Litman Gregory Funds Trust – ‘N-30D’ for 12/31/00

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Annual or Semi-Annual Report Mailed to Shareholders   —   Rule 30d-1
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Document/Exhibit                   Description                      Pages   Size 

 1: N-30D       Annual Report for the Year Ended 12/31/00             63    242K 

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THE MASTERS' SELECT FUNDS 

ANNUAL REPORT                                     

THE MASTERS' SELECT EQUITY FUND                   

THE MASTERS' SELECT INTERNATIONAL FUND            

THE MASTERS' SELECT VALUE FUND                    

DECEMBER 31, 2000                                 

LITMAN/GREGORY FUND ADVISORS, LLC 

www.mastersselectfunds.com

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THE MASTERS' SELECT CONCEPT                                                     

In constructing the Masters' Select Funds, our goal was to design funds that    
would isolate the stock-picking skills of a group of highly regarded portfolio  
managers. To meet this objective, we designed the funds with both risk and      
return in mind, placing particular emphasis on the following factors:           

1.   First, only stock-pickers we believe to be exceptionally skilled were      
chosen to manage each fund's portfolio.                               

2.   Second, and of equal importance, each stock-picker runs a very focused     
 portfolio of not more than 15 of his or her favorite stocks. We believe
    that most stock-pickers have an unusually high level of conviction in only
     a small number of stocks and that a portfolio limited to these stocks will,
    on average, outperform (a more diversified portfolio) over a market cycle.

3.   Third, even though each manager's portfolio is focused, we seek ways to    
  diversify each of our funds. With the Equity and International Funds, we
   have done this by including managers with differing investment styles and
     market cap orientations. With the Value Fund, we have selected managers who
each take unique approaches to assessing companies and defining value.

4.   Finally, we believe that excessive asset growth results in diminished      
   performance. We have committed to close each of the Masters' Select Funds
to new investors at levels that we believe will preserve the managers'
ability to effectively implement the "select" concept.                

PORTFOLIO FIT                                                                   

As with all equity funds, Masters' Select Funds are appropriate for investors   
with a long-term time horizon, who are willing to ride out occasional periods   
when the funds' net asset values decline. Within that context, we created the   
Masters' Select Equity and Masters' Select International Funds to be used as    
core equity and international fund holdings. We created Masters' Select Value   
Fund for investors who seek additional, dedicated value exposure in their       
portfolios. Although performance in each specific down market will vary, we     
purposely set the allocations to each manager with the objective of keeping risk
about equal to the funds' overall benchmarks. In the end, the focus on the      
highest conviction stocks of a group of very distinguished managers with        
superior track records is what we believe makes the funds ideal portfolio       
holdings.                                                                       

The Masters' Select Funds                                                       

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[GRAPHIC]                                                                       

CONTENTS                                                                        

Letter to Shareholders                                                         2

Masters' Select Equity Fund                                                     
Equity Fund Review                                                             7
Interview: Dick Weiss                                                         12
Equity Fund Stock Highlights                                                  16
Equity Fund Schedule of Investments                                           20

Masters' Select International Fund                                              
International Fund Review                                                     22
Interview: Helen Young Hayes                                                  26
International Fund Stock Highlights                                           30
International Fund Schedule of Investments                                    34

Masters' Select Value Fund                                                      
Value Fund Review                                                             36
Interview: Bill Nygren                                                        39
Value Fund Stock Highlights                                                   42
Value Fund Schedule of Investments                                            44

Statements of Assets and Liabilities                                          46

Statements of Operations                                                      47

Statement of Changes in Net Assets                                              
Equity Fund                                                                   48
International Fund                                                            49
Value Fund                                                                    50

Financial Highlights                                                            
Equity Fund                                                                   51
International Fund                                                            52
Value Fund                                                                    53

Notes to Financial Statements                                                 54

Report of Independent Accountants                                             60

This report is intended for shareholders of the Funds and may not be used as    
sales literature unless preceded or accompanied by a current prospectus for the 
Masters' Select Funds.                                                          

Past performance is not a guarantee of future results. Share price and returns  
will fluctuate, and investors may have a gain or loss when they redeem shares.  
Statements and other information in this report are dated and are subject to    
change. Litman/Gregory Fund Advisors, LLC has ultimate responsibility for the   
Funds' performance due to its responsibility to oversee its investment managers 
and recommend their hiring, termination and replacement.                        

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DEAR FELLOW SHAREHOLDER,                                                        

The year 2000 was a bit of a reality check for investors. But in spite of       
declining stock prices, we view the year as a very gratifying one for the       
Masters' Select Funds. That is because even though returns were not particularly
satisfying on an absolute basis, the full year performance of both Masters'     
Select Equity and Masters' Select International substantially exceeded their    
benchmarks.                                                                     

It is our mission to deliver to our shareholders benchmark-beating LONG-TERM    
returns that are satisfying on BOTH an absolute and relative return basis. Good 
long-term records can be built by adding value in a variety of environments--and
many investors learned in 2000 that value added in a mediocre investment climate
is at least as valuable as value added in a hot market. We are very pleased that
Masters' Select Equity and Masters' Select International have both outperformed 
their index benchmarks as well as their fund peer groups by clear margins, not  
only in 2000 but also over the full life of each fund. In addition, not only did
the funds outperform their benchmarks in aggregate, but after taking into       
account all expenses, ALL ELEVEN OF THE MANAGERS IN THESE TWO FUNDS HAVE        
OUTPERFORMED THEIR BENCHMARKS DURING THEIR FULL TENURE AS SUBADVISORS.          

We believe the long-term success of the funds can be attributed to two primary  
factors and two secondary factors:                                              

PRIMARY FACTORS                                                                 

*    The skill of our stock pickers                                             

*    The fact that each runs a concentrated portfolio of not more than 15 stocks
that are representative of their highest conviction ideas             

SECONDARY FACTORS                                                               

*    The funds' small asset base                                                

*    Our efforts to let our stock pickers know that we want to maximize         
    long-term performance and are less concerned about short-term performance.
   We believe the absence of short-term performance pressure makes it easier
for the managers to focus exclusively on extraordinary long-term      
opportunities regardless of the near-term question marks. The         
    diversification inherent in the multi-manager structure lessens the impact
of any single manager's poor performance over a short time period.    

LESSONS IN 2000                                                                 

The bursting of the technology and growth stock bubble in 2000 helped drive home
some classic investing lessons that tend to be forgotten in the euphoria of hot 
market environments:                                                            

1.   A stock's long-term value is a function of the underlying company's future 
     earnings. Intelligent fundamental analysts who can identify companies whose
stock prices do not accurately reflect their future earning power are 
likely to achieve stock-picking success over time. There was a period 
during the last few years when it seemed that technology              

2 The Masters' Select Funds                                                     

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stocks were the only ones with a future, but rationality returned and 
    fundamentally based investing proved itself--again. The "Masters" managing
    all our funds have a primary focus on fundamental investing--analyzing the
     value of each company given the magnitude and character of the earnings and
the potential earning power of their assets.                          

2.   Patience is also critical to investment success. It took patience over the 
     last few years for investors who understood that many stocks were mispriced
to wait for the market to realize their correct value. In the end more
 rational prices prevailed and investors who were patient were rewarded.
 Some of those who threw in the towel were whipsawed-missing much of the
    run-up but getting caught in the downdraft. We select managers for Masters
    who we believe take a long-term investment view, and we believe the funds'
 multi-manager structure makes it easier for the managers to invest with
patience in search of excellent long-term returns.                    

3.   To be patient requires the courage to think independently so as not to get 
caught up in the latest investment fad. This in turn requires         
  self-confidence in the investor's own investment skill. The stock picker
  who has a highly disciplined decision-making process and is obsessive in
his or her company research is more likely to be a confident,         
  high-conviction investor, capable of thinking independently, recognizing
    the analytical flaws in the latest investment fad, and exhibiting patience
    to wait for the return to a clearer-thinking market. These are the type of
 stock pickers we look for and we believe we have working for you in the
Masters' Select Funds.                                                

4.   With the S&P 500 dominating other equity asset classes for several years,  
investors began to question why they needed international exposure or 
     small-cap exposure. In addition, because growth stocks were driving the S&P
 500 during the period, many investors began to question why they should
   bother investing in anything other than technology stocks. But once again
 the benefits of portfolio diversification were underscored as investors
  were reminded that no equity market segment stays on top forever. By the
     end of 2000 value stocks had recaptured more than two years of growth stock
 outperformance. Masters' Select Equity has exposure to all equity asset
classes. Masters' Select International has exposure to a variety of   
    investment styles and market-caps within its foreign stock portfolio. Even
 Masters' Select Value offers diversification to managers with differing
     approaches to value stock selection (though this fund will not, on its own,
    deliver the overall level of diversification available via Masters' Select
Equity).                                                              

             ASSET CLASS PERFORMANCE RANKINGS DURING
            MASTERS' SELECT EQUITY FUND'S LIFE
             ---------------------------------------
            1997        1998       1999       2000
            ----        ----       ----       ----
Large-Cap Growth             1           1          1          4                
Large-Cap Value              2           3          4          1                
Small-Cap                    3           4          3          2                
Foreign                      4           2          2          3                

                                                                  Fund Summary 3

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DEVELOPMENTS IN 2000                                                            

There were a number of developments during 2000 including:                      

1.   The launch of our third fund based on the Masters' Select concept, Masters 
    Select Value Fund, which opened on June 30. Morningstar, the fund tracking
 firm, referred to our manager group of Mason Hawkins, Bill Miller, Bill
Nygren and Larry Sondike as a "dream team."                           

2.   Expenses declined for all three funds. Masters' Select Equity's expenses   
  were 1.24% for the full year, down slightly from 1.26% in 1999. Masters'
Select International's expenses were 1.18% down from 1.29% in 1999.   
  Expenses are not likely to decline significantly from current levels for
 either of these funds, but as assets grow there will be some additional
  expense reduction. Also, our management fee will decline as a percent of
     assets once the funds close, because we have agreed to cut the fee by 0.10%
on assets above $750 million for Equity and above $1 billion for      
International (asset growth will continue after the closings from     
appreciation and new investment from the existing shareholder base).  
    Masters' Select Value was launched at mid-year and because the fund is new
  and small, expenses have the potential to drop substantially as the fund
grows. As of early 2001 expenses are accruing at 1.41%                

3.   Masters' Select Equity replaced Robert Sanborn, one of the managers, with  
  Bill Miller. Though we were prepared to stick with Sanborn, there were a
     variety of concerns that arose out of his changing relationship with Harris
 Associates, the firm he worked for. The biggest issue was our suspicion
that Sanborn was planning to leave the firm and that he would be      
  pre-occupied with his long-term plans. By the end of the year he was, in
   fact, preparing to leave Harris. Our ability to replace Sanborn with Bill
     Miller, in our opinion one of the premier stock pickers around, was a major
factor in this decision.                                              

4.   The Masters' Select Funds received quite a few positive mentions in the    
 financial press during 2000.In addition to the stories mentioned in our
     semi-annual report, over the past few months there were positive stories in
    SMART MONEY (Death of the Expert), THE WALL STREET JOURNAL (A Core Fund of
     One's Own Adds Safety), KIPLINGERS' PERSONAL FINANCE (Meeting of the Minds)
    and MUTUAL FUNDS MAGAZINE (Four Kings). Moreover, fund tracker Morningstar
     named Masters' Select Value as one of two runners-up for Rookie Fund of the
 Year. And Morningstar Research Director John Rekenthaler named Masters'
Select Value as his favorite new fund for 2000 in the USA TODAY'S     
Investment Outlook 2001. Early in 2001 Charles Schwab & Company named 
Masters' Select International to their SELECT LIST, which is based on 
performance, risk and cost screens.                                   

We continue to have an extremely high level of confidence in the Masters' Select
concept. If anything, the performance since we launched the first Masters'      
Select Fund has increased that confidence. We will continue to keep our eye on  
the ball and work                                                               

4 The Masters' Select Funds                                                     

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    diligently to reward the confidence you have placed in the Masters' Select
    Funds. We believe the following factors will be key to our ability to meet
this goal:                                                            

1.   It is critical that our shareholders understand what our funds are about   
and have realistic expectations for their future performance. In this 
regard we believe the following points must be understood:            

*    Masters' Select Equity and Masters' Select International are     
        diversified by style and market-cap. Because of this diversification
         there will always be categories of funds that will out-return them in
       any given year. In a strong growth year Masters' Select Equity will
     probably underperform well-managed growth funds just like it will
          probably lag well-managed value funds in a strong value year. However,
       over many years one style is less likely to dominate. So we believe
    the stock-picking advantage we are attempting to capture via the
      structure of our funds will continue to prove itself over extended
         time periods leading to a continued superior long-term return record.
       Along the way we believe the diversification inherent in Equity and
International will smooth out the ride somewhat.            

*    All the Masters' Select portfolio managers make their investment 
         decisions based on fundamental analysis and a long-term time horizon.
   Investors should have a similarly long time horizon. We are not
       interested in shareholders who are attempting to time the market or
        play short-term market moves with their Masters' Select shares. This
      is why all our funds have a 2% redemption fee for shares held less
      than 180 days. (The fee is paid to the fund for the benefit of the
          remaining shareholders.) We hope that our shareholders have researched
       our fund carefully and invested with the expectation of holding for
         many years. This will allow for a stable asset base that will make it
easier for our managers to do their job well.               

   *    The global stock markets are unlikely to match the returns delivered
      over the past twenty years, during the next five years and longer.
        Many of the factors that drove stock returns to record levels during
     this period have played out. In our opinion, stocks are likely to
 deliver returns in the mid-single digits to low double-digits
         (annualized) over the next five to ten years. Individual year returns
          will fall in a far wider range. We believe these are likely to be fine
returns relative to inflation, however they are likely to be
          disappointing to investors conditioned to expect more. The performance
 of the Masters' Select Funds will be partly a function of the
       investment climate they operate in. Our objective is to continue to
  beat our stock market benchmarks, but if benchmark returns are
        significantly lower than in the recent past, Masters' performance is
also likely to be lower.                                    

2.   The quality of our stock pickers will obviously be a huge factor in our    
     success. As always we will continue to closely monitor the stability in the
 underlying organizations and the attentiveness of the managers to their
Masters mandate. We have an extremely high degree of confidence with  
  respect to all our managers and their ability to effectively execute the
concentrated, high conviction-stock strategy that is a hallmark of the
Masters' Select Funds.                                                

                                                                  Fund Summary 5

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3.   Our communications with you, our shareholders, is of utmost importance to  
us. We will continue to use our periodic reports and                  
     www.mastersselectfunds.com to keep you updated on developments with respect
to your funds.                                                        

We thank you for your investment in the Masters' Select Funds and we look       
forward to continuing to share with you a positive long-term investment         
experience. Please see the following pages for specific comments on Masters'    
Select Equity, Masters' Select International and Masters' Select Value including
stock profiles and manager interviews.                                          

Sincerely,                                                                      

/s/ Ken Gregory                                                                 

Ken Gregory                                                                     
President                                                                       
Litman/Gregory Fund Advisors                                                    

6 The Masters' Select Funds                                                     

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MASTERS' SELECT EQUITY                                                          

In a year when the Wilshire 5000 Index lost 10.90% of its value and our primary 
benchmark, the Custom Equity Index lost 7.90%, the positive 3.17% return        
delivered by Masters' Select Equity, though not exciting, looked quite good.    
And, given our long stated goal of delivering strong performance over a full    
market cycle, we are most gratified by the fund's performance since its         
inception. During its four-year life the Fund has handily beaten its benchmarks.
It has even out-returned the S&P 500 during a period that has favored large-caps
over more diversified portfolios like Masters' Select Equity. Relative to the   
Lipper Multi-Cap Core Index, the fund benchmark we believe is the best-fit      
comparison, Masters' Select Equity is a top quartile performer since inception, 
falling in the top 23% out of 228 funds. We believe there is significance to the
longer-term return because it now reflects a period that is closer to a full    
market-cycle, given that it incorporates a variety of time periods, both        
positive and negative, for a range of equity styles and market-caps.            

COMPARISON CHART                                                                

The value of a hypothetical $10,000 investment in the Master's Select Equity    
Fund from its inception (12/31/96) to present as compared with the Wilshire 5000
Index, the Lipper Multi-Cap Core Index and the Custom Equity Index(2).          

                                                                [Download Table]

       MASTERS' SELECT                       LIPPER MULTI-CAP                     
        EQUITY FUND     WILSHIRE 5000 INDEX   CORE FUND INDEX  CUSTOM EQUITY INDEX
        -----------     -------------------   ---------------  -------------------
                                                                                  
12/96     10,000             10,000               10,000             10,000       
01/97     10,290             10,535               10,474             10,443       
02/97     10,320             10,530               10,443             10,466       
03/97     9,860              10,065               10,057             10,070       
04/97     10,210             10,504               10,405             10,502       
05/97     10,920             11,248               11,107             11,251       
06/97     11,530             11,765               11,526             11,764       
07/97     12,790             12,669               12,402             12,547       
08/97     12,500             12,193               12,061             12,019       
09/97     13,560             12,912               12,724             12,724       
10/97     12,850             12,482               12,246             12,217       
11/97     12,740             12,891               12,454             12,584       
12/97     12,911             13,129               12,627             12,791       
01/98     12,845             13,200               12,698             12,908       
02/98     13,925             14,161               13,605             13,834       
03/98     14,415             14,870               14,243             14,486       
04/98     15,081             15,047               14,397             14,616       
05/98     14,557             14,646               14,002             14,275       
06/98     14,732             15,160               14,395             14,697       
07/98     14,579             14,828               14,102             14,364       
08/98     11,850             12,518               11,906             12,176       
09/98     12,210             13,336               12,471             12,873       
10/98     13,140             14,328               13,322             13,843       
11/98     13,883             15,231               14,036             14,647       
12/98     14,834             16,205               14,988             15,482       
01/99     15,304             16,801               15,485             15,971       
02/99     14,572             16,192               14,888             15,327       
03/99     15,413             16,817               15,358             15,868       
04/99     16,955             17,623               15,985             16,646       
05/99     16,736             17,237               15,806             16,340       
06/99     18,059             18,129               16,581             17,186       
07/99     17,589             17,548               16,216             16,767       
08/99     17,304             17,385               15,933             16,591       
09/99     16,898             16,930               15,536             16,290       
10/99     17,365             18,007               16,324             17,086       
11/99     17,728             18,610               16,850             17,592       
12/99     18,758             20,023               18,103             18,874       
01/00     18,471             19,192               17,589             18,030       
02/00     18,354             19,622               18,266             18,435       
03/00     20,115             20,787               19,437             19,526       
04/00     19,880             19,704               18,715             18,777       
05/00     19,254             19,017               18,065             18,243       
06/00     19,867             19,855               18,827             18,947       
07/00     19,658             19,450               18,533             18,536       
08/00     21,067             20,862               19,840             19,641       
09/00     19,684             19,903               18,929             18,704       
10/00     19,632             19,481               18,715             18,438       
11/00     18,210             17,542               17,121             16,972       
12/00     19,353             17,842               17,496             17,383       

The hypothetical $10,000 investment at Fund inception includes changes in share 
price and reinvestment of dividends and capital gains. Indexes are unmanaged, do
not incur fees, and cannot be invested directly.                                

                                                                  Fund Summary 7

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INVESTMENT PERFORMANCE AS OF DECEMBER 31, 2000                                  

                                                             AVERAGE
                                         3 YEAR             ANNUAL
                            12 MONTH    AVERAGE ANNUAL      TOTAL RETURN
                                 RETURN      TOTAL RETURN     SINCE INCEPTION(1)
                                 ------      ------------     ------------------
MASTERS' SELECT EQUITY FUND       3.17%         14.45%              17.93%      

CUSTOM EQUITY INDEX(2)           -7.90%         10.77%              14.81%      

WILSHIRE 5000 INDEX(3)          -10.90%         10.76%              15.56%      

LIPPER MULTI-CAP CORE FUND                                                      
INDEX(4)                       -3.35%         11.48%              15.00%    

Past performance is no guarantee of future results, and investors may have a    
gain or loss when they sell shares. Indexes are unmanaged, do not incur fees,   
and cannot be invested in directly.                                             

1.   The inception date of the Masters' Select Equity Fund is December 31, 1996.

2.   The Custom Equity Index is composed of a 70% weighting in the S&P 500      
  Index, a 20% weighting in the Russell 2000 Index, and a 10% weighting in
the MSCI EAFE Index.                                                  

3.   The Wilshire 5000 Index measures the performance of all U.S. headquartered 
equity securities with readily available pricing data.                

4.   The Lipper Multi-Cap Core Fund Index measures the performance of the 30    
largest mutual funds that invest in a variety of market capitalization
     ranges, without concentrating 75% or more of their equity assets in any one
market capitalization range over an extended period of time.          

The fund's performance in 2000 was driven by a combination of stock selection   
and the diversification structured into the fund, rather than any major industry
shifts.                                                                         

In addition to the aggregate performance of Masters' Select Equity we are       
thrilled to report that ALL FIVE "MASTERS" who have been part of the fund since 
its inception outperformed their benchmarks in 2000, and more importantly, they 
have done so since the fund's inception. The difficulty active managers have had
in outperforming their passive index benchmarks has been widely noted in the    
financial press. We view it as a substantial accomplishment that all five of our
managers have out-returned their benchmarks. Bill Miller, our sixth manager, has
been with the fund only since late March of 2000. During his nine-month tenure  
he also beat his benchmark.                                                     

MASTERS' SELECT EQUITY MANAGEMENT BENCHMARKS                                    

Shelby and Chris Davis             S&P 500                                      
Foster Friess                      Russell 2000 Growth                          
Mason Hawkins                      S&P/Barra Value Index                        
Bill Miller                        S&P 500                                      
Sig Segalas                        S&P/Barra Growth Index                       
Dick Weiss                         Russell 2000                                 

8 The Masters' Select Funds                                                     

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WHAT IS MASTERS' SELECT EQUITY?                                                 

It has always been our contention that Masters' Select Equity is an ideal core  
equity fund holding. In fact, we designed the fund to be diversified across a   
variety of equity styles and market-caps so that it could serve as a core equity
position. This diversification, along with the quality of our managers and their
concentrated portfolios, our monitoring and management, and our commitment to   
close the fund at $750 million in assets are the primary factors that we believe
make Masters' Select Equity an intelligent core equity fund holding. We believe 
the performance of the fund over the past four years, a period that has         
encompassed several different types of equity environments, is supportive of our
earlier optimism about Masters' Select as a high quality core fund. However, it 
is interesting that the style and market cap diversification that is part of the
reason why the fund is a good core equity holding, also makes the fund difficult
to categorize. Fund trackers Morningstar and Lipper recently re-categorized the 
fund as Large-Cap Value. Previously the fund was in Morningstar's Large-Cap     
Blend category and Lipper's Multi-Cap Core Category. We believe the original    
Lipper category is the closest we can get to a good fund benchmark. But, we     
believe an even smarter way to benchmark the fund is to use a blended benchmark 
since the fund is in fact a blend of styles and market caps. Thus we use our    
Custom Equity Index which includes a 70% weighting to the S&P 500 Index, a 20%  
weighting to the Russell 2000 Index (small-caps) and a 10% weighting to the MSCI
EAFE Index (foreign stocks). How has this benchmark's allocations matched up    
with the fund's asset allocation over time? Pretty well, as the following chart 
depicts:                                                                        

MASTERS' SELECT EQUITY FUND HISTORICAL ASSET ALLOCATION                         

        CASH       INTERNATIONAL    SMALL CAP      MID CAP       LARGE CAP
        ----       -------------    ---------      -------       ---------
03/97      12.9           11.1           17.3           27.5           30.0     
06/97       8.0           12.0           19.0           20.0           40.0     
09/97       6.3           12.3           17.8           20.0           42.5     
12/97       7.7           17.3           19.6           16.7           37.5     
03/98       4.5           18.1           19.1           19.3           37.8     
06/98       8.5           15.7           13.2           17.1           44.5     
09/98       6.3           10.3           16.1           22.9           44.4     
12/98       2.9            7.8           16.8           19.5           53.0     
03/99       5.6            5.0           18.3           20.2           50.9     
06/99       3.3            4.0           25.3           23.0           44.4     
09/99       4.1            4.6           21.8           23.2           46.3     
12/99       2.7            2.5           17.5           28.3           49.0     
03/00       6.7            5.2           18.0           26.7           43.4     
06/00       6.9            4.6           15.2           22.6           50.7     
09/00       4.8            3.7           17.2           22.8           51.5     
12/00       2.6            2.3           16.6           25.4           53.1     

As you can see Masters' Select Equity has tended to maintain about 20% of its   
assets in the stocks of small companies (the average is 18%). Foreign stocks    
have ranged from 3% to 18% of assets, averaging 9%. The primary difference      
relative to our Custom Equity Index is that stocks of large companies have      
tended to make up around 50% of assets                                          

                                                                  Fund Summary 9

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(the average was 44%) over the fund's life--much less than the assumed 70%. The 
difference has been filled by a rather sizable and consistent allocation to     
mid-cap stocks (averaging 22%) and the fund's cash reserve. From a style        
standpoint, the fund has had a mild value bias over its life. That bias hurt the
fund during the strong growth market of 1997 through early 2000, but it helped  
through the last nine month's of last year. Going forward, we expect the value  
bias to be less than it was during the fund's first three years because Bill    
Miller does not have the deep-value approach that Robert Sanborn (who he        
replaced) employed. We expect the fund to range from a slight value bias to more
of a neutral bias. We take issue with the categorization of this fund as Large  
Value, it is more of an all-cap fund with a definite style mix.                 

NEWS AND DEVELOPMENTS                                                           

The most important development during 2000 was the addition of Bill Miller as   
one of the fund's sub-advisors. This was discussed in prior reports and touched 
on in the introduction to this report. Another far less substantive change      
regards the role of Shelby Davis. Davis has been listed, along with Chris Davis,
as a co-portfolio manager for 20% of the fund's assets. The elder Davis (Shelby)
has gradually been scaling back his day-to-day involvement, and for this reason,
going forward, only Chris Davis will be listed as a portfolio manager. Although 
the transition of responsibility is real and not insignificant, from a practical
standpoint this is less of a change in the elder Davis' involvement than it may 
appear. Shelby Davis maintains his passion for the business, continues to visit 
companies and do research, and remains Senior Research Advisor in the Davis     
business. We characterize this transition as "less substantive" because while   
Chris now makes the day-to-day decisions, he speaks with his father regularly   
about all the Davis funds holdings, including those in Masters' Select. While   
the fund has gradually become more dependent on the judgement of Chris Davis, in
our opinion a superb investor in his own right, Chris will continue to benefit  
from the active involvement of his father on the research side of the business. 
So, as has been the case from the inception of Masters' Select Equity, the fund 
will benefit from the involvement of both Davises. We also want to mention the  
involvement of Ken Charles Feinberg who is also a full partner in stock picking 
decisions. Feinberg has worked with the Davises for over six years and has been 
co-manager of Selected American Shares with Chris Davis for several years.      
Feinberg works very closely with the Davises and shares analytical              
responsibility and decision-making responsibility.                              

The year 2000 was a bit disappointing from a tax perspective in that the fund's 
distributed capital gains exceeded its return. The good news is that over 90% of
the distribution was long-term capital gain. The size of the distribution was a 
function of the volatile investment climate and the strong returns in prior     
years. The powerful early start in 2000, on the heels of a huge fourth quarter  
in 1999, resulted in strong upward spikes in a number of stocks' prices. This   
compelled several of our managers to take profits in stocks that had exceeded   
their fair value range. Later in the year several of our managers were able to  
take losses in stocks that had been hit hard in the market sell-off (but only in
instances where there was an equally compelling replacement). This allowed the  
fund to                                                                         

10 The Masters' Select Funds                                                    

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eliminate most of its short-term capital gains for the year. Looking forward,   
the fund now has a relatively small unrealized gain equal to 10% of assets as of
12/31/00. We will continue to work hard to do what we can to make our funds as  
tax-efficient as possible. In 2000 this is something we paid close attention to 
as we kept track of gains and losses on an individual lot basis and were        
attentive to tax loss opportunities throughout the year. However,               
notwithstanding our efforts to be tax-efficient, we don't want to build         
expectations that our funds will be more than average from a tax-efficiency     
standpoint. We expect Masters' Select Equity to look very tax efficient in some 
years (e.g. 1998 when we did not make a year-end capital gain distribution) and 
much less efficient in other years. MORE IMPORTANT THAN ABSOLUTE TAX-EFFICIENCY,
WE BELIEVE, IS OUR OPTIMISM THAT WE CAN ACHIEVE OUR LONG-TERM GOAL OF DELIVERING
PRE-TAX RETURNS AND AFTER-TAX RETURNS THAT WILL BEAT OUR BENCHMARKS. IF OUR     
PRE-TAX RETURNS ARE HIGH ENOUGH WE CAN ACHIEVE THIS GOAL.                       

LOOKING FORWARD                                                                 

We are optimistic as we look forward. We believe Masters' Select Equity is an   
intelligently structured fund run by an exceptionally talented group of stock   
pickers. It is true that we believe U.S. stocks are, on average, likely to      
deliver lower returns than investors have grown accustomed to during most of the
past twenty years. This is primarily because we will not experience the interest
rate-driven P/E multiple expansion that we witnessed following the reversal of  
the high inflation and interest rates of the early 1980s. However, we believe   
the diversified structure of Masters' Select Equity, the quality of the fund's  
managers, the concentrated portfolios run by each and our monitoring role, is   
collectively, a strong reason to be confident that we can continue to do better 
than our benchmarks over the long run. Moreover, we believe there is a potential
for great stability that, we hope, will make it easy for shareholders to        
maintain their confidence in Masters' Select for many years. We expect this     
stability because the fund is not reliant on a single manager and because we    
have promised to close the fund to new shareholders once it reaches a mere $750 
million. So, though we are by no means complacent, we are optimistic that       
Masters' Select Equity will continue to prove itself as an excellent core equity
holding for many years to come. We will continue to put forth our maximum effort
towards meeting this goal.                                                      

Please see the following pages for a portfolio and market-cap breakout as well  
as stock profiles from each of the fund's managers. In addition, there is an    
interview with Dick Weiss, one of the fund's managers.                          

                                                                 Fund Summary 11

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[PHOTO OF DICK WEISS]                                                           

AN INTERVIEW WITH DICK WEISS                                                    

DICK WEISS MANAGES APPROXIMATELY                                                
10% OF THE MASTERS' SELECT EQUITY FUND.                                         

WHAT ATTRACTED YOU TO THE BUSINESS OF STOCK PICKING?                            

Two things. First, the job entails constant change, and there's always something
new to learn. Second, in this business you don't have to rely on anybody else to
measure you or judge your performance, you can always see it yourself.          

HOW DID YOUR INVESTMENT PHILOSOPHY DEVELOP?                                     

I've always had a preference for buying what I consider to be good companies.   
Starting in the business in 1975 at the end of the nifty fifty era, there were  
all sorts of stocks selling at very cheap prices, and certain companies that    
everybody said were the quality companies selling at much higher multiples. It  
made sense to me to buy the companies that I thought were high quality and      
selling at cheap prices, rather than pay more to own what I considered to be the
over-priced favorites. My initial specialization was media stocks, which didn't 
necessarily produce great reportable earnings, so I had to look for other       
methods of determining value. What I found was that these companies were        
building value by generating cash flow, and this led me to the private value    
basis of valuation, which is determining what value a buyer would assign to the 
stream of cash flow being generated by a company. That was how media companies  
were being valued at the time. As my career progressed and I began to look at   
other types of companies, I found that while you have to value industries       
differently, this private value method can work with all sorts of businesses.   

CAN YOU BRIEFLY DESCRIBE THE KEY ELEMENTS OF YOUR STOCK PICKING DISCIPLINE?     

It starts with looking at a universe of good companies that are growing. Then we
apply the private value analysis to tell us when to buy, because the value of a 
company doesn't change nearly as much as the stock price. If you can ascertain  
what the private market/takeover value of a company really would be, you have a 
real leg up when things get bad in the market and the stock price drops to      
50-60% of your estimate of value. If you're right on the value, you're pretty   
safe buying the stock. Of course, at the very instant when you should be buying,
most people are selling. Finally, it is important to know your own strengths and
weaknesses when you're buying a stock.                                          

12 The Masters' Select Funds                                                    

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AS YOU RESEARCH COMPANIES, WHAT ARE YOUR MOST IMPORTANT SOURCES OF INFORMATION? 

There are a number of sources. We always go out and see the management, then try
to cross check their statements with competitors and suppliers. We come up with 
our own ideas and don't use the "street" as source of ideas, but we find that   
the street does act as a monitoring device. I think imagination is critical, to 
be able to see what could be as opposed to what is.                             

HOW MUCH RESEARCH DO YOU DO YOURSELF AND IN WHAT WAYS DO YOU RELY ON OTHER      
MEMBERS OF YOUR TEAM?                                                           

I do a fair amount myself, but our team has grown and matured over the years so 
that I see my role as providing new ideas, and then also looking at things out  
on the extremes, either stocks that are doing really well or really poorly, and 
looking for the reasons. I am always involved in new ideas, and review the      
private value analysis of every new company to make sure they seem reasonable.  

WHAT FACTORS HAVE BEEN MOST IMPORTANT TO YOUR SUCCESS?                          

I think that I have a good imagination, I'm good at reading people and I have an
intuitive feel for valuation. I have a very good sense of what business         
strategies make sense and can see whether or not they're being implemented. I'm 
also honest with myself about myself. I think it's more the qualitative side    
that has made the difference as opposed to the quantitative.                    

HOW ATTRACTIVE ARE TODAY'S STOCK PICKING OPPORTUNITIES COMPARED WITH OTHER      
POINTS IN TIME IN YOUR CAREER?                                                  

Nothing would compare to the 1975-1982 period, where you could buy small tech   
stocks for under ten times earnings. In retrospect, 1982 may have been the      
cheapest year because it was the start of 18 years of rising multiples and an   
expanding economy. There were some similarities between the 1975-82 period and  
1998, where we were seeing multiples on some small companies drop below the ten 
times earnings level. We saw some very nice buying opportunities in 1998.       
Looking at the current market, there has been some recovery in small caps, but I
think the average stock is reasonably attractively priced. They're not uniquely 
cheap but they definitely aren't expensive. What's expensive in this market are 
the really large-cap momentum driven stocks.                                    

                                                                 Fund Summary 13

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WHAT ARE YOUR PRIMARY CONCERNS WITH RESPECT TO TODAY'S INVESTMENT CLIMATE?      

My biggest concern is that Greenspan has been so afraid to let things blow up   
that he's created a bubble, because there's been no fear in the market. He's    
theoretically done a good job of taking the bubble down because the NASDAQ has  
come down so much, but there's still no fear because people sense that he'll    
bail them out again. So my biggest fear is that he overreacts too much in       
pumping up the bubble again. I think a flattish period in the market might be   
good, because at some point bubbles blow up. He's got to walk a tightrope, and I
hope he doesn't think that he acted too far on the negative side with the       
economy and then flip flops too aggressively to the positive side.              

IS THERE ANYTHING YOU DO DIFFERENTLY IN RUNNING THE VERY CONCENTRATED MASTERS   
PORTFOLIO (THAT IS ALSO PART OF A BROADLY DIVERSIFIED PORTFOLIO) THAN YOU DO IN 
MANAGING A MORE DIVERSIFIED PORTFOLIO?                                          

I think the only difference is that with a bigger portfolio, because of the size
of the positions we have to buy, we might be a little more forgiving of a stock 
that had performed well but was likely to languish for a period of time. If we  
liked this stock for the long term, we would stick with it because of the risk  
that we could never get back in the stock. With the Masters, since we don't have
to buy that big of a position and are limited to 15 names, we might sell the    
type of stock I described, because it wouldn't be as hard to buy it back in     
three to six months. By doing this we've avoided holding some names that we     
thought were going to be flat but ended up going down significantly.            

14 The Masters' Select Funds                                                    

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MASTERS' SELECT EQUITY FUND                                                     

INVESTMENT MANAGERS                                                             

                                                                [Download Table]

                                    TARGET ASSET  MARKET           STOCK-PICKING    
MANAGER        FIRM                 ALLOCATION    CAPITALIZATION   STYLE            
-------        ----                 ----------    --------------   -----            
                                                                                    
CHRIS DAVIS    Davis Selected            20%      Mostly large     Growth at a      
               Advisors                           companies        reasonable price 

FOSTER FRIESS  Friess & Associates       10%      Small and mid-   High earnings    
AND TEAM                                          sized companies  growth           

MASON          Southeastern              20%      All sizes, may   Value            
HAWKINS        Asset                              have up to 50%                    
               Management                         foreign stocks                    

BILL MILLER    Legg Mason                20%      Mostly large     Eclectic,        
               Fund Advisors                      and mid-sized    may invest in    
                                                  companies        traditional value
                                                  stocks or                         
                                                  growth stocks                     

SIG SEGALAS    Jennison                  20%      Mostly large     High earnings    
               Associates                         companies        growth           

DICK WEISS     Strong Capital            10%      Small and        Growth at a      
               Management                         mid-sized        reasonable       
                                                  companies        price            

PORTFOLIO COMPOSITION                                                           

As reflected in this chart, your Fund is well diversified in terms of market    
capitalization. The Fund holds 71 securities, exclusive of cash equivalents.    

Foreign Securities       2.3%                                                   
Cash Equivalents         2.6%                                                   
Large-Cap               53.1%                                                   
Mid-Cap                 25.4%                                                   
Small-Cap               16.6%                                                   

Market Capitalization                                                           
Small-Cap < $1.6 billion                                                    
Mid-Cap $1.6-$10.0 billion                                                  
Large-cap > $10.0 billion                                                   

                                                                 Fund Summary 15

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MASTERS' SELECT EQUITY FUND STOCK HIGHLIGHTS                                    

TRANSATLANTIC HOLDINGS - CHRISTOPHER DAVIS                                      

Transatlantic Holdings is one of the best global financial companies that nobody
has ever heard of. This well-run multi-national leader competes in the esoteric 
industry of reinsurance - essentially providing insurance to insurance          
companies. Insurance companies use reinsurance to help smooth their results and 
prevent huge losses from any single event. The largest purchaser of reinsurance 
worldwide is the global powerhouse AIG -who happens to own 50% of Transatlantic 
Holdings. Starting at the top with AIG's legendary CEO Hank Greenberg serving as
Chairman of the Board, TRH's management is among the best in the reinsurance    
industry. Furthermore, TRH is able to follow in AIG's footsteps around the      
world. As a result, this relatively small reinsurance company has the global    
expertise and infrastructure of a company many times its size. It is also       
notable that when legendary investor Warren Buffett, who has been in the        
reinsurance business for many years through Berkshire Hathaway's subsidiary     
National Indemnity, made his largest acquisition ever, he purchased General     
Reinsurance for 17 times earnings and about 2.5 times premiums. TRH currently   
trades at less than 16 times our estimate of 2001 earnings and about 2.1 times  
premiums.                                                                       

WENDY'S INTERNATIONAL - FOSTER FRIESS                                           

You probably wouldn't pay a lot more for a McDonald's hamburger than one from   
Wendy's. Yet for some reason McDonald's investors are willing to pay            
considerably more for each dollar the company earns - and this situation exists 
despite a more appetizing earnings outlook for Wendy's.                         

NYSE-listed Wendy's International is the third-largest U.S. hamburger chain     
behind McDonald's and Burger King. It operates more than 5,500 Wendy's          
restaurants and about 1,800 Tim Hortons, a coffee and baked goods chain found   
mainly in Canada.                                                               

Wendy's grew September-quarter earnings 17 percent to $0.41 a share from $0.35  
the year before. It was the fourth consecutive quarter in which Wendy's exceeded
estimates thanks largely to productivity initiatives and tight cost controls    
that boosted profit margins.                                                    

To give you an idea of the company's potential to grow by expansion in the U.S. 
alone, McDonald's has one location for every 22,000 people versus one Wendy's   
per 56,000. That doesn't include international opportunities or potential for   
Tim Hortons expansion. And management is committed to quality growth, as        
evidenced by its recent decision to close 18 struggling sites in Argentina,     
eliminating their negative influence on operating earnings.                     

Your Friess team spoke with Chief Operating Officer Tom Mueller about the       
company's focus on operating efficiency and maintaining its reputation as a     
leader in quick service. As                                                     

16 The Masters' Select Funds                                                    

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an example, he said Wendy's is considering testing double drive-through         
prototypes to make sure quick service isn't sacrificed at even its busiest      
locations.                                                                      

Analysts were predicting Wendy's would grow earnings between 14 and 17 percent  
in 2000, but the company recently guided estimates up by publicly announcing it 
expects growth of between 17 and 19 percent because of strength in its North    
American restaurants. Your Friess team bought Wendy's in March for about 10     
times 2001 estimates. At the time, McDonald's sold at 21 times 2001 estimates   
despite slower expected earnings growth.                                        

GENERAL MOTORS - MASON HAWKINS                                                  

We have built a major stake in General Motors because of the equity's extreme   
undervaluation and the Board's focus on building shareholder value and getting  
it recognized. The Company's appraisal on conservative metrics is summarized    
below:                                                                          

                             $MILLIONS     VALUATION BASIS           PER SHARE
                             ---------     ---------------           ---------
Cars and trucks               $ 40,000      6xOI, Chrysler comp       $      67 
Net cash                         3,150                                        5 
Hughes Electronics              14,637      $3000/subscriber                 25 
GMAC                            17,750      10.5x net, 1.3x book             30 
Fiat                             2,400        Cost                            4 
Japanese equity affiliates       3,625      Suzuki, Isuzu,Fuji                6 
Commerce One                       600                                        1 
Options                          2,443                                        4 
"Other"                         (4,000)                                      (7)
Preferred                         (220)                                      (0)
                             --------                                ---------
Net Value                     $ 80,385                                $     135 
                             ========                                =========

Fully Diluted Shares               594                                          
Value per share               $    135                                          

Board members Bill Marriott, John Bryan, John Smale, Percy Barnevik, George     
Fisher, etc. are approximately 60% complete in their efforts to maximize and    
rationalize GM for owners. To date, they have sold Hughes' defense business,    
spun-off EDS and Delphi to shareholders as separate companies, fully funded     
retirement obligations in a tax efficient manner with Hughes Electronic shares, 
and perfected massive share repurchases at large discounts to intrinsic value.  
In 2001, we expect management to maximize its remaining investment in Hughes    
Electronics (Direct TV) via a transaction to take the company public and/or     
combine it with another media business. Separating out Hughes would return      
significant value to owners with no impact on GM's earnings - Direct TV is      
investing all its profits in new subscriber acquisition. At current prices, GM  
sells for less than 40% of our conservative evaluation.                         

                                                                 Fund Summary 17

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BANK ONE CORPORATION - BILL MILLER                                              

Bank One is the nation's fourth largest bank holding company with more than $280
billion in assets. It has a dominant banking presence in the Midwest and the    
southwestern United States, ranking first in commercial and middle-market       
Midwest banking and serving more than 8 million retail households. First USA, a 
subsidiary of Bank One Corporation, is the largest issuer of Visa credit cards. 

Under the new CEO, Jamie Dimon, who came on board in March 2000, management     
focused first on strengthening the bank's balance sheet to improve its capital  
structure. Mr. Dimon has hired a new senior management team who are now focused 
on cutting expenses and improving the banks' systems. These actions are setting 
the stage for strong earnings growth and consistently superior returns on equity
going forward.                                                                  

Bank stocks typically do well when the Fed is reducing short-term interest      
rates. Banks underperformed in both 1998 and 1999 and began to outperform in    
2000, as the market began discounting an easing of interest rates. We believe   
banks will continue to do well as the Fed continues to lower interest rates,    
credit quality concerns begin to dissipate, and loan spreads start to widen.    

Bank One sold in the $60's several years ago and currently is trading around    
$38, or 13 times 2001 estimated earnings per share. As the long-term earnings   
power becomes visible, we believe the company will move from an average bank    
multiple to a premium multiple over the next several years. Bank One should be  
able to maintain core earnings growth of around 15% with a greater than 20%     
Return on Equity, as they continue to see productivity improvements across their
chosen business lines.                                                          

QWEST COMMUNICATIONS - SIG SEGALAS                                              

Qwest offers the stability of a utility, but with strong growth and top-drawer  
management, at a very reasonable valuation. We believe Qwest can grow revenues  
15%-17%, and cash flow (EBITDA, earnings before interest, taxes, depreciation   
and amortization) 20%, over the coming few years. The biggest growth driver is  
data services, from provisioning very high-speed circuits, to providing         
sophisticated value-added services such as applications hosting. The constantly 
declining cost of bandwidth, thanks to silicon economics, is leading businesses 
to outsource many applications to remote IP-based facilities run by Qwest (and  
of course, others), which creates both better connectivity to vital corporate   
information for both internal and external parties, and also reduces internal IT
spend. We believe this ASP ("Application Service Provider") opportunity, now in 
its early days, will last years. Also not far off is the everyday use of video  
to the desktop, particularly in the corporate environment. While this is very   
bandwidth-intensive, the declining cost of bandwidth and the resulting rising   
quality of desktop video (no latency, etc.) will shift dollars from, for        
example, travel budgets, to bandwidth expenditures.                             

In addition to these opportunities, Qwest will be undertaking a massive effort  
to wholesale its local facilities to competitive carriers (a tack distinctly    
different from the other Bells,                                                 

18 The Masters' Select Funds                                                    

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which tend to be obstructionist). This will lead to re-entry into in-region long
distance services starting in 2001, and be a major profit source in its own     
right. We believe Qwest's assets - its network (which stretches across the      
Atlantic into Europe), management, and ubiquitous local facilities - will       
present an extremely powerful challenge to upstarts in their territory, who     
generally enjoy none of these advantages. Beyond wholesaling and long distance  
entry, Qwest has a sizable in-region wireless business that is growing rapidly. 
The stock trades at a single-digit multiple of EBITDA. We think that as the     
market better appreciates Qwest's upside and relative lack of cyclicality, Qwest
could hit $80 within the next 18 months, which equals 14 times our 2002 EBITDA  
estimate.                                                                       

TRIAD HOSPITALS - DICK WEISS                                                    

Triad Hospitals Inc. is a $1.0 billion market cap hospital operator that was    
spun out of HCA - The Healthcare Company (formerly known as Columbia HCA) in May
of 1999. Triad began its independent existence with a disparate collection of   
facilities (36 hospitals and 19 ambulatory surgery centers) and a fairly heavy  
debt load, ($675 million or 54% debt/total capital) but with a well experienced 
hospital operator as CEO. In its first full year, the company began the process 
of optimizing its asset portfolio and balance sheet. They pared the portfolio   
down to 30 hospitals and 14 ASC's, repaying roughly $125 million of debt with   
the proceeds.                                                                   

The attractive opportunity for Triad as a spinout was to focus management       
attention on hospitals that had gone without under the huge HCA umbrella.       
Recruiting doctors to local markets and providing capital for revenue producing 
equipment and services not only improved the level of care in these local       
markets it also enhanced the returns earned on the assets. In just the first    
year Triad improved its EBITDA margin from 9.6% to 13.7%, a testament to        
management's strategy and their ability to execute on their plan.               

This year, with their initial asset portfolio optimized, they have turned their 
sights to external opportunities. After acquiring two hospitals in June, Triad  
made the major move of acquiring another publicly traded hospital company,      
Quorum Health Group (the acquisition should close in the first half of 2001).   
Quorum had been a laggard in the hospital management sector for several years.  
The acquisition brought 21 owned and operated hospitals and a hospital          
management business that manages another 212 hospitals for third parties.       
Interestingly, the Quorum portfolio generated mediocre results due, in part, to 
poor doctor relationships.                                                      

We feel that with the Quorum acquisition, Triad is presented with opportunities 
much like those present when they were spun out of HCA - to rationalize the     
portfolio and improve operations though focused management attention, capital   
investment and improved doctor relationships. Triad is currently the cheapest   
stock selling at a substantial discount to our private value forecast in the    
hospital sector. As we try to buy good companies, with strong, proven management
at a discount - we feel Triad fits those criteria.                              

                                                                 Fund Summary 19

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MASTERS' SELECT EQUITY FUND                                                     

SCHEDULE OF INVESTMENTS at December 31, 2000                                    

SHARES                                                                  VALUE   
--------------------------------------------------------------------------------

COMMON STOCKS: 97.4%                                                            

BUSINESS SERVICES: 10.3%                                                        
 560,000     Galileo International, Inc.                          $ 11,200,000
 136,000     Getty Images, Inc.*                                     4,343,500
 775,000     Modem Media, Inc.*                                      2,542,969
 835,400     Republic Services, Inc. - Class A*                     14,358,437
 120,000     Waste Connections, Inc.*                                3,963,750
 430,000     Waste Management, Inc.*                                11,932,500
                                                                  ------------
                                                                    48,341,156
                                                                  ------------
CONGLOMERATES: 3.5%                                                             
     117     Berkshire Hathaway, Inc. - Class A*                     8,307,000
 147,000     Tyco International Ltd.                                 8,158,500
                                                                  ------------
                                                                    16,465,500
                                                                  ------------
CONSUMER PRODUCTS: 9.1%                                                         
  95,000     Anntaylor Stores Corp.*                                 2,369,062
 280,000     Eastman Kodak Co.                                      11,025,000
 197,000     General Motors Corp.                                   10,034,687
 110,000     Jones Apparel Group, Inc.*                              3,540,625
 285,200     Masco Corp.                                             7,326,075
  50,000     Performance Food Group, Co.*                            2,567,187
 130,000     Philip Morris Companies, Inc.                           5,720,000
                                                                   -----------
                                                                    42,582,636
                                                                   -----------
CONSUMER SERVICES: 8.3%                                                         
  85,000     Applebees International, Inc.                           2,690,781
 255,000     Costco Wholesale Corp.*                                10,192,031
 124,000     Home Depot, Inc.                                        5,665,250
 167,000     Jack in the Box, Inc.*                                  4,916,062
  96,500     Kohls Corp.*                                            5,886,500
 200,000     Stein Mart, Inc.*                                       2,350,000
 352,000     Ticketmaster Online-CitySearch, Inc.*                   2,970,000
 170,000     Wendy's International, Inc.                             4,462,500
                                                                   -----------
                                                                    39,133,124
                                                                   -----------
  84,100     BJ Services Co.*                                        5,792,388
 425,000     Chesapeake Energy Corp.*                                4,303,125
 140,500     Cross Timbers Oil Co.                                   3,898,875
 195,000     Grant Pride, Inc.*                                      4,277,813
 340,000     Harken Energy Corp.*                                    1,147,500
 753,300     Pioneer Natural Resources Co.*                         14,830,594
 133,000     Spinnaker Exploration Co.*                              5,652,500
  57,800     Unit Corp.*                                             1,094,588
 100,000     UTI Energy Corp.*                                       3,287,500
                                                                   -----------
                                                                    44,284,883
                                                                   -----------
FINANCE: 19.1%                                                                  
 283,200     American Express Co.                                   15,558,300
 325,000     Bank One Corp.                                         11,903,125
 225,566     Citigroup                                              11,517,964
 218,000     Household International, Inc.                          11,990,000
 102,800     JP Morgan Chase & Co.                                   4,670,975
 160,000     MGIC Investment Corp.                                  10,790,000
  89,000     Stilwell Financial, Inc.                                3,509,938
  59,200     Transatlantic Holdings, Inc.                            6,267,800
 250,000     Washington Mutual, Inc.                                13,265,625
                                                                   -----------
                                                                    89,473,727
                                                                   -----------
HEALTHCARE: 8.7%                                                                
 198,100     American Home Products Corp.                           12,589,255
 100,000     Ameripath, Inc.*                                        2,506,250
 120,000     Apria Healthcare Group, Inc.*                           3,570,000
  66,500     Eli Lilly & Co.                                         6,188,656
 125,000     First Health Group Corp.*                               5,816,406
  85,000     Health Management Association, Inc. - Class A*          1,763,750
 125,000     Orthodontic Centers of America, Inc.*                   3,906,250
 156,000     Triad Hospitals, Inc.*                                  5,079,750
                                                                  ------------
                                                                    41,420,317
                                                                  ------------

20   The Masters' Select Funds                                                  

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MASTERS' SELECT EQUITY FUND                                                     

SCHEDULE OF INVESTMENTS at December 31, 2000                                    

SHARES                                                                 VALUE    
--------------------------------------------------------------------------------

HOTELS & MOTELS: 6.0%                                                           
1,410,000     Hilton Hotels Corp.                                  $ 14,805,000 
 310,100     Marriott International, Inc. - Class A                 13,101,725
                                                                  ------------
                                                                    27,906,725
                                                                  ------------
MEDIA: 1.2%                                                                     
 117,200     Viacom, Inc. - Class B*                                 5,479,100
                                                                  ------------
TECHNOLOGY: 12.9%                                                               
 135,100     AOL Time Warner, Inc.*                                  4,701,480
 153,000     Cisco Systems, Inc.*                                    5,852,250
  85,900     Corning, Inc.                                           4,536,594
 575,000     Gateway, Inc.*                                         10,344,250
  93,200     Hewlett Packard Company                                 2,941,625
 225,000     Lucent Technologies, Inc.                               3,037,500
 126,600     Nokia Corp. Sponsored ADR*                              5,507,100
 114,200     Peoplesoft, Inc.*                                       4,239,675
  48,000     Tech Data Corp.*                                        1,297,500
 180,000     Tellabs, Inc.*                                         10,164,375
 825,000     Ucar International, Inc.*                               8,043,750
                                                                  ------------
                                                                    60,666,099
                                                                  ------------
TELECOMMUNICATIONS: 5.1%                                                        
 476,200     AT&T Corp.                                              8,244,213
  44,200     EMC Corp-Mass*                                          2,939,300
 132,700     Qwest Communications International*                     5,440,700
 146,600     Vodafone Group Plc                                      5,250,113
 127,000     XO Communications, Inc.*                                2,266,156
                                                                  ------------
                                                                    24,140,482
                                                                  ------------
TRANSPORTATION: 3.8%                                                            
 351,000     FedEx Corp.*                                           14,025,960
  72,000     Seacor Smit, Inc.*                                      3,789,000
                                                                  ------------
                                                                    17,814,960
                                                                  ------------
TOTAL COMMON STOCKS (cost $410,612,970)                             457,708,709 
                                                                  ------------

PRINCIPAL                                                                       
AMOUNT                                                                  VALUE   
--------------------------------------------------------------------------------
SHORT-TERM INVESTMENT: 0.5%                                                     

CORPORATE NOTE: 0.5%                                                            
$2,352,000    General Electric Capital Corporate 5.90%,                         
               1/02/01 (cost $2,352,000)                          $  2,352,000
                                                                  ------------
REPURCHASE AGREEMENTS: 2.3%                                                     
10,493,000    State Street Bank & Trust Co., 5.51%, 12/29/00,                   
due 1/2/01, [collateral: $9,505,000 U.S.        
Treasury Notes, 6.25%, due 5/15/30, value       
               $10,716,888] (proceeds $10,499,424)                  10,493,000
                                                                  ------------
201,000    State Street Bank & Trust Co., 6.43%, 12/29/00,                
due 1/2/01, [collateral: $205,000 Federal       
National Mortgage Association Notes, 6.25%, due 
               11/20/01, value $207,243] (proceeds $201,200)           201,000
                                                                  ------------
TOTAL REPURCHASE AGREEMENTS (cost $10,694,000)                       10,694,000 
                                                                  ------------
TOTAL SHORT-TERM INVESTMENTS (cost $13,046,000)                      13,046,000 
                                                                  ------------
TOTAL INVESTMENTS (cost $423,658,970): 100.2%                       470,754,709 

Liabilities in excess of Cash and Other Assets: (0.2)%               (1,780,945)
                                                                  ------------
TOTAL NET ASSETS: 100.0%                                           $468,973,764 
                                                                  ============

* Non-income producing security.                                                

See accompanying Notes to Financial Statements.                                 

                                                      Schedule of Investments 21

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MASTERS' SELECT INTERNATIONAL                                                   

It was a rough year for foreign markets and Masters' Select International was   
not immune. However, although the fund's return was negative in 2000, it        
significantly outperformed its benchmarks and peer group for the year. In fact, 
for the full year Masters' Select International was in the top 13% of all       
International Stock funds tracked by Lipper Analytical Services.* Of much       
greater importance to us and our long-term shareholders, the fund's 21.76%      
compounded average annual total return falls in the top 4% of International     
Stock funds tracked by Lipper over the three-years ended December 31, 2000. The 
fund was ranked 17th out of 502 funds. This three-year period covers all but one
month of the fund's life. We believe this performance is a tribute to the       
structure of the fund and the skill of our stock pickers. In this regard it must
be noted that all five of the fund's stock pickers' individual Masters'         
portfolios have outperformed the fund's international equity benchmark since the
fund's inception. The fund's exceptionally strong performance relative to its   
benchmark and peer group was built on the strength of back-to-back years of     
strong performance relative to those groups. We believe this performance is     
particularly noteworthy because 1999 was a strong growth year while 2000 was a  
strong value year. Few funds were able to land in the top 15% of their peer     
groups in both those years as most funds that delivered strong relative         
performance in one year did poorly in the other.*                               

COMPARISON CHART                                                                

The value of a hypothetical $10,000 investment in the Masters' Select           
International Fund from its inception (12/1/97) to present as compared with the 
MSCI All Countries World Free (ex US) Index and the Lipper International Fund   
Index.                                                                          

         MASTERS' SELECT    LIPPER INTERNATIONAL      MSCI ALL COUNTRIES
           INTERNATIONAL FUND        FUND INDEX         WORLD FREE (EX US) INDEX
           ------------------        ----------         ------------------------
12/97           10,000                  10,000                  10,000          
12/97            9,880                  10,079                  10,115          
01/98            9,910                  10,323                  10,417          
02/98           10,990                  10,984                  11,112          
03/98           11,680                  11,580                  11,497          
04/98           11,930                  11,758                  11,580          
05/98           11,770                  11,782                  11,370          
06/98           11,360                  11,679                  11,327          
07/98           11,440                  11,858                  11,434          
08/98            9,400                  10,152                   9,822          
09/98            9,140                  9,836                    9,615          
10/98            9,870                  10,559                  10,622          
11/98           10,580                  11,088                  11,192          
12/98           11,040                  11,361                  11,578          
01/99           11,665                  11,430                  11,565          
02/99           11,534                  11,136                  11,306          
03/99           12,129                  11,507                  11,852          
04/99           13,107                  12,043                  12,445          
05/99           12,562                  11,595                  11,860          
06/99           13,369                  12,145                  12,406          
07/99           13,591                  12,416                  12,697          
08/99           13,520                  12,514                  12,742          
09/99           13,702                  12,554                  12,828          
10/99           14,488                  12,992                  13,305          
11/99           16,537                  13,944                  13,838          
12/99           19,321                  15,659                  15,158          
01/00           19,373                  14,742                  14,335          
02/00           21,857                  15,715                  14,722          
03/00           21,991                  15,756                  15,275          
04/00           20,170                  14,757                  14,423          
05/00           19,518                  14,351                  14,054          
06/00           20,273                  15,016                  14,652          
07/00           19,673                  14,529                  14,074          
08/00           19,890                  14,775                  14,248          
09/00           19,342                  13,913                  13,457          
10/00           18,545                  13,440                  13,029          
11/00           17,831                  12,873                  12,444          
12/00           18,354                  13,353                  12,870          

The hypothetical $10,000 investment at Fund inception includes changes in share 
price and reinvestment of dividends and capital gains. Indexes are unmanaged, do
not incur fees, and cannot be invested directly.                                

*    The fund ranked 47 out of 618 funds in 1999 and 89 our of 696 funds in 2000
in the Lipper International Fund category.                            

22 The Masters' Select Funds                                                    

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INVESTMENT PERFORMANCE AS OF DECEMBER 31, 2000                                  
                                                             AVERAGE
                                            3 YEAR          ANNUAL
                                 12 MONTH  AVERAGE ANNUAL   TOTAL RETURN
                                      RETURN    TOTAL RETURN  SINCE INCEPTION(1)
                                      ------    ------------  ------------------
MASTERS' SELECT INTERNATIONAL FUND     -5.01%     22.93%           21.76%       

MSCI ALL COUNTRIES WORLD FREE         -15.09%      8.36%            8.52%       
(EX US) INDEX(2)                                                                
LIPPER INTERNATIONAL FUND INDEX(3)    -14.72%      9.83%            9.83%       

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS, AND INVESTORS MAY HAVE A    
GAIN OR LOSS WHEN THEY SELL SHARES. Indexes are unmanaged, do not incur fees,   
and cannot be invested in directly.                                             

1.   The inception date of the Masters' Select International Fund is December 1,
1997.                                                                 

2.   The MSCI All Countries World Free (ex US) Index is a broad based index that
  measures the performance of common equities in 46 developed and emerging
market countries.                                                     

3.   The Lipper International Fund Index measures the performance of the 30     
largest mutual funds in the international equity fund objective, as   
determined by Lipper, Inc.                                            

Many funds that participated in the strong growth burst of late 1999 and early  
2000 landed hard as last year unfolded. Masters' Select International also fell 
but it managed to hold up better than many funds that had put up big numbers in 
1999, in part because several of our managers who had technology and telecom    
exposure began reducing their exposure as early as February. There was still    
enough exposure to these areas to feel the bite of the decline, but not so much 
to crash the fund. So, as the year progressed, the fund, which had looked quite 
growthy in 1999 and early 2000, became less aggressive. In our opinion, the     
fund's exposure "averaged out" to more of a Growth-At-A-Reasonable-Price type of
portfolio, even though the fund had plenty of stocks that can appropriately be  
categorized in the growth or value styles. We believe the fund's small asset    
base and the limited number of stocks in the portfolio may have made it easier  
for the managers to make adjustments to their portfolios throughout the year.   

NEWS AND DEVELOPMENTS                                                           

The biggest development during 2000, as we reported in our Semi-Annual Report,  
was the increased allocation to Ted Tyson and Mastholm Asset Management. When   
Tyson and his team replaced Bee & Associates after the death of Bruce Bee in    
1999, they took over Bee's 10% position. The allocation to Bee had been only 10%
because he was a dedicated small-cap manager and we did not want too large of a 
small-cap weighting in the fund's portfolio (several of the other managers      
occasionally buy some small-cap stocks). Though Tyson often invests in          
small-caps, he is not a dedicated small-cap manager, so it was our expectation  
when we hired him that we would bring him up to a full allocation. However, we  
decided to wait a few months to ensure the fit was right. The result of Tyson's 
increased allocation is to equalize the target weightings of all five Masters'  
Select International managers at 20% of assets. The move turned out to be timely
as Tyson had a superb year in 2000.                                             

It was also a good year for the fund from an expense standpoint as expenses fell
from 1.29% in 1999 to 1.18% in 2000. This compares with average foreign stock   
fund                                                                            

                                                                 Fund Summary 23

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expenses of 1.70% according to Morningstar data. We will continue to manage     
expenses carefully. From this point there is the potential for some further     
expense reductions as assets grow, though we don't expect substantial change    
from the current expense level.                                                 

Last year was the first year in which Masters' Select International distributed 
a sizable capital gain. This distribution was, perhaps, particularly annoying   
given that it occurred during a down year. Moreover, about half the gain was    
short-term in nature. Though this was disappointing, it is important to         
recognize that prior to 2000 the fund had returned 93% over its entire life     
($9.32 increase in per share value since the fund's inception) but distributed  
only $0.50. The fund had built up large gains that sooner or later were going to
be recognized. The huge market gains in the fourth quarter of 1999 and early in 
2000 were the catalyst for significant profit taking in 2000. Despite the 2000  
distribution, the fund has been quite tax-efficient over its life with an 83.52%
return ($8.35 per share value increase), but total distributions of only $2.89. 
As of 12/31/00 the fund's unrealized appreciation was only 8.26% of total       
assets. As with all of our funds we do all we can to maximize tax-efficiency    
without risking performance. However, despite our efforts and the fact that     
Masters' Select International has been quite tax-efficient over its full        
three-year life, our long-term expectation is for only average tax-efficiency,  
with some good years and some bad years. One potential positive for the fund is 
the likelihood of substantial asset growth from the current asset base. Asset   
growth is generally a positive because it spreads the fund's gains over a larger
shareholder base.                                                               

LOOKING FORWARD                                                                 

With respect to foreign stock markets specifically, we are optimistic that      
foreign stocks will deliver competitive returns over the long-term. There       
continues to be gradual but significant change in many countries, including     
corporate re-structuring with a growing focus on profitability and more macro   
types of changes that will improve the business environment and help to create  
more of an equity culture. These gradual changes should be a positive for many  
foreign equity markets. However, returns in the teens or higher that many equity
investors have become accustomed to are not likely to be achieved over the next 
five to ten years because some of this positive change is already reflected in  
current stock prices, especially in Europe. In addition, as in the U.S. many of 
the factors that drove stock returns to record levels during the last twenty    
years have played out. So returns are likely to be lower in many foreign markets
than over the past twenty years. In our opinion foreign stocks are likely to    
deliver returns in the mid-single digits to low teens (annualized) over the next
ten years-similar to the U.S with perhaps a bit more upside. Individual year    
returns will fall in a far wider range. We believe these are likely to be fine  
returns relative to inflation, however they may be disappointing to investors   
conditioned to expect more. Masters' Select International's performance will be 
partly a function of the investment climate it operates in. Our objective is to 
continue to beat our stock market benchmarks, but if benchmark returns are      
significantly lower than in the recent past, Masters' performance is also likely
to be lower.                                                                    

24 The Masters' Select Funds                                                    

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We do tend to believe that it is somewhat easier to add value via stock picking 
in foreign markets. If we are right we believe this will play to the strength of
Masters' Select International. We are optimistic as we look forward that        
Masters' Select International will continue to deliver strong long-term         
performance relative to its benchmarks and peer group. We don't think any fund  
should expect to rank as high as the top 4% of its peer group but we do believe 
the fund's diversification, exceptional portfolio management team, the          
concentrated portfolios run by each manager, as well as our monitoring and      
promise to close the fund at $1 billion in assets give us good reason to be     
optimistic about the fund's potential long-term performance relative to its     
competitors.                                                                    

Please see the following pages for a portfolio breakout, country and market cap 
allocations and stock profiles from each of the fund's managers. In addition,   
there is an interview with Helen Young Hayes, one of our managers.              

                                                                 Fund Summary 25

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[PHOTO OF HELEN YOUNG HAYES]                                                    

AN INTERVIEW WITH HELEN YOUNG HAYES                                             

HELEN YOUNG HAYES MANAGES APPROXIMATELY 20% OF THE MASTERS' SELECT INTERNATIONAL
FUND.                                                                           

HOW ATTRACTIVE ARE FOREIGN STOCK PICKING OPPORTUNITIES RELATIVE TO OTHER POINTS 
IN TIME DURING YOUR INVESTMENT CAREER?                                          

At Janus, we believe outstanding opportunities exist in any market environment. 
While shifts in the economic, political and market climate can certainly        
influence how we select individual securities for the Portfolio, our approach   
revolves around finding great companies that can perform well regardless of     
which direction the markets - or the economy at large - are expected to turn.   
For that reason, we believe the opportunities presented by today's market are at
least as compelling as in years past.                                           

MOST OF YOUR HOLDINGS HAVE BEEN IN EUROPEAN DOMICILED COMPANIES. DO YOU EXPECT  
THIS TO CONTINUE TO BE THE CASE FOR THE FORESEEABLE FUTURE? WHY OR WHY NOT?     

Our high concentration in Europe is entirely a function of our research-driven, 
company-by-company approach to stock selection. Currently, many of the most     
compelling companies uncovered by that process happen to be domiciled in Europe.
If and when we find interesting opportunities elsewhere, our European weighting 
will reflect the shift. With that said, it seems likely that our weighting in   
Europe will remain stable, at least in the near-term. Reasons for this include  
our continued faith in those companies currently in the Portfolio, together with
the fact that the investment climate in Europe appears to us to be somewhat     
better than in Japan or other, less-developed markets.                          

EMERGING MARKETS HAD ANOTHER BAD YEAR IN 2000. DOES YOUR TEAM SPEND MUCH TIME   
LOOKING FOR STOCKS IN THESE MARKETS?                                            

We spend a great deal of time investigating any company we believe represents a 
favorable trade-off between risk and reward, including those located in emerging
markets. For example, our investment team has spent a great deal of time working
on China Mobile, a company that commands roughly 80% of the cellular market in  
some of Mainland China's busiest and most important provinces. Our work has     
involved numerous trips to China, discussions with the company's competitors and
suppliers and countless hours of analytical work spent getting to know the      
company's fundamental financial situation inside and out. All in all, we believe
it's a pretty good story that isn't outrageously valued.                        

One of the principles that drives our research as it relates to emerging markets
is an understanding of risk and how to manage it. All other things being equal, 
it's safe to say you're taking on more risk when you invest in a company based  
in a developing economy. Therefore, it's reasonable to expect a higher rate of  
return on your investment. It's also fair to say that macroeconomic factors are 
perhaps more likely to work against even the best                               

26 The Masters' Select Funds                                                    

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business model in an emerging market, so it can pay to spend more time          
developing an understanding of what's going on in the overall economy. But that 
doesn't mean our approach to emerging markets is any different than our approach
to, say Europe or Japan - it's still all about the business environment faced by
individual companies. In fact, the way we triangulate what's going on in the    
macro environment of a region - developing or otherwise - is through our        
individual contacts with the companies we're interested in from an investment   
standpoint.                                                                     

TECHNOLOGY AND TELECOM STOCKS HAD A ROUGH YEAR IN 2000 FOLLOWING THE BIG RETURNS
OF 1999. GIVEN THE DECLINES, ARE THERE COMPELLING VALUES IN FOREIGN TECH AND    
TELECOM STOCKS GOING INTO 2001?                                                 

It was a difficult year for foreign technology, media and telecommunications    
stocks, particularly during the last few months of the year. But the heightened 
volatility didn't reflect a change in the underlying fundamentals of these      
companies as much as it did a return of some of the spectacular gains won in    
1999. It's even possible to argue that last year's underperformance by these    
companies was, in a sense, the penalty for a strong 1999. Regardless, we remain 
confident that many of the secular trends in the global economy - such as       
rapidly increasing demand for bandwidth and data storage needs and the          
increasing ubiquity of wireless communications - remain intact. That, together  
with the steep declines registered by a number of high-quality companies in     
recent months has left many stocks - both in technology and elsewhere - trading 
at much more attractive valuations.                                             

HOW DO YOU BALANCE THE OPPORTUNITY AND RISK IN THESE SECTORS WHEN THEY SELL AT  
VERY HIGH MULTIPLES BUT OFFER THE POSSIBILITY OF VERY HIGH EARNINGS GROWTH?     

We build portfolios on a stock-by-stock basis, focusing on company fundamentals 
first. The companies we favor are either the dominant leaders in their          
industries or are rapidly gaining market share. We want to own businesses that  
dictate the competitive landscape within an industry rather than those that     
merely respond to competitive changes. In other words, businesses that are the  
masters of their own destiny. However, while a company may meet all our         
investment criteria, we will not invest unless we believe it is trading at an   
attractive valuation. With the assistance of the entire Janus investment team,  
we measure valuation using a variety of metrics, not just earnings and cash flow
multiples. If the underlying fundamentals of a company are impressive and its   
valuation is attractive relative to our proprietary estimates of its future     
earnings and cash flow growth, we will invest.                                  

WHAT ARE YOUR PRIMARY CONCERNS WITH RESPECT TO TODAY'S INVESTMENT CLIMATE?      

It is now clear that the U.S. economy is slowing faster than most economists    
expected. This is being paralleled by economic softness in Europe, Japan and    
emerging Asia, a fact that promises to keep markets volatile and the outlook for
corporate earnings clouded. At the same time, however, the steep correction in  
valuations in several high-growth sectors of the market has created a number of 
compelling opportunities in some of the market's                                

                                                                 Fund Summary 27

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most dynamic areas. Furthermore, we believe a slowdown in economic activity will
generate a much more benign interest rate environment than that which persisted 
in 2000.                                                                        

AFTER THREE YEARS OF RUNNING A CONCENTRATED PORTFOLIO FOR MASTERS' SELECT       
INTERNATIONAL, ARE YOU APPROACHING THE PORTFOLIO MANAGEMENT ANY DIFFERENTLY THAN
WHEN THE FUND WAS LAUNCHED?                                                     

No. If you look at the Portfolio today compared to what it looked like three    
years ago, there will be obvious differences. For example, our technology       
weighting at the beginning of the year was probably much higher than it was at  
the beginning of the mandate. But does that reflect a change in strategy?       
Absolutely not - it is simply a function of where we felt we should be investing
our client's money. Our approach has always been - and will remain - to use     
detailed fundamental research as a way to uncover companies with strong product 
positioning and exceptional management teams that are forward thinking,         
inspiring and have shareholders' interest in line with their own.               

28 The Master's Select Funds                                                    

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MASTERS'                                                                        
SELECT INTERNATIONAL FUND                                                       

INVESTMENT MANAGERS                                                             
                          TARGET ASSET       MARKET        STOCK-PICKING
MANAGER        FIRM            ALLOCATION    CAPITALIZATION         STYLE       
-------        ----            ----------    --------------         -----       
HELEN YOUNG    Janus Capital       20%         All sizes but     Growth at a    
HAYES          Corporation                     mostly large      reasonable     
                                     companies         price

DAVID HERRO    Harris              20%         All sizes         Value          
Associates                                        

DAN JAWORSKI   BPI Global Asset    20%         Mostly large      Eclectic, may  
         Management                      companies         invest in
                                                             traditional
                                                              value stocks
                                                           or growth
                                                        stocks

TED TYSON      Mastholm Asset      20%         All sizes         High earnings  
      Management                                        growth

MARK YOCKEY    Artisan Partners    20%         All sizes but     Growth at a    
                                          mostly large      reasonable
                                     companies         price

PORTFOLIO DIVERSIFICATION                                                       

                                                                        % OF
                                                                       NET
BY ASSET CLASS                        BY INDUSTRY                        ASSETS 
--------------                        -----------                        ------ 
Emerging             8.9%             Consumer Products                  16.9%  
Markets                               Technology                         14.4%  
                                    Finance                            11.3%
Cash Equivalents    10.6%             Telecommunications                 11.0%  
                                    Consumer Services                   9.4%
Develop Market      16.9%             Media                               6.3%  
Small-Cap                             Healthcare                          6.1%  
                                    Capital Goods                       4.3%
Developed Market    63.6%             Basic Industry                      3.8%  
Large-Cap                             Energy                              1.8%  
                                    Business Services                   1.6%
                                    Hotels & Motels                     1.6%
                                    Transportation                      0.9%
Market                                Short-Term Investments              9.5%  
Capitalization:                                                                 
Small-Cap < $1                                                                  
billion                                                                         
                                    TOTAL INVESTMENTS IN SECURITIES    98.9%
Large-Cap > $1                                                                  
billion                                                                         
                                    OTHER ASSETS LESS LIABILITIES       1.1%
                                     NET ASSETS                        100.00%

                                                                 Fund Summary 29

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MASTERS' SELECT INTERNATIONAL FUND STOCK HIGHLIGHTS                             

PORSCHE - HELEN YOUNG HAYES                                                     

To us, Porsche isn't just a car company. It's the most popular luxury car       
company in the world - and then some. Like everyone else, we see the Porsche    
brand as a symbol of prestige, power and performance. Unlike everyone else,     
however, we realize that this luxury auto manufacturer's customer base is       
diverse - much more so than most investors are aware. Through numerous          
discussions with management and various industry contacts, we've learned that   
the people buying Porsches aren't just auto collectors, race car enthusiast or  
dot-com executives looking for a place to spend their new fortunes. They're     
doctors and bankers, and they're as loyal as they come. In fact, many of        
Porsche's customers are so enamored with these cars that even a three to        
four-year waiting list won't discourage them from making a purchase. Demand this
strong gives Porsche a great deal of pricing power, which is one of the defining
qualities of a great company. It has also helped the stock hold up during       
economic sluggishness. For example, despite the fact that the stock market was  
down for the month of September, the company reported a 41% year-over-year sales
increase. With a backlog of orders to fill, it's possible that Porsche may not  
feel economic weakness for quite some time. By comparison, the so-called "big   
three" U.S. auto makers recently announced that the slowdown in the economy will
force them to idle a number of factories during the first quarter of 2001 to    
achieve production cuts ranging from 14% to 17% of total output.                

Currently, Porsche is enjoying the huge success of its new 911 Turbo, which is  
setting the standards for sports car performance. When it launched the new Turbo
in May, Porsche anticipated that, to meet demand, it would need to produce 2500 
cars by July 2001. However, our own detailed analysis led us to conclude that   
the automaker's estimate was conservative and that it would need to produce 3500
cars by July 2001. Sure enough, only two months after the launch, Porsche       
received a monthly order of 700 Turbos and raised its production target to 4000.
In 2002, Porsche plans to enter the sport utility vehicle market, a move we     
believe will increase margins and take the company to the next level in terms of
profitability.                                                                  

Another aspect of the company we're impressed with is Porsche's engineering     
services. The company employs more than 2500 highly qualified engineers and     
technicians who not only help create its own world-class cars, but also develop 
vehicles and products for customers around the globe. Limited competition and an
outstanding reputation enable the company to command a high price for these     
services.                                                                       

Years of detailed research have convinced us that Porsche is ahead of the curve 
and presents a great long-term investment for our shareholders.                 

30 The Masters' Select Funds                                                    

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FLETCHER CHALLENGE BUILDING - DAVID HERRO                                       

Fletcher Challenge Building (FLB), based in New Zealand, manufactures,          
distributes and sells materials for the building industry. Key products include 
aggregates, cement, plasterboard, and wood fiber based products. FLB also       
operates the leading construction company in New Zealand commercial and         
residential markets.                                                            

We are big fans of this stock for three reasons. First, its represents excellent
value. It trades at approximately 8 times earnings, and yields close to 8%.     
Second, its collection of businesses is of high quality. Their major profit     
earners-cement, aggregates, building products and construction-are highly       
profitable and are generally market leading in terms of both sales and profits. 
As far as growth is concerned, it is basically dependent on the macro economy of
New Zealand (since they already have high market shares in their key segments). 
From this perspective, it appears that building activity in New Zealand is close
to bottoming and expansion is on the way.                                       

Finally, FLB is in the midst of a restructuring process that should unlock some 
of its inherent, underlying value. FLB was once part of a larger, extremely     
poorly run Fletcher organization, which has been busted up into smaller, more   
manageable parts. This, along with newer more focused management, means better  
profit extraction giving us at least a 50% upside.                              

ING GROEP - DAN JAWORSKI                                                        

ING Groep N.V. operates in more than 60 countries worldwide, and is one of the  
world's largest integrated financial service providers, offering a comprehensive
range of life and non-life insurance, commercial and investment banking, asset  
management and related products and services. Through its wholly owned          
subsidiary, ING America, the Company recently acquired Aetna Financial Services 
and Aetna International, which encompass Aetna Inc.'s international operations  
and all domestic defined contribution plan businesses, annuities and mutual     
funds, financial and investment products, and investment advisory services.     
Earlier in 2000, the Company also acquired ReliaStar Financial Corp., a holding 
company whose subsidiaries offer individuals and institutions life insurance and
annuities, employee benefits products and services, retirement plans, life and  
health reinsurance, mutual funds, and bank and trust products. With these       
acquisitions, ING is now among the top 10 financial services providers in the   
U.S., and through Aetna's international operations in South America and the     
Asia/Pacific, among the leading insurance providers in the world.               

We believe that recent developments at ING have been transforming in terms of   
positioning the Company for stronger growth and more efficient use of capital.  
Following the retirement of the previous chairman, the new management team has  
moved decisively to bring about changes. Excess capital is being redeployed, the
strategy of the investment banking business is being re-examined, more demanding
financial targets have been set,                                                

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and investments are being made in areas of strength. Entering the year 2000, ING
was already strongly positioned in the Dutch life market as well as being the   
leading life insurer in Eastern Europe. The recent acquisitions have now also   
positioned ING among the top five in every product segment in the US and as the 
second largest foreign life insurer in Asia. This transformation of the         
business, in our view, should enable ING to achieve the highest return on equity
(ROE) of any European large cap insurer. In fact, as a result of the US         
acquisitions, the company has raised its ROE target from 12% to 18%.            

As the economic environment remains uncertain we believe that companies such as 
ING, which are positioned to deliver relatively stable and strong earnings      
growth, will see their share prices benefit. We do not believe that ING's       
strengths in its core markets are currently being reflected in its valuation, as
it trades at a discount to its main peers.                                      

S.O.I.T.E.C. - TED TYSON                                                        

S.O.I.T.E.C. is a specialized producer of semiconductors based just outside of  
Paris, France. As its name suggests, it focuses on "S.O.I." chips, which the    
founder of the company invented and patented in the early 1990's.               

S.O.I. is a fairly complex term for a fairly simple idea. As the devices that   
use the semiconductors have become more mobile (such as phones and portable PCs)
a crucial engineering problem has been how to increase the number of tasks a    
device performs without increasing the amount of battery power it consumes. A   
number of approaches have been tried with only limited success. We think the    
S.O.I. approach will be the first major breakthrough, giving the company        
absolutely enormous potential growth going forward.                             

The S.O.I. method can be thought of as a "semiconductor sandwich." The amount of
power a set of semiconductors in an electronic device uses is directly related  
to the purity of the materials - traditionally silicon - used in making them.   
The purity of the materials has increased enormously over the past several      
decades, but not fast enough for an increasingly mobile world. What the inventor
of the S.O.I. chip discovered was that any given chip was much purer at the top 
than at the bottom. So what he essentially did was sandwich two semiconductors  
together top end to top end and then use micro cutting tools to cut off the     
bottom half (now the outside part!) of the semiconductor sandwich. What was left
was an ultra pure semiconductor chip that used just a small fraction of the     
energy of a typical semiconductor.                                              

The company was financed by a major Japanese producer of semiconductor          
chemicals, which remains the main shareholder. We have had several conversations
with the research staff of the Japanese company and with a number of potential  
users of the chips in the computer and mobile phone industry and feel           
comfortable that S.O.I.T.E.C. remains on target to develop into a significant   
player in specialized semiconductors and hence a much larger company over the   
next several years.                                                             

32 The Masters' Select Funds                                                    

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WOLTERS KLUWER - MARK YOCKEY                                                    

We look for companies, of all sizes, that we believe are positioned for strong  
sustainable growth in industries or themes that we think are compelling. Having 
isolated promising companies, we then look for stocks that are attractively     
valued. This stock selection process led us to Wolters Kluwer NV.               

Wolters Kluwer is a multinational publishing company offering a complete line of
authoritative products to professional groups including: legal, tax and         
business, health and science, and education. The high-value added products and  
services that Wolters Kluwer provides to its professional customers range from  
traditional loose-leaf publications, books, newsletters and magazines to        
electronic productivity tools on CD-ROMs, proprietary online databases, software
packages, and the Internet.                                                     

One of the attributes that we like about Wolters Kluwer is the defensive quality
of its revenue stream. A majority of its revenues are derived from subscriptions
rather than from advertising, which we believe limits the company's exposure to 
adverse advertising cycles and slowdowns.                                       

Wolters Kluwer also continues to maintain its leadership position in the legal  
and tax and business segment of the industry. Largely because of this leadership
position, the stock has historically sold at a premium to other global          
publishing companies. However, the company's recent investments in              
Internet-based products have put pressure on the company's earnings and the     
stock is currently trading at a discount to its peer group of publishing stocks.
We expect the stock to regain its premium rating once the investments are       
completed.                                                                      

Finally, given its strong position in certain segments of the market and the    
quality of its revenues, we believe that Wolters Kluwer is well positioned to   
positively participate in and benefit from the continuing consolidation in the  
publishing/media industries.                                                    

                                                                 Fund Summary 33

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MASTERS' SELECT INTERNATIONAL FUND                                              
SCHEDULE OF INVESTMENTS at December 31, 2000                                    

SHARES                                                                VALUE     
--------------------------------------------------------------------------------

COMMON STOCKS: 89.4%                                                            

AUSTRALIA: 0.4%                                                                 
  565,508    Nufarm Ltd.                                          $  1,000,493
                                                                  ------------
BELGIUM: 1.7%                                                                   
   25,400    Dexia                                                   4,615,090
                                                                  ------------
CANADA: 6.3%                                                                    
  137,400    AT&T Canada, Inc., ADR - Class B*                       4,010,362
  102,800    Baytex Energy Ltd.*                                       685,196
  128,700    Bombardier, Inc. - Class B                              1,985,873
  161,000    Canadian Hunter Exploration Ltd.*                       4,410,518
  112,500    Corus Entertainment, Inc.                               2,924,415
   46,740    JDS Uniphase Corp.*                                     1,945,553
   81,090    Rogers Communications, Inc. - Class B*                  1,378,530
                                                                  ------------
                                                                    17,340,447
                                                                  ------------
DENMARK: 1.6%                                                                   
   81,500    Vestas Wind Systems AS                                  4,412,200
                                                                  ------------
FINLAND: 6.7%                                                                   
  492,700    Metso OYJ*                                              5,505,478
  241,600    Nokia Corp. Sponsored ADR*                             10,509,600
   55,000    Nokia OYJ*                                              2,453,137
                                                                  ------------
                                                                    18,468,215
                                                                  ------------
FRANCE: 2.7%                                                                    
   54,640    Chargeurs SA                                            3,591,486
  155,200    S.O.I.T.E.C.                                            3,789,052
                                                                  ------------
                                                                     7,380,538
                                                                  ------------
GERMANY: 7.5%                                                                   
   42,100    Altana AG                                               6,562,294
   57,000    Hannover Rueckversicherungs AG                          5,040,260
  180,900    Jenoptik AG                                             5,282,803
      791    Porsche AG                                              2,581,052
   86,251    Ser Systeme AG                                          1,320,132
                                                                  ------------
                                                                    20,786,541
                                                                  ------------
HONG KONG: 4.0%                                                                 
  190,400    China Mobile Ltd./HK*                                   5,164,600
2,950,000    Giordano International Ltd.                             1,361,591
4,042,000    Legend Holdings Ltd.                                    2,539,303
13,016,000    Oriental Press Group                                    1,902,412 
                                                                  ------------
                                                                    10,967,906
                                                                  ------------
IRELAND: 1.8%                                                                   
  378,000    Kerry Group plc                                         4,880,451
                                                                  ------------
ISRAEL: 4.0%                                                                    
   39,500    Check Point Software Technologies Ltd.*                 5,276,953
   80,000    Teva Pharmaceutical Industries                          5,857,500
                                                                  ------------
                                                                    11,134,453
                                                                  ------------
ITALY: 5.3%                                                                     
  400,750    Autogrill SpA                                           4,929,584
  412,000    Ducati Motor Holding SpA                                  746,655
  538,000    Fila Holding SPA*                                       4,102,250
3,034,000    Parmalat Finanziaria SpA                                4,914,396
                                                                  ------------
                                                                    14,692,885
                                                                  ------------
JAPAN: 5.4%                                                                     
   64,000    Anritsu                                                 1,511,547
  165,000    Furukawa Electric Co. Ltd.                              2,879,417
   63,300    Lawson, Inc.                                            2,502,764
      353    Nippon Telegraph & Telephone Corp.                      2,541,279
       78    NTT Docomo, Inc.                                        1,344,122
  142,000    Tokyo Broadcasting System                               4,198,390
                                                                  ------------
                                                                    14,977,519
                                                                  ------------
LUXEMBOURG: 1.6%                                                                
  495,700    Quilmes Industrial SA                                   4,461,300
                                                                  ------------
NETHERLANDS: 9.6%                                                               
   90,300    Akzo Nobel NV                                           4,850,084
   79,900    ING Groep NV                                            6,383,219
   60,342    Koninklijke Philips Electronics NV                      2,210,917
   74,000    Unilever NV                                             4,683,355
  309,016    Wolters Kluwer NV                                       8,426,419
                                                                  ------------
                                                                    26,553,994
                                                                  ------------
NEW ZEALAND: 1.7%                                                               
5,258,000    Fletcher Challenge Building*                            4,560,263
                                                                  ------------

34 The Masters' Select Funds                                                    

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MASTERS' SELECT INTERNATIONAL FUND                                              
SCHEDULE OF INVESTMENTS at December 31, 2000                                    

SHARES                                                                VALUE     
--------------------------------------------------------------------------------

PANAMA: 1.3%                                                                    
  101,000    Banco Latinoamericano de Exportaciones*              $  3,490,812
                                                                  ------------
SINGAPORE: 3.4%                                                                 
  445,560    DBS Group Holdings Ltd.                                 5,042,134
6,579,800    Mandarin Oriental Ltd.*                                 4,276,870
                                                                  ------------
                                                                     9,319,004
                                                                  ------------
SOUTH KOREA: 1.9%                                                               
  104,100    Hite Brewery Co. Ltd.                                   2,962,530
   67,000    Shinsegae Department Store                              2,388,696
                                                                  ------------
                                                                     5,351,226
                                                                  ------------
SPAIN: 1.1%                                                                     
  190,695    Telefonica SA*                                          3,151,501
                                                                  ------------
SWEDEN: 1.3%                                                                    
  182,666    Assa Abloy AB                                           3,570,492
                                                                  ------------
SWITZERLAND: 1.5%                                                               
    4,430    Serono SA                                               4,263,557
                                                                  ------------
UNITED KINGDOM: 18.6%                                                           
  468,000    Atlantic Telecom Group plc                                699,801
  467,000    British American Tobacco plc                            3,559,611
  355,000    Cable & Wireless plc                                    4,793,409
  585,171    Capita Group plc                                        4,375,032
  299,500    Diageo plc                                              3,358,818
  687,521    Granada Compass plc                                     7,489,347
4,389,600    House of Fraser                                         4,036,719
  619,300    Lloyds TSB Group plc                                    6,556,359
4,313,200    Royal Doulton plc*                                      4,417,927
3,322,000    Somerfield plc                                          4,669,344
1,960,507    Vodafone Group plc                                      7,196,947
                                                                  ------------
                                                                    51,153,314
                                                                  ------------
TOTAL COMMON STOCKS                                                             
(cost $223,646,554)                                                 246,532,201 
                                                                  ------------

PRINCIPAL                                                                       
AMOUNT                                                                VALUE     
--------------------------------------------------------------------------------

SHORT-TERM INVESTMENTS: 9.5%                                                    

REPURCHASE AGREEMENT: 5.1%                                                      
$14,187,000 State Street Bank & Trust Co., 5.51%,                               
12/29/00, due 1/2/01, [collateral: $12,855,000 U.S.                         
Treasury Notes, 6.25%, due 5/15/30, value                                   
$14,494,013] (proceeds $14,195,693)                                         
 (cost $14,187,000)                                               $ 14,187,000
                                                                  ------------
GOVERNMENT AGENCY OBLIGATION: 4.4%                                              
12,100,000 Federal Home Loan Mortgage Discount                                  
 Notes, 5.700%, 1/2/2001 (cost $12,098,094)                         12,098,084
                                                                  ------------
TOTAL SHORT-TERM INVESTMENTS                                                    
(cost $26,285,084)                                                   26,285,084 
                                                                  ------------
TOTAL INVESTMENTS                                                               
(cost $249,931,638): 98.9%                                          272,817,285 

Cash and Other Assets in excess                                                 
of Liabilities: 1.1%                                                  2,947,435 
                                                                  ------------
TOTAL NET ASSETS: 100.0%                                           $275,764,720 
                                                                  ============

* Non-income producing security.                                                

See accompanying Notes to Financial Statements.                                 

                                                      Schedule of Investments 35

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MASTERS' SELECT VALUE                                                           

Launched on June 30th of last year, Masters' Select Value got off to a sluggish 
start, underperforming its benchmarks over the last six months of the year.     
However, six months is not a long enough time to measure the success of any     
equity fund and we remain very optimistic. Much more encouraging is the early   
year 2001 performance. As we write this in mid-January the fund has performed   
strongly and caught and passed the Russell 3000 Value Index on an               
inception-to-date basis.                                                        

COMPARISON CHART                                                                

The value of a hypothetical $10,000 investment in the Masters' Select Value Fund
from its inception (6/30/00) to present as compared with the Russell 3000 Value 
Index.                                                                          

             MASTERS' SELECT VALUE FUND             RUSSELL 3000 VALUE INDEX
             --------------------------             ------------------------
06/00                    10,000                                10,000           
07/00                    10,040                                10,139           
08/00                    10,680                                10,696           
09/00                    10,480                                10,783           
10/00                    10,590                                11,028           
11/00                    10,100                                10,630           
12/00                    10,450                                11,201           

The hypothetical $10,000 investment at Fund inception includes changes in share 
price and reinvestment of dividends and capital gains. Indexes are unmanaged, do
not incur fees, and cannot be invested in directly.                             

INVESTMENT PERFORMANCE AS OF DECEMBER 31, 2000                                  

                                                                CUMULATIVE TOTAL
                                                                RETURN SINCE
                                                                INCEPTION(1)
                                                                ------------
MASTERS' SELECT VALUE FUND                                            4.50%     

RUSSELL 3000 VALUE INDEX(2)                                          12.02%     

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS, AND INVESTORS MAY HAVE A    
GAIN OR LOSS WHEN THEY SELL SHARES. Indexes are unmanaged, do not incur fees,   
and cannot be invested in directly.                                             

(1)  The inception date of the Masters' Select Value Fund is June 30, 2000.     
(2)  The Russell 3000 Value Index is a broad based index that measures the      
 performance of those companies within the 3,000 largest U.S. companies,
    based on total market capitalization, that have lower price-to-book ratios
and lower forecasted growth rates.                                    

36 The Masters' Select Funds                                                    

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MASTERS' SELECT VALUE'S FIRST SIX MONTHS                                        

Throughout its six-month life the fund's portfolio has been quite well          
diversified. As of the end of 2000 the fund's portfolio included 45 different   
holdings with no more than 15% in any sector. Though the fund can legally be    
"non-diversified", we expect that it will typically be well diversified across  
value companies. We believe the fund's diversification relative to other        
value-oriented funds will be aided by the fact that each manager has a distinct 
approach to stock selection. In addition, the universe of stocks each looks at  
and how they define value stocks differ to varying degrees.                     

During its first six months Masters' Select Value has steadily grown its assets,
closing the year at $56 million. Growth has continued early in 2001, and as we  
write this, fund assets are approaching $70 million. This asset growth is       
important to shareholders because it allows the fund's overhead to be spread    
across a larger shareholder base, thus reducing expenses. When the fund was     
launched expenses were capped at 1.70%. Currently expenses are accruing at the  
lower level of 1.41%. Expenses should continue to fall significantly, assuming  
there is steady asset growth.                                                   

During the first six months of its existence Masters' Select Value was the      
recipient of positive media coverage from a variety of sources. Morningstar, the
fund-tracking firm, referred to the fund's four managers as "a dream team" and  
named Masters' Select Value as one of two runners up for Rookie Fund of the     
Year. And in USA TODAY'S Investment Outlook 2001, Morningstar Director of       
Research John Rekenthaler mentioned that Masters' Select Value was his favorite 
new fund of 2000. Other notable stories included SMART MONEY'S "Death of the    
Expert", KIPLINGER'S PERSONAL FINANCE feature story, "Meeting of the Minds" and 
MUTUAL FUNDS MAGAZINE'S "Four Kings."                                           

LOOKING FORWARD                                                                 

It's too early in the life of this fund for much analysis or reflection, but we 
are extremely optimistic with respect to the potential of Masters' Select Value 
to generate solid returns in general and strong LONG-TERM performance relative  
to its benchmarks and peer group. There are three reasons for our optimism:     

   1.   We believe we have pulled together four of the best value investors.

    2.   We also believe the Masters' Select structure adds value and that the
       success of Masters' Select Equity and Masters' Select International
          offer reason to be optimistic about other Masters' Select funds. It is
   the structure that combines the efforts of highly skilled stock
         pickers and gives them the opportunity to focus on only their highest
          conviction stocks for a fund that has a long-term orientation and will
not be allowed to get too big.                              

  3.   Though we don't expect the very high returns delivered over much of
      the past twenty years, we do believe that the value stock universe
       currently offers solid opportunities on a three to five year basis.
Although the value style                                    

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     outperformed the rest of the U.S. stock market over the past nine
       months, it had significantly underperformed during the two previous
  years. Relative to the rest of the market, the value universe,
    especially outside the large-cap sector, appears very reasonably
       priced with some compelling opportunities at a stock picking level.
     The following table displays price-earnings ratios for growth and
         value across different market cap segments. Price-earnings ratios are
   one way of measuring relative value. As of the end of 2000, the
    relationships between growth and value P/Es still suggested that
         growth stocks were quite expensive compared to value stocks (relative
to the historical valuation relationship between these style
segments).                                                  

GROWTH P/E RATIOS VS. VALUE P/E RATIOS FOR SMALL, MID AND LARGE-CAP STOCKS      
(12/31/00)                                                                      

S&P/BARRA INDEX                GROWTH                      VALUE                
---------------                ------                      -----                
Small-Cap                     29.2x                      15.8x              

Mid-Cap                       35.4x                      17.1x              

Large-Cap                     38.5x                      19.6x              

As of 12/31/00 only 33% of Masters' Select Value's portfolio was in large-cap   
stocks. A much larger portion, 46% was in mid-cap stocks with 7% in small-cap   
stocks and 5% in foreign stocks.                                                

We thank you for your confidence in the Masters' Select Value Fund and look     
forward to a long and rewarding relationship. Please see the following pages for
a portfolio and market-cap breakout, a stock profile written by each of our     
managers, and an interview with Bill Nygren.                                    

38 The Masters' Select Funds                                                    

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[PHOTO OF BILL NYGREN]                                                          

AN INTERVIEW WITH BILL NYGREN                                                   

BILL NYGREN MANAGES APPROXIMATELY 25% OF                                        
THE MASTERS' SELECT VALUE FUND.                                                 

WHAT ATTRACTED YOU TO THE BUSINESS OF STOCK PICKING?                            

I think it was an odd combination of my love of sports and my talents being more
oriented to numbers than words. Since I was a kid, the pure competition in      
sports has fascinated me. The challenge of trying to outperform my peers in the 
stock market has that same attraction.                                          

HOW DID YOUR INVESTMENT PHILOSOPHY DEVELOP?                                     

I grew up in a middle-class Midwestern home. My parents taught me that by being 
a smart consumer I could buy more with my allowance. When I started reading     
about the stock market, the writings of Graham, Buffett, and Templeton          
intuitively made sense to me. They approached the stock market in the same way  
that I had been taught to behave as a consumer - that is, when something is on  
sale, you should buy more of it.                                                

CAN YOU BRIEFLY DESCRIBE THE KEY ELEMENTS OF YOUR STOCK PICKING DISCIPLINE?     

We look for three things in any stock. First, a price that is less than 60% of  
our estimate of the price an acquirer would pay to buy the entire company (we   
sell when the price exceeds 90%). Second, a business where value grows as time  
passes. And third, management that is on the same side of the table as are the  
outside investors. When those criteria are met, we are prepared to be patient,  
waiting for the market to reward this value. We would not buy a stock we were   
unwilling to hold for a three to five year time horizon.                        

AS YOU RESEARCH COMPANIES, WHAT ARE YOUR MOST IMPORTANT SOURCES OF INFORMATION? 

We generally are attracted to a stock for one of two reasons: either a large    
price decline has brought the company to our attention, or one of our corporate 
contacts comments that a customer or competitor is doing an unusually good job  
running their business. Importantly, we rarely use Wall Street research as a    
starting point when researching a new idea.                                     

HOW MUCH RESEARCH DO YOU DO YOURSELF AND IN WHAT WAYS DO YOU RELY ON OTHER      
MEMBERS OF YOUR TEAM?                                                           

I am supported by a great research team and I rely very heavily on them. I do   
some of my own research, but I'd estimate it's 10% me, 90% the research team.   
They spend all their time looking for stocks that meet our value criteria and   
then honing their estimates of intrinsic value. Once they have developed        
conviction on a new stock, I'm a pretty easy sale!                              

                                                                 Fund Summary 39

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WHAT FACTORS HAVE BEEN MOST IMPORTANT TO YOUR SUCCESS?                          

One of the most important factors has definitely been the strict adherence by   
our organization to a well developed investment philosophy. A reason many       
investors fail is that they don't truly have an investment philosophy. Then,    
they have no solid basis for deciding when to buy and sell stocks. Other factors
include the very strong research team I mentioned earlier, a comfort for making 
decisions that go against the crowd, and a passion for winning.                 

HOW ATTRACTIVE ARE TODAY'S STOCK PICKING OPPORTUNITIES COMPARED WITH OTHER      
POINTS IN TIME IN YOUR CAREER?                                                  

This year has been a value investor's dream. Most investors completely ignored  
intrinsic value as they decided what to buy and sell. That fact alone created   
more opportunity than I've seen in years. In general, I think the popularity of 
momentum based investment styles presents an ongoing positive for value         
investors. Sellers who want out regardless of price keep creating new           
opportunities for us.                                                           

WHAT ARE YOUR PRIMARY CONCERNS WITH RESPECT TO TODAY'S INVESTMENT CLIMATE?      

Clearly short-term factors like energy prices and the threat of recession are   
negatives. However, looking longer term, I don't see major threats. Most        
importantly, outside of the technology industry, prices for most businesses are 
at reasonable levels compared to the earnings power those businesses possess.   
And the environment is so much healthier than when I entered the business 20    
years ago. Capitalism is spreading worldwide, conservative economic policies    
have become mainstream in both parties, and businesses are run increasingly more
for their shareholders than for their managements. About the only concern that  
leaves is that I believe many investors have been spoiled recently and expect   
long term returns that are way above historical averages. They will be          
disappointed. But I think there is great opportunity to construct portfolios    
that will provide very attractive returns relative to other financial           
instruments.                                                                    

IS THERE ANYTHING YOU DO DIFFERENTLY IN RUNNING YOUR VERY CONCENTRATED MASTERS' 
PORTFOLIO (THAT IS ALSO PART OF A BROADLY DIVERSIFIED PORTFOLIO) THAN YOU DO IN 
MANAGING A MORE DIVERSIFIED PORTFOLIO?                                          

The approach is basically the same. One difference is that the more concentrated
the portfolio, the more I focus on the chance of being wrong as opposed to just 
maximizing the expected returns. Effectively, I'm willing to sacrifice a little 
of the possible upside in exchange for more certainty that the upside outcome   
occurs.                                                                         

40 The Masters' Select Funds                                                    

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MASTERS' SELECT VALUE FUND                                                      

INVESTMENT MANAGERS                                                             
                                 TARGET ASSET      MARKET        STOCK-PICKING
MANAGER              FIRM          ALLOCATION   CAPITALIZATION        STYLE     
-------              ----          ----------   --------------        -----     
MASON HAWKINS     Southeastern        25%          All sizes       Value        
Asset                                       
Management                                  

BILL MILLER       Legg Mason          25%          All sizes but   Eclectic, may
              Fund Advisor                     mostly large    invest in
                                                 and mid-sized   traditional
                                                  companies       value stocks
                                                               or growth
                                                            stocks

BILL NYGREN       Harris              25%          Mostly large    Value        
  Associates                       and mid-sized
                               companies

LARRY SONDIKE     Franklin Mutual     25%          All sizes       Value        
Advisors                                    

PORTFOLIO COMPOSITION                                                           

The Fund holds 45 securities, exclusive of cash equivalents.                    

Foreign Securities       5.4%                                                   
Mid-Cap                 45.5%                                                   
Large-Cap               32.8%                                                   
Cash Equities            9.3%                                                   
Small-Cap                7.0%                                                   

Fund Summary 41                                                                 

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MASTERS' SELECT VALUE FUND STOCK HIGHLIGHTS                                     

A T & T - MASON HAWKINS                                                         

A most inefficient stock market gave us an opportunity to purchase A T & T at   
substantially less than the mid $30's net value we ascribe to the combination of
its four component businesses. A very capable Board, including the likes of John
Malone, Amos Hostetter, Sandy Weill, and Lou Simpson, has elected to distribute 
the cable, wireless, consumer and business network companies to shareholders in 
order to surface their values. Thus, we expect to be paid within a reasonably   
short time horizon. As independent entities, each should be able to more        
effectively compete for management and capital and to account more responsibly  
to their owners. Rarely has such an American icon been as discounted below      
intrinsic value.                                                                

BANK ONE CORPORATION - BILL MILLER                                              

Bank One Corporation is held in both the Equity Fund and the Value Fund. Please 
refer to the discussion appearing on page 18.                                   

ENERGIZER HOLDINGS - BILL NYGREN                                                

Energizer Holdings (ENR) is the second largest manufacturer of batteries (behind
Duracell) selling under the names Energizer, Eveready and E2. We expect ENR to  
report earnings per share of about $1.60 for their fiscal year ending next      
September. Adding back 20(cent) of goodwill amortization and adjusting earnings 
to a calendar year puts ENR at 10 times next year's cash earnings and below 7   
times EBITA (earnings before interest, taxes and amortization).                 

When Duracell was purchased by Gillette in 1996, the price exceeded 18 times    
EBITA. Assuming Gillette was willing to overpay somewhat since they were issuing
high-priced shares, we felt it appropriate to set a less aggressive target more 
in line with acquisitions of other branded household product companies, more    
like 12 times EBITA. Using our forecast for next year, that equates to a $37 per
share value.                                                                    

We like the battery business because its unit growth rate is twice that of other
consumer packaged goods. Also, a duopoly market leads to strong pricing.        
Energizer lost some market share last year to Duracell's Ultra product line.    
This year, however, by launching the high-end E2 line and reintroducing the     
Eveready line at the low end, Energizer has gained market share. Management is  
allocating excess cash flow toward share repurchase, initiating a 5% repurchase 
last September. Good market growth, growing market share and a declining share  
base should lead to annual EPS growth well in excess of 10%.                    

42 The Masters' Select Funds                                                    

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Last, management seems to agree with our optimistic view. Since the spinoff from
Ralston in April, insiders have purchased over 2.5 million shares of stock.     
Priced at less than 60% of an intrinsic value that we expect to deliver         
double-digit annual growth, with management aligned with outside shareholders,  
we feel ENR is a great opportunity.                                             

FEDERATED DEPARTMENT STORES - LARRY SONDIKE                                     

Federated Department Stores is comprised of two businesses, a mall-based        
department store business, which is roughly 90% of company sales, and a direct  
to consumer business. The department store business, which is the largest in the
U.S., consists of such venerable names as Macy's and Bloomingdale's as well as  
Rich's, Lazarus, Goldsmith's, Burdines, The Bon Marche and Stern's. The direct  
to consumer business consists of direct mail catalog titles, which includes     
Macy's by Mail, Bloomingdale's by Mail and Fingerhut Companies as well as       
e-commerce operations, which include the macys.com, bloomingdales.com and       
fingerhut.com sites.                                                            

The department store business, while mature, is an attractive business. The     
competitive landscape is rational and operators are not tempted to overbuild,   
which can wreak havoc on profits and margins. Department stores enjoy a natural 
competitive advantage in that they are diversified and carry assortments in many
different categories. This enables department stores to "flex" their square     
footage, emphasizing those categories that are gaining market share with the    
customer. Department stores are also the preferred outlet of distribution for   
many national brand names such as Lee, Liz Claiborne and Ralph Lauren. Well-run 
department stores are generators of significant cash flow, which can be used to 
make strategic acquisitions, repay debt or buy back stock.                      

During the second half of 2000, many investors avoided department store stocks  
due to concerns over the future strength of the economy. Federated stock was    
especially punished after their Fingerhut credit portfolio warned of            
disappointing results for the year. We were able to buy a significant position  
in Federated stock at only seven times 2001 earnings per share. The shares have 
already appreciated substantially since their purchase. As the impact of the    
Fed's easing stance begins to be incorporated into the market, we would expect  
Federated stock's price to return to its historic multiples, generating further 
appreciation.                                                                   

Federated Department Stores is a good example of the stock picking strategies we
employ at Mutual Series. We strive to own good businesses, with strong          
franchises, managed by top-notch executives who are focused on creating         
shareholder value, all at a deep discount to the stock's intrinsic value. We    
believe Federated Department Stores meet all these criteria.                    

                                                                 Fund Summary 43

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MASTERS' SELECT VALUE FUND                                                      
SCHEDULE OF INVESTMENTS at December 31, 2000                                    

SHARES                                                                VALUE     
--------------------------------------------------------------------------------
COMMON STOCKS: 90.7%                                                            

BASIC INDUSTRY: 2.5%                                                            
   19,500    Rayonier, Inc.                                       $    776,344
   12,200    Syngenta AG                                               654,821
                                                                  ------------
                                                                     1,431,165
                                                                  ------------
BUSINESS SERVICES: 11.6%                                                        
   22,000    Moody's Corp.                                             565,125
   46,000    New Dun & Bradstreet Corp. (The)*                       1,190,250
  100,000    Republic Services, Inc. - Class A*                      1,718,750
  144,000    ServiceMaster Co.                                       1,656,000
   51,000    Waste Management, Inc.                                  1,415,250
                                                                  ------------
                                                                     6,545,375
                                                                  ------------
CAPITAL GOODS: 2.1%                                                             
   16,300    Martin Marietta Materials, Inc.                           689,490
   22,000    USG Corp.                                                 495,000
                                                                  ------------
                                                                     1,184,490
                                                                  ------------
CONGLOMERATES: 1.7%                                                             
      400    Berkshire Hathaway, Inc. - Class A*                       941,600
                                                                  ------------
CONSUMER PRODUCTS: 13.6%                                                        
   74,000    Delphi Automotive Systems                                 832,500
   45,000    Eastman Kodak Co.                                       1,771,875
   49,000    Energizer Holdings, Inc.*                               1,047,375
   45,000    Fortune Brands, Inc.                                    1,350,000
   26,000    General Motors Corp.                                    1,324,375
   19,000    Liz Claiborne, Inc.                                       790,875
   47,000    Visteon Corp                                              540,500
                                                                  ------------
                                                                     7,657,500
                                                                  ------------
CONSUMER SERVICES: 11.6%                                                        
   36,000    Federated Department Stores*                            1,260,000
   17,200    May Department Stores Co.                                 563,300
  143,000    Saks, Inc.*                                             1,430,000
   51,000    Toys R US, Inc.*                                          851,062
   73,500    Tricon Global Restaurants, Inc.*                        2,425,500
                                                                  ------------
                                                                     6,529,862
                                                                  ------------
FINANCE: 12.6%                                                                  
   40,000    Bank One Corp.                                          1,465,000
   14,700    Bear Stearns Companies, Inc. (The)*                       745,106
   11,000    Fairfax Financial Holdings Ltd.*                        1,675,332
  300,000    Finova Group, Inc.                                        281,250
    8,080    MBIA, Inc.                                                598,930
   45,000    UnumProvident Corp.                                     1,209,375
   22,000    Washington Mutual, Inc.                                 1,167,375
                                                                  ------------
                                                                     7,142,368
                                                                  ------------
HOTELS & MOTELS: 5.5%                                                           
  148,000    Hilton Hotels Corp.                                     1,554,000
   70,000    Mandalay Resort Group                                   1,535,625
                                                                  ------------
                                                                     3,089,625
                                                                  ------------
MEDIA: 6.1%                                                                     
   78,500    AT&T Corp./Liberty Media Corp.*                         1,064,656
   12,073    Lagardere S.C.A.                                          700,598
   13,500    Scripps Co. (E.W.)                                        848,812
    1,380    Washington Post Co.                                       851,288
                                                                  ------------
                                                                     3,465,354
                                                                  ------------
TECHNOLOGY: 14.0%                                                               
   37,000    Ceridian Corp.*                                           737,688
   85,000    Dell Computer Corp.*                                    1,484,844
   17,000    Electronic Data Systems Corp.                             981,750
   20,000    First Data Corp.                                        1,053,750
   90,000    Gateway, Inc.*                                          1,619,100
   48,000    Reynolds & Reynolds Co.                                   972,000
   35,000    Thermo Electron Corp.                                   1,041,250
                                                                  ------------
                                                                     7,890,382
                                                                  ------------
TELECOMMUNICATIONS: 7.2%                                                        
  172,000    AT&T Corp.                                              2,977,750
   11,900    Telephone & Data Systems, Inc.                          1,071,000
                                                                  ------------
                                                                     4,048,750
                                                                  ------------
TRANSPORTATION: 2.2%                                                            
   32,000    FedEx Corp.*                                            1,278,720
                                                                  ------------
TOTAL COMMON STOCKS                                                             
(cost $50,325,802)                                                   51,205,191 
                                                                  ------------

44 The Masters' Select Funds                                                    

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MASTERS' SELECT VALUE FUND                                                      
SCHEDULE OF INVESTMENTS at December 31, 2000 - (Continued)                      

PRINCIPAL                                                                       
AMOUNT                                                                 VALUE    
--------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS: 8.2%                                                    

REPURCHASE AGREEMENT: 8.2%                                                      
$4,613,000    State Street Bank & Trust Co. 5.51%,                              
12/29/00, due 1/02/01, [collateral:               
$4,185,000     U.S. Treasury Notes, 6.25%, due                                  
5/15/30, value $4,718,588] (proceeds              
              $4,615,824)                                         $  4,613,000
                                                                  ------------
TOTAL SHORT-TERM INVESTMENTS                                                    
(cost $4,613,000)                                                     4,613,000 
                                                                  ------------
TOTAL INVESTMENTS                                                               
(cost $54,938,802): 98.9%                                            55,818,191 

Cash and Other Assets in excess                                                 
of Liabilities: 1.1%                                                    614,318 
                                                                  ------------
TOTAL NET ASSETS: 100.0%                                           $ 56,432,509 
                                                                  ============

* Non-income producing security.                                                

See accompanying Notes to Financial Statements.                                 

                                                      Schedule of Investments 45

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MASTERS' SELECT FUNDS TRUST                                                     
STATEMENTS OF ASSETS AND LIABILITIES at December 31, 2000                       

                                                        [Enlarge/Download Table]

                                                               INTERNATIONAL                
                                                EQUITY FUND         FUND        VALUE FUND  
                                                -----------         ----        ----------  
                                                                                            
ASSETS                                                                                      
Investments in securities, at cost             $ 423,658,970   $ 249,931,638   $  54,938,802
                                               =============   =============   =============
Investments in securities, at value            $ 470,754,709   $ 272,817,285   $  55,818,191
Cash                                                 132,341           3,277             874
Receivables:                                                                                
  Securities sold                                  2,825,302       2,470,057              --
  Fund shares sold                                   789,214       1,324,783       1,420,642
  Dividends and interest                             358,400          21,705          45,867
  Foreign taxes witheld                                8,492         143,819              --
Deferred organizational costs                         19,811          14,605              --
Prepaid expenses                                      16,723          19,033           9,207
                                               -------------   -------------   -------------
     Total assets                                474,904,992     276,814,564      57,294,781
                                               -------------   -------------   -------------
LIABILITIES                                                                                 
Payables:                                                                                   
  Securities purchased                             5,178,573              --         535,002
  Fund shares redeemed                               271,759         709,046         206,768
  Advisory fees                                      416,617         216,685          66,405
Unrealized loss on forward exchange contracts             --          13,879          24,931
Accrued expenses                                      64,279         110,234          48,856
                                               -------------   -------------   -------------
     Total liabilities                             5,931,228       1,049,844         881,962
                                               -------------   -------------   -------------
NET ASSETS                                     $ 468,973,764   $ 275,764,720   $  56,412,819
                                               =============   =============   =============
  Number of shares issued and outstanding                                                   
   (unlimited number of shares authorized,                                                  
   $0.01 par value)                               36,128,484      18,007,872       5,398,484
                                               -------------   -------------   -------------
NET ASSET VALUE, OFFERING AND                                                               
  REDEMPTION PRICE PER SHARE                   $       12.98   $       15.31   $       10.45
                                               =============   =============   =============
COMPONENTS OF NET ASSETS                                                                    
  Paid-in capital                              $ 424,474,031   $ 257,789,082   $  55,332,471
  Undistributed (Distributions in excess of)                                                
   net realized gain on investments               (2,595,412)     (4,903,047)        225,890
Net unrealized appreciation on                                                              
 investments and foreign currency                 47,095,145      22,878,685         854,458
                                               -------------   -------------   -------------
     Net assets                                $ 468,973,764   $ 275,764,720   $  56,412,819
                                               =============   =============   =============

See accompanying Notes to Financial Statements.                                 

46 The Masters' Select Funds                                                    

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MASTERS' SELECT FUNDS TRUST                                                     
STATEMENTS OF OPERATIONS                                                        
For the Year Ended December 31, 2000                                            

                                                        [Enlarge/Download Table]

                                                                INTERNATIONAL               
                                                 EQUITY FUND         FUND       VALUE FUND  
                                                 -----------         ----       ----------  
                                                                                            
INVESTMENT INCOME                                                                           
 Income                                                                                     
  Dividends (net of foreign taxes withheld of                                               
   $6,856, $356,822 and $0, respectively)        $  2,699,081   $  3,084,539   $    231,489 
  Interest                                          1,460,718      1,367,167        117,472 
                                                 ------------   ------------   ------------ 
     Total income                                   4,159,799      4,451,706        348,961 
                                                 ------------   ------------   ------------ 
Expenses                                                                                    
  Advisory fees                                     5,188,776      2,983,497        218,145 
  Administration fees                                 169,658         99,697         20,109 
  Custody fees                                         51,417        192,833         19,195 
  Fund accounting fees                                 68,608         64,223         16,000 
  Transfer agent fees                                 187,720         69,086         18,001 
  Amortization of deferred                                                                  
   organizational costs                                21,316          7,551             -- 
  Registration expense                                 33,099         42,353         12,000 
  Professional fees                                    80,764         63,901         25,001 
  Reports to shareholders                              89,263         49,169          7,500 
  Trustee fees                                         13,623         14,999          5,000 
  Insurance expense                                    14,983          7,499          2,000 
  Miscellaneous                                        39,028         27,495          3,498 
                                                 ------------   ------------   ------------ 
     Total expenses                                 5,958,255      3,622,303        346,449 
     Less: fees waived                               (120,514)      (433,190)       (10,026)
     Less: expenses paid indirectly                    (3,911)        (4,831)        (1,695)
                                                 ------------   ------------   ------------ 
     Net expenses                                   5,833,830      3,184,282        334,728 
                                                 ------------   ------------   ------------ 

          NET INVESTMENT INCOME (LOSS)             (1,674,031)     1,267,424         14,233 
                                                 ------------   ------------   ------------ 
REALIZED AND UNREALIZED GAIN (LOSS) ON                                                      
 INVESTMENTS AND FOREIGN CURRENCY                                                           
 Net realized gain (loss) on:                                                               
   Investments                                     37,223,648     37,664,779        246,172 
   Foreign currency transactions                           --        928,883        (23,739)
                                                 ------------   ------------   ------------ 
 Net realized gain                                 37,223,648     38,593,662        222,433 
                                                 ------------   ------------   ------------ 
 Net unrealized appreciation (depreciation) on:                                             
   Investments                                    (22,974,270)   (58,817,399)       879,389 
   Foreign currency transactions                         (152)       (73,551)       (24,931)
                                                 ------------   ------------   ------------ 
   Net unrealized appreciation (depreciation)     (22,974,422)   (58,890,950)       854,458 
                                                 ------------   ------------   ------------ 
   Net realized and unrealized gain (loss) on                                               
    investments and foreign currency               14,249,226    (20,297,288)     1,076,891 
                                                 ------------   ------------   ------------ 
     NET INCREASE (DECREASE) IN NET ASSETS                                                  
      RESULTING FROM OPERATIONS                  $ 12,575,195   $(19,029,864)  $  1,091,124 
                                                 ============   ============   ============ 

*    For the period from June 30, 2000 (commencement of operations) to December 
31, 2000.                                                             

See accompanying Notes to Financial Statements.                                 

                                                      Statement of Operations 47

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MASTERS' SELECT EQUITY FUND                                                     
STATEMENT OF CHANGES IN NET ASSETS                                              

                                                        [Enlarge/Download Table]

                                                                    YEAR ENDED           YEAR ENDED    
                                                                DECEMBER 31, 2000     DECEMBER 31, 1999
                                                                -----------------     -----------------
INCREASE IN NET ASSETS FROM:                                                                           
OPERATIONS                                                                                             
                                                                                                       
  Net investment loss                                            $  (1,674,031)        $    (490,430)  
  Net realized gain on investments and foreign currency             37,223,648            90,855,318   
  Net unrealized appreciation (depreciation)                                                           
   on investments and foreign currency                             (22,974,422)            7,559,672   
                                                                 -------------         -------------   
     NET INCREASE IN NET ASSETS RESULTING FROM                                                         
      OPERATIONS                                                    12,575,195            97,924,560   
                                                                 -------------         -------------   
DISTRIBUTIONS TO SHAREHOLDERS                                                                          
  From net investment income                                                --              (453,126)  
  From net realized gain                                           (56,306,930)          (72,845,649)  
                                                                 -------------         -------------   
     Total distributions                                           (56,306,930)          (73,298,775)  
                                                                 -------------         -------------   
CAPITAL SHARE TRANSACTIONS                                                                             
  Net increase in net assets derived from                                                              
   net change in outstanding shares (a)                             63,458,924            19,162,903   
                                                                 -------------         -------------   
     TOTAL INCREASE IN NET ASSETS                                   19,727,189            43,788,688   

NET ASSETS                                                                                             
  Beginning of year                                                449,246,575           405,457,887   
                                                                 -------------         -------------   
  END OF YEAR                                                    $ 468,973,764         $ 449,246,575   
                                                                 =============         =============   
  Undistributed net investment income                            $          --         $          --   
                                                                 =============         =============   

(a)  A summary of capital share transactions is as follows:                                            

                                            YEAR ENDED                      YEAR ENDED                 
                                        DECEMBER 31, 2000                DECEMBER 31, 1999             
                                   ---------------------------       ---------------------------       
                                      SHARES          VALUE            SHARES          VALUE           
                                   ----------      -----------       ----------     ------------       
Shares sold                         5,868,297    $  86,487,875        4,970,856    $  73,906,691       
Shares issued in reinvestment                                                                          
  of distribution                   4,483,147       55,311,327        5,062,626       71,775,849       
Shares redeemed                    (5,460,704)     (78,340,278)      (8,668,083)    (126,519,637)      
                                   ----------      -----------       ----------     ------------       
Net increase                        4,890,740    $  63,458,924        1,365,399    $  19,162,903       
                                    =========    =============        =========    =============       

See accompanying Notes to Financial Statements.                                 

48 The Masters' Select Funds                                                    

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MASTERS' SELECT INTERNATIONAL FUND                                              
STATEMENT OF CHANGES IN NET ASSETS                                              

                                                        [Enlarge/Download Table]

                                                                  YEAR ENDED            YEAR ENDED    
                                                              DECEMBER 31, 2000      DECEMBER 31, 1999
                                                              -----------------      -----------------
                                                                                                      
INCREASE IN NET ASSETS FROM:                                                                          

OPERATIONS                                                                                            
  Net investment income                                         $   1,267,424          $      15,363  
  Net realized gain on investments and foreign currency            38,593,662             10,874,679  
  Net unrealized appreciation (depreciation) on                                                       
   investments and foreign currency                               (58,890,950)            72,373,381  
                                                                -------------          -------------  
     NET INCREASE (DECREASE) IN NET ASSETS                                                            
      RESULTING FROM OPERATIONS                                   (19,029,864)            83,263,423  
                                                                -------------          -------------  
DISTRIBUTIONS TO SHAREHOLDERS                                                                         
  From net investment income                                         (724,030)              (353,934) 
  From net realized gain                                          (36,981,527)            (4,038,447) 
                                                                -------------          -------------  
     Total distributions                                          (37,705,557)            (4,392,381) 
                                                                -------------          -------------  
CAPITAL SHARE TRANSACTIONS                                                                            
  Net increase in net assets derived from net                                                         
   change in outstanding shares (a)                               113,142,718             45,266,103  
                                                                -------------          -------------  
     TOTAL INCREASE IN NET ASSETS                                  56,407,297            124,137,145  

NET ASSETS                                                                                            
  Beginning of year                                               219,357,423             95,220,278  
                                                                -------------          -------------  
  END OF YEAR                                                   $ 275,764,720          $ 219,357,423  
                                                                =============          =============  
  Undistributed net investment income                           $          --          $      53,757  
                                                                =============          =============  

(a)  A summary of capital share transactions is as follows:                                           

                                           YEAR ENDED                      YEAR ENDED                 
                                        DECEMBER 31, 2000                DECEMBER 31, 1999            
                                    --------------------------        --------------------------      
                                     SHARES          VALUE             SHARES          VALUE          
                                    ---------    -------------        ---------    -------------      
Shares sold                         9,999,721    $ 190,895,315        7,886,341    $ 110,540,261      
Shares issued in reinvestment                                                                         
  of distribution                   2,449,922       36,969,605          274,383        4,296,677      
Shares redeemed                    (6,188,577)    (114,722,202)      (5,108,427)     (69,570,835)     
                                    ---------    -------------        ---------    -------------      
Net increase                        6,261,066    $ 113,142,718        3,052,297    $  45,266,103      
                                    =========    =============        =========    =============      

See accompanying Notes to Financial Statements.                                 

                                           Statement of Changes in Net Assets 49

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MASTERS' SELECT VALUE FUND                                                      
STATEMENT OF CHANGES IN NET ASSETS                                              

                                                                JUNE 30, 2000*
                                                               THROUGH
                                                               DECEMBER 31, 2000
                                                               -----------------
INCREASE IN NET ASSETS FROM:                                                    

OPERATIONS                                                                      
Net investment income                                          $    14,233  
Net realized gain on investments and foreign currency              222,433  
Net unrealized appreciation on investments and foreign                      
currency                                                          854,458 
                                                             -----------
 NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS          1,091,124
                                                             -----------
DISTRIBUTIONS TO SHAREHOLDERS                                                   
From net investment income                                              --  
From net realized gain                                                  --  
                                                             -----------
 Total distributions                                                  --
                                                             -----------
CAPITAL SHARE TRANSACTIONS                                                      
Net increase in net assets derived from net change in                       
outstanding shares (a)                                         55,321,695 
                                                             -----------
 TOTAL INCREASE IN NET ASSETS                                 56,412,819

NET ASSETS                                                                      
Beginning of period                                                     --  
                                                             -----------

END OF PERIOD                                                  $56,412,819  
                                                             ===========
Undistributed net investment income                              $        --    
                                                             ===========

(a) A summary of capital share transactions is as follows:                      

                                                    JUNE 30, 2000*
                                                     THROUGH
                                                     DECEMBER 31, 2000
                                                     -------------------------
                                                    SHARES           VALUE
                                                     ---------    ------------
Shares sold                                           5,524,320    $ 56,609,175 
Shares issued in reinvestment of distribution                --              -- 
Shares redeemed                                        (125,836)     (1,287,480)
                                                     ---------    ------------
Net increase                                          5,398,484    $ 55,321,695 
                                                     =========    ============

*    Commencement of operations.                                                

See accompanying Notes to Financial Statements.                                 

50 The Masters' Select Funds                                                    

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MASTERS' SELECT EQUITY FUND                                                     
FINANCIAL HIGHLIGHTS                                                            
For a capital share outstanding throughout each                                 
period                                                                          

                                                        [Enlarge/Download Table]

                                                      YEAR ENDED DECEMBER 31,           
                                            ------------------------------------------- 
                                             2000        1999        1998        1997** 
                                            -------     -------     -------     ------- 
                                                                                        
Net asset value,                                                                        
 beginning of period                        $ 14.38     $ 13.57     $ 11.84     $ 10.00 
                                            -------     -------     -------     ------- 
INCOME FROM INVESTMENT OPERATIONS:                                                      
  Net investment income (loss)                (0.05)      (0.01)       0.03        0.03 
  Net realized and unrealized gain on                                                   
   investments and foreign currency            0.42        3.52        1.73        2.90 
                                            -------     -------     -------     ------- 
     Total from investment operations          0.37        3.51        1.76        2.93 
                                            -------     -------     -------     ------- 
LESS DISTRIBUTIONS:                                                                     
  From net investment income                     --       (0.02)      (0.02)      (0.03)
  From net realized gain                      (1.77)      (2.68)      (0.01)      (1.06)
                                            -------     -------     -------     ------- 
     Total distributions                      (1.77)      (2.70)      (0.03)      (1.09)
                                            -------     -------     -------     ------- 

NET ASSET VALUE, END OF PERIOD              $ 12.98     $ 14.38     $ 13.57     $ 11.84 
                                            =======     =======     =======     ======= 

Total return                                   3.17%      26.45%      14.90%      29.11%
                                            -------     -------     -------     ------- 
RATIOS/SUPPLEMENTAL DATA:                                                               
  Net assets, end of period (millions)      $ 469.0     $ 449.2     $ 405.5     $ 296.9 
                                            -------     -------     -------     ------- 
  Ratio of expenses to average net                                                      
   assets before expenses paid indirectly:                                              
     Before fees waived                        1.26%       1.28%       1.38%       1.47%
                                            -------     -------     -------     ------- 
     After fees waived                         1.24%       1.26%       1.38%       1.47%
                                            -------     -------     -------     ------- 
  Ratio of net investment income                                                        
   (loss) to average net assets:              (0.35)%     (0.12)%      0.30%       0.12%
                                            -------     -------     -------     ------- 
Portfolio turnover rate                      129.70%     116.42%     135.41%     145.11%
                                            -------     -------     -------     ------- 

**   Commenced operations on December 31, 1996.                                 

See accompanying Notes to Financial Statements.                                 

                                                         Financial Highlights 51

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MASTERS' SELECT INTERNATIONAL FUND                                              
FINANCIAL HIGHLIGHTS                                                            
For a capital share outstanding throughout each period                          

                                                        [Enlarge/Download Table]

                                                YEAR ENDED DECEMBER 31,      PERIOD ENDED**
                                            -------------------------------   DECEMBER 31, 
                                              2000        1999        1998       1997      
                                            -------     -------     -------    -------     
                                                                                           
Net asset value,                                                                           
 beginning of period                        $ 18.67     $ 10.95     $  9.88    $ 10.00     
                                            -------     -------     -------    -------     
INCOME FROM INVESTMENT OPERATIONS:                                                         
  Net investment income                        0.07          --^       0.08         --     
  Net realized and unrealized gain (loss)                                                  
   on investments and foreign currency        (1.04)       8.13        1.08      (0.12)    
                                            -------     -------     -------    -------     
     Total from investment operations         (0.97)       8.13        1.16      (0.12)    
                                            -------     -------     -------    -------     
LESS DISTRIBUTIONS:                                                                        
  From net investment income                  (0.05)      (0.03)      (0.09)        --     
  From net realized gain                      (2.34)      (0.38)         --         --     
                                            -------     -------     -------    -------     
     Total distributions                      (2.39)      (0.41)      (0.09)        --     
                                            -------     -------     -------    -------     

NET ASSET VALUE, END OF PERIOD              $ 15.31     $ 18.67     $ 10.95    $  9.88     
                                            =======     =======     =======    =======     

Total return                                  (5.01)%     75.01%      11.74%     (1.20)%+  
                                            -------     -------     -------    -------     
RATIOS/SUPPLEMENTAL DATA:                                                                  
  Net assets, end of period (millions)      $ 275.8     $ 219.4     $  95.2    $  45.9     
                                            -------     -------     -------    -------     
  Ratio of expenses to average net                                                         
   assets before expenses paid indirectly:                                                 
     Before fees waived                        1.34%       1.41%       1.63%      1.83%*   
                                            -------     -------     -------    -------     
     After fees waived                         1.18%       1.29%       1.55%      1.83%*   
                                            -------     -------     -------    -------     
  Ratio of net investment income                                                           
   to average net assets:                      0.47%       0.01%       0.87%      0.42%*   
                                            -------     -------     -------    -------     
Portfolio turnover rate                      149.25%     100.00%      73.59%      0.00%    
                                            -------     -------     -------    -------     

*    Annualized.                                                                
**   Commenced operations on December 1, 1997.                                  
^    Amount represents less than $0.01 per share.                               
+    Not Annualized.                                                            

See accompanying Notes to Financial Statements.                                 

52 The Masters' Select Funds                                                    

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MASTERS' SELECT VALUE FUND                                                      
FINANCIAL HIGHLIGHTS                                                            
For a capital share outstanding throughout each period                          

                                                              PERIOD ENDED**
                                                               DECEMBER 31, 2000
                                                               -----------------
Net asset value,                                                                
beginning of period                                               $10.00    
                                                              ------
INCOME FROM INVESTMENT OPERATIONS:                                              

Net investment income                                               0.01    
Net realized and unrealized gain on                                         
investments and foreign currency                                   0.44   
                                                              ------
Total from investment operations                                 0.45 
                                                              ------
LESS DISTRIBUTIONS:                                                             
From net investment income                                            --    
From net realized gain                                                --    
                                                              ------
Total distributions                                                -- 
                                                              ------
NET ASSET VALUE, END OF PERIOD                                      $10.45      
                                                              ======
Total return                                                          4.50%+    
                                                              ------
RATIOS/SUPPLEMENTAL DATA:                                                       

Net assets, end of period (millions)                              $ 56.4    
                                                              ------
Ratio of expenses to average net assets                                     
before expenses paid indirectly:                                          

 Before fees waived                                               1.75%*
                                                              ------
 After fees waived                                                1.70%*
                                                              ------
Ratio of net investment income                                              
to average net assets:                                             0.07%* 
                                                              ------
Portfolio turnover rate                                              17.05%     
                                                              ------

*    Annualized.                                                                
+    Not Annualized.                                                            
**   Commenced operations on June 30, 2000.                                     

See accompanying Notes to Financial Statements.                                 

                                                         Financial Highlights 53

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MASTERS' SELECT FUNDS TRUST                                                     
NOTES TO FINANCIAL STATEMENTS                                                   

NOTE 1 - ORGANIZATION                                                           

The Masters' Select Funds Trust (the "Trust") was organized as a Delaware       
business trust registered under the Investment Company Act of 1940 (the "1940   
Act") as an open-end management investment company. The Trust consists of three 
separate series: the Masters' Select Equity Fund, Masters' Select International 
Fund and the Masters' Select Value Fund (each a "Fund" and collectively the     
"Funds").                                                                       

The Masters' Select Equity Fund is a growth fund that seeks to increase the     
value of your investment over the long-term by using the combined talents and   
favorite stock picking ideas of six highly regarded portfolio managers.         

The Masters' Select International Fund invests primarily in foreign companies.  
It seeks to increase the value of your investment over the long-term by using   
the combined talents and favorite stock-picking ideas of five highly regarded   
international portfolio managers.                                               

The Masters' Select Value Fund is a growth fund that seeks to increase the value
of your investment over the long-term by using the combined talents and favorite
stock picking ideas of four highly regarded value managers.                     

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES                                        

The following is a summary of the significant accounting policies followed by   
the Funds. These policies are in conformity with generally accepted accounting  
principles.                                                                     

A.   SECURITY VALUATION. Investments in securities traded on a national         
   securities exchange or Nasdaq are valued at the last reported sales price
     at the close of regular trading on each day that the exchanges are open for
  trading. Securities traded on an exchange or Nasdaq for which there have
    been no sales and other over-the-counter securities are valued at the mean
between the closing bid and asked prices. Securities for which market 
     prices are not readily available are valued at fair values as determined in
 good faith by the Board of Trustees. Debt securities maturing within 60
days or less are valued at amortized cost unless the Board of Trustees
determines that amortized cost does not represent fair value.         

B.   FOREIGN CURRENCY TRANSLATION. The Funds' records are maintained in U.S.    
dollars. The value of securities, currencies and other assets and     
liabilities denominated in currencies other than U.S. dollars are     
   translated into U.S. dollars based upon foreign exchange rates prevailing
at the end of the reporting period. Purchases and sales of investment 
   securities, income and expenses are translated on the respective dates of
such transactions.                                                    

54 The Masters' Select Funds                                                    

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MASTERS' SELECT FUNDS TRUST                                                     
NOTES TO FINANCIAL STATEMENTS - (Continued)                                     

    The Funds do not isolate that portion of their net realized and unrealized
    gains and losses on investments resulting from changes in foreign exchange
rates from the impact arising from changes in market prices. Such     
 fluctuations are included with net realized and unrealized gain or loss
from investments and foreign currency.                                

    Net realized foreign exchange gains and losses arise from sales of foreign
currencies, currency gains or losses realized between the trade and   
  settlement dates on securities transactions, and the differences between
    the amounts of dividends, interest, and foreign withholding taxes recorded
    on the Funds' books and the U.S. dollar equivalent of the amounts actually
  received or paid. Net unrealized foreign exchange gains and losses arise
     from changes in the value of assets and liabilities, other than investments
in securities, resulting from changes in the exchange rates.          

C.   FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. The Funds may utilize forward 
    foreign currency exchange contracts ("forward contracts") under which they
     are obligated to exchange currencies on specified future dates at specified
   rates, and are subject to the risks of foreign exchange fluctuations. All
     commitments are "marked-to-market" daily and any resulting unrealized gains
or losses are included as unrealized appreciation or depreciation on  
foreign currency denominated assets and liabilities. The Funds record 
realized gains or losses at the time the forward contract is settled. 
Counter parties to these forward contracts are major U.S. financial   
institutions.                                                         

D.   FEDERAL INCOME TAXES. The Funds intend to comply with the requirements of  
    the Internal Revenue Code applicable to regulated investment companies and
to distribute all of their taxable income to their shareholders.      
Accordingly, no provisions for federal income taxes are required.     

E.   DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions paid to         
    shareholders are recorded on the ex-dividend date. The amount of dividends
     and distributions from net investment income and net realized capital gains
    is determined in accordance with Federal income tax regulations, which may
   differ from generally accepted accounting principles. To the extent these
     "book/tax" differences are permanent in nature (i.e., that they result from
   other than timing of recognition - "temporary differences"), such amounts
are reclassified within the capital accounts based on their Federal   
tax-basis treatment.                                                  

The following amounts were reclassified within the capital accounts at
   December 31, 2000. These reclassifications primarily relate to the Funds'
utilization of earnings and profits distributed to shareholders on    
redemption of shares as a part of the dividends paid deduction for tax
purposes.                                                             

                                                Notes to Financial Statements 55

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MASTERS' SELECT FUNDS TRUST                                                     
NOTES TO FINANCIAL STATEMENTS - (Continued)                                     
                               INTERNATIONAL
                              EQUITY FUND        FUND         VALUE FUND
                              ----------      ----------      ----------
Paid-in capital                   $6,568,005      $7,324,032        $10,776     
Undistributed net investment                                                    
income (loss)                   $1,674,031      ($547,214)        $3,457    
Undistributed net realized gain                                                 
on investments                  ($8,242,036)    ($6,776,818)      ($14,233) 

F.   SECURITY TRANSACTIONS, DIVIDEND INCOME AND DISTRIBUTIONS. Security         
     transactions are accounted for on the trade date. Realized gains and losses
on securities transactions are reported on an identified cost basis.  
Dividend income and distributions to shareholders are recorded on the 
     ex-dividend date. Interest income is recorded on an accrual basis. Purchase
 discounts and premiums on securities held by the Funds are accreted and
amortized to maturity using the effective interest method.            

G.   REPURCHASE AGREEMENTS. It is the Trust's policy to take possession of      
    securities as collateral under repurchase agreements and to determine on a
    daily basis that the value of such securities, including accrued interest,
is sufficient to cover the value of the repurchase agreements.        

H.   DEFERRED ORGANIZATION COSTS. Expenses incurred by the Adviser in connection
   with the organization and registration of Equity and International Funds'
shares were borne by them and are being amortized to expense on a     
straight-line basis over a period of five years.                      

I.   ACCOUNTING ESTIMATES. The preparation of financial statements in conformity
   with 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 financial statements and the reported amounts of increases and decreases
   in net assets from operations during the reporting period. Actual results
could differ from those estimates.                                    

J.   OTHER. Under terms of the Trust's Custodial Agreement, the Funds earn      
   credits on cash balances which are used to reduce custodian fees. For the
year ended December 31, 2000, these credits totaled $3,911, $4,831 and
    $1,695 for Masters' Select Equity Fund, Masters' Select International Fund
and Masters' Select Value Fund, respectively.                         

NOTE 3 - MANAGEMENT FEES AND TRANSACTIONS WITH AFFILIATES                       

The Trust, on behalf of the Funds, entered into an Investment Advisory Agreement
(the "Agreement") with Litman/Gregory Fund Advisors, LLC (the "Advisor"). Under 
the terms of the Agreement, the Funds pay a fee to the Advisor equal to 1.10% of
the average daily net assets of each Fund. For the year ended December 31, 2000,
the Advisor contractually                                                       

56 The Masters' Select Funds                                                    

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MASTERS' SELECT FUNDS TRUST                                                     
NOTES TO FINANCIAL STATEMENTS - (Continued)                                     

agreed to waive 0.02% of its fee applicable to the Masters' Select Equity Fund, 
0.155% of its fee applicable to the Masters' Select International Fund, and     
0.02% of its fee applicable to the Masters' Select Value Fund. Additionally, the
Advisor voluntarily waived an additional 0.015% effective October 1, 2000, of   
its fee applicable to the Masters' Select International Fund. Additionally, the 
Advisor voluntarily agreed to cap expenses at 1.70% for the Masters' Select     
Value Fund. The Advisor has contractually agreed to continue the 0.02%, 0.17%   
and 0.02% waiver through December 31, 2001 for the Masters' Select Equity Fund, 
the Masters' Select International Fund and the Masters' Select Value Fund,      
respectively. While under certain circumstances the Advisor has the right to    
seek recoupment of expenses they have reimbursed to the Fund, the Advisor has   
agreed not to seek recoupment of the management fees waived for the Funds.      

The Trust, on behalf of the Funds, has also entered into an Administration      
Agreement with Investment Company Administration, L.L.C. (the "Administrator"). 
Under its terms, the Funds pay monthly a fee based on the value of the total    
average net assets of the Trust at an annual rate of 0.100% of the first $100   
million of such net assets, 0.050% of the next $150 million, 0.025% of the next 
$250 million and 0.0125% thereafter, subject to a minimum fee of $40,000 per    
Fund.                                                                           

Affiliated entities of the Trust received net commissions on purchases and sales
of the Funds' portfolio securities for the year ended December 31, 2000 of      
$48,672, $5,739 and $9,568 for the Masters' Select Equity Fund, International   
Fund and Value Fund, respectively.                                              

Each unaffiliated Trustee is compensated by the Trust at the rate of $10,000 per
year.                                                                           

NOTE 4 - PURCHASES AND SALES OF SECURITIES                                      

The cost of securities purchased and the proceeds from securities sold,         
excluding short-term investments, for the year ended December 31, 2000 were as  
follows:                                                                        
                      EQUITY FUND       INTERNATIONAL FUND    VALUE FUND
                      -----------       ------------------    ----------
Purchases                 $593,886,376         $429,202,654       $56,841,106   
Sales                      573,624,049          365,893,891         6,761,476   

At December 31, 2000, the aggregate unrealized appreciation and depreciation of 
securities, based on their cost for federal income tax purposes, was as follows:

                                 EQUITY FUND   INTERNATIONAL FUND   VALUE FUND
                                 -----------   ------------------   ----------
Total Tax Cost                    $424,956,474     $251,210,400      $55,068,325
                                  ============     ============      ===========
Gross Unrealized appreciation     $ 94,140,272     $ 40,999,411      $ 5,861,057
Gross Unrealized depreciation     (48,342,631)     (19,392,525)      (5,111,191)
                                 -----------      -----------       ----------
Net Unrealized appreciation       $ 45,797,641     $ 21,606,886      $ 749,866  
                                ============     ============      =========

                                                Notes to Financial Statements 57

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MASTERS' SELECT FUNDS TRUST                                                     
NOTES TO FINANCIAL STATEMENTS - (Continued)                                     

At December 31, 2000, the Masters' Select Equity Fund and the Masters' Select   
International Fund had realized losses occurring after October 31, 2000, of     
approximately $3,430,000 and $3,640,000 respectively. For tax purposes, such    
losses will be reflected in the year ending December 31, 2001.                  

NOTE 5 - OFF-BALANCE-SHEET RISK                                                 

The Funds are parties to financial instruments with off-balance-sheet risk,     
primarily forward exchange contracts, in order to minimize the impact of adverse
changes in the relationship between the U.S. dollar and various foreign         
currencies. These instruments involve market risk in excess of the amount       
recognized in the Statement of Assets and Liabilities. Risks also arise from the
possible inability of counter parties to meet the terms of their contracts,     
future adverse movement in currency values and contract positions that are not  
exact offsets. The contract amount indicates the extent of the Funds'           
involvement in such currencies.                                                 

A forward exchange contract is an agreement between two parties to exchange     
different currencies at a specified rate at an agreed future date. Forward      
contracts are reported in the financial statements at the Funds' net equity as  
measured by the difference between the forward exchange rate at the reporting   
date and the forward exchange rate on the date the contract is entered into. At 
December 31, 2000, the Funds had the following forward contracts outstanding:   

MASTERS' SELECT INTERNATIONAL FUND                                              

                              IN EXCHANGE       SETTLEMENT      UNREALIZED
CONTRACTS TO SELL                    FOR              DATE         GAIN (LOSS)  
-----------------                    ---              ----         -----------  
273,622 British Pound Sterling   U.S. $  402,416   01/02/2001       ($6,748)    
990,432 British Pound Sterling         1,473,862   01/04/2001        (7,131)    
                                 ----------   ----------       -------

NET UNREALIZED LOSS ON FORWARD CONTRACTS                            ($13,879)   
                                                                ========

MASTERS' SELECT VALUE FUND                                                      
                              IN EXCHANGE       SETTLEMENT      UNREALIZED
CONTRACTS TO SELL                    FOR              DATE         GAIN (LOSS)  
-----------------                    ---              ----         -----------  
517,563 Euro Dollar              U.S. $  462,287   02/26/2001      ($24,931)    
                                 ----------   ----------       -------
NET UNREALIZED LOSS ON FORWARD CONTRACTS                           ($24,931)    
                                                              ========

58 The Masters' Select Funds                                                    

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MASTERS' SELECT FUNDS TRUST                                                     
NOTES TO FINANCIAL STATEMENTS - (Continued)                                     

NOTE 6 - LINE OF CREDIT                                                         

The Trust has an unsecured $15,000,000 line of credit with its custodian.       
Borrowings under this arrangement bear interest at the federal funds rate plus  
0.50% per annum. At December 31, 2000, the Trust had no outstanding borrowings. 
As compensation for holding available the lending commitment, the Trust pays a  
0.08% per annum fee on the unused portion of the commitment which is allocated  
among the Funds based on their relative net assets. The fee is payable quarterly
in arrears.                                                                     

                                                Notes to Financial Statements 59

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REPORT OF INDEPENDENT ACCOUNTANTS                                               

To the Board of Trustees and Shareholders of Masters' Select Funds Trust:       

In our opinion, the accompanying statements of assets and liabilities, including
the schedules of investments, and the related statements of operations and of   
changes in net assets and the financial highlights present fairly, in all       
material respects, the financial position of Masters' Select Equity Fund,       
Masters' Select International Fund and Masters' Select Value Fund, each a series
of Masters' Select Funds Trust, at December 31, 2000, the results of each of    
their operations for the year then ended, the changes in Masters' Select Equity 
Fund's and Masters' Select International Fund's net assets and financial        
highlights for each of the two years in the period then ended, and the changes  
in Masters' Select Value Fund's net assets and financial highlights for the     
period from June 30, 2000 (commencement of operations) through December 31,     
2000, in conformity with accounting principles generally accepted in the United 
States of America. These financial statements and financial highlights          
(hereafter referred to as "financial statements") are the responsibility of the 
Fund's management, our responsibility is to express an opinion on these         
financial statements based on our audits. We conducted our audits of these      
financial statements in accordance with auditing standards generally accepted in
the United States of America, which require the we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of  
material misstatement. An audit includes examining, on a test basis, evidence   
supporting the amounts and disclosures in the financial statements, assessing   
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our    
audits, which included confirmation of securities at December 31, 2000 by       
correspondence with the custodian and brokers, provide a reasonable basis for   
our opinion. The financial highlights presented of the Masters' Select Equity   
Fund and the Masters' Select International Fund for the periods prior to January
1, 1999 were audited by other independent accountants whose report dated        
February 12, 1999 expressed an unqualified opinion on those statements.         

PricewaterhouseCoopers LLP New                                                  
York, New York February 9, 2001                                                 

60 The Masters' Select Funds                                                    

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ADVISOR:                                                                        

Litman/Gregory Fund Advisors, LLC 4                 
Orinda Way, Suite 230-D                             
Orinda, CA 94563                                    

DISTRIBUTOR:                                                                    

First Fund Distributors, Inc.                       
4455 E. Camelback Rd., Suite 261E                   
Phoenix, AZ 85018                                   

TRANSFER AGENT:                                                                 

NFDS                                                
P.O. Box 219922                                     
Kansas City, MO 64121-9922                          
1-800-960-0188                                      
For Overnight Delivery:                             
Masters' Select Funds C/O                           
NFDS                                                
330 W. 9th Street Kansas                            
City, MO 64105                                      

INVESTMENT PROFESSIONALS:                                                       

     Registered Investment Advisors, broker/dealers, and other
 investment professionals may contact Fund Services at
1-925-253-5213.                                     

PROSPECTUS:                                                                     

            To request a prospectus, statement of additional information, or
          an IRA application, call 1-800-656-8864, 24 hours a day, seven
days a week.                                        

SHAREHOLDER INQUIRIES:                                                          

            To request action on your existing account, contact the Transfer
       agent, NFDS, at 1-800-960-0188, from 9:00 a.m. to 6:00 p.m.
eastern time, Monday through Friday.                

24-HOUR AUTOMATED INFORMATION:                                                  

      For access to automated reporting of daily prices, account
              balances and transaction activity, call 1-800-960-0188, 24 hours a
            day, seven days a week. Please have your Fund number (see below)
    and account number ready in order to access your account
information.                                        

FUND INFORMATION:                                                               

               FUND            SYMBOL            CUSIP         FUND NUMBER
               ----            ------            -----         -----------
      Equity Fund          MSEFX          576417109          305
      International Fund   MSILX          576417208          306
      Value Fund           MSVFX          576417406          307

WEBSITE:                                                                        

www.mastersselectfunds.com                          

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘N-30D’ Filing		Date		First		Last			Other Filings
		12/31/01		59		60			24F-2NT,  N-30D,  NSAR-B,  NSAR-B/A
Filed on:		3/5/01
		2/9/01		62
For Period End:		12/31/00		1		62			13F-HR,  24F-2NT,  NSAR-B
		10/31/00		60
		10/1/00		59
		6/30/00		38		62			497J,  N-30D,  NSAR-A,  NT-NSAR
		12/31/99		50		51			24F-2NT,  N-30D,  NSAR-B,  NSAR-B/A
		2/12/99		62
		1/1/99		62
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