMotive Energy Systems Corp.* ..................................... (42,618) (33,881) FLIR Systems, Inc.* .......................... (5,045) (143,581) Fortress International Group, Inc.* .......... (7,845) (36,871) ICF International, Inc.* ..................... (7,920) (206,237) Ladish Co., Inc.* ............................ (4,100) (146,370) Layne Christensen Co.* ....................... (3,065) (122,723) Lindsay Manufacturing Co. .................... (2,275) (178,861) Nano-Proprietary, Inc.* ...................... (8,285) (9,528) Precision Castparts Corp. .................... (1,360) (150,130) Research Frontiers, Inc.* .................... (14,811) (111,823) Sulphco, Inc.* ............................... (46,671) (196,485) Titan International, Inc. .................... (6,165) (209,548) TurboChef Technologies, Inc.* ................ (7,733) (65,730) WorldWater & Solar Technologies Corp.* ..................................... (45,123) (69,941) ------------ (2,256,179) ------------ COMMUNICATIONS--(1.6%) Copernic, Inc.* .............................. (47,028) (58,315) CTC Communications Group, Inc.++* .................................... (98,900) (10) DigitalFX International, Inc.* ............... (906) (815) Gaiam, Inc.* ................................. (12,880) (274,086) Globalstar, Inc* ............................. (19,637) (151,794) Imergent, Inc.* .............................. (11,999) (131,989) Interliant, Inc.++* .......................... (600) 0 One Communications Corp.* .................... (37,790) (4) Quepasa Corp.* ............................... (15,015) (40,090) TechTarget, Inc.* ............................ (10,690) (124,218) ------------ (781,321) ------------ CONSUMER DURABLES--(0.5%) iRobot Corp.+* ............................... (13,340) (244,389) QSound Labs, Inc.* ........................... (4,440) (8,836) ------------ (253,225) ------------ CONSUMER NON-DURABLES--(4.6%) Aero Grow International, Inc.* ............... (14,492) (68,692) Amish Naturals, Inc.* ........................ (11,914) (21,326) Andersons, Inc., (The)* ...................... (4,400) (203,544) Cal-Maine Foods, Inc.* ....................... (11,205) (386,572) Guess?, Inc. ................................. (3,285) (135,112) Hansen Natural Corp.* ........................ (11,460) (475,590) Javo Beverage Co., Inc.* ..................... (26,895) (16,137) Skins, Inc.* ................................. (16,913) (4,059) Star Scientific, Inc.* ....................... (63,737) (118,551) True Religion Apparel, Inc.* ................. (9,185) (187,650) Under Armour, Inc., Class A* ................. (5,850) (215,397) USANA Health Sciences, Inc.* ................. (3,500) (109,130) Number of Shares Value --------- ------------ CONSUMER NON-DURABLES--(CONTINUED) Valence Technology, Inc.* .................... (38,015) $ (139,515) Volcom, Inc.* ................................ (5,980) (118,225) ------------ (2,199,500) ------------ CONSUMER SERVICES--(8.7%) Bally Technologies, Inc.* .................... (6,965) (264,043) Bankrate, Inc.* .............................. (3,080) (130,161) Big Dog Holdings, Inc.* ...................... (5,115) (54,321) China Finance Online Co., Ltd. - ADR* ....................................... (11,302) (240,394) Concur Technologies, Inc.* ................... (3,630) (106,141) Constant Contact, Inc. ....................... (8,190) (145,782) Crown Media Holdings, Inc., Class A* ................................... (19,815) (109,775) Escala Group, Inc.* .......................... (5,066) (14,387) GameStop Corp., Class A* ..................... (6,390) (270,680) Genius Products, Inc.* ....................... (42,200) (48,530) Genmed Holding Corp.* ........................ (5) (6) Iron Mountain, Inc.* ......................... (8,850) (266,208) L-1 Identity Soloutions, Inc.* ............... (1) (10) Local.com Corp.* ............................. (37,541) (162,177) Lululemon Athletica, Inc.* ................... (10,192) (274,165) Medis Technologies Ltd.* ..................... (18,472) (200,052) Metalico, Inc.* .............................. (13,465) (156,598) Netflix, Inc.* ............................... (9,540) (301,273) Peet's Coffee & Tea, Inc.* ................... (6,035) (141,279) PokerTek, Inc.* .............................. (8,680) (42,966) Rewards Network, Inc.* ....................... (51,855) (238,533) Ritchie Bros. Auctioneers, Inc.* ............. (4,185) (299,688) Shutterly, Inc.* ............................. (10,740) (164,215) Tim Hortons, Inc. ............................ (4,445) (156,331) Vail Resorts, Inc.* .......................... (5,970) (270,142) Wynn Resorts Ltd.* ........................... (1,130) (113,791) ------------ (4,171,648) ------------ ENERGY--(1.2%) Dril-Quip, Inc.* ............................. (2,670) (124,903) Energytec, Inc.* ............................. (1) 0 PowerSecure International, Inc.* ............. (34,710) (461,990) Terra Nostra Resources Corp.* ................ (875) (2,362) ------------ (589,255) ------------ FINANCE--(0.6%) Franklin Credit Management Corp.* ..................................... (3,109) (2,643) Ladenburg Thalmann Financial Services, Inc.* ............................ (1) (1) Life Partners Holdings, Inc.* ................ (10,057) (151,365) OptionsXpress Holdings, Inc.* ................ (6,105) (141,392) ------------ (295,401) ------------ HEALTH CARE--(1.9%) Align Technology, Inc.* ...................... (9,760) (120,536) BioMimetic Therapeutics, Inc.* ............... (6,190) (85,051) Conceptus, Inc.* ............................. (11,960) (204,038) EnteroMedics, Inc.* .......................... (3,760) (32,937) Isolagen, Inc.* .............................. (23,230) (14,402) THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2008 | 23 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS LONG/SHORT EQUITY FUND (concluded) PORTFOLIO OF INVESTMENTS - -------------------------------------------------------------------------------- Number of Shares Value --------- ------------ HEALTH CARE--(CONTINUED) Medivation, Inc.* ............................ (5,390) $ (86,294) ReGeneRx Biopharmaceuticals, Inc.* ...................................... (200) (200) RemoteMDX, Inc.* ............................. (72,530) (121,125) Savient Pharmaceuticals, Inc.* ............... (7,525) (170,667) Uluru, Inc.* ................................. (29,190) (76,186) ------------ (911,436) ------------ OTHER--0.0% China International Tourism Holdings Ltd.* ............................. (5,084) (117) ------------ TECHNOLOGY--(6.9%) Acme Packet, Inc.* ........................... (65,760) (527,395) Advanced Battery Technologies, Inc.* ...................................... (11,435) (53,058) Akeena Solar, Inc.* .......................... (23,005) (133,889) American Superconductor Corp.* ............... (6,565) (148,303) ANTS Software, Inc.* ......................... (13,984) (15,103) Axis Technologies Group, Inc.* ............... (5,845) (2,455) AXT, Inc.* ................................... (44,675) (246,606) ConSyGen, Inc.++* ............................ (200) 0 Ener1, Inc.* ................................. (155,310) (133,567) Exlservice Holdings, Inc.* ................... (7,590) (161,895) Garmin Ltd.* ................................. (2,075) (121,823) Juniper Networks, Inc.* ...................... (9,860) (264,445) LML Payment Systems, Inc.* ................... (7,808) (16,319) Media Sciences International, Inc.* .......... (15,144) (53,004) Metalink Ltd.* ............................... (31,510) (95,160) Multi-Fineline Electronix, Inc.* ............. (11,995) (255,134) Nestor, Inc.* ................................ (15,200) (6,384) NETGEAR, Inc.* ............................... (5,920) (129,174) Netscout Systems, Inc.* ...................... (21,445) (199,224) NVE Corp.* ................................... (3,405) (86,828) ParkerVision, Inc.* .......................... (16,407) (142,577) Raining Data Corp.* .......................... (30,205) (146,494) SPSS, Inc.* .................................. (2,020) (76,821) Tiger Telematics, Inc.* ...................... (6,510) (65) Universal Display Corp.* ..................... (5,275) (89,886) Vicor Corp. .................................. (10,055) (121,967) Vyyo, Inc.* .................................. (15,518) (22,501) Western Digital Corp.* ....................... (3,130) (96,623) Xybernaut Corp.* ............................. (35,000) (980) ------------ (3,347,680) ------------ Number of Shares Value --------- ------------ TRANSPORTATION--(0.6%) Genco Shipping & Trading Ltd. ................ (4,660) $ (271,538) ------------ UTILITIES--(0.5%) Clean Energy Fuels Corp.* .................... (8,440) (128,963) SJW Corp.* ................................... (4,010) (121,183) ------------ (250,146) ------------ TOTAL SECURITIES SOLD SHORT (Proceeds $20,182,676) ................... (17,073,662) ------------ OTHER ASSETS IN EXCESS OF LIABILITIES--17.1% ........................... 8,226,761 ------------ NET ASSETS--100.0% ............................. $ 48,239,634 ============ - ---------------- * -- Non-income producing. + -- Security position is either entirely or partially held in a segregated account as collateral for securities sold short. ++ -- Security has been valued at fair market value as determined in good faith by or under the direction of The RBB Fund, Inc.'s Board of Directors. ADR -- American Depository Receipt. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 24 | SEMI-ANNUAL REPORT 2008 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS LARGE CAP VALUE FUND PORTFOLIO OF INVESTMENTS - -------------------------------------------------------------------------------- Number of Shares Value --------- ------------ COMMON STOCK--97.7% BASIC INDUSTRIES--1.7% Alcoa, Inc. .................................. 15,365 $ 570,656 PPG Industries, Inc. ......................... 8,150 505,137 ------------ 1,075,793 ------------ CAPITAL GOODS--6.9% Honeywell International, Inc. ................ 13,905 800,094 Illinios Tool Works, Inc. .................... 6,450 316,501 Lockheed Martin Corp. ........................ 22,655 2,337,996 United Technologies Corp. .................... 15,115 1,065,759 ------------ 4,520,350 ------------ COMMUNICATIONS--3.3% Embarq Corp. ................................. 15,045 630,987 Vodafone Group PLC - ADR ..................... 33,897 1,092,500 Windstream Corp. ............................. 37,638 442,623 ------------ 2,166,110 ------------ CONSUMER NON-DURABLES--8.1% Altria Group, Inc. ........................... 22,912 1,675,784 Loews Corp. - Carolina Group ................. 3,195 240,551 Mattel, Inc. ................................. 17,500 338,100 Molson Coors Brewing Co., Class B .................................... 7,030 379,339 NIKE, Inc., Class B .......................... 14,380 865,676 Procter & Gamble Co. ......................... 26,265 1,738,218 ------------ 5,237,668 ------------ CONSUMER SERVICES--9.6% Advance Auto Parts, Inc. ..................... 15,130 507,460 Avis Budget Group, Inc.* ..................... 26,870 307,124 CBS Corp., Class B ........................... 17,490 399,122 eBay, Inc.* .................................. 11,520 303,667 Home Depot, Inc., (The) ...................... 23,095 613,172 Liberty Media Holding Capital, Series A* .................................. 5,367 623,162 Moody's Corp. ................................ 8,525 323,780 Omnicom Group, Inc. .......................... 14,420 644,141 R. R. Donnelley & Sons Co. ................... 21,420 681,799 Ross Stores, Inc. ............................ 21,670 603,510 Staples, Inc. ................................ 14,185 315,616 Time Warner, Inc. ............................ 59,061 921,942 ------------ 6,244,495 ------------ ENERGY--15.5% Chesapeake Energy Corp. ...................... 21,070 952,785 Chevron Corp. ................................ 13,176 1,141,832 ConocoPhillips ............................... 17,315 1,432,124 Dresser-Rand Group, Inc.* .................... 14,540 495,378 Exxon Mobil Corp. ............................ 20,879 1,816,682 Marathon Oil Corp. ........................... 33,925 1,803,453 Talisman Energy, Inc. ........................ 64,440 1,092,258 Total SA - ADR ............................... 17,800 1,341,942 ------------ 10,076,454 ------------ Number of Shares Value --------- ------------ FINANCE--25.5% ACE Ltd. ..................................... 19,339 $ 1,087,625 American International Group, Inc. ....................................... 13,978 655,009 Bank of America Corp. ........................ 45,015 1,788,896 Bank of New York Mellon Corp., (The) ...................................... 16,027 703,104 Bear Stearns Companies, Inc. (The) ...................................... 7,350 586,971 Berkshire Hathaway, Inc., Class B* ........... 433 2,024,058 Capital One Financial Corp. .................. 13,985 643,730 Citigroup, Inc. .............................. 67,393 1,597,888 Freddie Mac .................................. 12,207 307,372 JPMorgan Chase & Co. ......................... 51,295 2,085,142 Loews Corp. .................................. 29,115 1,218,172 Merrill Lynch & Co., Inc. .................... 27,080 1,342,085 Morgan Stanley ............................... 14,985 631,168 National City Corp. .......................... 19,495 309,191 Travelers Companies, Inc., (The) ............. 19,639 911,446 Wells Fargo & Co. ............................ 23,660 691,582 ------------ 16,583,439 ------------ HEALTH CARE--14.2% CIGNA Corp. .................................. 14,945 666,248 Covidien Ltd. ................................ 16,327 698,632 DaVita, Inc.* ................................ 14,065 698,046 Johnson & Johnson ............................ 40,506 2,509,752 Lincare Holdings, Inc.* ...................... 19,820 644,150 McKesson Corp. ............................... 8,750 514,150 Pfizer, Inc. ................................. 76,707 1,709,032 WellPoint, Inc.* ............................. 15,560 1,090,445 Wyeth ........................................ 15,905 693,776 ------------ 9,224,231 ------------ TECHNOLOGY--10.9% Accenture Ltd., Class A ...................... 11,900 419,475 Harris Corp. ................................. 18,505 903,599 Hewlett-Packard Co. .......................... 15,333 732,457 Ingram Micro, Inc., Class A* ................. 19,080 291,352 International Business Machines Corp. ...................................... 9,735 1,108,427 McAfee, Inc.* ................................ 12,440 413,879 Microsoft Corp. .............................. 32,184 876,049 Nokia OYJ - ADR .............................. 23,460 844,795 Oracle Corp.* ................................ 32,195 605,266 Symantec Corp.* .............................. 20,930 352,461 Taiwan Semiconductor Manufacturing Co., Ltd. - ADR .............. 54,414 529,992 ------------ 7,077,752 ------------ TRANSPORTATION--1.0% United Parcel Service, Inc. .................. 9,750 684,840 ------------ THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2008 | 25 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS LARGE CAP VALUE FUND (concluded) PORTFOLIO OF INVESTMENTS - -------------------------------------------------------------------------------- Number of Shares Value --------- ------------ UTILITIES--1.0% DTE Energy Co. ............................... 4,470 $ 177,951 PG&E Corp. ................................... 12,005 452,108 ------------ 630,059 ------------ TOTAL COMMON STOCK (Cost $62,867,850) ....................... 63,521,191 ------------ SHORT-TERM INVESTMENT--11.4% PNC Bank Money Market Deposit Account .................................... 7,407,778 7,407,778 ------------ TOTAL SHORT-TERM INVESTMENTS (Cost $7,407,778) ........................ 7,407,778 ------------ TOTAL INVESTMENTS--109.1% (Cost $70,275,628) ........................... 70,928,969 LIABILITIES IN EXCESS OF OTHER ASSETS--(9.1)% ......................... (5,912,629) ------------ NET ASSETS--100.0% ............................. $ 65,016,340 ============ - ---------------- * -- Non-income producing. ADR -- American Depository Receipt. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 26 | SEMI-ANNUAL REPORT 2008 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS MID CAP VALUE FUND PORTFOLIO OF INVESTMENTS - -------------------------------------------------------------------------------- Number of Shares Value --------- ------------ COMMON STOCK--97.4% BASIC INDUSTRIES--5.3% Albemarle Corp. .............................. 16,275 $ 617,474 Crown Holdings, Inc.* ........................ 25,440 633,710 Lubrizol Corp., (The) ........................ 12,835 748,281 PPG Industries, Inc. ......................... 8,045 498,629 ------------ 2,498,094 ------------ CAPITAL GOODS--7.5% Cooper Industries Ltd., Class A .............. 8,400 352,212 Ingersoll-Rand Co. Ltd., Class A ............. 7,820 327,345 Lennox International, Inc. ................... 11,695 440,200 Stanley Works, (The) ......................... 16,650 808,191 Terex Corp.* ................................. 7,125 480,581 Thomas & Betts Corp.* ........................ 17,845 716,477 W.W. Grainger, Inc. .......................... 5,750 423,545 ------------ 3,548,551 ------------ COMMUNICATIONS--2.6% CenturyTel, Inc. ............................. 10,955 396,461 Embarq Corp. ................................. 10,220 428,627 Windstream Corp. ............................. 33,150 389,844 ------------ 1,214,932 ------------ CONSUMER DURABLES--1.8% BorgWarner, Inc. ............................. 9,610 414,287 Lennar Corp., Class A ........................ 10,840 201,732 Pulte Homes, Inc. ............................ 17,110 231,670 ------------ 847,689 ------------ CONSUMER NON-DURABLES--4.4% General Mills, Inc. .......................... 14,495 811,575 Loews Corp. - Carolina Group ................. 4,735 356,498 Mattel, Inc. ................................. 35,265 681,320 VF Corp. ..................................... 2,890 219,756 ------------ 2,069,149 ------------ CONSUMER SERVICES--16.9% Burger King Holdings, Inc. ................... 10,120 259,679 CBS Corp., Class B ........................... 28,895 659,384 Dun & Bradstreet Corp., (The) ................ 5,740 501,332 Equifax, Inc. ................................ 17,555 600,732 Expedia, Inc.* ............................... 14,079 322,831 Family Dollar Stores, Inc. ................... 16,685 319,518 Hewitt Associates, Inc., Class A* ............ 10,650 420,249 Knoll, Inc. .................................. 47,085 662,957 Kohl's Corp.* ................................ 13,120 583,053 Kroger Co., (The) ............................ 9,555 231,709 Manpower, Inc. ............................... 6,295 356,926 McGraw-Hill Companies, Inc., (The) ...................................... 10,620 434,677 Meredith Corp. ............................... 13,455 583,274 Omnicom Group, Inc. .......................... 14,285 638,111 R. R. Donnelley & Sons Co. ................... 10,855 345,515 Safeway, Inc. ................................ 12,445 357,669 Staples, Inc. ................................ 31,450 699,762 ------------ 7,977,378 ------------ Number of Shares Value --------- ------------ ENERGY--6.9% Anadarko Petroleum Corp. ..................... 7,590 $ 483,786 Chesapeake Energy Corp. ...................... 10,085 456,044 Dresser-Rand Group, Inc.* .................... 12,695 432,519 Helix Energy Solutions Group, Inc.* ...................................... 8,720 307,118 Murphy Oil Corp. ............................. 3,550 285,349 Noble Energy, Inc. ........................... 7,775 601,785 PetroHawk Energy Corp.* ...................... 38,010 687,221 ------------ 3,253,822 ------------ FINANCE--21.9% ACE Ltd. ..................................... 8,675 487,882 Affiliated Managers Group, Inc.* ............. 2,020 194,627 Allied World Assurance Co. Holdings Ltd. .............................. 5,160 224,718 AON Corp. .................................... 5,325 221,573 Assurant, Inc. ............................... 9,190 574,834 Bear Stearns Companies, Inc. (The) ...................................... 2,880 229,997 Capital One Financial Corp. .................. 6,525 300,346 CNA Financial Corp. .......................... 10,795 287,687 Comerica, Inc. ............................... 5,605 203,125 Commerce Bancorp, Inc. ....................... 15,520 586,346 Federated Investors, Inc., Class B ........... 15,865 643,802 Hanover Insurance Group, Inc., (The) ...................................... 14,530 634,816 Lincoln National Corp. ....................... 6,160 314,838 Loews Corp. .................................. 14,250 596,220 Marsh & McLennan Cos., Inc. .................. 32,305 822,808 Mercury General Corp. ........................ 11,000 501,600 Nationwide Financial Services, Inc., Class A .............................. 5,635 232,444 Progressive Corp., (The) ..................... 18,790 344,421 Reinsurance Group of America, Inc. ....................................... 9,900 541,629 State Street Corp. ........................... 3,915 307,523 Student Loan Corp., (The) .................... 1,635 180,668 Suntrust Banks, Inc. ......................... 7,895 458,936 Synovus Financial Corp. ...................... 19,910 229,562 Unum Group ................................... 25,530 584,892 Willis Group Holdings Ltd. ................... 7,610 249,988 Zions Bancorporation ......................... 7,710 368,152 ------------ 10,323,434 ------------ HEALTH CARE--7.5% CIGNA Corp. .................................. 5,755 256,558 Coventry Health Care, Inc.* .................. 11,480 595,468 DaVita, Inc.* ................................ 12,400 615,412 Hospira, Inc.* ............................... 13,565 577,326 Lincare Holdings, Inc.* ...................... 7,840 254,800 McKesson Corp. ............................... 13,320 782,683 Quest Diagnostics, Inc. ...................... 9,370 446,668 ------------ 3,528,915 ------------ THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2008 | 27 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS MID CAP VALUE FUND (concluded) PORTFOLIO OF INVESTMENTS - -------------------------------------------------------------------------------- Number of Shares Value --------- ------------ OTHER--4.1% Annaly Capital Management, Inc. (REIT) ..................................... 23,346 $ 483,029 AvalonBay Communities, Inc. (REIT) ..................................... 2,665 246,326 Nationwide Health Properties, Inc. (REIT) ..................................... 8,950 271,453 ProLogis (REIT) .............................. 6,510 350,759 SL Green Realty Corp. (REIT) ................. 2,770 253,455 Ventas, Inc. (REIT) .......................... 7,520 314,486 ------------ 1,919,508 ------------ TECHNOLOGY--14.3% Acxiom Corp. ................................. 39,755 505,286 Amdocs Ltd.* ................................. 12,665 392,615 Arrow Electronics, Inc.* ..................... 18,705 609,970 Broadridge Financial Solutions, Inc. ....................................... 26,640 510,156 Brocade Communications Systems, Inc.* ............................. 60,430 464,707 CACI International, Inc., Class A* ........... 9,215 402,327 Comverse Tecnology, Inc.* .................... 14,840 244,415 Cymer, Inc.* ................................. 20,335 576,091 Emulex Corp.* ................................ 12,550 186,744 Harris Corp. ................................. 14,185 692,654 Ingram Micro, Inc., Class A* ................. 29,590 451,839 McAfee, Inc.* ................................ 16,072 534,715 SRA International, Inc., Class A* ............ 9,195 220,680 Sybase, Inc.* ................................ 8,860 235,853 Symantec Corp.* .............................. 42,935 723,025 ------------ 6,751,077 ------------ TRANSPORTATION--0.9% Norfolk Southern Corp. ....................... 8,270 437,400 ------------ UTILITIES--3.3% American Electric Power Co., Inc. ............ 5,120 209,511 DTE Energy Co. ............................... 7,510 298,973 Edison International ......................... 4,835 238,849 NiSource, Inc. ............................... 10,285 176,799 PG&E Corp. ................................... 11,435 430,642 Sierra Pacific Resources ..................... 14,090 181,902 ------------ 1,536,676 ------------ TOTAL COMMON STOCK (Cost $47,129,928) ....................... 45,906,625 ------------ Number of Shares Value --------- ------------ SHORT-TERM INVESTMENT--5.3% PNC Bank Money Market Deposit Account ............................ 2,516,844 $ 2,516,844 ------------ TOTAL SHORT-TERM INVESTMENTS (Cost $2,516,844) ........................ 2,516,844 ------------ TOTAL INVESTMENTS--102.7% (Cost $49,646,772) ........................... 48,423,469 LIABILITIES IN EXCESS OF OTHER ASSETS--(2.7)% ............................... (1,280,229) ------------ NET ASSETS--100.0% ............................. $ 47,143,240 ============ - ---------------- * -- Non-income producing REIT -- Real Estate Investment Trust. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 28 | SEMI-ANNUAL REPORT 2008 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS ALL-CAP VALUE FUND PORTFOLIO OF INVESTMENTS - -------------------------------------------------------------------------------- Number of Shares Value --------- ------------ COMMON STOCK--96.1% CAPITAL GOODS--3.1% Dover Corp. .................................. 4,860 $ 201,738 Parker-Hannifin Corp. ........................ 2,362 152,656 W.W. Grainger, Inc. .......................... 2,260 166,472 ------------ 520,866 ------------ COMMUNICATIONS--3.3% Embarq Corp. ................................. 2,010 84,300 Vodafone Group PLC - ADR ..................... 14,858 478,873 ------------ 563,173 ------------ CONSUMER DURABLES--2.8% Herman Miller, Inc. .......................... 2,625 78,304 Lennar Corp., Class A ........................ 5,445 101,331 National Presto Industries, Inc. ............. 1,150 60,260 Pulte Homes, Inc. ............................ 17,700 239,658 ------------ 479,553 ------------ CONSUMER NON-DURABLES--8.3% Mattel, Inc. ................................. 12,140 234,545 Nestle S.A. - ADR ............................ 2,010 240,466 NIKE, Inc., Class B .......................... 3,860 232,372 Oxford Industries, Inc. ...................... 1,660 35,092 Procter & Gamble Co. ......................... 5,380 356,049 Tupperware Brands Corp. ..................... 5,540 202,099 VF Corp. ..................................... 1,430 108,737 ------------ 1,409,360 ------------ CONSUMER SERVICES--8.6% BancTec, Inc. 144A++ ......................... 7,030 35,150 Career Education Corp.*# ..................... 4,300 63,855 Clear Channel Communications, Inc. ....................................... 2,445 78,240 Equifax, Inc. ................................ 1,355 46,368 Expedia, Inc.* ............................... 5,379 123,341 Harte-Hanks, Inc. ............................ 4,530 76,602 Herbalife Ltd. ............................... 2,165 90,562 Omnicom Group, Inc. .......................... 3,900 174,213 Pacific Sunwear of California, Inc.*# ..................................... 10,365 115,673 Rent-A-Center, Inc.* ......................... 3,510 60,197 Safeway, Inc. ................................ 5,545 159,363 Wal-Mart Stores, Inc. ........................ 7,575 375,644 Watson Wyatt Worldwide, Inc., Class A .................................... 1,080 57,294 ------------ 1,456,502 ------------ ENERGY--10.1% Apache Corp. ................................. 2,710 310,864 Chevron Corp. ................................ 1,875 162,488 Devon Energy Corp. ........................... 2,380 244,474 Dresser-Rand Group, Inc.* .................... 1,435 48,890 Marathon Oil Corp. ........................... 3,170 168,517 Pioneer Natural Resources Co. ................ 3,720 166,619 Quest Resource Corp.* ........................ 1,493 10,600 Quest Resource Corp.++ 144A* ................. 2,430 17,253 Number of Shares Value --------- ------------ ENERGY--(CONTINUED) Talisman Energy, Inc. ........................ 9,260 $ 156,957 Total SA - ADR ............................... 5,600 422,184 ------------ 1,708,846 ------------ FINANCE--28.4% ACE Ltd. ..................................... 11,185 629,044 Alleghany Corp.* ............................. 817 294,937 Allied World Assurance Co. Holdings Ltd. .............................. 2,265 98,641 AMBAC Financial Group, Inc. .................. 3,175 35,369 American International Group, Inc. ....................................... 3,395 159,090 AON Corp. .................................... 3,150 131,071 Aspen Insurance Holdings Ltd. ................ 2,520 72,929 Bear Stearns Companies, Inc. (The) ...................................... 645 51,510 Castlepoint Holdings Ltd. .................... 20 253 Castlepoint Holdings Ltd. 144A++* ............ 3,725 47,047 Countrywide Financial Corp. .................. 1,429 9,017 First American Corp. ......................... 1,225 42,667 Flagstone Reinsurance Holdings Ltd. ....................................... 10,505 134,359 Hanover Insurance Group, Inc., (The) ...................................... 3,875 169,299 IndyMac Bancorp, Inc. ........................ 1,750 10,762 IPC Holdings Ltd. ............................ 5,860 158,923 J.G. Wentworth, Inc. 144A++ .................. 4,470 53,640 JPMorgan Chase & Co. ......................... 2,000 81,300 Loews Corp. .................................. 18,210 761,906 Maiden Holdings Ltd. 144A++* ................. 3,315 26,520 Marsh & McLennan Cos., Inc. .................. 5,670 144,415 MBIA, Inc. ................................... 6,605 85,667 Morgan Stanley# .............................. 5,890 248,087 Peoples Choice Financial Corp. 144A++* .................................... 1,465 0 Quanta Capital Holdings Ltd.* ................ 19,670 57,633 SLM Corp.* ................................... 3,550 69,615 Solar Capital LLC++ 144A* .................... 6,075 91,125 Specialty Underwriters' Alliance, Inc.* ...................................... 3,000 15,060 Travelers Companies, Inc., (The) ............. 5,225 242,492 Unum Group ................................... 12,036 275,745 Wesco Financial Corp. ........................ 180 70,020 White Mountains Insurance Group Ltd. ................................. 1,065 525,471 ------------ 4,793,614 ------------ HEALTH CARE--14.4% Amgen, Inc.* ................................. 5,175 235,566 AstraZeneca PLC - ADR ........................ 4,040 152,025 Covidien Ltd. ................................ 2,300 98,417 DaVita, Inc.* ................................ 3,965 196,783 Johnson & Johnson ............................ 6,715 416,062 Lincare Holdings, Inc.* ...................... 4,965 161,363 Medtronic, Inc. .............................. 3,430 169,305 Mentor Corp. ................................. 2,155 63,917 Pfizer, Inc. ................................. 21,211 472,581 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2008 | 29 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS ALL-CAP VALUE FUND (concluded) PORTFOLIO OF INVESTMENTS - -------------------------------------------------------------------------------- Number of Shares Value --------- ------------ HEALTH CARE--(CONTINUED) Sanofi-Aventis - ADR ......................... 3,355 $ 124,437 UnitedHealth Group, Inc. ..................... 2,305 107,136 Wyeth ........................................ 5,355 233,585 ------------ 2,431,177 ------------ OTHER--2.6% Annaly Capital Management, Inc. (REIT) ..................................... 4,605 95,277 Ashford Hospitality Trust, Inc. (REIT) ..................................... 9,795 65,137 CBRE Realty Finance, Inc. (REIT) ..................................... 9,825 48,536 CBRE Realty Finance, Inc. (REIT)++ 144A* ............................. 210 1,037 Friedman, Billings, Ramsey Group, Inc., Class A (REIT) ................ 9,720 24,203 Hatteras Financial Corp. 144A++ (REIT)* .................................... 3,890 93,360 Meruelo Maddux Properties, Inc.* ............. 3,080 13,090 National Health Investors, Inc. (REIT) ..................................... 3,400 102,442 ------------ 443,082 ------------ TECHNOLOGY--13.2% Accenture Ltd., Class A ...................... 2,240 78,960 Acxiom Corp. ................................. 6,100 77,531 Avnet, Inc.* ................................. 3,125 105,344 Belden, Inc. ................................. 1,180 46,374 Broadridge Financial Solutions, Inc. ....................................... 3,520 67,408 Fidelity National Information Services, Inc. ............................. 2,185 90,656 GSI Group, Inc.* ............................. 5,320 43,305 Hewlett-Packard Co. .......................... 8,860 423,242 International Business Machines Corp. ...................................... 5,485 624,522 Microsoft Corp. .............................. 12,185 331,676 Nokia OYJ - ADR .............................. 2,500 90,025 Tech Data Corp.* ............................. 3,145 104,886 Tyco Electronics Ltd. ........................ 4,255 139,989 ------------ 2,223,918 ------------ UTILITIES--1.3% Korea Electric Power Corp.-- ADR ........................................ 12,325 213,346 ------------ TOTAL COMMON STOCK (Cost $16,399,062) ....................... 16,243,437 ------------ Par (000) Value --------- CORPORATE BONDS--0.3% MBIA Insurance Corp. 144A (a) (b) 14.00% 01/15/33 ............................ $ 46 46,920 ------------ TOTAL CORPORATE BONDS (Cost $46,000) ........................... 46,920 ------------ Number of Shares Value --------- ------------ SHORT-TERM INVESTMENTS--4.2% PNC Bank Money Market Deposit Account ............................ 714,271 $ 714,271 ------------ TOTAL SHORT-TERM INVESTMENTS (Cost $714,271) .......................... 714,271 ------------ TOTAL INVESTMENTS--100.6% (Cost $17,159,333) ........................... 17,004,628 ------------ OPTIONS WRITTEN--(0.5%) Career Education Corp. Call Options Expires 04/19/08 Strike Price $22.50 ........................ (43) (434) Morgan Stanley Call Options Expires 07/19/08 Strike Price $45 ........................... (25) (9,375) Pacific Sunwear of California, Inc. Call Options Expires 03/22/08 Strike Price $12.25 ........................ (77) (1,307) Pulte Homes, Inc. Call Options Expires 01/17/09 Strike Price $10 ........................... (120) (67,680) Pulte Homes, Inc. Call Options Expires 01/17/09 Strike Price $20 ........................... (57) (9,342) Vodaphone Group Call Options Expires 03/22/08 Strike Price $31 ........................... (35) (6,998) ------------ TOTAL OPTIONS WRITTEN (Premiums received $189,458) ............. (95,136) ------------ LIABILITIES IN EXCESS OF OTHER ASSETS--(0.1)% ......................... (12,875) ------------ NET ASSETS--100.0% ............................. $ 16,896,617 ============ - ---------------- * -- Non-income producing. ++ -- Security has been valued at fair market value as determined in good faith by or under the direction of The RBB Fund, Inc.'s Board of Directors. 144A -- Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may not be resold subject to that rule except to qualified institutional buyers. # -- Security segregated as collateral for options written. ADR -- American Depository Receipt. REIT -- Real Estate Investment Trust. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 30 | SEMI-ANNUAL REPORT 2008 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ROBECO WPG SMALL CAP VALUE FUND PORTFOLIO OF INVESTMENTS - -------------------------------------------------------------------------------- Number of Shares Value --------- ------------ COMMON STOCK--98.1% BASIC MATERIALS--0.8% Omnova Solutions, Inc.* ...................... 54,800 $ 213,720 Uranium Resources, Inc.#* .................... 15,077 142,930 ------------ 356,650 ------------ COMMERCIAL SERVICES--13.6% Cross Country Healthcare, Inc.* .............. 9,200 99,912 ICF International, Inc.* ..................... 18,700 486,948 LECG Corp.* .................................. 122,900 1,167,550 Marlin Business Services Corp.* .............. 39,300 374,136 MDC Partners, Inc., Class A* ................. 304,400 2,456,508 PeopleSupport, Inc.* ......................... 26,600 308,826 Princeton Review, Inc. (The)* ................ 24,000 199,200 RADWARE Ltd.* ................................ 50,800 621,284 Regis Corp. .................................. 8,800 220,440 WidePoint Corp.* ............................. 220,800 276,000 ------------ 6,210,804 ------------ CONSUMER CYCLICAL--8.0% Beacon Roofing Supply, Inc.#* ................ 25,000 214,000 Brown Shoe Co., Inc. ......................... 12,500 183,500 Casual Male Retail Group, Inc.#* ............. 139,900 540,014 Champion Enterprises, Inc.#* ................. 20,900 185,592 Collective Brands, Inc.* ..................... 30,400 479,408 Dress Barn, Inc. (The)* ...................... 23,800 313,684 DSW, Inc., Class A* .......................... 13,600 247,656 Hot Topic, Inc.* ............................. 19,800 90,882 Maidenform Brands, Inc.* ..................... 9,000 111,330 Shoe Carnival, Inc.* ......................... 43,500 589,425 Skechers U.S.A., Inc., Class A* .............. 9,800 208,642 Smith & Wesson Holding Corp.#* ............... 97,700 500,224 ------------ 3,664,357 ------------ CONSUMER NON-CYCLICAL--12.4% Alliance One International, Inc.* ............ 317,700 1,556,730 Chiquita Brands International, Inc.* ...................................... 17,600 360,272 Del Monte Foods Co. .......................... 51,200 459,776 Delek US Holdings, Inc. ...................... 7,400 116,772 Jarden Corp.* ................................ 19,200 462,528 Libbey, Inc. ................................. 88,500 1,376,175 Lifetime Brands, Inc.# ....................... 52,000 537,160 Pantry, Inc. (The)* .......................... 32,600 784,356 ------------ 5,653,769 ------------ CONSUMER SERVICES--6.0% American Dental Partners, Inc.* .............. 24,600 235,422 California Pizza Kitchen, Inc.* .............. 18,500 257,890 Carrols Restaurant Group, Inc.* .............. 46,300 382,901 Cheesecake Factory, Inc. (The)* .............. 11,800 246,738 CKE Restaurants, Inc. ........................ 16,100 178,388 Domino's Pizza, Inc. ......................... 17,400 230,550 Journal Register Co.# ........................ 44,700 44,700 Lee Enterprises, Inc. ........................ 49,100 506,221 P.F. Chang's China Bistro, Inc.#* ............ 4,000 114,120 Number of Shares Value --------- ------------ CONSUMER SERVICES--(CONTINUED) Valassis Communications, Inc.* ............... 47,800 $ 536,316 ------------ 2,733,246 ------------ ENERGY--1.8% American Oil & Gas, Inc.* .................... 49,200 236,160 Geomet, Inc.* ................................ 69,000 414,000 Holly Corp. .................................. 3,200 170,848 ------------ 821,008 ------------ FINANCE--28.4% Apollo Investment Corp. ...................... 21,400 331,700 Ares Capital Corp. ........................... 27,500 352,550 Ashford Hospitality Trust, Inc. (REIT) ..................................... 28,200 187,530 Aspen Insurance Holdings Ltd. ................ 13,600 393,584 Assured Guaranty Ltd. ........................ 15,500 397,575 Berkshire Hills Bancorp, Inc. ................ 18,900 428,085 CapLease, Inc. (REIT) ........................ 134,300 1,107,975 Danvers Bancorp, Inc.* ....................... 42,900 438,009 Darwin Professional Underwriters, Inc.* ...................................... 12,200 255,468 Dearborn Bancorp, Inc.* ...................... 25,350 177,196 Delphi Financial Group, Inc., Class A .................................... 17,600 530,816 Encore Bancshares, Inc.* ..................... 14,100 262,119 Essa Bancorp, Inc.* .......................... 21,700 260,400 First Financial Bankshares, Inc. ............. 5,401 204,536 Flushing Financial Corp. ..................... 12,600 205,380 Home Financial Bancorp, Inc. ................. 29,000 329,150 Investors Bancorp, Inc.* ..................... 17,300 250,850 Jackson Hewitt Tax Service, Inc. ............. 20,400 426,972 Meadowbrook Insurance Group, Inc. ....................................... 83,300 663,068 MFA Mortgage Investments, Inc. (REIT) ..................................... 50,400 481,824 National Financial Partners Corp. ............ 8,300 197,291 New York Community Bancorp, Inc. ....................................... 11,900 194,327 Pennantpark Investment Corp. ................. 53,400 496,086 Renasant Corp. ............................... 16,400 345,384 Sun Communities, Inc. (REIT)# ................ 52,200 1,063,836 TICC Capital Corp. ........................... 31,045 347,704 United Financial Bancorp, Inc. ............... 30,732 353,111 Validus Holdings Ltd. ........................ 22,300 553,932 Viewpoint Financial Group .................... 14,700 228,144 Westfield Financial, Inc. .................... 65,400 655,308 WSFS Financial Corp. ......................... 13,800 653,430 Zenith National Insurance Corp. .............. 5,800 197,664 ------------ 12,971,004 ------------ HEALTH CARE--10.2% HealthTronics, Inc.* ......................... 108,700 396,755 ICU Medical, Inc.* ........................... 25,800 692,472 Kensey Nash Corp.* ........................... 27,800 754,770 Lakeland Industries, Inc.* ................... 80,964 850,929 LifePoint Hospitals, Inc.* ................... 53,300 1,335,698 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2008 | 31 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ROBECO WPG SMALL CAP VALUE FUND (concluded) PORTFOLIO OF INVESTMENTS - -------------------------------------------------------------------------------- Number of Shares Value --------- ------------ HEALTH CARE--(CONTINUED) Matrixx Initiatives, Inc.* ................... 11,900 $ 172,550 NovaMed, Inc.#* .............................. 30,600 122,706 Providence Service Corp. (The)* .............. 12,300 346,737 ------------ 4,672,617 ------------ INDUSTRIAL--2.3% Altra Holdings, Inc.* ........................ 15,000 192,750 Newpark Resources, Inc.* ..................... 196,500 870,495 ------------ 1,063,245 ------------ TECHNOLOGY--8.4% Actuate Corp.* ............................... 46,200 221,760 Axesstel, Inc.* .............................. 284,420 76,793 Computer Programs and Systems, Inc. ....................................... 27,900 621,333 CPI International, Inc.* ..................... 46,550 484,120 Digi International, Inc.* .................... 26,500 279,045 Foundry Networks, Inc.* ...................... 25,300 300,311 OmniVision Technologies, Inc.#* .............. 13,400 212,524 Plantronics, Inc. ............................ 12,100 228,206 Rackable Systems, Inc.#* ..................... 97,600 901,824 Trident Microsystems, Inc.* .................. 102,700 512,473 ------------ 3,838,389 ------------ TRANSPORTATION--1.3% Double Hull Tankers, Inc. .................... 51,300 577,125 ------------ UTILITIES--4.9% El Paso Electric Co.* ........................ 16,300 333,498 Great Plains Energy, Inc. .................... 10,600 269,558 Hawaiian Electric Industries, Inc. ........... 10,300 231,338 Portland General Electric Co. ................ 18,800 438,604 Synthesis Energy Systems, Inc.* .............. 6,900 56,925 UGI Corp. .................................... 26,200 670,982 Vectren Corp. ................................ 8,900 229,353 ------------ 2,230,258 ------------ TOTAL COMMON STOCK (Cost $49,674,347) ....................... 44,792,472 ------------ SHORT-TERM INVESTMENTS--1.3% Dreyfus Government Cash Management ................................. 609,845 609,845 ------------ TOTAL SHORT-TERM INVESTMENTS (Cost $609,845) .......................... 609,845 ------------ TOTAL INVESTMENTS (a)--99.4% (Cost $50,284,192) ........................... 45,402,317 ------------ OTHER ASSETS IN EXCESS OF LIABILITIES--0.6% ............................ 277,640 ------------ NET ASSETS--100.0% ............................. $ 45,679,957 ============ - ---------------- * -- Non-income producing. # Portion of security out on loan (See Note 6). (a) At February 29, 2008, the market value of securities on loan was $1,946,888. REIT -- Real Estate Investment Trust THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 32 | SEMI-ANNUAL REPORT 2008 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ROBECO WPG 130/30 LARGE CAP CORE FUND PORTFOLIO OF INVESTMENTS (FORMERLY ROBECO WPG LARGE CAP GROWTH FUND) - -------------------------------------------------------------------------------- Number of Shares Value --------- ------------ LONG POSITIONS--127.9% DOMESTIC COMMON STOCK--127.9% BASIC MATERIALS--7.4% AK Steel Holding Corp. ....................... 1,010 $ 53,146 Celanese Corp. Series A ...................... 5,778 224,764 Freeport-McMoRan Copper & Gold, Inc., Class B ........................ 3,132 315,894 Monsanto Co. ................................. 530 61,310 Mosaic Co., (The)* ........................... 2,204 245,305 Nucor Corp. .................................. 3,124 201,717 PPG Industries, Inc. ......................... 499 30,928 ------------ 1,133,064 ------------ COMMERCIAL SERVICES--2.4% Avis Budget Group, Inc.* ..................... 8,145 93,098 Computer Sciences Corp.* ..................... 1,596 69,346 Hewitt Associates, Inc., Class A* ............ 1,809 71,383 Omnicom Group, Inc. .......................... 2,915 130,213 ------------ 364,040 ------------ CONSUMER CYCLICAL--8.3% AutoZone, Inc.* .............................. 1,071 123,251 Best Buy Co., Inc. ........................... 1,463 62,924 BorgWarner, Inc. ............................. 3,338 143,901 CB Richard Ellis Group, Inc., Class A* ................................... 8,856 177,651 Coach, Inc.* ................................. 2,184 66,219 Fastenal Co. ................................. 1,832 74,489 Oshkosh Corp. ................................ 1,872 75,011 RadioShack Corp. ............................. 11,326 197,639 TJX Companies, Inc. (The) .................... 2,511 80,352 Toro Co. ..................................... 1,472 70,921 Wal-Mart Stores, Inc. ........................ 4,192 207,881 ------------ 1,280,239 ------------ CONSUMER NON-CYCLICAL--10.6% Altria Group, Inc. ........................... 3,676 268,862 Avon Products, Inc. .......................... 2,367 90,088 Coca-Cola Enterprises, Inc. .................. 11,867 289,911 ConAgra Foods, Inc. .......................... 4,218 93,218 Estee Lauder Cos., Inc., (The) .............. 5,943 253,053 Kroger Co., (The) ............................ 3,200 77,600 Pepsi Bottling Group, Inc. ................... 6,978 237,322 Procter & Gamble Co. ......................... 1,565 103,572 Safeway, Inc. ................................ 7,263 208,738 ------------ 1,622,364 ------------ CONSUMER SERVICES--5.5% Brinker International, Inc. .................. 3,474 64,060 CBS Corp., Class B ........................... 4,779 109,057 Hasbro, Inc. ................................. 2,663 68,625 McDonald's Corp. ............................. 1,027 55,571 Royal Caribbean Cruises Ltd. ................. 3,595 125,861 Walt Disney Co., (The) ....................... 10,378 336,351 Yum! Brands, Inc. ............................ 2,446 84,265 ------------ 843,790 ------------ Number of Shares Value --------- ------------ ENERGY--15.1% Chesapeake Energy Corp. ...................... 1,807 $ 81,712 ConocoPhillips ............................... 818 67,657 EnCana Corp. ................................. 2,037 155,240 ENSCO International, Inc. .................... 4,694 280,889 Exxon Mobil Corp. ............................ 9,592 834,600 Murphy Oil Corp. ............................. 950 76,361 Occidental Petroleum Corp. ................... 1,940 150,098 Royal Dutch Shell PLC - ADR .................. 3,099 221,423 SEACOR Holdings, Inc.* ....................... 1,280 122,867 Valero Energy Corp. .......................... 4,770 275,563 Weatherford International Ltd.* .............. 654 45,074 ------------ 2,311,484 ------------ EXCHANGE TRADED FUNDS--1.1% SPDR Trust Series 1 .......................... 1,305 174,635 ------------ FINANCE--21.1% ACE Ltd. ..................................... 4,483 252,124 American Express Co. ......................... 5,831 246,651 Bank of America Corp. ........................ 4,049 160,907 Charles Schwab Corp., (The) .................. 11,196 219,553 Chubb Corp., (The) ........................... 5,802 295,322 CIT Group, Inc. .............................. 6,789 150,851 Endurance Specialty Holdings Ltd. ............ 2,873 112,909 Goldman Sachs Group, Inc., (The) ............. 417 70,736 JPMorgan Chase & Co. ......................... 4,026 163,657 Keycorp ...................................... 2,604 57,418 Loews Corp. .................................. 1,632 68,283 MetLife, Inc. ................................ 5,123 298,466 Northern Trust Corp. ......................... 2,898 195,992 ProLogis (REIT) .............................. 4,455 240,035 Regions Financial Corp. ...................... 10,939 231,907 State Street Corp. ........................... 1,303 102,351 TD Ameritrade Holding Corp.* ................. 6,643 121,567 W.R. Berkley Corp. ........................... 4,159 119,738 Wells Fargo & Co. ............................ 4,164 121,714 ------------ 3,230,181 ------------ HEALTH CARE--14.7% Aetna, Inc. .................................. 3,896 193,242 AstraZeneca PLC - ADR ........................ 5,360 201,697 Boston Scientific Corp.* ..................... 15,070 189,731 Humana, Inc.* ................................ 2,873 196,312 Invitrogen Corp.* ............................ 2,732 230,827 Medco Health Solutions, Inc.* ................ 4,934 218,625 Merck & Co., Inc. ............................ 2,098 92,941 Pfizer, Inc. ................................. 19,874 442,793 Sanofi-Aventis - ADR ......................... 6,321 234,446 Thermo Fisher Scientific, Inc.* .............. 2,858 159,848 Watson Pharmaceuticals, Inc.* ................ 3,318 92,273 ------------ 2,252,735 ------------ INDUSTRIAL--7.3% AGCO Corp.* .................................. 1,421 92,166 Caterpillar, Inc. ............................ 4,145 299,808 General Electric Co. ......................... 7,302 241,988 Parker-Hannifin Corp. ........................ 4,263 275,518 Tyco International Ltd. ...................... 5,399 216,284 ------------ 1,125,764 ------------ THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2008 | 33 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ROBECO WPG 130/30 LARGE CAP CORE FUND (continued) PORTFOLIO OF INVESTMENTS (FORMERLY ROBECO WPG LARGE CAP GROWTH FUND) - -------------------------------------------------------------------------------- Number of Shares Value --------- ------------ TECHNOLOGY--24.1% Apple, Inc.* ................................. 2,862 $ 357,807 Broadcom Corp., Class A* ..................... 2,316 43,796 CA, Inc. ..................................... 8,326 190,499 Ciena Corp.* ................................. 6,967 179,958 Expedia, Inc.* ............................... 10,609 243,264 Hewlett-Packard Co. .......................... 9,617 459,404 Intel Corp. .................................. 20,215 403,289 International Business Machines Corp. ...................................... 1,641 186,844 JDS Uniphase Corp.* .......................... 18,387 241,789 Nokia OYJ - ADR .............................. 4,615 166,186 Northrop Grumman Corp. ....................... 1,835 144,249 Novell, Inc.* ................................ 15,403 114,752 Oracle Corp.* ................................ 4,119 77,437 Raytheon Co. ................................. 4,008 259,879 STMicroelectronics N.V. ...................... 13,950 167,261 Symantec Corp.* .............................. 15,577 262,317 Taiwan Semiconductor Manufacturing Co., Ltd. - ADR .............. 20,833 202,914 ------------ 3,701,645 ------------ TELECOMMUNICATIONS--3.4% Embarq Corp. ................................. 5,394 226,224 Qwest Communications International, Inc. ........................ 29,022 156,719 Sprint Nextel Corp. .......................... 9,780 69,536 Telephone and Data Systems, Inc. ............. 1,451 68,052 ------------ 520,531 ------------ TRANSPORTATION--2.5% CSX Corp. .................................... 1,539 74,672 Delta Air Lines, Inc.* ....................... 3,966 52,946 GATX Corp. ................................... 6,910 248,622 ------------ 376,240 ------------ UTILITIES--4.4% Duke Energy Corp. ............................ 4,801 84,210 Edison International ......................... 5,016 247,790 Oneok, Inc. .................................. 1,861 86,667 Pepco Holdings, Inc. ......................... 2,492 62,973 Public Service Enterprise Group, Inc. ................................ 4,245 187,204 ------------ 668,844 ------------ TOTAL DOMESTIC COMMON STOCK (Cost $20,911,848) ....................... 19,605,556 ------------ TOTAL LONG POSITIONS (Cost $20,911,848) ....................... 19,605,556 ------------ SECURITIES SOLD SHORT--(29.3%) BASIC MATERIALS--(3.0%) Arch Coal, Inc. .............................. (1,131) (57,783) Ashland, Inc. ................................ (713) (31,493) Crown Holdings, Inc.* ........................ (2,267) (56,471) Foundation Coal Holdings, Inc.* .............. (916) (52,917) Goldcorp, Inc. ............................... (1,328) (57,383) Number of Shares Value --------- ------------ BASIC MATERIALS--(CONTINUED) Louisiana-Pacific Corp. ...................... (5,633) $ (61,287) Peabody Energy Corp. ......................... (1,491) (84,421) Titanium Metals Corp.* ....................... (2,853) (58,829) ------------ (460,584) ------------ COMMERCIAL SERVICES--(0.8%) DST Systems, Inc.* ........................... (493) (34,638) Idearc, Inc. ................................. (7,869) (37,929) Lamar Advertising Co., Class A ............... (1,303) (49,657) ------------ (122,224) ------------ CONSUMER CYCLICAL--(2.4%) Chico's FAS, Inc.* ........................... (8,215) (76,482) General Motors Corp. ......................... (3,180) (74,030) O'Reilly Automotive, Inc.* ................... (2,693) (72,603) Owens Corning, Inc.* ......................... (4,049) (76,364) Toll Brothers, Inc.* ......................... (3,389) (71,881) ------------ (371,360) ------------ CONSUMER NON-CYCLICAL--(2.0%) Dean Foods Co. ............................... (1,717) (36,950) Fortune Brands, Inc. ......................... (688) (44,706) Hansen Natural Corp.* ........................ (1,852) (76,858) Smithfield Foods, Inc.* ...................... (2,760) (76,038) Whole Foods Market, Inc. ..................... (2,130) (74,870) ------------ (309,422) ------------ CONSUMER SERVICES--(1.1%) Dreamworks Animation SKG, Inc., Class A* ................................... (2,154) (54,669) Harman International Industries, Inc. ....................................... (924) (38,069) Las Vegas Sands Corp.* ....................... (474) (39,484) Scientific Games Corp., Class A* ............. (1,951) (40,327) ------------ (172,549) ------------ ENERGY--(2.2%) Dresser-Rand Group, Inc.* .................... (984) (33,525) Hess Corp. ................................... (758) (70,630) Schlumberger Ltd. ............................ (973) (84,116) Southwestern Energy Co.* ..................... (1,157) (75,471) Tesoro Corp. ................................. (2,086) (77,474) ------------ (341,216) ------------ FINANCE--(4.4%) Arthur J. Gallagher & Co. .................... (2,580) (60,888) Douglas Emmett, Inc. (REIT) .................. (3,333) (70,626) First American Corp. ......................... (1,909) (66,491) Huntington Bancshares, Inc. .................. (6,017) (73,528) Kilroy Realty Corp. (REIT) ................... (682) (32,347) Marsh & McLennan Cos., Inc. .................. (1,734) (44,165) Merrill Lynch & Co., Inc. .................... (772) (38,260) National City Corp. .......................... (4,591) (72,813) Old Republic International Corp. ............. (6,203) (85,105) THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 34 | SEMI-ANNUAL REPORT 2008 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ROBECO WPG 130/30 LARGE CAP CORE FUND (concluded) PORTFOLIO OF INVESTMENTS (FORMERLY ROBECO WPG LARGE CAP GROWTH FUND) - -------------------------------------------------------------------------------- Number of Shares Value --------- ------------ FINANCE--(CONTINUED) PMI Group, Inc., (The) ....................... (7,500) $ (54,525) Washington Federal, Inc. ..................... (3,287) (74,615) ------------ (673,363) ------------ HEALTH CARE--(3.0%) Covance, Inc.* ............................... (555) (46,848) Elan Corp PLC - ADR* ......................... (3,392) (77,236) Health Management Associates, Inc., Class A .............................. (13,510) (72,278) Mylan, Inc. .................................. (5,357) (63,427) Omnicare, Inc. ............................... (1,677) (35,183) Pharmaceutical Product Development, Inc. .......................... (1,666) (75,087) Schering-Plough Corp. ........................ (1,280) (27,776) Tenet Healthcare Corp.* ...................... (13,750) (66,137) ------------ (463,972) ------------ INDUSTRIAL--(1.3%) Graco, Inc. .................................. (1,131) (39,257) Stericycle, Inc.* ............................ (1,455) (78,410) Teleflex, Inc. ............................... (1,328) (75,099) ------------ (192,766) ------------ TECHNOLOGY--(7.4%) Alliant Techsystems, Inc.* ................... (798) (83,742) Amphenol Corp., Class A ...................... (2,041) (75,456) Applied Materials, Inc. ...................... (4,249) (81,453) Compuware Corp.* ............................. (6,991) (55,648) Cypress Semiconductor Corp.* ................. (3,459) (75,199) Diebold, Inc. ................................ (3,172) (76,509) Echostar Corp., Class A* ..................... (2,017) (80,801) Linear Technology Corp. ...................... (1,751) (48,520) Marvell Technology Group Ltd.* ............... (5,154) (58,292) Pitney Bowes, Inc. ........................... (2,241) (80,183) Rambus, Inc.* ................................ (4,074) (73,454) Roper Industries, Inc. ....................... (981) (55,328) SBA Communications Corp., Class A* ................................... (1,948) (60,485) Spirit Aerosystems Holdings, Inc.* ........... (2,927) (79,088) Varian Semiconductor Equipment Associates, Inc.* .......................... (2,323) (78,471) Zebra Technologies Corp., Class A* ................................... (2,100) (69,972) ------------ (1,132,601) ------------ TRANSPORTATION--(0.7%) Burlington Northern Santa Fe Corp. ............................. (493) (43,275) YRC Worldwide, Inc.* ......................... (3,876) (53,334) ------------ (96,609) ------------ Number of Shares Value --------- ------------ UTILITIES--(0.5%) Covanta Holding Corp.* ....................... (2,512) $ (72,071) Great Plains Energy, Inc. .................... (2,941) (74,790) ------------ (146,861) ------------ TOTAL SECURITIES SOLD SHORT (Proceeds $4,838,306) .................... (4,483,527) ------------ OTHER ASSETS IN EXCESS OF LIABILITIES--1.4% ......................... 208,909 ------------ NET ASSETS--100.0% ............................. $ 15,330,938 ============ - -------------- * -- Non-income producing. ADR -- American Depository Receipt. REIT-- Real Estate Investment Trust THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2008 | 35 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ROBECO WPG CORE BOND FUND PORTFOLIO OF INVESTMENTS - -------------------------------------------------------------------------------- Moody's/ Par S&P (000's) Value --------- ------------ ------------ GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS--47.0% FEDERAL HOME LOAN MORTGAGE CORP.--11.6% 5.500% 09/01/19 .................. Aaa/AAA $ 1,823 $ 1,862,698 6.000% 08/01/22 .................. Aaa/AAA 2,975 3,069,662 5.000% 11/01/22 .................. Aaa/AAA 1,193 1,208,068 5.500% 02/01/37 .................. Aaa/AAA 1,787 1,799,021 6.000% 09/01/37 .................. Aaa/AAA 1,988 2,031,068 ------------ 9,970,517 ------------ FEDERAL NATIONAL MORTGAGE ASSOCIATION--26.9% 0.000% 03/12/08 .................. Aaa/AAA 360 359,762 9.000% 11/01/10 .................. Aaa/AAA 12 13,257 6.500% 12/01/14 .................. Aaa/AAA 258 269,030 5.000% 05/01/20 .................. Aaa/AAA 991 1,002,810 5.000% 06/01/20 .................. Aaa/AAA 515 520,828 5.000% 04/01/22 .................. Aaa/AAA 4,212 4,261,594 7.500% 02/01/31 .................. Aaa/AAA 11 12,085 7.500% 02/01/31 .................. Aaa/AAA 22 23,602 7.500% 02/01/31 .................. Aaa/AAA 14 14,347 5.000% 03/01/36 .................. Aaa/AAA 9,891 9,746,408 6.000% 09/01/36 .................. Aaa/AAA 1,598 1,633,952 5.500% 12/01/36 .................. Aaa/AAA 3,009 3,027,745 6.000% 04/01/37 .................. Aaa/AAA 1,978 2,022,327 5.500% 03/01/38 TBA .............. Aaa/AAA 360 362,025 ------------ 23,269,772 ------------ GOVERNMENT NATIONAL MORTGAGE ASSOCIATION--8.5% 2.822% 12/16/19(c) ............... Aaa/AAA 499 494,071 6.500% 02/15/24 .................. Aaa/AAA 154 160,934 6.500% 04/15/24 .................. Aaa/AAA 93 96,975 6.500% 10/15/24 .................. Aaa/AAA 284 296,627 3.999% 05/16/27(c) ............... Aaa/AAA 1,326 1,335,384 3.612% 11/16/27(c) ............... Aaa/AAA 1,210 1,211,719 4.314% 10/16/29(c) ............... Aaa/AAA 1,080 1,091,321 4.043% 07/16/31(c) ............... Aaa/AAA 420 421,901 5.000% 09/15/36 .................. Aaa/AAA 2,216 2,220,664 ------------ 7,329,596 ------------ TOTAL GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS (Cost $39,827,761) ........... 40,569,885 ------------ GOVERNMENT AGENCY OBLIGATIONS--5.4% FEDERAL HOME LOAN BANKS--3.8% 4.875% 11/18/11 .................. Aaa/AAA 3,060 3,263,729 ------------ FEDERAL HOME LOAN MORTGAGE CORP.--0.2% 3.350% 04/01/08(c) ............... Aaa/AAA 170 170,071 ------------ Moody's/ Par S&P (000's) Value --------- ------------ ------------ FEDERAL NATIONAL MORTGAGE ASSOCIATION--1.4% 5.000% 02/13/17 .................. Aaa/AAA $ 1,175 $ 1,244,013 ------------ TOTAL GOVERNMENT AGENCY OBLIGATIONS (Cost $4,441,905) ............ 4,677,813 ------------ ASSET BACKED SECURITIES--8.9% AUTOMOBILES--8.0% BMW Vehicle Owner Trust Series 2006-A Class A3 5.130% 09/27/10(c) ............. Aaa/AAA 350 353,748 Capital Auto Receivables Asset Trust Series 2008-1 Class A3A 3.860% 08/15/12(c) ............. Aaa/AAA 840 844,943 Capital One Prime Auto Receivables Trust Series 2007-1 Class A3 5.470% 06/15/11(c) ............. Aaa/AAA 800 822,515 Daimler Chrysler Auto Trust Series 2006-C A4 4.980% 11/08/11(c) ............. Aaa/AAA 510 523,976 Daimler Chrysler Auto Trust Series 2008-A Class A3A 3.700% 06/08/12(c) ............. Aaa/AAA 470 471,439 Honda Auto Receivables Owner Trust Series 2006-2 Class A4 5.280% 01/23/12(c) ............. Aaa/AAA 1,460 1,507,775 Nissan Auto Lease Trust Series 2006-A Class A4 5.100% 07/16/12 ................ Aaa/AAA 640 656,976 Nissan Auto Lease Trust Series 2007-A Class A3 5.200% 05/17/10 ................ Aaa/AAA 650 662,353 Nissan Auto Receivables Owner Trust Series 2007-B Class A2 5.130% 03/15/10 ................ Aaa/AAA 260 263,656 Volkswagen Auto Lease Trust Series 2006-A Class A3 5.500% 09/21/09(c) ............. Aaa/AAA 795 803,136 ------------ 6,910,517 ------------ THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 36 | SEMI-ANNUAL REPORT 2008 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ROBECO WPG CORE BOND FUND (continued) PORTFOLIO OF INVESTMENTS - -------------------------------------------------------------------------------- Moody's/ Par S&P (000's) Value --------- ------------ ------------ CREDIT CARDS--0.9% Citibank Credit Card Issuance Trust Series 2006-A5 Class A5 5.300% 05/20/11(c) ............. Aaa/AAA $ 790 $ 809,404 ------------ TOTAL ASSET BACKED SECURITIES (Cost $7,602,237) ............ 7,719,921 ------------ COLLATERALIZED MORTGAGE OBLIGATIONS--4.5% GSR Mortgage Loan Trust Series 2005-AR6 Class 3A1 4.561% 09/25/35(a)(c) ................. Aaa/AAA 1,524 1,535,760 JP Morgan Mortgage Trust Series 2004-S2 Class 4A5 6.000% 11/25/34(c) .................... Aaa/AAA 959 976,479 Washington Mutual Series 2005-AR12 Class 1A8 4.835% 10/25/35(a)(c) ................. Aaa/AAA 1,411 1,415,424 ------------ TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $3,871,611) ............ 3,927,663 ------------ CORPORATE BONDS--25.1% COMMUNICATIONS--2.4% AT&T, Inc. 4.125% 09/15/09(c) ............. A2/A 1,220 1,235,939 BellSouth Corp. 4.200% 09/15/09(c) ............. A2/A 865 875,970 ------------ 2,111,909 ------------ CONSUMER CYCLICAL--0.6% McDonald's Corp. 5.350% 03/01/18 ................ A3/A 255 260,940 McDonald's Corp. 6.300% 03/01/38 ................ A3/A 235 241,429 ------------ 502,369 ------------ CONSUMER NON-CYCLICAL--1.0% Archer-Daniels-Midland Co. 5.450% 03/15/18(c) ............. A2/A 320 322,959 Avon Products Inc. 5.750% 03/01/18 ................ A2/A 135 137,984 Diageo Capital PLC 3.375% 03/20/08 ................ A3/A 95 95,016 Schering-Plough Corp. 6.000% 09/15/17(c) ............. Baa1/A- 335 350,573 ------------ 906,532 ------------ ENERGY--1.9% Marathon Oil Corp. 6.000% 10/01/17++ .............. Baa1/BBB+ 375 386,539 Moody's/ Par S&P (000's) Value --------- ------------ ------------ ENERGY--(CONTINUED) Statoil Hydro ASA 6.360% 01/15/09(c) ............. Aa2/AA $ 1,185 $ 1,216,078 ------------ 1,602,617 ------------ FINANCE--13.8% American Express Centurion Bank 5.550% 10/17/12++ .............. Aa3/A+ 1,070 1,113,374 American Express Co. 5.250% 09/12/11 ................ A1/A+ 920 945,541 American General Finance Corp. 4.875% 05/15/10 ....................... A1/A+ 1,985 2,010,640 BHP Billiton Finance USA Ltd. 5.000% 12/15/10 ................ A1/A+ 425 437,457 Caterpillar Financial Services Corp. 4.300% 06/01/10(c) ............. A2/A 1,185 1,215,874 CIT Group Funding Co. of Canada 4.650% 07/01/10 ................ A2/A 600 577,637 Citigroup Inc 6.875% 03/05/38 ................ Aa3/AA- 855 849,094 First Tennessee Bank NA 5.316% 12/08/08(c) ............. A1/A 560 561,393 General Electric Capital Corp 6.000% 06/15/12 ....................... Aaa/AAA 1,160 1,244,164 General Electric Capital Corp. 9.500% 12/11/14 ....................... Aaa/AAA 2,350 230,499 Goldman Sachs Group, Inc., (The) 5.450% 11/01/12 ................ Aa3/AA 295 308,810 M&T Bank Corp. 6.625% 12/04/17 ................ A2/A- 835 883,549 Morgan Stanley 5.950% 12/28/17 ................ Aa3/AA- 385 379,017 Santander Central Hispano Issuance Ltd. 7.625% 11/03/09 ................ A1/A+ 360 386,146 Santander US SA 144A 4.750% 10/21/08(b) ............. Aa1/AA 800 810,694 ------------ 11,953,889 ------------ INDUSTRIAL--3.4% CSX Corp. 6.250% 03/15/18(c) ............. Baa3/BBB 720 734,485 Northrop Grumman Corp. 7.125% 02/15/11(c) ............. Baa1/BBB+ 780 854,530 Union Pacific Corp. 6.650% 01/15/11(c) ............. Baa2/BBB 1,240 1,321,948 ------------ 2,910,963 ------------ Real Estate--0.5% Westfield Group 144A 5.400% 10/01/12(b) ............. A2/A- 415 408,037 ------------ THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2008 | 37 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ROBECO WPG CORE BOND FUND (concluded) PORTFOLIO OF INVESTMENTS - -------------------------------------------------------------------------------- Moody's/ Par S&P (000's) Value --------- ------------ ------------ TECHNOLOGY--0.6% Hewlett-Packard Co. 3.625% 03/15/08(c) ............. A2/A $ 485 $ 485,036 ------------ UTILITIES--0.9% American Water Capital Corp. 144A 6.085% 10/15/17(b)(c) ................. Baa2/A- 760 785,349 ------------ TOTAL CORPORATE BONDS (Cost $21,101,753) ........... 21,666,701 ------------ U.S. TREASURY OBLIGATIONS--7.4% U.S. TREASURY NOTES--6.7% 4.625% 02/15/17 .................. 285 310,116 3.500% 02/15/18(d) ............... 1,225 1,221,937 5.000% 05/15/37 .................. 3,900 4,275,071 ------------ 5,807,124 ------------ U.S. TREASURY STRIP--0.7% 0.000% 05/15/17 .................. 880 619,049 ------------ TOTAL U.S. TREASURY OBLIGATIONS (Cost $6,211,824) ............ 6,426,173 ------------ FOREIGN government BONDS--0.8% MEXICO--0.3% Mexican Bonos 9.000% 12/20/12 ................ Baa1/A+ 2,000 197,979 ------------ Moody's/ Par S&P (000's) Value --------- ------------ ------------ UNITED STATES--0.5% Inter-American Development Bank 9.000% 04/23/09 ....................... Aaa/AAA $ 200 $ 117,808 International Bank For Reconstruction & Development 15.250% 04/03/09 ............... Aaa/AAA 150 124,643 International Bank For Reconstruction & Development 2.750% 07/06/10 ................ Aaa/AAAe 650 204,940 ------------ 447,391 ------------ TOTAL FOREIGN GOVERNMENT BONDS (Cost $627,842) .............. 645,370 ------------ Shares ---------- SHORT-TERM INVESTMENT--3.1% Dreyfus Government Cash Management ................ 2,664,733 2,664,733 ------------ TOTAL SHORT-TERM INVESTMENTS (Cost $2,664,733) ............ 2,664,733 ------------ TOTAL INVESTMENTS--102.2% (Cost $86,349,666) ............... 88,298,259 ------------ LIABILITIES IN EXCESS OF OTHER ASSETS(e)--(2.2)% .......... (1,881,555) ------------ NET ASSETS--100.0% ................. $ 86,416,704 ============ - --------------- ++ -- Security is valued at fair market value as determined in good faith by or under the direction of RBB's Board of Directors. TBA -- To be Announced. (a) Adjustable rate security. (b) Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may not be resold subject to that rule except to qualified institutional buyers. (c) Callable security. (d) All or a portion of the security was held as collateral for the folllowing futures contracts open at February 29, 2008:
NUMBER VALUE VALUE UNREALIZED OF EXPIRATION AT TRADE AT APPRECIATION CONTRACTS TYPE MONTH DATE 2/29/08 (DEPRECIATION) ---------- ----------------------- ----------- --------- ------------ --------------- Long Positions: 6 U.S. Treasury 5 Year Note June 2008 $ 678,000 $ 685,500 $ 7,500 64 U.S. Treasury 5 Year Note June 2008 7,314,000 7,312,000 (2,000) ---------- $ 5,500 ---------- Short Positions: (16) U.S. Treasury 2 Year Note June 2008 $(3,419,000) $ (3,438,750) $ (19,750) (8) U.S. Treasury 5 Year Note June 2008 (922,938) (938,250) (15,312) (1) U.S. Treasury 5 Year Note June 2008 (116,352) (118,625) (2,273) ---------- $ (37,335) ==========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 38 | SEMI-ANNUAL REPORT 2008 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ROBECO WPG CORE BOND FUND (concluded) PORTFOLIO OF INVESTMENTS - -------------------------------------------------------------------------------- (e) Liabilities in excess of other assets includes credit default and/or interest rate swaps as follows: Protection Purchased:
NOTIONAL ANNUAL UNREALIZED REFERENCE TERMINATION AMOUNT PROTECTION APPRECIATION COUNTERPARTY OBLIGATION DATE (000) PAYMENTS (DEPRECIATION) - -------------------------- ---------------------------------- ----------- ---------- ------------ -------------- Credit Suisse First Boston Merrill Lynch & Co. 3/20/2009 1,555 1.90% $ (9,190) Credit Suisse First Boston Merrill Lynch & Co. 3/20/2009 1,555 1.80 (12,735) Credit Suisse First Boston Merrill Lynch & Co. 3/20/2009 1,555 0.80 (12,891) Goldman Sachs Limited Brands 3/20/2009 1,555 0.90 (23,652) Credit Suisse First Boston GE Capital Corp. 3/20/2009 1,525 0.80 (5,765) Bank of America American International Group, Inc. 3/20/2009 1,515 0.75 (22,377) Goldman Sachs Williams Cos., Inc 12/20/2012 1,800 0.90 (33,767) Goldman Sachs Limited Brands 12/20/2012 1,600 2.10 109,280 Bank of America Kroger Co. (The) 3/20/2013 880 0.40 14,045 Bank of America Interest Rate Swap - 2 year (3 Month Libor rate) 1/30/2010 14,000 2.89 85,260 Bank of America Interest Rate Swap - 10 year (3 Month Libor rate) 1/30/2018 3,000 3.25 10,230 --------- $ 98,438 =========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2008 | 39 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ROBECO SAM SUSTAINABLE CLIMATE FUND PORTFOLIO OF INVESTMENTS - -------------------------------------------------------------------------------- Number of Shares Value --------- ------------ COMMON STOCK--91.5% AUSTRALIA--0.8% Origin Energy Ltd. (Utilities) ............... 3,600 $ 29,802 ------------ AUSTRIA--4.6% Verbund - Oesterreichische Elektrizitaetswirtschafts AG (Utilities) ............................. 1,800 134,033 Zumtobel AG (Technology) ..................... 1,100 31,411 ------------ 165,444 ------------ BELGIUM--1.4% Umicore (Basic Industries) ................... 1,000 51,297 ------------ BRAZIL--3.2% Aracruz Celulose SA - (Basic Industries) ADR ..................... 900 65,196 Cia Energetica de Minas Gerais - (Utilities) ADR ................... 2,600 49,478 ------------ 114,674 ------------ CANADA--2.4% Canadian Hydro Developers, Inc. (Utilities)* ............................... 4,400 25,338 Intermap Technologies Corp. (Capital Goods)* ........................... 10,100 61,359 ------------ 86,697 ------------ CHINA--3.4% Trina Solar Ltd. - (Energy) ADR* ....................................... 2,500 79,425 Yingli Green Energy Holding Co. Ltd. - (Technology) ADR* ............... 2,600 43,862 ------------ 123,287 ------------ DENMARK--6.9% Greentech Energy Systems (Utilities)* ............................... 7,200 112,227 Novozymes A/S, Class B (Health Care) .............................. 500 44,011 Vestas Wind Systems A/S (Technology)* .............................. 900 92,606 ------------ 248,844 ------------ FINLAND--4.7% Fortum Oyj (Utilities) ....................... 1,100 46,256 Vaisala Oyj (Technology) ..................... 1,200 52,101 Wartsila Oyj (Capital Goods) ................. 1,000 69,028 ------------ 167,385 ------------ FRANCE--1.3% Schneider Electric SA (Technology) ............................... 400 45,980 ------------ Number of Shares Value --------- ------------ GERMANY--9.8% Q-Cells AG (Technology)* ..................... 900 $ 73,930 Siemens AG (Capital Goods) ................... 700 90,773 Solon AG Fuer Solartechnik (Technology)* .............................. 700 52,432 Steico AG (Capital Goods)* ................... 1,800 23,500 Vossloh AG (Capital Goods) ................... 800 111,574 ------------ 352,209 ------------ GREECE--1.3% Terna Energy SA (Utilities)* ................. 4,800 47,510 ------------ ITALY--2.7% Prysmian SpA (Technology)* ................... 3,000 59,251 Trevi Finanziaria SpA (Capital Goods) ............................ 1,900 36,776 ------------ 96,027 ------------ JAPAN--2.5% Mitsubishi Rayon Co. Ltd. (Basic Industries) ......................... 11,000 38,250 Miura Co. Ltd. (Capital Goods) ............... 1,200 28,702 Nichias Corp. (Capital Goods) ................ 3,000 13,630 Yamatake Corp. (Technology) .................. 400 10,297 ------------ 90,879 ------------ NETHERLANDS--2.7% Boskalis Westminster (Capital Goods) ............................ 900 50,416 Smit Internationale NV (Transportation) ........................... 500 46,924 ------------ 97,340 ------------ NORWAY--0.9% Renewable Energy Corp. AS (Technology)* .............................. 1,300 32,274 ------------ SPAIN--4.1% Gamesa Corp. Tecnologica SA (Technology) ............................... 700 28,851 Iberdrola SA (Utilities) ..................... 8,000 116,590 ------------ 145,441 ------------ SWEDEN--1.5% Munters AB (Capital Goods) ................... 5,300 53,473 ------------ SWITZERLAND--4.4% Bucher Industries AG (Capital Goods) ............................ 200 51,159 Georg Fischer AG (Capital Goods)* ........................... 100 50,010 Syngenta AG (Basic Industries) ............... 200 57,434 ------------ 158,603 ------------ THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 40 | SEMI-ANNUAL REPORT 2008 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ROBECO SAM SUSTAINABLE CLIMATE FUND (concluded) PORTFOLIO OF INVESTMENTS - -------------------------------------------------------------------------------- Number of Shares Value --------- ------------ UNITED STATES--32.9% BorgWarner, Inc. (Consumer Durables) ........................ 2,000 $ 86,220 Covanta Holding Corp. (Energy)* .............. 3,100 88,908 Ecolab, Inc. (Basic Industries) .............. 1,500 70,185 Fluor Corp. (Capital Goods) .................. 300 41,775 FPL Group, Inc. (Utilities) .................. 900 54,261 General Electric Co. (Capital Goods) ............................ 1,800 59,652 Global Industries Ltd. (Energy)* ............. 3,500 64,435 Honeywell International, Inc. (Capital Goods) ............................ 900 51,786 Houston Wire & Cable Co. (Technology) ............................... 2,600 37,700 Jacobs Engineering Group, Inc. (Capital Goods)* ........................... 1,300 104,377 Johnson Controls, Inc. (Consumer Durables) ........................ 2,700 88,722 Kaydon Corp. (Capital Goods) ................. 1,400 59,794 Kingspan Group PLC (Capital Goods) ............................ 2,600 35,524 Quanta Services, Inc. (Consumer Non-Durables)* ................... 4,500 107,460 Sunpower Corp., Class A (Technology)* .............................. 700 46,004 Tetra Tech, Inc. (Consumer Services)* ....................... 4,000 75,480 Tetra Technologies, Inc. (Energy)* .................................. 4,400 75,592 U.S. BioEnergy Corp. (Basic Industries)* ........................ 4,400 32,252 ------------ 1,180,127 ------------ TOTAL COMMON STOCK (Cost $3,782,138) ........................ 3,287,293 ------------ SHORT-TERM INVESTMENTS--8.1% PNC Bank Money Market Deposit Account ............................ 292,770 292,770 ------------ TOTAL SHORT-TERM INVESTMENTS (Cost $292,770) .......................... 292,770 ------------ TOTAL INVESTMENTS--99.6% (Cost $4,074,908) ............................ 3,580,063 OTHER ASSETS IN EXCESS OF LIABILITIES--0.4% ............................ 12,802 ------------ NET ASSETS--100.0% ............................. $ 3,592,865 ============ - --------------- * -- Non-income Producing ADR -- American Depository Receipt. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2008 | 41 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ROBECO SAM SUSTAINABLE WATER FUND PORTFOLIO OF INVESTMENTS - -------------------------------------------------------------------------------- Number of Shares Value --------- ------------ COMMON STOCK--94.0% AUSTRALIA--0.3% Boart Longyear Group (Industrial)* .............................. 6,500 $ 12,464 ------------ AUSTRIA--2.6% Andritz AG (Industrial) ...................... 1,400 79,381 BWT AG (Industrial) .......................... 400 18,685 Christ Water Technology AG (Industrial)* .............................. 300 5,237 ------------ 103,303 ------------ BRAZIL--2.1% Cia de Saneamento Basico do Estado de Sao Paulo - (Utilities) ADR ............................ 1,800 84,330 ------------ CANADA--3.1% Bioteq Environmental Tech, Inc. (Industrial)* .............................. 8,000 31,693 Intermap Technologies Corp. (Consumer Non-Cyclical)* ................... 5,000 30,376 Stantec, Inc. (Consumer Non-Cyclical)* ................... 1,200 39,575 SunOpta, Inc. (Consumer Non-Cyclical)* ................... 3,600 21,852 ------------ 123,496 ------------ CHINA--1.1% Bio-Treat Technology Ltd. (Industrial) ............................... 49,000 20,733 Celestial Nutrifoods Ltd. (Consumer Non-Cyclical) .................... 39,000 17,760 Xinjiang Tianye Water Saving Irrigation System Co. Ltd. (Industrial) ............................... 24,000 7,958 ------------ 46,451 ------------ DENMARK--1.1% Novozymes A/S, Class B (Consumer Non-Cyclical) .................... 500 44,011 ------------ FINLAND--1.0% Uponor Oyj (Industrial) ...................... 1,500 39,417 ------------ FRANCE--12.5% Foraco International (Basic Materials)* ......................... 5,900 22,289 Groupe Danone (Consumer Non-Cyclical) .................... 1,000 78,911 Suez SA (Utilities) .......................... 2,400 153,789 Veolia Environnement (Utilities) ................................ 2,800 250,237 ------------ 505,226 ------------ Number of Shares Value --------- ------------ GERMANY--5.1% Henkel KGaA (Consumer Non-Cyclical) .................... 800 $ 35,475 Krones AG (Industrial) ....................... 250 19,409 KSB AG (Industrial) .......................... 140 84,907 Siemens AG (Industrial) ...................... 300 38,903 Washtec AG (Industrial)* ..................... 1,800 26,560 ------------ 205,254 ------------ HONG KONG--6.3% Chaoda Modern Agriculture (Consumer Non-Cyclical) .................... 137,450 156,694 China Water Affairs Group Ltd. (Industrial)* .............................. 48,000 18,446 Guangdong Investment Ltd. (Diversified Operation) .................... 148,000 80,080 ------------ 255,220 ------------ JAPAN--1.2% Kitz Corp. (Industrial) ...................... 2,000 11,392 Kurita Water Industries Ltd. (Industrial) ............................... 1,200 38,846 ------------ 50,238 ------------ NETHERLANDS--7.3% Aalberts Industries NV (Industrial) ............................... 2,200 43,084 Boskalis Westminster (Industrial) ............................... 1,600 89,628 Unilever NV (Consumer Non-Cyclical) .................... 1,500 46,750 Wavin NV (Industrial) ........................ 9,900 114,973 ------------ 294,435 ------------ PHILIPPINES--0.2% Manila Water Co., Inc. (Utilities) ........... 15,000 6,858 ------------ SINGAPORE--0.8% Hyflux Ltd. (Industrial) ..................... 4,500 10,618 Sinomem Technology Ltd. (Industrial)* .............................. 35,000 20,833 ------------ 31,451 ------------ SPAIN--0.5% Fluidra SA (Industrial)* ..................... 2,600 19,933 ------------ SWITZERLAND--6.5% Geberit AG (Industrial) ...................... 1,100 162,292 Georg Fischer AG (Consumer Cyclical)* ....................... 40 20,004 Nestle SA (Consumer Non-Cyclical) .................... 165 78,959 ------------ 261,255 ------------ THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 42 | SEMI-ANNUAL REPORT 2008 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ROBECO SAM SUSTAINABLE WATER FUND (concluded) PORTFOLIO OF INVESTMENTS - -------------------------------------------------------------------------------- Number of Shares Value --------- ------------ UNITED KINGDOM--3.0% Cascal NV (Utilities)* ....................... 2,200 $ 26,510 Pennon Group PLC (Utilities) ................. 1,500 19,171 PuriCore PLC (Consumer Non-Cyclical)* ................... 14,300 7,609 RPS Group PLC (Consumer Non-Cyclical) .................... 2,500 14,770 Severn Trent PLC (Utilities) ................. 1,900 53,707 ------------ 121,767 ------------ UNITED STATES--39.3% California Water Service Group (Utilities) .......................... 600 22,572 Danaher Corp. (Industrial) ................... 2,700 200,205 Ecolab, Inc. (Basic Materials) ............... 1,800 84,222 Hain Celestial Group, Inc. (Consumer Non-Cyclical)* ................... 800 21,600 IDEX Corp. (Industrial) ...................... 1,400 42,224 Insituform Technologies, Inc., Class A (Industrial)* ...................... 800 11,176 Itron, Inc. (Industrial)* .................... 800 76,264 ITT Corp. (Industrial) ....................... 4,100 230,584 Layne Christensen Co. (Industrial)* .............................. 900 36,036 Millipore Corp. (Consumer Non-Cyclical)* ................... 300 20,970 Mueller Water Products, Inc., Class B (Industrial) ....................... 4,100 35,711 Nalco Holding Co. (Industrial) ............... 3,500 75,600 Pall Corp. (Industrial) ...................... 3,700 145,669 Pentair, Inc. (Industrial) ................... 1,700 55,454 Procter & Gamble Co. (Consumer Non-Cyclical) .................... 600 39,708 Robbins & Myers, Inc. (Industrial) ........... 1,546 52,641 Roper Industries, Inc. (Industrial) .......... 2,600 146,640 Tetra Tech, Inc. (Industrial)* ............... 700 13,209 Thermo Fisher Scientific, Inc. (Industrial)* .............................. 2,100 117,453 Toro Co. (Consumer Cyclical) ................. 900 43,362 TyraTech, Inc. (Basic Materials)* ............ 2,500 24,492 URS Corp. (Industrial)* ...................... 900 36,252 Valmont Industries, Inc. (Industrial) ............................... 700 55,930 ------------ 1,587,974 ------------ TOTAL COMMON STOCK (Cost $4,142,464) ........................ 3,793,083 ------------ Number of Shares Value --------- ------------ SHORT-TERM INVESTMENTS--7.4% PNC Bank Money Market Deposit Account ............................ 296,648 $ 296,648 ------------ TOTAL SHORT-TERM INVESTMENTS (Cost $296,648) .......................... 296,648 ------------ TOTAL INVESTMENTS--101.4% (Cost $4,439,112) ............................ 4,089,731 LIABILITIES IN EXCESS OF OTHER ASSETS--(1.4)% ......................... (55,189) ------------ NET ASSETS--100.0% ............................. $ 4,034,542 ============ - --------------- * -- Non-income Producing ADR -- American Depository Receipt. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2008 | 43 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- STATEMENTS OF ASSETS AND LIABILITIES - --------------------------------------------------------------------------------
ROBECO BOSTON ROBECO BOSTON ROBECO BOSTON ROBECO BOSTON ROBECO BOSTON PARTNERS PARTNERS PARTNERS PARTNERS PARTNERS SMALL CAP LONG/SHORT LARGE CAP MID CAP ALL-CAP VALUE FUND II EQUITY FUND VALUE FUND VALUE FUND VALUE FUND --------------- ------------ ------------- ------------- ------------- ASSETS Investment in securities, at value+................ $144,590,742 $57,086,535 $70,928,969 $48,423,469 $17,004,628 Receivable from investment adviser................. -- -- -- -- 10,364 Receivable for investments sold.................... -- 1,647,295 -- -- 551 Deposits with brokers for securities sold short.... -- 8,901,097 -- -- -- Receivable for capital shares sold ................ 23,647 784 8,859 103,653 1,389 Dividends and interest receivable.................. 125,219 33,328 137,086 65,276 30,479 Prepaid expenses and other assets.................. 25,472 15,986 15,724 13,675 11,075 ------------ ----------- ----------- ----------- ----------- Total assets.................................. 144,765,080 67,685,025 71,090,638 48,606,073 17,058,486 ------------ ----------- ----------- ----------- ----------- LIABILITIES Securities sold short, at fair value*.............. -- 17,073,662 -- -- -- Options written, at valueo......................... -- -- -- -- 95,136 Payable for capital shares redeemed................ 188,967 -- 42,272 15,503 -- Payable for investments purchased ................. -- 2,168,727 5,981,452 1,403,645 48,803 Payable to investment adviser...................... 121,497 64,216 8,581 12,275 -- Payable for distributions.......................... -- -- -- -- -- Interest payable................................... -- 26,680 -- -- -- Payable for dividends on securities sold short..... -- 7,453 -- -- -- Other accrued expenses and liabilities............. 203,139 104,653 41,993 31,410 17,930 ------------ ----------- ----------- ----------- ----------- Total liabilities............................. 513,603 19,445,391 6,074,298 1,462,833 161,869 ------------ ----------- ----------- ----------- ----------- NET ASSETS Capital stock, $0.001 par value.................... 12,727 3,297 5,184 5,201 1,226 Paid-in capital.................................... 157,443,447 49,738,481 64,569,700 48,939,121 16,746,434 Undistributed net investment income/ (accumulated loss) .............................. (37,131) (820,233) 109,769 42,574 12,374 Accumulated net realized gain/(loss) from investments and foreign exchange transactions............................ (3,493,600) 1,480,491 (321,654) (620,353) 196,966 Net unrealized appreciation/(depreciation) on investments and foreign currency translation..... (9,673,966) (5,271,416) 653,341 (1,223,303) (60,383) Net unrealized appreciation/(depreciation) on investments sold short........................... -- 3,109,014 -- -- -- ------------ ----------- ----------- ----------- ----------- Net Assets......................................... $144,251,477 $48,239,634 $65,016,340 $47,143,240 $16,896,617 ============ =========== =========== =========== =========== INSTITUTIONAL CLASS Net assets......................................... $ 66,338,694 $38,881,255 $45,780,249 $32,809,786 $13,718,332 ------------ ----------- ----------- ----------- ----------- Shares outstanding................................. 5,738,797 2,647,669 3,673,156 3,588,101 994,941 ------------ ----------- ----------- ----------- ----------- Net asset value, offering and redemption price per share ....................................... $ 11.56 $ 14.69 $ 12.46 $ 9.14 $ 13.79 ============ =========== =========== =========== =========== INVESTOR CLASS Net assets......................................... $ 77,912,783 $ 9,358,379 $19,236,091 $14,333,454 $ 3,178,285 ------------ ----------- ----------- ----------- ----------- Shares outstanding................................. 6,987,946 649,208 1,510,372 1,612,674 231,084 ------------ ----------- ----------- ----------- ----------- Net asset value, offering and redemption price per share ................................. $ 11.15 $ 14.42 $ 12.74 $ 8.89 $ 13.75 ============ =========== =========== =========== =========== + Investment in securities, at cost................ $154,264,708 $62,357,951 $70,275,628 $49,646,772 $17,159,333 * Proceeds received, securities sold short......... -- 20,182,676 -- -- -- o Premiums received, options written............... -- -- -- -- 189,458
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 44 | SEMI-ANNUAL REPORT 2008 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- STATEMENTS OF ASSETS AND LIABILITIES - --------------------------------------------------------------------------------
ROBECO WPG 130/30 LARGE CAP CORE FUND ROBECO (FORMERLY WPG ROBECO WPG WPG SAM SAM SMALL CAP LARGE CAP CORE BOND SUSTAINABLE SUSTAINABLE VALUE FUND GROWTH FUND) FUND CLIMATE FUND WATER FUND ------------- ------------ ----------- ------------- ----------- ASSETS Investment in securities, at value+................ $45,402,317 $19,605,556 $88,298,259 $3,580,063 $4,089,731 Swap Agreements at value........................... -- -- 98,438 -- -- Deposits with brokers for securities sold short.... -- -- -- -- -- Cash .............................................. -- 816,862 -- -- -- Receivable from investment adviser................. -- 5,167 12,253 22,335 23,133 Receivable for tax reclaims........................ -- -- -- 146 -- Receivable for investments sold.................... 819,711 1,101,819 567,889 -- 8,228 Receivable for capital shares sold ................ -- 3,874 88,000 1,058 23,245 Dividends and interest receivable.................. 53,402 41,470 645,198 1,625 3,436 Prepaid expenses and other assets.................. 10,187 16,881 42,057 30,489 33,876 ----------- ----------- ----------- ---------- ---------- Total assets.................................. 46,285,617 21,591,629 89,752,094 3,635,716 4,181,649 ----------- ----------- ----------- ---------- ---------- LIABILITIES Securities sold short, at fair value*.............. -- 4,483,527 -- -- -- Payable for capital shares redeemed................ 3,888 -- 901,754 -- -- Payable for investments purchased ................. 544,701 1,040,459 2,364,842 -- 103,930 Deposits due to brokers for securities sold short.. -- 714,507 -- -- -- Payable to investment adviser...................... 33,772 -- -- -- -- Payable for distributions.......................... -- -- -- -- -- Variation margin for futures contracts............. -- -- 31,264 -- -- Payable for dividends on securities sold short..... -- 8,651 -- -- -- Interest payable .................................. -- 1,761 -- -- -- Other accrued expenses and liabilities............. 23,299 11,786 37,530 42,851 43,177 ----------- ----------- ----------- ---------- ---------- Total liabilities............................. 605,660 6,260,691 3,335,390 42,851 147,107 ----------- ----------- ----------- ---------- ---------- NET ASSETS Capital stock, $0.001 par value.................... 3,724 958 7,897 412 441 Paid-in capital.................................... 53,328,603 16,521,938 86,440,304 4,114,782 4,385,717 Undistributed net investment income/ (accumulated loss) .............................. 33,031 15,174 (26,797) (10,777) (9,338) Accumulated net realized gain/(loss) from investments and foreign exchange transactions............................ (2,803,526) (255,619) (2,021,682) (16,711) 7,279 Net unrealized appreciation/(depreciation) on investments and foreign currency translation..... (4,881,875) (1,306,292) 2,016,922 (494,841) (349,557) Net unrealized appreciation/(depreciation) on investments sold short........................... -- 354,779 -- -- -- ----------- ----------- ----------- ---------- ---------- Net Assets......................................... $45,679,957 $15,330,938 $86,416,704 $3,592,865 $4,034,542 ----------- ----------- ----------- ---------- ---------- INSTITUTIONAL CLASS Net assets......................................... $45,679,957 $15,330,938 $86,345,794 $3,527,177 $3,815,583 ----------- ----------- ----------- ---------- ---------- Shares outstanding................................. 3,724,158 958,380 7,891,281 404,724 416,933 ----------- ----------- ----------- ---------- ---------- Net asset value, offering and redemption price per share........................................ $ 12.27 $ 16.00 $ 10.94 $ 8.72 $ 9.15 =========== =========== =========== ========== ========== INVESTOR CLASS Net assets......................................... $ -- $ -- $ 48,381 $ 65,688 $ 218,959 ----------- ----------- ----------- ---------- ---------- Shares outstanding................................. -- -- 4,422 7,537 23,924 ----------- ----------- ----------- ---------- ---------- Net asset value, offering and redemption price per share........................................ $ -- $ -- $ 10.94 $ 8.72 $ 9.15 ----------- ----------- ----------- ---------- ---------- RETIREMENT CLASS Net assets......................................... -- $ -- $ 22,529 $ -- $ -- ----------- ----------- ----------- ---------- ---------- Shares outstanding................................. -- -- 2,059 -- -- ----------- ----------- ----------- ---------- ---------- Net asset value, offering and redemption price per share........................................ $ -- $ -- $ 10.94 $ -- $ -- =========== =========== =========== ========== ========== + Investment in securities, at cost................... $50,284,192 $20,911,848 $86,349,666 $4,074,908 $4,439,112 * Proceeds received, securities sold short............ -- 4,838,306 -- -- --
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2008 | 45 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- STATEMENTS OF OPERATIONS - --------------------------------------------------------------------------------
ROBECO BOSTON ROBECO BOSTON ROBECO BOSTON ROBECO BOSTON ROBECO BOSTON PARTNERS PARTNERS PARTNERS PARTNERS PARTNERS SMALL CAP LONG/SHORT LARGE CAP MID CAP ALL-CAP VALUE FUND II EQUITY FUND VALUE FUND VALUE FUND VALUE FUND ------------- ----------- ----------- ----------- ----------- INVESTMENT INCOME Dividends(1)....................................... $ 1,505,420 $ 373,603 $ 619,342 $ 404,489 $ 173,745 Interest........................................... 105,096 189,917 20,229 38,176 8,136 ------------ ----------- ----------- ----------- ----------- Total investment income....................... 1,610,516 563,520 639,571 442,665 181,881 ------------ ----------- ----------- ----------- ----------- EXPENSES Advisory fees...................................... 1,215,659 826,400 194,574 193,495 74,179 Distribution fees (Investor Class)................. 140,230 14,777 27,629 16,922 4,416 Administration and accounting fees................. 137,566 62,910 50,459 47,149 46,279 Printing and shareholder reporting fees............ 59,442 15,060 7,920 5,100 2,461 Transfer agent fees................................ 71,100 43,170 38,461 39,750 40,500 Professional fees.................................. 41,245 24,506 20,635 18,805 16,915 Directors' and officer's fees...................... 48,696 20,873 14,837 11,826 8,732 Custodian fees..................................... 19,255 16,715 11,040 10,801 10,739 Registration and filing fees....................... 19,184 16,422 15,500 12,358 11,216 Administrative service fees........................ 15,108 5,688 5,138 3,847 1,468 Dividend expense on securities sold short.......... -- 74,780 -- -- -- Interest expense .................................. -- 375,973 -- -- -- Other expenses..................................... 10,220 3,797 2,660 1,796 1,011 ------------ ----------- ----------- ----------- ----------- Total expenses before waivers and reimbursements.............................. 1,777,705 1,501,071 388,853 361,849 217,916 Less: waivers and reimbursements.............. (130,058) (117,318) (118,007) (103,058) (125,413) ------------ ----------- ----------- ----------- ----------- Net expenses after waivers and reimbursements. 1,647,647 1,383,753 270,846 258,791 92,503 ------------ ----------- ----------- ----------- ----------- Net investment income (loss)......................... (37,131) (820,233) 368,725 183,874 89,378 ------------ ----------- ----------- ----------- ----------- NET REALIZED AND UNREALIZED GAIN/(LOSS) FROM INVESTMENTS Net realized gain/(loss) from: Investments................................... 9,746,037 (4,048,951) 168,809 215,357 335,641 Investments sold short........................ -- 8,960,975 -- -- -- Written options............................... -- -- -- -- 162,979 Net change in unrealized appreciation/ (depreciation) on: Investments................................... (34,390,914) (7,869,720) (6,700,650) (4,706,796) (2,122,008) Investments sold short........................ -- 926,700 -- -- -- Written options............................... -- -- -- -- 63,275 ------------ ----------- ----------- ----------- ----------- Net realized and unrealized gain/(loss) from Investments................................... (24,644,877) (2,030,996) (6,531,841) (4,491,439) (1,560,113) ------------ ----------- ----------- ----------- ----------- NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS.................................... $(24,682,008) $(2,851,229) $(6,163,116) $(4,307,565) $(1,470,735) ============ =========== =========== =========== =========== (1) Net of foreign taxes ........................... -- (6,014) (6,541) -- (2,966)
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 46 | SEMI-ANNUAL REPORT 2008 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- STATEMENTS OF OPERATIONS - --------------------------------------------------------------------------------
ROBECO WPG 130/30 LARGE CAP CORE FUND ROBECO (FORMERLY ROBECO WPG ROBECO WPG WPG SAM SAM SMALL CAP LARGE CAP CORE BOND SUSTAINABLE SUSTAINABLE VALUE FUND GROWTH FUND) FUND CLIMATE FUND* WATER FUND* ------------- ------------ ----------- ------------- ----------- INVESTMENT INCOME Dividends(1)........................................ $ 397,678 $ 167,938 $ -- $ 7,473 $ 9,157 Interest............................................ 16,211 8,436 2,570,101 5,675 6,244 Reclaim income...................................... -- -- -- 141 -- Income from securities loaned....................... 7,126 -- 632 -- ------------ ----------- ----------- ----------- ----------- Total investment income........................ 421,015 176,374 2,570,733 13,289 15,401 ------------ ----------- ----------- ----------- ----------- EXPENSES Advisory fees....................................... 225,657 65,910 227,037 16,037 16,455 Distribution fees (Investor Class).................. -- -- 33 46 77 Distribution fees (Retirement Class)................ -- -- 11 -- -- Administration and accounting fees.................. 46,700 43,820 82,279 40,747 43,740 Printing and shareholder reporting fees............. 5,070 7,380 16,576 5,471 5,480 Transfer agent fees................................. 47,190 33,438 56,552 26,872 23,880 Professional fees................................... 22,975 18,805 34,860 18,896 18,878 Directors' and officer's fees....................... 13,393 8,785 25,631 6,445 6,401 Custodian fees...................................... 9,601 18,914 14,342 6,596 8,424 Registration and filing fees........................ 12,468 11,822 14,423 22,707 25,470 Administrative service fees......................... 2,500 2,500 2,499 2,497 2,416 Dividend expense on securities sold short........... -- 36,360 -- -- -- Interest expense ................................... -- 3,031 -- -- -- Other expenses...................................... 2,566 1,744 5,981 725 575 ------------ ----------- ----------- ----------- ----------- Total expenses before waivers and reimbursements............................... 388,120 252,509 480,224 147,039 151,796 Less: waivers and reimbursements............... -- (90,352) (263,233) (122,973) (127,057) Less: fees paid indirectly - Note 3............ (136) (957) -- -- -- ------------ ----------- ----------- ----------- ----------- Net expenses after waivers and reimbursements.. 387,984 161,200 216,991 24,066 24,739 ------------ ----------- ----------- ----------- ----------- Net investment income (loss)................... 33,031 15,174 2,353,742 (10,777) (9,338) ------------ ----------- ----------- ----------- ----------- NET REALIZED AND UNREALIZED GAIN/(LOSS) FROM INVESTMENTS Net realized gain/(loss) from: Investments.................................... (755,365) 2,464,972 1,884,745 (22,793) 3,138 Foreign currency transactions.................. -- -- -- 6,082 4,141 Investments sold short......................... -- 72,570 -- -- -- Futures transactions........................... -- -- 65,719 -- -- Swap agreements................................ -- -- (284,146) -- -- Net change in unrealized appreciation/ (depreciation)on: Investments.................................... (7,131,752) (4,654,673) 2,320,029 (494,841) (349,557) Investments sold short......................... -- 354,779 -- -- -- Futures transactions........................... -- -- 91,475 -- -- Swap agreements................................ -- -- (23,527) -- -- ------------ ----------- ----------- ----------- ----------- Net realized and unrealized gain/(loss) from Investments.................................... (7,887,117) (1,762,352) 4,054,295 (511,552) (342,278) ------------ ----------- ----------- ----------- ----------- NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS..................................... $ (7,854,086) $(1,747,178) $ 6,408,037 $ (522,329) $ (351,616) ============ =========== =========== =========== =========== (1) Net of foreign taxes ............................ -- (474) -- (510) (360) * For the period October 1, 2007 (Commencement of Operations) to February 29, 2008.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2008 | 47 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
ROBECO BOSTON PARTNERS ROBECO BOSTON PARTNERS SMALL CAP VALUE FUND II LONG/SHORT EQUITY FUND ----------------------------------- ----------------------------------- FOR THE SIX FOR THE FOR THE SIX FOR THE MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED FEBRUARY 29, 2008 AUGUST 31, 2007 FEBRUARY 29, 2008 AUGUST 31, 2007 ------------------ --------------- ----------------- ---------------- (UNAUDITED) (UNAUDITED) INCREASE/(DECREASE) IN NET ASSETS FROM OPERATIONS Net investment income/(loss)............................. $ (37,131) $ (759,783) $ (820,233) $ (1,361,926) Net realized gain/(loss) from investments and foreign exchange transactions.......................... 9,746,037 69,018,171 4,912,024 10,732,357 Net change in unrealized appreciation/(depreciation) on investments and foreign exchange transactions....... (34,390,914) (29,653,912) (6,943,020) (6,363,788) ------------ ------------ ----------- ------------ Net increase/(decrease) in net assets resulting from operations........................................ (24,682,008) 38,604,476 (2,851,229) 3,006,643 ------------ ------------ ----------- ------------ LESS DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income (Institutional Class).............. -- (391,961) -- -- Net investment income (Investor Class)................... -- (158,933) -- -- Net realized capital gains (Institutional Class)......... (30,253,300) (16,867,927) (7,243,467) (9,144,393) Net realized capital gains (Investor Class).............. (41,264,089) (34,020,717) (1,286,875) (1,852,903) ------------ ------------ ----------- ------------ Total dividends and distributions to shareholders........ (71,517,389) (51,439,538) (8,530,342) (10,997,296) ------------ ------------ ----------- ------------ INCREASE/(DECREASE) IN NET ASSETS DERIVED FROM CAPITAL SHARE TRANSACTIONS (NOTE 5).................... (8,432,425) (82,797,055) (28,812,916) (14,594,704) ------------ ------------ ----------- ------------ Total increase/(decrease) in net assets.................. (104,631,822) (95,632,117) (40,194,487) (22,585,357) NET ASSETS Beginning of Period...................................... 248,883,299 344,515,416 88,434,121 111,019,478 ------------ ------------ ----------- ------------ End of Period............................................ $144,251,477 $248,883,299 $48,239,634 $ 88,434,121 ============ ============ =========== ============ Includes undistributed net investment income/(loss) of ...................................... $ (37,131) $ -- $ (820,233) $ --
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 48 | SEMI-ANNUAL REPORT 2008 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS (continued) - --------------------------------------------------------------------------------
ROBECO BOSTON PARTNERS ROBECO BOSTON PARTNERS LARGE CAP VALUE FUND MID CAP VALUE FUND ----------------------------------- ----------------------------------- FOR THE SIX FOR THE FOR THE SIX FOR THE MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED FEBRUARY 29, 2008 AUGUST 31, 2007 FEBRUARY 29, 2008 AUGUST 31, 2007 ------------------ --------------- ----------------- ---------------- (UNAUDITED) (UNAUDITED) INCREASE/(DECREASE) IN NET ASSETS FROM OPERATIONS Net investment income/(loss)............................. $ 368,725 $ 727,810 $ 183,874 $ 138,323 Net realized gain/(loss) from investments and foreign exchange transactions.......................... 168,809 6,058,378 215,357 5,912,750 Net change in unrealized appreciation/(depreciation) on investments and foreign exchange transactions....... (6,700,650) 2,361,865 (4,706,796) 873,125 ------------ ------------ ----------- ------------ Net increase/(decrease) in net assets resulting from operations........................................ (6,163,116) 9,148,053 (4,307,565) 6,924,198 ------------ ------------ ----------- ------------ LESS DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income (Institutional Class).............. (544,588) (424,565) (195,014) (65,744) Net investment income (Investor Class)................... (218,588) (197,951) (46,363) (1,191) Net realized capital gains (Institutional Class)......... (3,923,968) (3,114,117) (4,230,672) (8,391,078) Net realized capital gains (Investor Class).............. (2,023,944) (1,837,246) (1,660,750) (1,834,532) ------------ ------------ ----------- ------------ Total dividends and distributions to shareholders........ (6,711,088) (5,573,879) (6,132,799) (10,292,545) ------------ ------------ ----------- ------------ INCREASE/(DECREASE) IN NET ASSETS DERIVED FROM CAPITAL SHARE TRANSACTIONS (NOTE 5).................... 11,120,824 6,087,387 9,083,572 18,996,364 ------------ ------------ ----------- ------------ Total increase/(decrease) in net assets.................. (1,753,380) 9,661,561 (1,356,792) 15,628,017 NET ASSETS Beginning of Period...................................... 66,769,720 57,108,159 48,500,032 32,872,015 ------------ ------------ ----------- ------------ End of Period............................................ $ 65,016,340 $ 66,769,720 $47,143,240 $ 48,500,032 ============ ============ =========== ============ Includes undistributed net investment income/(loss) of ...................................... $ 109,769 $ 504,220 $ 42,574 $ 100,077
ROBECO BOSTON PARTNERS ALL-CAP VALUE FUND ----------------------------------- FOR THE SIX FOR THE MONTHS ENDED YEAR ENDED FEBRUARY 29, 2008 AUGUST 31, 2007 ------------------ --------------- (UNAUDITED) INCREASE/(DECREASE) IN NET ASSETS FROM OPERATIONS Net investment income/(loss)............................. $ 89,378 $ 156,470 Net realized gain/(loss) from investments and foreign exchange transactions.......................... 498,620 1,684,278 Net change in unrealized appreciation/(depreciation) on investments and foreign exchange transactions....... (2,058,733) 519,878 ------------ ------------ Net increase/(decrease) in net assets resulting from operations........................................ (1,470,735) 2,360,626 ------------ ------------ LESS DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income (Institutional Class).............. (156,892) (104,775) Net investment income (Investor Class)................... (24,174) (22,078) Net realized capital gains (Institutional Class)......... (1,351,923) (1,060,815) Net realized capital gains (Investor Class).............. (300,869) (321,372) ------------ ------------ Total dividends and distributions to shareholders........ (1,833,858) (1,509,040) ------------ ------------ INCREASE/(DECREASE) IN NET ASSETS DERIVED FROM CAPITAL SHARE TRANSACTIONS (NOTE 5).................... 2,459,819 3,776,353 ------------ ------------ Total increase/(decrease) in net assets.................. (844,774) 4,627,939 NET ASSETS Beginning of Period...................................... 17,741,391 13,113,452 ------------ ------------ End of Period............................................ $ 16,896,617 $ 17,741,391 ============ ============ Includes undistributed net investment income/(loss) of ...................................... $ 12,374 $ 104,062
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2008 | 49 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS (continued) - --------------------------------------------------------------------------------
ROBECO ROBECO WPG WPG SMALL CAP VALUE FUND 130/30 LARGE CAP CORE FUND* ----------------------------------- ----------------------------------- FOR THE SIX FOR THE FOR THE SIX FOR THE MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED FEBRUARY 29, 2008 AUGUST 31, 2007 FEBRUARY 29, 2008 AUGUST 31, 2007 ------------------ --------------- ----------------- ---------------- (UNAUDITED) (UNAUDITED) INCREASE/(DECREASE) IN NET ASSETS FROM OPERATIONS Net investment income/(loss)............................. $ 33,031 $ 46,418 $ 15,174 $ (32,314) Net realized gain/(loss) from investments and foreign exchange transactions.......................... (755,365) 8,063,660 2,537,542 1,682,467 Net change in unrealized appreciation/(depreciation) on investments and foreign exchange transactions....... (7,131,752) (1,260,902) (4,299,894) 1,142,225 ------------ ------------ ----------- ------------ Net increase/(decrease) in net assets resulting from operations........................................ (7,854,086) 6,849,176 (1,747,178) 2,792,378 ------------ ------------ ----------- ------------ LESS DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income (Institutional Class).............. (43,780) (12,697) -- (1,770,663) Net investment income (Investor Class)................... -- -- -- -- Net investment income (Retirement Class)................. -- -- -- -- Net realized capital gains (Institutional Class)......... (7,781,157) (5,092,584) (4,297,082) -- Net realized capital gains (Investor Class).............. -- -- -- -- ------------ ------------ ----------- ------------ Total dividends and distributions to shareholders........ (7,824,937) (5,105,281) (4,297,082) (1,770,663) ------------ ------------ ----------- ------------ Increase/(decrease) in net assets derived from capital share transactions (Note 5)............................ 7,396,997 3,610,754 2,745,372 (1,326,445) ------------ ------------ ----------- ------------ Total increase/(decrease) in net assets.................. (8,282,026) 5,354,649 (3,298,888) (304,730) NET ASSETS Beginning of Period...................................... 53,961,983 48,607,334 18,629,826 18,934,556 ------------ ------------ ----------- ------------ End of Period............................................ $ 45,679,957 $ 53,961,983 $15,330,938 $ 18,629,826 ============ ============ =========== ============ Includes undistributed net investment income/(loss) of ...................................... $ 33,031 $ 43,780 $ 15,174 $ --
* Formerly Robeco WPG Large Cap Growth Fund ** Commencement of operations THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 50 | SEMI-ANNUAL REPORT 2008 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS (continued) - --------------------------------------------------------------------------------
ROBECO SAM SUSTAINABLE SAM SUSTAINABLE WPG CORE BOND FUND CLIMATE FUND WATER FUND ----------------------------------- ----------------- ----------------- FOR THE PERIOD FOR THE PERIOD FOR THE SIX FOR THE ENDED OCTOBER 1, ENDED OCTOBER 1, MONTHS ENDED YEAR ENDED 2007** TO 2007** TO FEBRUARY 29, 2008 AUGUST 31, 2007 FEBRUARY 29, 2008 FEBRUARY 29, 2008 ------------------ --------------- ----------------- ----------------- (UNAUDITED) (UNAUDITED) (UNAUDITED) INCREASE/(DECREASE) IN NET ASSETS FROM OPERATIONS Net investment income/(loss)............................. $ 2,353,742 $ 7,345,814 $ (10,777) $ (9,338) Net realized gain/(loss) from investments and foreign exchange transactions.......................... 1,666,318 876,733 (16,711) 7,279 Net change in unrealized appreciation/(depreciation) on investments and foreign exchange transactions....... 2,387,977 (880,014) (494,841) (349,557) ------------ ------------ ----------- ------------ Net increase/(decrease) in net assets resulting from operations........................................ 6,408,037 7,342,533 (522,329) (351,616) ------------ ------------ ----------- ------------ LESS DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income (Institutional Class).............. (2,408,068) (7,345,475) -- -- Net investment income (Investor Class)................... (595) (925) -- -- Net investment income (Retirement Class)................. (504) (955) -- -- Net realized capital gains (Institutional Class)......... -- -- -- -- Net realized capital gains (Investor Class).............. -- -- -- -- ------------ ------------ ----------- ------------ Total dividends and distributions to shareholders........ (2,409,167) (7,347,355) -- -- ------------ ------------ ----------- ------------ Increase/(decrease) in net assets derived from capital share transactions (Note 5)............................ (27,379,354) (68,728,906) 4,115,194 4,386,158 ------------ ------------ ----------- ------------ Total increase/(decrease) in net assets.................. (23,380,484) (68,733,728) 3,592,865 4,034,542 NET ASSETS Beginning of Period...................................... 109,797,188 178,530,916 -- -- ------------ ------------ ----------- ------------ End of Period............................................ $ 86,416,704 $109,797,188 $ 3,592,865 $ 4,034,542 ============ ============ =========== ============ Includes undistributed net investment income/(loss) of ...................................... $ (26,797) $ 28,628 $ (10,777) $ (9,338)
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2008 | 51 ROBECO INVESTMENT FUNDS FEBRUARY 29, 2008 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- STATEMENTS OF CASH FLOWS - --------------------------------------------------------------------------------
Robeco Boston Partners Robeco Boston Partners Long/Short Equity Fund WPG 130/30 Large Cap Core Fund ------------------------ ------------------------------- SIX MONTHS ENDED SIX MONTHS ENDED FEBRUARY 29, 2008 FEBRUARY 29, 2008 ------------------------ ------------------------------- INCREASE DECREASE IN CASH Cash flows provided from operating activities: Interest and dividends received............................ $ 772,792 $ 163,144 Operating expenses paid.................................... (1,191,597) (183,912) Interest expenses paid..................................... (349,293) (1,270) Purchases of long-term portfolio investments............... (50,554,744) (25,270,556) Proceeds from disposition of short-term portfolio investments ................................... 17,230,682 -- Proceeds from disposition of long-term portfolio investments ................................... 70,698,227 21,996,977 Net proceeds from short sales.............................. (14,310,542) 4,910,875 Increase in other assets................................... 7,338 8,167 ------------ ------------- NET CASH PROVIDED FROM OPERATING ACTIVITIES:............... 22,302,863 1,623,425 ------------ ------------- Cash flows from financing activities: Net proceeds from broker................................... 15,046,844 714,507 Cash dividends paid ....................................... (15,975) (737,432) Net payment from fund share activity....................... (37,333,732) (818,152) ------------ ------------- NET CASH PROVIDED BY FINANCING ACTIVITIES:................. (22,302,863) (841,077) ------------ ------------- Net increase in cash....................................... -- 782,348 Cash at beginning of period................................ -- 34,514 ------------ ------------- CASH AT END OF PERIOD...................................... $ -- $ 816,862 ============ ============= RECONCILIATION OF NET INCREASE IN NET ASSETS TO NET CASH PROVIDED FROM OPERATING ACTIVITIES Net decrease in net assets resulting from operations....... $ (2,851,229) $ (1,747,451) ------------ ------------- Change in investments...................................... 22,910,333 1,640,897 Net realized loss on investments........................... (4,912,024) (2,537,276) Net increase in unrealized appreciation on investments..... 6,943,020 4,299,894 Change in receivable for investments sold.................. (1,349,289) (1,036,631) Change in interest receivable.............................. 209,272 (13,230) Change in other assets..................................... (3,298) 738 Change in payable for investments purchased................ 1,513,215 1,040,459 Change in accrued expenses ................................ (157,137) (23,975) ------------ ------------- Total adjustments.......................................... 25,154,092 3,370,876 ------------ ------------- Net cash provided from operating activities................ $ 22,302,863 $ 1,623,425 ------------ -------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 52 | SEMI-ANNUAL REPORT 2008 [THIS PAGE INTENTIONALLY LEFT BLANK] ROBECO INVESTMENT FUNDS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS PER SHARE OPERATING PERFORMANCE - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Contained below is per share operating performance data for each class of shares outstanding, total investment return, ratios to average net assets and other supplemental data for the respective periods. This information has been derived from information provided in the financial statements. - --------------------------------------------------------------------------------
NET DIVIDENDS TO DISTRIBUTIONS TO DISTRIBUTIONS TO ASSET NET REALIZED SHAREHOLDERS SHAREHOLDERS SHAREHOLDERS VALUE, NET AND UNREALIZED FROM NET FROM NET FROM BEGINNING INVESTMENT GAIN/(LOSS) ON INVESTMENT REALIZED TAX RETURN REDEMPTION OF PERIOD INCOME/(LOSS) INVESTMENTS INCOME GAINS OF CAPITAL FEES - ------------------------------------------------------------------------------------------------------------------------------------ ROBECO BOSTON PARTNERS SMALL CAP VALUE FUND II - ---------------------------------------------- INSTITUTIONAL CLASS 9/1/07 through 2/29/08+ $21.47 $ 0.01* $(2.22) $ -- $(7.70) $ -- $ --(3) 8/31/07 22.82 (0.01)* 2.41 (0.09) (3.67) -- 0.01 8/31/06 24.75 (0.08)* 1.57 -- (3.42) -- --(3) 8/31/05 22.80 (0.10) 5.07 -- (3.03) -- 0.01 8/31/04 20.19 (0.12)* 2.92 -- (0.20) -- 0.01 8/31/03 15.71 (0.09)* 4.55 -- --(3) -- 0.02 INVESTOR CLASS 9/1/07 through 2/29/08+ $21.02 $(0.01)* $(2.16) $ -- $(7.70) $ -- $ --(3) 8/31/07 22.40 (0.07)* 2.37 (0.02) (3.67) -- 0.01 8/31/06 24.35 (0.13)* 1.54 -- (3.36) -- --(3) 8/31/05 22.53 (0.17) 5.01 -- (3.03) -- 0.01 8/31/04 20.00 (0.18)* 2.90 -- (0.20) -- 0.01 8/31/03 15.61 (0.12)* 4.49 -- --(3) -- 0.02 - ------------------------------------------------------------------------------------------------------------------------------------ ROBECO BOSTON PARTNERS LONG/SHORT EQUITY FUND - --------------------------------------------- INSTITUTIONAL CLASS 9/1/07 through 2/29/08+ $17.23 $(0.18)* $(0.46) $ -- $(1.90) $ -- $ --(3) 8/31/07 18.57 (0.21)* 0.73 -- (1.86) -- --(3) 8/31/06 17.89 (0.26)* 2.40 -- (1.47) -- 0.01 8/31/05 14.70 (0.25) 3.43 -- -- -- 0.01 8/31/04 14.31 (0.32)* 0.69 -- -- -- 0.02 8/31/03 15.17 (0.28)* 0.10 -- (0.51) (0.20) 0.03 INVESTOR CLASS 9/1/07 through 2/29/08+ $16.97 $(0.20)* $(0.45) $ -- $(1.90) $ -- $ --(3) 8/31/07 18.36 (0.26)* 0.73 -- (1.86) -- --(3) 8/31/06 17.74 (0.30)* 2.38 -- (1.47) -- 0.01 8/31/05 14.62 (0.28) 3.39 -- -- -- 0.01 8/31/04 14.27 (0.36)* 0.69 -- -- -- 0.02 8/31/03 15.13 (0.31)* 0.10 -- (0.51) (0.17) 0.03 - ------------------------------------------------------------------------------------------------------------------------------------ ROBECO BOSTON PARTNERS LARGE CAP VALUE FUND - ------------------------------------------- INSTITUTIONAL CLASS 9/1/07 through 2/29/08+ $15.34 $ 0.09* $(1.38) $(0.19) $(1.40) $ -- $ -- 8/31/07 14.53 0.20* 2.02 (0.17) (1.24) -- -- 8/31/06 15.00 0.16* 1.55 (0.16) (2.02) -- -- 8/31/05 12.67 0.11* 2.33 (0.11) -- -- -- 8/31/04 10.84 0.09* 1.84 (0.10) -- -- -- 8/31/03 10.33 0.09* 0.57 (0.06) (0.09) -- -- INVESTOR CLASS 9/1/07 through 2/29/08+ $15.62 $ 0.07* $(1.36) $(0.19) $(1.40) $ -- $ -- 8/31/07 14.77 0.15* 2.07 (0.13) (1.24) -- -- 8/31/06 15.22 0.13* 1.57 (0.13) (2.02) -- -- 8/31/05 12.86 0.08* 2.36 (0.08) -- -- -- 8/31/04 11.01 0.05* 1.88 (0.08) -- -- -- 8/31/03 10.50 0.07* 0.57 (0.04) (0.09) -- --
- ---------- + Unaudited * Calculated based on average shares outstanding for the period. (1) Total return is calculated by assuming a purchase of shares on the first day and a sale of shares on the last day of the period. (2) Redemption fees are reflected in total return calculations. (3) Amount is less than $0.01 per share. (4) Annualized. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 54 | SEMI-ANNUAL REPORT 2008 ROBECO INVESTMENT FUNDS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS (continued) PER SHARE OPERATING PERFORMANCE - --------------------------------------------------------------------------------
RATIO OF EXPENSES TO AVERAGE NET RATIO OF ASSETS WITH NET NET EXPENSES TO WAIVERS AND ASSET ASSETS, AVERAGE NET REIMBURSEMENTS VALUE, TOTAL END OF ASSETS WITH (EXCLUDING END OF INVESTMENT PERIOD WAIVERS AND DIVIDEND AND PERIOD RETURN(1,2) (000) REIMBURSEMENTS INTEREST EXPENSE) - -------------------------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS SMALL CAP VALUE FUND II - ---------------------------------------------- INSTITUTIONAL CLASS 9/1/07 through 2/29/08+ $11.56 (9.22)% $ 66,339 1.55%(4) $ -- 8/31/07 21.47 10.53 94,337 1.55 -- 8/31/06 22.82 6.39 114,153 1.52 -- 8/31/05 24.75 22.65 138,143 1.53 -- 8/31/04 22.80 13.96 133,060 1.49 -- 8/31/03 20.19 28.55 98,383 1.55 -- INVESTOR CLASS 9/1/07 through 2/29/08+ $11.15 (9.30)% $ 77,913 1.80%(4) $ -- 8/31/07 21.02 10.26 154,546 1.80 -- 8/31/06 22.40 6.12 230,362 1.77 -- 8/31/05 24.35 22.32 274,648 1.78 -- 8/31/04 22.53 13.69 327,569 1.74 -- 8/31/03 20.00 28.16 279,593 1.80 -- - -------------------------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS LONG/SHORT EQUITY FUND - --------------------------------------------- INSTITUTIONAL CLASS 9/1/07 through 2/29/08+ $14.69 (3.98)% $ 38,881 3.73%(4) $2.50%(4) 8/31/07 17.23 2.61 73,770 3.44 2.50 8/31/06 18.57 12.93 90,313 3.24 2.50 8/31/05 17.89 21.70 99,748 3.13 2.50 8/31/04 14.70 2.73 58,293 3.02 2.50 8/31/03 14.31 (1.13) 57,351 3.05 2.50 INVESTOR CLASS 9/1/07 through 2/29/08+ $14.42 (4.11)% $ 9,358 3.98%(4) $2.75%(4) 8/31/07 16.97 2.35 14,664 3.69 2.75 8/31/06 18.36 12.69 20,706 3.48 2.75 8/31/05 17.74 21.34 24,716 3.37 2.75 8/31/04 14.62 2.45 14,322 3.27 2.75 8/31/03 14.27 (1.32) 15,381 3.32 2.75 - -------------------------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS LARGE CAP VALUE FUND - ------------------------------------------- INSTITUTIONAL CLASS 9/1/07 through 2/29/08+ $12.46 (9.22)% $ 45,780 0.75%(4) $ -- 8/31/07 15.34 15.70 43,148 0.75 -- 8/31/06 14.53 12.43 35,994 0.86 -- 8/31/05 15.00 19.30 27,172 1.00 -- 8/31/04 12.67 17.87 42,066 1.00 -- 8/31/03 10.84 6.54 43,722 1.00 -- INVESTOR CLASS 9/1/07 through 2/29/08+ $12.74 (9.30)% $ 19,236 1.00%(4) $ -- 8/31/07 15.62 15.45 23,622 1.00 -- 8/31/06 14.77 12.14 21,114 1.11 -- 8/31/05 15.22 19.04 12,827 1.25 -- 8/31/04 12.86 17.53 8,112 1.25 -- 8/31/03 11.01 6.22 5,116 1.25 --
RATIO OF NET INVESTMENT RATIO OF INCOME (LOSS) EXPENSES TO TO AVERAGE AVERAGE NET NET ASSETS ASSETS WITHOUT WITH WAIVERS PORTFOLIO WAIVERS AND AND TURNOVER REIMBURSEMENTS REIMBURSEMENTS RATE - -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS SMALL CAP VALUE FUND II - ---------------------------------------------- INSTITUTIONAL CLASS 9/1/07 through 2/29/08+ 1.69%(4) 0.11%(4) 27.41% 8/31/07 1.56 (0.09) 46.19 8/31/06 1.53 (0.34) 33.60 8/31/05 1.54 (0.42) 37.61 8/31/04 1.49 (0.53) 47.06 8/31/03 1.79 (0.54) 72.72 INVESTOR CLASS 9/1/07 through 2/29/08+ 1.94%(4) (0.14)%(4) 27.41% 8/31/07 1.81 (0.32) 46.19 8/31/06 1.78 (0.58) 33.60 8/31/05 1.79 (0.64) 37.61 8/31/04 1.74 (0.77) 47.06 8/31/03 2.04 (0.77) 72.72 - -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS LONG/SHORT EQUITY FUND - --------------------------------------------- INSTITUTIONAL CLASS 9/1/07 through 2/29/08+ 4.05%(4) (2.19)%(4) 69.62% 8/31/07 3.60 (1.17) 93.21 8/31/06 3.40 (1.51) 108.59 8/31/05 3.30 (1.82) 107.14 8/31/04 3.20 (2.26) 239.06 8/31/03 3.44 (1.94) 282.36 INVESTOR CLASS 9/1/07 through 2/29/08+ 4.30%(4) (2.46)%(4) 69.62% 8/31/07 3.85 (1.42) 93.21 8/31/06 3.65 (1.77) 108.59 8/31/05 3.55 (2.07) 107.14 8/31/04 3.45 (2.50) 239.06 8/31/03 3.69 (2.13) 282.36 - -------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS LARGE CAP VALUE FUND - ------------------------------------------- INSTITUTIONAL CLASS 9/1/07 through 2/29/08+ 1.12%(4) 1.23%(4) 40.01% 8/31/07 1.07 1.20 61.70 8/31/06 1.22 1.11 58.04 8/31/05 1.35 0.83 76.91 8/31/04 1.22 0.73 47.21 8/31/03 1.41 0.94 81.13 INVESTOR CLASS 9/1/07 through 2/29/08+ 1.37%(4) 0.97%(4) 40.01% 8/31/07 1.32 0.95 61.70 8/31/06 1.46 0.87 58.04 8/31/05 1.61 0.53 76.91 8/31/04 1.47 0.43 47.21 8/31/03 1.66 0.66 81.13 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2008 | 55 ROBECO INVESTMENT FUNDS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS (continued) PER SHARE OPERATING PERFORMANCE - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Contained below is per share operating performance data for each class of shares outstanding, total investment return, ratios to average net assets and other supplemental data for the respective periods. This information has been derived from information provided in the financial statements. - --------------------------------------------------------------------------------
NET DIVIDENDS TO DISTRIBUTIONS TO NET ASSET NET REALIZED SHAREHOLDERS SHAREHOLDERS ASSET VALUE, NET AND UNREALIZED FROM NET FROM NET VALUE, BEGINNING INVESTMENT GAIN/(LOSS) ON INVESTMENT REALIZED END OF OF PERIOD INCOME/(LOSS) INVESTMENTS INCOME GAINS PERIOD - -------------------------------------------------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS MID CAP VALUE FUND - ----------------------------------------- INSTITUTIONAL CLASS 9/1/07 through 2/29/08+ $11.45 $ 0.04* $(0.93) $(0.06) $(1.36) $ 9.14 8/31/07 13.05 0.05* 2.44 (0.03) (4.06) 11.45 8/31/06 14.02 0.04* 0.86 (0.02) (1.85) 13.05 8/31/05 13.16 --(2) 3.22 (0.01) (2.35) 14.02 8/31/04 11.57 0.01* 1.65 (0.07) -- 13.16 8/31/03 9.69 0.05* 1.83 --(2) -- 11.57 INVESTOR CLASS 9/1/07 through 2/29/08+ $11.16 $ 0.03* $(0.90) $(0.04) $(1.36) $ 8.89 8/31/07 12.81 0.02* 2.39 -- (4.06) 11.16 8/31/06 13.80 (0.01)(2)* 0.87 -- (1.85) 12.81 8/31/05 13.02 --(2) 3.13 -- (2.35) 13.80 8/31/04 11.43 (0.02)* 1.65 (0.04) -- 13.02 8/31/03 9.58 0.02* 1.83 -- -- 11.43 - -------------------------------------------------------------------------------------------------------------------------- ROBECO BOSTON PARTNERS ALL-CAP VALUE FUND - ----------------------------------------- INSTITUTIONAL CLASS 9/1/07 through 2/29/08+ $16.47 $ 0.08* $(1.21) $(0.16) $(1.39) $13.79 8/31/07 15.69 0.16* 2.05 (0.13) (1.30) 16.47 8/31/06 15.54 0.15* 1.03 (0.08) (0.95) 15.69 8/31/05 13.29 0.07 2.83 (0.05) (0.60) 15.54 8/31/04 10.82 0.06 2.48 (0.07) -- 13.29 8/31/03 9.45 0.06 1.34 (0.03) -- 10.82 INVESTOR CLASS 9/1/07 through 2/29/08+ $16.41 $ 0.06* $(1.22) $(0.11) $(1.39) $13.75 8/31/07 15.63 0.11* 2.06 (0.09) (1.30) 16.41 8/31/06 15.49 0.11* 1.03 (0.05) (0.95) 15.63 8/31/05 13.26 0.03 2.83 (0.03) (0.60) 15.49 8/31/04 10.80 0.02 2.48 (0.04) -- 13.26 8/31/03 9.44 0.04 1.34 (0.02) -- 10.80 - -------------------------------------------------------------------------------------------------------------------------- ROBECO WPG SMALL CAP VALUE FUND - ------------------------------- INSTITUTIONAL CLASS 9/1/07 through 2/29/08+ $17.05 $ 0.01* $(2.33) $(0.01) $(2.45) $12.27 8/31/07 16.54 0.01 2.31 -- (1.81) 17.05 8/31/06 17.42 -- 1.10 -- (1.98) 16.54 8/31/05(3) 17.55 (0.04) (0.09) -- -- 17.42 12/31/04 16.34 -- 3.11 -- (1.90) 17.55 12/31/03 11.24 -- 5.10 -- -- 16.34 12/31/02 15.21 -- (3.97) -- -- 1.24
- ---------- * Calculated based on average shares outstanding. + Unaudited (1) Total return is calculated by assuming a purchase of shares on the first day and a sale of shares on the last day of the period. (2) Amount is less than $0.01. (3) For the period January 1, 2005 through August 31, 2005. (4) Annualized. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 56 | SEMI-ANNUAL REPORT 2008 ROBECO INVESTMENT FUNDS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS (continued) PER SHARE OPERATING PERFORMANCE - --------------------------------------------------------------------------------
RATIO OF NET INVESTMENT RATIO OF RATIO OF INCOME (LOSS) NET EXPENSES TO EXPENSES TO TO AVERAGE ASSETS, AVERAGE NET AVERAGE NET NET ASSETS TOTAL END OF ASSETS WITH ASSETS WITHOUT WITH WAIVERS PORTFOLIO INVESTMENT PERIOD WAIVERS AND WAIVERS AND AND TURNOVER RETURN(1) (000) REIMBURSEMENTS REIMBURSEMENTS REIMBURSEMENTS RATE - ------------------------------------------------------------------------------------------------------------------------------------ ROBECO BOSTON PARTNERS MID CAP VALUE FUND - ----------------------------------------- INSTITUTIONAL CLASS 9/1/07 through 2/29/08+ (8.51)% $32,810 1.00%(4) 1.43%(4) 0.83%(4) 33.78% 8/31/07 21.32 35,722 1.00 1.48 0.38 88.80 8/31/06 6.82 27,538 1.00 1.38 0.28 97.30 8/31/05 25.97 54,187 1.00 1.31 0.03 74.08 8/31/04 14.39 42,240 1.00 1.26 0.07 67.40 8/31/03 19.41 57,052 1.00 1.40 0.55 77.87 INVESTOR CLASS 9/1/07 through 2/29/08+ (8.58)% $14,333 1.25%(4) 1.68%(4) 0.58%(4) 33.78% 8/31/07 21.02 12,778 1.25 1.73 0.14 88.80 8/31/06 6.59 5,334 1.25 1.70 (0.04) 97.30 8/31/05 25.47 4,462 1.25 1.56 (0.22) 74.08 8/31/04 14.08 2,819 1.25 1.51 (0.18) 67.40 8/31/03 19.31 3,159 1.25 1.65 0.21 77.87 - ------------------------------------------------------------------------------------------------------------------------------------ ROBECO BOSTON PARTNERS ALL-CAP VALUE FUND - ----------------------------------------- INSTITUTIONAL CLASS 9/1/07 through 2/29/08+ (7.34)% $13,718 0.95%(4) 2.30%(4) 1.01%(4) 34.93% 8/31/07 14.38 13,720 0.95 2.24 0.92 45.26 8/31/06 7.95 9,374 1.09 2.93 0.94 51.10 8/31/05 22.33 7,315 1.25 3.90 0.53 28.72 8/31/04 23.50 5,177 1.25 5.82 0.51 27.40 8/31/03 14.84 2,890 1.25 9.49 0.62 38.36 INVESTOR CLASS 9/1/07 through 2/29/08+ (7.54)% $ 3,178 1.20%(4) 2.55%(4) 0.76%(4) 34.93% 8/31/07 14.16 4,021 1.20 2.49 0.67 45.26 8/31/06 7.72 3,739 1.34 3.19 0.69 51.10 8/31/05 22.06 2,840 1.50 4.04 0.20 28.72 8/31/04 23.13 649 1.50 5.84 0.14 27.40 8/31/03 14.63 106 1.50 9.88 0.41 38.36 - ------------------------------------------------------------------------------------------------------------------------------------ ROBECO WPG SMALL CAP VALUE FUND - ------------------------------- INSTITUTIONAL CLASS 9/1/07 through 2/29/08+ (14.56)% $45,680 1.55%(4) 1.55%(4) 0.13%(4) 92.42% 8/31/07 14.28 53,962 1.47 1.47 0.09 138.38 8/31/06 7.16 48,607 1.43 1.43 0.02 139.15 8/31/05(3) (0.74) 52,368 1.57(4) 1.57(4) (0.35)(4) 135.85 12/31/04 19.35 57,787 1.55 1.55 (0.55) 159.20 12/31/03 45.37 58,282 1.68 1.68 0.83 228.30 12/31/02 (26.10) 47,705 1.54 1.54 (0.81) 105.60
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2008 | 57 ROBECO INVESTMENT FUNDS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS (continued) PER SHARE OPERATING PERFORMANCE - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Contained below is per share operating performance data for each class of shares outstanding, total investment return, ratios to average net assets and other supplemental data for the respective periods. This information has been derived from information provided in the financial statements. - --------------------------------------------------------------------------------
NET DIVIDENDS TO DISTRIBUTIONS TO NET ASSET NET REALIZED SHAREHOLDERS SHAREHOLDERS ASSET VALUE, NET AND UNREALIZED FROM NET FROM NET VALUE, BEGINNING INVESTMENT GAIN/(LOSS) ON INVESTMENT REALIZED REDEMPTION END OF OF PERIOD INCOME/(LOSS) INVESTMENTS INCOME GAINS FEES PERIOD - ----------------------------------------------------------------------------------------------------------------------------- ROBECO WPG 130/30 LARGE CAP CORE FUND (FORMERLY ROBECO WPG LARGE CAP GROWTH FUND) - --------------------------------------------------------------------------------- INSTITUTIONAL CLASS 9/1/07 through 2/29/08+ $23.42 $ 0.02* $(1.88) $ -- $(5.56) $ -- $16.00 8/31/07 22.27 (0.04) 3.40 -- (2.21) -- 23.42 8/31/06 23.36 (0.01) 1.42 -- (2.50) -- 22.27 8/31/05(3) 23.10 (0.07) 0.33 -- -- -- 23.36 12/31/04 25.27 -- 0.93 -- (3.10) -- 23.10 12/31/03 19.16 -- 6.11 -- -- -- 25.27 12/31/02 26.46 -- (7.30) -- -- -- 19.16 - ----------------------------------------------------------------------------------------------------------------------------- ROBECO WPG CORE BOND FUND - ------------------------- INSTITUTIONAL CLASS 9/1/07 through 2/29/08+ $10.50 $ 0.25* $ 0.44 $(0.25) $ -- $ --(7) $10.94 8/31/07 10.50 0.50* -- (0.50) -- --(7) 10.50 8/31/06 10.84 0.45* (0.34) (0.45) -- --(7) 10.50 8/31/05(3) 10.81 0.25 0.03 (0.25) -- --(7) 10.84 12/31/04 10.66 0.31 0.15 (0.31) -- -- 10.81 12/31/03 10.44 0.30 0.22 (0.30) -- -- 10.66 12/31/02 9.80 0.40 0.64 (0.40) -- -- 10.44 INVESTOR CLASS 9/1/07 through 2/29/08+ $10.50 $ 0.22* $ 0.46 $(0.24) $ -- $ --(7) $10.94 8/31/07 10.50 0.47* -- (0.47) -- --(7) 10.50 1/17/06** to 8/31/06 10.69 0.28* (0.19) (0.28) -- -- 10.50 RETIREMENT CLASS 9/1/07 through 2/29/08+ $10.50 $ 0.24* $ 0.44 $(0.24) $ -- $ --(7) $10.94 8/31/07 10.50 0.49* -- (0.49) -- --(7) 10.50 9/01/05** to 8/31/06 10.86 0.44* (0.36) (0.44) -- -- 10.50 - ----------------------------------------------------------------------------------------------------------------------------- SAM SUSTAINABLE CLIMATE FUND - ---------------------------- INSTITUTIONAL CLASS 10/1/07** through 2/29/08+ $10.00 $(0.03)* $(1.25) $ -- $ -- $ -- $ 8.72 INVESTOR CLASS 10/1/07** through 2/29/08+ $10.22 $(0.03)* $(1.47) $ -- $ -- $ -- $ 8.72 - ----------------------------------------------------------------------------------------------------------------------------- SAM SUSTAINABLE WATER FUND - -------------------------- INSTITUTIONAL CLASS 10/1/07** through 2/29/08+ $10.00 $(0.02)* $(0.83) $ -- $ -- $ -- $ 9.15 INVESTOR CLASS 10/1/07** through 2/29/08+ $10.12 $(0.04)* $(0.93) $ -- $ -- $ -- $ 9.15
- ---------- * Calculated based on average shares outstanding for the period. ** Commencement of operations. + Unaudited (1) Total return is calculated by assuming a purchase of shares on the first day and a sale of shares on the last day of each period reported and includes reinvestments of dividends and distributions, if any. Total returns for periods less than one year has not been annualized. (2) Redemption fees are reflected in total return calculations. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 58 | SEMI-ANNUAL REPORT 2008 ROBECO INVESTMENT FUNDS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS (concluded) PER SHARE OPERATING PERFORMANCE - --------------------------------------------------------------------------------
RATIO OF NET INVESTMENT RATIO OF RATIO OF INCOME (LOSS) NET EXPENSES TO EXPENSES TO TO AVERAGE ASSETS, AVERAGE NET AVERAGE NET NET ASSETS TOTAL END OF ASSETS WITH ASSETS WITHOUT WITH WAIVERS PORTFOLIO INVESTMENT PERIOD WAIVERS AND WAIVERS AND AND TURNOVER RETURN(1,2) (000) REIMBURSEMENTS REIMBURSEMENTS REIMBURSEMENTS RATE - ------------------------------------------------------------------------------------------------------------------------ ROBECO WPG 130/30 LARGE CAP CORE FUND (FORMERLY ROBECO WPG LARGE CAP GROWTH FUND) - --------------------------------------------------------------------------------- INSTITUTIONAL CLASS 9/1/07 through 2/29/08+ (10.11)% $ 15,331 1.40%(6) 2.86%(6) 0.17%(6) 107.80% 8/31/07 15.74 18,630 1.40 1.99 (0.17) 94.09 8/31/06 6.10 18,935 1.40(4) 1.79 (0.06) 93.80 8/31/05(3) 1.13 20,626 1.40(4,6) 2.08(6) (0.42)(6) 100.01 12/31/04 3.82 26,222 1.40 1.50 (0.06) 138.70 12/31/03 31.89 52,355 1.44 1.44 (0.52) 126.80 12/31/02 (27.59) 43,412 1.25 1.25 (0.42) 107.90 - ------------------------------------------------------------------------------------------------------------------------ ROBECO WPG CORE BOND FUND - ------------------------- INSTITUTIONAL CLASS 9/1/07 through 2/29/08+ 6.38% $ 86,346 0.43%(6) 0.95%(6) 4.65%(6) 217.67%(5) 8/31/07 4.84 109,755 0.43 0.83 4.72 448.33(5) 8/31/06 1.11 178,491 0.43(4) 0.79 4.29 626.69(5) 8/31/05(3) 2.65 161,761 0.43(4,6) 0.75(6) 3.52(6) 602.95(5) 12/31/04 4.38 144,349 0.43 0.71 2.90 805.80(5) 12/31/03 5.04 145,818 0.45 0.75 2.81 561.80 12/31/02 10.87 105,261 0.50 0.83 4.02 539.20 INVESTOR CLASS 9/1/07 through 2/29/08+ 6.25% $ 48 0.68%(6) 1.20%(6) 4.18%(6) 217.67%(5) 8/31/07 4.58 21 0.68 1.08 4.49 448.33(5) 1/17/06** to 8/31/06 0.84 20 0.66(4,6) 1.04(6) 4.23(6) 626.69(5) RETIREMENT CLASS 9/1/07 through 2/29/08+ 6.33% $ 23 0.53%(6) 1.05%(6) 4.43%(6) 217.67%(5) 8/31/07 4.73 21 0.53 0.94 4.63 448.33(5) 9/01/05** to 8/31/06 0.84 20 0.50(4,6) 0.86(6) 4.21(6) 626.69(5) - ------------------------------------------------------------------------------------------------------------------------ SAM SUSTAINABLE CLIMATE FUND - ---------------------------- INSTITUTIONAL CLASS 10/1/07** through 2/29/08+ (12.19%) $ 3,527 1.50%(6) 9.23%(6) (0.67%)(6) 8.17% INVESTOR CLASS 10/1/07** through 2/29/08+ (12.19%) $ 66 1.75%(6) 9.71%(6) (0.97%)(6) 8.17% - ------------------------------------------------------------------------------------------------------------------------ SAM SUSTAINABLE WATER FUND - -------------------------- INSTITUTIONAL CLASS 10/1/07** through 2/29/08+ (7.30%) $ 3,816 1.50%(6) 9.26%(6) (0.56%)(6) 13.38% INVESTOR CLASS 10/1/07** through 2/29/08+ (7.30%) $ 219 1.75%(6) 9.96%(6) (1.12%)(6) 13.38%
(3) For the period January 1, 2005 through August 31, 2005. (4) Excludes the effects of fees paid indirectly. Had such offsets been included, the ratio would not differ. (5) The portfolio turnover rates excluding mortgage dollar roll transactions were 213.99%, 301.04%, 295.59%, 295.21% and 573.60% for the six months ended February 29, 2008, the years ended August 31, 2007 and 2006, for the period ended August 31, 2005 and the year ended December 31, 2004, respectively. (6) Annualized. (7) Amount is less than $0.01 per share. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. SEMI-ANNUAL REPORT 2008 | 59 ROBECO INVESTMENT FUNDS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (unaudited) - -------------------------------------------------------------------------------- 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES The RBB Fund, Inc. ("RBB" or the "Company") was incorporated under the laws of the State of Maryland on February 29, 1988 and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company. RBB is a "series fund," which is a mutual fund divided into separate portfolios. Each portfolio is treated as a separate entity for certain matters under the 1940 Act, and for other purposes, and a shareholder of one portfolio is not deemed to be a shareholder of any other portfolio. Currently, RBB has twenty-one active investment portfolios, including Robeco Boston Partners Small Cap Value Fund II ("BP Small Cap Value Fund II"), Robeco Boston Partners Long/Short Equity Fund ("BP Long/Short Equity Fund"), Robeco Boston Partners Large Cap Value Fund ("BP Large Cap Value Fund"), Robeco Boston Partners Mid Cap Value Fund ("BP Mid Cap Value Fund"), Robeco Boston Partners All-Cap Value Fund ("BP All-Cap Value Fund") (collectively "BP Funds"), Robeco WPG Small Cap Value Fund ("WPG Small Cap Value Fund"), Robeco WPG 130/30 Large Cap Core Fund, formerly Robeco Large Cap Growth Fund ("WPG 130/30 Large Cap Core Fund"), Robeco WPG Core Bond Fund ("WPG Core Bond Fund") (collectively "WPG Funds"), SAM Sustainable Climate Fund and SAM Sustainable Water Fund (collectively "SAM Funds") (each a "Fund," collectively the "Funds"). As of February 29, 2008, the BP Funds and SAM Funds each offer two classes of shares, Institutional Class and Investor Class. The WPG Small Cap Value and WPG 130/30 Large Cap Core Funds are single class funds offering only the Institutional Class of shares. The WPG Core Bond Fund offers three classes of shares, Institutional Class, Investor Class and Retirement Class. RBB has authorized capital of one hundred billion shares of common stock of which 78.073 billion shares are currently classified into one hundred and twenty classes of common stock. Each class represents an interest in an active or inactive RBB investment portfolio. The active classes have been grouped into ten separate "families." PORTFOLIO VALUATION -- Each Fund's net asset value ("NAV") is calculated once daily at the close of regular trading hours on the New York Stock Exchange ("NYSE") (generally 4:00 p.m. Eastern time) on each day the NYSE is open. Securities held by a Fund are valued using the closing price or the last sale price on a national securities exchange or the National Association of Securities Dealers Automatic Quotation System ("NASDAQ") market system where they are primarily traded. Equity securities traded in the over-the-counter market are valued at their closing prices. If there were no transactions on that day, securities traded principally on an exchange or on NASDAQ will be valued at the mean of the last bid and ask prices prior to the market close. Fixed income securities having a remaining maturity of greater than 60 days are valued using an independent pricing service. Fixed income securities having a remaining maturity of 60 days or less are valued at amortized cost. Foreign securities are valued based on prices from the primary market in which they are traded, and are translated from the local currency into U.S. dollars using current exchange rates. Investments in other open-end investment companies are valued based on the NAV of the investment companies (which may use fair value pricing as discussed in their prospectuses). If market quotations are unavailable or deemed unreliable, securities will be valued in accordance with procedures adopted by the Company's Board of Directors. Relying on prices supplied by pricing services or dealers or using fair valuation may result in values that are higher or lower than the values used by other investment companies and investors to price the same investments. USE OF ESTIMATES -- The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. INVESTMENT TRANSACTIONS, INVESTMENT INCOME AND EXPENSES -- The Funds record security transactions based on trade date. The cost of investments sold is determined by use of the specific identification method for both financial reporting and income tax purposes in determining realized gains and losses on investments. Interest income is accrued when earned. Dividend income is recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gains are recorded as a reduction of cost of investments and/or as a realized gain. The Funds estimate the components of distributions received that may be considered return of capital distributions or capital gain distributions. The Funds' investment income, expenses (other than class specific distribution fees) and unrealized and realized gains and losses are allocated daily to each class of shares based upon the relative proportion of net assets of each class at the beginning of the day. Expenses incurred on behalf of a specific class, fund or fund family are charged directly to the class, fund or fund family (in proportion to net assets). Expenses incurred for all of the RBB fund families (such as director or professional fees) are charged to all funds in proportion to their net assets of the RBB funds, or in such other manner as the Board of 60 | SEMI-ANNUAL REPORT 2008 ROBECO INVESTMENT FUNDS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (unaudited) (continued) - -------------------------------------------------------------------------------- Directors deems fair or equitable. Expenses and fees, including investment advisory and administration fees are accrued daily and taken into account for the purpose of determining the net asset value of the Funds. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net investment income and distributions from net realized capital gains, if any, are declared and paid at least annually to shareholders and recorded on ex-dividend date for all Funds with the exception of the WPG Core Bond Fund which declares daily and pays monthly dividends from net investment income. Income dividends and capital gain distributions are determined in accordance with U.S. federal income tax regulations which may differ from U.S. generally accepted accounting principles. Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications within the components of net assets. U.S. TAX STATUS -- No provision is made for U.S. income taxes as it is each Fund's intention to continue to qualify for and elect the tax treatment applicable to regulated investment companies under Subchapter M of the Internal Revenue Code of 1986, as amended, and make the requisite distributions to its shareholders which will be sufficient to relieve it from U.S. income and excise taxes. OTHER -- In the normal course of business, the Funds may enter into contracts that provide general indemnifications. The Funds' maximum exposure under these arrangements is dependent on claims that may be made against the Funds in the future, and, therefore, cannot be estimated; however, based on experience, the risk of material loss for such claims is considered remote. FOREIGN CURRENCY TRANSLATION -- The books and records of the portfolios are maintained in U.S. dollars as follows: (1) the foreign currency market value of investment securities and other assets and liabilities stated in foreign currencies are translated at the exchange rate prevailing at the end of the period; and (2) purchases, sales, income and expenses are translated at the rate of exchange prevailing on the respective dates of such transactions. The resulting exchange gains and losses are included in the Statement of Operations. FOREIGN SECURITIES -- There are certain risks resulting from investing in foreign securities in addition to the usual risks inherent in domestic investments. Such risks include future political, economic and currency exchange developments including investment restrictions and changes in foreign laws. FORWARD CURRENCY CONTRACTS -- The Funds may enter into forward currency contracts. Such contracts may be utilized in connection with planned purchases or sales of securities or to hedge the U.S. dollar value of portfolios denominated in foreign currencies. Fluctuations in the value of the forward contracts are recorded as unrealized gains or losses by the Funds. Risks may arise upon entering into these contracts from the potential inability of counterparties to meet the terms of their contracts and from unanticipated movements in the value of the foreign currency relative to the U.S. dollar. Upon entering into such a contract, a Fund is required to segregate assets with its custodian at least equal to the value of the Fund's assets committed to fulfilling the forward currency contract. At February 29, 2008, the Funds did not hold any forward currency contracts. FUTURES -- The WPG Funds and the SAM Funds may enter into futures contracts. A futures contract is an agreement between two parties to buy and sell a security at a set price on a future date. Upon entering into such a contract, a Fund is required to pledge to the broker an amount of cash and/or securities equal to the minimum "initial margin" requirements of the exchange on which such contract is traded. Pursuant to the contract, the Fund agrees to receive from, or pay to the broker, an amount of cash equal to the daily fluctuation in value of the contract. Such a receipt of payment is known as a "variation margin" and is recorded by each Fund as an unrealized gain or loss. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The Fund is also required to fully collateralize futures contracts purchased. The Funds only enter into futures contracts that are traded on exchanges or boards of trade that are licensed and regulated by the Commodity Futures Trading Commission. LINE OF CREDIT -- Each Robeco Boston Partners Fund may borrow an amount up to its prospectus-defined limitations, from a committed line of credit of 10% of the Fund's net assets through Custodial Trust Company available to the Funds in the Robeco Boston Partners Fund Family. Borrowings from the line of credit will bear interest at the Federal Funds Rate plus 125 basis points. The Funds had no outstanding borrowings at February 29, 2008 or at any time during the six months ended February 29, 2008. SEMI-ANNUAL REPORT 2008 | 61 ROBECO INVESTMENT FUNDS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (unaudited) (continued) - -------------------------------------------------------------------------------- MORTGAGE DOLLAR ROLLS (WPG CORE BOND FUND) -- The WPG Core Bond Fund may enter into mortgage dollar rolls in which the WPG Core Bond Fund sells mortgage securities for delivery in the current month and simultaneously contracts to repurchase similar, but not identical, securities at an agreed upon price on a fixed date. The WPG Core Bond Fund accounts for such dollar rolls as purchases and sales and records an unrealized gain or loss each day equal to the difference between the original value of the purchase and the current market value. The WPG Core Bond Fund must maintain liquid securities having a value not less than the repurchase price (including accrued interest) for such dollar rolls. Losses may arise due to changes in value of the securities or if the counterparty does not perform under the terms of the agreement. If the counterparty files for bankruptcy or becomes insolvent, the WPG Core Bond Fund's right to repurchase or sell securities may be limited. OPTIONS -- The BP All-Cap Value Fund, the WPG Funds and the SAM Funds may buy put and call options and write covered call and secured put options. Such options may relate to particular securities or domestic stock indices, and may or may not be listed on a domestic securities exchange or issued by the Options Clearing Corporation. The risk in writing a call option is that a Fund gives up the opportunity for profit if the market price of the security increases. The risk in writing a put option is that a Fund may incur a loss if the market price of the security decreases and the option is exercised. The risk in purchasing an option is that a Fund pays a premium whether or not the option is exercised. A Fund also has the additional risk of being unable to enter into a closing transaction at an acceptable price if a liquid secondary market does not exist. A Fund also may write over-the-counter options where completing the obligation depends upon the credit standing of the other party. Option contracts also involve the risk that they may result in loss due to unanticipated developments in market conditions or other causes. Options purchased are recorded as an asset and written options are recorded as liabilities to the extent of premiums paid or received. Gains or losses are realized when the option transaction expires or closes. When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option or the cost of a security for a purchased put or call option is adjusted by the amount of the premium received or paid. The BP All-Cap Value Fund had transactions in options written during the six month period ended February 29, 2008 as follows: NUMBER OF PREMIUMS CONTRACTS RECEIVED --------- -------- Options outstanding at August 31, 2007 314 $134,602 Options written 208 129,150 Options expired (37) (23,608) Options exercised (128) (50,686) ---- -------- Options outstanding at February 29, 2008 357 $189,458 ==== ======== SHORT SALES -- When the investment adviser believes that a security is overvalued, the BP Long/Short Equity Fund, the BP All-Cap Value Fund and the WPG 130/30 Large Cap Core Fund may sell the security short by borrowing the same security from a broker or other institution and selling the security. A Fund will incur a loss as a result of a short sale if the price of the borrowed security increases between the date of the short sale and the date on which the Fund buys and replaces such borrowed security. A Fund will realize a gain if there is a decline in price of the security between those dates where the decline in price exceeds the costs of borrowing the security and other transaction costs. There can be no assurance that a Fund will be able to close out a short position at any particular time or at an acceptable price. Although a Fund's gain is limited to the amount at which it sold a security short, its potential loss is unlimited. Until a Fund replaces a borrowed security, it will maintain at all times cash, U.S. Government securities, or other liquid securities in an amount which, when added to any amount deposited with a broker as collateral, will at least equal the current market value of the security sold short. Depending on arrangements made with brokers, a Fund may not receive any payments (including interest) on collateral deposited with them. At February 29, 2008, the BP Long/Short Equity Fund had securities sold short valued at $17,073,662 for which securities of $32,946,474 and cash deposits of $8,901,097 were pledged as collateral. At such date, the WPG 130/30 Large Cap Core Fund had securities sold short valued at $4,483,527 for which securities of $12,384,385 and cash deposits of $714,507 were pledged as collateral. In accordance with the Special Custody and Pledge Agreement with Goldman Sachs, the Fund may borrow from Goldman Sachs to the extent necessary to maintain required margin cash deposits on short positions. Interest on such borrowings is charged to the Fund based on the Fed Funds rate plus a spread. 62 | SEMI-ANNUAL REPORT 2008 ROBECO INVESTMENT FUNDS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (unaudited) (continued) - -------------------------------------------------------------------------------- The BP Long/Short Equity Fund utilized cash borrowings to meet required margin cash deposits as follows during the six months ended February 29, 2008: AVERAGE DAILY WEIGHTED AVERAGE DAYS UTILIZED BORROWINGS INTEREST RATE ----------------- ----------------- -------------------- 182 $14,871,268 4.88% At February 29, 2008, the Fund had borrowings of $9,423,104. Interest expense for the six months ended February 29, 2008 totaled $379,793. SWAP AGREEMENTS -- The WPG Core Bond Fund and the SAM Funds may enter into credit default swap agreements. A credit default swap agreement is where one party (the protection buyer) makes a stream of payments to another party (the protection seller) in exchange for the right to receive a specified payment in the event of a default by a third party, typically corporate issues or sovereign issues of an emerging country, on its obligation. The maximum amount of the payment may equal the notional, at par, of the underlying index or security as a result of a default (or "credit event"). In addition to bearing the risk that the credit event will occur, the WPG Core Bond Fund could be exposed to market risk due to unfavorable changes in interest rates or in the price of the underlying security or index, to the risk that the WPG Core Bond Fund may be unable to close out its position at the same time or at the same price as if it had purchased comparable publicly traded securities, or to the risk that the counterparty may default on its obligation to perform. The WPG Core Bond Fund may enter into swap agreements as either the protection buyer or seller. The swaps are valued daily at current market value and any change in value is included in net unrealized appreciation or depreciation on investments. Periodic payments received or paid by the WPG Core Bond Fund are recorded as realized gains or losses. Upfront payments made or received are amortized over the life of the agreement. Risk of loss may exceed amounts recognized on the statements of assets and liabilities. Swap agreements outstanding at period end, if any, are listed on the Portfolio of Investments. 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES Effective January 1, 2007, Boston Partners Asset Management, L.L.C. and Robeco USA, L.L.C. (formerly known as Weiss, Peck and Greer Investments) ("WPG"), the former entities that provided investment advisory services to the BP Funds and the WPG Funds, respectively, merged into and with Robeco USA, Inc., with Robeco USA, Inc. remaining as the surviving entity. In addition, effective January 1, 2007, Robeco USA, Inc., which had been doing business under the name Robeco Investment Management, officially changed its name to Robeco Investment Management, Inc. For its advisory services with respect to the BP Funds, Robeco Investment Management, Inc. ("Robeco") is entitled to receive 1.25% of the BP Small Cap Value Fund II's average daily net assets, 2.25% of the BP Long/Short Equity Fund's average daily net assets, 0.60% of the BP Large Cap Value Fund's average daily net assets, 0.80% of the BP Mid Cap Value Fund's average daily net assets and 0.80% of the BP All-Cap Value Fund's average daily net assets, each accrued daily and payable monthly. Until December 31, 2011, Robeco has contractually agreed to limit the BP Funds' total operating expenses to the extent that such expenses exceed the ratios in the table below. This limit is calculated daily based on each Fund's average daily net assets. This limitation is effected in waivers of advisory fees and reimbursements of expenses exceeding the advisory fee as necessary. The BP Funds will not pay Robeco at a later time for any amounts waived or any amounts assumed. INSTITUTIONAL INVESTOR ------------- -------- BP Small Cap Value Fund II 1.55%** 1.80%** BP Long/Short Equity Fund 2.50%* 2.75%* BP Large Cap Value Fund 0.75% 1.00% BP Mid Cap Value Fund 1.00% 1.25% BP All-Cap Value Fund 0.95% 1.20% * Excluding short sale dividend expense and interest expense. ** Effective March 5, 2008, Robeco has contractually agreed to reduce the total annual Fund operating expenses of the BP Small Cap Value Fund II to 1.30% for the Institutional Class and 1.55% for the Investor Class, respectively. SEMI-ANNUAL REPORT 2008 | 63 ROBECO INVESTMENT FUNDS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (unaudited) (continued) - -------------------------------------------------------------------------------- For its advisory services with respect to the WPG Funds, Robeco is entitled to receive advisory fees, accrued daily and paid monthly, as follows:
WPG Small Cap Value Fund 0.90% of net assets up to $300 million 0.80% of net assets $300 million to $500 million 0.75% of net assets in excess of $500 million WPG 130/30 Large Cap Core Fund (formerly WPG Large Cap Growth Fund) 0.75% of net assets WPG Core Bond Fund 0.45% of net assets
Until December 31, 2011, Robeco has contractually agreed to cap the WPG Funds' operating expenses. The WPG Small Cap Value Fund's expenses are capped at 1.70%, WPG 130/30 Large Cap Core Fund expenses are capped at 1.40% for the Institutional Class and 1.65% for the Investor Class, and WPG Core Bond Fund, Institutional Class, Investor Class, and Retirement Class expenses are capped at 0.43%, 0.68% and 0.53%, respectively. Sustainable Asset Management USA, Inc. ("SAM") provides investment advisory services to the SAM Funds. SAM is an affiliate of Robeco Investment Management, Inc., and a subsidiary of Robeco Groep. SAM is entitled to an advisory fee at the annual rate of 1.00% of each SAM Fund's average daily net assets, computed daily and payable monthly. Until December 31, 2011, SAM has contractually agreed to cap the SAM Funds' operating expenses. The SAM Funds' expenses are capped at 1.50% for the Institutional Class and 1.75% for the Investor Class. For the six months ended February 29, 2008, investment advisory fees, waivers and reimbursements of expenses were as follows:
GROSS NET EXPENSE ADVISORY FEES WAIVERS ADVISORY FEES REIMBURSEMENT ------------- ---------- ------------- ------------- BP Small Cap Value Fund II $1,215,659 $(130,058) $1,085,601 $ -- BP Long/Short Equity Fund 826,400 (117,318) 709,083 -- BP Large Cap Value Fund 194,574 (118,007) 76,568 -- BP Mid Cap Value Fund 193,495 (103,058) 90,438 -- BP All-Cap Value Fund 74,179 (74,179) -- (51,234) WPG Small Value Fund 225,657 -- 225,657 -- WPG 130/30 Large Cap Core Fund (formerly WPG Large Cap Growth Fund) 65,910 (65,910) -- (24,442) WPG Core Bond Fund 227,037 (227,037) -- (36,196) SAM Sustainable Climate Fund 16,037 (16,037) -- (106,936) SAM Sustainable Water Fund 16,455 (16,455) -- (110,602)
PFPC Inc. ("PFPC"), a wholly-owned subsidiary of PFPC Worldwide Inc., an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc., serves as administrator for the Funds. For providing administration and accounting services, PFPC is entitled to receive a monthly fee equal to an annual rate of 0.1125% of each Fund's first $200 million of average net assets and 0.095% of each Fund's average net assets in excess of $200 million, with a minimum monthly fee of $5,833 for each Fund. For the six-month period ended February 29, 2008, PFPC administration and accounting service fees were as follows: ADMINISTRATION AND ACCOUNTING SERVICE FEES -------------- BP Small Cap Value Fund II $137,566 BP Long/Short Equity Fund 62,910 BP Large Cap Value Fund 50,459 BP Mid Cap Value Fund 47,149 BP All-Cap Value Fund 46,279 WPG Small Value Fund 46,700 WPG 130/30 Large Cap Core Fund (formerly WPG Large Cap Growth Fund) 43,820 WPG Core Bond Fund 82,279 SAM Sustainable Climate Fund 40,747 SAM Sustainable Water Fund 43,740 64 | SEMI-ANNUAL REPORT 2008 ROBECO INVESTMENT FUNDS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (unaudited) (continued) - -------------------------------------------------------------------------------- Included in the administration and accounting service fees, shown above, are fees for providing regulatory administrative services to RBB. For providing these services, PFPC is entitled to receive compensation as agreed to by the Company and PFPC. This fee is allocated to each Fund in proportion to its net assets of the RBB funds. In addition, PFPC serves as the Funds' transfer and dividend disbursing agent. For providing transfer agency services, PFPC is entitled to receive a monthly fee, subject to a minimum monthly fee of $3,000 per class plus per account charges and out-of-pocket expenses. For providing custodial services to the BP Funds, PFPC Trust Company, a wholly-owned subsidiary of PFPC Worldwide Inc., an indirect wholly-owned subsidiary of the PNC Financial Services Group, Inc. is entitled to receive a monthly fee equal to an annual rate of 0.01% of the Funds' average daily gross assets or a minimum monthly fee of $1,000. PFPC Distributors, Inc., a wholly-owned subsidiary of PFPC Worldwide, Inc. and an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc. provides certain administrative services to the Funds. As compensation for such administrative services, PFPC Distributors, Inc. is entitled to receive an annual fee of $62,500 from the BP Funds, which is allocated to the BP Funds in proportion to their net assets. PFPC Distributors, Inc. is entitled to receive an annual fee of $5,000 per Fund from the WPG and SAM Funds. The Board of Directors of the Company has approved a Distribution Agreement and adopted a separate Plan of Distribution for the Investor Class (the "Plan") pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the Plan, PFPC Distributors, Inc. (the "Distributor") is entitled to receive from the Funds a distribution fee with respect to the Investor Class, which is accrued daily and paid monthly, of up to 0.25% on an annualized basis of the average daily net assets of the Class. Amounts paid to the Distributor under the Plan may be used by the Distributor to cover expenses that are related to (i) the sale of the Shares, (ii) ongoing servicing and/or maintenance of the accounts of shareholders, and (iii) sub-transfer agency services, subaccounting services or administrative services related to the sale of the Investor Class, all as set forth in the Funds' 12b-1 Plan. Ongoing servicing and/or maintenance of the accounts of shareholders may include updating and mailing prospectuses and shareholder reports, responding to inquiries regarding shareholder accounts and acting as agent or intermediary between shareholders and the Funds or their service providers. The Board of Directors of the Company has adopted a Shareholder Services Plan (the "Plan") for the WPG Core Bond Fund's Retirement Class authorizing the WPG Core Bond Fund to pay securities dealers, plan administrators or other service organizations ("Service Organizations") who agree to provide certain shareholder and administrative services to plans or plan participants holding Retirement Class of the WPG Core Bond Fund a service fee at an annual rate of up to 0.10% of the average daily net asset value of WPG Core Bond Fund's Retirement Class. At February 29, 2008, PFPC and its affiliates were due fees for their services of $69,336, $31,956, $20,334, $15,569, $15,464, $13,220, $7,589, $28,064, $19,658 and $20,258 from the BP Small Cap Value Fund II, BP Long/Short Equity Fund, BP Large Cap Value Fund, BP Mid Cap Value Fund, BP All-Cap Value Fund, WPG Small Cap Value Fund, WPG 130/30 Large Cap Core Fund, WPG Core Bond Fund, SAM Sustainable Climate Fund and SAM Sustainable Water Fund, respectively. 3. CUSTODIAN FEES (WPG SMALL CAP VALUE FUND, WPG 130/30 LARGE CAP CORE FUND AND WPG CORE BOND FUND) Mellon Trust of New England, N.A. ("Mellon") provides custodial services to the WPG Funds. Each WPG Fund has entered into an expense offset agreement with Mellon, wherein it receives a credit toward the reduction of custodian fees whenever there are uninvested cash balances. For the six-month period ended February 29, 2008, the Funds' custodian fees and related offset fees were as follows: CUSTODIAN FEE OFFSET FEES ------------- ----------- WPG Small Cap Value Fund $ 9,601 $(136) WPG 130/30 Large Cap Core Fund (formerly WPG Large Cap Growth Fund) 18,914 (957) WPG Core Bond Fund 14,342 -- SEMI-ANNUAL REPORT 2008 | 65 ROBECO INVESTMENT FUNDS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (unaudited) (continued) - -------------------------------------------------------------------------------- 4. INVESTMENT IN SECURITIES For the six-month period ended February 29, 2008, aggregate purchases and sales of investment securities (excluding short-term investments and U.S. government obligations) were as follows:
INVESTMENT SECURITIES ----------------------------- PURCHASES SALES ----------- ------------ BP Small Cap Value Fund II $51,914,644 $119,115,604 BP Long/Short Equity Fund 52,082,813 72,313,735 BP Large Cap Value Fund 28,956,000 25,017,400 BP Mid Cap Value Fund 19,686,486 15,911,461 BP All-Cap Value Fund 6,581,762 6,412,379 WPG Small Cap Value Fund 33,944,689 32,323,546 WPG 130/30 Large Cap Core Fund (formerly WPG Large Cap Growth Fund) 26,311,015 23,033,608 WPG Core Bond Fund 79,282,387 77,771,971 SAM Sustainable Climate Fund 4,101,570 296,640 SAM Sustainable Water Fund 4,648,605 509,192
Purchases and sales of long-term U.S. government obligations were:
PURCHASES SALES ----------- ------------ WPG Core Bond Fund $142,339,704 $164,700,607
5. CAPITAL SHARE TRANSACTIONS As of February 29, 2008, each class of each Fund has 100,000,000 shares of $0.001 par value common stock authorized except for the Institutional Class of the WPG Small Cap Value Fund, WPG 130/30 Large Cap Core Fund and WPG Core Bond Fund, each of which has 50,000,000 shares of $0.001 par value common stock authorized. Transactions in capital shares for the respective periods were as follows:
BP SMALL CAP VALUE FUND II -------------------------------------------------------------------- FOR THE FOR THE SIX-MONTH PERIOD ENDED YEAR ENDED FEBRUARY 29, 2008 AUGUST 31, 2007 --------------------------- ------------------------------- SHARES VALUE SHARES VALUE ---------- ------------ ---------- ------------- INSTITUTIONAL CLASS Sales ........................... 647,682 $ 10,439,647 1,034,990 $ 23,670,644 Repurchases ..................... (1,432,021) (23,602,343) (2,344,722) (53,907,304) Redemption fees* ................ -- 6,238 -- 27,871 Reinvestments ................... 2,128,887 26,185,309 702,290 15,127,331 ---------- ------------ ---------- ------------- Net Increase / (Decrease) .......... 1,344,548 $ 13,028,851 (607,442) $ (15,081,458) ========== ============ ========== ============= INVESTOR CLASS Sale of shares .................. 148,039 $ 2,190,743 536,231 $ 11,987,659 Shares repurchased .............. (3,906,659) (63,941,334) (5,057,946) (113,394,985) Redemption fees* ................ 8,351 -- 51,706 Reinvestments ................... 3,393,510 40,280,964 1,592,045 33,640,023 ---------- ------------ ---------- ------------- Net Decrease ....................... (365,110) $(21,461,276) (2,929,670) $ (67,715,597) ========== ============ ========== =============
66 | SEMI-ANNUAL REPORT 2008 ROBECO INVESTMENT FUNDS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (unaudited) (continued) - --------------------------------------------------------------------------------
BP LONG/SHORT EQUITY FUND -------------------------------------------------------------------- FOR THE FOR THE SIX-MONTH PERIOD ENDED YEAR ENDED FEBRUARY 29, 2008 AUGUST 31, 2007 --------------------------- ------------------------------- SHARES VALUE SHARES VALUE ---------- ------------ ---------- ------------- INSTITUTIONAL CLASS Sales ........................... 84,667 $ 1,266,010 246,703 $ 4,512,232 Repurchases ..................... (2,200,117) (33,751,396) (1,344,360) (23,478,775) Redemption fees* ................ -- 2,088 -- 1,069 Reinvestments ................... 481,369 7,230,172 516,071 9,062,212 ---------- ------------ ---------- ------------- Net Decrease ....................... (1,634,081) $(25,253,126) (581,586) $ (9,903,262) ========== ============ ========== ============= INVESTOR CLASS Sale of shares .................. 5,365 $ 80,041 36,741 $ 655,085 Shares repurchased .............. (307,530) (4,924,395) (406,674) (7,188,380) Redemption fees* ................ -- 369 -- 206 Reinvestments ................... 87,064 1,284,195 106,331 1,841,647 ---------- ------------ ---------- ------------- Net Decrease ....................... (215,101) $ (3,559,790) (263,602) $ (4,691,442) ========== ============ ========== ============= BP LARGE CAP VALUE FUND -------------------------------------------------------------------- FOR THE FOR THE SIX-MONTH PERIOD ENDED YEAR ENDED FEBRUARY 29, 2008 AUGUST 31, 2007 --------------------------- ------------------------------- SHARES VALUE SHARES VALUE ---------- ------------ ---------- ------------- INSTITUTIONAL CLASS Sales ........................... 871,442 $ 11,886,204 382,517 $ 5,830,726 Repurchases ..................... (338,459) (5,100,073) (286,558) (4,367,917) Reinvestments ................... 327,378 4,445,798 240,187 3,518,750 ---------- ------------ ---------- ------------- Net Increase ....................... 860,361 $ 11,231,929 336,146 $ 4,981,559 ========== ============ ========== ============= INVESTOR CLASS Sale of shares .................. 114,213 $ 1,716,492 312,719 $ 4,776,947 Shares repurchased .............. (276,365) (4,045,303) (364,458) (5,694,073) Reinvestments ................... 159,777 2,217,706 135,405 2,022,954 ---------- ------------ ---------- ------------- Net Increase / (Decrease) .......... (2,375) $ (111,105) 83,666 $ 1,105,828 ========== ============ ========== ============= BP MID CAP VALUE FUND -------------------------------------------------------------------- FOR THE FOR THE SIX-MONTH PERIOD ENDED YEAR ENDED FEBRUARY 29, 2008 AUGUST 31, 2007 --------------------------- ------------------------------- SHARES VALUE SHARES VALUE ---------- ------------ ---------- ------------- INSTITUTIONAL CLASS Sales ........................... 299,948 $ 3,080,184 598,181 $ 7,048,998 Repurchases ..................... (275,789) (2,829,187) (349,796) (4,287,051) Reinvestments ................... 444,123 4,312,435 761,214 8,129,767 ---------- ------------ ---------- ------------- Net Increase ....................... 468,282 $ 4,563,432 1,009,599 $ 10,891,714 ========== ============ ========== ============= INVESTOR CLASS Sale of shares .................. 647,269 $ 6,507,679 872,884 $ 9,927,310 Shares repurchased .............. (358,078) (3,673,741) (319,738) (3,651,207) Reinvestments ................... 178,623 1,686,202 175,316 1,828,547 ---------- ------------ ---------- ------------- Net Increase ....................... 467,814 $ 4,520,140 728,462 $ 8,104,650 ========== ============ ========== =============
SEMI-ANNUAL REPORT 2008 | 67 ROBECO INVESTMENT FUNDS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (unaudited) (continued) - --------------------------------------------------------------------------------
BP ALL-CAP VALUE FUND -------------------------------------------------------------------- FOR THE FOR THE SIX-MONTH PERIOD ENDED YEAR ENDED FEBRUARY 29, 2008 AUGUST 31, 2007 --------------------------- ------------------------------- SHARES VALUE SHARES VALUE ---------- ------------ ---------- ------------- INSTITUTIONAL CLASS Sales ........................... 176,200 $ 2,956,911 244,596 $ 3,879,814 Repurchases ..................... (117,695) (1,738,585) (81,903) (1,347,601) Reinvestments ................... 103,418 1,507,839 72,940 1,165,590 ---------- ------------ ---------- ------------- Net Increase ....................... 161,923 $ 2,726,165 235,633 $ 3,697,803 ========== ============ ========== ============= INVESTOR CLASS Sale of shares .................. 19,983 $ 283,892 78,840 $ 1,292,161 Shares repurchased .............. (53,575) (834,594) (92,246) (1,521,598) Reinvestments ................... 19,543 284,356 19,310 307,987 ---------- ------------ ---------- ------------- Net Increase / (Decrease) .......... (14,049) $ (266,346) 5,904 $ 78,550 ========== ============ ========== ============= WPG SMALL CAP VALUE FUND -------------------------------------------------------------------- FOR THE FOR THE SIX-MONTH PERIOD ENDED YEAR ENDED FEBRUARY 29, 2008 AUGUST 31, 2007 --------------------------- ------------------------------- SHARES VALUE SHARES VALUE ---------- ------------ ---------- ------------- INSTITUTIONAL CLASS Sales ........................... 219,008 $ 3,143,469 378,085 $ 6,633,831 Repurchases ..................... (218,790) (3,104,023) (432,509) (7,719,866) Reinvestments ................... 559,084 7,357,551 279,752 4,696,789 ---------- ------------ ---------- ------------- Net Increase ....................... 559,302 $ 7,396,997 225,328 $ 3,610,754 ========== ============ ========== ============= WPG 130/30 LARGE CAP CORE FUND (FORMERLY ROBECO WPG LARGE CAP GROWTH FUND) -------------------------------------------------------------------- FOR THE FOR THE SIX-MONTH PERIOD ENDED YEAR ENDED FEBRUARY 29, 2008 AUGUST 31, 2007 --------------------------- ------------------------------- SHARES VALUE SHARES VALUE ---------- ------------ ---------- ------------- INSTITUTIONAL CLASS Sales ........................... 10,306 $ 224,420 12,595 $ 293,696 Repurchases ..................... (49,590) (1,038,698) (134,442) (3,094,889) Reinvestments ................... 202,253 3,559,650 67,217 1,474,748 ---------- ------------ ---------- ------------- Net Increase / (Decrease) .......... 162,969 $ 2,745,372 (54,630) $ (1,326,445) ========== ============ ========== =============
68 | SEMI-ANNUAL REPORT 2008 ROBECO INVESTMENT FUNDS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (unaudited) (continued) - --------------------------------------------------------------------------------
WPG CORE BOND FUND -------------------------------------------------------------------- FOR THE FOR THE SIX-MONTH PERIOD ENDED YEAR ENDED FEBRUARY 29, 2008 AUGUST 31, 2007 --------------------------- ------------------------------- SHARES VALUE SHARES VALUE ---------- ------------ ---------- ------------- INSTITUTIONAL CLASS Sales ........................... 188,330 $ 2,017,924 868,315 $ 9,148,462 Repurchases ..................... (2,945,773) (31,515,061) (8,066,059) (84,762,113) Redemption fees* ................ -- 8,648 -- 140 Reinvestments ................... 194,145 2,082,250 654,018 6,882,709 ---------- ------------ ---------- ------------- Net Decrease ....................... (2,563,298) $(27,406,239) (6,543,726) $ (68,730,802) ========== ============ ========== ============= INVESTOR CLASS Sale of shares .................. 2,357 $ 25,782 -- $ -- Shares repurchased .............. -- -- -- -- Redemption fees* ................ -- 2 -- -- Reinvestments ................... 55 598 89 933 ---------- ------------ ---------- ------------- Net Increase ....................... 2,412 $ 26,382 89 $ 933 ========== ============ ========== ============= RETIREMENT CLASS Sale of shares .................. -- $ -- -- $ -- Shares repurchased .............. -- -- -- -- Redemption fees* ................ -- 2 -- -- Reinvestments ................... 47 501 91 963 ---------- ------------ ---------- ------------- Net Increase ....................... 47 $ 503 91 $ 963 ========== ============ ========== =============
SAM SUSTAINABLE CLIMATE FUND ---------------------------- FOR THE PERIOD OCTOBER 1, 2007** TO FEBRUARY 29, 2008 --------------------------- SHARES VALUE ---------- ------------ INSTITUTIONAL CLASS Sales ........................... 404,724 $ 4,040,919 Repurchases ..................... -- -- Redemption fees* ................ -- 197 Reinvestments ................... -- -- ---------- ------------ Net Increase ....................... 404,724 $ 4,041,116 ========== ============ INVESTOR CLASS Sale of shares .................. 9,805 $ 96,394 Shares repurchased .............. (2,268) (22,320) Redemption fees* ................ -- 4 Reinvestments ................... -- -- ---------- ------------ Net Increase ....................... 7,537 $ 74,078 ========== ============ SEMI-ANNUAL REPORT 2008 | 69 ROBECO INVESTMENT FUNDS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (unaudited) (continued) - -------------------------------------------------------------------------------- SAM SUSTAINABLE WATER FUND --------------------------- FOR THE PERIOD OCTOBER 1, 2007** TO FEBRUARY 29, 2008 --------------------------- SHARES VALUE ---------- ------------ INSTITUTIONAL CLASS Sales ........................... 416,933 $ 4,161,095 Repurchases ..................... -- -- Redemption fees* ................ -- -- Reinvestments ................... -- -- ---------- ------------ Net Increase ....................... 416,933 $ 4,161,095 ========== ============ INVESTOR CLASS Sale of shares .................. 23,924 $ 225,063 Shares repurchased .............. -- -- Redemption fees* ................ -- -- Reinvestments ................... -- -- ---------- ------------ Net Increase ....................... 23,924 $ 225,063 ========== ============ - -------------------------- * There is a 1.00% redemption fee on shares redeemed which have been held 365 days or less on the BP Small Cap Value Fund II. There is a 2.00% redemption fee on shares redeemed which have been held 365 days or less on the BP Long/Short Equity Fund. The redemption fees are retained by the Funds for the benefit of the remaining shareholders and recorded as paid-in capital. The WPG Funds and SAM Funds have a 2.00% and 1.00% redemption fee, respectively, on shares redeemed within 60 days of purchase. **Commencement of operations. As of February 29, 2008, the following shareholders held 10% or more of the outstanding shares of the Funds. These shareholders may be omnibus accounts which are comprised of many underlying shareholders. BP Small Cap Value Fund II (2 shareholders) 39% BP Long/Short Equity Fund (1 shareholder) 32% BP Large Cap Value Fund (2 shareholders) 44% BP Mid Cap Value Fund (1 shareholder) 63% BP All-Cap Value Fund (3 shareholders) 63% WPG 130/30 Large Cap Core Fund (1 shareholder) (formerly WPG Large Cap Growth Fund) 13% WPG Core Bond Fund (3 shareholders) 58% SAM Sustainable Climate Fund (1 shareholder) 92% SAM Sustainable Water Fund (1 shareholder) 88% 6. SECURITIES LENDING (WPG SMALL CAP VALUE FUND AND WPG CORE BOND FUND) At February 29, 2008, the WPG Small Cap Value Fund loaned securities valued at $202,330,490. For collateral, the WPG Small Cap Value Fund received a letter of credit from Banco Santander Bank in an amount equal to $2,500,000. For the six-month period ended February 29, 2008, the WPG Small Cap Value Fund earned $7,126 and the WPG Core Bond Fund earned $632 in securities lending fees, net of custodian expenses. Securities may be loaned to financial institutions, such as broker-dealers, and are required to be secured continuously by collateral in cash, cash equivalents or U.S. government securities maintained on a current basis at an amount at least equal to the market value of the securities loaned. 70 | SEMI-ANNUAL REPORT 2008 ROBECO INVESTMENT FUNDS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (unaudited) (continued) - -------------------------------------------------------------------------------- 7. FEDERAL INCOME TAX INFORMATION At February 29, 2008, federal tax cost and aggregate gross unrealized appreciation and depreciation of securities held by each Fund were as follows:
NET UNREALIZED FEDERAL TAX UNREALIZED UNREALIZED APPRECIATION FUND COST APPRECIATION DEPRECIATION (DEPRECIATION) - ------ ------------- ------------ ------------ -------------- BP Small Cap Value Fund II $154,264,708 $15,307,392 $(24,981,898) $(9,673,966) BP Long/Short Equity Fund 62,357,951 2,718,420 (7,989,836) (5,271,416) BP Large Cap Value Fund 70,275,628 5,497,099 (4,843,758) 653,341 BP Mid Cap Value Fund 49,646,772 2,792,427 (4,015,730) (1,223,303) BP All-Cap Value Fund 17,159,333 1,414,387 (1,569,092) (154,705) WPG Small Cap Value Fund 50,284,192 2,231,101 (7,112,976) (4,881,875) WPG 130/30 Large Cap Core Fund (formerly WPG Large Cap Growth Fund) 20,907,527 768,740 (2,075,032) (1,306,292) WPG Core Bond Fund 86,349,666 2,186,179 (139,148) (2,047,031) SAM Sustainable Climate Fund 4,074,908 128,817 (623,662) (494,845) SAM Sustainable Water Fund 4,439,199 93,376 (442,757) (349,381)
As of August 31, 2007, the components of distributable earnings on a tax basis were as follows: UNDISTRIBUTED UNDISTRIBUTED ORDINARY LONG-TERM FUND INCOME GAINS - ------ ------------ ------------- BP Small Cap Value Fund II $1,124,853 $58,020,990 BP Long/Short Equity Fund 188,800 6,420,944 BP Large Cap Value Fund 1,229,639 4,895,910 BP Mid Cap Value Fund 2,684,455 2,496,832 BP All-Cap Value Fund 577,185 912,109 WPG Small Cap Value Fund 4,029,658 2,700,115 WPG 130/30 Large Cap Core Fund (formerly WPG Large Cap Growth Fund) 501,423 1,067,784 WPG Core Bond Fund 35,591 -- On August 31, 2007, the WPG Core Bond Fund had capital loss carryforwards of $2,305,123 available to offset future capital gains which expire in 2014 ($481,592) and in 2015 ($1,823,531). $2,731,098 of prior year capital loss carryovers expired on August 31, 2007. Under federal tax law, foreign currency and capital losses realized after October 31 may be deferred and treated as having arisen on the first day of the following fiscal year. For the year ended August 31, 2007, the WPG Core Bond Fund deferred post-October capital losses of $1,261,196. The differences between the book and tax basis components of distributable earnings relate principally to the timing of recognition of income and gains for federal income tax purposes. Distributions from net investment income, foreign currency gains, and short-term capital gains are treated as ordinary income for federal tax purposes. 8. NEW ACCOUNTING PRONOUNCEMENTS Effective February 29, 2008, the Funds adopted FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes" (FIN 48). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Funds' tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax positions not deemed to meet the "more-likely-than-not" threshold would be recorded as a tax benefit or expense in the current year. The adoption of FIN 48 did not result in the recording of any tax benefits or expenses. SEMI-ANNUAL REPORT 2008 | 71 ROBECO INVESTMENT FUNDS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (unaudited) (continued) - -------------------------------------------------------------------------------- In September 2006, FASB issued Statement of Financial Accounting Standards ("SFAS") 157, Fair Value Measurements, which clarifies the definition of fair valuation and requires companies to expand their disclosure about the use of fair valuation to measure assets and liabilities in interim and annual periods subsequent to initial recognition. Adoption of SFAS 157 requires the use of the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. At this time, management is in the process of reviewing the impact, if any, of SFAS 157 on the Funds' financial statements. 9. SUBSEQUENT EVENT Effective March 5, 2008, Robeco lowered the advisory fee for the BP Small Cap Value Fund II to 1.00% of the Fund's average daily net assets. On March 26, 2008, the Board of Directors of the Company considered and approved a plan of liquidation and termination for the WPG Core Bond Fund. The Board of Directors authorized shareholders of the WPG Core Bond Fund to receive liquidating redemptions representing their interests in the WPG Core Bond Fund at net asset value on or about May 30, 2008. The Fund is closed and no longer offers shares. 72 | SEMI-ANNUAL REPORT 2008 ROBECO INVESTMENT FUNDS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- OTHER INFORMATION (unaudited) - -------------------------------------------------------------------------------- PROXY VOTING Policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities as well as information regarding how the Funds voted proxies relating to portfolio securities for the most recent 12-month period ended June 30 are available without charge, upon request, by calling (877) 264-5346 and on the Securities and Exchange Commission's ("SEC") website at http://www.sec.gov. QUARTERLY PORTFOLIO SCHEDULE The Company files a complete schedule of portfolio holdings with the SEC for the first and third fiscal quarters of each fiscal year (quarters ended November 30 and May 31) on Form N-Q. The Company's Form N-Q will be available on the SEC website at http://www.sec.gov and may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. Information on the operation of the SEC Public Reference Room may be obtained by calling (202) 551-8090. APPROVAL OF INVESTMENT ADVISORY AGREEMENT The Company's Board of Directors (the "Board"), including all of the Directors who are not "interested persons" of the Company, as that term is defined in the Investment Company Act (the "Independent Directors"), considered the approval of the investment advisory agreements between SAM and the Company (the "Advisory Agreements") on behalf of the SAM Funds at a meeting of the Board held on September 6, 2007 (the "Meeting"). At the Meeting, the Board approved the Advisory Agreements for an initial term ending on August 16, 2009. The Board's decision to approve the Advisory Agreements reflects the exercise of its business judgment to engage SAM to provide advisory services to the Fund pursuant to the terms of the Advisory Agreements and based upon the information provided to the Directors in connection with the Meeting and a special meeting of the Board held on July 3, 2007 (the "Special Meeting"). In approving the Advisory Agreements, the Board considered information provided by the Adviser with the assistance and advice of counsel to the Independent Directors and the Company. In considering the approval of the advisory agreements with SAM, the Directors took into account all materials provided prior to and during the Meeting and the Special Meeting, the presentations made during the Meeting and the Special Meeting, and the discussions during the Meeting and the Special Meeting. Among other things, the Directors considered (i) the nature, extent, and quality of SAM's services to be provided to the SAM Funds; (ii) descriptions of the experience and qualifications of SAM's personnel providing those services; (iii) SAM's investment philosophies and processes; (iv) SAM's soft dollar commission and trade allocation policies, including information on the types of research and services obtained in connection with soft dollar commissions; (v) SAM's proposed advisory fee arrangements with the Company and current fee arrangements with other similarly managed clients; (vi) SAM's compliance procedures; (vii) SAM's financial information and insurance coverage; (viii) the extent to which economies of scale are relevant to the SAM Funds; (ix) a report prepared by the Company's administrator comparing the SAM Funds' proposed advisory fees and expenses to those of similar funds; and (x) a report disclosing composite performance for all separate accounts and commingled accounts managed by the SAM Funds' portfolio managers on behalf of SAM's affiliate, SAM AG, in a substantially similar manner as the SAM Funds. No one factor was determinative in the Board's consideration of the Advisory Agreements. The Directors then met in executive session with counsel to discuss and consider information presented in connection with the approval of the Advisory Agreements as well as the Directors' responsibilities and duties in approving the Advisory Agreements. The Directors noted that because the SAM Funds had not commenced investment operations no comparative fee data has been provided. The Directors reviewed the proposed advisory fees and total expense ratio for the Funds. The Directors noted that SAM had agreed to lower the contractually waived portion of its fees and reimburse expenses so that each SAM Fund's total expense ratio will not exceed 1.75% for the Investor classes and 1.50% for the Institutional classes through December 31, 2008, and that SAM's advisory fee will be 1.00% of the each Fund's net assets. The Directors then concluded that the nature, extent and quality of services to be provided by SAM in advising the SAM Funds were satisfactory; and the benefits expected to be derived by SAM from managing the SAM Funds, including its use of soft dollars and its method for selecting brokers, seemed reasonable. The Directors recognized that because the SAM Funds had not yet commenced investment operations, the effect of any economies of scale due to asset growth could not currently be evaluated. Based on all of the information presented to the Board and its consideration of relevant factors, the Board concluded that the advisory fee structure was reasonable for the SAM Funds and determined that the Advisory Agreements, on behalf of the SAM Funds, be approved for an initial period ending August 16, 2009. SEMI-ANNUAL REPORT 2008 | 73 INVESTMENT ADVISERS --------------------------------- Robeco Investment Management Inc. 909 Third Avenue New York, NY 10022 or Sustainable Asset Management USA, Inc. 909 Third Avenue, 32nd Floor New York, NY 10022 and Seefeldstrasse 215 CH-8008 Zurich, Switzerland ADMINISTRATOR ------------------ PFPC Inc. 301 Bellevue Parkway Wilmington, DE 19809 TRANSFER AGENT ----------------------- PFPC Inc. 101 Sabin Street Pawtucket, RI 02860 PRINCIPAL UNDERWRITER -------------------------- PFPC Distributors, Inc. 760 Moore Road King of Prussia, PA 19406 CUSTODIANS ----------------------- PFPC Trust Company 8800 Tinicum Blvd. Suite 200 Philadelphia, PA 19153 Mellon Trust of New England N.A. One Boston Place Boston, MA 02108 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM -------------------------------------- Ernst & Young LLP Two Commerce Square 2001 Market Street, Suite 4000 Philadelphia, PA 19103 COUNSEL ---------------------------- Drinker Biddle & Reath LLP One Logan Square 18th and Cherry Streets Philadelphia, PA 19103-6996 ======================================== THE SCHNEIDER FUNDS ======================================== OF THE RBB FUND, INC. SCHNEIDER VALUE FUND SCHNEIDER SMALL CAP VALUE FUND ----------------------- SEMI-ANNUAL REPORT FEBRUARY 29, 2008 (UNAUDITED) ----------------------- [LOGO OMITTED] ---------------------------------------- SCHNEIDER CAPITAL MANAGEMENT This report is submitted for the general information of the shareholders of the Funds. It is not authorized for distribution unless preceded or accompanied by a current prospectus for the Funds. THE SCHNEIDER FUNDS SEMI-ANNUAL INVESTMENT ADVISER'S REPORT FEBRUARY 29, 2008 (UNAUDITED) Dear Fellow Shareholder: We are pleased to provide you with the semi-annual report for the Schneider Funds for the six months ended February 29, 2008. U.S. equities were under pressure during the period covered by this report. Worries had been building since mid-2007 that the housing downturn and instability in the financial system could more broadly impact the economy and corporate earnings. Data that reinforced these fears seemed to control the market's direction. The Russell 3000(R) Index, which reflects the broad U.S. stock market, posted a -8.8% decline. Recent weak data reinforce our view of near recessionary conditions as severe credit pressures and a deepening housing slump apply pressure on consumer expenditures and business investment. The problem is that American households accelerated their debt accumulated since 1995. They are now more vulnerable as they contend with declines in both housing and financial wealth combined with a weakening economy that is eroding job and income growth. It could take some time for consumers to completely repair their balance sheets, which means higher savings and a possibly lengthy period of relatively slower growth in consumer spending. Although the current picture looks gloomy, we believe there is some potentially good news: [ ] The currently painful transition of deleveraging the financial and household sectors could build a foundation that eventually leads to a better balanced economy. [ ] Aggressive and creative policy moves by the Fed, Treasury and other agencies are laying the groundwork that should help stabilize housing and support an eventual upturn. [ ] The housing affordability index hit a three-year high in January. Once the excessive housing inventory clears, more hesitant buyers should eventually return from the sidelines. [ ] Shrinking aggregate demand resulting from the economic slowdown, bursting housing bubble and credit crunch should eventually dampen near-term inflation pressures. [ ] Most importantly, equity and fixed income markets may have already discounted a U.S. recession and the housing debacle, setting the stage for an eventual bottom. The pessimism embedded in the equity market correction has clearly provided a bargain-hunter like us with numerous new investment opportunities to consider, and beginning in mid-January we put the Funds' higher-than-normal cash reserves to work. With lower prices and higher return potential in select areas, we believe it was an opportune time for real value investors with longer time horizons to move in. We appreciate your support and continued confidence in our people and our investment process that has delivered successful results over time through varied market conditions. /s/ Arnold C. Schneider III Arnold C. Schneider III, CFA Portfolio Manager Schneider Capital Management 1 THE SCHNEIDER FUNDS SEMI-ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED) FEBRUARY 29, 2008 (UNAUDITED) SCHNEIDER VALUE FUND -- PORTFOLIO REVIEW The Value Fund produced favorable results relative to the benchmark during the six months ended February 29, 2008, returning (6.19%) versus (10.38%) for the Russell 1000(R) Value Index. We are particularly pleased that the Fund's longer-term performance also exceeded the benchmark (see table on page 4). Coal mining stocks, which had a 14% average weighting in the Fund during the period, generated sizeable returns. We believe these holdings still offer more upside despite their strong run. Arch Coal (ACI) is the second-largest coal miner in the U.S., producing low-sulfur coal from its mines in the western U.S. and the Central Appalachian region. Coal prices have rebounded globally, and Arch could benefit greatly from tighter conditions since much of its 2008 production and most of its 2009 output is not under contract and should be sold at hoped-for higher prices. Global demand is running above 5% annually as coal is significantly cheaper than natural gas and oil. Fannie Mae and Freddie Mac suffered a significant decline during the period. In response to the severe housing downturn, we believe that many investors are in panic mode regarding potential credit and funding risk at these government-sponsored enterprises (GSEs). The substantial drop in their share prices seems excessive. We believe that broad credit concerns related to the housing decline should not outweigh the facts that the GSEs have the potential to be big beneficiaries from stresses in the mortgage market. They have little exposure to loans with low credit quality and adhere to conservative underwriting standards. We believe wider spreads and more attractive pricing in the mortgage market will boost future margins, and they will continue to gain market share in their traditional guarantee business. Thus far in 2008, financial stocks continued to take their lead from trading patterns in the disrupted credit markets, and the prices of many financials appear to have been detached from any traditional valuation parameters. Many of the companies with significant amounts of even high-quality mortgage exposure are trading at low price-to-earnings ratios on currently depressed earnings. Our sense is that the funding crisis for higher-quality assets might have turned the corner, although risks remain given the poor outlook for the economic cycle and lingering financial system instability. Given the compelling spreads relative to historical norms for higher-quality assets, we expect to see demand improve somewhat and mortgage markets to eventually calm down. Late in the period we moved to an overweight in financials relative to the benchmark.
- --------------------------------------------------------------------------------------------------------------------------- TEN LARGEST HOLDINGS - --------------------------------------------------------------------------------------------------------------------------- Annaly Capital Management, Inc. 8.7% | Reliant Energy, Inc. 4.5% --------------------------------------------------- | --------------------------------------------------- Arch Coal, Inc. 7.2% | National City Corp. 4.3% --------------------------------------------------- | --------------------------------------------------- CONSOL Energy, Inc. 5.9% | AU Optronics Corp. - ADR 3.3% --------------------------------------------------- | --------------------------------------------------- Navistar International Corp. 5.3% | iShares Russell 1000(R) Value Index Fund 3.0% --------------------------------------------------- | --------------------------------------------------- Freddie Mac 4.5% | Dell, Inc. 3.0% - ---------------------------------------------------------------------------------------------------------------------------
As a percentage of net assets on February 29, 2008 2 THE SCHNEIDER FUNDS SEMI-ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED) FEBRUARY 29, 2008 (UNAUDITED) SCHNEIDER SMALL CAP VALUE FUND -- PORTFOLIO REVIEW The Small Cap Value Fund delivered favorable results relative to the benchmark for the six months ended February 29, 2008, returning (7.59%) versus (14.20%) for the Russell 2000(R) Value Index. Since inception, the Fund has produced strong long-term results compared to the benchmark index (see table on page 5). Anworth Mortgage Asset and Massey Energy were primary drivers of the relative outperformance during the period. Anworth Mortgage Asset staged a strong rebound. Anworth is a mortgage REIT that invests in agency mortgage-backed securities. The company aims to generate income by taking advantage of the yield spread between agency securities and its short-term funding costs. It has no exposure to subprime mortgages. A steeper yield curve and wider mortgage spreads are affording Anworth the opportunity to make very profitable new investments for their portfolio. Massey Energy is the largest coal producer and reserve holder in the low sulfur Central Appalachian region. The company, which is a low-cost producer, appears well positioned to generate strong earnings and cash flow during a global recovery in coal markets. The U.S. coal market seems to have turned the corner after high inventory levels sparked a precipitous drop in coal prices in 2006. Domestic inventories are on the decline and non-U.S. demand for coal is growing rapidly. Coal prices are strengthening globally, and Massey could benefit from tighter conditions as it expands production and contracts its future output at hoped-for higher prices. The stock has had quite a run-up since mid-2007, but we believe it is still undervalued. We measurably increased our exposure to financials during the period as the sector weakened. Some regional and community banks look attractive to us based on their cheap valuations and the expectation that they should be able to eke out a modest profit over the next couple of years, preserving their regulatory capital and leaving book value largely intact. The investment case surrounding industrial commodities looks poised to be tested and we continue to generally avoid the affected stocks. Five years of rising commodity prices and margin expansion have pushed earnings for many cyclical stocks significantly above trend. Stocks that look expensive to us on earnings that are near the peak pose a significant risk of a severe valuation and earnings correction. History suggests that industrial commodity prices can weaken considerably during recessions, even when they are on an upward trend. We feel the risk profile of commodity prices is further elevated by the speculative money (much of it borrowed) that has piled in as the rally took on bubble-like characteristics.
- --------------------------------------------------------------------------------------------------------------------------- TEN LARGEST HOLDINGS - --------------------------------------------------------------------------------------------------------------------------- Anworth Mortgage Asset Corp. 8.5% | AAR Corp. 3.0% --------------------------------------------------- | --------------------------------------------------- Take-Two Interactive Software, Inc. 6.0% | NVR, Inc. 2.6% --------------------------------------------------- | --------------------------------------------------- Massey Energy Co. 5.3% | Navistar International Corp. 2.5% --------------------------------------------------- | --------------------------------------------------- Huntington Bancshares, Inc. 4.7% | Hudson Highland Group, Inc. 2.5% --------------------------------------------------- | --------------------------------------------------- First BanCorp. 3.7% | Golden Star Resources, Ltd. 2.3% - ---------------------------------------------------------------------------------------------------------------------------
As a percentage of net assets on February 29, 2008 3 THE SCHNEIDER FUNDS SCHNEIDER VALUE FUND SEMI-ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED) FEBRUARY 29, 2008 (UNAUDITED) Comparison of Change in Value of $10,000 Investment in Schneider Value Fund vs. Russell 1000(R) Value Index [GRAPH OMITTED] EDGAR REPRESENTATION OF DATA USED IN PRINTED GRAPHIC AS FOLLOWS: Schneider Value Fund Russell 1000(R) Value Index -------------------- --------------------------- 9/30/02 $10,000 $10,000 10/31/02 10,660 10,620 11/30/02 11,950 11,289 12/31/02 11,237 10,799 1/31/03 10,636 10,537 2/28/03 10,566 10,256 3/31/03 10,796 10,274 4/30/03 11,638 11,178 5/31/03 13,042 11,899 6/30/03 13,252 12,048 7/31/03 13,984 12,228 8/31/03 14,846 12,418 9/30/03 14,495 12,297 10/31/03 15,628 13,049 11/30/03 16,430 13,226 12/31/03 17,738 14,042 1/31/04 18,397 14,289 2/29/04 18,929 14,595 3/31/04 18,950 14,467 4/30/04 18,438 14,114 5/31/04 19,044 14,258 6/30/04 19,775 14,594 7/31/04 19,023 14,389 8/31/04 19,034 14,594 9/30/04 19,431 14,820 10/31/04 19,713 15,066 11/30/04 21,290 15,828 12/31/04 22,123 16,358 1/31/05 21,305 16,067 2/28/05 21,769 16,599 3/31/05 21,647 16,372 4/30/05 20,354 16,079 5/31/05 21,481 16,466 6/30/05 22,067 16,646 7/31/05 22,897 17,127 8/31/05 22,720 17,053 9/30/05 22,742 17,292 10/31/05 21,913 16,852 11/30/05 22,576 17,404 12/31/05 23,102 17,510 1/31/06 23,495 18,189 2/28/06 23,900 18,300 3/31/06 24,530 18,547 4/30/06 25,542 19,018 5/31/06 24,971 18,537 6/30/06 25,054 18,656 7/31/06 24,435 19,109 8/31/06 25,185 19,428 9/30/06 26,006 19,815 10/31/06 26,887 20,463 11/30/06 28,160 20,929 12/31/06 28,494 21,400 1/31/07 29,094 21,674 2/28/07 28,969 21,336 3/31/07 29,332 21,667 4/30/07 31,070 22,468 5/31/07 32,997 23,279 6/30/07 32,346 22,735 7/31/07 30,157 21,684 8/31/07 28,932 21,927 9/30/07 30,057 22,679 10/31/07 30,407 22,682 11/30/07 27,743 21,572 12/31/07 28,399 21,363 1/31/08 27,591 20,507 2/28/08 27,141 19,647 The chart assumes a hypothetical $10,000 initial investment in the Fund made on September 30, 2002 (inception) and reflects Fund expenses. Investors should note that the Fund is a professionally managed mutual fund while the Russell 1000(R) Value Index is unmanaged, does not incur sales charges and/or expenses and is not available for investment.
- ------------------------------------------------------------------------------------------------------ Total Returns For the Period Ended February 29, 2008 AVERAGE ANNUAL CUMULATIVE -------------------- -------------------- SIX ONE FIVE SINCE FIVE SINCE MONTHS YEAR YEARS INCEPTION* YEARS INCEPTION* -------- ------- --------- ---------- --------- ---------- SCHNEIDER VALUE (6.19)% (6.31)% 20.77% 20.25% 156.89% 171.41% RUSSELL 1000(R) VALUE INDEX (10.38)% (7.91)% 13.89% 13.56% 91.63% 98.78% * Inception date: 9/30/02 - ------------------------------------------------------------------------------------------------------
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER. SCHNEIDER CAPITAL MANAGEMENT CONTRACTUALLY AGREED TO WAIVE A PORTION OF ITS ADVISORY FEE AND REIMBURSE A PORTION OF THE FUND'S OPERATING EXPENSES, AS NECESSARY, TO MAINTAIN THE EXPENSE LIMITATION, AS SET FORTH IN THE NOTES TO THE FINANCIAL STATEMENTS. TOTAL RETURNS SHOWN INCLUDE FEE WAIVERS AND EXPENSE REIMBURSEMENTS, IF ANY; TOTAL RETURNS WOULD HAVE BEEN LOWER HAD THERE BEEN NO WAIVER OR REIMBURSEMENT OF FEES AND EXPENSES IN EXCESS OF EXPENSE LIMITATIONS. RETURNS SHOWN INCLUDE THE REINVESTMENT OF ALL DIVIDENDS AND OTHER DISTRIBUTIONS AND DO NOT REFLECT TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR ON THE REDEMPTION OF FUND SHARES. THE FUND HAS EXPERIENCED RELATIVELY HIGH PERFORMANCE WHICH MAY NOT BE REPEATED. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH-END, PLEASE CALL 1-888-520-3277. THE FUND'S GROSS ANNUAL OPERATING EXPENSES, AS STATED IN THE CURRENT PROSPECTUS, ARE 1.12%. SHARES OF THE FUND NOT PURCHASED THROUGH REINVESTED DIVIDENDS OR CAPITAL GAINS AND HELD LESS THAN 90 DAYS ARE SUBJECT TO A 1.00% REDEMPTION FEE. The Fund's aggregate total return since inception is based on an increase in net asset value from $10.00 per share on September 30, 2002 (inception) to $20.49 per share on February 29, 2008, adjusted for dividends and distributions totaling $5.74 per share paid from net investment income and realized gains. Portfolio composition is subject to change. 4 THE SCHNEIDER FUNDS SCHNEIDER SMALL CAP VALUE FUND SEMI-ANNUAL INVESTMENT ADVISER'S REPORT (CONCLUDED) FEBRUARY 29, 2008 (UNAUDITED) Comparison of Change in Value of $10,000 Investment in Schneider Small Cap Value Fund vs. Russell 2000(R) Value Index [GRAPH OMITTED] EDGAR REPRESENTATION OF DATA USED IN PRINTED GRAPHIC AS FOLLOWS: Schneider Small Cap Value Fund Russell 2000(R) Value Index ------------------------------ --------------------------- 09/02/98 $10,000 $10,000 9/30/98 10,000 10,363 10/31/98 11,930 10,670 11/30/98 12,410 10,959 12/31/98 12,471 11,303 1/31/99 13,786 11,046 2/28/99 12,531 10,292 3/31/99 13,007 10,207 4/30/99 15,222 11,139 5/31/99 16,233 11,481 6/30/99 18,044 11,897 7/31/99 18,731 11,615 8/31/99 18,246 11,190 9/30/99 17,518 10,966 10/31/99 16,759 10,747 11/30/99 17,457 10,803 12/31/99 18,341 11,134 1/31/00 17,833 10,843 2/29/00 18,069 11,506 3/31/00 19,392 11,560 4/30/00 19,392 11,628 5/31/00 19,770 11,451 6/30/00 19,841 11,786 7/31/00 19,734 12,178 8/31/00 20,750 12,723 9/30/00 20,845 12,651 10/31/00 20,490 12,606 11/30/00 19,416 12,349 12/31/00 21,495 13,676 1/31/01 24,178 14,053 2/28/01 23,127 14,034 3/31/01 22,034 13,809 4/30/01 23,326 14,448 5/31/01 24,547 14,820 6/30/01 25,101 15,416 7/31/01 24,874 15,070 8/31/01 24,888 15,018 9/30/01 20,856 13,360 10/31/01 21,864 13,709 11/30/01 23,951 14,694 12/31/01 25,657 15,594 1/31/02 25,477 15,801 2/28/02 25,432 15,897 3/31/02 28,415 17,088 4/30/02 29,389 17,689 5/31/02 29,089 17,104 6/30/02 27,785 16,725 7/31/02 22,825 14,240 8/31/02 22,210 14,177 9/30/02 19,767 13,164 10/31/02 19,887 13,362 11/30/02 23,484 14,429 12/31/02 21,848 13,812 1/31/03 20,912 13,423 2/28/03 20,293 12,972 3/31/03 20,127 13,111 4/30/03 23,011 14,356 5/31/03 26,665 15,822 6/30/03 27,314 16,090 7/31/03 30,469 16,892 8/31/03 34,003 17,534 9/30/03 33,202 17,333 10/31/03 38,366 18,746 11/30/03 42,292 19,466 12/31/03 45,017 20,170 1/31/04 46,405 20,867 2/29/04 47,518 21,271 3/31/04 47,743 21,565 4/30/04 46,114 20,450 5/31/04 46,388 20,697 6/30/04 48,985 21,748 7/31/04 47,340 20,748 8/31/04 46,921 20,952 9/30/04 48,469 21,781 10/31/04 48,582 22,119 11/30/04 54,082 24,081 12/31/04 57,277 24,657 1/31/05 54,010 23,702 2/28/05 56,089 24,174 3/31/05 54,851 23,676 4/30/05 50,420 22,454 5/31/05 54,010 23,824 6/30/05 56,980 24,877 7/31/05 62,104 26,293 8/31/05 61,732 25,688 9/30/05 62,128 25,644 10/31/05 60,223 25,001 11/30/05 62,079 26,016 12/31/05 62,904 25,815 1/31/06 66,116 27,950 2/28/06 67,752 27,947 3/31/06 71,933 29,300 4/30/06 72,418 29,379 5/31/06 68,812 28,163 6/30/06 68,176 28,509 7/31/06 65,328 28,113 8/31/06 66,540 28,954 9/30/06 68,509 29,237 10/31/06 71,449 30,725 11/30/06 75,660 31,601 12/31/06 76,162 31,876 1/31/07 78,905 32,354 2/28/07 79,116 31,956 3/31/07 80,909 32,343 4/30/07 82,456 32,679 5/31/07 86,359 33,879 6/30/07 82,913 33,089 7/31/07 71,415 30,273 8/31/07 67,020 30,879 9/30/07 66,985 31,018 10/31/07 67,336 31,356 11/30/07 60,972 29,007 12/31/07 63,157 28,761 1/31/08 63,231 27,582 2/29/08 61,937 26,487 The chart assumes a hypothetical $10,000 initial investment in the Fund made on September 2, 1998 (inception) and reflects Fund expenses. Investors should note that the Fund is a professionally managed mutual fund while the Russell 2000(R) Value Index is unmanaged, does not incur sales charges and/or expenses and is not available for investment.
- ------------------------------------------------------------------------------------------------------ Total Returns For the Period Ended February 29, 2008 AVERAGE ANNUAL CUMULATIVE -------------------- -------------------- SIX ONE FIVE SINCE FIVE SINCE MONTHS YEAR YEARS INCEPTION* YEARS INCEPTION* -------- ------- --------- ---------- --------- ---------- SCHNEIDER SMALL CAP VALUE (7.59)% (21.72)% 25.00% 21.18% 205.22% 519.37% RUSSELL 2000(R) VALUE INDEX (14.20)% (17.13)% 15.35% 10.72% 104.17% 162.41% * Inception date: 9/2/98 - ------------------------------------------------------------------------------------------------------
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER. SCHNEIDER CAPITAL MANAGEMENT CONTRACTUALLY AGREED TO WAIVE A PORTION OF ITS ADVISORY FEE AND REIMBURSE A PORTION OF THE FUND'S OPERATING EXPENSES, AS NECESSARY, TO MAINTAIN THE EXPENSE LIMITATION, AS SET FORTH IN THE NOTES TO THE FINANCIAL STATEMENTS. TOTAL RETURNS SHOWN INCLUDE FEE WAIVERS AND EXPENSE REIMBURSEMENTS, IF ANY; TOTAL RETURNS WOULD HAVE BEEN LOWER HAD THERE BEEN NO WAIVER OR REIMBURSEMENT OF FEES AND EXPENSES IN EXCESS OF EXPENSE LIMITATIONS. RETURNS SHOWN INCLUDE THE REINVESTMENT OF ALL DIVIDENDS AND OTHER DISTRIBUTIONS AND DO NOT REFLECT TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR ON THE REDEMPTION OF FUND SHARES. THE FUND HAS EXPERIENCED RELATIVELY HIGH PERFORMANCE WHICH MAY NOT BE REPEATED. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH-END, PLEASE CALL 1-888-520-3277. THE FUND'S GROSS ANNUAL OPERATING EXPENSES, AS STATED IN THE CURRENT PROSPECTUS, ARE 1.50%. SHARES OF THE FUND NOT PURCHASED THROUGH REINVESTED DIVIDENDS OR CAPITAL GAINS AND HELD LESS THAN ONE YEAR ARE SUBJECT TO A 1.75% REDEMPTION FEE. The Fund's annualized total return since inception is based on an increase in net asset value from $10.00 per share on September 2, 1998 (inception) to $16.75 per share on February 29, 2008, adjusted for dividends and distributions totaling $29.28 per share paid from net investment income and realized gains. Small company stocks are generally riskier than large company stocks due to greater volatility and less liquidity. Portfolio composition is subject to change. 5 THE SCHNEIDER FUNDS FUND EXPENSE EXAMPLES (UNAUDITED) As a shareholder of the Fund(s), you incur two types of costs: (1) transaction costs, including redemption fees; and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund(s) and to compare these costs with the ongoing costs of investing in other mutual funds. These examples are based on an investment of $1,000 invested at the beginning of the six-month period from September 1, 2007 through February 29, 2008, and held for the entire period. ACTUAL EXPENSES The first line of the accompanying tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second line of the accompanying tables provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not your Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare these 5% hypothetical examples with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that the expenses shown in the accompanying tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees. Therefore, the second line of the accompanying tables is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. 6 THE SCHNEIDER FUNDS FUND EXPENSE EXAMPLES (CONCLUDED) (UNAUDITED)
SCHNEIDER VALUE FUND --------------------------------------------------------------------------------- BEGINNING ACCOUNT VALUE ENDING ACCOUNT VALUE EXPENSES PAID SEPTEMBER 1, 2007 FEBRUARY 29, 2008 DURING PERIOD* ----------------------- -------------------- -------------- Actual $1,000.00 $ 938.10 $4.10 Hypothetical (5% return before expenses) 1,000.00 1,020.58 4.28 SCHNEIDER SMALL CAP VALUE FUND --------------------------------------------------------------------------------- BEGINNING ACCOUNT VALUE ENDING ACCOUNT VALUE EXPENSES PAID SEPTEMBER 1, 2007 FEBRUARY 29, 2008 DURING PERIOD* ----------------------- -------------------- -------------- Actual $1,000.00 $ 924.10 $5.26 Hypothetical (5% return before expenses) 1,000.00 1,019.33 5.54
* Expenses are equal to an annualized expense ratio of 0.85% for the Schneider Value Fund and 1.10% for the Schneider Small Cap Value Fund, which includes waived fees or reimbursed expenses, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year (182), then divided by 366 to reflect the one-half year period. The Fund's ending account values on the first line in each table are based on the actual six-month total return for each Fund of (6.19%) for the Schneider Value Fund and (7.59%) for the Schneider Small Cap Value Fund. 7 THE SCHNEIDER FUNDS SCHNEIDER VALUE FUND PORTFOLIO HOLDINGS SUMMARY TABLE FEBRUARY 29, 2008 (UNAUDITED) % OF NET ASSETS VALUE -------- ------------- Domestic Common Stocks: Oil, Gas & Consumable Fuels ................. 15.0% $ 44,793,213 Real Estate Investment Trusts ............... 10.3 30,743,410 Thrifts & Mortgage Finance .................. 7.4 22,212,334 Commercial Banks ............................ 7.1 21,302,236 Insurance ................................... 7.1 21,244,249 Machinery ................................... 5.3 15,791,888 Electric Utilities .......................... 4.5 13,324,320 Media ....................................... 4.2 12,460,258 Electronic Equipment & Instruments .............................. 3.9 11,614,307 Household Durables .......................... 3.6 10,806,521 Computers & Peripherals ..................... 3.2 9,469,517 Road & Rail ................................. 2.0 5,985,477 Health Care Providers & Service.. ........... 1.7 5,024,185 Semiconductors .............................. 1.7 4,952,619 Aerospace & Defense ......................... 1.6 4,797,681 Diversified Financial Services .............. 1.1 3,354,046 Hotels Restaurants & Leisure ................ 1.0 3,075,202 Health Care Equipment & Supplies ................................. 1.0 2,968,761 Specialty Retail ............................ 0.9 2,742,012 Food Products ............................... 0.8 2,540,633 Real Estate Management & Development .............................. 0.7 1,963,323 Chemicals ................................... 0.6 1,918,880 Communication Equipment ..................... 0.6 1,771,420 Consumer Finance ............................ 0.5 1,619,105 Wireless Telecommunication Services .................................... 0.4 1,244,784 IT Services ................................. 0.4 1,222,011 Auto Components ............................. 0.3 908,600 Temporary Investment .......................... 7.4 22,149,600 Exchange Traded Fund .......................... 3.0 9,161,826 Canadian Common Stock ......................... 2.1 6,238,326 Preferred Stock ............................... 1.9 5,664,000 Corporate Bonds ............................... 0.5 1,403,094 Liabilities in Excess of Other Assets ......... (1.8) (5,364,650) ------ ------------ NET ASSETS .................................... 100.0% $299,103,188 ====== ============ - ------------------ Portfolio holdings are subject to change at any time. The accompanying notes are an integral part of the financial statements. 8 THE SCHNEIDER FUNDS SCHNEIDER SMALL CAP VALUE FUND PORTFOLIO HOLDINGS SUMMARY TABLE FEBRUARY 29, 2008 (UNAUDITED) % OF NET ASSETS VALUE -------- ----------- Domestic Common Stocks: Real Estate Investment Trusts ............... 12.6% $10,597,324 Commercial Banks ............................ 11.0 9,277,520 Semiconductors .............................. 6.8 5,688,121 Software .................................... 6.0 5,035,000 Oil, Gas & Consumable Fuels ................. 5.3 4,471,638 Real Estate Management & Development .............................. 4.9 4,090,896 Insurance ................................... 4.6 3,834,360 Aerospace & Defense ......................... 4.3 3,584,989 Thrifts & Mortgage Finance .................. 4.2 3,510,494 Commercial Services & Supplies .............. 4.0 3,400,354 Machinery ................................... 3.1 2,622,381 Internet Software & Services ................ 3.1 2,578,155 Household Durables .......................... 2.6 2,211,381 Metals & Mining ............................. 2.3 1,942,683 Electric Utilities .......................... 2.2 1,826,068 Health Care Equipment & Supplies. ........... 2.1 1,748,233 Auto Components ............................. 1.9 1,593,810 Specialty Retail ............................ 1.5 1,283,850 Leisure Equipment & Products ................ 1.4 1,178,559 Health Care Providers & Service.. ........... 1.3 1,088,400 Airlines .................................... 1.3 1,059,535 Automobiles ................................. 1.2 992,154 Marine ...................................... 1.1 946,860 Building Products ........................... 1.0 846,905 % OF NET ASSETS VALUE -------- ----------- Biotechnology ............................... 1.0 $ 832,128 Road & Rail ................................. 0.9 759,500 Textiles, Apparel & Luxury Goods. ........... 0.9 740,943 IT Services ................................. 0.8 683,492 Computers & Peripherals ..................... 0.7 632,192 Distributors ................................ 0.6 498,236 Electronic Equipment & Instruments .......... 0.4 369,423 Food Products ............................... 0.3 233,562 Construction & Building Materials ........... 0.2 160,020 Transportation Infrastructure ............... 0.1 57,477 Chemicals ................................... 0.1 48,178 Temporary Investment .......................... 5.1 4,278,291 Corporate Bonds ............................... 1.0 786,311 Exchange Traded Fund .......................... 0.1 111,554 Liabilities in Excess of Other Assets ......... (2.0) (1,649,616) ------ ----------- NET ASSETS .................................... 100.0% $83,951,361 ====== =========== - ------------------ Portfolio holdings are subject to change at any time. The accompanying notes are an integral part of the financial statements. 9 THE SCHNEIDER FUNDS SCHNEIDER VALUE FUND PORTFOLIO OF INVESTMENTS FEBRUARY 29, 2008 (UNAUDITED) SHARES VALUE ---------- ------------- DOMESTIC COMMON STOCKS -- 86.9% AEROSPACE & DEFENSE -- 1.6% Boeing Co. (The) ............................... 57,950 $ 4,797,681 ------------ AUTO COMPONENTS -- 0.3% Visteon Corp.* ................................. 259,600 908,600 ------------ CHEMICALS -- 0.6% Cytec Industries, Inc. ......................... 33,500 1,918,880 ------------ COMMERCIAL BANKS -- 7.1% National City Corp. ............................ 806,520 12,791,407 Wachovia Corp. ................................. 277,950 8,510,829 ------------ 21,302,236 ------------ COMMUNICATION EQUIPMENT -- 0.6% Motorola, Inc. ................................. 177,675 1,771,420 ------------ COMPUTERS & PERIPHERALS -- 3.2% Dell, Inc.* .................................... 450,953 8,951,417 SanDisk Corp.* ................................. 22,000 518,100 ------------ 9,469,517 ------------ CONSUMER FINANCE -- 0.5% Capital One Financial Corp. .................... 35,175 1,619,105 ------------ DIVERSIFIED FINANCIAL SERVICES -- 1.1% Citigroup, Inc. ................................ 138,775 3,290,355 Legg Mason, Inc. ............................... 950 63,691 ------------ 3,354,046 ------------ ELECTRIC UTILITIES -- 4.5% Reliant Energy, Inc.* .......................... 584,400 13,324,320 ------------ ELECTRONIC EQUIPMENT & INSTRUMENTS -- 3.9% AU Optronics Corp. -- ADR ...................... 511,126 9,752,284 Celestica, Inc.* ............................... 284,713 1,862,023 ------------ 11,614,307 ------------ FOOD PRODUCTS -- 0.8% Smithfield Foods, Inc.* ........................ 2,900 79,895 Tyson Foods, Inc., Class A ..................... 170,766 2,460,738 ------------ 2,540,633 ------------ SHARES VALUE ---------- ------------- HEALTH CARE EQUIPMENT & SUPPLIES -- 1.0% Boston Scientific Corp.* ....................... 214,075 $ 2,695,204 Covidien, Ltd. ................................. 6,393 273,557 ------------ 2,968,761 ------------ HEALTH CARE PROVIDERS & SERVICE -- 1.7% Omnicare, Inc. ................................. 239,475 5,024,185 ------------ HOTELS RESTAURANTS & LEISURE -- 1.0% Carnival Corp. ................................. 78,150 3,075,202 ------------ HOUSEHOLD DURABLES -- 3.6% Centex Corp. ................................... 242,390 5,378,634 NVR, Inc.* ..................................... 10,039 5,427,887 ------------ 10,806,521 ------------ INSURANCE -- 7.1% Allstate Corp. (The) ........................... 650 31,025 American International Group, Inc. ............. 67,300 3,153,678 Fidelity National Financial, Inc., Class A ..................................... 276,371 4,866,893 Genworth Financial, Inc., Class A. ............. 327,450 7,590,291 RenaissanceRe Holdings, Ltd. ................... 74,828 4,108,057 Unum Group ..................................... 65,225 1,494,305 ------------ 21,244,249 ------------ IT SERVICES -- 0.4% BearingPoint, Inc.* ............................ 754,328 1,222,011 ------------ MACHINERY -- 5.3% Navistar International Corp.* .................. 279,750 15,791,888 ------------ MEDIA -- 4.2% Liberty Media Corp. - Capital, Series A* ................................... 53,106 6,166,138 XM Satellite Radio Holdings, Inc., Class A* .................................... 533,400 6,294,120 ------------ 12,460,258 ------------ The accompanying notes are an integral part of the financial statements. 10 THE SCHNEIDER FUNDS SCHNEIDER VALUE FUND PORTFOLIO OF INVESTMENTS (CONTINUED) FEBRUARY 29, 2008 (UNAUDITED) SHARES VALUE ---------- ------------- OIL, GAS & CONSUMABLE FUELS -- 15.0% Arch Coal, Inc. ................................ 423,525 $ 21,637,892 Cameco Corp. ................................... 64,640 2,537,120 CONSOL Energy, Inc. ............................ 233,525 17,743,230 Massey Energy Co. .............................. 75,143 2,874,971 ------------ 44,793,213 ------------ REAL ESTATE INVESTMENT TRUSTS -- 10.3% Annaly Capital Management, Inc. ................ 1,258,213 26,032,427 Redwood Trust, Inc. ............................ 140,963 4,710,983 ------------ 30,743,410 ------------ REAL ESTATE MANAGEMENT & DEVELOPMENT -- 0.7% Brookdale Senior Living, Inc. .................. 14,275 372,435 D.R. Horton, Inc. .............................. 89,275 1,252,528 St. Joe Co. (The) .............................. 8,800 338,360 ------------ 1,963,323 ------------ ROAD & RAIL -- 2.0% CSX Corp. ...................................... 69,250 3,360,010 J.B. Hunt Transport Services, Inc. ............. 95,925 2,625,467 ------------ 5,985,477 ------------ SEMICONDUCTORS -- 1.7% International Rectifier Corp.* ................. 149,800 3,410,946 Qimonda AG -- ADR* ............................. 341,078 1,541,673 ------------ 4,952,619 ------------ SPECIALTY RETAIL -- 0.9% Chico's Fas, Inc.* ............................. 210,100 1,956,031 Staples, Inc. .................................. 35,325 785,981 ------------ 2,742,012 ------------ THRIFTS & MORTGAGE FINANCE -- 7.4% Fannie Mae ..................................... 276,025 7,632,091 Freddie Mac .................................... 538,976 13,571,416 PMI Group, Inc. (The) .......................... 123,600 898,572 Washington Mutual, Inc. ........................ 7,200 110,255 ------------ 22,212,334 ------------ SHARES VALUE ---------- ------------- WIRELESS TELECOMMUNICATION SERVICES -- 0.4% Sprint Nextel Corp. ............................ 175,075 $ 1,244,784 ------------ TOTAL DOMESTIC COMMON STOCKS (Cost $250,813,454) ...................... 259,850,992 ------------ CANADIAN COMMON STOCK -- 2.1% AEROSPACE & DEFENSE -- 2.1% Bombardier, Inc., Class B* ..................... 1,085,225 6,238,326 ------------ TOTAL CANADIAN COMMON STOCK (Cost $3,526,358) ........................ 6,238,326 ------------ PREFERRED STOCK -- 1.9% SAVINGS & LOAN ASSOCIATIONS -- 1.9% Washington Mutual, Inc. ........................ 5,900 5,664,000 ------------ TOTAL PREFERRED STOCK (Cost $5,731,175) ........................ 5,664,000 ------------ PAR (000) ---------- CORPORATE BONDS -- 0.5% Qimonda Finance LLC 6.75%, 03/22/13 ............................. $1,475 1,403,094 ------------ TOTAL CORPORATE BONDS (Cost $1,475,000) ........................ 1,403,094 ------------ SHARES ---------- EXCHANGE TRADED FUND -- 3.0% FINANCE -- 3.0% iShares Russell 1000(R) Value Index Fund .................................. 123,775 9,161,826 ------------ TOTAL EXCHANGE TRADED FUND (Cost $9,353,153) ........................ 9,161,826 ------------ The accompanying notes are an integral part of the financial statements. 11 THE SCHNEIDER FUNDS SCHNEIDER VALUE FUND PORTFOLIO OF INVESTMENTS (CONCLUDED) FEBRUARY 29, 2008 (UNAUDITED) SHARES VALUE ---------- ------------- TEMPORARY INVESTMENT -- 7.4% PNC Bank Money Market Account 2.51%, 03/03/08(a) .......................... 22,149,600 $ 22,149,600 ------------ TOTAL TEMPORARY INVESTMENT (Cost $22,149,600) ....................... 22,149,600 ------------ TOTAL INVESTMENTS -- 101.8% (Cost $293,048,740) ...................... 304,467,838 ------------ LIABILITIES IN EXCESS OF OTHER ASSETS -- (1.8)% ............................ (5,364,650) ------------ NET ASSETS -- 100.0% ........................... $299,103,188 ============ - ------------ * Non-income producing. ADR -- American Depository Receipt. (a) Security is affiliated to the principal underwriter of the Fund. The accompanying notes are an integral part of the financial statements. 12 THE SCHNEIDER FUNDS SCHNEIDER SMALL CAP VALUE FUND PORTFOLIO OF INVESTMENTS FEBRUARY 29, 2008 (UNAUDITED) SHARES VALUE -------- ------------ DOMESTIC COMMON STOCKS -- 95.8% AEROSPACE & DEFENSE -- 4.3% AAR Corp.* ..................................... 95,880 $ 2,482,333 Triumph Group, Inc. ............................ 19,485 1,102,656 ----------- 3,584,989 ----------- AIRLINES -- 1.3% AirTran Holdings, Inc.* ........................ 146,750 1,059,535 ----------- AUTO COMPONENTS -- 1.9% American Axle & Manufacturing Holdings, Inc. .............................. 78,250 1,539,960 Dollar Thrifty Automotive Group, Inc.* ....................................... 3,750 53,850 ----------- 1,593,810 ----------- AUTOMOBILES -- 1.2% Fleetwood Enterprises, Inc.* ................... 232,900 992,154 ----------- BIOTECHNOLOGY -- 1.0% Human Genome Sciences, Inc.* ................... 140,800 832,128 ----------- BUILDING PRODUCTS -- 1.0% Builders FirstSource, Inc.* .................... 79,050 524,101 Griffon Corp.* ................................. 36,475 322,804 ----------- 846,905 ----------- CHEMICALS -- 0.1% Spartech Corp. ................................. 3,400 48,178 ----------- COMMERCIAL BANKS -- 11.0% Colonial Bancgroup, Inc. (The) ................. 62,100 750,168 First BanCorp .................................. 344,425 3,113,602 Huntington Bancshares, Inc. .................... 322,250 3,937,895 South Financial Group, Inc. .................... 1,950 28,139 Sterling Financial Corp. ....................... 86,450 1,375,092 United Community Banks, Inc. ................... 5,100 72,624 ----------- 9,277,520 ----------- COMMERCIAL SERVICES & SUPPLIES -- 4.0% Administaff, Inc. .............................. 45,825 1,130,045 Hudson Highland Group, Inc.* ................... 277,050 2,064,022 Viad Corp. ..................................... 5,950 206,287 ----------- 3,400,354 ----------- SHARES VALUE -------- ------------ COMPUTERS & PERIPHERALS -- 0.7% Xyratex, Ltd.* ................................. 35,200 $ 632,192 ----------- CONSTRUCTION & BUILDING MATERIALS -- 0.2% Eagle Materials, Inc. .......................... 4,500 160,020 ----------- DISTRIBUTORS -- 0.6% Building Materials Holding Corp. ............... 86,200 498,236 ----------- ELECTRIC UTILITIES -- 2.2% PNM Resources, Inc. ............................ 47,450 561,808 Reliant Energy, Inc.* .......................... 55,450 1,264,260 ----------- 1,826,068 ----------- ELECTRONIC EQUIPMENT & INSTRUMENTS -- 0.4% Insight Enterprises, Inc.* ..................... 11,850 207,731 Mercury Computer Systems, Inc.* ................ 25,225 161,692 ----------- 369,423 ----------- FOOD PRODUCTS -- 0.3% Sanderson Farms, Inc. .......................... 6,700 233,562 ----------- HEALTH CARE EQUIPMENT & SUPPLIES -- 2.1% American Medical Systems Holdings, Inc.* ....................................... 102,050 1,488,909 Orthofix International N.V.* ................... 6,475 259,324 ----------- 1,748,233 ----------- HEALTH CARE PROVIDERS & SERVICE -- 1.3% Assisted Living Concepts, Inc., Class A* .................................... 23,650 142,373 Matria Healthcare, Inc.* ....................... 10,075 253,083 Pharmerica Corp.* .............................. 47,075 692,944 ----------- 1,088,400 ----------- HOUSEHOLD DURABLES -- 2.6% NVR, Inc.* ..................................... 4,090 2,211,381 ----------- The accompanying notes are an integral part of the financial statements. 13 THE SCHNEIDER FUNDS SCHNEIDER SMALL CAP VALUE FUND PORTFOLIO OF INVESTMENTS (CONTINUED) FEBRUARY 29, 2008 (UNAUDITED) SHARES VALUE -------- ------------ INSURANCE -- 4.6% Landamerica Financial Group, Inc.. ............. 47,125 $ 1,735,142 Old Republic International Corp. ............... 23,350 320,362 ProAssurance Corp.* ............................ 33,456 1,778,856 ----------- 3,834,360 ----------- INTERNET SOFTWARE & SERVICES -- 3.1% CMGI, Inc. ..................................... 23,700 272,313 Internet Capital Group, Inc.* .................. 166,500 1,448,550 Openwave Systems, Inc. ......................... 416,161 857,292 ----------- 2,578,155 ----------- IT SERVICES -- 0.8% BearingPoint, Inc.* ............................ 33,000 53,460 Ness Technologies, Inc.* ....................... 67,600 630,032 ----------- 683,492 ----------- LEISURE EQUIPMENT & PRODUCTS -- 1.4% Brunswick Corp. ................................ 23,500 382,815 MarineMax, Inc.* ............................... 64,800 795,744 ----------- 1,178,559 ----------- MACHINERY -- 3.1% Navistar International Corp.* .................. 37,075 2,092,884 Wabash National Corp. .......................... 67,025 529,497 ----------- 2,622,381 ----------- MARINE -- 1.1% Alexander & Baldwin, Inc. ...................... 21,500 946,860 ----------- METALS & MINING -- 2.3% Golden Star Resources, Ltd.* ................... 471,525 1,942,683 ----------- OIL, GAS & CONSUMABLE FUELS -- 5.3% Massey Energy Co. .............................. 116,875 4,471,638 ----------- REAL ESTATE INVESTMENT TRUSTS -- 12.6% Anworth Mortgage Asset Corp. ................... 753,831 7,153,865 Arbor Realty Trust, Inc. ....................... 45,050 724,404 Chimera Investment Corp. ....................... 47,125 780,861 Colonial Properties Trust ...................... 39,400 959,784 U-Store-It Trust ............................... 81,450 816,943 Winthrop Realty Trust .......................... 32,423 161,467 ----------- 10,597,324 ----------- SHARES VALUE -------- ------------ REAL ESTATE MANAGEMENT & DEVELOPMENT -- 4.9% D.R. Horton, Inc. .............................. 105,200 $ 1,475,956 MI Developments, Inc., Class A ................. 33,925 781,971 St. Joe Co. (The) .............................. 11,200 430,640 Thomas Properties Group, Inc. .................. 147,925 1,402,329 ----------- 4,090,896 ----------- ROAD & RAIL -- 0.9% Genesee & Wyoming, Inc., Class A*. ............. 24,500 759,500 ----------- SEMICONDUCTORS -- 6.8% Advanced Energy Industries, Inc.*. ............. 25,125 322,103 Alliance Semiconductor Corp. ................... 280,825 336,990 ASM International N.V .......................... 29,325 573,597 Axcelis Technologies, Inc.* .................... 171,375 985,406 BE Semiconductor Industries N.V.*. ............. 303,218 1,500,626 International Rectifier Corp.* ................. 14,350 326,749 Qimonda AG - ADR* .............................. 44,525 201,253 Silicon Storage Technology, Inc.*. ............. 344,275 974,298 ZiLog, Inc.* ................................... 139,850 467,099 ----------- 5,688,121 ----------- SOFTWARE -- 6.0% Take-Two Interactive Software, Inc.* ........... 190,000 5,035,000 ----------- SPECIALTY RETAIL -- 1.5% AC Moore Arts & Crafts, Inc.* .................. 28,686 245,839 Chico's Fas, Inc.* ............................. 70,925 660,312 Coldwater Creek, Inc.* ......................... 68,300 377,699 ----------- 1,283,850 ----------- TEXTILES, APPAREL & LUXURY GOODS -- 0.9% Barry (R.G.) Corp.* ............................ 92,850 740,943 ----------- THRIFTS & MORTGAGE FINANCE -- 4.2% First Niagara Financial Group, Inc. ............ 101,100 1,154,562 FirstFed Financial Corp.* ...................... 25,750 804,687 Flagstar Bancorp, Inc. ......................... 25,050 179,358 PMI Group, Inc. (The) .......................... 104,150 757,171 Provident Financial Services, Inc. ............. 1,950 23,381 Washington Federal, Inc. ....................... 26,050 591,335 ----------- 3,510,494 ----------- The accompanying notes are an integral part of the financial statements. 14 THE SCHNEIDER FUNDS SCHNEIDER SMALL CAP VALUE FUND PORTFOLIO OF INVESTMENTS (CONCLUDED) FEBRUARY 29, 2008 (UNAUDITED) SHARES VALUE -------- ------------ TRANSPORTATION INFRASTRUCTURE -- 0.1% J.B. Hunt Transport Services, Inc. ............. 2,100 $ 57,477 ----------- TOTAL DOMESTIC COMMON STOCKS (Cost $80,430,324) ....................... 80,424,821 ----------- PAR (000) ----- CORPORATE BONDS -- 1.0% Advanced Medical Optics, Inc. 3.25%, 08/01/26 ............................. $ 418 319,247 Qimonda Finance LLC 6.75%, 03/22/13 ............................. 491 467,064 ----------- TOTAL CORPORATE BONDS (Cost $831,930) .......................... 786,311 ----------- SHARES -------- EXCHANGE TRADED FUND -- 0.1% FINANCE -- 0.1% iShares Russell 2000(R) Value Index Fund .................................. 1,700 111,554 ----------- TOTAL EXCHANGE TRADED FUND (Cost $120,567) .......................... 111,554 ----------- TEMPORARY INVESTMENT -- 5.1% PNC Bank Money Market Account 2.51%, 03/03/08(a) .......................... 4,278,291 4,278,291 ----------- TOTAL TEMPORARY INVESTMENT (Cost $4,278,291) ........................ 4,278,291 ----------- TOTAL INVESTMENTS -- 102.0% (Cost $85,661,112) ....................... 85,600,977 ----------- LIABILITIES IN EXCESS OF OTHER ASSETS -- (2.0)% ............................ (1,649,616) ----------- NET ASSETS -- 100.0% ........................... $83,951,361 =========== - ------------ * Non-income producing. ADR -- American Depository Receipt. (a) Security is affiliated to the principal underwriter of the Fund. The accompanying notes are an integral part of the financial statements. 15 THE SCHNEIDER FUNDS STATEMENTS OF ASSETS AND LIABILITIES FEBRUARY 29, 2008 (UNAUDITED)
SCHNEIDER SCHNEIDER VALUE FUND SMALL CAP VALUE FUND ------------ -------------------- ASSETS Investment securities at value (cost -- $293,048,740 and $85,661,112, respectively) ........................................................ $304,467,838 $ 85,600,977 Receivable for investments sold ...................................................... 1,949,686 267,212 Receivable for capital shares sold ................................................... 629,200 -- Dividends and interest receivable .................................................... 344,773 36,059 Prepaid expenses and other assets .................................................... 32,370 10,764 ------------ ------------ Total Assets ................................................................... 307,423,867 85,915,012 ------------ ------------ LIABILITIES Payable for investments purchased .................................................... 7,625,882 1,771,438 Payable to the Investment Adviser .................................................... 144,380 47,923 Payable for capital shares redeemed .................................................. 443,584 15,000 Accrued expenses payable and other liabilities ....................................... 106,833 129,290 ------------ ------------ Total Liabilities .............................................................. 8,320,679 1,963,651 ------------ ------------ NET ASSETS Capital stock, $0.001 par value ...................................................... $ 14,600 $ 5,012 Additional paid-in capital ........................................................... 317,831,457 94,697,406 Undistributed net investment income .................................................. 2,043,775 241,787 Accumulated net realized loss from investments and foreign exchange transactions ...................................................................... (32,205,742) (10,932,709) Net unrealized appreciation/(depreciation) on investments ............................ 11,419,098 (60,135) ------------ ------------ Net assets applicable to shares outstanding .......................................... $299,103,188 $ 83,951,361 ============ ============ Shares outstanding ..................................................................... 14,600,415 5,011,845 ============ ============ Net asset value, offering and redemption price per share ............................... $ 20.49 $ 16.75 ============ ============
The accompanying notes are an integral part of the financial statements. 16 THE SCHNEIDER FUNDS STATEMENTS OF OPERATIONS
SCHNEIDER SCHNEIDER VALUE FUND SMALL CAP VALUE FUND ----------------- --------------------- FOR THE FOR THE SIX MONTHS ENDED SIX MONTHS ENDED FEBRUARY 29, 2008 FEBRUARY 29, 2008 (UNAUDITED) (UNAUDITED) ----------------- --------------------- INVESTMENT INCOME Dividends* ........................................................................... $ 2,931,930 $ 589,877 Interest ............................................................................. 509,558 149,328 ------------ ----------- Total investment income ........................................................ 3,441,488 739,205 ------------ ----------- EXPENSES Advisory fees ........................................................................ 1,153,757 449,259 Administration services fees ......................................................... 247,234 67,389 Administration and accounting services fees .......................................... 229,389 75,046 Custodian fees ....................................................................... 46,642 26,759 Transfer agent fees .................................................................. 44,612 19,854 Directors' and officer's fees ........................................................ 39,825 21,536 Professional fees .................................................................... 37,256 27,158 Registration and filing fees ......................................................... 32,558 15,414 Printing and shareholder reporting fees .............................................. 15,847 21,610 Other expenses ....................................................................... 10,203 3,816 ------------ ----------- Total expenses before waivers .................................................. 1,857,323 727,841 Less: waivers ....................................................................... (459,610) (233,657) ------------ ----------- Net expenses after waivers .......................................................... 1,397,713 494,184 ------------ ----------- Net investment income .................................................................. 2,043,775 245,021 ------------ ----------- NET REALIZED AND UNREALIZED GAIN/(LOSS) FROM INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS: Net realized gain/(loss) from: Investments .................................................................... (27,491,138) (5,012,070) Foreign currency transactions .................................................. 1,257 -- Net change in unrealized appreciation/(depreciation) on: Investments .................................................................... 3,535,111 (2,544,025) Foreign currency transactions .................................................. -- (445) ------------ ----------- Net realized and unrealized gain/(loss) from investments and foreign currency transactions........................................................... (23,954,770) (7,556,540) ------------ ----------- NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ................................... $(21,910,995) $(7,311,519) ============ =========== - ------------------ * Net of foreign withholding taxes of $9,967 and $13,394, for the Value Fund and Small Cap Value Fund, respectively.
The accompanying notes are an integral part of the financial statements. 17 THE SCHNEIDER FUNDS STATEMENTS OF CHANGES IN NET ASSETS
SCHNEIDER VALUE FUND --------------------------------------- FOR THE SIX MONTHS ENDED FOR THE FEBRUARY 29, 2008 YEAR ENDED (UNAUDITED) AUGUST 31, 2007 ----------------- --------------- INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS Net investment income ............................................................... $ 2,043,775 $ 2,213,539 Net realized gain/(loss) from investments and foreign currency transactions ......... (27,489,881) 14,262,470 Net change in unrealized appreciation/(depreciation) on investments and foreign currency transactions ..................................................... 3,535,111 (1,724,299) ------------ ------------ Net increase/(decrease) in net assets resulting from operations ..................... (21,910,995) 14,751,710 ------------ ------------ DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income ............................................................... (1,903,773) (736,868) Net realized capital gains .......................................................... (15,318,154) (9,518,612) ------------ ------------ Total dividends and distributions to shareholders ................................. (17,221,927) (10,255,480) ------------ ------------ INCREASE/(DECREASE) IN NET ASSETS DERIVED FROM CAPITAL SHARE TRANSACTIONS (SEE NOTE 4) ........................................................................ (26,556,674) 221,008,583 ------------ ------------ Total increase/(decrease) in net assets ........................................... (65,689,596) 225,504,813 NET ASSETS Beginning of period ................................................................. 364,792,784 139,287,971 ------------ ------------ End of period* ...................................................................... $299,103,188 $364,792,784 ============ ============ - -------------- *Includes undistributed net investment income of $2,043,775 and $1,903,773 for the six months ended February 29, 2008 and the year ended August 31, 2007, respectively.
The accompanying notes are an integral part of the financial statements. 18 THE SCHNEIDER FUNDS STATEMENTS OF CHANGES IN NET ASSETS
SCHNEIDER SMALL CAP VALUE FUND --------------------------------------- FOR THE SIX MONTHS ENDED FOR THE FEBRUARY 29, 2008 YEAR ENDED (UNAUDITED) AUGUST 31, 2007 ----------------- --------------- INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS Net investment income ............................................................... $ 245,021 $ 2,233,399 Net realized gain/(loss) from investments and foreign currency transactions, if any . (5,012,070) 516,362 Net change in unrealized appreciation/(depreciation) on investments and foreign currency transactions, if any ............................................. (2,544,470) (2,038,487) ------------ ------------ Net increase/(decrease) in net assets resulting from operations ..................... (7,311,519) 711,274 ------------ ------------ DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income ............................................................... (1,553,403) (925,644) Net realized capital gains .......................................................... (2,671,636) (15,428,129) ------------ ------------ Total dividends and distributions to shareholders ................................. (4,225,039) (16,353,773) ------------ ------------ INCREASE/(DECREASE) IN NET ASSETS DERIVED FROM CAPITAL SHARE TRANSACTIONS (SEE NOTE 4) ........................................................................ (5,564,080) 11,602,727 ------------ ------------ Total decrease in net assets ...................................................... (17,100,638) (4,039,772) NET ASSETS Beginning of period ................................................................. 101,051,999 105,091,771 ------------ ------------ End of period* ...................................................................... $ 83,951,361 $101,051,999 ============ ============ - -------------- *Includes undistributed net investment income of $241,787 and $1,550,169 for the six months ended February 29, 2008 and for the year ended August 31, 2007, respectively.
The accompanying notes are an integral part of the financial statements. 19 THE SCHNEIDER FUNDS SCHNEIDER VALUE FUND FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- Contained below is per share operating performance data for a share outstanding during each period, total investment return, ratios to average net assets and other supplemental data for the respective periods. This information has been derived from information provided in the financial statements. - --------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEARS ENDED AUGUST 31, FOR THE PERIOD FEBRUARY 29, 2008 ------------------------------------------- SEPTEMBER 30, 2002* (UNAUDITED) 2007 2006 2005 2004 THROUGH AUGUST 31, 2003 ----------------- ------- ------- ------- ------- ----------------------- PER SHARE OPERATING PERFORMANCE** Net asset value, beginning of period .... $23.13 $ 21.16 $ 20.55 $ 18.22 $ 14.81 $ 10.00 Net investment income ................... 0.16 0.14 0.10 0.07 0.04 0.07 Net realized and unrealized gain/(loss) from investments and foreign currency transactions ................ (1.56) 2.99 1.99 3.40 4.05 4.77 ------ ------- ------- ------- ------- ------- Net increase/(decrease) in net assets resulting from operations ............ (1.40) 3.13 2.09 3.47 4.09 4.84 ------ ------- ------- ------- ------- ------- Dividends and distributions to shareholders from: Net investment income ................... (0.14) (0.08) (0.08) (0.05) (0.06) (0.03) Net realized capital gains .............. (1.10) (1.08) (1.40) (1.09) (0.62) 0.00 ------ ------- ------- ------- ------- ------- Total dividends and distributions to shareholders ...................... (1.24) (1.16) (1.48) (1.14) (0.68) (0.03) ------ ------- ------- ------- ------- ------- Redemption fees (Note 4)+ ............... -- -- -- -- -- -- ------ ------- ------- ------- ------- ------- Net asset value, end of period .......... $20.49 $ 23.13 $ 21.16 $ 20.55 $ 18.22 $ 14.81 ====== ======= ======= ======= ======= ======= Total investment return(1) .............. (6.19)% 14.88% 10.85% 19.37% 28.21% 48.46% ====== ======= ======= ======= ======= ======= RATIO/SUPPLEMENTAL DATA Net assets, end of period (000's omitted) ...................... $299,103 $364,793 $139,288 $61,146 $38,406 $11,788 Ratio of expenses to average net assets(2) ........................ 0.85%(3) 0.85% 0.85% 0.85% 0.85% 0.85%(3) Ratio of expenses to average net assets without waivers and expense reimbursements ............... 1.13%(3) 1.12% 1.27% 1.38% 1.96% 4.01%(3) Ratio of net investment income to average net assets(2) ................ 1.24%(3) 0.77% 0.69% 0.41% 0.35% 0.72%(3) Portfolio turnover rate ................. 50.30% 131.75% 104.92% 76.66% 116.60% 98.06%
- ------------------ * Commencement of operations. ** Calculated based on shares outstanding on the first and last day of the respective period, except for dividends and distributions, if any, which are based on actual shares outstanding on the dates of distributions. + Amount is less than $0.01 per share. (1) Total investment return is calculated by assuming a purchase of shares on the first day and a sale of shares on the last day of each period reported and includes reinvestments of dividends and distributions, if any. (2) Reflects waivers and reimbursements. (3) Annualized. The accompanying notes are an integral part of the financial statements. 20 THE SCHNEIDER FUNDS SCHNEIDER SMALL CAP VALUE FUND FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- Contained below is per share operating performance data for a share outstanding during each period, total investment return, ratios to average net assets and other supplemental data for the respective periods. This information has been derived from information provided in the financial statements. - --------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEARS ENDED AUGUST 31, FEBRUARY 29, 2008 ------------------------------------------------------- (UNAUDITED) 2007 2006 2005 2004 2003 ----------------- ------- ------- ------- ------- ------- PER SHARE OPERATING PERFORMANCE* Net asset value, beginning of period....... $ 19.06 $ 21.96 $ 24.94 $ 29.09 $ 22.52 $ 14.82 Net investment income/(loss)............... 0.08 0.43 0.05 (0.10) (0.13) 0.10 Net realized and unrealized gain/(loss) on investments and foreign currency transactions................... (1.52) 0.15 1.66 8.01 8.50 7.71 ------- ------- ------- ------- ------- ------- Net increase/(decrease) in net assets resulting from operations......................... (1.44) 0.58 1.71 7.91 8.37 7.81 ------- ------- ------- ------- ------- ------- Dividends and distributions to shareholders from: Net investment income...................... (0.32) (0.20) -- -- (0.11) (0.03) Net realized capital gains................. (0.55) (3.28) (4.69) (12.06) (1.69) (0.08) ------- ------- ------- ------- ------- ------- Total dividends and distributions to shareholders......................... (0.87) (3.48) (4.69) (12.06) (1.80) (0.11) ------- ------- ------- ------- ------- ------- Redemption fees (Note 4)+.................. -- -- -- -- -- -- ------- ------- ------- ------- ------- ------- Net asset value, end of period............. $ 16.75 $ 19.06 $ 21.96 $ 24.94 $ 29.09 $ 22.52 ======= ======= ======= ======= ======= ======= Total investment return(1)................. (7.59)% 0.72% 7.79% 31.57% 37.99% 53.10% ======= ======= ======= ======= ======= ======= RATIO/SUPPLEMENTAL DATA Net assets, end of period (000's omitted).. $83,951 $101,052 $105,092 $55,163 $48,845 $48,920 Ratio of expenses to average net assets(2). 1.10%(3) 1.10% 1.10% 1.10% 1.10% 1.10% Ratio of expenses to average net assets without waivers and expense reimbursements.......................... 1.62%(3) 1.50% 1.56% 1.71% 1.74% 1.85% Ratio of net investment income to average net assets(2)........................... 0.55%(3) 1.81% 0.29% (0.41)% (0.49)% 0.53% Portfolio turnover rate.................... 51.82% 75.21% 91.45% 68.87% 110.69% 85.33%
- ------------------ * Calculated based on shares outstanding on the first and last day of the respective year, except for dividends and distributions, if any, which are based on actual shares outstanding on the dates of distributions. + Amount is less than $0.01 per share. (1) Total investment return is calculated by assuming a purchase of shares on the first day and a sale of shares on the last day of each year reported and includes reinvestments of dividends and distributions, if any. (2) Reflects waivers and reimbursements. (3) Annualized. The accompanying notes are an integral part of the financial statements. 21 THE SCHNEIDER FUNDS NOTES TO FINANCIAL STATEMENTS FEBRUARY 29, 2008 (UNAUDITED) 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES The RBB Fund, Inc. ("RBB" or the "Company") was incorporated under the laws of the State of Maryland on February 29, 1988 and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company. RBB is a "series fund," which is a mutual fund divided into separate portfolios. Each portfolio is treated as a separate entity for certain matters under the 1940 Act, and for other purposes, and a shareholder of one portfolio is not deemed to be a shareholder of any other portfolio. Currently, RBB has twenty-one active investment portfolios, including the Schneider Value Fund (the "Value Fund") and the Schneider Small Cap Value Fund (the "Small Cap Value Fund") (each a "Fund," collectively the "Funds"), which commenced investment operations on September 2, 1998 and September 30, 2002, respectively. As of the date hereof, each Fund offers Institutional Class shares. RBB has authorized capital of one hundred billion shares of common stock of which 78.073 billion shares are currently classified into one hundred and twenty classes of Common Stock. Each class represents an interest in an active or inactive RBB investment portfolio. The active classes have been grouped into ten separate "families." PORTFOLIO VALUATION -- Each Fund's net asset value ("NAV") is calculated once daily at the close of regular trading hours on the New York Stock Exchange ("NYSE") (generally 4:00 p.m. Eastern time) on each day the NYSE is open. Securities held by the Funds are valued using the closing price or the last sale price on a national securities exchange or the National Association of Securities Dealers Automatic Quotation System (NASDAQ) market system where they are primarily traded. Equity securities traded in the over-the-counter market are valued at their closing prices. If there were no transactions on that day, securities traded principally on an exchange or on NASDAQ will be valued at the mean of the last bid and ask prices prior to the market close. Fixed Income securities having a remaining maturity of greater than 60 days are valued using an independent pricing service. Fixed Income securities having a remaining maturity of 60 days or less are amortized to maturity based on their cost. Foreign securities are valued based on prices from the primary market in which they are traded, and are translated from the local currency into U.S. dollars using current exchange rates. Investments in other open-end investment companies are valued based on the NAV of the investment companies (which may use Fair Value Pricing as discussed in their prospectuses). If market quotations are unavailable or deemed unreliable, securities will be valued in accordance with procedures adopted by the Board of Directors. Relying on prices supplied by pricing services or dealers or using fair valuation may result in values that are higher or lower than the values used by other investment companies and investors to price the same investments. USE OF ESTIMATES -- The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. INVESTMENT TRANSACTIONS, INVESTMENT INCOME, AND EXPENSES -- Transactions are accounted for on the trade date. The cost of investments sold is determined by use of the specific identification method for both financial reporting and income tax purposes in determining realized gains and losses on investments. Interest income is accrued as earned. Dividend income is recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. Each fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Expenses incurred on behalf of a specific class, fund or fund family are charged directly to the class, fund or fund family (in 22 THE SCHNEIDER FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 29, 2008 (UNAUDITED) proportion to net assets). Expenses incurred for all of the RBB fund families (such as director or professional fees) are charged to all funds in proportion to their average net assets of the RBB funds, or in such other manner as the Board of Directors deems fair or equitable. Expenses and fees, including investment advisory and administration fees, are accrued daily and taken into account for the purpose of determining the net asset value of the Funds. FOREIGN CURRENCY TRANSLATION -- Foreign securities and other foreign assets and liabilities are valued using the foreign currency exchange rate effective at the end of the reporting period. The books and records of the Funds are maintained in U.S. dollars. Cost of investments is translated at the currency exchange rate effective at the trade date. The gain or loss resulting from a change in currency exchange rates between the trade and settlement dates of a portfolio transaction is treated as a gain or loss on foreign currency. Likewise, the gain or loss resulting from a change in currency exchange rates, between the date income is accrued and paid, is treated as a gain or loss on foreign currency. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net investment income and distributions from net realized capital gains, if any, are declared, recorded on ex-date and paid at least annually to shareholders. Income dividends and capital gain distributions are determined in accordance with U.S. federal income tax regulations, which may differ from generally accepted accounting principles. Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications within the components of net assets. U.S. TAX STATUS -- No provision is made for U.S. income taxes as it is each Fund's intention to qualify for and elect the tax treatment applicable to regulated investment companies under Subchapter M of the Internal Revenue Code of 1986, as amended, and make the requisite distributions to its shareholders which will be sufficient to relieve it from U.S. income and excise taxes. OTHER -- In the normal course of business, the Funds may enter into contracts that provide general indemnifications. The Funds' maximum exposure under these arrangements is dependent on claims that may be made against the Funds in the future, and, therefore, cannot be estimated; however, based on experience, the risk of material loss for such claims is considered remote. 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES Schneider Capital Management Company ("SCM" or the "Adviser") serves as each Fund's investment adviser. For its advisory services, SCM is entitled to receive 0.70% of the Value Fund's average daily net assets and 1.00% of the Small Cap Value Fund's average daily net assets, computed daily and payable monthly. The Adviser contractually agreed to limit the Value Fund's and the Small Cap Value Fund's total operating expenses for the current fiscal year to the extent that such expenses exceed 0.85% and 1.10%, respectively, of the Fund's average daily net assets. As necessary, this limitation is effected in waivers of advisory fees and reimbursements of other Fund expenses. For the six months ended February 29, 2008, investment advisory fees and waivers of expenses were as follows:
GROSS ADVISORY FEES WAIVERS NET ADVISORY FEES ------------------- ---------- ----------------- Schneider Value Fund $1,153,757 $(270,823) $882,934 Schneider Small Cap Value Fund 449,259 (174,791) 274,468
23 THE SCHNEIDER FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 29, 2008 (UNAUDITED) The Funds will not pay SCM at a later time for any amounts it may waive or any amounts that SCM has assumed. PFPC Inc. ("PFPC"), a wholly-owned subsidiary of PFPC Worldwide, Inc. and an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc., serves as administrator for the Funds. For providing administration and accounting services, PFPC is entitled to receive a monthly fee equal to an annual rate of 0.125% of each Fund's average daily net assets, subject to a minimum monthly fee of $8,333 per Fund plus out-of-pocket expenses. PFPC voluntarily agreed to waive a portion of its administration and accounting services fees for the Funds. For the six months ended February 29, 2008, PFPC's administration and accounting services fees and waivers of the Funds' expenses were as follows:
GROSS ADMINISTRATION NET ADMINISTRATION AND ACCOUNTING AND ACCOUNTING SERVICES FEES WAIVERS SERVICES FEES -------------------- --------- ------------------ Schneider Value Fund $229,389 $ -- $229,389 Schneider Small Cap Value Fund 75,046 (3,500) 71,546
Included in the administration and accounting services fees and expenses, shown above, are fees for providing regulatory administration services to RBB. For providing these services, PFPC is entitled to receive compensation as agreed to by the Company and PFPC. This fee is allocated to each portfolio of the Company in proportion to its net assets of the RBB Funds. In addition, PFPC serves as the Funds' transfer and dividend disbursing agent. For providing transfer agent services, PFPC is entitled to receive a monthly fee, subject to a minimum monthly fee of $2,000 per Fund, plus out-of-pocket expenses. For the six months ended February 29, 2008, transfer agency fees for the Funds were as follows: TRANSFER AGENT FEES ---------- Schneider Value Fund $44,612 Schneider Small Cap Value Fund 19,854 For providing custodian services, PFPC Trust Company, a wholly-owned subsidiary of PFPC Worldwide, Inc. and an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc., is entitled to receive a monthly fee equal to an annual rate of 0.015% of each Fund's average daily gross assets, subject to a minimum monthly fee of $1,000 per Fund, excluding transaction changes and out-of-pocket expenses. For the six months ended February 29, 2008, custodial fees for the Funds were as follows: CUSTODIAN FEES --------- Schneider Value Fund $46,642 Schneider Small Cap Value Fund 26,759 24 THE SCHNEIDER FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 29, 2008 (UNAUDITED) PFPC Distributors, Inc. ("PFPC Distributors"), a wholly-owned subsidiary of PFPC Worldwide, Inc. and an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc., provides certain administrative services to the Funds. As compensation for such administrative services, PFPC Distributors receives a monthly fee equal to an annual rate of 0.15% of each Fund's average daily net assets. PFPC Distributors voluntarily agreed to waive a portion of its administrative services fees for the Funds. For the six months ended February 29, 2008, administrative services fees and related waivers for the Funds were as follows:
GROSS ADMINISTRATIVE NET ADMINISTRATIVE SERVICES FEES WAIVERS SERVICES FEES -------------- ---------- ------------------ Schneider Value Fund $247,234 $(188,787) $58,447 Schneider Small Cap Value Fund 67,389 (55,366) 12,023
As of February 29, 2008, the Value Fund and Small Cap Value Fund owed PFPC and affiliates $59,099 and $58,677, respectively, for their services. 3. INVESTMENT IN SECURITIES For the six months ended February 29, 2008, aggregate purchases and sales of investment securities (excluding short-term investments) were as follows: PURCHASES SALES ------------ ------------ Schneider Value Fund $153,271,339 $177,610,894 Schneider Small Cap Value Fund 43,362,061 47,848,829 4. CAPITAL SHARE TRANSACTIONS As of February 29, 2008, each Fund has 100,000,000 shares of $0.001 par value common stock authorized. Transactions in capital shares for the respective periods were as follows:
SCHNEIDER VALUE FUND --------------------------------------------------------------------------- FOR THE SIX MONTHS ENDED FOR THE FISCAL YEAR ENDED -------------------------------- ------------------------------- FEBRUARY 29, 2008 AUGUST 31, 2007 -------------------------------- ------------------------------- SHARES AMOUNT SHARES AMOUNT ---------- ------------- ---------- ------------ Sales............................... 2,129,647 $ 46,973,887 11,605,311 $278,680,701 Reinvestments....................... 758,511 15,912,728 425,249 9,755,495 Redemption Fees*.................... -- 29,248 -- 128,850 Repurchases......................... (4,057,234) (89,472,537) (2,845,025) (67,556,463) ---------- ------------ ---------- ------------ Net increase/(decrease)............. (1,169,076) $(26,556,674) 9,185,535 $221,008,583 ========== ============ ========== ============
25 THE SCHNEIDER FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 29, 2008 (UNAUDITED)
SCHNEIDER SMALL CAP VALUE FUND ------------------------------------------------------------------------- FOR THE SIX MONTHS ENDED FOR THE FISCAL YEAR ENDED ---------------------------- ----------------------------- FEBRUARY 29, 2008 AUGUST 31, 2007 ---------------------------- ----------------------------- SHARES AMOUNT SHARES AMOUNT -------- ------------ -------- ------------ Sales............................... 49,067 $ 853,663 383,516 $ 8,837,271 Reinvestments....................... 232,816 3,932,266 734,073 15,907,358 Redemption Fees*.................... -- 14,985 -- 25,324 Repurchases......................... (572,720) (10,364,994) (599,605) (13,167,226) --------- ------------ -------- ------------ Net increase/(decrease)............. (290,837) $ (5,564,080) 517,984 $ 11,602,727 ========= ============ ======== ============
* There is a 1.00% redemption fee on shares redeemed which have been held less than 90 days in the Schneider Value Fund. There is a 1.75% redemption fee on shares redeemed which have been held less than one year in the Schneider Small Cap Value Fund. The redemption fees are retained by the Funds for the benefit of the remaining shareholders and recorded as paid-in capital. As of February 29, 2008, the following shareholders held 10% or more of the outstanding shares of the Fund. These shareholders may be omnibus accounts which are comprised of many individual shareholders. Schneider Small Cap Value Fund (1 shareholder) 23% 5. FEDERAL INCOME TAX INFORMATION At February 29, 2008, federal tax cost, aggregate gross unrealized appreciation and depreciation of securities held by the Funds were as follows:
NET UNREALIZED FEDERAL TAX UNREALIZED UNREALIZED APPRECIATION/ COST APPRECIATION DEPRECIATION DEPRECIATION ------------ ------------ ------------ -------------- Schneider Value Fund $293,048,740 $56,271,039 $(44,851,941) $11,419,098 Schneider Small Cap Value Fund 85,661,112 12,083,988 (12,144,123) (60,135)
On August 31, 2007, the components of distributable earnings on a tax basis were as follows:
UNDISTRIBUTED UNDISTRIBUTED ORDINARY INCOME LONG-TERM GAINS --------------- --------------- Schneider Value Fund $11,581,781 $5,640,146 Schneider Small Cap Value Fund 1,553,402 --
On August 31, 2007, the Funds had no capital loss carryforwards available to offset future capital gains. Under federal tax law, foreign currency and capital losses realized after October 31 may be deferred and treated as having arisen on the first day of the following fiscal year. For the year ended August 31, 2007, there were no post-October losses incurred in the Schneider Value Fund. The Schneider Small Cap Value Fund incurred post-October capital and currency losses of $1,011,038 and $3,233, respectively. 26 THE SCHNEIDER FUNDS NOTES TO FINANCIAL STATEMENTS (CONCLUDED) FEBRUARY 29, 2008 (UNAUDITED) 6. NEW ACCOUNTING PRONOUNCEMENTS In July 2006, the Financial Accounting Standards Board ("FASB") issued FASB Interpretation No. 48 ("FIN 48"), "Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109." FIN 48 provides guidance as to how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken in the course of preparing the Funds' tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax benefits of positions not deemed to meet the "more-likely-than-not" threshold would be booked as a tax expense in the current year and recognized as: a liability for unrecognized tax benefits; a reduction of an income tax refund receivable; a reduction of deferred tax assets; an increase in deferred tax liability; or a combination thereof. Adoption of FIN 48 is required for the last net asset value calculation in the first required financial statement reporting period for fiscal years beginning after December 15, 2006. The Funds have adopted FIN 48 and management has determined that it has no impact on the Funds' financial statements. In September 2006, FASB issued Statement of Financial Accounting Standards ("SFAS") 157, Fair Value Measurements, which clarifies the definition of fair value and requires companies to expand their disclosure about the use of fair value to measure assets and liabilities in interim and annual periods subsequent to initial recognition. Adoption of SFAS 157 requires the use of the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. At this time, management is in the process of reviewing the impact, if any, of the SFAS on the Funds' financial statements. 27 THE SCHNEIDER FUNDS OTHER INFORMATION (UNAUDITED) PROXY VOTING Policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities as well as information regarding how the Funds voted proxies relating to portfolio securities for the most recent 12-month period ended June 30 are available without charge, upon request, by calling Schneider Funds at (888) 520-3277 and on the Securities and Exchange Commission's ("SEC") website at http://www.sec.gov. QUARTERLY PORTFOLIO SCHEDULES The Company will file a complete schedule of portfolio holdings with the SEC for the first and third fiscal quarters of each fiscal year (quarters ended November 30 and May 31) on Form N-Q. The Company's Form N-Q will be available on the SEC website at http://www.sec.gov and may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. Information on the operation of the SEC Public Reference Room may be obtained by calling (202) 551-8090. 28 [THIS PAGE INTENTIONALLY LEFT BLANK.] [THIS PAGE INTENTIONALLY LEFT BLANK.] [THIS PAGE INTENTIONALLY LEFT BLANK.] INVESTMENT ADVISER Schneider Capital Management 460 E. Swedesford Road Suite 1080 Wayne, PA 19087 ADMINISTRATOR PFPC Inc. 301 Bellevue Parkway Wilmington, DE 19809 TRANSFER AGENT PFPC Inc. 101 Sabin Street Pawtucket, RI 02860 PRINCIPAL UNDERWRITER PFPC Distributors, Inc. 760 Moore Road King of Prussia, PA 19406 CUSTODIAN PFPC Trust Company 8800 Tinicum Blvd. Suite 200 Philadelphia, PA 19153 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM PricewaterhouseCoopers LLP Two Commerce Square, Suite 1700 2001 Market Street Philadelphia, PA 19103-7042 COUNSEL Drinker Biddle & Reath LLP One Logan Square 18th and Cherry Streets Philadelphia, PA 19103-6996 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND SEMIANNUAL REPORT FOR THE SIX-MONTH PERIOD ENDED FEBRUARY 29, 2008 - -------------------------------------------------------------------------------- Fellow Shareholder: The Bogle Small Cap Growth Fund (the "Fund") lost -16.30% for the Investor shares and -16.26% for the Institutional shares in the semiannual period ended February 29, 2008, underperforming by -3.39% and -3.35%, respectively, the Russell 2000(R) benchmark loss of -12.91%. Although the Fund's semiannual performance relative to the benchmark was not directly impacted by the crisis in the housing and mortgage markets, the extreme credit contraction that occurred in the wake of this crisis had ripple effects throughout the equity markets. The shift in the macroeconomic environment and jump in market volatility caused investors to focus primarily on proven performers, regardless of price. In this environment, stocks that had attractive relative valuation according to our measures and as indicated by growth and value index returns were generally the hardest hit. The recent market environment is addressed in more detail in the next section of this letter. This discussion is followed by performance attribution analysis, which explains the results generated by our investment models during the semiannual period, including a few stock-specific examples. We then present key fundamental characteristics of the Fund and benchmark, highlighting the Fund's characteristics' likeness to the Russell 2000(R) due to our risk controls. Finally, we close with an update on developments at Bogle Investment Management, L.P. INVESTMENT PERFORMANCE -- MULTI-PERIODS BOGLE FUND VS. RUSSELL 2000(R) BENCHMARK AS OF 2/29/08 [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA USED IN PRINTED GRAPHIC AS FOLLOWS:
Semiannual Period One-Year Period Three-Year Period Five-Year Period Since Inception (9/1/07 - 2/29/08) (3/1/07 - 2/29/08) (3/1/05 - 2/29/08) (3/1/03 - 2/29/08) (10/1/99 - 2/29/08) Bogle Investor Class (16.30)% (17.37)% 3.94% 15.46% 13.15% Bogle Institutional Class (16.26) (17.29) 4.05 15.58 13.25 Russell 2000(R) Index (12.91) (12.44) 3.90 15.10 7.11 Investor Class Net Asset Value Added (3.39) (4.94) 0.04 0.36 6.04
- ---------- ALL FUND RETURNS ARE PRESENTED NET OF FEES AND INCLUDE THE REINVESTMENT OF ALL DIVIDENDS AND OTHER EARNINGS. MULTI-YEAR PERIOD RETURNS ARE ANNUALIZED. RETURNS SHOWN REPRESENT PAST PERFORMANCE AND DO NOT GUARANTEE FUTURE RESULTS. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE RETURNS SHOWN ABOVE. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. RETURNS CURRENT TO THE MOST RECENT MONTH-END MAY BE OBTAINED AT 1-877-264-5346. THE TABLE DOES NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. THE PERFORMANCE QUOTED REFLECTS FEE WAIVERS IN EFFECT AND WOULD HAVE BEEN LESS IN THEIR ABSENCE. THE FUND'S ANNUAL OPERATING EXPENSES, AS STATED IN THE CURRENT PROSPECTUS, ARE 1.43% FOR THE INSTITUTIONAL CLASS AND 1.53% FOR THE INVESTOR CLASS, PRIOR TO FEE WAIVERS. 1 MARKET ENVIRONMENT. The most recent semiannual period was the most negative six-month period for U.S. equity markets since the second half of 2002. Back then, the economy and markets were working out excessive speculation in internet and growth stocks, and the damage was most acutely felt by investors in these stocks. In the most recent downturn, past housing market speculation fueled by easy credit and largely financed by Wall Street has had a widespread effect throughout the economy. In response to slowing economic growth, the Federal Reserve started cutting the Fed Funds rate in September of last year and by the end of the semiannual period the rate had dropped by 2.25 percentage points, from 5.25% to 3.00%. At the same time, soaring commodity prices (most notably oil) and a weak dollar served to exacerbate negative sentiment and complicate the Fed's ability to steer the economy. Against this backdrop, all U.S. equity market segments generally declined from November 2007 through February of 2008 and volatility increased sharply. Small cap stocks were among the hardest hit as the Russell 2000(R) Index fell -12.91% for the six months ended February 29, 2008, compared with a return of -8.45% for the larger cap Russell 1000(R). Within small capitalization stocks, growth outperformed value, by +2.56%. For the semiannual period, the Russell 2000(R) Growth lost -11.67%, while the Russell 2000(R) Value dropped -14.23%. Within the Russell 2000(R) Index, over the six-month period, technology and consumer cyclicals were the poorest performing sectors, while the energy and basic industry sectors were the strongest. PERFORMANCE ATTRIBUTION. We estimate that negative stock selection from the combination of our small cap investment models accounted for about two percentage points of the Fund's three percentage points of relative underperformance in the semiannual period. Sector exposures relative to benchmark, and specifically an underweight of basic industry and energy stocks, detracted another percentage point. As you know, our three primary models seek to identify the following: 1) stocks that have demonstrated an ability to produce unexpectedly better earnings growth (the earnings expectations model); 2) companies that do not have to "manufacture" earnings growth through aggressive accounting (financial quality model); and 3) stocks that trade at attractive valuations relative to their most similar peers (relative valuation model). On a standalone basis, financial quality model returns were strongest, the earnings expectations model posted modestly positive returns, and the relative valuation model produced negative results in five out of six months and for the six-month period. In fact, the relative valuation model started to struggle in March of last year and its recent performance has been as negative as we have seen since the internet bubble inflation. Over this latest semiannual period, stock selection was strongest in consumer cyclical stocks and was also positive in financial, consumer growth and utility stocks. The consumer cyclical sector also made the largest contribution to return. Poor selection in energy, basic industry and technology stocks offset these gains and then some. At the end of the semiannual period, the Fund held 175 stocks and the largest holding represented 1.2% of portfolio assets. This diversification limits the impact any single stock can have on total Fund performance. The benefit of diversification can also be seen within sectors; for example, despite a significant loss in one of 2 our financial stock holdings (a holding severely hurt by its subprime market exposure), the Fund's overall financial sector had relatively little exposure to the subprime market and outperformed the benchmark's financial sector for the semiannual period. A few other stock specific examples illustrate investors' preference during this latest reporting period for historically positive performers with established earnings growth and financial quality. The flip side of this preference was a negative attitude toward "cheap" stocks, as pessimistic investor sentiment appeared to limit support for stocks that had suffered recent declines. One of our top performing stocks for the semiannual period was Gigamedia Ltd., an online gambling and entertainment company that entered the Fund portfolio in the fourth quarter of 2006 because of its strong earnings expectations ranking and positive financial quality. This stock performed extremely well during the semiannual period despite its relatively high valuation. Contributing to our strong relative performance in the consumer cyclical sector, online movie rental company Netflix, Inc. was also a top performer over the last six months. The stock stood out in the beginning of 2007 because of strong earnings expectations and financial quality (relative valuation was neutral). At the end of the semiannual period the stock maintained its positive financial quality ranking, while its earnings expectations signal was stronger than it was a year ago. In February, the company raised its earnings guidance for the first quarter and full year in February to reflect subscriber growth. Finally, two of our worst performers, flash memory company Spansion, Inc. and health club operator Town Sports International Holdings, Inc., both had strong relative valuation and financial quality signals at the start of the semiannual period. While both companies have struggled on the earnings front, both experienced some improvement in their earnings signal during the semiannual period, and as of February 29, 2008 we maintained both positions. INVESTMENT POSITIONING. As has been the case for much of the Fund's history, Fund characteristics remain very much in line with the benchmark. Note that small deviations from the benchmark reflected in both sector exposures and the fundamental characteristics of the Fund arise purely from the bottom up stock selection process and do not reflect any attempt to time the overall market, style preferences, or sector rotation. As of the end of February, our median market capitalization was slightly below benchmark. By continuing to keep the size of the Fund controlled, we benefit from the ability to maintain exposure to the smaller companies within the small cap market. The Fund maintains a bias to companies with modestly higher long-term earnings growth rates; price-to-earnings ratios are currently slightly below the benchmark; and the Fund's median price-to-sales ratio continues to be lower than the benchmark's, as the ratio is a significant part of our relative valuation model. - -------------------------------------------------------------------------------- FUNDAMENTAL CHARACTERISTICS FEBRUARY 29, 2008 RUSSELL 2000(R) MEDIAN BOGLX INDEX - ------ ----- ------- Market Cap. (mil.) $921 $1,062 Estimated Long-Term Earnings Growth Rate 15.7% 15.0% Price/Historical Earnings 15.1x 18.1x Price/Forward Earnings 13.8x 15.1x Price/Sales 1.3x 1.7x RISK STATISTICS* - SEMIANNUAL PERIOD - ------------------------------------ Annualized Standard Dev. 24.3% 25.3% Annualized Active Risk 6.1% Beta with Russell 2000(R) 0.93 Cash 1.6% * STANDARD DEVIATION IS A STATISTICAL MEASURE OF THE RANGE OF PERFORMANCE. BETA IS A MEASURE OF A PORTFOLIO'S SENSITIVITY TO MARKET MOVEMENTS. - -------------------------------------------------------------------------------- 3 Despite our frustration with recent Fund performance, we believe that the Fund is well positioned going forward, as we remain confident that our models are uncovering opportunities in stocks with sustainable earnings growth and at reasonable prices. In our view, it would be highly unusual for the market to ignore the merits of these investment characteristics for an extended period of time. PROGRESS AT BOGLE INVESTMENT MANAGEMENT, L.P. Our team did not change during the semiannual period, remaining at thirteen full-time professionals, five dedicated to portfolio management and research and eight focused on client service, compliance, and operations. At the end of February 2008, assets in the Fund were a little over $218 million and the Fund remains closed to new investors. As a reminder, information about the Fund, including historical NAVs, sector allocation, fundamental characteristics, and top ten holdings, can be viewed on our website, www.boglefunds.com. The NAVs are updated daily while the other Fund information is updated quarterly. Please feel free to call on us at any time with questions you may have about the portfolio or anything else that might be on your mind. Respectfully, Bogle Investment Management, L.P. Management Office: 781-283-5000 Shareholder Services Toll Free: 1-877-BOGLEIM (264-5346) - ---------- THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND DOES NOT GUARANTEE FUTURE RESULTS. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER. PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END MAY BE OBTAINED AT 1-877-264-5346. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THE PERFORMANCE QUOTED REFLECTS FEE WAIVERS IN EFFECT AND WOULD HAVE BEEN LESS IN THEIR ABSENCE. THE FUND'S ANNUAL OPERATING EXPENSE RATIO, AS STATED IN THE CURRENT PROSPECTUS, IS 1.43% FOR THE INSTITUTIONAL CLASS AND 1.53% FOR THE INVESTOR CLASS, PRIOR TO FEE WAIVERS. THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS. THE RUSSELL 2000(R) IS AN INDEX OF STOCKS 1001 THROUGH 3000 IN THE RUSSELL 3000(R) INDEX AS RANKED BY TOTAL MARKET CAPITALIZATION. A DIRECT INVESTMENT IN THE INDEX IS NOT POSSIBLE. INVESTING IN SMALL COMPANIES CAN INVOLVE MORE VOLATILITY, LESS LIQUIDITY AND LESS AVAILABLE INFORMATION THAN INVESTING IN LARGE COMPANIES. 4 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND FUND EXPENSE EXAMPLES (UNAUDITED) As a shareholder of the Fund, you incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees, shareholder servicing fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. These examples are based on an investment of $1,000 invested at the beginning of the six-month period from September 1, 2007 through February 29, 2008, and held for the entire period. ACTUAL EXPENSES The first line of the accompanying tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second line of the accompanying tables provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare these 5% hypothetical examples with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that the expenses shown in the accompanying tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees. Therefore, the second line of the accompanying tables is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
INSTITUTIONAL CLASS ------------------------------------------------------------------------- BEGINNING ACCOUNT VALUE ENDING ACCOUNT VALUE EXPENSES PAID DURING SEPTEMBER 1, 2007 FEBRUARY 29, 2008 PERIOD* ----------------------- -------------------- -------------------- Actual $1,000.00 $ 837.40 $5.71 Hypothetical (5% return before expenses) 1,000.00 1,018.57 6.29
5 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND FUND EXPENSE EXAMPLES (CONCLUDED) (UNAUDITED)
INVESTOR CLASS ------------------------------------------------------------------------- BEGINNING ACCOUNT VALUE ENDING ACCOUNT VALUE EXPENSES PAID DURING SEPTEMBER 1, 2007 FEBRUARY 29, 2008 PERIOD* ----------------------- -------------------- -------------------- Actual $1,000.00 $ 837.00 $6.17 Hypothetical (5% return before expenses) 1,000.00 1,018.07 6.80 - ---------- * Expenses are equal to the Fund's annualized expense ratio of 1.25% for the Institutional Class and 1.35% for the Investor Class, which includes waived fees or reimbursed expenses, multiplied by the average account value over the period, multiplied by the number of days (182) in the most recent fiscal half-year, then divided by 366 to reflect the one-half year period. The Fund's ending account values on the first line in each table are based on the actual six-month total return for each class of (16.26)% for the Institutional Class and (16.30)% for the Investor Class.
6 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND PORTFOLIO HOLDINGS SUMMARY TABLE FEBRUARY 29, 2008 (UNAUDITED) % OF NET SECURITY TYPE & SECTOR CLASSIFICATION ASSETS VALUE - ------------------------------------------------------------------------------- COMMON STOCKS: Technology 23.0% $ 50,278,304 Industrial 20.5 44,648,029 Consumer Growth 20.4 44,467,386 Financial 16.6 36,210,096 Consumer Cyclical 13.3 28,938,770 Energy 2.7 5,835,004 Basic Industry 1.4 3,119,274 SHORT-TERM INVESTMENTS 1.6 3,405,191 OTHER ASSETS IN EXCESS OF LIABILITIES 0.5 1,163,592 ------ ------------ NET ASSETS 100.0% $218,065,646 ====== ============ - ---------------- Portfolio holdings are subject to change at any time. The accompanying notes are an integral part of the financial statements. 7 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND PORTFOLIO OF INVESTMENTS FEBRUARY 29, 2008 (UNAUDITED) NUMBER OF SHARES VALUE ---------- ------------ COMMON STOCKS--97.9% BASIC INDUSTRY--1.4% Brush Engineered Materials, Inc.* .................................... 18,100 $ 502,818 ICO, Inc.* ................................. 78,100 608,399 Methanex Corp. ............................. 69,700 2,008,057 ------------ 3,119,274 ------------ CONSUMER CYCLICAL--13.3% Barnes & Noble, Inc. ....................... 33,200 933,584 Bidz.com, Inc.* ............................ 116,500 1,190,630 Brunswick Corp. ............................ 85,900 1,399,311 Buckle, Inc., (The) ........................ 38,500 1,747,900 Callaway Golf Co. .......................... 97,400 1,484,376 Casey's General Stores, Inc. ............... 65,800 1,648,290 Cooper Tire & Rubber Co. ................... 95,400 1,723,878 FTD Group, Inc. ............................ 136,500 1,882,335 G & K Services, Inc., Class A .............. 12,100 462,946 Harman International Industries, Inc. ..................................... 31,300 1,289,560 Interstate Hotels & Resorts, Inc.* .................................... 308,200 1,531,754 Maidenform Brands, Inc.* ................... 53,800 665,506 Mesa Air Group, Inc.* ...................... 435,700 1,054,394 Netflix, Inc.* ............................. 30,500 963,190 Pantry, Inc., (The)* ....................... 68,400 1,645,704 PC Connection, Inc.* ....................... 125,800 1,249,194 Perry Ellis International, Inc.* .................................... 61,200 1,198,908 Polaris Industries, Inc. ................... 32,400 1,237,032 Rush Enterprises, Inc., Class A* ................................. 111,800 1,656,876 Town Sports International Holdings, Inc.* .......................... 66,900 539,214 United Stationers, Inc.* ................... 30,100 1,485,736 Warnaco Group, Inc., (The)* ................ 14,200 533,352 Wolverine World Wide, Inc. ................. 53,400 1,415,100 ------------ 28,938,770 ------------ NUMBER OF SHARES VALUE ---------- ------------ CONSUMER GROWTH--20.4% Air Methods Corp.* ......................... 21,100 $ 867,632 AMERIGROUP Corp.* .......................... 51,700 1,861,200 Apria Healthcare Group, Inc.* .................................... 58,100 1,261,351 Boston Beer Co., Inc., (The) Class A* ................................. 41,200 1,469,192 Capella Education Co.* ..................... 32,844 1,731,207 Centene Corp.* ............................. 80,800 1,447,936 China Medical Technologies, Inc. - ADR ............................... 42,900 1,973,400 Chindex International, Inc.* ............... 44,300 1,617,393 Conmed Corp.* .............................. 44,400 1,197,024 CorVel Corp.* .............................. 7,600 228,988 Cubist Pharmaceuticals, Inc.* .............. 77,000 1,401,400 Cynosure, Inc., Class A* ................... 55,700 1,332,901 Flowers Foods, Inc. ........................ 74,600 1,690,436 Health Management Associates, Inc., Class A ................ 166,500 890,775 Herbalife Ltd. ............................. 45,600 1,907,448 Kinetic Concepts, Inc.* .................... 22,600 1,161,414 MedCath Corp.* ............................. 32,700 681,795 Medicis Pharmaceutical Corp., Class A ........................... 21,300 436,863 Mindray Medical International Ltd. - ADR ................... 33,100 1,214,770 Molina Healthcare, Inc.* ................... 38,600 1,221,690 Nash Finch Co. ............................. 40,800 1,430,856 NBTY, Inc.* ................................ 60,500 1,727,880 Nektar Therapeutics* ....................... 216,900 1,507,455 Noven Pharmaceuticals, Inc.* .................................... 97,400 1,320,744 Pall Corp. ................................. 25,300 996,061 Par Pharmaceutical Cos., Inc.* .................................... 83,300 1,473,577 PerkinElmer, Inc. .......................... 50,700 1,258,374 Pozen, Inc.* ............................... 110,300 1,344,557 Scholastic Corp.* .......................... 54,500 1,900,415 Synovis Life Technologies, Inc.* .................................... 97,200 1,718,496 Vivus, Inc.* ............................... 236,700 1,387,062 The accompanying notes are an integral part of the financial statements. 8 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND PORTFOLIO OF INVESTMENTS (CONTINUED) FEBRUARY 29, 2008 (UNAUDITED) NUMBER OF SHARES VALUE ---------- ------------ CONSUMER GROWTH--(CONTINUED) WellCare Health Plans, Inc.* ............... 35,100 $ 1,675,674 Winn-Dixie Stores, Inc.* ................... 69,200 1,131,420 ------------ 44,467,386 ------------ ENERGY--2.7% ATP Oil & Gas Corp.* ....................... 30,600 1,078,650 Aventine Renewable Energy Holdings, Inc.* .......................... 154,300 992,149 Bois D'arc Energy, Inc.* ................... 68,700 1,474,989 Dawson Geophysical Co.* .................... 25,000 1,646,750 Solarfun Power Holdings Co. Ltd. - ADR* .......................... 55,100 642,466 ------------ 5,835,004 ------------ FINANCIAL--16.6% Allied World Assurance Holdings Ltd. ............................ 41,000 1,785,550 AMERISAFE, Inc.* ........................... 123,373 1,622,355 Amtrust Financial Services, Inc. ..................................... 107,900 1,801,930 Arch Capital Group Ltd.* ................... 31,200 2,136,576 Banner Corp. ............................... 29,500 638,970 Boston Private Financial Holdings, Inc. ........................... 6,700 92,259 Calamos Asset Management, Inc., Class A ............................ 84,200 1,548,438 CNA Surety Corp.* .......................... 5,600 79,016 E-House China Holdings Ltd. - ADR* .............................. 72,700 1,182,102 Evercore Partners, Inc., Class A .................................. 93,600 1,838,304 EZCORP, Inc., Class A* ..................... 115,000 1,348,950 FCStone Group, Inc.* ....................... 44,500 2,075,480 Greenhill & Co., Inc. ...................... 24,800 1,612,248 Heartland Payment Systems, Inc. ..................................... 42,400 934,072 Interactive Data Corp. ..................... 53,100 1,553,706 Investment Technology Group, Inc.* ............................. 11,300 526,354 Labranche & Co., Inc.* ..................... 159,700 741,008 NUMBER OF SHARES VALUE ---------- ------------ FINANCIAL--(CONTINUED) Navigators Group, Inc.* .................... 12,600 $ 689,598 Nelnet, Inc., Class A ...................... 79,600 867,640 Penson Worldwide, Inc.* .................... 144,800 1,479,856 Philadelphia Consolidated Holding Corp.* ........................... 50,600 1,716,352 Phoenix Cos., Inc., (The) .................. 63,500 722,630 Prospect Capital Corp. ..................... 49,300 741,965 Reinsurance Group of America, Inc. .............................. 36,900 2,018,799 Safety Insurance Group, Inc. ............... 50,000 1,854,500 Security Capital Assurance Ltd. ..................................... 173,400 263,568 StanCorp Financial Group, Inc. ..................................... 28,200 1,384,338 United America Indemnity Ltd., Class A* ........................... 58,900 1,104,964 Universal American Financial Corp.* ................................... 107,600 1,848,568 ------------ 36,210,096 ------------ INDUSTRIAL--20.5% Acuity Brands, Inc. ........................ 33,900 1,505,499 AerCap Holdings N.V.* ...................... 78,600 1,575,930 American Railcar Industries, Inc. ..................................... 49,000 1,217,160 Astronics Corp.* ........................... 23,200 458,200 AZZ, Inc.* ................................. 62,200 2,203,124 Brink's Co., (The) ......................... 20,000 1,338,600 Consolidated Graphics, Inc.* ............... 30,700 1,632,933 Cubic Corp. ................................ 12,400 317,068 Darling International, Inc.* ............... 164,900 2,292,110 Diamond Management & Technology Consultants, Inc. ............. 57,500 340,975 EMCOR Group, Inc.* ......................... 35,700 860,013 Gardner Denver, Inc.* ...................... 57,300 2,114,943 Global Industries Ltd.* .................... 45,800 843,178 H&E Equipment Services, Inc.* .................................... 63,100 984,360 Harbin Electric, Inc.* ..................... 70,100 1,394,990 The accompanying notes are an integral part of the financial statements. 9 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND PORTFOLIO OF INVESTMENTS (CONTINUED) FEBRUARY 29, 2008 (UNAUDITED) NUMBER OF SHARES VALUE ---------- ------------ INDUSTRIAL--(CONTINUED) Heidrick & Struggles International, Inc. ...................... 12,900 $ 441,567 Herman Miller, Inc. ........................ 66,600 1,986,678 HNI Corp. .................................. 44,300 1,309,508 HUB Group, Inc., Class A* .................. 45,100 1,352,549 ICF International, Inc.* ................... 23,700 617,148 Intevac, Inc.* ............................. 42,500 545,700 Kaiser Aluminum Corp. ...................... 20,000 1,467,000 L.B. Foster Co., Class A* .................. 42,100 1,783,356 Michael Baker Corp.* ....................... 39,300 1,131,840 Mueller Industries, Inc. ................... 61,400 1,764,022 Pacer International, Inc. .................. 100,100 1,538,537 PeopleSupport, Inc.* ....................... 134,400 1,560,384 Perini Corp.* .............................. 35,600 1,334,288 PHH Corp.* ................................. 43,600 882,464 Robbins & Myers, Inc. ...................... 66,200 2,254,110 Rollins, Inc. .............................. 88,250 1,557,612 Source Interlink Cos, Inc.* ................ 95,397 161,221 Steelcase, Inc., Class A ................... 85,000 1,205,300 TeleTech Holdings, Inc.* ................... 46,500 1,049,505 Thomas & Betts Corp.* ...................... 13,800 554,070 Waste Industries USA, Inc. ................. 29,300 1,072,087 ------------ 44,648,029 ------------ TECHNOLOGY--23.0% Alvarion Ltd.* ............................. 34,300 259,651 Amkor Technology, Inc.* .................... 99,400 1,163,974 Applied Micro Circuits Corp.* ................................... 47,300 351,439 ASM International N.V.* .................... 31,600 618,096 Aspen Technology, Inc.* .................... 149,400 1,673,280 Atheros Communications, Inc.* .................................... 46,000 1,118,720 Audible, Inc.* ............................. 165,000 1,889,250 Avici Systems, Inc. ........................ 152,500 1,169,675 Ceragon Networks Ltd.* ..................... 168,300 1,457,478 Chordiant Software, Inc.* .................. 193,800 1,116,288 ClickSoftware Technologies Ltd.* .................................... 139,650 413,364 COMSYS IT Partners, Inc.* .................. 129,000 1,215,180 Credence Systems Corp.* .................... 382,444 543,070 Data Domain, Inc.* ......................... 54,600 1,159,704 NUMBER OF SHARES VALUE ---------- ------------ TECHNOLOGY--(CONTINUED) Double-Take Software, Inc.* ................ 93,400 $ 970,426 Emulex Corp.* .............................. 100,700 1,498,416 GigaMedia Ltd.* ............................ 137,100 2,685,789 Global Sources Ltd.* ....................... 18,138 221,284 Globecomm Systems, Inc.* ................... 98,500 867,785 Greenfield Online, Inc.* ................... 45,000 608,850 JDA Software Group, Inc.* .................. 77,900 1,329,753 Mattson Technology, Inc.* .................. 119,800 711,612 MicroStrategy, Inc., Class A* .............. 21,000 1,396,920 Move, Inc.* ................................ 143,470 360,110 Network Equipment Technologies, Inc.* ...................... 55,000 313,500 Novell, Inc.* .............................. 21,800 162,410 Phoenix Technologies Ltd.* ................. 97,300 1,606,423 Plantronics, Inc. .......................... 52,500 990,150 Power Integrations, Inc.* .................. 55,400 1,457,020 QLogic Corp.* .............................. 121,400 1,924,190 Quidel Corp.* .............................. 104,200 1,712,006 Radiant Systems, Inc.* ..................... 94,900 1,355,172 RF Micro Devices, Inc.* .................... 214,800 676,620 S1 Corp.* .................................. 197,100 1,395,468 Sapient Corp.* ............................. 215,800 1,592,604 Shanda Interactive Entertainment Ltd. - ADR* ................ 72,700 2,404,916 Sierra Wireless, Inc.* ..................... 106,800 1,544,328 SonicWALL, Inc.* ........................... 69,500 578,935 Spansion, Inc., Class A* ................... 141,200 388,300 SPSS, Inc.* ................................ 34,000 1,293,020 Synchronoss Technologies, Inc.* .................................... 51,300 824,904 Taleo Corp., Class A* ...................... 69,600 1,326,576 Verigy Ltd.* ............................... 81,500 1,638,150 Vignette Corp.* ............................ 11,800 149,270 VNUS Medical Technologies, Inc.* .................................... 50,300 940,107 Zoran Corp.* ............................... 87,700 1,204,121 ------------ 50,278,304 ------------ TOTAL COMMON STOCKS (Cost $235,757,782)............................... 213,496,863 ------------ The accompanying notes are an integral part of the financial statements. 10 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND PORTFOLIO OF INVESTMENTS (CONCLUDED) FEBRUARY 29, 2008 (UNAUDITED) NUMBER OF SHARES VALUE ---------- ------------ SHORT-TERM INVESTMENTS--1.6% Columbia Prime Reserves Fund 3.45% 03/03/08 ........................... 3,405,191 $ 3,405,191 ------------ TOTAL SHORT-TERM INVESTMENTS (Cost $3,405,191)....................... 3,405,191 ------------ TOTAL INVESTMENTS--99.5% (Cost $239,162,973)......................... 216,902,054 OTHER ASSETS IN EXCESS OF LIABILITIES--0.5%........................... 1,163,592 ------------ NET ASSETS--100.0%............................ $218,065,646 ============ - ---------- * Non-income producing. ADR -- American Depository Receipt. The accompanying notes are an integral part of the financial statements. 11 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND STATEMENT OF ASSETS AND LIABILITIES FEBRUARY 29, 2008 (UNAUDITED) ASSETS Investments, at value (cost - $239,162,973) .............. $216,902,054 Receivable for investments sold .......................... 6,518,225 Receivable for capital shares sold ....................... 97,921 Dividends receivable ..................................... 94,026 Prepaid expenses and other assets ........................ 48,695 ------------ Total assets ........................................ 223,660,921 ------------ LIABILITIES Payable for investments purchased ........................ 5,157,969 Payable for capital shares redeemed ...................... 188,746 Payable to the Adviser ................................... 162,444 Accrued expenses and other liabilities ................... 86,116 ------------ Total liabilities ................................... 5,595,275 ------------ NET ASSETS Capital stock, $0.001 par value .......................... 12,171 Paid-in capital .......................................... 243,535,144 Accumulated net investment loss .......................... (877,536) Accumulated net realized loss from investments ........... (2,343,214) Net unrealized depreciation on investments ............... (22,260,919) ------------ Net assets .......................................... $218,065,646 ============ INSTITUTIONAL CLASS Net assets ............................................... $120,144,570 ------------ Shares outstanding ....................................... 6,671,650 ------------ Net asset value, offering and redemption price per share . $ 18.01 ============ INVESTOR CLASS Net assets ............................................... $ 97,921,076 ------------ Shares outstanding ....................................... 5,499,116 ------------ Net asset value, offering and redemption price per share . $ 17.81 ============ The accompanying notes are an integral part of the financial statements. 12 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND STATEMENT OF OPERATIONS (UNAUDITED) FOR THE SIX MONTHS ENDED FEBRUARY 29, 2008 ----------------- INVESTMENT INCOME Dividends (Net of foreign withholding taxes of $5,836) ... $ 986,336 ------------ Total investment income .................................. 986,336 ............ EXPENSES Advisory fees ............................................ 1,443,094 Administrative service fees .............................. 216,464 Administration and accounting fees ....................... 205,352 Shareholder servicing fees ............................... 60,004 Transfer agent fees ...................................... 52,663 Custodian fees ........................................... 43,293 Directors' and officer's fees ............................ 40,278 Professional fees ........................................ 25,009 Printing and shareholder reporting fees .................. 16,271 Registration and filing fees ............................. 8,513 Other expenses ........................................... 12,244 ------------ Total expenses before waivers ......................... 2,123,185 Less: waivers ......................................... (259,313) ------------ Net expenses .......................................... 1,863,872 ------------ Net investment loss ...................................... (877,536) ------------ NET REALIZED AND UNREALIZED GAIN/(LOSS) FROM INVESTMENTS Net realized gain from investments ....................... 161,920 Net change in unrealized appreciation/(depreciation) on investments ........................................ (46,600,863) ------------ Net realized and unrealized loss from investments ........ (46,438,943) ------------ NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ....... $(47,316,479) ============ The accompanying notes are an integral part of the financial statements. 13 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED FOR THE FEBRUARY 29, 2008 YEAR ENDED (UNAUDITED) AUGUST 31, 2007 ----------------- --------------- INCREASE/(DECREASE) IN NET ASSETS FROM OPERATIONS Net investment loss .............................. $ (877,536) $ (1,220,252) Net realized gain from investments ............... 161,920 40,649,625 Net change in unrealized appreciation/(depreciation) on investments ................................ (46,600,863) (4,334,599) ------------- ------------ Net increase/(decrease) in net assets resulting from operations ............................... (47,316,479) 35,094,774 ------------- ------------ LESS DISTRIBUTIONS TO SHAREHOLDERS FROM: Net realized capital gains--Institutional shares . (24,591,378) (39,206,310) Net realized capital gains--Investor shares ...... (16,794,654) (30,588,836) ------------- ------------ Total distributions to shareholders ........... (41,386,032) (69,795,146) ------------- ------------ INCREASE/(DECREASE) IN NET ASSETS DERIVED FROM CAPITAL SHARE TRANSACTIONS(1) .................... (26,398,693) 30,476,008 ------------- ------------ Total decrease in net assets ..................... (115,101,204) (4,224,364) NET ASSETS Beginning of period .............................. 333,166,850 337,391,214 ------------- ------------ End of period* ................................... $ 218,065,646 $333,166,850 ============= ============ - ---------- * Includes accumulated net investment loss of $(877,536) and $0 for the six months ended February 29, 2008 and for the year ended August 31, 2007, respectively. (1) See Note 4 in the Notes to Financial Statements.
The accompanying notes are an integral part of the financial statements. 14 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- Contained below is per share operating performance data for each class of shares outstanding, total investment return, ratios to average net assets and other supplemental data for the respective periods. This information has been derived from information provided in the financial statements. - --------------------------------------------------------------------------------
INSTITUTIONAL CLASS -------------------------------------------------------------------------------- FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE SIX MONTHS YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED ENDED 2/29/08 8/31/07 8/31/06 8/31/05 8/31/04 8/31/03 ----------- -------- -------- --------- --------- --------- (UNAUDITED) PER SHARE OPERATING PERFORMANCE Net asset value, beginning of period ....... $ 24.61 $ 27.74 $ 28.78 $ 24.99 $ 22.71 $ 17.83 ------- -------- -------- --------- --------- --------- Net investment loss ........................ (0.06)* (0.08)* (0.16)* (0.22) (0.16)* (0.11)* Net realized and unrealized gain/(loss) from investments .......................... (3.40) 2.74 3.08 6.49 2.44 4.99 ------- -------- -------- --------- --------- --------- Net increase/(decrease) in net assets resulting from operations ................ (3.46) 2.66 2.92 6.27 2.28 4.88 ------- -------- -------- --------- --------- --------- Distributions to shareholders from: Net realized capital gains ................. (3.14) (5.79) (3.96) (2.48) -- -- ------- -------- -------- --------- --------- --------- Net asset value, end of period ............. $18.01 $ 24.61 $ 27.74 $ 28.78 $ 24.99 $ 22.71 ======= ======== ======== ========= ========= ========= Total investment return(1) ................. (16.26)% 10.29% 12.46% 27.34% 10.04% 27.37% ======= ======== ======== ========= ========= ========= RATIOS/SUPPLEMENTAL DATA Net assets, end of period (000's omitted) $120,145 $197,415 $189,920 $ 177,359 $ 175,642 $ 132,845 Ratio of expenses to average net assets with waivers and reimbursements .......... 1.25%(2) 1.25% 1.25% 1.25% 1.25% 1.25% Ratio of expenses to average net assets without waivers and reimbursements ....... 1.43%(2) 1.43% 1.43% 1.46% 1.44% 1.50% Ratio of net investment loss to average net assets ............................... (0.57)%(2) (0.30)% (0.55)% (0.73)% (0.61)% (0.60)% Portfolio turnover rate .................... 79.13% 142.45% 126.64% 129.18% 129.18% 122.39% - ---------- * Calculated based on average shares outstanding for the period. (1) Total investment return is calculated assuming a purchase of shares on the first day and a sale of shares on the last day of each period reported and includes reinvestments of dividends and distributions, if any. (2) Annualized.
The accompanying notes are an integral part of the financial statements. 15 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- Contained below is per share operating performance data for each class of shares outstanding, total investment return, ratios to average net assets and other supplemental data for the respective periods. This information has been derived from information provided in the financial statements. - --------------------------------------------------------------------------------
INVESTOR CLASS -------------------------------------------------------------------------------- FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE SIX MONTHS YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED ENDED 2/29/08 8/31/07 8/31/06 8/31/05 8/31/04 8/31/03 ----------- -------- -------- --------- --------- --------- (UNAUDITED) PER SHARE OPERATING PERFORMANCE Net asset value, beginning of period ....... $ 24.38 $ 27.56 $ 28.65 $ 24.91 $ 22.65 $ 17.80 ------- -------- -------- --------- --------- --------- Net investment loss ........................ (0.07)* (0.10)* (0.18)* (0.23) (0.18)* (0.12)* Net realized and unrealized gain/(loss) from investments ......................... (3.36) 2.71 3.05 6.45 2.44 4.97 ------- -------- -------- --------- --------- --------- Net increase/(decrease) in net assets resulting from operations................. (3.43) 2.61 2.87 6.22 2.26 4.85 ------- -------- -------- --------- --------- --------- Distributions to shareholders from: Net realized capital gains.................. (3.14) (5.79) (3.96) (2.48) -- -- ------- -------- -------- --------- --------- --------- Net asset value, end of period.............. $ 17.81 $ 24.38 $ 27.56 $ 28.65 $ 24.91 $ 22.65 ======= ======== ======== ========= ========= ========= Total investment return(1).................. (16.30)% 10.15% 12.33% 27.22% 9.98% 27.25% ======= ======== ======== ========= ========= ========= RATIOS/SUPPLEMENTAL DATA Net assets, end of period (000's omitted)... $97,921 $135,752 $147,471 $ 134,054 $ 124,031 $ 112,508 Ratio of expenses to average net assets with waivers and reimbursements........... 1.35%(2) 1.35% 1.35% 1.35% 1.35% 1.35% Ratio of expenses to average net assets without waivers and reimbursements........ 1.53%(2) 1.53% 1.53% 1.56% 1.54% 1.60% Ratio of net investment loss to average net assets................................ (0.66)%(2) (0.40)% (0.65)% (0.83)% (0.70)% (0.69)% Portfolio turnover rate..................... 79.13% 142.45% 126.64% 129.18% 129.18% 122.39% - ---------- * Calculated based on average shares outstanding for the period. (1) Total investment return is calculated assuming a purchase of shares on the first day and a sale of shares on the last day of each period reported and includes reinvestments of dividends and distributions, if any. (2) Annualized.
The accompanying notes are an integral part of the financial statements. 16 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND NOTES TO FINANCIAL STATEMENTS (UNAUDITED) 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES The RBB Fund, Inc. ("RBB" or the "Company") was incorporated under the laws of the State of Maryland on February 29, 1988 and is registered under the Investment Company Act of 1940, as amended, (the "Investment Company Act") as an open-end management investment company. RBB is a "series fund," which is a mutual fund divided into separate portfolios. Each portfolio is treated as a separate entity for certain matters under the Investment Company Act, and for other purposes, and a shareholder of one portfolio is not deemed to be a shareholder of any other portfolio. Currently, RBB has twenty-one active investment portfolios, including the Bogle Investment Management Small Cap Growth Fund (the "Fund"), which commenced investment operations on October 1, 1999. As of the date hereof, the Fund offers two classes of shares, Institutional Class and Investor Class. RBB has authorized capital of one hundred billion shares of common stock of which 78.073 billion shares are currently classified into one hundred and twenty classes of common stock. Each class represents an interest in an active or inactive RBB investment portfolio. The active classes have been grouped into ten separate "families." PORTFOLIO VALUATION -- The Fund's net asset value ("NAV") is calculated once daily at the close of regular trading hours on the New York Stock Exchange ("NYSE") (generally 4:00 p.m. Eastern time) on each day the NYSE is open. Securities held by the Fund are valued using the closing price or the last sale price on a national securities exchange or the National Association of Securities Dealers Automatic Quotation System (NASDAQ) market system where they are primarily traded. Equity securities traded in the over-the-counter market are valued at their closing prices. If there were no transactions on that day, securities traded principally on an exchange or on NASDAQ will be valued at the mean of the last bid and ask prices prior to the market close. Fixed income securities having a remaining maturity of greater than 60 days are valued using an independent pricing service. Fixed income securities having a remaining maturity of 60 days or less are amortized to maturity based on their cost. Investments in other open-end investment companies are valued based on the NAV of those investment companies (which may use fair value pricing as discussed in their prospectuses). If market quotations are unavailable or deemed unreliable, securities will be valued in accordance with procedures adopted by the Board of Directors. Relying on prices supplied by pricing services or dealers or using fair valuation may result in values that are higher or lower than the values used by other investment companies and investors to price the same investments. USE OF ESTIMATES -- The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. 17 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) INVESTMENT TRANSACTIONS, INVESTMENT INCOME AND EXPENSES -- The Fund records security transactions based on trade date. The cost of investments sold is determined by use of the specific identification method for both financial reporting and income tax purposes in determining realized gains and losses on investments. Interest income is accrued when earned. Dividend income is recorded on the ex-dividend date. The Fund's net investment income (other than class specific shareholder servicing fees) and unrealized and realized gains and losses are allocated daily to each class of shares based upon the relative proportion of net assets of each class at the beginning of the day. Expenses incurred on behalf of a specific class, fund or fund family are charged directly to the class, fund or fund family (in proportion to net assets). Expenses incurred for all of the RBB fund families (such as director or professional fees) are charged to all funds in proportion to their net assets of the RBB funds, or in such other manner as the Board of Directors deems fair or equitable. Expenses and fees, including investment advisory and administration fees, are accrued daily for the purpose of determining the net asset value of the Fund. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net investment income and distributions from net realized capital gains, if any, will be declared and paid at least annually to shareholders and recorded on ex-date. Income dividends and capital gain distributions are determined in accordance with U.S. federal income tax regulations which may differ from accounting principles generally accepted in the United States. Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications within the components of net assets. U.S. TAX STATUS -- No provision is made for U.S. income taxes as it is the Fund's intention to qualify for and elect the tax treatment applicable to regulated investment companies under Subchapter M of the Internal Revenue Code of 1986, as amended, and make the requisite distributions to its shareholders which will be sufficient to relieve it from U.S. income and excise taxes. OTHER -- In the normal course of business, the Fund may enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is dependent on claims that may be made against the Fund in the future, and, therefore, cannot be estimated; however, based on experience, the risk of material loss for such claims is considered remote. 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES Bogle Investment Management, L.P. (the "Adviser" or "Bogle") serves as the Fund's investment adviser. For its advisory services, the Adviser is entitled to receive 1.00% of the Fund's average daily net assets, computed daily and payable monthly. The Adviser has contractually agreed to limit the Fund's total operating expenses for the current fiscal year to the extent that such expenses exceed 1.25% of the average daily net assets of the Fund's Institutional Class and 1.35% of the average daily net assets of the Fund's Investor Class. As necessary, this limitation is effected in waivers of advisory fees and reimbursements of expenses exceeding the advisory fee. The contractual fee waiver does not provide for recoupment of fees that were waived or expenses that were 18 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) reimbursed. For the six months ended February 29, 2008, investment advisory fees and waivers of the Fund were as follows: GROSS NET ADVISORY FEES WAIVERS ADVISORY FEES ------------- --------- ------------- $1,443,094 $(53,673) $1,389,421 The Fund will not pay the Adviser at a later time for any amounts waived or any amounts assumed. In addition to serving as the Fund's investment adviser, Bogle provides certain shareholder services to the Investor Class of the Fund. As compensation for such services, the Adviser receives a monthly fee equal to an annual rate of 0.10% of the average daily net assets of the Fund's Investor Class. PFPC Inc. ("PFPC"), a wholly-owned subsidiary of PFPC Worldwide Inc. and an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc., serves as administrator for the Fund. For providing administrative and accounting services, PFPC is entitled to receive a monthly fee equal to an annual rate of 0.115% of the Fund's average daily net assets, subject to a minimum of $6,250 per month. The Fund also pays a monthly multiple class fee of $1,875 per additional class. In addition, PFPC serves as the Fund's transfer and dividend disbursing agent. PFPC voluntarily agreed to waive a portion of its administration and accounting services fees for the Fund. For the six months ended February 29, 2008, administration and accounting services fees and waivers of the Fund were as follows: GROSS ADMINISTRATION NET ADMINISTRATION AND ACCOUNTING AND ACCOUNTING SERVICES FEES WAIVERS SERVICES FEES -------------------- --------- ------------------ $205,352 $(18,038) $187,314 Included in the administration and accounting services fees and expenses, shown above, are fees for providing regulatory administration services to RBB. For providing these services, PFPC is entitled to receive compensation as agreed to by the Company and PFPC. This fee is allocated to each portfolio in proportion to its net assets of the RBB Funds. In addition, PFPC serves as the Fund's transfer and dividend disbursing agent. For providing transfer agent services, PFPC is entitled to receive a monthly fee subject to a minimum monthly fee of $6,000 plus out of pocket expenses. For the six months ended February 29, 2008, PFPC transfer agency fees were $52,663. PFPC Trust Company provides certain custodial services to the Fund. PFPC Trust Company is a wholly-owned subsidiary of PFPC Worldwide, Inc. and an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc. As compensation for such custodial services, PFPC Trust Company is entitled to receive a monthly fee equal to an annual rate of 0.03% of the Fund's average daily net assets subject to a minimum monthly fee of $1,500. 19 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) PFPC Distributors, Inc. ("PFPC Distributors"), a wholly-owned subsidiary of PFPC Worldwide, Inc. and an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc., provides certain administrative services to the Fund. As compensation for such administrative services, PFPC Distributors receives a monthly fee equal to an annual rate of 0.15% of the Fund's average daily net assets. PFPC Distributors voluntarily agreed to waive a portion of its administrative services fees for the Fund. For the six months ended February 29, 2008, administrative services fees and waivers of the Fund were as follows: GROSS ADMINISTRATIVE NET ADMINISTRATIVE SERVICES FEES WAIVERS SERVICES FEES -------------------- ---------- ------------------ $216,464 $(187,602) $28,862 The Fund will not pay PFPC or PFPC's affiliates at a later time for any amounts waived or any amounts assumed. As of February 29, 2008, the Fund owed PFPC and its affiliates $31,744 for their services. 3. INVESTMENT IN SECURITIES For the six months ended February 29, 2008, aggregate purchases and sales of investment securities (excluding short-term investments) of the Fund were as follows: INVESTMENT SECURITIES ----------------------------------- PURCHASES SALES -------------- ------------ $227,836,505 $299,611,804 4. CAPITAL SHARE TRANSACTIONS As of February 29, 2008, the Fund has 100,000,000 shares of $0.001 par value common stock authorized for the Institutional Class and 100,000,000 shares of $0.001 par value common stock authorized for the Investor Class. Transactions in capital shares were as follows:
INSTITUTIONAL CLASS ----------------------------------------------------------------- FOR THE SIX MONTHS ENDED FOR THE FEBRUARY 29, 2008 YEAR ENDED (UNAUDITED) AUGUST 31, 2007 ------------------------------ ---------------------------- SHARES VALUE SHARES VALUE ---------- ------------ ---------- ------------ Sales.......................................... 402,011 $ 8,345,480 1,423,321 $ 35,662,955 Reinvestments.................................. 1,096,152 23,830,362 1,580,281 37,610,697 Redemptions.................................... (2,848,105) (57,554,376) (1,827,260) (45,832,743) ---------- ------------ ---------- ------------ Net Increase/(Decrease)........................ (1,349,942) $(25,378,534) 1,176,342 $ 27,440,909 ========== ============ ========== ============
20 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
INVESTOR CLASS ----------------------------------------------------------------- FOR THE SIX MONTHS ENDED FOR THE FEBRUARY 29, 2008 YEAR ENDED (UNAUDITED) AUGUST 31, 2007 ------------------------------ ---------------------------- SHARES VALUE SHARES VALUE ---------- ------------ ---------- ------------ Sales.......................................... 107,280 $ 2,185,951 464,077 $ 11,597,939 Reinvestments.................................. 745,852 16,043,279 1,229,987 29,027,689 Redemptions.................................... (921,246) (19,249,389) (1,477,245) (37,590,529) ---------- ------------ ---------- ------------ Net Increase/(Decrease)..................... (68,114) $ (1,020,159) 216,819 $ 3,035,099 ========== ============ ========== ============
5. FEDERAL INCOME TAX INFORMATION At February 29, 2008, federal tax cost, aggregate gross unrealized appreciation and depreciation of securities held by the Fund were as follows: FEDERAL TAX UNREALIZED UNREALIZED NET UNREALIZED COST APPRECIATION DEPRECIATION DEPRECIATION ----------- ------------ ------------ -------------- $239,162,973 $12,862,075 $(35,122,994) $(22,260,919) As of August 31, 2007, the components of distributable earnings on a tax basis were as follows: UNDISTRIBUTED UNDISTRIBUTED ORDINARY LONG-TERM INCOME GAINS ------------- ------------- $2,094,136 $39,291,899 At August 31, 2007, the Fund had no capital loss carryforwards available to offset future capital gains. Under federal tax law, foreign currency and capital losses realized after October 31 may be deferred and treated as having arisen on the first day of the following fiscal year. For the year ended August 31, 2007, the Fund incurred no post-October capital losses. The differences between the book and tax basis components of distributable earnings relate principally to the timing of recognition of income and gains for federal income tax purposes. Short-term and foreign currency gains are reported as ordinary income for federal tax purposes. 21 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND NOTES TO FINANCIAL STATEMENTS (CONCLUDED) (UNAUDITED) 6. NEW ACCOUNTING PRONOUNCEMENTS Effective February 29, 2008, the Funds adopted FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes" (FIN 48). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Fund's tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax positions not deemed to meet the "more-likely-than-not" threshold would be recorded as a tax benefit or expense in the current year. The adoption of FIN 48 did not result in the recording of any tax benefits or expenses. In September 2006, FASB issued Statement of Financial Accounting Standards ("SFAS") 157, Fair Value Measurements, which clarifies the definition of fair value and requires companies to expand their disclosure about the use of fair value to measure assets and liabilities in interim and annual periods subsequent to initial recognition. Adoption of SFAS 157 requires the use of the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. At this time, management is in the process of reviewing the impact, if any, of SFAS 157 on the Fund's financial statements. 22 BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND OTHER INFORMATION (UNAUDITED) PROXY VOTING Policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities as well as information regarding how the Fund voted proxies relating to portfolio securities for the most recent 12-month period ended June 30 are available without charge, upon request, by calling Bogle Small Cap Growth Fund at (877) 264-5346 and on the Securities and Exchange Commission's ("SEC") website at http://www.sec.gov. QUARTERLY PORTFOLIO SCHEDULES The Company will file its complete schedule of portfolio holdings with the SEC for the first and third fiscal quarters of each fiscal year (quarters ended November 30 and May 31) on Form N-Q. The Company's Form N-Q will be available on the SEC website at http://www.sec.gov and may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. Information on the operation of the SEC Public Reference Room may be obtained by calling (202) 551-8090. 23 INVESTMENT ADVISER Bogle Investment Management, L.P. 2310 Washington Street Suite 310 Newton Lower Falls, MA 02462 ADMINISTRATOR PFPC Inc. 301 Bellevue Parkway Wilmington, DE 19809 TRANSFER AGENT PFPC Inc. 101 Sabin Street Pawtucket, RI 02860 PRINCIPAL UNDERWRITER PFPC Distributors, Inc. 760 Moore Road King of Prussia, PA 19406 CUSTODIAN PFPC Trust Company 8800 Tinicum Blvd. Suite 200 Philadelphia, PA 19153 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM PricewaterhouseCoopers LLP Two Commerce Square 2001 Market Street Philadelphia, PA 19103-7042 COUNSEL Drinker Biddle & Reath LLP One Logan Square 18th and Cherry Streets Philadelphia, PA 19103-6996 ================================================================================ BOGLE INVESTMENT MANAGEMENT SMALL CAP GROWTH FUND OF THE RBB FUND, INC. SEMIANNUAL REPORT FEBRUARY 29, 2008 (UNAUDITED) This report is submitted for the general information of the shareholders of the Fund. It is not authorized for distribution unless preceded or accompanied by a current prospectus for the Fund. [GRAPHIC OMITTED] BEAR STEARNS BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO OF THE RBB FUND, INC. SEMI-ANNUAL REPORT FEBRUARY 29, 2008 (UNAUDITED) - -------------------------------------------------------------------------------- This report is submitted for the general information of the shareholders of the Portfolio. It is not authorized for distribution unless preceded or accompanied by a current prospectus for the Portfolio. - -------------------------------------------------------------------------------- BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO SEMI-ANNUAL REPORT FOR THE PERIOD ENDED FEBRUARY 29, 2008 - -------------------------------------------------------------------------------- Dear Shareholder, We are pleased to present the Bear Stearns CUFS MLP Mortgage Portfolio ("the Portfolio") semi-annual report covering the period from September 1, 2007 through February 29, 2008. Portfolio performance information, market commentary and our outlook for the period ended February 29, 2008 follows. We encourage you to carefully review the enclosed information. PORTFOLIO PERFORMANCE AND MARKET REVIEW: From September 1, 2007 through February 29, 2008 the Bear Stearns CUFS MLP Mortgage Portfolio generated a periodic total return of 2.05% net of expenses. The Portfolio's primary benchmark, the Lehman Brothers 1 to 3-month U.S. Treasury Bill Index, returned 1.84% during the same period, while an index tracking 1-month U.S. LIBOR returned 2.54%. The 30-day yield of the Portfolio at the end of the period was 5.82%, compared to a yield of 1.92% for the Portfolio's benchmark and 3.11% for the 1-month LIBOR. The past six months were characterized by tightening credit conditions and a lack of liquidity throughout the financial markets. These factors, in part, caused the Federal Reserve Board ("the Fed") to take action by lowering the Federal Funds rate five times during the period. Both short and long term Treasury yields fell sharply over the last six months, helping make Treasuries the best performing asset class in the fixed income markets. Following the initial credit crunch that started last summer, select mortgages had started to recover somewhat in September and October. However, a renewed bout of seizing credit conditions triggered another flight to quality, pushing mortgage spreads wider. What had originally been diagnosed as an isolated subprime mortgage issue has now negatively impacted virtually every spread sector. This contagion, which some had hoped would be cured by numerous Fed rate cuts, continued to spread. As last year's "subprime crisis" turned into this year's "liquidity crisis", securities previously thought of as low-risk began a dramatic repricing. Mortgage performance suffered considerably in this environment, with agency mortgage-backed securities (MBS) underperforming duration-matched Treasuries by about 100 basis points. Non-agency MBS performed even worse, as deleveraging and margin-related liquidations pushed clearing levels lower. The Portfolio suffered the effect of this difficult market, as holdings of non-agency prime and alt-A mortgage securities in particular put pressure on performance. Holdings of interest-only securities, which performed well in the slowing prepayment environment, added to performance, but not enough to fully recoup losses in other areas. PORTFOLIO POSITIONING AND MARKET OUTLOOK: The focus of the Portfolio continues to be on high quality mortgage securities, with most of them being either U.S. agency-backed instruments or AAA-rated private label securities. While almost all of these have been affected by the ongoing credit crunch, we believe that the price volatility has been driven more by changes in liquidity than in the overall quality of the securities themselves. Additionally, the current yield of the portfolio remains relatively stable despite drops in benchmark liability rates. Looking forward, we believe that the curing process for the current market disruption has begun, but could take some time to fully take hold. On a positive note, recent legislative and regulatory responses by various parts of the government should help both homeowners and investors. Significant writedowns as well as capital infusions have improved the longer-term ability of banks and brokers to move forward. Additionally, the widening spreads and steep yield curve make mortgage assets more attractive to investors. 1 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO SEMI-ANNUAL REPORT FOR THE PERIOD ENDED FEBRUARY 29, 2008 (CONCLUDED) At the same time, uncertainty and capital hoarding has made risk taking more difficult for many of the traditional mortgage market participants. At a time when general risk reduction and deleveraging needs to occur in our financial systems, the paring back of risk-taking in many parts of our markets makes this task more difficult. Loss of confidence in the rating agencies and bond insurers will also continue to plague financial markets. Despite these concerns, we continue to believe that the Portfolio is positioned for long-term success, and we have confidence that we can deliver attractive long-term returns for our clients. We appreciate the trust you have placed in us and remain focused on achieving the Portfolio's long-term investment goals. CUFS(R): HELPING CREDIT UNIONS DO WELL SO THAT THEY CAN DO GOOD Sincerely, Wade Charles Barnett Andrew Headley, CFA Senior Managing Director, CUFS(R) Portfolio Manager Bear Stearns & Co., Inc. Bear Stearns Asset Management 2 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO PERFORMANCE DATA FEBRUARY 29, 2008 (UNAUDITED)
- ------------------------------------------------------------------------------------------------------------------ TOTAL RETURNS AS OF FEBRUARY 29, 2008 Average Annual Total Returns Six-Month 1 Year Since Inception* --------- ------ ---------------- Bear Stearns CUFS MLP Mortgage Portfolio(1) 2.05% 3.82% 4.34% Lehman Brothers 1 to 3-month U.S. Treasury Bill Index(2) 1.84% 4.47% 4.56% 1-month U.S. LIBOR(3) 2.54% 5.32% 5.36% - ------------------------------------------------------------------------------------------------------------------
PERFORMANCE QUOTED IS PAST PERFORMANCE AND DOES NOT GUARANTEE FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE RETURNS QUOTED ABOVE. CALL CUFS(R) AT 1-800-519-CUFS (2837) FOR RETURNS CURRENT TO THE MOST RECENT MONTH-END. THE PORTFOLIO'S GROSS ANNUAL OPERATING EXPENSES, AS STATED IN THE CURRENT PROSPECTUS, IS 0.60%. THE PERFORMANCE DATA REFLECTS FEE WAIVERS AND EXPENSE REIMBURSEMENTS. THE RETURNS COULD HAVE BEEN LOWER IF THESE WAIVERS AND EXPENSE REIMBURSEMENTS WERE NOT IN EFFECT. PORTFOLIO COMPOSITION IS SUBJECT TO CHANGE. - ---------- * The inception date of the fund was December 19, 2006. (1) Net of fees and expenses. (2) The Lehman Brothers U.S. Treasury Bills 1-3 Month Index is the 1-3 Month component of the Lehman Brothers U.S. Treasury Bills Index. The Lehman Brothers Treasury Bill Index includes U.S. Treasury bills with a remaining maturity from 1 up to (but not including) 12 months. It excludes zero coupon strips. Source: Lehman Live. (3) The 1-Month LIBOR is a constant maturity index of the London Interbank Offering Rate established to reflect the total return of the 1-Month LIBOR rate. Source: Merrill Lynch. 3 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO FUND EXPENSE EXAMPLE (UNAUDITED) As a shareholder of the Portfolio, you incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees and other Portfolio expenses. The example is intended to help you understand your ongoing costs (in dollars) of investing in the Portfolio and to compare these costs with the ongoing costs of investing in other mutual funds. These examples are based on an investment of $1,000 invested at the beginning of the period from September 1, 2007 through February 29, 2008, and held for the entire period. ACTUAL EXPENSES The first line of the accompanying tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second line of the accompanying tables provides information about hypothetical account values and hypothetical expenses based on the Portfolio's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare these 5% hypothetical examples with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that the expenses shown in the accompanying tables are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the second line of the accompanying tables is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if any transactional costs were included, your costs would have been higher.
---------------------------------------------------------------------------- BEGINNING ACCOUNT VALUE ENDING ACCOUNT VALUE EXPENSES PAID DURING SEPTEMBER 1, 2007 FEBRUARY 29, 2008 PERIOD* ----------------------- -------------------- -------------------- Actual $1,000.00 $1,020.50 $3.01 Hypothetical (5% return before expenses) 1,000.00 1,021.84 3.02 - ---------- * Expenses are equal to the Portfolio's annualized expense ratio of 0.60%, which includes waived fees or reimbursed expenses, multiplied by the number of days (182) in the most recent fiscal half-year, then divided by 366 to reflect the one-half year period. The Portfolio's ending account value on the first line is based on the actual six-month total return of 2.05%.
4 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO PORTFOLIO HOLDINGS SUMMARY TABLE FEBRUARY 29, 2008 (UNAUDITED)
% OF NET SECURITY TYPE CLASSIFICATION ASSETS VALUE - ----------------------------------------------------------------------------------------------------------- COLLATERALIZED MORTGAGE OBLIGATIONS 52.3% $ 84,702,944 GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS 44.2 71,634,429 MORTGAGE DERIVATIVES 14.0 22,721,645 SHORT TERM OBLIGATIONS 6.1 9,929,900 OPTIONS PURCHASED 0.4 646,875 SECURITIES SOLD SHORT: FEDERAL NATIONAL MORTGAGE ASSOCIATION (6.2) (10,033,593) LIABILITIES IN EXCESS OF OTHER ASSETS (10.8) (17,465,069) ------ ------------ NET ASSETS 100.0% $162,137,131 ====== ============ - ---------------- Portfolio holdings are subject to change at any time.
The accompanying notes are an integral part of the financial statements. 5 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO PORTFOLIO OF INVESTMENTS FEBRUARY 29, 2008 (UNAUDITED) MOODY'S/ PAR FAIR S&P (000'S) VALUE -------- ------- ------------ GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS--44.2% FEDERAL HOME LOAN MORTGAGE CORPORATION--12.6% 5.935% 08/01/36 (a) Aaa/AAA $ 7,415 $ 7,677,724 5.969% 09/01/36 (a) Aaa/AAA 3,821 3,954,093 5.864% 11/01/36 (a) Aaa/AAA 3,546 3,670,248 5.827% 08/01/37 (a) Aaa/AAA 4,934 5,085,267 ------------ 20,387,332 ------------ FEDERAL NATIONAL MORTGAGE ASSOCIATION--31.6% 6.000% 03/01/31 TBA Aaa/AAA 17,000 17,373,203 6.048% 10/01/36 (a) Aaa/AAA 3,239 3,358,631 6.093% 10/01/36 (a) Aaa/AAA 1,748 1,812,883 5.500% 12/01/36 Aaa/AAA 13,670 13,771,006 5.865% 12/01/36 (a) Aaa/AAA 1,884 1,949,756 5.000% 03/01/37 TBA Aaa/AAA 5,000 4,923,828 5.500% 03/01/37 TBA Aaa/AAA 5,000 5,028,125 5.557% 09/01/37 (a) Aaa/AAA 2,934 3,029,665 ------------ 51,247,097 ------------ TOTAL GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS (Cost $70,578,458)................................ 71,634,429 ------------ MORTGAGE DERIVATIVES--14.0% FANNIE MAE (IO)--10.9% 4.500% 12/01/18 Aaa/AAA 8,117 1,185,986 4.500% 01/01/19 Aaa/AAA 8,108 1,187,249 4.500% 03/01/20 Aaa/AAA 6,084 923,645 5.500% 05/25/23 Aaa/AAA 1,640 464,034 5.500% 07/25/28 Aaa/AAA 30,044 1,974,693 5.000% 10/01/33 * Aaa/AAA 10,967 2,299,464 5.000% 08/01/34 Aaa/AAA 3,407 861,449 5.000% 02/01/35 Aaa/AAA 5,436 1,162,679 5.500% 04/01/36 * Aaa/AAA 8,262 1,844,275 5.500% 04/01/36 * Aaa/AAA 14,025 2,984,017 6.000% 08/01/36 Aaa/AAA 8,287 1,693,583 5.000% 10/01/36 Aaa/AAA 4,491 1,103,139 ------------ 17,684,213 ------------ FANNIE MAE (PO)--0.6% 0.000% 06/25/36 Aaa/AAA 1,392 926,551 ------------ FREDDIE MAC (IO)--0.4% 5.500% 07/15/16 Aaa/AAA 1,264 194,999 5.500% 05/15/24 Aaa/AAA 5,658 202,641 5.500% 12/15/24 Aaa/AAA 2,912 118,750 5.000% 05/15/34 Aaa/AAA 8,103 196,001 ------------ 712,391 ------------ FREDDIE MAC (PO)--1.0% 0.000% 09/15/35 Aaa/AAA 1,191 748,912 0.000% 09/15/36 Aaa/AAA 1,332 913,512 ------------ 1,662,424 ------------ MOODY'S/ PAR FAIR S&P (000'S) VALUE -------- ------- ------------ NON-AGENCY--1.1% CWALT Series 2006-43CB IO 6.000% 02/25/37 Aaa/AAA $ 5,113 $ 1,736,066 ------------ TOTAL MORTGAGE DERIVATIVES (Cost $23,311,832).............................. 22,721,645 ------------ COLLATERALIZED MORTGAGE OBLIGATIONS--52.3% Banc of America Mortgage Securities, Inc. Series 2005-H (a) 4.805% 09/25/35 Aaa/AAA 2,000 1,962,851 Banc of America Mortgage Securities, Inc. Series 2006-B * 6.160% 02/25/37 Aaa/AAA 4,819 4,818,850 Banc of America Mortgage Securities, Inc. Series 2007-3 6.000% 03/25/49 Aaa/AAA 4,872 4,885,441 Citigroup Mortgage Loan Trust, Inc. Series 2007-AR8 (a) 5.921% 07/31/37 Aaa/AAA 4,696 4,740,291 Countrywide Asset-Backed Certificates Series 2004-AB2 (a) 3.735% 05/25/36 Aa3/AA 500 431,519 Countrywide Home Loan Mortgage Pass-Through Trust Series 2007-HY1 (a) * 5.694% 04/25/37 Aaa/AAA 2,671 2,582,020 CWALT Series 2003-3 (a) 3.635% 04/25/18 Aaa/AAA 1,459 1,451,680 CWALT Series 2006-2CB 5.500% 03/25/36 Aaa/AAA 825 810,042 CWALT Series 2006-43CB 6.000% 02/25/37 Aaa/AAA 1,585 1,598,504 CWALT Series 2006-HY13 (a) * 5.903% 02/25/37 Aaa/AAA 12,127 11,351,630 CWALT Series 2006-J2 6.000% 04/25/36 Aaa/AAA 8,320 8,331,558 CWALT Series 2007-2CB * 5.750% 03/25/37 Aaa/AAA 5,383 4,672,378 CWALT Series 2007-J2 6.000% 07/25/37 Aaa/AAA 1,913 1,937,975 Fannie Mae REMICS Series 2005-25 (a) 3.485% 04/25/35 Aaa/AAA 2,391 2,348,209 First Horizon Asset Securities, Inc. Series 2006-AR1 (a) * 5.859% 05/25/36 Aaa/AAA 4,181 4,087,437 Freddie Mac REMIC Series 2995 (a) 3.521% 06/15/35 Aaa/AAA 2,192 2,167,848 JP Morgan Mortgage Trust Series 2005-A4 (a) 5.176% 07/25/35 Aaa/AAA 1,355 1,332,013 JP Morgan Mortgage Trust Series 2005-A6 (a) 4.972% 08/25/35 Aaa/AAA 882 874,928 The accompanying notes are an integral part of the financial statements. 6 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) FEBRUARY 29, 2008 (UNAUDITED) MOODY'S/ PAR FAIR S&P (000'S) VALUE -------- ------- ------------ COLLATERALIZED MORTGAGE OBLIGATIONS--CONTINUED Residential Asset Securitization Trust Series 2007-A5 6.000% 05/25/37 Aaa/AAA $ 1,764 $ 1,727,671 Residential Funding Mortgage Securities I Series 2006-SA4 (a) 6.123% 11/25/36 Aaa/AAA 7,780 7,844,342 Residential Funding Mortgage Securities I Series 2007-SA2 (a) 5.676% 04/25/37 Aa1/AAA 4,523 4,244,955 Washington Mutual, Inc. Series 2007-HY3 (a) 5.349% 03/25/37 Aaa/AA 1,651 1,398,005 Washington Mutual, Inc. Series 2007-HY4 (a) 5.550% 04/25/37 Aaa/AAA 4,414 4,411,498 Wells Fargo Mortgage- Backed Securities Trust Series 2007-10 6.250% 07/25/37 Aaa/Aaa 4,547 4,691,299 ------------ TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $86,623,504)............................... 84,702,944 ------------ CONTRACTS/ NOTIONAL AMOUNT (000'S) --------- OPTIONS PURCHASED--0.4% CALL OPTIONS--0.4% U.S. Treasury 10 year Note, Strike price $117, Expires 05/25/08 300 646,875 ------------ TOTAL OPTIONS PURCHASED (Cost $343,162).................................. 646,875 ------------ PAR FAIR (000'S) VALUE ------- ------------ SHORT TERM OBLIGATIONS--6.1% GOVERNMENT AGENCIES--0.2% Federal Home Loan Mortgage Corporation Note (c) 2.720% 03/05/08 $ 330 $ 329,900 ------------ REPURCHASE AGREEMENT--5.9% Lehman Brothers, Inc. (Tri-Party agreement dated 02/29/08 to be repurchased at $9,602,320, collateralized by $9,335,000 par value, Federal Home Loan Mortgage Corporation Note, 4.125% due 12/21/12, Market Value of collateral is $9,747,196) 2.900% 03/03/08 9,600 9,600,000 ------------ TOTAL SHORT TERM OBLIGATIONS (Cost $9,929,900)................................ 9,929,900 ------------ TOTAL INVESTMENTS--117.0% (Cost $190,786,856).................................. 189,635,793 ------------ SECURITIES SOLD SHORT--(6.2%) FEDERAL NATIONAL MORTGAGE ASSOCIATION--(6.2%) 5.000% 03/01/37 TBA (5,000) (4,923,828) 6.000% 03/01/31 TBA (5,000) (5,109,765) ------------ TOTAL SECURITIES SOLD SHORT (Cost $(9,826,367)).............................. (10,033,593) ------------ LIABILITIES IN EXCESS OF OTHER ASSETS(b)--(10.8)%.................................... (17,465,069) ------------ NET ASSETS--100.0%....................................... $162,137,131 ============ - ---------- CWALT -- Countrywide Alternative Loan Trust IO -- Interest Only PO -- Principal Only TBA -- To Be Announced * Security has been valued at fair market value as determined in good faith by or under the direction of RBB's Board of Directors. (a) Adjustable rate security. Interest rate varies due to interest rate fluctuations, or, in the case of certain asset-backed securities, interest payment shortfalls. The accompanying notes are an integral part of the financial statements. 7 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO PORTFOLIO OF INVESTMENTS (CONCLUDED) FEBRUARY 29, 2008 (UNAUDITED) (b) Liabilities in excess of other assets include interest rate swaps as follows:
NOTIONAL UNREALIZED TERMINATION AMOUNT FIXED FLOATING APPRECIATION COUNTERPARTY DATE (000) RATE RATE (DEPRECIATION) - ------------ ----------- -------- ------ ------------- -------------- Deutsche Bank+ 03/14/13 $20,000 4.220% 3 month LIBOR $(769,400) ==========
+ Portfolio pays the fixed rate and receives the floating rate. (c) All or a portion of the security was held as collateral for the following Futures contracts open at February 29, 2008:
NUMBER VALUE VALUE UNREALIZED OF EXPIRATION AT TRADE AT APPRECIATION CONTRACTS TYPE MONTH DATE 02/29/08 (DEPRECIATION) - --------- --------------------------- ---------- ------------ ----------- -------------- Long Positions: 400 U.S. Treasury 10 Year Note 06/08 $45,834,113 $46,912,500 $1,078,387 Short Positions: 80 U.S. Treasury 2 Year Note 06/08 ($17,072,240) ($17,193,750) (121,510) 113 U.S. Treasury 5 Year Note 06/08 ($12,665,465) ($12,910,250) (244,785) ---------- $ 712,092 ==========
The accompanying notes are an integral part of the financial statements. 8 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES FEBRUARY 29, 2008 (UNAUDITED) ASSETS Investments, at fair value (cost $190,786,856) .............. $189,635,793 Receivable for securities sold short ........................ 9,826,367 Cash ........................................................ 61,122 Receivable for investments sold ............................. 126,086 Dividends and interest receivable ........................... 811,230 Due from broker-variation margin ............................ 407,438 Prepaid expenses and other assets ........................... 19,126 ------------ Total assets ............................................. 200,887,162 ------------ LIABILITIES Payable for investments purchased ........................... 27,431,251 Short sales at fair value (proceeds received $9,826,367) ........................... 10,033,593 Unrealized depreciation on swap agreements .................. 769,400 Distributions payable ....................................... 422,595 Payable to the Adviser ...................................... 46,480 Accrued expenses and other liabilities ...................... 46,712 ------------ Total liabilities ........................................ 38,750,031 ------------ Net assets .................................................. $162,137,131 ============ NET ASSETS CONSISTED OF: Capital stock, $0.001 par value ............................. $ 16,486 Additional paid-in capital .................................. 165,216,426 Distributions in excess of net investment income ............ (72,378) Accumulated net realized loss from investments, futures transactions, short sales and swap agreements .... (1,607,806) Net unrealized depreciation on investments, futures transactions, short sales and swap agreements .... (1,415,597) ------------ Net assets .................................................. $162,137,131 ============ Net asset value, offering and redemption price per share ($162,137,131/16,486,160 outstanding shares of common stock, $0.001 par value, 100,000,000 shares authorized) .. $ 9.83 ============ The accompanying notes are an integral part of the financial statements. 9 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED FEBRUARY 29, 2008 (UNAUDITED) ----------------- INVESTMENT INCOME Interest .................................................... $ 5,017,969 Dividends ................................................... 4,324 ----------- Total investment income .................................. 5,022,293 ----------- EXPENSES Advisory fees ............................................... 386,283 Administration and accounting services fees ................. 83,643 Professional fees ........................................... 28,109 Transfer agent fees ......................................... 27,087 Directors' and officer's fees ............................... 22,919 Custodian fees .............................................. 14,386 Printing and shareholder reporting fees ..................... 12,940 Registration and filing fees ................................ 11,905 Other expenses .............................................. 4,770 ----------- Total expenses before waivers ............................ 592,042 Less: waivers ............................................ (109,126) ----------- Net expenses ............................................. 482,916 ----------- Net investment income .................................... 4,539,377 ----------- NET REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS, FUTURES TRANSACTIONS, SHORT SALES AND SWAP AGREEMENTS Net realized gain (loss) from: Investments .............................................. 846,216 Futures transactions ..................................... 969,257 Short sales .............................................. (583,942) Swap agreements .......................................... (2,223,000) ----------- Total net realized loss from investments, futures transactions, short sales and swap agreements ......... (991,469) ----------- Net change in unrealized appreciation (depreciation) on: Investments .............................................. (1,594,039) Futures transactions ..................................... 783,953 Short sales .............................................. 60,296 Swap agreements .......................................... 385,093 ----------- Total net change in unrealized appreciation (depreciation) on investments, futures transactions, short sales and swap agreements ....................................... (364,697) ----------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .......... $ 3,183,211 =========== The accompanying notes are an integral part of the financial statements. 10 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED FOR THE PERIOD FEBRUARY 29, 2008 DECEMBER 19, 2006* TO (UNAUDITED) AUGUST 31, 2007 ------------------ --------------------- INCREASE IN NET ASSETS FROM OPERATIONS Net investment income .............................................. $ 4,539,377 $ 5,596,303 Net realized loss from investments, futures transactions, short sales and swap agreements .................................. (991,469) (577,949) Net change in unrealized appreciation (depreciation) on investments, futures transactions, short sales and swap agreements ............ (364,697) (1,050,900) ------------ ------------ Net increase in net assets resulting from operations .................................................. 3,183,211 3,967,454 ------------ ------------ LESS DIVIDENDS TO SHAREHOLDERS FROM: Net investment income .............................................. (4,647,437) (5,618,485) ------------ ------------ INCREASE IN NET ASSETS DERIVED FROM CAPITAL SHARE TRANSACTIONS(1) ..... 2,323,807 162,928,581 ------------ ------------ Total increase in net assets ....................................... 859,581 161,277,550 NET ASSETS Beginning of period ................................................ 161,277,550 -- ------------ ------------ End of period** .................................................... $162,137,131 $161,277,550 ============ ============ - ---------------- * Commencement of operations. ** Includes undistributed (distributions in excess of) net investment income of $(72,378) and $35,682 for the six months ended February 29, 2008 and the period ended August 31, 2007, respectively. (1) See Note 4 in the Notes to Financial Statements.
The accompanying notes are an integral part of the financial statements. 11 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- Contained below is per share operating performance data for a share outstanding during each period, total investment return, ratios to average net assets and other supplemental data for the respective periods. This information has been derived from information provided in the financial statements. - --------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE PERIOD FEBRUARY 29, 2008 DECEMBER 19, 2006* TO (UNAUDITED) AUGUST 31, 2007 ------------------ --------------------- PER SHARE OPERATING PERFORMANCE Net asset value, beginning of period................................ $ 9.92 $ 10.00 Net investment income............................................... 0.28 0.38 Net realized and unrealized gain (loss) on investments, futures transactions, short sales and swap agreements............. (0.09) (0.08) -------- -------- Net increase in net assets resulting from operations................ 0.19 0.30 -------- -------- Dividends to shareholders from: Net investment income............................................... (0.28) (0.38) Net realized capital gains.......................................... -- -- -------- -------- Net asset value, end of period...................................... $ 9.83 $ 9.92 ======== ======== Total investment return(1).......................................... 2.05% 3.10% RATIOS/SUPPLEMENTAL DATA Net assets, end of period (000's omitted)........................... $162,137 $161,278 Ratio of expenses to average net assets with waivers and expense reimbursements (excluding interest expense)(2)................... 0.60% 0.60% Ratio of expenses to average net assets with waivers and expense reimbursements (including interest expense)(2)................... 0.60% 0.78% Ratio of expenses to average net assets without waivers and expense reimbursements (including interest expense)(2)........... 0.74% 0.95% Ratio of net investment income to average net assets(2)............. 5.64% 5.58% Portfolio turnover rate(3).......................................... 67.66% 259.47% - ---------------- * Commencement of operations. (1) Total investment return is calculated by assuming a purchase of shares on the first day and a sale of shares on the last day of each period reported and includes reinvestments of dividends and distributions, if any. (2) Annualized. (3) The portfolio turnover rate excluding TBA transactions (see Note 1 in Notes to the Financial Statements) is 21.69% for the six months ended February 29, 2008 and 125.15% for the period December 19, 2006 to August 31, 2007, respectively.
The accompanying notes are an integral part of the financial statements. 12 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO NOTES TO FINANCIAL STATEMENTS FEBRUARY 29, 2008 (UNAUDITED) 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES The RBB Fund, Inc. ("RBB" or the "Company") was incorporated under the laws of the State of Maryland on February 29, 1988 and is registered under the Investment Company Act of 1940, as amended, (the "Investment Company Act") as an open-end management investment company. RBB is a "series fund," which is a mutual fund divided into separate portfolios. Each portfolio is treated as a separate entity for certain matters under the Investment Company Act, and for other purposes, and a shareholder of one portfolio is not deemed to be a shareholder of any other portfolio. Currently, RBB has twenty-one active investment portfolios, including the Bear Stearns CUFS MLP Mortgage Portfolio (the "Portfolio"), which commenced investment operations on December 19, 2006. RBB has authorized capital of one hundred billion shares of common stock of which 78.073 billion shares are currently classified into one hundred and twenty classes of common stock. Each class represents an interest in an active or inactive RBB investment portfolio. The active classes have been grouped into ten separate "families." PORTFOLIO VALUATION -- The Portfolio's net asset value ("NAV") is calculated once daily at the close of regular trading hours on the New York Stock Exchange ("NYSE") (generally 4:00 p.m. Eastern time) on each day the NYSE is open. Fixed income securities having a remaining maturity of greater than 60 days are valued using an independent pricing service. Fixed income securities having a remaining maturity of 60 days or less are valued at amortized cost, which approximates market value. Investments in other open-end investment companies, if held, are valued based on the NAV of the investment companies (which may use fair value pricing as discussed in their prospectuses). If price quotes are unavailable or deemed unreliable, securities will be fair valued in accordance with procedures adopted by the Company's Board of Directors. Relying on prices supplied by pricing services or dealers or using fair valuation may result in values that are higher or lower than the values used by other investment companies and investors to price the same investments. USE OF ESTIMATES -- The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. INVESTMENT TRANSACTIONS, INVESTMENT INCOME AND EXPENSES -- The Portfolio records security transactions based on trade date. The cost of investments sold is determined by use of the specific identification method for both financial reporting and income tax purposes in determining realized gains and losses on investments. Interest income is accrued when earned. Paydown gains and losses on mortgage and asset-backed securities are presented as an adjustment to interest income. Dividend income is recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gains are recorded as a reduction of cost of investments and/or as a realized gain. The Portfolio estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. The Portfolio's investment income, expenses and unrealized and realized gains and losses are allocated daily. Expenses incurred for all of the RBB Fund families (such as director or professional fees) are charged to all funds in proportion to their net assets of the RBB Funds, or in such other manner as the Board of Directors deems fair or equitable. Expenses and fees, including investment advisory and administration fees are accrued daily and taken into account for the purpose of determining the net asset value of the Portfolio. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net investment income are declared daily and paid monthly. Distributions from net realized capital gains, if any, are declared and paid at least annually to shareholders and recorded on ex-date for the Portfolio. Income dividends and capital gain distributions are determined in accordance with U.S. federal income tax regulations which may differ from generally accepted accounting principles in the United States of America. Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications within the components of net assets. U.S. TAX STATUS -- No provision is made for U.S. income taxes as it is the Portfolio's intention to qualify for and elect the tax treatment applicable to regulated investment companies under Subchapter M of the Internal Revenue Code of 1986, as amended, and make the requisite distributions to its shareholders which will be sufficient to relieve it from U.S. income and excise taxes. OTHER -- In the normal course of business, the Portfolio may enter into contracts that provide general indemnifications. The Portfolio's maximum exposure under these arrangements is dependent on claims that may be made against the Portfolio in the future, and, therefore, cannot be estimated; however, based on experience, the risk of material loss from such claims is considered remote. 13 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO NOTES TO FINANCIAL STATEMENTS FEBRUARY 29, 2008 (UNAUDITED) (CONTINUED) MORTGAGE-RELATED SECURITIES GENERALLY -- The Portfolio may invest in mortgage pass-through securities and multiple-class pass-through securities, such as collateralized mortgage obligations ("CMOs") and Real Estate Mortgage Investment Conduit ("REMIC") pass-through or participation certificates as well as other securities collateralized by or representing a direct or indirect interest in mortgage-related securities or mortgage loans. The Portfolio may also invest in certain stripped mortgage-backed securities. Some of these securities may contain "embedded leverage" which can make them more sensitive to small movements in interest rates. The types of mortgage-related securities in which the Portfolio may invest include: mortgage pass-through securities, including CMOs and REMICs, which may or may not be U.S. Government guaranteed, privately issued mortgage-related securities, stripped mortgage-backed securities, including interest only ("IO") or principal only ("PO") class securities, and floating rate and inverse floating rate securities. Stripped mortgage-backed securities represent a participation in, or are secured by and payable from, mortgage loans on real property, and may be structured in classes with rights to receive varying proportions of principal and interest. Payments received for IOs and POs are used to reduce the cost of the security. Payments in excess of cost are recognized as interest income on the Statement of Operations based on a security's yield to maturity. If the underlying mortgage assets experience greater then anticipated payments of principal, the Portfolio may fail to recoup some or all of it's initial investment in IO securities. For PO securities, accelerated payments of principal will cause a faster then anticipated return of the initial investment resulting in an increased yield to maturity for the security. The market value of these securities is highly sensitive to changes in interest rates. TBAS -- The Portfolio may purchase securities on a to-be-announced ("TBA") basis, with payment and delivery scheduled for a future date. These transactions are subject to market fluctuations and are subject to the risk that their value at delivery may be more or less than the trade date purchase price. Although the Portfolio may purchase securities on a when-issued or forward commitment basis with the intention of acquiring the securities for its portfolio, the Portfolio may dispose of when-issued securities or forward commitments prior to settlement if the Adviser deems it appropriate. FINANCIAL FUTURES CONTRACTS -- The Portfolio may enter into futures contracts to hedge against changes in interest rates and securities prices, or to otherwise manage its term structure, sector selections and duration. Upon entering into a futures contract, the Portfolio is required to deposit with the broker an amount of cash or cash equivalents equal to a certain percentage of the contract amount. This is known as the "initial margin." Subsequent payments ("variation margin") are made or received by the Portfolio each day, depending on the daily fluctuation of the value of the contract. The daily changes in the contract are recorded as unrealized gain or loss. The Portfolio recognizes a realized gain or loss when the contract is closed. The risks associated with entering into financial futures contracts include the possibility that a change in the value of the contract may not correlate with the changes in the value of the underlying instruments. In addition, investing in financial futures contracts involves the risk that the Fund could lose more than the original margin deposit and subsequent payments required for a futures transaction. Risks may also arise upon entering into these contracts from the potential inability of the counterparties to meet the terms of their contracts. OPTIONS CONTRACTS -- The Portfolio may write covered call and put options on futures, or securities it owns or in which it may invest. Writing put options tends to increase the Portfolio's exposure to the underlying instrument. When the Portfolio writes a call or put option, an amount equal to the premium received is recorded as a liability and subsequently marked to market to reflect the current value of the option written. These liabilities are reflected as written options outstanding in the Statement of Assets and Liabilities. Payments received or made, if any, from writing options with premiums to be determined on a future date are reflected as such on the Statement of Assets and Liabilities. Premiums received from writing options that expire are treated as realized gains. Premiums received from writing options that are exercised or closed are added to the proceeds or offset against amounts paid on the underlying future or security transaction to determine the realized gain or loss. The Portfolio, as a writer of an option, has no control over whether the underlying future or security may be sold (call) or purchased (put), and as a result bears the market risk of an unfavorable change in the price of the future or security underlying the written option. The Portfolio may not be able to enter into a closing transaction because of an illiquid market. The Portfolio may also purchase put and call options. Purchasing call options tends to increase the Portfolio's exposure to the underlying instrument. Purchasing put options tends to decrease the Portfolio's exposure to the underlying instrument. The Portfolio pays a premium which is included in the Portfolio's Statement of Assets and Liabilities as an investment and subsequently marked to market to reflect the current value of the option. Premiums paid for purchasing options that expire are treated as realized losses. The risk associated with purchasing put and call options is limited to the premium paid. Premiums paid for purchasing options that are exercised or closed are added to the amounts paid or offset against the proceeds on the underlying future or security transaction to determine the realized gain or loss. 14 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO NOTES TO FINANCIAL STATEMENTS FEBRUARY 29, 2008 (UNAUDITED) (CONTINUED) SWAP AGREEMENTS -- The Portfolio may invest in swap agreements for the purpose of hedging against changes in interest rates. Swap agreements involve the exchange by the Portfolio with another party of their respective commitments to pay or receive interest with respect to a notional amount of principal. Swaps are marked to market daily based upon quotations from independent market makers and the change, if any, is recorded as unrealized gain or loss in the statement of operations. Net payments of interest are recorded as realized gain or loss. SHORT SALES -- The Portfolio may engage in short sales of securities. A short sale is a sale by the Portfolio of a security which has been borrowed from a third party on the expectation that the market price will decline. If the price of the security drops, the Portfolio will make a profit by purchasing the security in the market at a lower price than the price at which it sold the security. If the price of the security rises, the Portfolio may have to cover its short position at a higher price than the short sale price, resulting in a loss to the Portfolio. Possible losses from short sales may be unlimited, whereas losses from purchases cannot exceed the total amount invested. REPURCHASE AGREEMENTS -- Money market instruments may be purchased subject to the seller's agreement to repurchase them at an agreed-upon date and price. The seller will be required on a daily basis to maintain the value of the securities as collateral, subject to the agreement at not less than the repurchase price plus accrued interest. If the value of the collateral falls below this amount, the Portfolio will require the seller to deposit additional collateral by the next Portfolio business day. In the event that the seller under the agreement defaults on its repurchase obligation or fails to deposit sufficient collateral, the Portfolio has the contractual right, subject to the requirements of applicable bankruptcy and insolvency laws, to sell the underlying securities and may claim any resulting loss from the seller. The agreements are conditioned upon the collateral being deposited under the Federal Reserve Book Entry System or with the Portfolio's custodian or a third party sub-custodian. REVERSE REPURCHASE AGREEMENTS -- The Portfolio may borrow money by entering into transactions called reverse repurchase agreements. Under these arrangements, the Portfolio will sell portfolio securities to dealers in U.S. Government securities or members of the Federal Reserve System, with an agreement to repurchase the security on an agreed date, price and interest payment. Reverse repurchase agreements involve the possible risk that the value of portfolio securities the Portfolio relinquishes may decline below the price the Portfolio must pay when the transaction closes. Borrowings may magnify the potential for gain or loss on amounts invested resulting in an increase in the speculative character of the Portfolio's outstanding shares. 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES Bear Stearns Asset Management Inc. ("BSAM" or the "Adviser"), a wholly-owned subsidiary of The Bear Stearns Companies, Inc. ("Bear Stearns"), serves as investment adviser to the Portfolio pursuant to an investment advisory agreement with the Company (the "Advisory Agreement"). For its services, the Adviser is paid a monthly fee at the annual rate of 0.48% of the Portfolio's average daily net assets. BSAM is voluntarily waiving a portion of its advisory fee and reimbursing certain expenses in order to limit the Portfolio's total annual portfolio operating expenses excluding interest expense to 0.60% of the Portfolio's average daily net assets. The fee waiver and expense reimbursement are not contractual, and can be terminated at any time. For the six months ended February 29, 2008, investment advisory fees were $386,283, of which $87,387 was waived by the Adviser. Bear Stearns Pricing Direct, an affiliate of the Portfolio's investment adviser, is the pricing service used to value the Portfolio's fixed income securities having a remaining maturity of greater than 60 days. Bear Stearns Pricing Direct is considered to be an independent pricing service because the Portfolio's investment adviser has no influence on how the securities are priced. PFPC Inc. ("PFPC"), a wholly-owned subsidiary of PFPC Worldwide Inc., an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc., serves as administrator for the Portfolio. For providing administration and accounting services, PFPC is entitled to receive a monthly fee equal to an annual rate of 0.08% of the Portfolio's first $250 million of average daily net assets; 0.06% of the next $250 million of average daily net assets; and 0.04% of the average daily net assets in excess of $500 million. For the six months ended February 29, 2008, PFPC's administration and accounting services fees were $83,643. PFPC voluntarily agreed to waive a portion of its administration and accounting services fees for the Portfolio. For the six months ended February 29, 2008, $21,739 was waived by PFPC. Included in the administration and accounting fees, shown above, are fees for providing regulatory administration services to RBB. For providing these services, PFPC is entitled to receive compensation as agreed to by the Company and PFPC. This fee is allocated to each portfolio in proportion to its net assets of the RBB Funds. 15 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO NOTES TO FINANCIAL STATEMENTS FEBRUARY 29, 2008 (UNAUDITED) (CONTINUED) In addition, PFPC serves as the Portfolio's transfer and dividend disbursing agent. For providing transfer agent services, PFPC is entitled to receive an annual fee of $25,000, paid monthly, plus out-of-pocket expenses. For the six months ended February 29, 2008, PFPC transfer agency fees were $27,087. PFPC Trust Company provides certain custodial services to the Portfolio. PFPC Trust Company is a wholly-owned subsidiary of PFPC Worldwide, Inc. and an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc. As compensation for such custodial services, PFPC Trust Company is entitled to receive a monthly fee equal to an annual rate of 0.01% of the first $250 million of the Portfolio's average daily gross assets; 0.0075% of the next $250 million of the Portfolio's average daily gross assets; and 0.005% of the Portfolio's average daily gross assets over $500 million. There is a minimum monthly fee of $1,200 for the Portfolio, exclusive of transaction charges and out-of-pocket expenses charged to the Portfolio. For the six months February 29, 2008 PFPC Trust Company's custodian fees were $14,386. PFPC Distributors, Inc. ("PFPC Distributors"), a wholly-owned subsidiary of PFPC Worldwide, Inc. and an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc., provides certain administrative services to the Portfolio. As compensation for such administrative services, PFPC Distributors is entitled to receive a fee paid by PFPC from the fees PFPC receives from the Portfolio pursuant to the Administration and Accounting Services Agreement. The Portfolio will not pay PFPC or PFPC's affiliates at a later time for any amounts waived or any amounts assumed. As of February 29, 2008, the Portfolio owed PFPC and its affiliates $16,508 for their services, which is included as a component of accrued expenses and other liabilities on the accompanying Statement of Assets and Liabilities. 3. INVESTMENT IN SECURITIES For the six months ended February 29, 2008, aggregate purchases and sales of investment securities (excluding short-term investments and including TBA securities) of the Portfolio were as follows: PURCHASES SALES ------------ ------------ Investment Securities $127,642,217 $113,904,477 4. CAPITAL SHARE TRANSACTIONS As of February 29, 2008, the Portfolio has 100,000,000 shares of $0.001 par value common stock authorized. Transactions in capital shares for the respective periods were as follows:
FOR THE FOR THE SIX MONTHS ENDED PERIOD ENDED FEBRUARY 29, 2008 AUGUST 31, 2007 ---------------------------- ----------------------------- SHARES VALUE SHARES VALUE ------- ---------- ---------- ------------ Sales................................................ -- $ -- 15,858,652 $159,001,000 Reinvestments........................................ 235,056 2,323,807 392,553 3,928,597 Redemptions.......................................... -- -- (101) (1,016) ------- ---------- ---------- ------------ Net Increase......................................... 235,056 $2,323,807 16,251,104 $162,928,581 ======= ========== ========== ============
5. FEDERAL INCOME TAX INFORMATION At February 29, 2008, federal tax cost, aggregate gross unrealized appreciation and depreciation of securities held by the Portfolio were as follows: FEDERAL TAX UNREALIZED UNREALIZED NET UNREALIZED COST APPRECIATION DEPRECIATION DEPRECIATION ------------ ------------ ------------ -------------- $190,786,856 $2,206,381 $(3,357,444) $(1,151,063) As of August 31, 2007, the components of distributable earnings on a tax basis were as follows: UNDISTRIBUTED UNDISTRIBUTED ORDINARY INCOME LONG-TERM GAINS --------------- --------------- $408,339 $ -- 16 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO NOTES TO FINANCIAL STATEMENTS FEBRUARY 29, 2008 (UNAUDITED) (CONCLUDED) As of August 31, 2007, the Fund had a capital loss carryforward of $685,873, available to offset future capital gains. This capital loss carryforward will expire on August 31, 2015 if it is not utilized by future capital gains. Under federal tax law, foreign currency and capital losses realized after October 31 may be deferred and treated as having arisen on the first day of the following fiscal year. For the period ended August 31, 2007, the Fund does not expect to elect to defer any losses for the period December 19, 2007 to August 31, 2007. 6. NEW ACCOUNTING PRONOUNCEMENTS In July 2006, the Financial Accounting Standards Board ("FASB") issued FASB Interpretation No. 48 ("FIN 48"), "Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109." FIN 48 provides guidance as to how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken in the course of preparing the Fund's tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax benefits of positions not deemed to meet the more-likely-than-not threshold would be booked as a tax expense in the current year and recognized as: a liability for unrecognized tax benefits; a reduction of an income tax refund receivable; a reduction of deferred tax assets; an increase in deferred tax liability; or a combination thereof. Adoption of FIN 48 is required for the last net asset value calculation in the first required financial statement reporting period for fiscal years beginning after December 15, 2006. The Portfolio has adopted FIN 48 and management has determined that it has no impact on the Portfolio's financial statements. In September 2006, FASB issued Statement of Financial Accounting Standards ("SFAS") 157, Fair Value Measurements, which clarifies the definition of fair value and requires companies to expand their disclosure about the use of fair value to measure assets and liabilities in interim and annual periods subsequent to initial recognition. Adoption of SFAS 157 requires the use of the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Although still in the process of evaluating the impact, if any, upon adoption of the standard, management believes there will be no material impact on the Portfolio other than enhanced disclosures. 7. SUBSEQUENT EVENT On March 16, 2008, JPMorgan Chase & Co. ("JPMC") announced that it had agreed to acquire Bear Stearns. Under the Agreement and Plan of Merger between JPMC and Bear Stearns and subject to certain conditions, JPMC is entitled as of the date of the Agreement and Plan of Merger to oversee the business, operations and management of Bear Stearns including the Adviser at the reasonable discretion of JPMC. The acquisition is subject to approval by the Bear Stearns shareholders. There is no assurance, however, that the Bear Stearns shareholders will approve the acquisition or that the acquisition will be completed. JPMC and Bear Stearns have advised the Company that they believe that by virtue of certain of its terms and conditions, the execution and delivery of the Agreement and Plan of Merger may have resulted in a change in control of the Adviser. This change in control may have constituted an "assignment" (as defined in the Investment Company Act of 1940) of the existing Investment Advisory Agreement between the Portfolio and the Adviser, resulting in its automatic termination. Pursuant to a no-action letter issued by the Securities and Exchange Commission to JPMC and the Adviser on March 16, 2008, the Adviser was permitted to continue to serve as investment adviser to the Portfolio for a 10-day period following the change in control, provided that the Board of Directors of the Company (the "Board") promptly took action to approve an interim advisory agreement with the Adviser pursuant to certain provisions of the Investment Company Act of 1940. On March 26, 2008, the Board approved, and the Portfolio entered into, an Interim Investment Advisory Agreement with the Adviser (the "Interim Agreement") that is identical in all material respects to the Portfolio's terminated Investment Advisory Agreement with the Adviser except that (1) the Interim Agreement will continue until the earlier of August 24, 2008 or the effective date of a new investment advisory agreement approved by the shareholders of the Portfolio and (2) the Interim Agreement may be terminated by the Portfolio or its shareholders on 10 days prior written notice to the Adviser. Shareholder approval of a new investment advisory agreement between the Portfolio and the Adviser will be sought. It is expected that the new investment advisory agreement will contain substantially the same terms and conditions as the Portfolio's terminated Investment Advisory Agreement with the Adviser. 17 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO OTHER INFORMATION (UNAUDITED) PROXY VOTING Policies and procedures that the Portfolio uses to determine how to vote proxies relating to portfolio securities as well as information regarding how the Portfolio voted proxies relating to portfolio securities for the most recent 12-month period ended June 30 are available without charge, upon request, by calling Bear Stearns CUFS(R) MLP Mortgage Portfolio at (800) 519-CUFS (2837) and on the Securities and Exchange Commission's ("SEC") website at http://www.sec.gov. QUARTERLY PORTFOLIO SCHEDULES The Company will file its complete schedule of portfolio holdings with the SEC for the first and third fiscal quarters of each fiscal year (quarters ended November 30 and May 31) on Form N-Q. The Company's Form N-Q will be available on the SEC website at http://www.sec.gov and may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. Information on the operation of the SEC Public Reference Room may be obtained by calling (202) 551-8090. 18 BEAR STEARNS CUFS(R) MLP MORTGAGE PORTFOLIO INVESTMENT ADVISERS ------------------- Bear Stearns Asset Management Inc. 237 Park Avenue New York, NY 10017 ADMINISTRATOR ------------- PFPC Inc. 301 Bellevue Parkway Wilmington, DE 19809 TRANSFER AGENT -------------- PFPC Inc. 301 Bellevue Parkway Wilmington, DE 19809 PRINCIPAL UNDERWRITER --------------------- PFPC Distributors, Inc. 760 Moore Road King of Prussia, PA 19406 CUSTODIAN --------- PFPC Trust Company 8800 Tinicum Blvd. Suite 200 Philadelphia, PA 19153 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM --------------------------------------------- Deloitte & Touche LLP 1700 Market Street Philadelphia, PA 19103 LEGAL COUNSEL ------------- Drinker Biddle & Reath LLP One Logan Square 18th and Cherry Streets Philadelphia, PA 19103 19 [GRAPHIC OMITTED] BEAR STEARNS BEAR STEARNS ULTRA-SHORT INCOME FUND (FORMERLY BEAR STEARNS ENHANCED INCOME FUND) OF THE RBB FUND, INC. SEMI-ANNUAL REPORT February 29, 2008 (Unaudited) This report is submitted for the general information of the shareholders of the Fund. It is not authorized for distribution unless preceded or accompanied by a current prospectus for the Fund. BEAR STEARNS ULTRA-SHORT INCOME FUND (FORMERLY BEAR STEARNS ENHANCED INCOME FUND) SEMI-ANNUAL REPORT FOR THE PERIOD ENDED FEBRUARY 29, 2008 - -------------------------------------------------------------------------------- Dear Shareholder, We are pleased to present the Bear Stearns Ultra-Short Income Fund ("the Fund") semi-annual report covering the period from September 1, 2007 through February 29, 2008. Portfolio performance information, market commentary and our outlook for the period ended February 29, 2008 follow. We encourage you to carefully review the enclosed information. Portfolio Performance and Investment Environment From September 1, 2007 through February 29th, 2008 the Bear Stearns Ultra-Short Income Fund generated a periodic total return of 1.20% with a 30 day yield of 4.96%. The Fund's primary benchmark, the Merrill Lynch 3-month U.S. Treasury Bill Index, returned 2.10% during the same period. A repeat of this summer's credit crunch occurred over the last six months, triggering a repricing of risk and a flight to quality. Both short- and long-term Treasury yields fell sharply during the last six months, helping Treasuries to be the best performing asset class in the fixed income markets for the time period. Weakness in the mortgage market continued, as the contagion from the subprime market spread throughout the sector. Corporate bonds were also dragged down as increased risk aversion negatively impacted the asset class. Short-term lending rates, specifically the 3-Month LIBOR, increased dramatically and the Federal Reserve (as well as the European Central Bank and the Bank of England) were forced to inject liquidity into the market, including the creation of the Term Auction Facility (TAF). We believe the U.S. economy will continue to grow at a slower rate than expected. Contributing to growth are the competitive benefits that the manufacturing sector will reap as an outgrowth of the weak dollar (which should also help reduce the trade deficit), as well as increases in foreign investment in the real estate and banking sectors. Additionally, the agricultural and agricultural machinery sectors are experiencing explosive growth. On the downside, we expect the decline in housing prices to continue given the growing supply and diminishing demand. Consumer confidence should continue to drop given rising energy costs, further declines in the housing market and softening labor conditions. At the same time, rising food and energy prices should continue to widen the gap between headline and core inflation. This will be difficult for the Federal Reserve and other central banks to ignore as higher food and fuel prices erode wages. Setting monetary rate policy based on the above will be further complicated by the uncertainty of the market's reaction to the Fed and other central banks' efforts to inject liquidity into the financial system via new policy tools (i.e., Term Auction Facility). As a result of write downs (nearing $200 billion), many financial institutions have turned to outside sources such as sovereign wealth funds for capital infusions. This trend could continue as banks and brokers seek to appropriately value the assets on their books and record additional write-downs. As banks defend their capital bases, we believe that tighter lending standards will exacerbate the credit crisis as it becomes more expensive for consumers and businesses to borrow. We believe that the Fed will maintain its position of being "timely" and "responsive" to economic developments, causing the market to price in additional rate cuts (as implied by Fed Fund Futures) by year end. We concur with market expectations and believe that the Fed will continue to attempt to forestall a major economic downturn. Over this period, the preservation of your principal will remain at the forefront of our strategy. Sincerely, Scott Pavlak, CFA Senior Managing Director Portfolio Manager Bear Stearns Asset Management Shares of the Bear Stearns Ultra-Short Income Fund are distributed by PFPC Distributors, Inc., King of Prussia, PA 19406 - ---------- THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND DOES NOT GUARANTEE FUTURE RESULTS. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER. PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH-END MAY BE OBTAINED AT WWW.BSAMONLINE.COM OR BY CALLING 1-800-436-4118. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THE PERFORMANCE QUOTED REFLECTS FEE WAIVERS IN EFFECT AND WOULD HAVE BEEN LESS IN THEIR ABSENCE. THE FUND'S ANNUAL OPERATING EXPENSE RATIO, AS STATED IN THE CURRENT PROSPECTUS, IS 0.26%. THIS RATE CAN FLUCTUATE AND MAY DIFFER FROM THE ACTUAL EXPENSES INCURRED BY THE FUND FOR THE PERIOD COVERED BY THIS REPORT. 1 BEAR STEARNS ULTRA-SHORT INCOME FUND (FORMERLY BEAR STEARNS ENHANCED INCOME FUND) PERFORMANCE DATA FEBRUARY 29, 2008 (UNAUDITED) - -------------------------------------------------------------------------------- TOTAL RETURNS AS OF FEBRUARY 29, 2008 SIX SINCE MONTHS INCEPTION* ------ ---------- Bear Stearns Ultra-Short Income Fund(1) 1.20% 2.83% Merrill Lynch 3-Month U.S. Treasury Bill Index(2) 2.10% 5.27% - -------------------------------------------------------------------------------- THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND DOES NOT GUARANTEE FUTURE RESULTS. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER. PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH-END MAY BE OBTAINED AT WWW.BSAMONLINE.COM OR BY CALLING 1-800-436-4118. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THE PERFORMANCE QUOTED REFLECTS FEE WAIVERS IN EFFECT AND WOULD HAVE BEEN LESS IN THEIR ABSENCE. THE FUND'S ANNUAL OPERATING EXPENSE RATIO, AS STATED IN THE CURRENT PROSPECTUS, IS 0.26%. THE EXPENSE RATIO IS CONTRACTUALLY CAPPED AT 0.20% THROUGH AUGUST 31, 2008, WITHOUT WHICH, PERFORMANCE WOULD HAVE BEEN LESS. THIS CAP CAN BE DISCONTINUED AFTER AUGUST 31, 2008. - ---------- * The inception date of the fund was March 6, 2007. (1) Net of fees and expenses. (2) The Merrill Lynch 3-Month U.S. Treasury Bill Index is a one-security index which, at the beginning of every month, selects for inclusion the bill maturing closest to, but not beyond, 91 days from that date. That issue is then held for one month, sold and rolled into a new bill. The performance of the index does not reflect the deduction of expenses associated with a mutual fund, such as investment management fees. By contrast, the performance of the Fund reflects the deduction of the mutual fund expenses, including sales charges if applicable. 2 BEAR STEARNS ULTRA-SHORT INCOME FUND (FORMERLY BEAR STEARNS ENHANCED INCOME FUND) FUND EXPENSE EXAMPLE (UNAUDITED) As a shareholder of the Fund, you incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees and other Fund expenses. The example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. These examples are based on an investment of $1,000 invested at the beginning of the period from September 1, 2007* through February 29, 2008, and held for the entire period. ACTUAL EXPENSES The first line of the accompanying tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second line of the accompanying tables provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare these 5% hypothetical examples with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that the expenses shown in the accompanying tables are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the second line of the accompanying tables is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if any transactional costs were included, your costs would have been higher.
--------------------------------------------------------------------- BEGINNING ACCOUNT VALUE ENDING ACCOUNT VALUE EXPENSES PAID DURING SEPTEMBER 1, 2007 FEBRUARY 29, 2008 PERIOD* ----------------------- --------------------- -------------------- Actual $1,000.00 $1,012.00 $1.00 Hypothetical (5% return before expenses) 1,000.00 1,023.86 1.01 - ---------- * Expenses are equal to the Fund's annualized expense ratio of 0.20%, which includes waived fees or reimbursed expenses, multiplied by the number of days (182) in the most recent fiscal half-year, then divided by 366 to reflect the one-half year period. The Fund's ending account value on the first line is based on the actual total return of 1.20%.
3 BEAR STEARNS ULTRA-SHORT INCOME FUND (FORMERLY BEAR STEARNS ENHANCED INCOME FUND) PORTFOLIO HOLDINGS SUMMARY TABLE FEBRUARY 29, 2008 (UNAUDITED) % OF NET SECURITY TYPE CLASSIFICATION ASSETS VALUE - -------------------------------------------------------------------------------- CORPORATE BONDS 30.4% $16,160,079 SHORT TERM OBLIGATIONS 21.9 11,641,777 NON-GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES 15.2 8,069,382 ASSET-BACKED SECURITIES 14.0 7,459,280 COMMERCIAL MORTGAGE-BACKED SECURITIES 8.6 4,594,661 GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES 7.2 3,846,143 MUNICIPAL BONDS 4.7 2,498,360 GOVERNMENT AGENCY OBLIGATIONS 2.8 1,512,927 LIABILITIES IN EXCESS OF OTHER ASSETS (4.8) (2,546,581) ----- ----------- NET ASSETS 100.0% $53,236,028 ===== =========== - ---------- Portfolio holdings are subject to change at any time. 4 BEAR STEARNS ULTRA-SHORT INCOME FUND (FORMERLY BEAR STEARNS ENHANCED INCOME FUND) PORTFOLIO OF INVESTMENTS FEBRUARY 29, 2008 (UNAUDITED) MOODY'S/ PAR FAIR S&P (000'S) VALUE -------- ------- ------------ GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES--7.2% FEDERAL HOME LOAN MORTGAGE CORPORATION--2.8% 5.750% 07/15/11 Aaa/AAA $ 782 $ 783,743 3.000% 03/15/20 Aaa/AAA 58 57,557 2.500% 06/15/22 Aaa/AAA 663 661,629 ----------- 1,502,929 ----------- FEDERAL NATIONAL MORTGAGE ASSOCIATION--4.4% 5.000% 12/25/25 Aaa/AAA 261 260,531 5.078% 09/01/35(a) Aaa/AAA 2,069 2,082,683 ----------- 2,343,214 ----------- TOTAL GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES (Cost $3,832,107)................................. 3,846,143 ----------- NON-GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES--15.2% Countrywide Home Loan Mortgage Pass Through Trust Series 2003-HYB1(a) 6.497% 05/19/33 Aaa/AAA 988 987,130 Merrill Lynch Mortgage Investors, Inc. Series 2005-A8(a) 5.250% 08/25/36 Aaa/AAA 1,443 1,463,175 Residential Asset Securitization Trust Series 2007-A5(a) 3.535% 05/25/37 NR/AAA 3,363 2,977,175 Structured Asset Securities Corp. Series 2003-34A(a) 7.491% 11/25/33 Aaa/AAA 550 559,051 Structured Asset Securities Corp. Series 2005-6 5.000% 05/25/35 Aaa/AAA 1,514 1,524,054 Washington Mutual, Inc. Series 2002-S8 4.500% 01/25/18 NR/AAA 559 558,797 ----------- TOTAL NON-GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES (Cost $8,419,434)................................. 8,069,382 ----------- COMMERCIAL MORTGAGE-BACKED SECURITIES--8.6% DLJ Commercial Mortgage Corp. Series 1999-CG2(a) 7.300% 06/10/32 Aaa/AAA 1,225 1,248,743 JPMorgan Chase Commercial Mortgage Securities Corp. Series 2005-CB13(a) 3.279% 01/12/43 Aaa/NR 900 878,190 LB-UBS Commercial Mortgage Trust Series 2004-C2 3.246% 03/15/29 Aaa/AAA 1,250 1,226,759 MOODY'S/ PAR FAIR S&P (000'S) VALUE -------- ------- ------------ COMMERCIAL MORTGAGE-BACKED SECURITIES--(CONTINUED) LB-UBS Commercial Mortgage Trust Series 2004-C4(a) 4.567% 06/15/29 Aaa/AAA $1,250 $ 1,240,969 ----------- TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES (Cost $4,610,089)................................. 4,594,661 ----------- GOVERNMENT AGENCY OBLIGATIONS--2.8% FEDERAL HOME LOAN BANK--2.8% 3.000% 04/15/09 Aaa/AAA 1,500 1,512,927 ----------- TOTAL GOVERNMENT AGENCY OBLIGATIONS (Cost $1,479,750)................................. 1,512,927 ----------- ASSET-BACKED SECURITIES--14.0% Ameriquest Mortgage Securities, Inc. Series 2005-R3(a) 3.335% 05/25/35 Aaa/AAA 1,412 1,387,697 Chase Funding Mortgage Loan Asset-Backed Certificates Series 2004-2(a) 3.385% 02/25/35 Aaa/AAA 1,778 1,694,011 Countrywide Asset-Backed Certificates Series 2004-15(a) 4.025% 01/25/31 Aaa/AAA 207 206,930 Fieldstone Mortgage Investment Corp. Series 2006-1(a) 3.215% 05/25/36 Aaa/AAA 597 590,615 Long Beach Mortgage Loan Trust Series 2005-WL2(a) 3.315% 08/25/35 Aaa/AAA 1,390 1,366,257 People's Choice Home Loan Securities Trust Series 2005-3(a) 3.405% 08/25/35 Aaa/AAA 1,228 1,213,163 World Financial Network Credit Card Master Trust Series 2003-A(a) 3.491% 05/15/12 Aaa/AAA 1,000 1,000,607 ----------- TOTAL ASSET-BACKED SECURITIES (Cost $7,611,152)................................. 7,459,280 ----------- CORPORATE BONDS--30.4% BANKS--1.9% Wachovia Corp.(a) 3.031% 10/28/08 Aa3/AA- 1,000 999,947 ----------- DIVERSIFIED FINANCIAL SERVICES--24.7% Allstate Life Global Funding Trusts(a) 3.543% 02/26/10 Aa2/AA 500 495,399 American Honda Finance Corp. 144A(a) 5.207% 03/09/09 Aa3/A+ 2,000 2,000,008 Caterpillar Financial Services Corp.(a) 3.595% 02/08/10 A2/A 250 249,752 The accompanying notes are an integral part of the financial statements. 5 BEAR STEARNS ULTRA-SHORT INCOME FUND (FORMERLY BEAR STEARNS ENHANCED INCOME FUND) PORTFOLIO OF INVESTMENTS (CONCLUDED) FEBRUARY 29, 2008 (UNAUDITED) MOODY'S/ PAR FAIR S&P (000'S) VALUE -------- ------- ------------ CORPORATE BONDS--(CONTINUED) Credit Suisse U.S.A., Inc.(a) 3.265% 08/15/10 Aa1/AA- $ 450 $ 444,161 General Electric Capital Corp.(a) 3.262% 02/02/09 Aaa/AAA 2,000 1,994,158 Goldman Sachs Group, Inc.(a) 5.143% 06/28/10 Aa3/AA- 500 492,175 Hewlett-Packard Co.(a) 3.456% 09/03/09 A2/A 325 325,019 IBM International Group Capital LLC(a) 3.120% 02/13/09 A1/A+ 1,000 999,826 John Deere Capital Corp.(a) 3.530% 02/26/10 A2/A 250 249,725 JPMorgan Chase & Co.(a) 4.938% 06/25/10 Aa2/AA- 1,010 1,003,723 Lehman Brothers Holdings, Inc.(a) 4.793% 04/03/09 A1/A+ 2,000 1,959,104 Morgan Stanley(a) 3.206% 02/09/09 Aa3/A+ 2,000 1,985,964 SLM Corp. 144A(a) 5.081% 03/16/09 1,000 961,204 ----------- 13,160,218 ----------- TELECOMMUNICATIONS--3.8% AT&T, Inc.(a) 3.155% 05/15/08 A2/A 2,000 1,999,914 ----------- TOTAL CORPORATE BONDS (Cost $16,260,878)................................ 16,160,079 ----------- MUNICIPAL BONDS--4.7% Alabama Power Co. 3.125% 05/01/08 A2/A 1,500 1,498,360 Colorado Housing & Finance Authority(a) 5.000% 05/01/41 Aaa/AAA 1,000 1,000,000 ----------- TOTAL MUNICIPAL BONDS (Cost $2,494,507)................................. 2,498,360 ----------- SHORT TERM OBLIGATIONS--21.9% COMMERCIAL PAPER--18.6% Australia and New Zealand Banking Group 3.050% 03/03/08 1,000 999,831 Bank of America Corp. 3.000% 03/07/08 1,800 1,799,100 Bank of Scotland PLC 3.100% 03/17/08 2,001 1,997,244 KfW Bankengruppe 2.950% 03/12/08 2,000 1,998,197 Rabobank Nederland Australia 3.080% 03/04/08 2,000 1,999,487 Westpac Securities NZ, Ltd. 3.060% 03/20/08 1,100 1,098,223 ----------- 9,892,082 ----------- FAIR SHARES VALUE ------ ----------- INVESTMENT COMPANY--3.3% PNC Bank Money Market 2.51% 03/03/08 1,749,695 $ 1,749,695 ----------- TOTAL SHORT TERM OBLIGATIONS (Cost $11,641,777)................................ 11,641,777 ----------- TOTAL INVESTMENTS--104.8% (Cost $56,349,695)..................................... 55,782,609 ----------- LIABILITIES IN EXCESS OF OTHER ASSETS--(4.8)%................................... (2,546,581) ----------- NET ASSETS--100.0%....................................... $53,236,028 =========== - ---------- (a) Adjustable rate security. Percentage of adjustable rate securities to net assets is as follows: Corporate Bonds 30.4% Asset-Backed Securities 14.0 Non-Government Agency Mortgage-Backed Securities 11.2 Commercial Mortgage-Backed Securities 6.3 Government Agency Mortgage-Backed Obligations 3.9 Municipal Bonds 1.9 ---- Total 67.7% ==== 144A -- Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may not be resold subject to that Rule except to qualified institutional buyers. The accompanying notes are an integral part of the financial statements. 6 BEAR STEARNS ULTRA-SHORT INCOME FUND (FORMERLY BEAR STEARNS ENHANCED INCOME FUND) STATEMENT OF ASSETS AND LIABILITIES FEBRUARY 29, 2008 (UNAUDITED) ASSETS Investments, at fair value (cost $56,349,695) ............... $55,782,609 Dividends and interest receivable ........................... 178,275 Receivable from Investment Adviser .......................... 98,618 Prepaid expenses and other assets ........................... 19,168 ----------- Total assets .............................................. 56,078,670 ----------- LIABILITIES Payable for investments purchased ........................... 2,816,549 Payable for dividends ....................................... 2,574 Payable for capital shares redeemed ......................... 1,082 Accrued expenses and other liabilities ...................... 22,437 ----------- Total liabilities ......................................... 2,842,642 ----------- Net assets ................................................ $53,236,028 =========== NET ASSETS CONSIST OF: Capital stock, $0.001 par value ............................. $ 5,444 Additional paid-in capital .................................. 60,088,878 Distributions in excess of net investment income ............ (4,457) Accumulated net realized loss from investments .............. (6,288,826) Net unrealized depreciation on investments .................. (565,011) ----------- Net assets ................................................ $53,236,028 =========== Net asset value, offering and redemption price per share ($53,236,028/5,443,684 outstanding shares of common stock, $0.001 par value, 50,000,000,000 shares authorized) ......... $ 9.78 =========== The accompanying notes are an integral part of the financial statements. 7 BEAR STEARNS ULTRA-SHORT INCOME FUND (FORMERLY BEAR STEARNS ENHANCED INCOME FUND) STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED FEBRUARY 29, 2008 (UNAUDITED) ----------------- INVESTMENT INCOME Interest income.............................................. $2,814,867 ---------- Total investment income...................................... 2,814,867 ---------- EXPENSES Administration and accounting fees........................... 114,610 Advisory fees................................................ 85,204 Professional fees............................................ 35,930 Directors' and officer's fees................................ 30,091 Custodian fees............................................... 7,013 Printing and shareholder reporting fees...................... 6,749 Registration and filing fees................................. 2,606 Transfer agent out of pocket fees............................ 1,331 Other expenses............................................... 4,228 ---------- Total expenses before waivers and reimbursements .......... 287,762 Less: waivers and reimbursements .......................... (182,418) ---------- Net expenses .............................................. 105,344 ---------- Net investment income........................................ 2,709,523 ---------- NET REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS AND FUTURES TRANSACTIONS Net realized gain/(loss) from investments.................... (6,288,826) Net change in unrealized appreciation on investments and futures transactions................................... 5,386,109 ---------- Net realized and unrealized gain/(loss) from investments..... (902,717) ---------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........... $1,806,806 ========== The accompanying notes are an integral part of the financial statements. 8 BEAR STEARNS ULTRA-SHORT INCOME FUND (FORMERLY BEAR STEARNS ENHANCED INCOME FUND) STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED FOR THE PERIOD FEBRUARY 29, 2008 MARCH 6, 2007* TO (UNAUDITED) AUGUST 31, 2007 ------------------ --------------------- INCREASE IN NET ASSETS FROM OPERATIONS Net investment income.................................................. $ 2,709,523 $ 13,193,059 Net realized gain/(loss) from investments and futures transactions..... (6,288,826) 22,036 Net change in unrealized appreciation/(depreciation) on investments and futures transactions............................................. 5,386,109 (5,951,120) ------------- ------------ Net increase in net assets resulting from operations................. 1,806,806 7,263,975 ------------- ------------ LESS DIVIDENDS TO SHAREHOLDERS: Net investment income................................................ (2,713,363) (13,258,750) ------------- ------------ INCREASE/(DECREASE) IN NET ASSETS DERIVED FROM CAPITAL SHARE TRANSACTIONS(1)........................................ (471,085,355) 531,222,715 ------------- ------------ Total increase/(decrease) in net assets.............................. (471,991,912) 525,227,940 NET ASSETS Beginning of period.................................................. 525,227,940 -- ------------- ------------ End of period**...................................................... $ 53,236,028 $525,227,940 ============= ============ - ---------- * Commencement of operations. ** Includes distribution in excess of net investment income $(4,457) for the six months ended February 29, 2008 and $(617) for the period ended August 31, 2007. (1) See Note 4 in the Notes to Financial Statements.
The accompanying notes are an integral part of the financial statements. 9 BEAR STEARNS ULTRA-SHORT INCOME FUND (FORMERLY BEAR STEARNS ENHANCED INCOME FUND) FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- Contained below is per share operating performance data for a share outstanding during the period, total investment return, ratios to average net assets and other supplemental data for the respective periods. This information has been derived from information provided in the financial statements. - --------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE PERIOD FEBRUARY 29, 2008 MARCH 6, 2007* TO (UNAUDITED) AUGUST 31, 2007 ------------------ ----------------- PER SHARE OPERATING PERFORMANCE Net asset value, beginning of period................................ $ 9.90 $ 10.00 Net investment income............................................... 0.13 0.30 Net realized and unrealized gain on investments and futures transactions ............................................. (0.12) (0.10) -------- -------- Net increase in net assets resulting from operations................ 0.01 0.20 -------- -------- Dividends to shareholders from: Net investment income............................................... (0.13) (0.30) -------- -------- Net asset value, end of period...................................... $ 9.78 $ 9.90 ======== ======== Total investment return(1).......................................... 1.20% 1.61% RATIOS/SUPPLEMENTAL DATA Net assets, end of period (000's omitted)........................... $53,236 $525,228 Ratio of expenses to average net assets(2).......................... 0.20% 0.20% Ratio of expenses to average net assets without waivers and expense reimbursements(2)......................................... 0.54% 0.26% Ratio of net investment income to average net assets(2)............. 5.09% 5.30% Portfolio turnover rate............................................. 17.46% 21.51% - ---------------- * Commencement of operations. (1) Total investment return is calculated assuming a purchase of shares on the first day and a sale of shares on the last day of each period reported and includes reinvestments of dividends and distributions, if any. (2) Annualized. (3) Per share amounts were adjusted to reflect a 10 for 1 reverse stock split effective December 10, 2007.
The accompanying notes are an integral part of the financial statements. 10 BEAR STEARNS ULTRA-SHORT INCOME FUND (FORMERLY BEAR STEARNS ENHANCED INCOME FUND) NOTES TO FINANCIAL STATEMENTS FOR THE PERIOD ENDED FEBRUARY 29, 2008 (UNAUDITED) 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES The RBB Fund, Inc. ("RBB" or the "Company") was incorporated under the laws of the State of Maryland on February 29, 1988 and is registered under the Investment Company Act of 1940, as amended, (the "Investment Company Act") as an open-end management investment company. RBB is a "series fund," which is a mutual fund divided into separate portfolios. Each portfolio is treated as a separate entity for certain matters under the Investment Company Act, and for other purposes, and a shareholder of one portfolio is not deemed to be a shareholder of any other portfolio. Currently, RBB has twenty-one active investment portfolios, including the Bear Stearns Ultra-Short Income Fund, formerly the Enhanced Income Fund (the "Fund"), which commenced investment operations on March 6, 2007. RBB has authorized capital of one hundred billion shares of common stock of which 78.073 billion are currently classified into one hundred and twenty classes of common stock. Each class represents an interest in an active or inactive RBB investment portfolio. The active classes have been grouped into ten separate "families." At a meeting held on September 6, 2007, the Board of Directors of the Company approved a 1-for-10 reverse stock split of the outstanding shares of common stock of the Fund. The stock split was effective December 10, 2007. PORTFOLIO VALUATION -- The Fund's net asset value ("NAV") is calculated once daily at the close of regular trading hours on the New York Stock Exchange ("NYSE") (generally 4:00 p.m. Eastern time) on each day the NYSE is open. Fixed Income securities having a remaining maturity of greater than 60 days are valued using an independent pricing service. Fixed Income securities having a remaining maturity of 60 days or less are valued at amortized cost, which approximates market value. Investments in other open-end investment companies, if any, are valued based on the NAV of the investment companies (which may use fair value pricing as discussed in their prospectuses). If price quotes are unavailable or deemed unreliable, securities will be fair valued in accordance with procedures adopted by the Company's Board of Directors. Relying on prices supplied by pricing services or dealers or using fair valuation may result in values that are higher or lower than the values used by other investment companies and investors to price the same investments. USE OF ESTIMATES -- The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. INVESTMENT TRANSACTIONS, INVESTMENT INCOME AND EXPENSES -- The Fund records security transactions based on trade date. The cost of investments sold is determined by use of the specific identification method for both financial reporting and income tax purposes in determining realized gains and losses on investments. Interest income is accrued when earned. Dividend income is recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gains are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. The Fund's investment income, expenses and unrealized and realized gains and losses are allocated daily. Expenses incurred for all of the RBB fund families (such as director or professional fees) are charged to all funds in proportion to their net assets of the RBB funds, or in such other manner as the Board of Directors deems fair or equitable. Expenses and fees, including investment advisory and administration fees are accrued daily and taken into account for the purpose of determining the net asset value of the Fund. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net investment income are declared daily and paid monthly. Distributions from net realized capital gains, if any, are declared and paid at least annually to shareholders and recorded on ex-date for the Fund. Income dividends and capital gain distributions are determined in accordance with U.S. federal income tax regulations which may differ from generally accepted accounting principles in the United States of America. Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications within the components of net assets. 11 BEAR STEARNS ULTRA-SHORT INCOME FUND (FORMERLY BEAR STEARNS ENHANCED INCOME FUND) NOTES TO FINANCIAL STATEMENTS FOR THE PERIOD ENDED FEBRUARY 29, 2008 (UNAUDITED) (CONTINUED) U.S. TAX STATUS -- No provision is made for U.S. income taxes as it is the Fund's intention to qualify for and elect the tax treatment applicable to regulated investment companies under Subchapter M of the Internal Revenue Code of 1986, as amended, and make the requisite distributions to its shareholders which will be sufficient to relieve it from U.S. income and excise taxes. OTHER -- In the normal course of business, the Fund may enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is dependent on claims that may be made against the Fund in the future, and, therefore, cannot be estimated; however, based on experience, the risk of material loss from such claims is considered remote. FUTURES -- The Fund may enter into futures contracts. A futures contract is an agreement between two parties to buy and sell a security at a set price on a future date. Upon entering into such a contract, a Fund is required to pledge to the broker an amount of cash and/or securities equal to the minimum "initial margin" requirements of the exchange on which such contract is traded. Pursuant to the contract, the Fund agrees to receive from, or pay to the broker, an amount of cash equal to the daily fluctuation in value of the contract. Such a receipt of payment is known as a "variation margin" and is recorded by the Fund as an unrealized gain or loss. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The Fund is also required to fully collateralize futures contracts purchased. The Fund only enters into futures contracts that are traded on exchanges. MORTGAGE-RELATED SECURITIES GENERALLY -- The Portfolio may invest in mortgage pass-through securities and multiple-class pass-through securities, such as collateralized mortgage obligations ("CMOs") and Real Estate Mortgage Investment Conduit ("REMIC") pass-through or participation certificates as well as other securities collateralized by or representing a direct or indirect interest in mortgage-related securities or mortgage loans. The Portfolio may also invest in certain stripped mortgage-backed securities. Some of these securities may contain "embedded leverage" which can make them more sensitive to small movements in interest rates. 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES Bear Stearns Asset Management, Inc. ("BSAM" or the "Adviser"), a wholly-owned subsidiary of The Bear Stearns Companies, Inc. ("Bear Stearns"), serves as investment adviser to the Fund pursuant to an investment advisory agreement with the Company (the "Advisory Agreement"). For its services, the Adviser is paid a monthly fee at the annual rate of 0.16% of the Fund's average daily net assets. BSAM is voluntarily waiving a portion of its advisory fee and reimbursing certain expenses in order to limit the Fund's total annual portfolio operating expenses to 0.20% of the Fund's average daily net assets. The fee waiver and expense reimbursement are not contractual, and can be terminated at any time. For the six-month period ended February 29, 2008, investment advisory fees were $85,204 and $151,176 was waived by the Adviser. For the six-month period ended February 29, 2008, the Adviser reimbursed the Fund for $98,168 of Fund expenses. PFPC Inc. ("PFPC"), a wholly-owned subsidiary of PFPC Worldwide Inc., an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc., serves as administrator for the Fund. Administration and accounting fees accrued also include Transfer Agent and dividend disbursing agent fees, Custodian fees and Administrative Service fees. For providing administrative and accounting services, PFPC is entitled to receive a monthly fee equal to an annual rate of 0.0625% of the Fund's first $500 million of average daily net assets; 0.04% of the Fund's next $250 million of average daily net assets; 0.035% of the Fund's next $250 million of average daily net assets; and 0.03% of the Fund's average daily net assets in excess of $1 billion. For the six-month period ended February 29, 2008, PFPC's administration and accounting fees were $114,610. PFPC voluntarily agreed to waive a portion of its administration and accounting fees from the Fund. For the six-month period ended February 29, 2008, $31,242 was waived by PFPC. Included in the administration and accounting fees, shown above, are fees for providing regulatory administration services to RBB. For providing these services, PFPC is entitled to receive compensation as agreed to by the Company and PFPC. This fee is allocated to each portfolio in proportion to its net assets of the RBB funds. For providing transfer agent services, PFPC is entitled to receive out of pocket expenses. For the six-month period ended February 29, 2008, PFPC out of pocket transfer agency fees were $1,331. 12 BEAR STEARNS ULTRA-SHORT INCOME FUND (FORMERLY BEAR STEARNS ENHANCED INCOME FUND) NOTES TO FINANCIAL STATEMENTS FOR THE PERIOD ENDED FEBRUARY 29, 2008 (UNAUDITED) (CONTINUED) PFPC Trust Company provides certain custodial services to the Fund. PFPC Trust Company is a wholly-owned subsidiary of PFPC Worldwide, Inc. and an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc. For the six-month period ended February 29, 2008, PFPC Trust Company received transaction charges and out of pocket expenses of $7,013. PFPC Distributors, Inc., ("PFPC Distributors") a wholly-owned subsidiary of PFPC Worldwide, Inc. and an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc., provides certain administrative services to the Fund. As compensation for such administrative services, PFPC Distributors is entitled to receive a fee paid by PFPC from the fees PFPC receives from the Fund pursuant to the Administration and Accounting Services Agreement. The Fund will not pay PFPC or PFPC's affiliates at a later time for any amounts waived or any amounts assumed. As of February 29, 2008, the Fund owed PFPC and its affiliates $23,848 for their services. 3. INVESTMENT IN SECURITIES For the six-month period ended February 29, 2008, aggregate purchases and sales of investment securities (excluding short-term investments) were as follows: PURCHASES SALES ------------ ------------ Investment Securities $20,447,163 $395,314,102 4. CAPITAL SHARE TRANSACTIONS As of February 29, 2008, the Fund has 50,000,000,000 shares of common stock authorized. Transactions in capital shares were as follows:
FOR THE SIX MONTHS ENDED FOR THE FEBRUARY 29, 2008 PERIOD ENDED (UNAUDITED) AUGUST 31, 2007 -------------------------------- ----------------------------- SHARES* VALUE SHARES VALUE ----------- ---------- ---------- ------------ Sales................................................ 225,601 $ 2,208,904 59,462,964 $594,629,640 Reinvestments........................................ 270,900 2,673,349 1,328,341 13,258,134 Redemptions.......................................... (48,101,244) (475,967,608) (7,742,878) (76,665,059) ----------- ------------- ---------- ------------ Net Increase/(decrease).............................. (47,604,743) $(471,085,355) 53,048,427 $531,222,715 =========== ============= ========== ============ * Share transactions were adjusted to reflect a 10 for 1 reverse split effective December 10, 2007.
As of February 29, 2008, the following shareholder held a majority of the outstanding shares of the Fund. Bear Stearns Asset Management, Inc. 96.05% 5. FEDERAL INCOME TAX INFORMATION At February 29, 2008, federal tax cost, aggregate gross unrealized appreciation and depreciation of securities held by the Fund were as follows: FEDERAL TAX UNREALIZED UNREALIZED NET UNREALIZED COST APPRECIATION DEPRECIATION DEPRECIATION ------------ ------------ ------------ -------------- $56,349,695 $106,209 ($671,220) $(565,011) Dividends from net investment income and short-term capital gains are treated as ordinary income dividends for federal income tax purposes. 13 BEAR STEARNS ULTRA-SHORT INCOME FUND (FORMERLY BEAR STEARNS ENHANCED INCOME FUND) NOTES TO FINANCIAL STATEMENTS FOR THE PERIOD ENDED FEBRUARY 29, 2008 (UNAUDITED) (CONCLUDED) At August 31, 2007, the Fund had no capital loss carryforwards available to offset future capital gains. Under federal tax law, foreign currency and capital losses realized after October 31 may be deferred and treated as having arisen on the first day of the following fiscal year. For the period ended August 31, 2007, the Fund did not incur any post-October capital losses for the period March 6, 2007 through August 31, 2007. The differences between book and tax components of distributable earnings relate principally to the timing of recognition of income and gains for federal income tax purposes. Short-term and foreign currency gains are reported as ordinary income for federal tax purposes. 6. NEW ACCOUNTING PRONOUNCEMENTS Effective February 29, 2008, the Fund adopted FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes" (FIN 48). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Fund's tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. The adoption of FIN 48 did not result in the recording of any tax benefit or expenses. In September 2006, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards ("SFAS") 157, Fair Value Measurements, which clarifies the definition of fair value and requires companies to expand their disclosure about the use of fair value to measure assets and liabilities in interim and annual periods subsequent to initial recognition. Adoption of SFAS 157 requires the use of the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Although still in the process of evaluating the impact, if any, of SFAS 157 on the Fund, management believes that there will be no material impact on the Fund's financial statements other than enhanced disclosures. 7. SUBSEQUENT EVENT On March 16, 2008, JPMorgan Chase & Co. ("JPMC") announced that it had agreed to acquire Bear Stearns. Under the Agreement and Plan of Merger between JPMC and Bear Stearns and subject to certain conditions, JPMC is entitled as of the date of the Agreement and Plan of Merger to oversee the business, operations and management of Bear Stearns, including the Adviser, at the reasonable discretion of JPMC. The acquisition is subject to approval by the Bear Stearns shareholders. There is no assurance, however, that the Bear Stearns shareholders will approve the acquisition or that the acquisition will be completed. JPMC and Bear Stearns have advised the Company that they believe that by virtue of certain of its terms and conditions, the execution and delivery of the Agreement and Plan of Merger resulted in a change in control of the Adviser. This change in control constituted an "assignment" (as defined in the Investment Company Act of 1940) of the existing Investment Advisory Agreement between the Fund and the Adviser, resulting in its automatic termination. Pursuant to a no-action letter issued by the Securities and Exchange Commission to JPMC and the Adviser on March 16, 2008, the Adviser was permitted to continue to serve as investment adviser to the Fund for a 10-day period following the change in control, provided that the Board of Directors of the Company (the "Board") promptly took action to approve an interim advisory agreement with the Adviser pursuant to certain provisions of the Investment Company Act of 1940. On March 26, 2008, the Board approved, and the Fund entered into, an Interim Investment Advisory Agreement with the Adviser (the "Interim Agreement") that is identical in all material respects to the Fund's terminated Investment Advisory Agreement with the Adviser except that (1) the Interim Agreement will continue until the earlier of August 24, 2008 or the effective date of a new investment advisory agreement approved by the shareholders of the Fund and (2) the Interim Agreement may be terminated by the Fund or its shareholders on 10 days prior written notice to the Adviser. Shareholder approval of a new investment advisory agreement between the Fund and the Adviser will be sought. It is expected that the new investment advisory agreement will contain substantially the same terms and conditions as the Fund's terminated Investment Advisory Agreement with the Adviser. 14 BEAR STEARNS ULTRA-SHORT INCOME FUND (FORMERLY BEAR STEARNS ENHANCED INCOME FUND) OTHER INFORMATION (UNAUDITED) PROXY VOTING Policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities as well as information regarding how the Fund voted proxies relating to portfolio securities for the most recent 12-month period ended June 30 are available without charge, upon request, by calling Bear Stearns at (866) 509-7229 and on the Securities and Exchange Commission's ("SEC") website at http://www.sec.gov. QUARTERLY PORTFOLIO SCHEDULES The Company will file its complete schedule of portfolio holdings with the SEC for the first and third fiscal quarters of each fiscal year (quarters ended November 30 and May 31) on Form N-Q. The Company's Form N-Q will be available on the SEC website at http://www.sec.gov and may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. Information on the operation of the SEC Public Reference Room may be obtained by calling (202) 551-8090. 15 [THIS PAGE INTENTIONALLY LEFT BLANK] [THIS PAGE INTENTIONALLY LEFT BLANK] [THIS PAGE INTENTIONALLY LEFT BLANK] BEAR STEARNS ULTRA-SHORT INCOME FUND (FORMERLY BEAR STEARNS ENHANCED INCOME FUND) - -------------------------------------------------------------------------------- INVESTMENT ADVISERS ------------------- Bear Stearns Asset Management Inc. 237 Park Ave. New York, NY 10017 ADMINISTRATOR ------------- PFPC Inc. 301 Bellevue Parkway Wilmington, DE 19809 TRANSFER AGENT -------------- PFPC Inc. 301 Bellevue Parkway Wilmington, DE 19809 PRINCIPAL UNDERWRITER --------------------- PFPC Distributors, Inc. 760 Moore Road King of Prussia, PA 19406 CUSTODIAN --------- PFPC Trust Company 8800 Tinicum Blvd. Suite 200 Philadelphia, PA 19153 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM --------------------------------------------- Deloitte & Touche LLP 1700 Market Street Philadelphia, PA 19103 LEGAL COUNSEL ------------- Drinker Biddle & Reath LLP One Logan Square 18th and Cherry Streets Philadelphia, PA 19103 [GRAPHIC OMITTED] MARVIN & PALMER(R) ASSOCIATES, INC. GLOBAL EQUITY MANAGEMENT MARVIN & PALMER LARGE CAP GROWTH FUND OF THE RBB FUND, INC. SEMI-ANNUAL REPORT FEBRUARY 29, 2008 (UNAUDITED) THIS REPORT IS SUBMITTED FOR THE GENERAL INFORMATION OF THE SHAREHOLDERS OF THE FUND. IT IS NOT AUTHORIZED FOR DISTRIBUTION UNLESS PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS FOR THE FUND. SHARES OF THE FUND ARE DISTRIBUTED BY PFPC DISTRIBUTORS, INC. 760 MOORE ROAD, KING OF PRUSSIA, PA 19406. MARVIN & PALMER LARGE CAP GROWTH FUND SEMI-ANNUAL INVESTMENT ADVISER'S REPORT FEBRUARY 29, 2008 (UNAUDITED) DEAR FELLOW SHAREHOLDER: Enclosed is the Fund's semi-annual report for the period September 1, 2007 through February 29, 2008. Although the Fund declined 4.1% during this period, it outperformed the Russell 1000 Growth Index which was down 6.6%. INVESTMENT CLIMATE AND OUTLOOK Equity markets were extremely volatile during this period. From the market's peak in early October, the Russell 1000 Growth Index dropped 11% through the end of February. This volatility was caused primarily by the continuation of the crisis in the U.S. financial system. January was a particularly poor month around the world for leading stocks. The global market decline featured a wholesale liquidation of the 2007 stock market leaders and a rush towards the groups that had been severely punished last year. Although certain credit events may continue to cause uncertainty in the stock market, it is our belief that the ongoing credit crisis and its impact on equities is nearing its end. The authorities in the United States and Europe have stepped forward to contain the problem. The Federal Reserve has cut interest rates, opened the discount window and prevented the collapse of Bear Stearns. The recent offering of preferred stock at Lehman Brothers has been positively received by the market. Investors have been concerned about Lehman, and the success of its offering, which shored up its balance sheet, has been taken as a good sign. While the economic news coming out of the U.S. has been negative, the combination of increased liquidity and continued growth in the international markets should be positive for equities going forward. INVESTMENT REVIEW AND PORTFOLIO STRATEGY The Marvin & Palmer Large Cap Growth Fund outperformed the Russell 1000 Growth Index and the broader S&P 500 Index during the six months ending February 29, 2008. The Fund's outperformance was driven primarily by stock selection, though sector allocation was also positive. Issue selection was particularly strong in the materials and energy sectors. The Fund's underweighting in financials and the consumer-related sectors helped as well. The Fund had particularly strong performance in the materials and energy sectors where stocks such as Mosaic, Monsanto, XTO Energy and Apache contributed positively to performance. On a sector basis, we anticipate that the Fund will remain overweight in materials, energy and consumer staples. The Fund's primary underweights are in the information technology, consumer discretionary and health care sectors. We remain positive on the outlook for the U.S. market. Presently, a substantial portion of the earnings growth of the Fund's positions comes from overseas. Our current research on those foreign markets continues to give us confidence that growth in those countries and sectors should continue. We believe North America's leading large capitalization companies should continue to take advantage of that growth. We appreciate your support and confidence in our firm's investment philosophy, process and people. Please let us know if there is any way we can improve your experience with us. David F. Marvin, CFA Chairman Marvin & Palmer Associates, Inc. 1 MARVIN & PALMER LARGE CAP GROWTH FUND SEMI-ANNUAL REPORT February 29, 2008 (Unaudited) - -------------------------------------------------------------------------------- Total Returns For the Period Ended February 29, 2008 SIX SINCE MONTHS INCEPTION* --------- ------------ LARGE CAP GROWTH FUND (4.10)% (2.18)% RUSSELL 1000 GROWTH(R) INDEX (6.56)% (6.73)% - -------------------------------------------------------------------------------- * The Fund commenced operations on June 29, 2007. THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND DOES NOT GUARANTEE FUTURE RESULTS. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER. PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH-END MAY BE OBTAINED BY CALLING 1-877-821-2117. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THE TABLE DOES NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. THE PERFORMANCE QUOTED REFLECTS FEE WAIVERS IN EFFECT AND WOULD HAVE BEEN LESS IN THEIR ABSENCE. THE FUND'S GROSS ANNUAL OPERATING EXPENSE RATIO, AS STATED IN THE CURRENT PROSPECTUS, IS 3.93% AND THE FUND'S NET OPERATING EXPENSE RATIO IS 0.80%. THE EXPENSE RATIO IS CONTRACTUALLY CAPPED AT 0.80% THROUGH DECEMBER 31, 2008, WITHOUT WHICH PERFORMANCE WOULD HAVE BEEN LESS. THIS CAP CAN BE DISCONTINUED AT ANY TIME AFTER DECEMBER 31, 2008. 2 MARVIN & PALMER LARGE CAP GROWTH FUND FUND EXPENSE DISCLOSURE FEBRUARY 29, 2008 (UNAUDITED) As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including redemption fees; and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. This example is based on an investment of $1,000 invested at the beginning of the period from September 1, 2007 through February 29, 2008, and held for the entire period. ACTUAL EXPENSES The first line of the accompanying tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second line of the accompanying tables provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not your Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare these 5% hypothetical examples with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that the expenses shown in the accompanying tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees. Therefore, the second line of the accompanying tables is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
LARGE CAP GROWTH FUND ----------------------------------------------------------------------- BEGINNING ACCOUNT VALUE ENDING ACCOUNT VALUE EXPENSES PAID SEPTEMBER 1, 2007 FEBRUARY 29, 2008 DURING PERIOD* ----------------------- -------------------- --------------- Actual $1,000.00 $ 959.00 $3.90 Hypothetical (5% return before expenses) 1,000.00 1,020.84 4.03
- ------------------------------ * Expenses are equal to an annualized six-month expense ratio of 0.80% for the Fund which includes waived fees or reimbursed expenses, multiplied by the average account value over the period, multiplied by the number of days in the most recent period (182), then divided by 366 to reflect the period. The Fund's ending account values on the first line in each table are based on the actual six-month total return for the Fund of (4.10)%. 3 MARVIN & PALMER LARGE CAP GROWTH FUND PORTFOLIO HOLDINGS SUMMARY TABLE FEBRUARY 29, 2008 (UNAUDITED) % of Net Assets Value -------- --------------- Domestic Common Stocks Energy................................ 13.9% $ 2,931,413 Materials............................. 12.5 2,641,634 Capital Goods......................... 9.5 2,003,372 Food, Beverages & Tobacco............. 8.1 1,707,589 Health Care Equipment & Services...... 8.0 1,678,344 Technology Hardware & Equipment ...... 7.1 1,498,642 Diversified Financials................ 6.8 1,435,528 Software & Services................... 6.7 1,407,335 Pharmaceuticals, Biotechnology & Life Sciences....................... 6.2 1,307,505 Retailing............................. 4.7 981,144 Household Products.................... 4.0 846,247 Food & Staples Retailing.............. 3.1 644,670 Semiconductors & Semiconductors Equipment........................... 1.3 279,948 Consumer Services..................... 1.3 262,854 Utilities............................. 1.2 256,736 Consumer Durables & Apparel........... 1.2 255,850 Banking............................... 1.1 236,948 Temporary Investment.................. 2.9 612,961 Other Assets In Excess Of Liabilities. 0.4 92,072 ------ ------------ NET ASSETS............................ 100.0% $ 21,080,792 ====== ============ - ----------------------- Portfolio holdings are subject to change at any time. The accompanying notes are an integral part of the financial statements. 4 MARVIN & PALMER LARGE CAP GROWTH FUND PORTFOLIO OF INVESTMENTS FEBRUARY 29, 2008 (UNAUDITED) Shares Value -------- ----------- DOMESTIC COMMON STOCKS -- 96.7% BANKING -- 1.1% U.S. Bancorp ................................ 7,399 $ 236,948 ----------- CAPITAL GOODS -- 9.5% Deere & Co. ................................. 10,979 935,606 Emerson Electric Co. ........................ 4,290 218,618 General Dynamics Corp. ...................... 4,180 342,133 Jacobs Engineering Group, Inc.* ............. 3,270 262,548 L-3 Communications Holdings, Inc. ........... 2,300 244,467 ----------- 2,003,372 ----------- CONSUMER DURABLES & APPAREL -- 1.2% Nike, Inc. .................................. 4,249 255,850 ----------- CONSUMER SERVICES -- 1.3% Yum! Brands, Inc. ........................... 7,629 262,854 ----------- DIVERSIFIED FINANCIALS -- 6.8% JPMorgan Chase & Co. ........................ 12,899 524,385 Northern Trust Corp. ........................ 3,600 243,468 State Street Corp. .......................... 8,500 667,675 ----------- 1,435,528 ----------- ENERGY -- 13.9% Apache Corp. ................................ 2,350 269,568 Consol Energy, Inc. ......................... 6,600 501,468 Devon Energy Corp. .......................... 2,900 297,888 Exxon Mobil Corp. ........................... 3,400 295,834 Ultra Petroleum Corp.* ...................... 3,900 306,033 Weatherford International, Ltd.* ............ 8,799 606,496 XTO Energy, Inc. ............................ 10,599 654,126 ----------- 2,931,413 ----------- FOOD & STAPLES RETAILING -- 3.1% Wal-Mart Stores, Inc. ....................... 12,999 644,670 ----------- FOOD, BEVERAGES & TOBACCO -- 8.1% Altria Group, Inc. .......................... 6,100 446,154 Bunge, Ltd. ................................. 4,060 450,010 Coca-Cola Co., (The) ........................ 13,879 811,425 ----------- 1,707,589 ----------- HEALTH CARE EQUIPMENT & SERVICES -- 8.0% Baxter International, Inc. .................. 4,700 277,394 Becton, Dickinson & Co. ..................... 3,600 325,512 Express Scripts, Inc.* ...................... 8,629 510,033 Medco Health Solutions, Inc.* ............... 5,780 256,112 Thermo Fisher Scientific, Inc.* ............. 5,530 309,293 ----------- 1,678,344 ----------- HOUSEHOLD PRODUCTS -- 4.0% Avon Products, Inc. ......................... 8,399 319,704 Colgate-Palmolive Co. ....................... 6,920 526,543 ----------- 846,247 ----------- Shares Value -------- ----------- MATERIALS -- 12.5% Monsanto Co. ................................ 8,600 $ 994,848 Mosaic Co., (The)* .......................... 8,810 980,553 Newmont Mining Corp. ........................ 13,019 666,233 ----------- 2,641,634 ----------- PHARMACEUTICALS, BIOTECHNOLOGY & LIFE SCIENCES -- 6.2% Genzyme Corp.* .............................. 7,000 496,440 Gilead Sciences, Inc.* ...................... 17,139 811,065 ----------- 1,307,505 ----------- RETAILING -- 4.7% Amazon.Com, Inc.* ........................... 3,320 214,040 Best Buy Co., Inc. .......................... 5,400 232,254 Staples, Inc. ............................... 9,800 218,050 TJX Cos., Inc. (The) ........................ 9,899 316,800 ----------- 981,144 ----------- SEMICONDUCTORS & SEMICONDUCTORS EQUIPMENT -- 1.3% MEMC Electronic Materials, Inc.* ............ 3,669 279,948 ----------- SOFTWARE & SERVICES -- 6.7% Google, Inc., Class A* ...................... 485 228,522 Microsoft Corp. ............................. 16,699 454,574 Oracle Corp.* ............................... 13,999 263,200 Salesforce.Com, Inc.* ....................... 7,720 461,039 ----------- 1,407,335 ----------- TECHNOLOGY HARDWARE & EQUIPMENT -- 7.1% EMC Corp.* .................................. 17,629 273,970 Hewlett-Packard Co. ......................... 7,299 348,721 International Business Machines Corp. ....... 5,200 592,072 QUALCOMM, Inc. .............................. 6,700 283,879 ----------- 1,498,642 ----------- UTILITIES -- 1.2% Exelon Corp. ................................ 3,429 256,736 ----------- TOTAL DOMESTIC COMMON STOCKS (Cost $19,808,524) .................... 20,375,759 ----------- TEMPORARY INVESTMENT -- 2.9% PNC Bank Money Market Account ............... 612,961 612,961 ----------- TOTAL TEMPORARY INVESTMENT (Cost $612,961) ....................... 612,961 ----------- TOTAL INVESTMENTS -- 99.6% (Cost $20,421,485) ...................... 20,988,720 OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.4% ..................... 92,072 ----------- NET ASSETS -- 100.0% ........................ $21,080,792 =========== - ----------------------- * Non-income producing. The accompanying notes are an integral part of the financial statements. 5 MARVIN & PALMER LARGE CAP GROWTH FUND STATEMENT OF ASSETS AND LIABILITIES FEBRUARY 29, 2008 (UNAUDITED) ASSETS Investments, at value (cost $20,421,485) ................ $20,988,720 Receivable for investments sold ......................... 687,941 Receivable from Investment Advisor ...................... 20,051 Dividends receivable .................................... 12,956 Prepaid expenses ........................................ 14,385 ----------- Total assets .......................................... 21,724,053 ----------- LIABILITIES Payable for Investments purchased ....................... 617,966 Accrued expenses payable ................................ 25,295 ----------- Total liabilities ..................................... 643,261 ----------- NET ASSETS Capital stock, $0.001 par value ......................... $ 2,155 Additional paid-in capital .............................. 22,530,598 Distributions in excess of net investment income ........ (11,497) Accumulated net realized loss from investments .......... (2,007,699) Net unrealized appreciation on investments .............. 567,235 ----------- Net Assets .............................................. $21,080,792 =========== Shares outstanding ...................................... 2,154,824 =========== Net asset value, offering and redemption price per share. $ 9.78 =========== The accompanying notes are an integral part of the financial statements. 6 MARVIN & PALMER LARGE CAP GROWTH FUND STATEMENT OF OPERATIONS FOR THE SIX MONTH PERIOD ENDED FEBRUARY 29, 2008 (UNAUDITED) ------------------ INVESTMENT INCOME Dividends ............................................... $ 61,868 ----------- Total investment income................................ 61,868 ----------- EXPENSES Administration and accounting fees ...................... 82,860 Advisory fees ........................................... 59,609 Transfer agent out of pocket fees ....................... 24,149 Professional fees ....................................... 16,882 Registration and filing fees ............................ 10,309 Directors' and officer's fees ........................... 8,407 Printing and shareholder reporting fees ................. 4,960 Custodian fees .......................................... 2,162 Other expenses .......................................... 326 ----------- Total expenses before waivers and reimbursements....... 209,664 Less: waivers and reimbursements ........................ (136,299) ----------- Net expenses ............................................ 73,365 ----------- Net investment loss ..................................... (11,497) ----------- NET REALIZED AND UNREALIZED GAIN/(LOSS) FROM INVESTMENTS: Net realized loss from investments ...................... (1,679,116) Net change in unrealized appreciation on investments .... (131,012) ----------- Net realized and unrealized loss from investments ....... (1,810,128) ----------- NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS........ $(1,821,625) =========== The accompanying notes are an integral part of the financial statements. 7 MARVIN & PALMER LARGE CAP GROWTH FUND STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTH PERIOD ENDED FOR THE PERIOD FEBRUARY 29, 2008 JUNE 29, 2007* (UNAUDITED) TO AUGUST 31, 2007 ----------------- ------------------ INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS Net investment income/loss ....................................................... $ (11,497) $ 3,604 Net realized loss from investments ............................................... (1,679,116) (328,583) Net change in unrealized appreciation (depreciation) on investments .............. (131,012) 698,247 ----------- ----------- Net increase/(decrease) in net assets resulting from operations .................. (1,821,625) 373,268 ----------- ----------- LESS DIVIDENDS TO SHAREHOLDERS: Net investment income ............................................................ (3,604) -- ----------- ----------- Increase in net assets derived from capital share transactions(1) ................... 7,622,637 14,910,116 ----------- ----------- Total increase in net assets ................................................... 5,797,408 15,283,384 NET ASSETS Beginning of period .............................................................. 15,283,384 -- ----------- ----------- End of period (including accumulated net investment income/loss of $(11,497) and $3,604, respectively) ............................................ $21,080,792 $15,283,384 =========== ===========
- ----------------------- * Commencement of Operations. (1) See Note 4 in the Notes to Financial Statements. The accompanying notes are an integral part of the financial statements. 8 MARVIN & PALMER LARGE CAP GROWTH FUND FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- Contained below is per share operating performance data for each share outstanding, total investment return, ratios to average net assets and other supplemental data for the respective periods. This information has been derived from information provided in the financial statements. - --------------------------------------------------------------------------------
FOR THE SIX MONTH PERIOD ENDED FOR THE PERIOD FEBRUARY 29, 2008 JUNE 29, 2007* (UNAUDITED) TO AUGUST 31, 2007 ----------------- ------------------ PER SHARE OPERATING PERFORMANCE Net asset value, beginning of period ..................................................... $ 10.20 $ 10.00 ------- ------- Net investment loss ...................................................................... (0.01) --(3) Net realized and unrealized gain/(loss) on investments ................................... (0.41) 0.20 ------- ------- Net increase/(decrease) in net assets resulting from operations .......................... (0.42) 0.20 ------- ------- DIVIDENDS TO SHAREHOLDERS FROM: Net investment income .................................................................... --(3) -- ------- ------- Net asset value, end of period ........................................................... $ 9.78 $ 10.20 ======= ======= Total investment return(1) ............................................................... (4.10)% 2.00% RATIO/SUPPLEMENTAL DATA Net assets, end of period (000's omitted) ................................................ $21,081 $15,283 Ratio of expenses to average net assets(2) ............................................... 0.80% 0.80% Ratio of expenses to average net assets without waivers and expense reimbursements(2) .... 2.29% 3.93% Ratio of net investment income to average net assets(2) .................................. (0.13)% 0.21% Portfolio turnover rate .................................................................. 129.79% 28.70%
- ----------------------- * Commencement of Operations. (1) Total investment return is calculated by assuming a purchase of shares on the first day and a sale of shares on the last day of each period reported and includes reinvestments of dividends and distributions, if any. (2) Annualized. (3) Less than $0.01 per share. The accompanying notes are an integral part of the financial statements. 9 MARVIN & PALMER LARGE CAP GROWTH FUND NOTES TO FINANCIAL STATEMENTS FEBRUARY 29, 2008 (Unaudited) 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES The RBB Fund, Inc. ("RBB" or the "Company") was incorporated under the laws of the State of Maryland on February 29, 1988 and is registered under the Investment Company Act of 1940, as amended, (the "Investment Company Act") as an open-end management investment company. RBB is a "series fund," which is a mutual fund divided into separate portfolios. Each portfolio is treated as a separate entity for certain matters under the Investment Company Act, and for other purposes, and a shareholder of one portfolio is not deemed to be a shareholder of any other portfolio. Currently, RBB has twenty-one active investment portfolios, including the Marvin & Palmer Large Cap Growth Fund (the "Fund"), which commenced investment operations on June 29, 2007. RBB has authorized capital of one hundred billion shares of common stock of which 78.073 billion are currently classified into one hundred and twenty classes of common stock. Each class represents an interest in an active or inactive RBB investment portfolio. The active classes have been grouped into ten separate "families." PORTFOLIO VALUATION -- The Fund's net asset value ("NAV") is calculated once daily at the close of regular trading hours on the New York Stock Exchange ("NYSE") (generally 4:00 p.m. Eastern time) on each day the NYSE is open. Securities held by the Fund are valued using the closing price or the last sale price on a national securities exchange or the National Association of Securities Dealers Automatic Quotation System ("NASDAQ") market system where they are primarily traded. Equity securities traded in the over-the-counter market are valued at their closing prices. If there were no transactions on that day, securities traded principally on an exchange or on NASDAQ will be valued at the mean of the last bid and ask prices prior to the market close. Fixed Income securities having a remaining maturity of greater than 60 days are valued using an independent pricing service. Fixed Income securities having a remaining maturity of 60 days or less are amortized to maturity based on their cost. Foreign securities are valued based on prices from the primary market in which they are traded, and are translated from the local currency into U.S. dollars using current exchange rates. Investments in other open-end investment companies are valued based on the NAV of the investment companies (which may use fair value pricing as discussed in their prospectuses). If market quotations are unavailable or deemed unreliable, securities will be valued in accordance with procedures adopted by the Company's Board of Directors. Relying on prices supplied by pricing services or dealers or using fair valuation may result in values that are higher or lower than the values used by other investment companies and investors to price the same investments. USE OF ESTIMATES -- The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. INVESTMENT TRANSACTIONS, INVESTMENT INCOME AND EXPENSES -- The Fund records security transactions based on trade date. The cost of investments sold is determined by use of the specific identification method for both financial reporting and income tax purposes in determining realized gains and losses on investments. Interest income is accrued when earned. Dividend income is recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gains are recorded as a reduction of cost of investments and/or as a realized gain. The Fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. The Fund's investment income, expenses and unrealized and realized gains and losses are allocated daily. Expenses incurred on behalf of a specific class, fund or fund family are charged directly to the class, fund or fund family (in proportion to net assets). Expenses incurred for all the RBB fund families (such as director or professional fees) are charged to all funds in proportion to their average net assets of the RBB funds, or in such other manner as the Board of Directors deems fair or equitable. Expenses and fees, including investment advisory and administration fees, are accrued daily and taken into account for the purpose of determining the net asset value of the Fund. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net investment income and distributions from net realized capital gains, if any, are declared, recorded on ex-date and paid at least annually to shareholders. Income dividends and capital gain distributions are determined in accordance with U.S. federal income tax regulations, which may differ from generally accepted accounting principles. Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications within the components of net assets. 10 MARVIN & PALMER LARGE CAP GROWTH FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 29, 2008 (Unaudited) U.S. TAX STATUS -- No provision is made for U.S. income taxes as it is the Fund's intention to qualify for and elect the tax treatment applicable to regulated investment companies under Subchapter M of the Internal Revenue Code of 1986, as amended, and make the requisite distributions to its shareholders which will be sufficient to relieve it from U.S. income and excise taxes. OTHER -- In the normal course of business, the Fund may enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is dependent on claims that may be made against the Fund in the future, and, therefore, cannot be estimated; however, based on experience, the risk of material loss for such claims is considered remote. 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES Marvin & Palmer Associates, Inc. ("Marvin & Palmer Associates" or the "Adviser"), serves as investment adviser to the Fund pursuant to an investment advisory agreement with the Company (the "Advisory Agreement"). For its services, the Adviser is paid a monthly fee at the annual rate of 0.65% of the Fund's average daily net assets. The Adviser has agreed to limit through December 31, 2008 the Fund's total operating expenses to the extent that such expenses exceed 0.80% of the Fund's average daily net assets. This limitation is effected in waivers of advisory fees and reimbursement of expenses exceeding the advisory fee as necessary. If at any time during the first three years the Advisory Agreement is in effect the Fund's total annual operating expenses are less than 0.80% of the Fund's average daily net assets, the Adviser is entitled to reimbursement by the Fund of the advisory fees waived and other payments remitted by the Adviser to the Fund. For the period ended February 29, 2008, investment advisory fees accrued and waived were $59,609 and expenses reimbursed or to be reimbursed by the Adviser were $61,690. PFPC Inc. ("PFPC"), a wholly-owned subsidiary of PFPC Worldwide Inc., an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc., serves as administrator for the Fund. Administration and accounting fees accrued also include certain Transfer Agent and dividend disbursing agent fees, certain Custodian fees and Administrative Service fees. For providing administrative and accounting services, PFPC is entitled to receive a monthly fee equal to an annual rate of 0.15% of the Fund's first $250 million of average daily net assets; 0.12% of the Fund's next $250 million of average daily net assets; 0.10% of the Fund's next $250 million of average daily net assets; 0.08% of the Fund's next $750 million of average daily net assets; and 0.06% of the Fund's average daily net assets in excess of $1,500 million. For the period ended February 29, 2008, PFPC's administration and accounting fees were $82,860. Included in the administration and accounting fees, shown above, are fees for providing regulatory administration services to RBB. For providing these services, PFPC is entitled to receive compensation as agreed to by the Company and PFPC. This fee is allocated to each portfolio in proportion to its net assets of the RBB Funds. In addition, PFPC serves as the Fund's transfer and dividend disbursing agent. For providing transfer agent services, PFPC is entitled to receive out of pocket expenses. For the period ended February 29, 2008, PFPC out of pocket transfer agency fees were $24,149. PFPC Trust Company provides certain custodial services to the Fund. PFPC Trust Company is a wholly-owned subsidiary of PFPC Worldwide, Inc. and an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc. For the period ended February 29, 2008, PFPC Trust Company received transaction charges and out of pocket expenses of $2,162. PFPC Distributors, Inc., ("PFPC Distributors") a wholly-owned subsidiary of PFPC Worldwide, Inc. and an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc., provides certain administrative services to the Fund. As compensation for such administrative services, PFPC Distributors is entitled to receive a fee paid by PFPC from the fees PFPC receives from the Fund pursuant to the Administration and Accounting Services Agreement. PFPC voluntarily agreed to waive a portion of its fees from the Fund. For the period ended February 29, 2008, $15,000 of Administration and accounting fees were waived. The Fund will not pay PFPC or PFPC's affiliates at a later time for any amounts waived or any amounts assumed. As of February 29, 2008, the Fund owed PFPC and its affiliates $12,837 for their services. 11 MARVIN & PALMER LARGE CAP GROWTH FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 29, 2008 (Unaudited) 3. INVESTMENT IN SECURITIES For the period ended February 29, 2008, aggregate purchases and sales of investment securities (excluding short-term investments) of the Fund were as follows: PURCHASES SALES --------------- --------------- Investment Securities................... $30,526,460 $22,751,834 4. CAPITAL SHARE TRANSACTIONS As of February 29, 2008, the Fund has 100,000,000 shares of $0.001 par value common stock authorized. Transactions in capital shares were as follows:
FOR THE SIX MONTH PERIOD ENDED FOR THE PERIOD FEBRUARY 29, 2008 JUNE 29, 2007 TO (UNAUDITED) AUGUST 31, 2007 --------------------------- ---------------------------- SHARES AMOUNT SHARES AMOUNT --------- ---------- ---------- ----------- Sales................................. 656,670 $7,619,033 1,507,805 $15,010,116 Reinvestments......................... 309 3,604 -- -- Redemptions .......................... -- -- (9,960) (100,000) --------- ----------- ---------- ----------- Net Increase.......................... 656,979 $7,622,637 1,497,845 $14,910,116 ========= ========== ========== ===========
5. FEDERAL INCOME TAX INFORMATION At February 29, 2008, Federal tax cost, aggregate gross unrealized appreciation and depreciation of securities held by the Fund were as follows: FEDERAL TAX UNREALIZED UNREALIZED NET UNREALIZED COST APPRECIATION DEPRECIATION APPRECIATION ----------- ------------ ------------ ------------- $20,421,485 $1,500,838 $(933,603) $567,235 At August 31, 2007, the Fund had no capital loss carryforwards available to offset future capital gains. Under federal tax law, foreign currency and capital losses realized after October 31 may be deferred and treated as having arisen on the first day of the following fiscal year. For the year ended August 31, 2007, the Fund expects to elect to treat post-October capital losses of $309,258 incurred in the period June 29, 2007 through August 31, 2007 as having been incurred in the following fiscal year. The differences between the book and tax basis components of distributable earnings relate principally to the timing of recognition of income and gains for federal income tax purposes. Short-term and foreign currency gains are reported as ordinary income for Federal tax purposes. 12 MARVIN & PALMER LARGE CAP GROWTH FUND NOTES TO FINANCIAL STATEMENTS (CONCLUDED) FEBRUARY 29, 2008 (Unaudited) 6. IN KIND TRANSFER OF SECURITIES For the period ended February 29, 2008, the Fund received cash and securities in exchange for fund shares. The value of these subscriptions was as follows: VALUE OF THE CAPITAL SHARES SUBSCRIPTIONS SUBSCRIPTIONS ------------------- -------------------- $6,765,000 576,235 7. NEW ACCOUNTING PRONOUNCEMENTS Effective February 29, 2008, the Fund adopted FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes" (FIN 48). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Fund's tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax positions not deemed to meet the "more-likely-than-not" threshold would be recorded as a tax benefit or expense in the current year. The adoption of FIN 48 did not result in the recording of any tax benefit or expenses. In September 2006, FASB issued Statement of Financial Accounting Standards 157 ("SFAS 157"), Fair Value Measurements, which clarifies the definition of fair value and requires companies to expand their disclosure about the use of fair value to measure assets and liabilities in interim and annual periods subsequent to initial recognition. Adoption of SFAS 157 requires the use of the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Although still in the process of evaluating the impact, if any, SFAS 157 on the Fund, management believes that there will be no material impact on the Fund's financial statements other than enhanced disclosure. 13 MARVIN & PALMER LARGE CAP GROWTH FUND OTHER INFORMATION (UNAUDITED) PROXY VOTING Policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities as well as information regarding how the Fund voted proxies relating to portfolio securities for the most recent 12-month period ended June 30 are available without charge, upon request, by calling Marvin and Palmer at (877) 821-2117 and on the Securities and Exchange Commission's ("SEC") website at http://www.sec.gov. QUARTERLY PORTFOLIO SCHEDULES The Company will file a complete schedule of portfolio holdings with the SEC for the first and third fiscal quarters of each fiscal year (quarters ended November 30 and May 31) on Form N-Q. The Company's Form N-Q will be available on the SEC website at http://www.sec.gov and may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. Information on the operation of the SEC Public Reference Room may be obtained by calling (202) 551-8090. 14 [THIS PAGE INTENTIONALLY LEFT BLANK.] [THIS PAGE INTENTIONALLY LEFT BLANK.] [THIS PAGE INTENTIONALLY LEFT BLANK.] Investment Adviser Marvin & Palmer Associates, Inc. 1201 N. Market Street Suite 2300 Wilmington, DE 19801-1165 Administrator PFPC Inc. 301 Bellevue Parkway Wilmington, DE 19809 Transfer Agent PFPC Inc. 101 Sabin Street Pawtucket, RI 02860 Principal Underwriter PFPC Distributors, Inc. 760 Moore Road King of Prussia, PA 19406 Custodian PFPC Trust Company 8800 Tinicum Blvd. Suite 200 Philadelphia, PA 19153 Independent Registered Public Accounting Firm PricewaterhouseCoopers LLP Two Commerce Square, Suite 1700 2001 Market Street Philadelphia, PA 19103-7042 Counsel Drinker Biddle & Reath LLP One Logan Square 18th and Cherry Streets Philadelphia, PA 19103-6996 FREE MARKET U.S. EQUITY FUND FREE MARKET INTERNATIONAL EQUITY FUND FREE MARKET FIXED INCOME FUND OF THE RBB FUND, INC. SEMI-ANNUAL REPORT February 29, 2008 (Unaudited) This report is submitted for the general information of the shareholders of the Funds. It is not authorized for distribution unless preceded or accompanied by a current prospectus for the Funds. Shares of the Free Market Funds are distributed by PFPC Distributors, Inc., 760 Moore Road, King of Prussia, PA 19406. FREE MARKET FUNDS SEMI-ANNUAL INVESTMENT ADVISER'S REPORT FEBRUARY 29, 2008 (UNAUDITED) Dear Fellow Shareholder: It has been a short period of time since the launch of the Abundance Free Market U.S. Equity, Free Market International Equity and Free Market Fixed Income Funds (collectively, the "Funds" or the "Free Market Funds") on December 31, 2007. The Funds have steadily gained assets since their start and have also performed well against their benchmarks. Each Fund operates as a Fund of Funds. Abundance Technologies, Inc. ("Abundance") strives to deliver the performance of capital markets and add value through Free Market investment strategies and structured market portfolios. Grounded in the conviction that Free Markets work, Abundance avoids the cost-generating activity of stock picking and market timing. Instead, we focus on the dimensions of capital markets that we believe reward investors as intelligently and effectively as possible. Our disciplined approach to life-long investing provides both the individual investor and the financial professional with an academic foundation upon which to help achieve investment goals. Sound economic and financial research has documented that, over the long term, small cap stocks outperform large cap stocks and value stocks outperform growth stocks. These returns seem to be compensation for risk. In fixed income, risk is well-described by bond maturity and credit quality. Abundance's vehicles deliberately target specific risk and return trade offs. The Funds are broadly diversified and designed to work together in your total investment plan. Throughout its history, Abundance has sought to improve its research and investment technologies. The Funds are the latest example of this evolution. Each Fund's strategy targets a broad and diverse group of stocks or bonds across various markets, using other mutual funds that specifically target certain asset classes. The work is never complete, however, and Abundance will continue to research solutions to address your future needs. We invite you to contact your financial professional or explore our website, www.MyMatrix.cc, to learn more about the concepts and strategies of Abundance's investing. We appreciate your support and confidence in our firm's investment philosophy, process and people. /s/ Daniel J List Daniel J List Director of Portfolio Management Abundance Technologies, Inc. 1 FREE MARKET FUNDS FUND EXPENSE EXAMPLES (UNAUDITED) As a shareholder of the Fund(s), you incur two types of costs: (1) transaction costs, including redemption fees; and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund(s) and to compare these costs with the ongoing costs of investing in other mutual funds. These examples are based on an investment of $1,000 invested at the beginning of the period from December 31, 2007* through February 29, 2008, and held for the entire period. ACTUAL EXPENSES The first line of the accompanying tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second line of the accompanying tables provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not your Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare these 5% hypothetical examples with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that the expenses shown in the accompanying tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees. Therefore, the second line of the accompanying tables is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. * Commencement of operations. 2 FREE MARKET FUNDS FUND EXPENSE EXAMPLES (CONCLUDED) (UNAUDITED)
FREE MARKET U.S. EQUITY FUND ----------------------------------------------------------------------------------- BEGINNING ACCOUNT VALUE ENDING ACCOUNT VALUE EXPENSES PAID DECEMBER 31, 2007* FEBRUARY 29, 2008 DURING PERIOD** -------------------------- ---------------------- ------------------------- Actual $1,000.00 $1,025.00 $1.91 Hypothetical (5% return before expenses) 1,000.00 1,006.44 1.89
FREE MARKET INTERNATIONAL EQUITY FUND ----------------------------------------------------------------------------------- BEGINNING ACCOUNT VALUE ENDING ACCOUNT VALUE EXPENSES PAID DECEMBER 31, 2007* FEBRUARY 29, 2008 DURING PERIOD** -------------------------- ---------------------- ------------------------- Actual $1,000.00 $1,006.00 $2.26 Hypothetical (5% return before expenses) 1,000.00 1,006.07 2.26
FREE MARKET FIXED INCOME FUND ----------------------------------------------------------------------------------- BEGINNING ACCOUNT VALUE ENDING ACCOUNT VALUE EXPENSES PAID DECEMBER 31, 2007* FEBRUARY 29, 2008 DURING PERIOD** -------------------------- ---------------------- ------------------------- Actual $1,000.00 $1,004.00 $1.67 Hypothetical (5% return before expenses) 1,000.00 1,006.66 1.67
* Commencement of operations. ** Expenses are equal to an annualized expense ratio of 1.13% for the Free Market U.S. Equity Fund, 1.35% for the Free Market International Equity Fund and 1.00% for the Free Market Fixed Income Fund, which includes waived fees or reimbursed expenses, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal period (61), then divided by 366 to reflect the current period. Each Fund's ending account value on the first line in each table are based on the actual total return for each Fund of 2.50% for the Free Market U.S. Equity Fund, 0.60% for the Free Market International Equity Fund and 0.40% for the Free Market Fixed Income Fund. 3 FREE MARKET FUNDS FREE MARKET U.S. EQUITY FUND PORTFOLIO OF INVESTMENTS FEBRUARY 29, 2008 (UNAUDITED) NUMBER OF SHARES VALUE ---------- ---------- EQUITY FUNDS -- 93.4% DFA US Large Cap Value Portfolio III ............. 534,559 $ 8,841,605 DFA US Large Company Institutional Index Portfolio ................................ 412,989 4,311,602 DFA US Micro Cap Portfolio ....................... 368,138 4,436,067 DFA US Small Cap Portfolio ....................... 253,818 4,429,120 DFA US Small Cap Value Portfolio ................. 331,647 7,379,142 ----------- TOTAL EQUITY FUNDS(Cost $29,754,753) .......... 29,397,536 ----------- TEMPORARY INVESTMENT -- 0.3% PNC Bank Money Market Account 2.51%, 03/03/08 .... 105,939 105,939 ----------- TOTAL TEMPORARY INVESTMENT (Cost $105,939) ............................. 105,939 ----------- TOTAL INVESTMENTS -- 93.7% (Cost $29,860,692) .......................... 29,503,475 OTHER ASSETS IN EXCESS OF LIABILITIES -- 6.3% .... 1,983,597 ----------- NET ASSETS -- 100.0% ............................. $31,487,072 =========== PORTFOLIO HOLDINGS SUMMARY TABLE % OF NET ASSETS VALUE ---------- ----------- Equity Funds ..................................... 93.4% $29,397,536 Temporary Investment ............................. 0.3 105,939 Other Assets in Excess of Liabilities............. 6.3 1,983,597 ----- ----------- NET ASSETS ....................................... 100.0% $31,487,072 ===== =========== - ------------------ Portfolio holdings are subject to change at any time. FAS 157 DISCLOSURE - -------------------------------------------------------------------------------- The following is a summary of the inputs used, as of February 29, 2008, in valuing the Fund's assets carried at fair value:
INVESTMENTS OTHER IN FINANCIAL VALUATION INPUTS SECURITIES INSTRUMENTS -------------------------- --------------- -------------- Level 1 - Quoted Prices ........................................................ $29,503,475 $ -- Level 2 - Other Significant Observable Inputs .................................. -- -- Level 3 - Significant Unobservable Inputs ...................................... -- -- ----------- ---- Total .......................................................................... $29,503,475 $ -- =========== ====
The accompanying notes are an integral part of the financial statements. 4 FREE MARKET FUNDS FREE MARKET INTERNATIONAL EQUITY FUND PORTFOLIO OF INVESTMENTS FEBRUARY 29, 2008 (UNAUDITED) NUMBER OF SHARES VALUE ---------- ---------- INTERNATIONAL EQUITY FUNDS -- 93.7% DFA Asia Pacific Small Company Portfolio ............ 17,851 $ 461,285 DFA Continental Small Company Portfolio ............. 41,027 831,620 DFA Emerging Markets Portfolio ...................... 38,092 1,202,580 DFA Emerging Markets Small Cap Portfolio ............ 55,623 1,126,927 DFA Emerging Markets Value Portfolio ................ 26,910 1,121,060 DFA International Small Cap Value Portfolio ......... 494,923 9,240,206 DFA International Value Portfolio III ............... 333,931 6,895,676 DFA Japanese Small Company Portfolio ................ 31,021 465,933 DFA Large Cap International Portfolio ............... 47,674 1,150,848 DFA United Kingdom Small Company Portfolio .......... 17,344 461,517 ----------- TOTAL INTERNATIONAL EQUITY FUNDS (Cost $22,663,367) ............................. 22,957,652 ----------- TEMPORARY INVESTMENT -- 0.3% PNC Bank Money Market Account 2.51%, 03/03/08 ....... 73,854 73,854 ----------- TOTAL TEMPORARY INVESTMENT (Cost $73,854) ................................. 73,854 ----------- TOTAL INVESTMENTS -- 94.0% (Cost $22,737,221) ............................. 23,031,506 OTHER ASSETS IN EXCESS OF LIABILITIES -- 6.0% ....... 1,460,117 ----------- NET ASSETS -- 100.0% ................................ $24,491,623 =========== PORTFOLIO HOLDINGS SUMMARY TABLE % OF NET ASSETS VALUE ---------- ----------- International Equity Funds .......................... 93.7% $22,957,652 Temporary Investment ................................ 0.3 73,854 Other Assets in Excess of Liabilities ............... 6.0 1,460,117 ----- ----------- NET ASSETS .......................................... 100.0% $24,491,623 ===== =========== - ------------------ Portfolio holdings are subject to change at any time. FAS 157 DISCLOSURE - -------------------------------------------------------------------------------- The following is a summary of the inputs used, as of February 29, 2008, in valuing the Fund's assets carried at fair value:
INVESTMENTS OTHER IN FINANCIAL VALUATION INPUTS SECURITIES INSTRUMENTS -------------------------- --------------- -------------- Level 1 - Quoted Prices ........................................................ $23,031,506 $ -- Level 2 - Other Significant Observable Inputs .................................. -- -- Level 3 - Significant Unobservable Inputs ...................................... -- -- ----------- ---- Total .......................................................................... $23,031,506 $ -- =========== ====
The accompanying notes are an integral part of the financial statements. 5 FREE MARKET FUNDS FREE MARKET FIXED INCOME FUND PORTFOLIO OF INVESTMENTS FEBRUARY 29, 2008 (UNAUDITED) NUMBER OF SHARES VALUE ---------- ---------- FIXED INCOME FUNDS -- 92.1% DFA Five-Year Global Fixed Income Portfolio ......... 490,541 $5,302,753 DFA Five-Year Government Portfolio .................. 508,228 5,321,144 DFA One-Year Fixed Income Portfolio ................. 521,106 5,211,061 DFA Two-Year Global Fixed Income Fund ............... 510,049 5,299,408 ----------- TOTAL FIXED INCOME FUNDS(Cost $21,078,801) ....... 21,134,366 ----------- TEMPORARY INVESTMENT -- 0.3% PNC Bank Money Market Account 2.51%, 03/03/08 ....... 73,450 73,450 ----------- TOTAL TEMPORARY INVESTMENT (Cost $73,450) ................................. 73,450 ----------- TOTAL INVESTMENTS -- 92.4% (Cost $21,152,251).............................. 21,207,816 OTHER ASSETS IN EXCESS OF LIABILITIES -- 7.6% ....... 1,735,319 ----------- NET ASSETS -- 100.0% ................................ $22,943,135 =========== PORTFOLIO HOLDINGS SUMMARY TABLE % OF NET ASSETS VALUE ---------- ----------- Fixed Income Funds .................................. 92.1% $21,134,366 Temporary Investment ................................ 0.3 73,450 Other Assets in Excess of Liabilities ............... 7.6 1,735,319 ----- ----------- NET ASSETS .......................................... 100.0% $22,943,135 ===== =========== - ------------------ Portfolio holdings are subject to change at any time. FAS 157 DISCLOSURE - -------------------------------------------------------------------------------- The following is a summary of the inputs used, as of February 29, 2008, in valuing the Fund's assets carried at fair value:
INVESTMENTS OTHER IN FINANCIAL VALUATION INPUTS SECURITIES INSTRUMENTS -------------------------- --------------- -------------- Level 1 - Quoted Prices ........................................................ $21,207,816 $ -- Level 2 - Other Significant Observable Inputs .................................. -- -- Level 3 - Significant Unobservable Inputs ...................................... -- -- ----------- ---- Total .......................................................................... $21,207,816 $ -- =========== ====
The accompanying notes are an integral part of the financial statements. 6 FREE MARKET FUNDS STATEMENTS OF ASSETS AND LIABILITIES FEBRUARY 29, 2008 (UNAUDITED)
FREE MARKET FREE MARKET FREE MARKET INTERNATIONAL FIXED INCOME U.S. EQUITY FUND EQUITY FUND FUND ----------------- ------------- --------------- ASSETS Investment securities at value (cost -- $29,860,692, $22,737,221, and $21,152,251, respectively) ........................................ $29,503,475 $23,031,506 $21,207,816 Cash .................................................................... 1 -- -- Receivable for Capital shares sold ...................................... 1,962,821 1,440,378 1,711,311 Receivable from Investment Adviser ...................................... 11,452 12,730 17,061 Dividends and interest receivable ....................................... 7 54 Prepaid expenses and other assets ....................................... 20,607 18,550 18,548 ----------- ----------- ----------- Total Assets .......................................................... 31,498,363 24,503,218 22,954,736 ----------- ----------- ----------- LIABILITIES Payable for investments purchased ....................................... -- -- -- Payable to the Investment Adviser ....................................... -- -- -- Payable for Fund shares redeemed ........................................ -- -- -- Accrued expenses payable and other liabilities .......................... 11,291 11,595 11,601 ----------- ----------- ----------- Total Liabilities ..................................................... 11,291 11,595 11,601 ----------- ----------- ----------- Net Assets .............................................................. $31,487,072 $24,491,623 $22,943,135 =========== =========== =========== NET ASSETS CONSISTED OF: Capital stock, $0.001 par value ......................................... $ 3,073 $ 2,435 $ 2,285 Additional paid-in capital .............................................. 31,853,607 24,206,281 22,885,298 Accumulated net investment loss ......................................... (12,391) (11,378) (13) Accumulated net realized gain/(loss) from investments ................... -- -- -- Net unrealized appreciation/(depreciation) on investments ............... (357,217) 294,285 55,565 ----------- ----------- ----------- Net assets applicable to shares outstanding ............................. $31,487,072 $24,491,623 $22,943,135 =========== =========== =========== Shares outstanding ......................................................... 3,073,236 2,435,233 2,285,309 =========== =========== =========== Net asset value, offering and redemption price per share ................... $ 10.25 $ 10.06 $ 10.04 =========== =========== ===========
The accompanying notes are an integral part of the financial statements. 7 FREE MARKET FUNDS STATEMENTS OF OPERATIONS
FREE MARKET FREE MARKET FREE MARKET INTERNATIONAL FIXED INCOME U.S. EQUITY FUND EQUITY FUND FUND --------------------- ------------------ ------------------ FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD DECEMBER 31, 2007* DECEMBER 31, 2007* DECEMBER 31, 2007* THROUGH THROUGH THROUGH FEBRUARY 29, 2008 FEBRUARY 29, 2008 FEBRUARY 29, 2008 (UNAUDITED) (UNAUDITED) (UNAUDITED) --------------------- ------------------ ------------------ INVESTMENT INCOME Dividends ........................................................ $ 57 $ 95 $ 7,129 ---------- ---------- -------- Total investment income ........................................ 57 95 7,129 ---------- ---------- -------- EXPENSES Administration and accounting fees ............................... 15,632 15,935 15,935 Advisory fees .................................................... 5,506 4,256 3,575 Professional fees ................................................ 4,998 4,997 4,997 Registration and filing fees ..................................... 1,445 1,445 1,445 Directors' and officer's fees .................................... 1,146 1,146 1,146 Transfer agent out of pocket fees ................................ 300 300 300 Custodian transaction and out of pocket fees ..................... 200 200 200 Other expenses ................................................... 180 180 180 ---------- ---------- -------- Total expenses before waivers .................................. 29,407 28,459 27,778 Less: waivers and reimbursements ................................. (16,959) (16,986) (20,636) ---------- ---------- -------- Net expenses after waivers ....................................... 12,448 11,473 7,142 ---------- ---------- -------- Net investment loss ................................................. (12,391) (11,378) (13) ---------- ---------- -------- NET REALIZED AND UNREALIZED GAIN/(LOSS) FROM INVESTMENTS: Net realized gain/(loss) from: Investments .................................................... -- -- -- Net change in unrealized appreciation/(depreciation) on: Investments .................................................... (357,217) 294,285 55,565 ---------- ---------- -------- Net realized and unrealized gain/(loss) from investments. ........ (357,217) 294,285 55,565 ---------- ---------- -------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ..... $ (369,608) $ 282,907 $ 55,552 ========== ========== ========
- ------------------ * Commencement of operations. The accompanying notes are an integral part of the financial statements. 8 FREE MARKET FUNDS STATEMENTS OF CHANGES IN NET ASSETS
FREE MARKET FREE MARKET FREE MARKET INTERNATIONAL FIXED INCOME U.S. EQUITY FUND EQUITY FUND FUND --------------------- ------------------ ------------------ FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD DECEMBER 31, 2007* DECEMBER 31, 2007* DECEMBER 31, 2007* THROUGH THROUGH THROUGH FEBRUARY 29, 2008 FEBRUARY 29, 2008 FEBRUARY 29, 2008 (UNAUDITED) (UNAUDITED) (UNAUDITED) --------------------- ------------------ ------------------ INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS Net investment loss ............................................... $ (12,391) $ (11,378) $ (13) Net realized gain/(loss) from investments ......................... -- -- -- Net change in unrealized appreciation/(depreciation) on investments ................................................. (357,217) 294,285 55,565 ----------- ----------- ----------- Net increase/(decrease) in net assets resulting from operations ... (369,608) 282,907 55,552 ----------- ----------- ----------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income ............................................. -- -- -- Net realized capital gains ........................................ -- -- -- ----------- ----------- ----------- Total dividends and distributions to shareholders ............... -- -- -- ----------- ----------- ----------- INCREASE IN NET ASSETS DERIVED FROM CAPITAL SHARE TRANSACTIONS (SEE NOTE 4) .................................................... 31,856,680 24,208,716 22,887,583 ----------- ----------- ----------- Total increase in net assets .................................... 31,487,072 24,491,623 22,943,135 NET ASSETS Beginning of period ............................................... -- -- -- ----------- ----------- ----------- End of period** ................................................... $31,487,072 $24,491,623 $22,943,135 =========== =========== ===========
- -------------- * Commencement of operations. ** Includes accumulated net investment loss for the period December 31, 2007 through February 29, 2008 of $(12,391) for the Free Market U.S. Equity Fund, $(11,378) for the Free Market International Equity Fund and $(13) for the Free Market Fixed Income Fund. The accompanying notes are an integral part of the financial statements. 9 FREE MARKET FUNDS FREE MARKET U.S. EQUITY FUND FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- Contained below is per share operating performance data for each share outstanding, total investment return, ratios to average net assets and other supplemental data for the respective periods. This information has been derived from information provided in the financial statements. - --------------------------------------------------------------------------------
FOR THE PERIOD DECEMBER 31, 2007* THROUGH FEBRUARY 29, 2008 (UNAUDITED) ------------------- PER SHARE OPERATING PERFORMANCE** Net asset value, beginning of period ....................................................... $ 10.00 Net investment income/(loss) ............................................................... --+ Net realized and unrealized gain on investments ............................................ 0.25 ------- Net increase in net assets resulting from operations ....................................... 0.25 ------- Dividends and distributions to shareholders from: Net investment income ...................................................................... -- Net realized capital gains ................................................................. -- ------- Total dividends and distributions to shareholders .......................................... -- ------- Net asset value, end of period ............................................................. $10.25 ======= Total investment return(1) ................................................................. 2.50% ======= RATIO/SUPPLEMENTAL DATA Net assets, end of period (000's omitted) .................................................. $31,487 Ratio of expenses to average net assets(2) ................................................. 1.13%(3) Ratio of expenses to average net assets without waivers and expense reimbursements ......... 2.66%(3) Ratio of net investment income to average net assets(2) .................................... (1.12)%(3) Portfolio turnover rate .................................................................... 0.00%
- ------------------ * Commencement of operations. ** Calculated based on shares outstanding on the first and last day of the respective period, except for dividends and distributions, if any, which are based on actual shares outstanding on the dates of distributions. + Amount less than $0.01 per share. (1) Total investment return is calculated by assuming a purchase of shares on the first day and a sale of shares on the last day of each period reported and includes reinvestments of dividends and distributions, if any. (2) Reflects waivers and reimbursements. (3) Annualized. The accompanying notes are an integral part of the financial statements. 10 FREE MARKET FUNDS FREE MARKET INTERNATIONAL EQUITY FUND FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- Contained below is per share operating performance data for each share outstanding, total investment return, ratios to average net assets and other supplemental data for the respective periods. This information has been derived from information provided in the financial statements. - --------------------------------------------------------------------------------
FOR THE PERIOD DECEMBER 31, 2007* THROUGH FEBRUARY 29, 2008 (UNAUDITED) ------------------- PER SHARE OPERATING PERFORMANCE** Net asset value, beginning of period ....................................................... $ 10.00 Net investment income/(loss) ............................................................... --+ Net realized and unrealized gain on investments ............................................ 0.06 ------- Net increase in net assets resulting from operations ....................................... 0.06 ------- Dividends and distributions to shareholders from: Net investment income ...................................................................... -- Net realized capital gains ................................................................. -- ------- Total dividends and distributions to shareholders .......................................... -- ------- Net asset value, end of period ............................................................. $ 10.06 ======= Total investment return(1) ................................................................. 0.60% ======= RATIO/SUPPLEMENTAL DATA Net assets, end of period (000's omitted) .................................................. $24,492 Ratio of expenses to average net assets(2) ................................................. 1.35%(3) Ratio of expenses to average net assets without waivers and expense reimbursements ......... 3.34%(3) Ratio of net investment income to average net assets(2) .................................... (1.34)%(3) Portfolio turnover rate .................................................................... 0.00%
- ------------------ * Commencement of operations. ** Calculated based on shares outstanding on the first and last day of the respective period, except for dividends and distributions, if any, which are based on actual shares outstanding on the dates of distributions. + Amount less than $0.01 per share. (1) Total investment return is calculated by assuming a purchase of shares on the first day and a sale of shares on the last day of each period reported and includes reinvestments of dividends and distributions, if any. (2) Reflects waivers and reimbursements. (3) Annualized. The accompanying notes are an integral part of the financial statements. 11 FREE MARKET FUNDS FREE MARKET FIXED INCOME FUND FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- Contained below is per share operating performance data for each share outstanding, total investment return, ratios to average net assets and other supplemental data for the respective periods. This information has been derived from information provided in the financial statements. - --------------------------------------------------------------------------------
FOR THE PERIOD DECEMBER 31, 2007* THROUGH FEBRUARY 29, 2008 (UNAUDITED) ------------------- PER SHARE OPERATING PERFORMANCE** Net asset value, beginning of period ....................................................... $ 10.00 Net investment income/(loss) ............................................................... --+ Net realized and unrealized gain on investments ............................................ 0.04 ------- Net increase in net assets resulting from operations ....................................... 0.04 ------- Dividends and distributions to shareholders from: Net investment income ...................................................................... -- Net realized capital gains ................................................................. -- ------- Total dividends and distributions to shareholders .......................................... -- ------- Net asset value, end of period ............................................................. $ 10.04 ======= Total investment return(1) ................................................................. 0.40% ======= RATIO/SUPPLEMENTAL DATA Net assets, end of period (000's omitted) .................................................. $22,943 Ratio of expenses to average net assets(2) ................................................. 1.00%(3) Ratio of expenses to average net assets without waivers and expense reimbursements ......... 3.88%(3) Ratio of net investment income to average net assets(2) .................................... 0.00%++(3) Portfolio turnover rate .................................................................... 0.00%
- ------------------ * Commencement of operations. ** Calculated based on shares outstanding on the first and last day of the respective period, except for dividends and distributions, if any, which are based on actual shares outstanding on the dates of distributions. + Amount less than $0.01 per share. ++ Amount less than 0.01%. (1) Total investment return is calculated by assuming a purchase of shares on the first day and a sale of shares on the last day of each period reported and includes reinvestments of dividends and distributions, if any. (2) Reflects waivers and reimbursements. (3) Annualized. The accompanying notes are an integral part of the financial statements. 12 FREE MARKET FUNDS NOTES TO FINANCIAL STATEMENTS FEBRUARY 29, 2008 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES The RBB Fund, Inc. ("RBB" or the "Company") was incorporated under the laws of the State of Maryland on February 29, 1988 and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company. RBB is a "series fund," which is a mutual fund divided into separate portfolios. Each portfolio is treated as a separate entity for certain matters under the 1940 Act, and for other purposes, and a shareholder of one portfolio is not deemed to be a shareholder of any other portfolio. Currently, RBB has twenty-one active investment portfolios, including the Free Market U.S. Equity Fund, Free Market International Equity Fund, and the Free Market Fixed Income Fund (each a "Fund," collectively the "Funds"), are contained in this report. Each Fund operates as a Fund of Funds and commenced investment operations on December 31, 2007. RBB has authorized capital of one hundred billion shares of common stock of which 78.073 billion shares are currently classified into one hundred and twenty classes of common stock. Each class represents an interest in an active or inactive RBB investment portfolio. The active classes have been grouped into ten separate "families." PORTFOLIO VALUATION -- Investments in the underlying funds are valued at each fund's net asset value determined as of the close of business of the New York Stock Exchange (generally 4:00 p.m. Eastern time). As required, some securities and assets may be valued at fair value as determined in good faith by the Company's Board of Directors. Direct investments in fixed income securities having a remaining maturity of 60 days or less are valued at amortized cost, which approximates market value. In September 2006, the Financial Accounting Standards Board issued Financial Accounting Standards ("FAS") 157 effective for fiscal years beginning after November 15, 2007. This standard clarifies the definition of fair value for financial reporting, establishes a framework for measuring fair value and requires additional disclosures about the use of fair value measurements. The Funds adopted FAS 157 as of the commencement of investment operations, December 31, 2007. The three levels of the fair value hierarchy under FAS 157 are described below: o Level 1 - quoted prices in active markets for identical securities o Level 2 - other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) o Level 3 - significant unobservable inputs (including the Funds' own assumptions in determining the fair value of investments) The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. A summary of the inputs used to value the Funds' net assets as of February 29, 2008 is included with each Fund's Schedule of Investments. USE OF ESTIMATES -- The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. INVESTMENT TRANSACTIONS, INVESTMENT INCOME AND EXPENSES -- Transactions are accounted for on the trade date. The cost of investments sold is determined by use of the specific identification method for both financial reporting and income tax purposes in determining realized gains and losses on investments. Interest income is accrued when earned. Dividend income is recorded on the ex-dividend date. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The Funds estimate the components of distributions received that may be considered return of capital distributions or capital gain distributions. Each Fund's investment income, expenses and unrealized and realized gains and losses are allocated daily. Expenses incurred on behalf of a specific class, fund or fund family are charged directly to the class, fund or fund family (in proportion to net assets). Expenses incurred for all of the RBB fund families (such as director or professional fees) are charged to all funds in proportion to their average net assets of the RBB funds, or in such other manner as the Board of Directors deems fair or equitable. Expenses and fees, including investment advisory and administration fees, are accrued daily and taken into account for the purpose of determining the net asset value of the Funds. 13 FREE MARKET FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 29, 2008 (UNAUDITED) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net investment income and distributions from net realized capital gains, if any, are declared and paid at least annually to shareholders and recorded on ex-dividend date for all Funds with the exception of the Free Market Fixed Income Fund which declares and pays quarterly dividends from net investment income. Income dividends and capital gain distributions are determined in accordance with U.S. federal income tax regulations which may differ from U.S. generally accepted accounting principles. Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications within the components of net assets. U.S. TAX STATUS -- No provision is made for U.S. income taxes as it is each Fund's intention to qualify for and elect the tax treatment applicable to regulated investment companies under Subchapter M of the Internal Revenue Code of 1986, as amended, and make the requisite distributions to its shareholders which will be sufficient to relieve it from U.S. income and excise taxes. The Funds adopted the provisions of Financial Accounting Standards Board Interpretation No. 48 ("FIN 48"), ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES, as of the commencement of investment operations, December 31, 2007. As of and during the period ended February 29, 2008, the Funds did not have a liability for any unrecognized tax benefits. The Funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the statement of operations. During the period, the Funds did not incur any interest or penalty. OTHER -- In the normal course of business, the Funds may enter into contracts that provide general indemnifications. The Funds' maximum exposure under these arrangements is dependent on claims that may be made against the Funds in the future, and, therefore, cannot be estimated; however, based on experience, the risk of material loss for such claims is considered remote. 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES Abundance Technologies, Inc. ("Abundance" or the "Advisor"), serves as each Fund's investment advisor. For its advisory services, Abundance is entitled to receive 0.50% of each Fund's average daily net assets, computed daily and payable monthly. The Advisor has contractually agreed to waive its advisory fee and/or reimburse certain expenses in order to limit total annual fund operating expenses of Free Market U.S. Equity Fund, Free Market International Equity Fund and the Free Market Fixed Income Fund to 1.13%, 1.35% and 1.00%, respectively, of the particular Fund's average daily net assets through December 31, 2008. The Advisor may discontinue these arrangements at any time after December 31, 2008. For the period ended February 29, 2008, investment advisory fees and waivers of expenses were:
EXPENSE GROSS ADVISORY FEES WAIVERS NET ADVISORY FEES REIMBURSEMENT ----- ---------------- --------- ------------------ ---------------- Free Market U.S. Equity Fund $5,506 $(5,506) $-- $11,453 Free Market International Equity Fund 4,256 (4,256) -- 12,730 Free Market Fixed Income Fund 3,575 (3,575) -- 17,061
The Funds will not pay Abundance at a later time for any amounts they may waive or any amounts that Abundance has assumed. PFPC Inc. ("PFPC"), a wholly-owned subsidiary of PFPC Worldwide Inc. and an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc., serves as administrator for the Funds. Administration and accounting fees accrued also include transfer agent and dividend disbursing agent fees, custodian fees and administrative service fees. For providing administrative and accounting services, PFPC is entitled to receive a monthly fee equal to an annual rate of 0.11% of the Fund's first $250 million of average daily net assets; 0.0925% of the next $250 million of average daily net assets; 0.0725% of the next $200 million of average daily net assets; and 0.055% of the average daily net assets in excess of $700 million, subject to a minimum monthly fee of $9,375 per Fund plus out of pocket expenses. For the period ended February 29, 2008, PFPC's administration and accounting fees were as follows: ADMINISTRATION AND ACCOUNTING FEES ------------------ Free Market U.S. Equity Fund $15,632 Free Market International Equity Fund 15,935 Free Market Fixed Income Fund 15,935 14 FREE MARKET FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) FEBRUARY 29, 2008 (UNAUDITED) For providing transfer agent services, PFPC is entitled to receive out of pocket expenses. For the period ended February 29, 2008, PFPC out of pocket transfer agency fees were $300, $300 and $300 for the Free Market U.S. Equity Fund, Free Market International Equity Fund, and the Free Market Fixed Income Fund, respectively. PFPC Trust Company provides certain custodial services to the Funds. PFPC Trust Company is a wholly-owned subsidiary of PFPC Worldwide, Inc. and an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc. For the period ended February 29, 2008, PFPC Trust Company received transaction charges and out of pocket expenses of $200, $200 and $200 for the Free Market U.S. Equity Fund, Free Market International Equity Fund, and the Free Market Fixed Income Fund, respectively. PFPC Distributors, Inc. ("PFPC Distributors"), a wholly-owned subsidiary of PFPC Worldwide, Inc. and an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc., provides certain administrative services to the Funds. As compensation for such administrative services, PFPC Distributors is entitled to receive a fee paid by the Funds from the fees PFPC receives from the Funds pursuant to the Administration and Accounting Services Agreement. 3. INVESTMENT IN SECURITIES For the period ended February 29, 2008, aggregate purchases and sales of investment securities (excluding short-term investments) of the Funds were as follows: PURCHASES SALES ------------- ---------- Free Market U.S. Equity Fund $29,754,753 $ -- Free Market International Equity Fund 22,663,367 -- Free Market Fixed Income Fund 21,078,801 -- 4. CAPITAL SHARE TRANSACTIONS As of February 29, 2008, each Fund has 100,000,000 shares of $0.001 par value common stock authorized. Transactions in capital shares were as follows: FREE MARKET U.S. EQUITY FUND ------------------------------- FOR THE PERIOD DECEMBER 31, 2007* THROUGH FEBRUARY 29, 2008 ------------------------------- SHARES VALUE ----------- ----------- Sales ........................... 3,074,641 $31,871,245 Reinvestments ................... -- -- Redemptions ..................... (1,405) (14,565) ----------- ----------- Net Increase .................... 3,073,236 $31,856,680 =========== =========== FREE MARKET INTERNATIONAL EQUITY FUND ------------------------------- FOR THE PERIOD DECEMBER 31, 2007* THROUGH FEBRUARY 29, 2008 ------------------------------- SHARES VALUE ----------- ----------- Sales ........................... 2,436,324 $24,219,488 Reinvestments ................... -- -- Redemptions ..................... (1,091) (10,772) ----------- ----------- Net Increase .................... 2,435,233 $24,208,716 =========== =========== 15 FREE MARKET FUNDS NOTES TO FINANCIAL STATEMENTS (CONCLUDED) FEBRUARY 29, 2008 (UNAUDITED) FREE MARKET FIXED INCOME FUND ------------------------------- FOR THE PERIOD DECEMBER 31, 2007* THROUGH FEBRUARY 29, 2008 ------------------------------- SHARES VALUE ----------- ----------- Sales ........................... 2,285,887 $22,893,374 Reinvestments ................... -- -- Redemptions ..................... (578) (5,791) ----------- ----------- Net Increase .................... 2,285,309 $22,887,583 =========== =========== *Commencement of operations. 5. FEDERAL INCOME TAX INFORMATION At February 29, 2008, federal tax cost, aggregate gross unrealized appreciation and depreciation of securities held by each Fund were as follows:
FEDERAL TAX UNREALIZED UNREALIZED NET UNREALIZED COST APPRECIATION DEPRECIATION APPRECIATION/DEPRECIATION -------------- -------------- -------------- ---------------------------- Free Market U.S. Equity Fund $29,860,592 $ 0 $(357,217) $(357,217) Free Market International Equity Fund 22,737,221 294,285 0 294,285 Free Market Fixed Income Fund 21,152,251 56,550 (985) 55,565
16 FREE MARKET FUNDS OTHER INFORMATION (UNAUDITED) PROXY VOTING Policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities as well as information regarding how the Funds voted proxies relating to portfolio securities for the most recent 12-month period ended June 30 are available without charge, upon request, by calling FreeMarket Funds at (877) 264-5346 and on the Securities and Exchange Commission's ("SEC") website at http://www.sec.gov. QUARTERLY PORTFOLIO SCHEDULES The Company will file a complete schedule of portfolio holdings with the SEC for the first and third fiscal quarters of each fiscal year (quarters ended November 30 and May 31) on Form N-Q. The Company's Form N-Q will be available on the SEC website at http://www.sec.gov and may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. Information on the operation of the SEC Public Reference Room may be obtained by calling (202) 551-8090. APPROVAL OF INVESTMENT ADVISORY AGREEMENT The Company's Board of Directors (the "Board"), including all of the Directors who are not "interested persons" of the Company, as that term is defined in the Investment Company Act (the "Independent Directors"), considered the approval of the investment advisory agreement between Abundance and the Company on behalf of the Funds (the "Advisory Agreement") at a meeting of the Board held on May 24, 2007 (the "Meeting"). At the Meeting, the Board approved the Advisory Agreement for an initial term ending August 16, 2008. The Board's decision to approve the Advisory Agreement reflects the exercise of its business judgment to engage Abundance to provide advisory services to the Funds pursuant to the terms of the Advisory Agreement and based upon the information provided to the Directors in connection with the Meeting. In approving the Advisory Agreement, the Board considered information provided by Abundance with the assistance and advice of counsel to the Independent Directors and the Company. In considering the approval of the Advisory Agreement, the Directors took into account all the materials provided prior to and during the Meeting, the presentations made during the Meeting, and the discussions during the Meeting. The Directors discussed the materials from Abundance mailed in advance of the Meeting that addressed the factors listed below. Abundance also made presentations during the Meeting and responded to questions from the Directors. Among other things, the Directors considered (i) the nature, extent, and quality of Abundance's services to be provided to the Fund; (ii) descriptions of the experience and qualifications of Abundance's personnel providing those services; (iii) Abundance's investment philosophies and processes; (iv) Abundance's assets under management and client descriptions; (v) Abundance's soft dollar commission and trade allocation policies, including information on the types of research and services obtained in connection with soft dollar commissions; (vi) Abundance's proposed advisory fee arrangements with the Company and other similarly managed clients; (vii) Abundance's compliance procedures; (viii) Abundance's financial information and insurance coverage; (ix) the extent to which economies of scale are relevant to the Fund; (x) a report prepared by the Advisor and utilizing information from Morningstar, Inc. that compared the Fund's proposed advisory fee and total expense ratio to those of its peer group. No one factor was determinative in the Board's consideration of the Advisory Agreement. The Directors then met in executive session with counsel to discuss and consider information presented, as well as the Directors' responsibilities and duties in connection with approving the Advisory Agreement. The Directors considered Abundance's advisory services and processes, and the type of securities to be purchased by Abundance for the Funds in relation to the proposed advisory fee payable and the estimated total expense ratio for each Fund. The Directors noted that Abundance has agreed to waive advisory fees for each Fund. The Directors then concluded that the nature, extent and quality of services to be provided by Abundance in advising each Fund was satisfactory; and the benefits expected to be derived by Abundance from managing the Funds seemed reasonable. The Directors recognized that because the Funds had not yet commenced investment operations, the effect of any economies of scale due to asset growth could not currently be evaluated. Based on all of the information presented to the Board and its consideration of relevant factors, the Board, and separately the Independent Directors, concluded that the proposed advisory fee structure was reasonable and determined that Abundance's Advisory Agreement be approved for an initial period ending August 16, 2008. 17 [THIS PAGE INTENTIONALLY LEFT BLANK.] [THIS PAGE INTENTIONALLY LEFT BLANK.] INVESTMENT ADVISER ABUNDANCE TECHNOLOGIES, INC. 3700 Park 42 Drive Suite 105A Cincinnati, OH 45241 ADMINISTRATOR PFPC Inc. 301 Bellevue Parkway Wilmington, DE 19809 TRANSFER AGENT PFPC Inc. 101 Sabin Street Pawtucket, RI 02860 PRINCIPAL UNDERWRITER PFPC Distributors, Inc. 760 Moore Road King of Prussia, PA 19406 CUSTODIAN PFPC Trust Company 8800 Tinicum Blvd. Suite 200 Philadelphia, PA 19153 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM PricewaterhouseCoopers LLP Two Commerce Square, Suite 1700 2001 Market Street Philadelphia, PA 19103-7042 COUNSEL Drinker Biddle & Reath LLP One Logan Square 18th and Cherry Streets Philadelphia, PA 19103-6996 ITEM 2. CODE OF ETHICS. Not applicable. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. ITEM 6. SCHEDULE OF INVESTMENTS. Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the report to shareholders filed under Item 1 of this Form. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. There have been no material changes to the procedures by which the shareholders may recommend nominees to the registrant's board of directors, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)), or this Item. ITEM 11. CONTROLS AND PROCEDURES. (a) The registrant's principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the "1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)). (b) There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the registrant's second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS. (a)(1) Not applicable. (a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto. (a)(3) Not applicable. (b) Certifications pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) The RBB Fund, Inc. ------------------------------------------------------------------- By (Signature and Title)* /s/ Edward J. Roach ------------------------------------------------------- Edward J. Roach, President & Treasurer (principal executive officer) Date April 24, 2008 ---------------------------------------------------------------------------- Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title)* /s/ Edward J. Roach ------------------------------------------------------- Edward J. Roach, President & Treasurer (principal executive officer & principal financial officer) Date April 24, 2008 ---------------------------------------------------------------------------- * Print the name and title of each signing officer under his or her signature. EX-99.CERT 2 g44401bedford_cert.txt 302 CERTIFICATION CERTIFICATION PURSUANT TO RULE 30A-2(a) UNDER THE 1940 ACT AND SECTION 302 OF THE SARBANES-OXLEY ACT I, Edward J. Roach, certify that: 1. I have reviewed this report on Form N-CSR of The RBB Fund, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: April 24, 2008 /s/ Edward J. Roach ---------------------- -------------------------------------------- Edward J. Roach, President & Treasurer (principal executive officer & principal financial officer) EX-99.906CERT 3 g44401bedford_cert906.txt 906 CERTIFICATION CERTIFICATION PURSUANT TO RULE 30A-2(b) UNDER THE 1940 ACT AND SECTION 906 OF THE SARBANES-OXLEY ACT I, Edward J. Roach, President & Treasurer of The RBB Fund, Inc. (the "Registrant"), certify that: 1. The Registrant's periodic report on Form N-CSR for the period ended February 29, 2008 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. Date: April 24, 2008 /s/ Edward J. Roach ---------------------------- ------------------------------------------- Edward J. Roach, President & Treasurer (principal executive officer & principal financial officer) THIS CERTIFICATION IS BEING FURNISHED TO THE SECURITIES AND EXCHANGE COMMISSION SOLELY PURSUANT TO RULE 30A-2(B) UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED, AND 18 U.S.C. SS.1350 AND IS NOT BEING FILED AS PART OF THE REPORT OR AS A SEPARATE DISCLOSURE DOCUMENT. -----END PRIVACY-ENHANCED MESSAGE-----