UNITED STATES   SECURITIES AND EXCHANGE COMMISSION  Washington, D.C. 20549   FORM N-CSR   CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT   INVESTMENT COMPANIES   Investment Company Act file number 811-4963   THE BERWYN FUNDS   1189 LANCASTER AVENUE, BERWYN, PA 19312   KEVIN M. RYAN, 1189 LANCASTER AVENUE, BERWYN, PA 19312   Registrant's telephone number, including area code: (610) 296-7222   Date of fiscal year end: 12/31/03  Date of reporting period: 09/08/03 

 

  Form N-CSR is to be used by management investment companies to file reports  with the Commission not later than 10 days after the transmission to stockholders  of any report that is required to be transmitted to stockholders under Rule  30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission  may use the information provided on Form N-CSR in its regulatory, disclosure  review, inspection, and policymaking roles. A registrant is required to disclose  the information specified by Form N-CSR, and the Commission will make this information  public. A registrant is not required to respond to the collection of information  contained in Form N-CSR unless the Form displays a currently valid Office of  Management and Budget ("OMB") control number. Please direct comments concerning  the accuracy of the information collection burden estimate and any suggestions  for reducing the burden to Secretary, Securities and Exchange Commission, 450  Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection  of information under the clearance requirements of 44 U.S.C. Section 3507. 

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Item 1. Reports to Stockholders              A copy of  the Semi-Annual Report send to shareholders is enclosed.   Item 2. Code of Ethics N/A   Item 3. Audit Committee Financial Expert N/A   Item 4. Principal Accountant Fees and Services N/A   Item 9. Controls and Procedures   a) The registrant's principal executive officer and principal financial officer  have reviewed the registrant's disclosure controls and procedures and concluded  they are effective.   (b) There were no significant changes in the registrant's internal controls  or other factors that could have significantly affected the controls subsequent  to the date of evaluation.   Item 10. Exhibits   (b) Certifications of the principal executive officer and principal financial  officer are enclosed. 

 

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THE BERWYN FUNDS

BERWYN FUND SERIES

BERWYN INCOME FUND SERIES

BERWYN CORNERSTONE FUND SERIES

 

2003

SEMI-ANNUAL REPORT

 

Shareholders Services	*                                           no  loadc/o PFPC Inc.*                                                 mutual  fundsP.O. Box 9815  Providence, RI 02940-9840                       (800)  992-6757
 

**THE BERWYN FUNDS****2003 SEMI-ANNUAL REPORT**

**TABLE OF CONTENTS**

 

President's Letter...........................................................................................................................................................1

Berwyn Fund Portfolio Manager's Letter..................................................................................................................2

	Average Annual Total Returns and Growth of a $10,000 Investment..................................................................3

Berwyn Income Fund Portfolio Manager's Letter....................................................................................................4

	Average Annual Total Returns and Growth of a $10,000 Investment................................................................5,  6

Berwyn Cornerstone Fund Portfolio Manager's Letter.............................................................................................7

	Total Return Since Inception and Growth of a $10,000 Investment........................................................................8

Statements of Assets and Liabilities............................................................................................................................9

Statements of Operations.............................................................................................................................................10

Statements of Changes In Net Assets........................................................................................................................11

Financial Highlights Berwyn Fund..........................................................................................................................13

Financial Highlights  Berwyn Income Fund............................................................................................................14

Financial Highlights  Berwyn Cornerstone Fund....................................................................................................15

Statement of Investments  Berwyn Fund..................................................................................................................16

Statement of Investments  Berwyn Income Fund....................................................................................................19

Statement of Investments - Berwyn Cornerstone Fund............................................................................................25

Notes to Financial Statements.......................................................................................................................................27

 

**THE BERWYN FUNDS**

2003 Semi-Annual Report ***THE BERWYN FUNDS***Letter from the President

 

July 25, 2003

Dear Shareholder:

Each of our Funds did well during the first  half of 2003. The Berwyn Fund benefited from the broad market advance, which  began in March. The Berwyn Income Fund also rose as investors poured money into  bonds and other income-producing securities. Berwyn Cornerstone Fund, which  began operations in May, 2002 advanced, but its gain was muted by a substantial  cash position, which has since been reduced as we continue to invest in a prudent  and deliberate manner.

The first half began in an environment filled  with fear of recession, tension in the Mid-East, SARS and falling stock prices.  Investors were searching frantically for income-producing securities in an effort  to mitigate the losses realized from the bear market of the prior three years.  Anticipating success in Iraq, continued low interest rates and an imminent economic  recovery, the stock market rallied sharply in March and moved higher through  June.

Our viewpoint is that the spring rally was the  beginning of the second "leg" of a bull market, which began in 2000  for the broader list of stocks. The major stock indices also participated in  this rally and, unlike prior periods of recent strength, this rally was led  by the high technology sector. The level of speculation exhibited by the market  in June and early July, so soon after the collapse of the major indices, is  of concern. In fact, we believe the senior stock averages will be weaker in  the near term. Should this occur, recent portfolio changes should soften the  impact upon The Berwyn Funds' net asset values.

The primary focus of your management's daily  activities continues to be finding solid, undervalued, long-term investments.  The market activity of recent years has demonstrated the risks associated with  uninformed speculation and "momentum" investing. Although gains reaped  from short-term speculation provide immediate gratification, the story, almost  always, ends badly.

In addition to our basic work of security selection,  we are always attempting to identify the relevant macro-economic forces that  are changing the economy's behavior. Present concerns include the direction  of long-term interest rates, our nation's trade imbalance, the outlook for the  dollar and the stimulative fiscal, tax and monetary policies of the Federal  Administration. Hopefully, an understanding of these issues improves our ability  to make more profitable decisions for shareholders of The Berwyn Funds.

Thank you for your participation in The Berwyn  Funds.

Sincerely,

Robert E. Killen President

1.

 

**THE BERWYN FUNDS**

**2003 Semi-Annual Report****BERWYN FUND****a series of *THE BERWYN FUNDS***

 

July 25, 2003 			

Dear Berwyn Fund Shareholder:

Berwyn Fund (BF) ended the first half of 2003 with a net asset  value of $19.87 as compared to a year-end value of $17.23. This increase, 15.32  percent on a total return basis, compared favorably with most large capitalization  indices, but was less than the gain experienced by some of the smaller capitalization  indices. During the six month period the Dow Jones Industrial Average (DJIA),  S&P 500 and Russell 2000 gained 9.01 percent, 11.75 percent and 17.88 percent,  respectively.

For the twelve months ended June 30th, BF investors  experienced a total return of minus 3.87 percent which includes a 2002 year  end dividend payment of $1.455. This compares with total returns for the DJIA,  S&P 500 and Russell 2000 of minus 0.48 percent, plus 0.25 percent, and minus  1.63 percent, respectively.

We view the stock market rally, which began in March of this  year, as a continuation of the bull market for medium and smaller capitalization  non-technology companies dating from early 2000. The stock prices of these companies  had become depressed during the 1998-1999 time period when Internet, high technology  and larger companies' stock prices became overvalued. It is our viewpoint that  this "second leg" of the rally is being driven by lower interest rates  on certificates of deposit and bonds, which make stock dividends more attractive  to investors, and by the expectation that the economy will strengthen in the  second half of the year, thereby raising corporate earnings.

Veteran shareholders of BF know that we manage the Fund from  a longer term perspective and try to avoid the distraction of shorter term trends  and fads. At this juncture, we continue to be bullish for the intermediate and  longer term, but we have taken a more cautious investment posture in recent  weeks. We believe that the overall market has become "frothy" and a correction  at this point is likely. As value-oriented stock pickers, we would welcome a  pull-back as an opportunity to purchase a number of new, high quality investments  at attractive prices.

During the first half of 2003 a number of our investments registered  very impressive gains. Quidel, a developer and manufacturer of medical diagnostic  kits for use in the doctor's office, rose 89.1 percent in price. FPIC, a provider  of medical liability insurance in the state of Florida, rose 87.2 percent. Carpenter  Technology, which we have recently sold, rose 72.7 percent. Finally, Terex,  a leading manufacturer of cranes, roadbuilding equipment and mining trucks,  saw its stock price appreciate 62.2 percent. Our worst performer during the  six month period was Wells-Gardner, a manufacturer of gaming equipment, which  lost 52.2 percent. Fortunately, we had been selling this position and the impact  to the Fund was not serious.

The graph shown below compares the performance of BF with the  Russell 2000 Index over the past 10 years. The Index is a widely known and accepted  indicator of small capitalization stock performance. Through 1997 the performance  of your Fund correlated closely with the Index and then diverged when the Index  experienced a superior performance. Since the end of 1999 BF has generally outperformed  the Index and, consequently, over the 10 year period the results are similar.  Obviously, our goal is to outperform the Index in a consistent manner over a  long period of time.

We appreciate the support of our shareholders. We are committed  to creating value through the execution of our value oriented investment strategy  over the long term.

Very truly yours,

Robert E. Killen				               Lee  S. Grout  President					                          Co-Manager

 

Long Term Fund Performance as of 06/30/03 (Average  Annual Total Returns) 

One Year      Five Years       Ten Years

Berwyn Fund                          (3.87)%           1.46%             7.91%                                                                                                 Past  performance is not a guarantee of future results. 

*Note: 	Returns for BF are net of all expenses,  advisory fees and commission charges and include the reinvestment of BF's dividends  (total return). All index returns listed herein also include the reinvestment  of dividends and interest (total return). The investment return and the principal  value of an investment in BF will fluctuate so that an investor's shares, when  redeemed, may be worth more or less than their original cost.*

3.

**THE BERWYN FUNDS**

**2003 Semi-Annual Report****BERWYN INCOME FUND****a series of *The Berwyn Funds***

July 25, 2003

Dear Berwyn Income Fund Shareholder:

The total return to shareholders of the Berwyn  Income Fund Series (BIF) during the first half of 2003 was 9.32 percent. The  net asset value per share increased from $10.64 on December 31, 2002 to $11.33  on June 30, 2003. Quarterly dividends totaling $0.29 per share were paid to  shareholders from net investment income, compared with dividends of $0.31 paid  in the first half of 2002. The lower dividend payout reflects the downward pressure  on interest rates during this period. However, BIF's net asset value appreciated  significantly as it benefited from the strong rally in the corporate bond market.  Consistent with its objective to generate an attractive level of income while  preserving capital, at mid-year over two-thirds of BIF's portfolio was invested  in corporate bonds with the remainder in preferred and dividend-paying common  stocks.

The bond market exhibited a very broad rally  in the first half of the year with lower quality issues outperforming higher  quality bonds. The demand for lower quality corporate bonds was apparently sparked  by some investors believing that the persistently sluggish economy will not  worsen and may improve soon. BIF's emphasis on the purchase of higher yielding  bonds beginning in last year's fourth quarter enabled it to participate in this  rally.

The year-to-date total returns for BIF versus  its reference indices* follow:

 
Six Months Ending 6/30/03 
BIF
 9.32%
BIG
 4.00%
HYC
21.33%
LIFI
 8.07%
*Citigroup Broad Investment Grade Index (BIG), Citigroup High  Yield Composite Index (HYC) and Lipper Income Fund Index (LIFI).

BIF outperformed all of its reference indices  except HYC which reflects the impressive returns for high yield bonds. BIG index,  dominated by US Treasury and agency bonds, benefited from the moderate decline  in interest rates which occurred in the first half. The Lipper Income Fund Index,  our only reference index with an equity component, advanced largely as a consequence  of the stock market rally in the second quarter. BIF's performance was driven  by the appreciation of its corporate bonds which have a blend of 

investment grade and high yield ratings.

A number of recent developments in the financial  markets will have an important impact on our income strategy. 
The bull market in high quality fixed income      securities is aged and may have entered its final phase for this economic      cycle. U.S. Treasuries and agency bonds have become over-valued after providing      handsome returns in recent years based on the steep decline in interest      rates. Regarding high quality corporate bonds, it is difficult to see further      appreciation potential given the low level of interest rates and the highly      stimulative fiscal and monetary policies. BIF has emphasized corporate bonds      in the lower tier of investment-grade and upper tier of high yield (rated      BBB and BB, respectively, by Standard and Poor's rating agency). The credit      yield spreads of bonds in these categories have the potential to narrow      further as the economy recovers and individual companies improve their fundamentals.      Recent examples of bonds in BIF which have been upgraded subsequent to being      purchased are those of Rite-Aid Corp. and Nextel Communications.
- High yield bonds underwent a major rally and held their gains.    Prior to the rally, high yield bonds had been selling at very depressed levels    after years of poor returns, high volatility and default rates. The rally    probably signals a genuine turn in the credit cycle, especially when combined    with the Federal Reserve's expressed conviction to stave off deflation and    stimulate the economy. High yield bonds will be an important area of focus    for BIF going forward, and while they have recently performed well as a sector,    future returns are likely to be more selective based on individual company    progress. In our opinion, this is not the time to become complacent about    the credit risk associated with lower quality bonds as the economy may prove    more resistant than generally expected to the Federal Reserve's measures.
Congress passed legislation to reduce the double taxation    of dividends. The maximum tax on corporate dividends is now fifteen percent.    In industries where over-capacity exists, it may make more sense for management    to return profits directly to shareholders than invest in new equipment or    acquisitions. BIF has introduced a number of common stocks which have secure    dividend coverage with the potential for increased payouts in the future.    These include RR Donnelly, HJ Heinz, and Northern Pittsburgh Systems, Inc.

Bond investors have long enjoyed an environment  characterized by disinflation and declining interest rates. In an attempt to  stave off deflation brought about by global forces, recent policies advanced  by the Federal Government are designed to stimulate and, possibly, reflate our  economy. The tension between global disinflationary forces and these policies  has important implications for the direction of interest rates. Bond investors  should not assume that they will have the "wind at their backs" going  forward. 

We are exploring various alternatives to cope  with the challenges presented by the current environment. A survey of the economy  and the financial markets may at first seem daunting to investors seeking income.  Interest rates have fallen to low levels. The economy is sluggish and resistant  to stimulative measures, while unemployment remains high. We are optimistic  that if we first set realistic goals and proceed methodically with a disciplined,  value-oriented approach, we can continue to build a healthy and consistent stream  of income for our shareholders.

Thank you for your past confidence in our management.  We look forward to serving you going forward.

Very truly yours,Edward A. Killen				                                     Robert  E. KillenPortfolio Manager			                                   President

Long Term Fund Performance as of 06/30/03  (Average Annual Total Returns)

One Year      Five  Years      Ten Years

Berwyn Income Fund                               12.56%             6.45%              8.74%                                                                                                       Past  performance is not a guarantee of future results. 

*Note: 	Returns for BIF are net of all  expenses, advisory fees and commission charges and include the reinvestment  of BIF's dividends (total return). All index returns listed herein also include  the reinvestment of dividends and interest (total return). The investment return  and the principal value of an investment in BIF will fluctuate so that an investor's  shares, when redeemed, may be worth more or less than their original cost.*

6.

 

**THE BERWYN FUNDS**

**2002 Semi-Annual Report  BERWYN CORNERSTONE FUND  a series of *The Berwyn Funds***

 

July 25, 2003

Dear Berwyn Cornerstone Fund Shareholder:

For the first six months of 2003, Berwyn Cornerstone Fund (BCF)  increased 5.86 percent on a total return basis versus 12.26 percent and 12.41  percent for the S&P 400 Midcap Value Index and S&P 400 Index, respectively.  For the twelve month period ending June 30th, 2003, Berwyn Cornerstone  Fund recorded a total return of 8.39 percent, whereas the S&P 400 Mid-Cap  Index declined 2.48 percent and the S&P Mid-Cap Index declined 0.72 percent.

The first half of the year for both BCF and the indices was  characterized by an extremely weak first quarter and a strong rebound in the  second quarter. In the early months, investors were concerned about the economy,  terrorism and a potential war with Iraq. These concerns caused the stock market  to decline and the Fund to do relatively well. In contrast to the first quarter,  the second quarter was characterized by the successful overthrow of the Hussein  regime in Iraq and a belief that the economy was showing signs of recovery and  would expand further in the second half of the year. This caused the stock market  to rally sharply for most of the second quarter. BCF lagged behind the indices  over this period, held back by its cash reserves. Since late in the quarter  we have become somewhat more cautious in our outlook for the market. Our concern  is that expectations for corporate earnings growth may not be met in spite of  a pick-up in the economy. 

BCF's strategy, since inception, has been to invest in high  quality companies at attractive prices. In implementing this strategy, we have  erred on the side of being strict on price, and thus have invested at a slower  pace than most other funds would have. This has paid off over the life of the  Fund, but contributed to the relative underperformance of the fund during the  second quarter. We continued to pursue our strategy of moving to full investment,  with the Fund being over 70 percent invested at the end of the second quarter,  a significant increase from March 31st 's invested position of approximately  35 percent.

New companies added in the second quarter include General Dynamics  (GD), Baxter Healthcare (BAX), Black & Decker (BDK), RR Donnelley (DNY)  and Webster Financial (WBS). We believe that all of these companies fit the  criteria that we have outlined in the past, including quality management teams  with sound strategies and good balance sheets. Although it is always more difficult  to find bargains when the market is going up, we are confident that we will  continue to make progress towards our goal of becoming fully invested in high  quality companies during the third quarter.

While we were disappointed with our second quarter results,  we believe that we are pursuing the correct strategy to build an excellent long  term track record of outperformance and capital appreciation. Once again, we  appreciate your continued support and look forward to reporting on our progress  in the future.

Sincerely yours,

Lee S. Grout, CFA				                           Robert  E. Killen  Co-Manager					                                     Co-Manager

 

Long Term Performance as of 6/30/03 (Average  Annual Total Returns)

           One  Year         From Inception (5/01/02)

Berwyn Cornerstone Fund                           8.39%                           4.70%  

                                              Past  performance is not a guarantee of future results 

*Note: 	Returns for BCF are net of all  expenses, advisory fees and commission charges and include the reinvestment  of BCF's dividends (total return). All index returns listed herein also include  the reinvestment of dividends and interest (total return). The investment return  and the principal value of an investment in BCF will fluctuate so that an investor's  shares, when redeemed, may be worth more or less than their original cost.*

 

8.

**THE BERWYN FUNDS - STATEMENTS OF ASSETS AND LIABILITIES**
**JUNE 30, 2003 (Unaudited)**                 
        
**BERWYN**  
**BERWYN INCOME**  
**BERWYN CORNERSTONE**     
**FUND**  
**FUND**  
**FUND**   
**Assets:**           
 Investments in Securities, at Market Value 
 $ 
 35,647,898  
 $ 
 128,458,405  
 $ 
 612,280    
 (Cost $27,127,263, $119,081,541 and $562,491 for Berwyn        Fund, Berwyn Income Fund and Berwyn Cornerstone Fund,           
respectively) (Note 2)           

 Cash  
 -   
 -   
 134,385    
 Receivables:            
 Dividends  
 37,908   
 174,569   
 339    
 Fund Shares Sold  
 12,475   
 122,853   
 14,375    
 Interest  
 1,537   
 1,487,342   
 -    
 Investment Securities Sold  
 76,149   
 954,375   
 -    
 Other Assets  
 6,657   
 9,505   
 732    
 Due From Advisor  
 -   
 -   
 9,428 
  
**Total Assets** 
**35,782,624**  
**131,207,049**  
**771,539**               
**Liabilities:**           
 Accrued Expenses  
 4,350   
 6,525   
 3,025    
 Payables:            
 Investment Advisory Fee  
 28,110   
 52,178   
 7,135    
 Fund Shares Redeemed  
 23,020   
 786,486   
 -    
 Investment Securities Purchased  
 -   
 119,953   
 33,595    
**Total Liabilities** 
**55,480**  
**965,142**  
**43,755**                           
**Net Assets:**
**$**
**35,727,144**
**$**
**130,241,907**
**$**
**727,784**            
 Outstanding Shares of Beneficial Interest  
 1,798,489   
 11,500,380   
 69,529                
 Net Asset Value and Offering Price Per Share 
 $ 
 19.87 
 $ 
 11.33 
 $ 
 10.47 
 Minimum Redemption Price Per Share (Note 1) 
 $ 
 19.67 
 $ 
 11.22 
 $ 
 10.37 
            
**On June 30, 2003 Net Assets consisted of the following:**                       
 Paid-in Capital  
 25,863,835   
 135,744,367   
 678,171    
 Undistributed (Accumulated) Net Investment Income/(Loss)         
 (21,056)  
 39,541   
 (3,059)   
 Accumulated Net Realized Gain (Loss)  
 1,363,730   
 (14,918,865)  
 2,883    
 Net Unrealized Appreciation of Investment Securities         
 8,520,635   
 9,376,864   
 49,789    
**$**
**35,727,144**
**$**
**130,241,907**
**$**
**727,784**                        
 The accompanying notes are an integral part of these        financial statements.                                                                                                                        9.         
**THE BERWYN FUNDS - STATEMENTS OF OPERATIONS**
**(Unaudited)**     
  
   
**BERWYN**  
**BERWYN INCOME**  
**BERWYN CORNERSTONE**   
**FUND**  
**FUND**  
**FUND**   
**SIX MONTHS**  
**SIX MONTHS**  
**SIX MONTHS**   
**ENDED**  
**ENDED**  
**ENDED**   
**6/30/03**  
**6/30/03**  
**6/30/03** 
**Investment Income:**         
 Dividends 
 $ 
 218,817  
 $ 
 728,288  
 $ 
 1,602  
 Interest  
 11,833   
 2,402,351   
 1,083  
 Other Income  
 944   
 4,550   
 -            
 Total Investment Income 

 231,594  

 3,135,189  

 2,685            
         
**Expenses:**         
 Investment Advisory Fee (Note 3)  
 160,530   
 253,461   
 37,357  
 Transfer Agent Fees  
 20,554   
 25,229   
 8,585  
 Custodian Fees  
 3,697   
 8,115   
 3,508  
 Professional Fees  
 17,776   
 17,784   
 12,509  
 Trustees' Fees  
 1,600   
 1,600   
 1,600  
 Registration Fees  
 15,940   
 16,050   
 19,407  
 Printing Costs  
 9,544   
 11,153   
 941  
 Office Expense  
 6,128   
 9,984   
 635  
 Insurance  
 2,291   
 3,378   
 345  
 Taxes Other Than Income Taxes  
 3,233   
 2,443   
 -  
 Total Expenses Before Reimbursement by Advisor  
 241,293   
 349,197   
 84,887  
 Less Expenses Waived and/or Paid by Advisor (Note 3)         
 -   
 -   
 (79,143)           
 Net Expenses  
 241,293   
 349,197   
 5,744            
 Net Investment Income (Loss)  
 (9,699)  
 2,785,992   
 (3,059)                     
**Realized and Unrealized Gain (Loss) on Investments:**         
 Net Realized Gain (Loss) from Sales of Investment Securities         
 1,380,780   
 154,278   
 4,227            
 Net Change in Net Unrealized Appreciation (Depreciation)         
 3,321,162   
 6,565,232   
 39,000  
 on Investment Securities                    
 Net Realized and Unrealized Gain (Loss) on Investments         
 4,701,942   
 6,719,510   
 43,227                      
**Net Increase (Decrease) in Net Assets Resulting**         
**from Operations:**
**$**
**4,692,243**
**$**
**9,505,502**
**$**
**40,168**                              
 The accompanying notes are an integral part of these        financial statements.   10.    
 

**THE BERWYN FUNDS - STATEMENTS OF CHANGES        IN NET ASSETS**
**(Unaudited)**

     
        
**BERWYN FUND**
   
**BERWYN  INCOME  FUND**  
**BERWYN CORNERSTONE  FUND**                           
**SIX MONTHS**  
**YEAR**   
**SIX MONTHS**  
**YEAR**  
**SIX MONTHS**  
**05/01/02***     
**ENDED**  
**ENDED**   
**ENDED**  
**ENDED**  
**ENDED**  
**THROUGH**     
**06/30/03**  
**12/31/02**   
**06/30/03**  
**12/31/02**  
**06/30/03**  
**12/31/02**  
**Net Increase (Decrease) in Net Assets Resulting from        Operations:**                     
 Net Investment Income (Loss)  
 $ 
 (9,699)  
 $ 
 102,217   

 2,785,992  
 $ 
 3,700,721  
 $ 
 (3,059)  
 $ 
 (1,346)   
 Net Realized Gain (Loss) from Sales of                      
 Investment Securities   
 1,380,780   
 2,497,252    
 154,278   
 1,456,238   
 4,227   
 (1,344)   
 Change in Net Unrealized Appreciation (Depreciation)                             
 on Investment Securities   
 3,321,162   
 (6,139,749)    
 6,565,232   
 322,599   
 39,000   
 10,789                         
 Net Increase (Decrease) in Net Assets Resulting                      
 from Operations   
 4,692,243   
 (3,540,280)    
 9,505,502   
 5,479,558   
 40,168   
 8,099                         
**Distributions to Shareholders:**                     
 From Net Investment Income   
 -   
 (114,361)    
 (2,923,108)   
 (3,706,605)   
 -   
 -   
 From Realized Gain from Sales of Investments   
 -   
 (2,510,181)    
 -   
 -   
 -   
 -   
 Net Decrease in Net Assets Resulting from Distributions          
 -   
 (2,624,542)    
 (2,923,108)   
 (3,706,605)   
 -   
 -                         
**Capital Share Transactions (1):**                     
 Net Proceeds from Sales of Shares   
 1,469,357   
 27,126,003    
 55,661,001   
 38,807,964   
 149,144   
 751,004   
 Cost of Shares Redeemed   
 (2,713,559)   
 (35,228,449)    
 (13,888,942)   
 (12,958,230)   
 (1,592)   
 (219,039)   
 Distributions Reinvested   
 -   
 2,586,152    
 2,741,905   
 3,181,772   
 -   
 -   
 Net Increase (Decrease) in Net Assets from                      
 Capital Share Transactions   
 (1,244,202)   
 (5,516,294)    
 44,513,964   
 29,031,506   
 147,552   
 531,965                         
 Total Increase (Decrease) in Net Assets   
 3,448,041   
 (11,681,116)    
 51,096,358   
 30,804,459   
 187,720   
 540,064                         
**Net Assets:**                     
 Beginning of Period   
 32,279,103   
 43,960,219    
 79,145,549   
 48,341,090   
 540,064   
 -                         
 End of Period 
 $ 
 35,727,144 
 $ 
 32,279,103 

 130,241,907 
 $ 
 79,145,549 
 $ 
 727,784 
 $ 
 540,064 
**(1) Capital Shares Issued and Redeemed:**                     
 Shares Sold   
 83,032   
 1,262,938    
 5,061,208   
 3,683,407   
 15,080   
 77,626   
 Shares Redeemed   
 (157,837)   
 (1,730,017)    
 (1,252,180)   
 (1,228,290)   
 (166)   
 (23,010)   
 Distributions Reinvested   
 -   
 150,533    
 249,473   
 300,946   
 -   
 -   
 (74,805) 
 (316,546) 
 4,058,501 
 2,756,063 
 14,914 
 54,616                                             
 * Inception 
 The accompanying notes are an integral part of these        financial statements. 
11. /12.

**THE BERWYN FUNDS - FINANCIAL HIGHLIGHTS**
**FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD**
**(Unaudited)**
**BERWYN FUND**
**SIX MONTHS**
**YEAR**
**YEAR**
**YEAR**
**YEAR**
**YEAR** 
**ENDED**

 
**ENDED** 
**ENDED** 
**ENDED** 
**ENDED** 
**ENDED** 
**06/30/03** 
**12/31/02** 
**12/31/01** 
**12/31/00** 
**12/31/99** 
**12/31/98**            
**Net Asset Value, Beginning of Period**
**$17.23** 
**$20.07** 
**$16.52** 
**** 
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