HARRIS INSIGHT(REGISTRATION MARK) FUNDS
ANNUAL REPORT
DECEMBER 31, 1996
GROWTH
INCOME
STABILITY
HARRIS INSIGHT FUNDS [LOGO OMITTED]
Powerful Insight
Solid Investments(SM)
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NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
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Harris Insight(REGISTRATION MARK) Funds JANUARY 31, 1997
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DEAR SHAREHOLDER:
It is with pleasure that we report to you the results for the Harris Insight
Funds for the fiscal year ended December 31, 1996. The following pages provide
greater detail about specific factors which contributed to Fund performance.
Harris Trust and Savings Bank's Vice President and Chief Investment Officer,
David Mead, offers his perspective on the markets and the economy for 1997. An
overview of the past year's fixed income and equity market activity is provided
by Mark Newlin, Director of Fixed Income Management for Harris Investment
Management, Inc. (HIM), and William Leszinske, President and Chief Investment
Officer of HIM.
1996 was a year of milestones for this growing mutual fund family. In February,
the Harris Insight Funds expanded the family of funds from six to thirteen
portfolios. Assets in the Funds increased from $1.5 billion to approximately $3
billion. The increase primarily resulted from investments in the Funds by the
common trust funds of Harris Trust and Savings Bank. April, 1996 saw the
introduction of the Bond Fund. It seeks to provide a high level of total return,
including a competitive level of current income, by investing primarily in
investment-grade debt securities of various maturities.
Shareholders have benefitted from this expansion through the availability of
additional funds to meet diverse and changing investment needs, expanded
shareholder services providing greater convenience and flexibility, and a
larger--and growing--asset base over which to spread the expenses associated
with operating mutual funds. In September the Harris Insight Funds made their
debut on the Internet (the Harris Insight Funds' address on the World Wide Web
is http://www.harrisinsight.com). Harris Insight Funds' shareholders and
prospective investors can now use this "electronic superhighway" to access
general Fund information, current Fund performance, and insight into the
markets.
In the next year our plans for the Harris Insight Funds are no less ambitious.
We will continue focusing our efforts on improving shareholder services. Also,
the Funds will be available to large and small companies as part of 401(k)
plans, a variety of small retirement plans, and to individual investors through
new asset allocation programs. Finally, certain existing Harris Bank collective
funds will convert to Harris Insight Funds, increasing total assets in the Fund
family.
As always, we welcome your comments and suggestions as to how we can best serve
your needs. We look forward to the year ahead and thank you for your continued
confidence in us.
SINCERELY,
/s/ RICHARD W. INGRAM
RICHARD W. INGRAM
PRESIDENT AND CHIEF FINANCIAL OFFICER
HARRIS INSIGHT FUNDS
1
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TABLE OF CONTENTS
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Letter to Shareholders ................................................. 1
The Market Environment
Economic Review ................................................... 3-4
Fixed Income Markets Review ....................................... 5
Equity Markets Review ............................................. 6
Money Market Funds Summary ............................................. 7
Fixed Income Funds Summary ............................................. 8-12
Equity Funds Summary ................................................... 13-19
Tax Information -- Fixed Income and Equity Funds ....................... 20
Statement of Net Assets
Money Market Funds:
Government Money Market Fund ("Government Money Fund") .......... 22
Money Market Fund ("Money Fund") ................................ 23-24
Tax-Exempt Money Market Fund ("Tax-Exempt Money Fund") .......... 25-28
Fixed Income Funds:
Short/Intermediate Bond Fund ("Short/Intermediate Fund") ........ 29-31
Bond Fund ....................................................... 32-33
Intermediate Tax-Exempt Bond Fund
("Intermediate Tax-Exempt Fund") ............................. 34-36
Tax-Exempt Bond Fund ("Tax-Exempt Fund") ........................ 37-39
Convertible Fund ................................................ 40-41
Equity Funds
Equity Fund ..................................................... 42-43
Equity Income Fund .............................................. 44-45
Growth Fund ..................................................... 46-47
Small-Cap Opportunity Fund ("Small-Cap Fund") ................... 48-50
Index Fund ...................................................... 51-57
International Fund .............................................. 58-62
Hemisphere Free Trade Fund ("Hemisphere Fund") .................. 63-65
Statements of Operations ............................................... 66-67
Statements of Changes in Net Assets .................................... 68-70
Statements of Changes-- Capital Stock Activity ......................... 71-73
Financial Highlights ................................................... 74-82
Notes to Financial Statements .......................................... 83-93
Report of Independent Accountants ...................................... 94
2
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THE MARKET ENVIRONMENT
ECONOMIC REVIEW JANUARY 31, 1997
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As the fourth quarter of 1996 came to a close two facts became obvious. Consumer
spending, while improving relative to a year earlier, still resulted in
lackluster Christmas retail sales. This was somewhat surprising given strong
consumer confidence readings and a pickup in personal income growth. Second, the
manufacturing sector showed strong growth as production rose sharply. These
developments resulted in estimated fourth quarter economic growth expanding at a
4.7% annual rate.
The prospect of an acceleration in the economy at a time when unemployment is
low and wage growth is showing signs of accelerating has unnerved the bond
market and driven long-term Treasury yields higher. Despite the rise in bond
yields, stock prices have continued to rise as investors presume the outlook for
corporate earnings growth has improved. Such optimism should be tempered,
however, as sluggish growth in most major foreign economies indicates little
improvement in U.S. exports, high consumer debt levels may limit near-term
spending activity and the economy is likely to slow.
IS AN ACCELERATION IN INFLATION CLOSE AT HAND?
Prior to the 4th quarter there appeared to be little chance that the Federal
Reserve Board ("Fed") would turn restrictive. While it still appears unlikely
that any increase in short-term interest rates is imminent, if the economy
continues to expand rapidly, the odds favoring a rate hike will increase.
Despite the absence of any current signs of accelerating inflation, the Fed
could decide to make a preemptive move as a precaution. However, even if such an
action eventually does take place, it is unlikely to occur in the immediate
future. The Fed has tended to be quite deliberate when making policy shifts and
will undoubtedly wait for additional evidence concerning the direction of the
economy before moving from its current neutral policy stance.
INVESTORS' APPETITE FOR STOCKS CONTINUES
For all of 1996 the S&P 500 Index appreciated by nearly 23% marking a
continuation of this magnificent bull market that started in the early 1980s. It
has also been more than 6 years since a 10% market "correction" has occurred.
The rise in 1996 was driven by sharply rising corporate earnings and, until late
in the year, declining long-term bond yields.
Larger capitalization issues outperformed smaller ones as portfolio managers
invested strong mutual fund cash flows in bigger, more liquid shares in case
they needed to sell quickly. They were particularly attracted to growth-oriented
names and increasingly avoided the more cyclical ones as the economy's prospects
became more questionable. Foreign shares tended to under perform as those
foreign economies continued to struggle vis-a-vis the U.S.
LOOKING FORWARD INTO 1997
As 1997 begins it appears likely that corporate earnings growth will slow as
additional cost reduction becomes increasingly difficult to achieve. The global
pricing environment remains extremely competitive and, with even modest wage
growth, seems likely to put pressure on corporate profit margins. As a result,
the chances for earnings disappointments is rising.
3
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THE MARKET ENVIRONMENT
ECONOMIC REVIEW (CONTINUED) JANUARY 31, 1997
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The risk of earnings disappointment should be limited by the favorable outlook
for inflation and lower bond yields. Despite the outlook for continued (albeit
modest) economic growth, the prospects for continued low inflation remain a plus
in the outlook for bond investments.
Looking forward, investors are faced with a situation where the chance of
earnings disappointments is rising, but where the likelihood for lower bond
yields is also increasing. This would appear to be an environment where market
volatility is likely to rise but also one where any downside risk appears
limited to moderate proportions. Despite the rising probability of a correction
in stock prices, at the moment, the odds of a major bear market occurring appear
remote. Nevertheless, even a correction of moderate proportions may prove
unsettling to recent market entrants as investors' expectations may have risen
to unrealistic levels.
DAVID L. MEAD
VICE PRESIDENT AND CHIEF INVESTMENT OFFICER
HARRIS TRUST AND SAVINGS BANK
4
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THE MARKET ENVIRONMENT
FIXED INCOME MARKETS REVIEW JANUARY 31, 1997
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Unlike the year for the U.S. stock market, 1996 proved to be a rather
unremarkable period for interest rates. Treasury bond prices in particular,
which experienced dramatic up and down gyrations over the course of the year,
ended the year slightly lower--with yields slightly higher--than when 1996
began.
Expectations about the Federal Reserve Board's credit policy had a great effect
on the markets. Early last year, when the Federal Reserve Board moved to lower
its Federal Funds rate (the rate it pays banks for deposits in excess of reserve
requirements) by one-quarter of a percentage point, fixed income investors were
hopeful that further interest rate reductions--and higher bond prices--were in
store. Unfortunately, the January 31, 1996 rate cut proved to be the only one of
its kind for the year.
What began as bullish sentiment in the fixed income markets during the first
quarter gave way to fears that signs of stronger growth in the economy would
push inflation and interest rates higher. These concerns dashed hopes that the
Federal Reserve Board would move to push interest rates lower any time soon.
These fears were realized in the second quarter, as the economy grew at a robust
4.7% annual rate. Heightened anxiety about each new piece of economic news
released by the Government in turn contributed to market bearishness. On the
other hand, signs that inflation remained largely in check in spite of full
employment and steady growth limited the drop in bond prices.
Corporate issuers, in fact, took advantage of yields that still looked low on an
historical basis, and a $405 billion flood of new issues came to market. This
huge supply came close to the record high of $416 billion in new issues during
1993. Corporate bond issuance was especially high during the months of November
and December, as a result of declining rates earlier in the fall.
Fixed-income investors were also attracted to the comparatively high yields of
the junk bond market, which outperformed other fixed-income sectors, while
uncertainty over discussions about possibilities of a flat tax dampened demand
for tax-exempt bonds. For short-term debt instruments, the year was uneventful,
with little movement in yields.
MARK E. NEWLIN, C.F.A.
DIRECTOR OF FIXED INCOME MANAGEMENT
HARRIS INVESTMENT MANAGEMENT, INC.
5
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THE MARKET ENVIRONMENT
EQUITY MARKETS REVIEW JANUARY 31, 1997
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1996 was an excellent year for the U.S. equity markets--with the Standard &
Poor's 500 Index finishing up 23%, following the dramatic gain of 37.4% in 1995.
Since 1926, back-to-back gains of this magnitude have occurred only five times.
In many ways 1996 was a repetition of 1995, when large capitalized stocks
dominated the market. Small companies, as measured by the Russell 2000, again
underperformed with a return of 16.5%. The best performing sectors of the market
were financials, technology, and energy. Underperforming areas were consumer
services, basic industries and transportation. Utilities had difficult year
despite the overall strong environment.
Investors' nervousness about strength in the economy led to increased volatility
during the year. Fears that renewed growth in the economy would trigger upward
pressure on inflation and interest rates weighed on stock prices. Compounding
these factors were concerns about the sustainability of corporate earnings
growth. In the second quarter especially, the market appeared to have little
regard for companies that were experiencing earnings disappointments.
Supporting the market was positive news on the inflation front and relatively
stable interest rates during the course of the year. And while earnings growth
slowed for many companies, particularly in the latter part of the year, results,
on balance, were generally favorable. Last, but not least, there were enormous
inflows into the stock market as a result of inflows into equity mutual funds.
According to the Investment Company Institute, the trade association for the
mutual fund industry, in 1996 investors poured $223 billion in new cash into
mutual funds which invest in stocks. This level surpassed the previous record of
$129.6 billion set in 1993 by more than 70%, as well as the $128.1 billion
inflow into equity mutual funds in 1995. In December alone, investors put more
than $13.5 billion in net new money into equity funds. Although year-end
comments by Federal Reserve Chairman Alan Greenspan about valuations in the
markets sparked some concern, they were unable to dampen what proved to be a
spectacular ascent for the year.
WILLIAM O. LESZINSKE
PRESIDENT AND CHIEF INVESTMENT OFFICER
HARRIS INVESTMENT MANAGEMENT, INC.
6
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GOVERNMENT MONEY MARKET FUND SUMMARY
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INVESTMENT OBJECTIVE
The Fund seeks to provide investors with as high a level of current income
as is consistent with its investment policies and preservation of capital
and liquidity. The Fund invests exclusively in U.S. Government Securities
that have remaining maturities not exceeding thirteen months and certain
repurchase agreements.
INVESTMENT RESULTS
Based on strong performance over the course of the year, Class A and
Institutional shares of the Government Money Fund finished the year in the
top quartile of their respective peer groups--that is, other funds against
which they are ranked that have similar investment objectives.
The Fund's managers maintained a somewhat longer average maturity with
the portfolio during the second half of the year, based on their positive
outlook for the fixed income markets. This strategy paid off handsomely for
the Fund as interest rates, which had been on an upward course, reversed
direction and fell dramatically. Active management of the Fund's average
maturity during the first and second quarter of 1996 helped the Fund
weather the significant volatility of the fixed income markets.
MONEY MARKET FUND SUMMARY
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INVESTMENT OBJECTIVE
The Fund seeks to provide investors with as high a level of current income
as is consistent with its investment policies and with preservation of
capital and liquidity. The Fund invests in a broad range of money market
instruments that have remaining maturities not exceeding thirteen months.
INVESTMENT RESULTS
Like the Government Money Fund, the Money Fund's strong performance over
the course of the year can be attributed to vigilant "duration management",
or the active management of the Fund's average weighted maturity. The
significant interest rate shifts over the course of the year provided the
Fund's managers with an excellent opportunity to employ this strategy, thus
enhancing fund performance.
The most significant event of the first half of the year for the Money
Fund was the conversion of common trust fund assets held by Harris Trust &
Savings Bank personal trust clients into the Harris Insight Funds. In order
to accommodate this significant inflow of new assets, the
average-days-to-maturity of the Funds was extended. After the conversion
was completed, the average-days-to-maturity of the Money Fund eventually
was reset. This strategy worked well for the Fund, as the interest rate
yield curve inverted deeply during January (with long-term rates rising
much faster than short-term rates) and then rebounded through the first
half of the year.
TAX-EXEMPT MONEY MARKET FUND SUMMARY
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INVESTMENT OBJECTIVE
The Fund seeks to provide investors with as high a level of current income
(exempt from federal income taxes) as is consistent with its investment
policies and preservation of capital and liquidity. The Fund invests
primarily in high-quality municipal obligations that have remaining
maturities not exceeding thirteen months.
INVESTMENT RESULTS
Like the Money Fund, the Tax-Exempt Money Fund experienced a significant
inflow of new assets in the first quarter of the year following a
conversion of common trust fund assets into the Fund. The Fund maintained a
relatively short average maturity through much of the first quarter in
order to accommodate the conversion of assets into the Fund. Upon
completion of the conversion and transfer, the Fund extended its average
maturity, and by the end of the first half of the year its average maturity
stood at 52.5 days.
A number of strategies employed by the Fund's managers helped to
strengthen the Fund's performance in the second half of the year. In the
third quarter, the Fund's average maturity had widened to 58 days, largely
as a result of the Fund's increased participation in a number of new issues
of one-year tax-exempt notes. In the fourth quarter, the Fund attempted to
capitalize on certain technical characteristics of the tax-exempt market.
For example, the Fund was able to take advantage of rising rates in the
variable rate sector of the market. As a result of this strategy, the
Fund's average maturity shortened somewhat. Nonetheless, the Fund's
managers maintained a longer average maturity based on their bullish
outlook for the interest rate market and the steepness of the yield curve.
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The Harris Insight Money Market Funds are neither insured nor guaranteed by the
U.S. Government, and there can be no assurance that the Funds will be able to
maintain a stable $1.00 share price.
A portion of income from the Tax-Exempt Money Market Fund may be subject to some
state and/or local taxes and, for certain investors, a portion may be subject to
the federal alternative minimum tax.
7
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SHORT/INTERMEDIATE BOND FUND SUMMARY
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GROWTH OF A $10,000 INVESTMENT IN THE SHORT/INTERMEDIATE BOND FUND AND THE
LEHMAN BROTHERS INTERMEDIATE GOVERNMENT/CORPORATE BOND INDEX FROM INCEPTION
THROUGH DECEMBER 31, 1996.
PERFORMANCE BENCHMARK:
Lehman Brothers Intermediate Government/Corporate Bond Index - A weighted
composite of ( I ) the Lehman Brothers Intermediate Government Bond Index, which
is comprised of all publicly issued, non-convertible debt of the U.S. Government
or any agency thereof, quasi-federal corporations, and corporate debt guaranteed
by the U.S. Government with a maturity of between one and ten years and ( II )
the Lehman Brothers Corporate Bond Index, which is comprised of all public
fixed-rate, non-convertible investment-grade domestic corporate debt with a
maturity of between one and ten years excluding collateralized mortgage
obligations.
INVESTMENT OBJECTIVE:
The Fund seeks to provide a high level of total return, including a competitive
level of current income. The Fund seeks to achieve its investment objective by
investing primarily in investment grade debt securities with a
short/intermediate term average maturity.
INVESTMENT RESULTS:
The reemergence of strong economic activity early in the year put upward
pressure on interest rates, and consequently weighed on demand for fixed income
investments. The overall bearish sentiment in the first half of the year was
linked to heightened market anxiety that a resurgent economy would trigger
higher inflation. Intermediate interest rates ended the year 80 basis points
(100 basis points equals one percent) higher than the year before.
The most favorable period of the year for the Fund was the fourth quarter,
when interest rates declined by an average of 25 basis points, sparking a rally
in the markets. Slowing economic growth was a contributing factor behind the
strong performance of the fixed income markets. In particular, the Fund's
portfolio at the end of the year was overweighted in the corporate and
asset-backed sectors, which the Fund's managers considered especially attractive
areas in which to invest.
[GRAPHIC OMITTED]
INSTITUTIONAL
INDEX SHARES
Feb. '96 10,000 10,000
Mar. '96 9,949 9,887
Apr. '96 9,914.18 9,857
May '96 9,906.25 9,859
Jun. '96 10,011.2 9,948
Jul. '96 10,041.3 9,981
Aug. '96 10,049.3 9,983
Sep. '96 10,189 10,114
Oct. '96 10,369.4 10,286
Nov. '96 10,506.2 10,419
Dec. '96 10,439 10,361
[GRAPHIC OMITTED]
CLASS A
INDEX SHARES
Mar. '91 10,000 9,550
Jun. '91 10,178 9,657
Dec. '91 11,181 10,605
Jun. '92 11,518 10,904
Dec. '92 11,983 11,165
Jun. '93 12,720 11,974
Dec. '93 13,028 12,271
Jun. '94 12,685 11,945
Dec. '94 12,774 12,113
Jun. '95 13,999 13,128
Dec. '95 14,729 13,794
Jun. '96 14,699 13,727
Dec. '96 15,327 14,278
AVERAGE ANNUAL TOTAL RETURNS* FOR THE PERIOD ENDED 12-31-96
1 YEAR 5 YEAR INCEPTION**
INSTITUTIONAL SHARES -- -- 3.61%
CLASS A SHARES -1.16% 5.15% 6.38%
* Total returns include changes in share price and the reinvestment of income
dividends and all capital gain distributions. The results for the Class A
Shares of the Fund assume an initial sales charge of 4.50%.
Aggregate total returns are given for those classes of shares that have not
been operational for a full year.
** The inception date for the Fund's performance is February 26, 1996 with
respect to the Institutional Shares, and April 1, 1991 with respect to the
Class A Shares. Inception for the Index begins on the month-end closest to
the inception date of the Fund (or class thereof).
Performance figures represent past performance and are not a guarantee of
future results. The investment return and principal value of shares will
fluctuate and shares, when redeemed, may be worth more or less than the
original amount invested.
8
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BOND FUND SUMMARY
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GROWTH OF A $10,000 INVESTMENT IN THE BOND FUND AND THE LEHMAN BROTHERS
AGGREGATE BOND INDEX FROM INCEPTION THROUGH DECEMBER 31, 1996.
PERFORMANCE BENCHMARK:
Lehman Brothers Aggregate Bond Index - An index composed of the Lehman
Government/Corporate Index and the Mortgage-Backed Securities Index and includes
treasury issues, agency issues, corporate bond issues and mortgage-backed
securities.
INVESTMENT OBJECTIVE:
The Fund seeks to provide a high level of total return, including a competitive
level of current income. The Fund seeks to achieve its investment objective by
investing primarily in investment grade debt securities of varying maturities.
INVESTMENT RESULTS:
1996 followed a pattern established in the fixed-income markets in previous
years, whereby a spectacular year of fixed-income returns is followed by a
lackluster year. The year's returns, albeit positive, posted the third worst
year of fixed-income market performance since 1981, when the market's upward
bull trend started.
And while the Fund's return was positive in 1996, results were greatly
affected by the volatility in the fixed income markets throughout the year. This
volatility reflected investor concerns that strong growth in the economy would
cause upward pressure on inflation and, consequently, interest rates. Stronger
than anticipated economic activity was reflected in bond yields, which rose
approximately 80 basis points on a year-over-year basis. However, the positive
returns experienced by the bond market during the third quarter of the year were
just enough to pull the market out of negative territory for the first time
since February 1996. The fourth quarter also saw improved returns as interest
rates fell, on average, 25 basis points.
[GRAPHIC OMITTED]
Index InstitutionalShares
Apr. '96 10,000 10,000
May '96 9,980 9,958
Jun. '96 10,114 10,067
Jul. '96 10,141 10,099
Aug. '96 10,124 10,090
Sep. '96 10,300 10,234
Oct. '96 10,529 10,461
Nov. '96 10,709 10,648
Dec. '96 10,609 10,540
[GRAPHIC OMITTED]
Index Class A Shares
Apr. '96 10,000 9,550
May '96 9,980 9,512
Jun. '96 10,114 9,615
Jul. '96 10,141 9,643
Aug. '96 10,124 9,632
Sep. '96 10,300 9,768
Oct. '96 10,529 9,983
Nov. '96 10,709 10,159
Dec. '96 10,609 10,054
AGGREGATE TOTAL RETURNS* FOR THE PERIOD ENDED 12-31-96
INCEPTION**
INSTITUTIONAL SHARES 5.40%
CLASS A SHARES 0.54%
* Total returns include changes in share price and the reinvestment of income
dividends and all capital gain distributions. The results for the Class A
Shares of the Fund assume an initial sales charge of 4.50%.
Aggregate total returns are given for those classes of shares that have not
been operational for a full year.
** The inception date for the Fund's performance is April 16, 1996 with
respect to the Institutional Shares, and April 22, 1996 with respect to the
Class A Shares. Inception for the Index begins on the month-end closest to
the inception date of the Fund (or class thereof).
Performance figures represent past performance and are not a guarantee of
future results. The investment return and principal value of shares will
fluctuate and shares, when redeemed, may be worth more or less than the
original amount invested.
9
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INTERMEDIATE TAX-EXEMPT BOND FUND SUMMARY
GROWTH OF A $10,000 INVESTMENT IN THE INTERMEDIATE TAX-EXEMPT BOND FUND AND THE
LEHMAN BROTHERS MUNICIPAL BOND FUND INDEX FROM INCEPTION THROUGH DECEMBER 31,
1996.
PERFORMANCE BENCHMARK:
Lehman Brothers Municipal Bond Fund Index - An index comprised of 8,000 bonds.
The bonds are all investment-grade, fixed-rate, long-term maturities (greater
than two years) and are selected from issues larger than $50 million dated since
January 1984.
INVESTMENT OBJECTIVE:
The Fund seeks to provide a high level of current income that is exempt from
federal income tax. The Fund seeks to achieve its investment objective by
investing, under normal market conditions, at least 80% of its assets in a broad
range of municipal bonds and other obligations issued by state and local
governments to finance their operations or special projects.
INVESTMENT RESULTS:
By comparison, the municipal bond market performed better than its taxable
counterpart. Fear of declining supply in response to rising rates helped
municipals as Treasury Bond yields rose throughout much of the year. Concern
over a potential Federal Reserve tightening of interest rates influenced the
municipal market to a lesser degree than the Treasury market.
The first half of 1996 was a difficult period for the municipal bond
market. In February, the tax-exempt market ended its string of seven consecutive
months of positive price performance. A number of other factors weighed heavily
on Fund performance, including a steepening of the tax-exempt yield curve--which
reflected investor preferences for shorter-term tax-exempt maturities--as well
as a large supply of new issues overhanging the market during the early part of
the year. The yield relationship between taxable and tax-exempt issues also
widened back out to its historical norm as prospects for a flat tax faded with
Steve Forbes' presidential run. The strong performance of the stock market in
the second half of the year also drew investor interest away from the municipal
bond market. On balance, however, demand for tax-exempt bonds proved to be
remarkably resilient over the course of the year, especially as concerns over
the flat tax abated.
[GRAPHIC OMITTED]
Index Class A Shares Institutional Shares
Dec. '85 10,000 9,550 10,000
Dec. '86 11,931 10,418 10,935
Dec. '87 12,111 10,378 10,919
Dec. '88 13,342 10,825 11,417
Dec. '89 14,781 11,673 12,342
Dec. '90 15,858 12,377 13,119
Dec. '91 17,784 13,714 14,573
Dec. '92 19,352 14,609 15,563
Dec. '93 21,729 15,812 16,885
Dec. '94 20,606 15,287 16,366
Dec. '95 24,202 17,032 18,279
Dec. '96 25,274 17,466 18,848
AVERAGE ANNUAL TOTAL RETURNS* FOR THE PERIOD ENDED 12-31-96
1 YEAR 5 YEAR 10 YEAR INCEPTION**
INSTITUTIONAL SHARES 3.11% 5.28% 5.60% 5.93%
CLASS A SHARES -2.06% 3.99% 4.82% 5.20%
* Total returns include changes in share price and the reinvestment of income
dividends and all capital gain distributions. The results for the Class A
Shares of the Fund assume an initial sales charge of 4.50%.
Performance information includes the performance of the Intermediate
Tax-Exempt Bond Fund's predecessor common trust fund for periods before the
Fund commenced operations. Performance for the common trust fund has been
adjusted to reflect the Fund's estimate of its expense ratio for the first
year of operations as a mutual fund. The common trust fund was not
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), or subject to certain investment restrictions that are imposed by the
1940 Act. If the common trust fund had been registered under the 1940 Act,
its performance may have been adversely affected. The common trust fund did
not impose any charges that correspond to the advisory and other fees of the
Intermediate Tax-Exempt Bond Fund. Therefore, the quoted performance figures
for the common trust fund have been reduced to reflect expenses of 0.80% and
1.05%, the estimated expense ratios of the Institutional and Class A Shares
of the Intermediate Tax-Exempt Bond Fund, respectively, at commencement of
operations.
** The inception date for the Fund's performance with respect to both of the
Institutional and Class A Shares is January 1, 1986. Inception for the Index
begins on the month-end closest to the inception date of the Fund (or class
thereof).
Performance figures represent past performance and are not a guarantee of
future results. The investment return and principal value of shares will
fluctuate and shares, when redeemed, may be worth more or less than the
original amount invested.
A portion of income may be subject to some state and/or local taxes and, for
certain investors, a portion may be subject to the federal alternative
minimum tax.
10
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TAX-EXEMPT BOND FUND SUMMARY
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GROWTH OF A $10,000 INVESTMENT IN THE TAX-EXEMPT BOND FUND AND THE LEHMAN
BROTHERS MUNICIPAL BOND FUND INDEX FROM INCEPTION THROUGH DECEMBER 31, 1996.
PERFORMANCE BENCHMARK:
Lehman Brothers Municipal Bond Fund Index - An index comprised of 8,000 actual
bonds. The bonds are all investment-grade, fixed-rate, long-term maturities
(greater than two years) and are selected from issues larger than $50 million
dated since January 1984.
INVESTMENT OBJECTIVE:
The Fund seeks to provide a high level of current income that is exempt from
federal income tax. The Fund seeks to achieve its investment objective by
investing at least 80% of its assets, under normal market conditions, in a broad
range of municipal bonds and other obligations issued by state and local
governments to finance their operations or special projects.
INVESTMENT RESULTS:
Municipal bonds performed well in 1996 compared to the rather lackluster
performance of taxable fixed income investments. Pre-election proposals for a
"flat tax"--which would lessen the demand for tax-advantaged investments such as
municipal bonds--weighed on prices early in the year. Also contributing to
weakened demand for municipal bonds was the rally in the equity markets in the
second half of the year. Many bond investors were reinvesting the proceeds from
maturing bonds into stocks. But as flat-tax concerns abated, municipal bond
prices rose.
As the difference in interest rate spreads between the highest quality
bonds and lower quality bonds narrowed throughout the year, the lower quality
issues were the stronger performers. In fact, an oversupply of insured, triple
A-rated securities caused that sector of the market to be one of the weakest
performing for the year. Although the Fund's portfolio was overweighted in
insured bonds and underweighted in single-A and triple-B issues, the Fund was
well positioned in higher coupon, non-callable bonds. The strong performance of
these issues mitigated the weaker performance of the insured bonds within the
Fund's portfolio.
[GRAPHIC OMITTED]
Index Institutional Shares Class A Shares
Jan. '85 10,000 10,000 9,550
12,003 11,814 11,255
Dec. '86 14,321 13,887 13,197
14,537 13,372 12,676
Dec. '88 16,014 14,729 13,927
17,742 16,330 15,403
Dec. '90 19,035 17,245 16,225
21,346 19,247 18,064
Dec. '92 23,228 20,857 19,526
26,081 23,558 22,000
Dec. '94 24,733 21,838 20,343
29,050 24,993 23,224
DEC. '96 30,337 25,932 24,021
AVERAGE ANNUAL TOTAL RETURNS* FOR THE PERIOD ENDED 12-31-96
1 YEAR 5 YEAR 10 YEAR INCEPTION**
INSTITUTIONAL SHARES 3.76% 6.14% 6.44% 8.26%
CLASS A SHARES -1.22% 4.90% 5.68% 7.57%
* Total returns include changes in share price and the reinvestment of income
dividends and all capital gain distributions. The results for the Class A
Shares of the Fund assume an initial sales charge of 4.50%.
Performance information includes the performance of the Tax-Exempt Bond
Fund's predecessor common trust fund for periods before the Fund commenced
operations. Performance for the common trust fund has been adjusted to
reflect the Fund's estimate of its expense ratio for the first year of
operations as a mutual fund. The common trust fund was not registered under
the Investment Company Act of 1940, as amended (the "1940 Act"), or subject
to certain investment restrictions that are imposed by the 1940 Act. If the
common trust fund had been registered under the 1940 Act, its performance
may have been adversely affected. The common trust fund did not impose any
charges that correspond to the advisory and other fees of the Tax-Exempt
Bond Fund. Therefore, the quoted performance figures for the common trust
fund have been reduced to reflect expenses of 0.80% and 1.05%, the
estimated expense ratios of the Institutional and Class A Shares of the
Tax-Exempt Bond Fund, respectively, at commencement of operations.
** The inception date for the Fund's performance with respect to both of the
Institutional and Class A Shares is January 1, 1985. Inception for the Index
begins on the month-end closest to the inception date of the Fund (or class
thereof).
Performance figures represent past performance and are not a guarantee of
future results. The investment return and principal value of shares will
fluctuate and shares, when redeemed, may be worth more or less than the
original amount invested.
A portion of income may be subject to some state and/or local taxes and, for
certain investors, a portion may be subject to the federal alternative
minimum tax.
11
<PAGE>
CONVERTIBLE FUND SUMMARY
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE CONVERTIBLE FUND AND THE FIRST BOSTON
CONVERTIBLE INDEX FROM INCEPTION THROUGH DECEMBER 31, 1996.
PERFORMANCE BENCHMARK:
First Boston Convertible Index - An index comprised of an unmanaged group of
domestic convertible bonds and preferred stocks with a Standard & Poor's rating
of B- or better and a minimum issue size of $50 million, and dollar-denominated
Euroconvertibles issued by U.S.-domiciled companies and having a Standard &
Poor's rating of B- or better and a minimum issue size of $100 million.
INVESTMENT OBJECTIVE:
The Fund seeks to provide capital appreciation and current income. The Fund
seeks to achieve its investment objective by investing primarily in convertible
securities including bonds, debentures, notes or preferred stocks that are
convertible into common stocks or warrants that provide the right to purchase
shares of common stock.
INVESTMENT RESULTS:
Because 1996 was an especially volatile year for the fixed income markets, the
Fund benefited over the course of the year from minimal holdings of "bond
equivalents" (convertibles with large premiums to conversion value) and from
specific issue selections.
The Fund's strong performance was boosted by its portfolio holdings in
technology and financial issues. Particularly noteworthy were holdings in
Quantum, Altera, Seagate and S3.
[GRAPHIC OMITTED]
Index Convertible Fund
Feb. '88 10,000 9,550
Dec. '88 10,551 10,209
Dec. '89 12,002 11,283.2
Dec. '90 11,177 9,351
Dec. '91 14,432 11,786.6
Dec. '92 16,936 13,601.8
Dec. '93 20,079 15,438.4
Dec. '94 19,129 14,819
Dec. '95 23,664 17,563.2
Dec. '96 26,941 21,185
AVERAGE ANNUAL TOTAL RETURNS* FOR THE PERIOD ENDED 12-31-96
1 YEAR 5 YEAR INCEPTION**
CONVERTIBLE FUND 15.18% 11.40% 8.84%
* Total returns include changes in share price and the reinvestment of
income dividends and all capital gain distributions. The results for shares
of the Fund assume an initial sales charge of 4.50%.
** The inception date for the Fund's performance is February 24, 1988.
Inception for the Index begins on the month-end closest to the Fund's
inception date.
Performance figures represent past performance and are not a guarantee of
future results. The investment return and principal value of shares will
fluctuate and shares, when redeemed, may be worth more or less than the
original amount invested.
12
<PAGE>
EQUITY FUND SUMMARY
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE EQUITY FUND AND THE S & P 500 STOCK INDEX
FROM INCEPTION THROUGH DECEMBER 31, 1996.
PERFORMANCE BENCHMARK:
S & P 500 Stock Index - An index comprised of an unmanaged group of 500 widely
held common stocks listed on the New York Stock Exchange, the American Stock
Exchange and the over-the-counter market.
INVESTMENT OBJECTIVE:
The Equity Fund seeks to provide capital appreciation and current income. The
Fund seeks to achieve its investment objective by investing primarily in common
stocks of larger capitalization companies.
INVESTMENT RESULTS:
The Equity Fund outperformed the S & P 500 Index during the last 12 months ended
December 31, 1996. The Fund's performance was based on issue selection and
sector exposure. Financial, Technology and Energy exposures benefited
performance. Utilities was the weakest performing sector.
[GRAPHIC OMITTED]
Index Institutional Shares
Feb. '96 10,000 10,000
Mar. '96 10,096 9,752
Apr. '96 10,244 9,888
May '96 10,509 10,105
Jun. '96 10,552 9,973
Jul. '96 10,082 9,545
Aug. '96 10,296 9,900
Sep. '96 10,875 10,365
Oct. '96 11,173 10,774
Nov. '96 12,021 11,493
Dec. '96 11,785 11,366
[GRAPHICOMITTED]
Index Class A Shares
Feb. '88 10,000 9,550
Dec. '88 10,700 10,337
Dec. '89 14,069 13,233
Dec. '90 13,623 12,192
Dec. '91 17,784 15,519
Dec. '92 19,149 16,789
Dec. '93 21,061 19,851
Dec. '94 21,337 19,443
Dec. '95 29,323 26,493
Dec. '96 36,089 32,892
AVERAGE ANNUAL TOTAL RETURNS* FOR THE PERIOD ENDED 12-31-96
1 YEAR 5 YEAR INCEPTION**
INSTITUTIONAL SHARES -- -- 13.66%
CLASS A SHARES 18.56% 15.14% 14.39%
* Total returns include changes in share price and the reinvestment of income
dividends and all capital gain distributions. The results for the Class A
Shares of the Fund assume an initial sales charge of 4.50%.
Aggregate total returns are given for those classes of shares that have
not been operational for a full year.
** The inception date for the Fund's performance is February 26, 1996 with
respect to the Institutional Shares, and February 26, 1988 with respect to
the Class A Shares. Inception for the Index begins on the month-end closest
to the inception date of the Fund (or class thereof).
Performance figures represent past performance and are not a guarantee of
future results. The investment return and principal value of shares will
fluctuate and shares, when redeemed, may be worth more or less than the
original amount invested.
13
<PAGE>
EQUITY INCOME FUND SUMMARY
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE EQUITY INCOME FUND AND THE S & P 500 STOCK
INDEX FROM INCEPTION THROUGH DECEMBER 31, 1996.
PERFORMANCE BENCHMARK:
S & P 500 Stock Index - An index comprised of an unmanaged group of 500 widely
held common stocks listed on the New York Stock Exchange, the American Stock
Exchange and the over-the-counter market.
INVESTMENT OBJECTIVE:
The Equity Income Fund seeks to provide current income and, secondarily, capital
appreciation. The Fund seeks to achieve its investment objective by investing
primarily in common stocks and convertible securities believed to offer good
value, an attractive yield and dividend growth potential.
INVESTMENT RESULTS:
The Equity Income Fund produced solid returns in 1996. The Fund's performance
benefited from its Finance, Healthcare and Technology exposure. Individual issue
selection and sector exposure equally contributed to performance. The Fund was
able to maintain its yield premium to the S & P's 500 Index throughout 1996.
[GRAPHIC OMITTED]
Index Institutional Shares Class A Shares
Jan. '94 10,000 10,000 9,500
Jun. '94 9,658 9540 9,100
Dec. '94 10,131 9,957 9,487
Jun. '95 12,172 11,676 11,111
Dec. '95 13,923 13,625 12,950
Jun. '96 15,342 14,462 13,729
Dec. '96 17,135 16,071 15,232
AVERAGE ANNUAL TOTAL RETURNS* FOR THE PERIOD ENDED 12-31-96
1 YEAR INCEPTION**
INSTITUTIONAL SHARES 17.95% 17.12%
CLASS A SHARES 12.33% 15.04%
* Total returns include changes in share price and the reinvestment of income
dividends and all capital gain distributions. The results for the Class A
Shares of the Fund assume an initial sales charge of 4.50%.
Performance information includes the performance of the Equity Income Fund's
predecessor common trust fund for periods before the Fund commenced
operations. Performance for the common trust fund has been adjusted to
reflect the Fund's estimate of its expense ratio for the first year of
operations as a mutual fund. The common trust fund was not registered under
the Investment Company Act of 1940, as amended (the "1940 Act"), or subject
to certain investment restrictions that are imposed by the 1940 Act. If the
common trust fund had been registered under the 1940 Act, its performance may
have been adversely affected. The common trust fund did not impose any
charges that correspond to the advisory and other fees of the Equity Income
Fund. Therefore, the quoted performance figures for the common trust fund
have been reduced to reflect expenses of 0.93% and 1.18%, the estimated
expense ratios of the Institutional and Class A Shares of the Equity Income
Fund, respectively, at commencement of operations.
** The inception date for the Fund's performance with respect to both of the
Institutional and Class A Shares is January 1, 1994. Inception for the Index
begins on the month-end closest to the inception date of the Fund (or class
thereof).
Performance figures represent past performance and are not a guarantee of
future results. The investment return and principal value of shares will
fluctuate and shares, when redeemed, may be worth more or less than the
original amount invested.
14
<PAGE>
GROWTH FUND SUMMARY
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE GROWTH FUND AND THE S & P 500 STOCK INDEX
FROM INCEPTION THROUGH DECEMBER 31, 1996.
PERFORMANCE BENCHMARK:
S & P 500 Stock Index - An index comprised of an unmanaged group of 500 widely
held common stocks listed on the New York Stock Exchange, the American Stock
Exchange and the over-the-counter market.
INVESTMENT OBJECTIVE:
The Growth Fund seeks to provide capital appreciation and, secondarily, current
income. The Fund seeks to achieve its investment objective by investing
primarily in common stocks and convertible securities believed to offer
above-average growth potential.
INVESTMENT RESULTS:
The Growth Fund outperformed the S&P 500 Index during 1996. The Fund primarily
benefited from favorable issue selection and secondarily by emphasis on the
Technology and Health Care sectors. The Fund is a well diversified large
capitalization growth fund that increased its position in the Financial and
Energy sectors during the year and reduced its position somewhat in Technology
and large capitalization consumer companies.
[GRAPHIC OMITTED]
Index Institutional Shares Class A Shares
Apr. '92 10,000 10,000 9,550
Jun. '92 10,197 9,901 9,451
Dec. '92 11,049 10,910 10,403
Jun. '93 11,582 11,036 10,511
Dec. '93 12,153 11,587 11,023
Jun. '94 11,737 10,714 10,179
Dec. '94 12,312 11,581 10,990
Jun. '95 14,792 14,040 13,307
Dec. '95 16,920 15,800 14,963
Jun. '96 18,645 18,108 17,126
Dec. '96 20,824 20,369 19,243
AVERAGE ANNUAL TOTAL RETURNS* FOR THE PERIOD ENDED 12-31-96
1 YEAR INCEPTION**
INSTITUTIONAL SHARES 28.92% 16.28%
CLASS A SHARES 22.81% 14.88%
* Total returns include changes in share price and the reinvestment of income
dividends and all capital gain distributions. The results for the Class A
Shares of the Fund assume an initial sales charge of 4.50%.
Performance information includes the performance of the Growth Fund's
predecessor common trust fund for periods before the Fund commenced
operations. Performance for the common trust fund has been adjusted to
reflect the Fund's estimate of its expense ratio for the first year of
operations as a mutual fund. The common trust fund was not registered under
the Investment Company Act of 1940, as amended (the "1940 Act"), or subject
to certain investment restrictions that are imposed by the 1940 Act. If the
common trust fund had been registered under the 1940 Act, its performance may
have been adversely affected. The common trust fund did not impose any
charges that correspond to the advisory and other fees of the Growth Fund.
Therefore, the quoted performance figures for the common trust fund have been
reduced to reflect expenses of 1.10% and 1.35%, the estimated expense ratios
of the Institutional and Class A Shares of the Growth Fund, respectively, at
commencement of operations.
** The inception date for the Fund's performance with respect to both of the
Institutional and Class A Shares is April 1, 1992. Inception for the Index
begins on the month-end closest to the inception date of the Fund (or class
thereof).
Performance figures represent past performance and are not a guarantee of
future results. The investment return and principal value of shares will
fluctuate and shares, when redeemed, may be worth more or less than the
original amount invested.
15
<PAGE>
SMALL-CAP OPPORTUNITY FUND SUMMARY
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE SMALL-CAP OPPORTUNITY FUND AND THE RUSSELL
2000 SMALL STOCK INDEX FROM INCEPTION THROUGH DECEMBER 31, 1996.
PERFORMANCE BENCHMARK:
Russell 2000 Small Stock Index - An index of the 2,000 smallest stocks in the
Russell 3000 Index. The smallest company has a market capitalization of
approximately $13 million. The total adjusted market capitalization as of March
1991 was $156.5 billion.
INVESTMENT OBJECTIVE:
The Small-Cap Fund seeks to provide long term capital appreciation. The Fund
seeks to achieve its investment objective by investing primarily in equity
securities of smaller to medium capitalization companies.
INVESTMENT RESULTS:
Although 1996 proved to be a spectacular year for the stock market, the overall
performance of smaller capitalization issues during the period lagged that of
larger capitalization issues. There was strength in "small cap" issues for the
first five months of 1996. However, during the months of June and July 1996, the
small cap market experienced a significant decline. From August to year-end,
small caps rebounded, but still trailed their large cap counterparts. Technology
stocks were especially affected by both the decline and the rebound. Solid
performance by the Fund's portfolio holdings in Technology, Financial Services
and Energy helped the Fund produce a strong showing for the year relative to its
peers.
[GRAPHIC OMITTED]
Index Institutional Shares Class A Shares
Jan. '85 10,000 10,000 9,550
Dec. '85 13,105 12,055 11,486
Dec. '86 13,850 13,691 13,012
Dec. '87 12,635 14,194 13,457
Dec. '88 15,781 17,624 16,667
Dec. '89 18,343 20,660 19,490
Dec. '90 14,765 18,269 17,192
Dec. '91 21,564 26,974 25,322
Dec. '92 25,534 32,100 30,060
Dec. '93 30,362 36,975 34,523
Dec. '94 29,809 35,602 33,158
Dec. '95 38,286 44,966 41,775
Dec. '96 44,616 53,421 49,517
AVERAGE ANNUAL TOTAL RETURNS* FOR THE PERIOD ENDED 12-31-96
1 YEAR 5 YEAR 10 YEAR INCEPTION**
INSTITUTIONAL SHARES 18.80% 14.64% 14.59% 15.03%
CLASS A SHARES 13.20% 13.31% 13.77% 14.30%
* Total returns include changes in share price and the reinvestment of income
dividends and all capital gain distributions. The results for the Class A
Shares of the Fund assume an initial sales charge of 4.50%.
Performance information includes the performance of the Small-Cap Opportunity
Fund's predecessor common trust fund for periods before the Fund commenced
operations. Performance for the common trust fund has been adjusted to
reflect the Fund's estimate of its expense ratio for the first year of
operations as a mutual fund. The common trust fund was not registered under
the Investment Company Act of 1940, as amended (the "1940 Act"), or subject
to certain investment restrictions that are imposed by the 1940 Act. If the
common trust fund had been registered under the 1940 Act, its performance may
have been adversely affected. The common trust fund did not impose any
charges that correspond to the advisory and other fees of the Small-Cap
Opportunity Fund. Therefore, the quoted performance figures for the common
trust fund have been reduced to reflect expenses of 1.20% and 1.45%, the
estimated expense ratios of the Institutional and Class A Shares of the
Small-Cap Opportunity Fund, respectively, at commencement of operations.
** The inception date for the Fund's performance with respect to both of the
Institutional and Class A Shares is January 1, 1985. Inception for the Index
begins on the month-end closest to the inception date of the Fund (or class
thereof).
Performance figures represent past performance and are not a guarantee of
future results. The investment return and principal value of shares will
fluctuate and shares, when redeemed, may be worth more or less than the
original amount invested.
Historically, small company stocks have been more volatile than large company
stocks, U.S. Government, bonds and Treasury bills.
16
<PAGE>
INDEX FUND SUMMARY
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE INDEX FUND AND THE S & P 500 STOCK INDEX
FROM INCEPTION THROUGH DECEMBER 31, 1996.
PERFORMANCE BENCHMARK:
S & P 500 Stock Index - An index comprised of an unmanaged group of 500 widely
held common stocks listed on the New York Stock Exchange, the American Stock
Exchange and the over-the-counter market.
INVESTMENT OBJECTIVE:
The Index Fund seeks to provide the return and risk characteristics of the S & P
500 Index, which emphasizes large capitalization companies.
INVESTMENT RESULTS:
Mirroring the exceptional year in the equity markets, the Index Fund turned in a
very strong showing in 1996. Supporting the equity markets in 1996 was the
continued strong growth in the economy coupled with low inflation and relatively
stable interest rates.
At the end of the year, issues held by the Fund represented more than 99.5
percent of the weighted capitalization of the S&P 500 Index. The three sectors
contributing the best performance to the Fund during the course of the year were
Technology, Financial Services and Health Care. The Utility, Business Service
and Consumer Cyclical sectors provided the least contribution to the Fund's
performance.
[GRAPHIC OMITTED]
Index Institutional Shares Class A Shares
Apr. '92 10,000 10,000 9,550
Jun. '92 10,197 9,932 9,480
Dec. '92 11,049 10,730 10,229
Jun. '93 11,582 11,215 10,678
Dec. '93 12,153 11,750 11,173
Jun. '94 11,737 11,325 10,756
Dec. '94 12,312 11,841 11,232
Jun. '95 14,792 14,209 13,461
Dec. '95 16,920 16,218 15,345
Jun. '96 18,645 17,839 16,862
Dec. '96 20,824 19,902 18,793
AVERAGE ANNUAL TOTAL RETURNS* FOR THE PERIOD ENDED 12-31-96
1 YEAR INCEPTION**
INSTITUTIONAL SHARES 22.71% 15.71%
CLASS A SHARES 16.96% 14.31%
* Total returns include changes in share price and the reinvestment of income
dividends and all capital gain distributions. The results for the Class A
Shares of the Fund assume an initial sales charge of 4.50%.
Performance information includes the performance of the Index Fund's
predecessor common trust fund for periods before the Fund commenced
operations. Performance for the common trust fund has been adjusted to
reflect the Fund's estimate of its expense ratio for the first year of
operations as a mutual fund. The common trust fund was not registered under
the Investment Company Act of 1940, as amended (the "1940 Act"), or subject
to certain investment restrictions that are imposed by the 1940 Act. If the
common trust fund had been registered under the 1940 Act, its performance may
have been adversely affected. The common trust fund did not impose any
charges that correspond to the advisory and other fees of the Index Fund.
Therefore, the quoted performance figures for the common trust fund have been
reduced to reflect expenses of 0.45% and 0.70%, the estimated expense ratios
of the Institutional and Class A Shares of the Index Fund, respectively, at
commencement of operations.
** The inception date for the Fund's performance with respect to both of the
Institutional and Class A Shares is April 1, 1992. Inception for the Index
begins on the month-end closest to the inception date of the Fund (or class
thereof).
Performance figures represent past performance and are not a guarantee of
future results. The investment return and principal value of shares will
fluctuate and shares, when redeemed, may be worth more or less than the
original amount invested.
17
<PAGE>
INTERNATIONAL FUND SUMMARY
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE INTERNATIONAL FUND AND THE MSCI EAFE INDEX
FROM INCEPTION THROUGH DECEMBER 31, 1996.
PERFORMANCE BENCHMARK:
MSCI EAFE Index - An index consisting of companies listed on the stock exchanges
of Europe, Australasia and the Far East. The Index is capitalization weighted
and replicates the industry composition and sampling of the large, medium and
small capitalization companies of each local market.
INVESTMENT OBJECTIVE:
The Fund seeks to provide international diversification and capital
appreciation. Current income is a secondary objective. The Fund seeks to achieve
its investment objective by investing primarily in securities of foreign
issuers.
INVESTMENT RESULTS:
The International Fund's performance closely tracked the MSCI EAFE Index. Fund
performance benefited from strong markets in the United Kingdom, France,
Netherlands, Spain and Germany. However, weak markets in Japan and Switzerland
hurt Fund performance. The Consumer Goods and Energy sectors exposure benefited
Fund performance while the Financial sector dampened performance.
[GRAPHIC OMITTED]
Index Institutional Shares Class A Shares
Jan. '87 10,000 10,000 9,550
Dec. '87 12,463 11,015 10,511
Dec. '88 15,986 12,621 12,013
Dec. '89 17,671 14,115 13,383
Dec. '90 13,528 10,987 10,385
Dec. '91 15,168 12,300 11,607
Dec. '92 13,322 11,761 11,073
Dec. '93 17,659 14,655 13,770
Dec. '94 19,033 15,283 14,336
Dec. '95 21,166 15,923 14,891
Dec. '96 22,446 16,737 15,619
AVERAGE ANNUAL TOTAL RETURNS* FOR THE PERIOD ENDED 12-31-96
1 YEAR 5 YEAR INCEPTION**
INSTITUTIONAL SHARES 5.11% 6.35% 5.33%
CLASS A SHARES 0.17% 5.14% 4.59%
* Total returns include changes in share price and the reinvestment of income
dividends and all capital gain distributions. The results for the Class A
Shares of the Fund assume an initial sales charge of 4.50%.
Performance information includes the performance of the International Fund's
predecessor common trust fund for periods before the Fund commenced
operations. Performance for the common trust fund has been adjusted to
reflect the Fund's estimate of its expense ratio for the first year of
operations as a mutual fund. The common trust fund was not registered under
the Investment Company Act of 1940, as amended (the "1940 Act"), or subject
to certain investment restrictions that are imposed by the 1940 Act. If the
common trust fund had been registered under the 1940 Act, its performance may
have been adversely affected. The common trust fund did not impose any
charges that correspond to the advisory and other fees of the International
Fund. Therefore, the quoted performance figures for the common trust fund
have been reduced to reflect expenses of 1.40% and 1.65%, the estimated
expense ratios of the Institutional and Class A Shares of the International
Fund, respectively, at commencement of operations.
** The inception date for the Fund's performance with respect to both of the
Institutional and Class A Shares is January 1, 1987. Inception for the Index
begins on the month-end closest to the inception date of the Fund (or class
thereof).
Performance figures represent past performance and are not a guarantee of
future results. The investment return and principal value of shares will
fluctuate and shares, when redeemed, may be worth more or less than the
original amount invested.
International investing, especially in emerging markets, poses greater
potential risks as well as rewards when compared to U.S. investing, as a
result of market and currency fluctuations caused by political and financial
factors abroad.
18
<PAGE>
HEMISPHERE FREE TRADE FUND SUMMARY
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE HEMISPHERE FREE TRADE FUND, COMPOSITE AND
MSCI WORLD INDEX FROM INCEPTION THROUGH DECEMBER 31, 1996.
PERFORMANCE BENCHMARKS:
Composite (S&P 500 Stock Index (40%), TSE 300 Composite Index (30%), Mexican
Bolsa Index (30%)) - A weighted composite of ( I ) the S & P 500 Stock Index,
which is an index comprised of an unmanaged group of 500 widely held common
stocks listed on the New York Stock Exchange, the American Stock Exchange and
the over-the-counter market ( II ) the TSE 300 Composite Index, which is an
Index that is intended to portray the overall performance of 300 stocks listed
on the Toronto Stock Exchange and ( III ) the Mexican Bolsa Index, which is a
capitalization weighted index of the leading stocks traded on the Mexican Stock
Exchange.
MSCI World Index - An Index consisting of companies listed on the stock
exchanges of Australia, Austria, Belgium, Canada, Denmark, Finland, France,
Germany, Hong Kong, Ireland, Italy, Japan, Malaysia, Netherlands, New Zealand,
Norway, Singapore, Spain, Sweden, Switzerland, United Kingdom and United States.
The Index is capitalization weighted and replicates the industry composition and
sampling of the large, medium and small capitalization companies of each local
market.
INVESTMENT OBJECTIVE:
The Harris Insight Hemisphere Free Trade Fund seeks to provide capital
appreciation. Current income is a secondary objective. The Fund seeks to achieve
its investment objective by investing in equity securities, fixed income
securities and/or cash equivalents of issuers in Canada, Mexico and the United
States.
INVESTMENT RESULTS:
The Fund's positive performance in 1996 can be attributed to the double-digit
returns of the equity markets in the United States, Canada, and Mexico.
From the Hemisphere Free Trade Fund's inception in April through the end of
the year, the Fund's asset allocation in the three North American free trade
zone countries has been approximately 40 percent in the United States, 30
percent in Canada, and 30 percent in Mexico. Best performing sectors in the
United States allocation for the Fund were Energy and Financial, while
Transportation was the weakest performing sector.
[GRAPHIC OMITTED]
Composite Index Institutional Shares
Apr. '96 10,000 10,000 10,000
May '96 10,510 10,240 10,260
Jun. '96 10,427 10,290 10,020
Jul. '96 9,977 9,924 9,540
Aug. '96 10,493 10,036 10,100
Sep. '96 10,761 10,427 10,310
Oct. '96 11,049 10,497 10,420
Nov. '96 11,726 11,084 11,130
Dec. '96 11,662 10,904 11,030
[GRAPHIC OMITTED]
Composite Index Class A Shares
Apr. '96 10,000 10,000 9,550
May. '96 10,510 10,240 9,799
Jun. '96 10,427 10,290 9,570
Jul. '96 9,977 9,924 9,102
Aug. '96 10,493 10,036 9,637
Sep. '96 10,761 10,427 9,838
Oct. '96 11,049 10,497 9,933
Nov. '96 11,726 11,084 10,602
Dec. '96 11,662 10,904 10,516
AGGREGATE TOTAL RETURNS* FOR THE PERIOD ENDED 12-31-96
INCEPTION**
INSTITUTIONAL SHARES 10.30%
CLASS A SHARES 5.16%
* Total returns include changes in share price and the reinvestment of income
dividends and all capital gain distributions. The results for the Class A
Shares of the Fund assume an initial sales charge of 4.50%.
Aggregate total returns are given for those classes of shares that have not
been operational for a full year.
** The inception date for the Fund's performance is April 9, 1996 with respect
to the Institutional Shares, and April 11, 1996 with respect to the Class A
Shares. Inception for the Index begins on the month-end closest to the
inception date of the Fund (or class thereof).
Performance figures represent past performance and are not a guarantee of
future results. The investment return and principal value of shares will
fluctuate and shares, when redeemed, may be worth more or less than the
original amount invested.
Global investing, especially in emerging markets, poses greater potential
risks as well as rewards when compared to U.S. investing, as a result of
market and currency fluctuations caused by political and financial factors
abroad.
19
<PAGE>
TAX INFORMATION
FIXED INCOME FUNDS
For the year ended December 31, 1996, the following Harris Insight
Portfolios declared dividends from net realized capital gains:
SHORT-TERM LONG-TERM
CAPITAL GAIN, CAPITAL GAIN,
PER SHARE PER SHARE
------------- --------------
Short/Intermediate Fund.......... $ -- $ --
Bond Fund........................ 0.0091 0.0240
Intermediate Tax-Exempt Fund..... -- 0.0364
Tax-Exempt Fund.................. 0.0076 0.2087
Convertible Fund................. -- --
EQUITY FUNDS
For the year ended December 31, 1996, the following Harris Insight
Portfolios declared dividends from net realized capital gains:
SHORT-TERM LONG-TERM
CAPITAL GAIN, CAPITAL GAIN,
PER SHARE PER SHARE
------------- -------------
Equity Fund...................... $0.1087 $1.5554
Equity Income Fund............... 0.0813 0.9167
Growth Fund...................... 0.1678 0.8971
Small-Cap Fund................... -- 0.7175
Index Fund....................... 0.0122 0.3314
International Fund............... 0.0620 0.0055
Hemisphere Fund.................. -- --
FOR CORPORATE SHAREHOLDERS ONLY:
The percentage of dividends from net investment income declared for the
year ended December 31, 1996, which qualify for the corporate dividends received
deduction is as follows:
Equity Fund..................................... 100.0%
Equity Income Fund.............................. 100.0%
Growth Fund..................................... 100.0%
Small-Cap Fund.................................. 100.0%
Index Fund...................................... 100.0%
International Fund.............................. 0.0%
Hemisphere Fund................................. 0.0%
ADDITIONAL TAX INFORMATION FOR SHAREHOLDERS OF THE INTERNATIONAL FUND
For the year ended December 31, 1996, the International Fund distributed
$859,557 of foreign source income on which the Fund paid foreign taxes of
$191,849. This information is being furnished to you pursuant to notice
requirements of Sections 853(a) and 855(d) of the Internal Revenue Code, as
amended, and the Treasury Regulations thereunder.
20
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK.]
<PAGE>
HARRIS INSIGHT FUNDS
GOVERNMENT MONEY FUND
STATEMENT OF NET ASSETS
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
ANNUALIZED PAR
YIELD/RATE MATURITY (000) VALUE(DAGGER)
---------- -------- ----- -------------
AGENCY OBLIGATIONS -- 41.5%
FEDERAL FARM CREDIT BANK -- 4.1%
5.620% 09/03/97 $10,000 $ 9,975,431
------------
FEDERAL HOME LOAN BANK -- 8.2%
5.325% 03/18/97 10,000 9,997,316
5.490% 11/07/97 10,000 9,995,658
------------
19,992,974
------------
FEDERAL HOME LOAN MORTGAGE CORP.-- 18.9%
5.290% 01/14/97 10,000 9,980,897
5.230% 01/16/97 8,000 7,982,567
5.400% 01/16/97 20,000 19,955,000
5.230% 02/10/97 8,000 7,953,511
------------
45,871,975
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 6.2%
5.520% 10/28/97 5,000 4,998,389
5.450% 11/06/97 10,000 9,990,603
------------
14,988,992
------------
STUDENT LOAN MARKETING ASSOCIATION -- 4.1%
5.870% 06/30/97 10,000 10,007,907
------------
TOTAL AGENCY OBLIGATIONS
(Cost $100,837,279) 100,837,279
------------
VARIABLE RATE OBLIGATIONS (DOUBLE DAGGER) -- 49.3%
FEDERAL HOME LOAN BANK -- 11.9%
5.498% 01/26/97* 10,000 9,995,413
5.540% 02/18/97* 10,000 10,018,858
5.370% 03/04/97* 9,000 8,994,897
------------
29,009,168
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 23.0%
5.540% 01/02/97* 10,000 9,998,191
5.320% 01/07/97* 6,000 6,000,000
5.205% 01/12/97* 20,000 19,990,058
5.331% 01/14/97* 20,000 19,994,540
------------
55,982,789
------------
STUDENT LOAN MARKETING ASSOCIATION-- 14.4%
5.410% 01/07/97* 10,000 9,996,718
5.430% 01/07/97* 10,000 10,001,695
5.480% 01/07/97* 15,000 15,000,000
------------
34,998,413
------------
TOTAL VARIABLE RATE OBLIGATIONS
(Cost $119,990,370) 119,990,370
------------
ANNUALIZED PAR
YIELD/RATE MATURITY (000) VALUE(DAGGER)
- ---------- -------- ----- -------------
REPURCHASE AGREEMENTS -- 9.2%
Donaldson, Lufkin & Jenrette
Securities Corp., 7.000%
Agreement dated 12/31/96, proceeds
at maturity $22,476,738 (Collateralized
by $32,386,000 U.S. Treasury Strip
0.00%, due 08/15/02. The market
value is $22,926,535.)
(Cost $22,468,000) 01/02/97 $22,468 $ 22,468,000
------------
TOTAL INVESTMENTS -- 100.0%
(Cost $243,295,649) 243,295,649
------------
LIABILITIES IN EXCESS OF
OTHER ASSETS -- 0.0% (53,313)
------------
NET ASSETS -- 100.0%
Applicable to 37,169,682 and 206,072,726
shares outstanding of Institutional Class
and Class A, respectively, $.001 par value;
1.5 billion authorized shares (Note 9) $243,242,336
============
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE
EACH FOR INSTITUTIONAL CLASS AND
CLASS A SHARES $1.00
=====
-------------------
(DAGGER) See Note 2a to the Financial Statements.
(DOUBLE DAGGER) Rate in effect on 12/31/96.
* Date of next interest rate reset.
See Notes to Financial Statements.
22
<PAGE>
HARRIS INSIGHT FUNDS
MONEY FUND
STATEMENT OF NET ASSETS
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
ANNUALIZED PAR
YIELD/RATE MATURITY (000) VALUE(DAGGER)
- ---------- -------- ------- ------------
AGENCY OBLIGATIONS -- 2.7%
Federal Home Loan Bank
5.650% 01/02/97 $12,500 $ 12,522,872
Federal National Mortgage Association
5.840% 01/02/97 10,000 10,001,637
------------
TOTAL AGENCY OBLIGATIONS
(Cost $22,524,509) 22,524,509
------------
ASSET BACKED SECURITIES -- 5.2%
Boatmens Auto Trust 1996 Class A
5.753% 08/08/97 9,886 9,884,706
Contimortgage Home Equity Loan Trust
5.900% 01/15/97 11,119 11,128,310
Ford Credit Auto Trust Series 1996A
5.670% 07/15/97 5,125 5,124,867
Norwest Automobile Trust 1996-A
5.465% 12/05/97 11,103 11,103,142
The Money Store Auto Trust 1996-1
5.638% 07/18/97 5,941 5,940,593
------------
TOTAL ASSET BACKED SECURITIES
(Cost $43,181,618) 43,181,618
------------
CERTIFICATES OF DEPOSIT -- 24.6%
Bank of Tokyo
5.590% 01/08/97 36,000 36,000,000
Dai Ichi Kangyo Bank Ltd.
5.800% 01/24/97 35,000 35,000,445
Fuji Bank Ltd.
5.800% 01/16/97 26,000 26,000,215
Sanwa Bank Ltd.
5.750% 01/15/97 39,100 39,100,000
Societe Generale
6.100% 09/12/97 33,000 32,994,512
Sumitomo Bank (Cayman)
5.490% 01/22/97 35,000 35,000,000
------------
TOTAL CERTIFICATES OF DEPOSIT
(Cost $204,095,172) 204,095,172
------------
COMMERCIAL PAPER -- 39.6%
Associates Corp. of North America
7.000% 01/02/97 11,000 10,997,861
Beta Finance
5.350% 02/03/97 10,000 9,950,958
Columbia HCA
5.500% 01/31/97 7,000 6,967,917
Comdisco, Inc.
5.620% 03/21/97 4,000 3,950,669
Corporate Receivable Trust
5.320% 01/10/97 1,000 998,670
CXC INC.
6.750% 01/02/97 10,000 9,998,125
5.320% 01/16/97 25,000 24,944,583
Enterprise Funding
5.340% 01/10/97 25,239 25,205,306
General Motors Acceptance Corp.
7.500% 01/02/97 12,063 12,060,487
ANNUALIZED PAR
YIELD/RATE MATURITY (000) VALUE(DAGGER)
- ---------- -------- ------- ------------
COMMERCIAL PAPER (CONTINUED)
Heller Financial, Inc.
5.400% 01/06/97 $25,000 $ 24,981,250
5.460% 01/06/97 10,000 9,992,417
National Fleet Funding
5.340% 01/06/97 35,000 34,974,042
New Center Asset Trust
7.500% 01/02/97 28,000 27,994,167
Prefco.
5.350% 01/09/97 35,000 34,958,389
5.650% 01/14/97 6,494 6,480,750
Public Service Electric & Gas Co.
5.500% 01/08/97 2,000 1,997,861
5.530% 01/08/97 4,590 4,585,064
Salomon Brothers
5.450% 01/13/97 8,000 7,985,467
Sheffield Receivables Corp.
5.320% 01/17/97 5,450 5,437,114
5.320% 01/17/97 10,000 9,976,356
Stadshypotek AB
5.450% 01/06/97 20,000 19,984,861
Texas Utilities Co.
5.650% 02/14/97 6,000 5,958,567
Textron Financial Corp.
5.480% 01/24/97 6,500 6,477,243
U.S. West Capital Funding Corp.
5.540% 01/28/97 7,000 6,970,915
West Baton Rouge, LA
5.600% 02/03/97 15,000 15,000,000
------------
TOTAL COMMERCIAL PAPER
(Cost $328,829,039) 328,829,039
------------
CORPORATE BONDS -- 8.9%
Abbey National
5.500% 11/21/97 33,000 32,971,858
Beta Finance
6.125% 09/12/97 22,000 22,000,000
Chase Manhattan Corp.-New York
7.500% 12/01/97 10,000 10,164,231
General Electric Capital Corp. Euro Bond
8.000% 01/17/97 3,856 3,859,622
General Electric Capital Corp.
8.000% 02/01/97 1,000 1,002,381
General Motors Acceptance Corp.
7.600% 01/09/97 4,055 4,056,723
------------
TOTAL CORPORATE BONDS
(Cost $74,054,815) 74,054,815
------------
VARIABLE RATE OBLIGATIONS(DOUBLE DAGGER) -- 19.0%
Federal Home Loan Bank
5.540% 03/31/97* 6,000 6,011,315
Federal National Mortgage Association
5.850% 01/01/97* 16,000 16,005,320
4.770% 01/02/97* 10,000 9,998,804
5.320% 01/07/97* 10,000 10,000,000
See Notes to Financial Statements.
23
<PAGE>
HARRIS INSIGHT FUNDS
MONEY FUND
STATEMENT OF NET ASSETS (CONTINUED)
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
ANNUALIZED PAR
YIELD/RATE MATURITY (000) VALUE(DAGGER)
- ---------- -------- ------- ------------
VARIABLE RATE OBLIGATIONS(DOUBLE DAGGER) (CONTINUED)
General Motors Acceptance Corp.
5.574% 01/11/97* $ 5,000 $ 5,002,843
PHH Corp.
5.496% 01/08/97* 35,000 34,983,884
Racer Series 1996-MM-10-1-Trust
5.664% 01/24/97* 33,000 33,000,000
Steers Floating Rate Note
5.624% 01/30/97* 33,000 33,000,000
Student Loan Marketing Association
5.430% 01/07/97* 10,000 10,001,694
------------
TOTAL VARIABLE RATE OBLIGATIONS
(Cost $158,003,860) 158,003,860
------------
SHARES
--------
TEMPORARY INVESTMENTS -- 0.0%
Dreyfus Cash Management Plus, Inc.
Class A Shares 1,000 1,000
Goldman Sachs Financial Square
Money Market Portfolio 1,374 1,374
Lehman Prime Money Market Fund
Class A Shares 11,096 11,096
------------
TOTAL TEMPORARY INVESTMENTS
(Cost $13,470) 13,470
------------
TOTAL INVESTMENTS -- 100.0%
(Cost $830,702,483) 830,702,483
------------
LIABILITIES IN EXCESS OF
OTHER ASSETS -- 0.0% (72,161)
------------
NET ASSETS -- 100.0%
Applicable to 369,418,377,
and 461,214,535 shares outstanding
of Institutional Class and
Class A, respectively, $.001 par
value; 1.75 billion authorized
shares (Note 9) $830,630,322
============
NET ASSET VALUE, OFFERING PRICE
AND REDEMPTION PRICE PER SHARE
EACH FOR INSTITUTIONAL CLASS AND
CLASS A SHARES $1.00
=====
- --------------------------------------------------------------------------------
(DAGGER) See Note 2a to the Financial Statements.
(DOUBLE DAGGER) Rate in effect on 12/31/96.
* Date of next interest rate reset.
See Notes to Financial Statements.
24
<PAGE>
HARRIS INSIGHT FUNDS
TAX-EXEMPT MONEY FUND
STATEMENT OF NET ASSETS
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
ANNUALIZED PAR
YIELD/RATE MATURITY (000) VALUE(DAGGER)
- ---------- -------- ------- ------------
MUNICIPAL BONDS -- 98.9%
ALASKA -- 7.3%
Anchorage, Alaska Municipal Light & Power
Revenue Series 1996D VR
3.950% 01/08/97 $ 8,000 $ 8000,000
Valdez, Alaska Marine Terminal (ARCO)
Series C PS
3.650% 02/03/97 6,000 6,000,000
3.550% 02/05/97 7,000 7,000,000
3.550% 03/04/97 6,500 6,500,000
Valdez, Alaska Marine Terminal (Atlantic
Richfield) Series 1994A PS
3.600% 01/07/97 5,000 5,000,000
3.450% 02/24/97 3,900 3,900,000
Valdez, Alaska, Marine Terminal Revenue
Bonds (Exxon Pipeline 1985) VR
4.900% 01/02/97 5,200 5,200,000
------------
41,600,000
------------
ARIZONA -- 8.8%
Apache County, Arizona Industrial
Development Authority Pollution
Control Revenue Bonds VR
4.000% 01/08/97 18,000 18,000,000
Maricopa County, Arizona, Pollution
Control Revenue Refunding Bonds
(Arizona Public Service Co.)
Series E VR
4.950% 01/02/97 6,000 6,000,000
Salt River, Arizona, Agriculture Industrial
Power & Development TECP
3.550% 01/21/97 4,000 4,000,000
3.400% 02/18/97 6,000 6,000,000
3.600% 02/19/97 7,000 7,000,000
3.450% 03/06/97 9,050 9,050,000
------------
50,050,000
------------
CALIFORNIA -- 5.3%
Calfornia Community College Financing
Authority Series A TRANS
4.750% 07/02/97 17,105 17,176,769
Los Angeles, California, Union School
District Series 1996-97B TRANS
4.500% 09/30/97 2,000 2,012,317
Los Angeles, California, Union School
District TRANS
4.500% 06/30/97 4,350 4,364,455
San Diego County, California, General
Obligation Note
5.000% 04/01/97 1,650 1,655,331
South Coast, California, Local Education
Agencies Note Partners Series A TRANS
4.750% 06/30/97 5,000 5,016,091
------------
30,224,963
------------
ANNUALIZED PAR
YIELD/RATE MATURITY (000) VALUE(DAGGER)
- ---------- -------- ------- ------------
MUNICIPAL BONDS (CONTINUED)
DELAWARE -- 0.4%
State of Delaware Series 1991A
5.600% 08/15/97 $ 2,000 $ 2,024,181
------------
DISTRICT OF COLUMBIA -- 5.2%
District of Columbia Loans Revenue
Series 1985 PS
4.330% 07/01/97 1,620 1,622,177
District of Columbia Revenue Bonds,
American Association for the
Advancement of Science VR
5.000% 01/02/97 28,100 28,100,000
------------
29,722,177
------------
FLORIDA -- 8.4%
Dade County, Florida, Industrial
Development Authority Revenue
Refunding Bonds (Florida Power &
Light Company) VR
4.900% 01/02/97 10,000 10,000,000
Dade County, Florida, Special Obligation
Revenue Bonds Capital Asset
Acquisition Series 1990 VR
4.250% 01/08/97 6,060 6,060,000
Gainesville, Florida, Utility System
Series C TECP
3.400% 03/11/97 7,000 7,000,000
Jacksonville, Florida Authority Series
D-3 TECP
3.400% 01/22/97 1,100 1,100,000
Jacksonville, Florida, Electric Authority
TECP
3.600% 02/20/97 3,700 3,700,000
Putnam County, Florida, Development
Authority Pollution Control Revenue
Bonds Seminole Electric Series D PS
3.450% 06/15/97 2,000 2,000,000
Putnam County, Florida Development
Authority Pollution Control Revenue
Bonds Seminole Electric Series H-4 PS
3.800% 03/15/97 3,830 3,830,000
Sunshine State, Florida TECP
3.650% 01/06/97 8,000 8,000,000
Sunshine State GFC Revenue Series 1986 PS
3.450% 03/12/97 6,000 6,000,000
------------
47,690,000
------------
GEORGIA -- 7.7%
Burke County, Georgia, Development
Authority Pollution Control Revenue
Bonds (Georgia Power & Light Company
Vogtle Project) Series 1994-3rd VR
4.950% 01/02/97 15,900 15,900,000
See Notes to Financial Statements.
25
<PAGE>
HARRIS INSIGHT FUNDS
TAX-EXEMPT MONEY FUND
STATEMENT OF NET ASSETS (CONTINUED)
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
ANNUALIZED PAR
YIELD/RATE MATURITY (000) VALUE(DAGGER)
- ---------- -------- ------- ------------
MUNICIPAL BONDS (CONTINUED)
GEORGIA (CONTINUED)
Burke County, Georgia, Development
Authority Pollution Control Revenue
Bonds (Oglethorpe Power Corporation)
Project A PS
3.450% 02/04/97 $ 5,000 $ 5,000,000
3.600% 02/10/97 5,000 5,000,000
Dekalb Private Hospital Authority, Georgia
Revenue Bonds (Egleston Children's
Hospital) Series A VR
4.050% 01/08/97 6,000 6,000,000
Dekalb Private Hospital Authority,
Georgia Revenue Bonds (Egleston
Children's Hospital) Series B VR
4.150% 01/08/97 9,500 9,500,000
Georgia Municipal Gas Authority
Revenue Series A PS
3.500% 03/12/97 2,500 2,500,000
------------
43,900,000
------------
IDAHO -- 0.7%
Idaho State TRANS
4.500% 06/30/97 4,000 4,011,385
------------
ILLINOIS -- 3.3%
Chicago, Illinois General Obligation
Notes
3.100% 02/04/97 3,000 3,000,000
Cook County, Illinois Revenue Bonds
(Catholic Charities) VR
4.200% 01/08/97 8,200 8,200,000
Illinois Development Finance Authority
Revenue Bonds (Catholic Charities)
Series B VR
4.200% 01/02/97 1,310 1,310,000
Illinois Educational Facility TECP
3.600% 02/13/97 6,000 6,000,000
------------
18,510,000
------------
INDIANA -- 0.9%
Indiana Bond Bank
4.250% 01/09/97 5,000 5,000,794
------------
KANSAS -- 6.9%
Burlington, Kansas Pollution Control
Revenue Bonds (Kansas City Power &
Light) Series 1985B PS
3.800% 01/06/97 5,000 5,000,000
3.800% 01/13/97 5,000 5,000,000
3.500% 04/02/97 6,700 6,700,000
Burlington, Kansas Pollution Control
Revenue Bonds Series 1987A PS
3.650% 01/23/97 4,000 4,000,000
Kansas State Department of Transportation
Highway Revenue Bonds Series B VR
3.950% 01/07/97 18,400 18,400,000
-----------
39,100,000
-----------
ANNUALIZED PAR
YIELD/RATE MATURITY (000) VALUE(DAGGER)
- ---------- -------- ------- ------------
MUNICIPAL BONDS (CONTINUED)
KENTUCKY -- 0.4%
Jefferson County, Kentucky, Series
1992A PS
3.650% 01/27/97 $ 2,000 $ 2,000,000
-----------
LOUISIANA -- 6.6%
Jefferson Parish Hospital Service
District No. 2 (East Jefferson General
Hospital) VR
4.100% 01/02/97 10,800 10,800,000
West Baton Rouge, Louisiana,
District #3 PS
3.600% 01/15/97 4,900 4,900,000
West Baton Rouge, Louisiana, Industrial
District #3 Revenue Bonds (Dow
Chemical Co.) Series B VR
5.000% 01/02/97 21,900 21,900,000
-----------
37,600,000
-----------
MARYLAND -- 1.8%
Maryland Health & Higher Education
Series C TECP
3.650% 02/07/97 5,950 5,950,000
3.550% 02/14/97 2,000 2,000,000
Montgomery County, Maryland TECP
3.500% 03/05/97 2,300 2,300,000
-----------
10,250,000
-----------
MICHIGAN -- 3.7%
Delta County, Michigan Economic
Development Corp. Environmental
Revenue VR
5.000% 01/02/97 6,200 6,200,000
Detroit, Michigan, School District
State School Notes
4.500% 05/01/97 4,800 4,810,619
Michigan Underground Storage
Authority TECP
3.550% 02/05/97 10,000 10,000,000
-----------
21,010,619
-----------
MINNESOTA -- 3.8%
Rochester, Minnesota, Health Care
Facilities Revenue Bonds (Mayo
Foundation/Mayo Medical Center)
Series A PS
3.700% 02/06/97 2,500 2,500,000
Rochester, Minnesota, Health Care
Facilities Revenue Bonds (Mayo
Foundation/Mayo Medical Center)
Series C PS
3.450% 03/07/97 5,000 5,000,000
Rochester, Minnesota, Health Care
Facilities Revenue Bonds (Mayo
Foundation/Mayo Medical Center)
Series F PS
3.500% 03/10/97 4,000 4,000,000
See Notes to Financial Statements.
26
<PAGE>
HARRIS INSIGHT FUNDS
TAX-EXEMPT MONEY FUND
STATEMENT OF NET ASSETS (CONTINUED)
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
ANNUALIZED PAR
YIELD/RATE MATURITY (000) VALUE(DAGGER)
- ---------- -------- ------- ------------
MUNICIPAL BONDS (CONTINUED)
MINNESOTA (CONTINUED)
University of Minnesota Revenue
Bonds Series 1985I PS
3.450% 03/10/97 $ 5,000 $ 5,000,000
University of Minnesota Revenue
Bonds Series G PS
3.750% 02/01/97 5,000 5,000,000
-----------
21,500,000
-----------
MISSOURI -- 0.5%
Missouri Health and Education Facility
Authority
4.500% 09/08/97 2,500 2,509,897
-----------
NEBRASKA -- 2.3%
Lincoln, Nebraska TECP
3.450% 04/03/97 1,500 1,500,000
Nebraska Public Power Development
Electric System Municipal Notes
3.600% 02/11/97 5,000 5,000,000
3.500% 02/12/97 5,000 5,000,000
Nebraska Public Power Development
Electric System TECP
3.450% 03/14/97 1,715 1,715,000
-----------
13,215,000
-----------
NEW YORK -- 6.4%
New York City General Obligation Bonds,
Weekly Series 1995F-2 VR
4.050% 01/08/97 6,450 6,450,000
New York City General Obligation Bonds,
Series 1992B VR
4.500% 01/02/97 7,050 7,050,000
New York City Municipal Finance
Authority Water and Sewer System
Series 1995A VR
4.700% 01/02/97 6,000 6,000,000
New York City Unlimited Tax General
Obligation Bonds Series 1992B
4.500% 01/02/97 4,000 4,000,000
New York Energy Research and
Development Authority (Niagara
Mohawk Power Corporation Project)
Series 1985C VR
4.900% 01/02/97 6,200 6,200,000
New York State Energy Research &
Development Authority Pollution
Control Revenue Bonds (Niagara
Mohawk Power) Series A VR
4.700% 01/02/97 6,300 6,300,000
-----------
36,000,000
-----------
OHIO -- 1.9%
Cleveland, Ohio, City School District RANS
4.500% 06/01/97 2,000 2,004,804
Ohio Air Quality Development Authority
Series 1985A VR
4.700% 01/02/97 7,800 7,800,000
ANNUALIZED PAR
YIELD/RATE MATURITY (000) VALUE(DAGGER)
- ---------- -------- ------- ------------
MUNICIPAL BONDS (CONTINUED)
OHIO (CONTINUED)
Toledo, Ohio, City Services Special
Assessment Notes PS
4.500% 06/02/97 $ 1,000 $ 1,002,004
-----------
10,806,808
-----------
PENNSYLVANIA -- 0.8%
Montgomery County, Pennsylvania TECP
3.450% 02/20/97 4,600 4,600,000
-----------
RHODE ISLAND -- 0.5%
State of Rhode Island TRANS
4.500% 06/30/97 3,000 3,007,080
-----------
TENNESSEE -- 2.4%
Metropolitan Government Nashville
& Davidson County, Tennessee,
Health and Education Facilities
Revenue Bonds (Vanderbilt University)
Series B PS
3.700% 05/01/97 750 750,000
State of Tennessee BANS Series A VR
3.900% 01/08/97 12,600 12,600,000
-----------
13,350,000
-----------
TEXAS -- 6.1%
Harris County, Texas, Health Facilities
Development Corp. Revenue
(Memorial Hospital System Project)
Series 1994B TECP
3.650% 01/14/97 5,900 5,900,000
San Antonio, Texas, Electric and Gas
Series A TECP
3.550% 03/05/97 2,000 2,000,000
State of Texas TRANS
4.750% 08/29/97 20,825 20,930,540
Texas Municipal Power Agency BANS
3.550% 01/29/97 6,000 6,000,000
-----------
34,830,540
-----------
UTAH -- 2.2%
Intermountain Power Authority
Supply Revenue Bonds Series 1985F
3.750% 03/17/97 7,000 7,000,000
Intermountain Power Authority
Revenue Series 1985F PS
3.450% 02/25/97 5,400 5,400,000
-----------
12,400,000
-----------
VERMONT -- 0.2%
Vermont Educational Health and Building
Funding Agency Revenue Bonds
(Middlebury College) Series A PS
3.700% 05/01/97 1,000 1,000,000
-----------
See Notes to Financial Statements.
27
<PAGE>
HARRIS INSIGHT FUNDS
TAX-EXEMPT MONEY FUND
STATEMENT OF NET ASSETS (CONTINUED)
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
ANNUALIZED PAR
YIELD/RATE MATURITY (000) VALUE(DAGGER)
- ---------- -------- ------- ------------
MUNICIPAL BONDS (CONTINUED)
WASHINGTON -- 3.9%
Washington Public Power Supply
System Project No. 1 Refunding
Electric Revenue Bonds VR
3.850% 01/07/97 $11,000 $ 11,000,000
Washington State Public Power Supply
4.000% 01/01/97 11,200 11,200,000
-------------
22,200,000
-------------
WISCONSIN -- 0.5%
Milwaukee, Wisconsin, School Notes
Series 1996B
4.250% 08/21/97 3,000 3,007,329
-------------
TOTAL MUNICIPAL BONDS
(Cost $561,120,773) 561,120,773
-------------
SHARES
--------
TEMPORARY INVESTMENTS -- 0.8%
Federated Tax-Free Obligation Fund 4,029,281 4,029,281
Fidelity Tax-Exempt Money Market Fund 25,460 25,460
Goldman Sachs Financial Square
Tax-Exempt Money Market Portfolio 185,596 185,596
Nuveen Tax-Exempt Money Market Fund 99,042 99,042
-------------
TOTAL TEMPORARY INVESTMENTS
(Cost $4,339,379) 4,339,379
-------------
TOTAL INVESTMENTS -- 99.7%
(Cost $565,460,152) 565,460,152
-------------
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 0.3% 1,792,945
-------------
NET ASSETS -- 100.0%
Applicable to 388,396,499 and
178,850,805 shares outstanding
of Institutional Class and Class
A, respectively, $.001 par value;
1.5 billion authorized
shares (Note 9) $567,253,097
============
NET ASSET VALUE,OFFERING PRICE AND
REDEMPTIONPRICE PER SHARE EACH
FOR INSTITUTIONAL CLASS AND CLASS A SHARES $1.00
=====
- ---------------
(DAGGER) See Note 2a to the Financial Statements.
PS -- Security with a "put" feature; date shown is when security may be put back
for redemption.
VR -- Variable rate demand note; interest rate in effect on 12/31/96. Maturity
date is the later of the next interest rate change or exercise of the
demand feature.
TECP -- Tax Exempt Commercial Paper.
TRANS -- Tax Revenue Anticipation Note.
RANS -- Revenue Anticipation Note.
BANS -- Bond Anticipation Note.
See Notes to Financial Statements.
28
<PAGE>
HARRIS INSIGHT FUNDS
SHORT/INTERMEDIATE FUND
STATEMENT OF NET ASSETS
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
COUPON MATURITY PAR
RATE (DOUBLE DAGGER) (000) VALUE(DAGGER)
------ --------------- ----- -------------
AGENCY OBLIGATIONS -- 7.9%
AID -- Israel Guaranteed Notes
6.050% 08/15/00 $ 520 $ 513,499
Federal Home Loan Bank
5.430% 12/29/98 8,500 8,414,914
7.360% 07/01/04 1,000 1,049,190
Federal Home Loan Mortgage Corp.
7.980% 09/08/04 5,000 5,038,600
Federal National Mortgage Association
6.375% 10/13/00 400 398,296
8.400% 10/25/04 5,000 5,216,500
-----------
TOTAL AGENCY OBLIGATIONS
(Cost $20,472,914) 20,630,999
-----------
ASSET-BACKED SECURITIES -- 17.6%
AFC Home Equity Loan Trust Series
1991-4, Class A
7.750% 02/15/06 121 122,671
Banco Nacional De Mexico, S.A
Series 1996-A, Class A1
6.250% 12/01/03 5,000 4,915,625
Bank America Manufactured Housing
Contract Series 1996-1 Class B-1
7.875% 10/10/26 3,500 3,564,904
Bridgestone/Firestone Master Trust
Series 1996-1, Class A
6.170% 07/01/03 4,000 3,978,366
Capita Equipment Receivables Trust
Series 1996-1, Class A4
6.280% 06/15/00 3,500 3,504,648
Chase Manhattan Credit Card Master
Trust Series 1996-3, Class A
7.040% 02/15/04 2,750 2,816,825
Chemical Master Credit Card Trust I
Series 1996-1, Class A
5.550% 09/15/03 3,000 2,913,409
First Deposit Master Trust Series 1995-2,
Class A
6.050% 08/15/02 5,000 5,007,490
Fleet Financial Home Equity Series 1991-1,
Class A
8.450% 04/15/06 106 107,443
Ford Credit Auto Loan Master Trust
Series 1995-1, Class A
6.500% 08/15/02 1,000 1,003,736
Goldome Credit Corporation Home
Equity Trust Series 1990-1, Class A
10.000% 07/15/05 242 248,228
Greentree Financial Corporation
Series 1996-2, Class B1
7.550% 04/21/03 1,500 1,516,263
Merrill Lynch Home Equity Loan
Series 1994-1, Class A1
6.168% 07/15/22 613 611,272
Nissan Auto Receivable Grantor Trust
Series 1994-A, Class A
6.450% 09/15/99 251 252,301
COUPON MATURITY PAR
RATE (DOUBLE DAGGER) (000) VALUE(DAGGER)
------ --------------- ----- -------------
ASSET-BACKED SECURITIES (CONTINUED)
Premier Auto Trust Series 1995-4,
Class CTFS
6.200% 09/06/00 $4,662 $ 4,661,339
Premier Auto Trust Series 1996,
Class CTFS
6.350% 07/06/00 4,000 4,011,327
Private Label Credit Card Master Trust II
Series 1994-1, Class A
7.150% 06/20/01 333 334,404
Security Pacific Home Equity Loan
Series 1991-1, Class A
7.850% 05/15/98 48 47,735
Standard Credit Card Master Trust
Series 1995-3, Class A
7.850% 02/07/02 2,000 2,081,284
WFS Financial Owner Trust Series
1996-A, Class A3
6.050% 06/01/00 4,000 3,993,922
-----------
TOTAL ASSET-BACKED SECURITIES
(Cost $45,669,407) 45,693,192
-----------
COLLATERALIZED MORTGAGE OBLIGATIONS -- 26.1%
Asset Securitization Corp. Series
1996-D3, Class A-1C
7.330% 10/31/26 2,300 2,356,063
DLJ Mortgage Acceptance Corp.
Series 1995-Q1, Class A1-S IO
1.967% 03/25/25 599 145,087
DLJ Mortgage Acceptance Corp.
Series 1996-M Class 1
9.000% 11/28/11 7,456 7,646,571
Federal Home Loan Mortgage Association
Series 1571, Class BA PO
8.612% 04/15/19 627 586,531
Federal Home Loan Mortgage Corp.
1988 Series 15, Class A
9.100% 10/15/19 -- 136
Federal Home Loan Mortgage Corp.
FHR, Series 1758, Class K
5.500% 11/15/02 750 746,588
Federal Home Loan Mortgage Corp.
Series 1645, Class B
5.500% 01/15/08 8,011 7,377,211
Federal National Mortgage Association
Pool 303724
6.000% 01/01/11 7,955 7,723,386
Federal National Mortgage Association
Pool 305189
9.000% 01/01/25 50 52,893
Federal National Mortgage Association
Pool 305555
9.000% 01/01/25 489 515,677
Federal National Mortgage Association
Pool 306031
9.000% 02/01/25 1,082 1,140,738
See Notes to Financial Statements.
29
<PAGE>
HARRIS INSIGHT FUNDS
SHORT/INTERMEDIATE FUND
STATEMENT OF NET ASSETS (CONTINUED)
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
COUPON MATURITY PAR
RATE (DOUBLE DAGGER) (000) VALUE(DAGGER)
------ --------------- ----- -------------
COLLATERALIZED MORTGAGE OBLIGATIONS (CONTINUED)
Federal National Mortgage Association
Pool 306674
9.000% 03/01/25 $ 385 $ 405,445
Federal National Mortgage Association
Pool 317306
9.000% 07/01/25 435 458,911
Federal National Mortgage Association
Pool 338001
9.000% 10/01/25 41 43,398
Federal National Mortgage Association
Series 1990-32, Class E
9.000% 08/01/01 6,650 6,932,625
Federal National Mortgage Association
Series 1993-146, Class B PO
7.702% 05/25/23 859 827,434
Federal National Mortgage Association
Series 1994-85, Class E
6.000% 06/01/00 1,200 1,187,211
Federal National Mortgage Association
Series 1996-M4, Class A
7.750% 01/15/30 6,949 7,104,874
Federal National Mortgage Association
7.000% 01/15/27 2,785 2,738,438
FGLMC Pool G00143
7.500% 06/01/23 1,028 1,033,712
GE Capital Mortgage Services, Inc.
Series 1994-12, Class A8
6.000% 03/25/09 5,280 5,093,919
GNMA Pool 326150
7.000% 09/15/23 271 266,671
GNMA Pool 333668
7.000% 07/15/23 741 728,639
GNMA Pool 345039
7.000% 09/15/23 823 809,598
GNMA Pool 345536
7.000% 01/15/24 529 520,076
GNMA Pool 351638
7.000% 01/15/24 741 729,124
GNMA Pool 377553
7.000% 07/15/25 740 723,691
GNMA Pool 383330
7.000% 12/01/23 963 942,027
GNMA Pool 391901
7.000% 12/01/23 808 790,721
GNMA Pool 397755
7.000% 05/15/24 682 670,823
GNMA Pool 406568
7.000% 07/15/25 965 944,040
GNMA Pool 407660
7.000% 12/01/23 859 840,024
GNMA Pool 780023
7.000% 09/15/24 877 861,711
GNMA Pool 8747
6.500% 01/15/25 262 267,812
COUPON MATURITY PAR
RATE (DOUBLE DAGGER) (000) VALUE(DAGGER)
------ --------------- ----- -------------
COLLATERALIZED MORTGAGE OBLIGATIONS (CONTINUED)
Merrill Lynch Mortgage Investors, Inc.
Series 1996-C2, Class A3
6.960% 11/21/28 $1,345 $ 1,335,543
Mortgage Capital Funding Inc. Series
1996-MC2, Class A3
7.008% 12/21/26 2,450 2,456,125
Prudential Home Mortgage Securities
1992-6, Class A3
7.000% 04/01/97 324 323,867
Ryland Acceptance Corporation
Series 74, Class D
7.500% 08/01/13 545 544,503
-----------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $67,702,249) 67,871,843
-----------
CORPORATE BONDS -- 26.9%
BANKS -- 3.1%
First Chicago NBD Bancorp
7.250% 08/15/04 3,320 3,398,850
Korea Development Bank
5.875% 12/01/98 4,000 3,975,000
State Bank of New South Wales
10.375% 04/26/99 750 813,375
-----------
8,187,225
-----------
FINANCE -- 11.3%
American Express Credit Corp.
6.125% 11/15/01 440 433,950
Associates Corp.
5.750% 10/15/03 190 180,975
Banco Bibao Vizcaya, SA International
Finance
6.875% 10/27/05 4,080 3,988,200
BankAmerica Institutional Series 144A
8.070% 12/31/26 875 885,938
Beneficial Corp.
8.400% 05/15/08 20 22,225
Beneficial Corp., MTN
9.130% 07/25/01 1,000 1,095,000
British Gas Financial European Bond
8.375% 09/08/99 3,485 3,646,181
Caterpillar Financial Services Corp., MTN
8.290% 03/04/99 1,000 1,040,000
First Chicago NBD Institutional
7.950% 12/01/26 1,725 1,718,531
General Motors Acceptance Corp., MTN
8.250% 12/09/97 2,000 2,044,980
Household Finance Corp.
8.550% 10/15/04 3,000 3,116,250
Lehman Brothers Holdings
6.890% 10/10/00 4,600 4,611,500
Merrill Lynch
6.500% 04/01/01 3,940 3,905,525
Sears Overseas Financial
0.000% 07/12/98 3,000 2,741,250
-----------
29,430,505
-----------
See Notes to Financial Statements.
30
<PAGE>
HARRIS INSIGHT FUNDS
SHORT/INTERMEDIATE FUND
STATEMENT OF NET ASSETS (CONTINUED)
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
COUPON MATURITY PAR
RATE (DOUBLE DAGGER) (000) VALUE(DAGGER)
------ --------------- ----- -------------
CORPORATE BONDS (CONTINUED)
INDUSTRIAL -- 11.2%
Atlantic Richfield
9.125% 03/01/11 $ 100 $ 118,125
Browning - Ferris Industries Inc.
6.100% 01/15/03 1,000 968,750
E.I. DuPont de Nemours & Co.
7.500% 06/11/99 440 451,660
Ford Motor Co.
9.000% 09/15/01 4,000 4,370,000
H.J. Heinz Co.
7.500% 04/26/00 1,000 1,031,250
Hertz Corp.
8.300% 02/02/98 1,000 1,025,000
Lockheed Martin Corp.
6.550% 05/15/99 4,200 4,226,250
National Power European Bond
7.125% 07/11/01 4,500 4,567,500
Pohang Iron & Steel
7.125% 11/01/06 1,970 1,965,075
Ryder Systems, Inc.
5.770% 04/21/98 1,475 1,471,313
Sears Roebuck, Co., MTN
8.390% 02/14/02 800 863,000
Telstra Corp. Ltd.
6.500% 11/28/05 4,625 4,520,938
Walt Disney Co.
6.375% 03/30/01 2,785 2,774,556
Waste Management Technologies, Inc.
6.250% 10/15/00 700 693,875
-----------
29,047,292
-----------
UTILITIES-ELECTRIC -- 1.3%
Commonwealth Edison Co.
6.000% 03/15/98 715 714,106
Consolidated Edison
6.625% 07/01/05 2,150 2,117,750
Pacific Gas & Electric
7.875% 03/01/02 500 529,375
-----------
3,361,231
-----------
TOTAL CORPORATE BONDS
(Cost $69,524,828) 70,026,253
-----------
VARIABLE RATE OBLIGATIONS -- 1.6%
Comdisco Inc. (Cost $4,000,578)
5.750% 02/24/97 4,000 4,003,947
-----------
U.S. TREASURY OBLIGATIONS -- 19.1%
U.S. Treasury Bonds
8.750% 08/15/20 1,360 1,676,893
-----------
COUPON MATURITY PAR
RATE (DOUBLE DAGGER) (000) VALUE(DAGGER)
------ --------------- ----- -------------
U.S. TREASURY OBLIGATIONS (CONTINUED)
U.S. Treasury Notes
8.875% 11/15/98 $ 900 $ 947,277
7.500% 10/31/99 1,515 1,570,782
7.875% 11/15/99 5,000 5,241,850
7.750% 11/30/99 3,320 3,470,097
7.750% 12/31/99 2,850 2,982,582
5.625% 11/30/00 3,500 3,436,755
5.500% 12/31/00 5,800 5,666,135
6.625% 06/30/01 4,430 4,502,829
5.750% 08/15/03 1,000 970,520
7.875% 11/15/04 17,120 18,693,322
7.000% 07/15/06 515 535,291
------------
48,017,440
------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $49,605,408) 49,694,333
------------
SHARES
--------
TEMPORARY INVESTMENTS -- 1.1%
Goldman Sachs Financial Square
Money Market Portfolio
(Cost $2,930,017) 2,930,017 2,930,017
------------
TOTAL INVESTMENTS-- 100.3%
(Cost $259,905,401) 260,850,584
------------
LIABILITIES IN EXCESS OF
OTHER ASSETS-- (0.3%) (845,226)
------------
NET ASSETS -- 100.0%
Applicable to 25,204,518 and 437,115
shares outstanding of Institutional
Class and Class A, respectively,
$.001 par value; 200,000,000
authorized shares (Note 9) $260,005,358
============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER INSTITUTIONAL
CLASS SHARE ($255,573,048/25,204,518) $10.14
======
NET ASSET VALUE AND REDEMPTION
PRICE PER CLASS A SHARE
($4,432,310/437,115) $10.14
======
MAXIMUM PUBLIC OFFERING PRICE
PER CLASS A SHARE (NOTE 6) $10.62
======
- ---------------
(DAGGER) See Note 2a to the Financial Statements.
(DOUBLE DAGGER) Maturity dates for asset-backed securities, including
collateralized mortgage obligations, represent weighted average
maturities of the underlying securities at December 31, 1996.
MTN -- Medium Term Note.
IO -- Interest Only security.
PO -- Principal Only security.
See Notes to Financial Statements.
31
<PAGE>
HARRIS INSIGHT FUNDS
BOND FUND
STATEMENT OF NET ASSETS
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
COUPON MATURITY PAR
RATE (DOUBLE DAGGER) (000) VALUE(DAGGER)
------ --------------- ----- -------------
AGENCY OBLIGATIONS -- 14.7%
Federal National Mortgage Association
7.000% 11/01/11 $ 48 $ 48,026
7.000% 11/01/11 127 126,807
7.000% 11/01/11 55 55,183
7.000% 12/01/11 534 533,557
7.000% 12/01/11 835 834,535
7.000% 12/01/11 419 419,076
Federal National Mortgage Association
Pool #305555
9.000% 01/01/25 500 526,930
Federal National Mortgage Association
Pool #359740
7.000% 10/01/26 334 327,055
Federal National Mortgage Association
Pool #364248
7.000% 01/01/27 342 334,296
Federal National Mortgage Association
Pool #364731
7.000% 12/01/26 334 327,186
Federal National Mortgage Association
8.000% 12/01/26 1,400 1,426,250
Government National Mortgage
Association
7.500% 01/15/26 1,400 1,400,438
-----------
TOTAL AGENCY OBLIGATIONS
(Cost $9,261,636) 6,359,339
-----------
ASSET-BACKED SECURITIES -- 20.2%
Asset Securitization Corp.
7.400% 10/13/26 700 717,063
American Southwest Financial Securities
Corp. Series 1996-FH, Class A1
6.675% 12/30/26 1,000 1,001,249
Bank America Manufactured Housing
Contract Series 1996-1, Class B1
7.875% 10/10/26 500 508,750
Bridgestone/Firestone Master Trust
Series 1996-1, Class A
6.170% 07/01/03 800 795,000
Capita Equipment Receivables Trust
Series 1996-1, Class A4
6.280% 06/15/00 500 500,664
Chase Manhattan Credit Card Master
Trust Series 1996-3, Class A
7.040% 02/15/04 500 512,150
Chemical Master Credit Card Trust
Series 1995-2, Class A
6.230% 06/15/03 610 608,454
Countrywide Funding Corp.
6.750% 03/25/24 776 740,360
8.423% 05/25/24 651 619,223
DLJ Mortgage Acceptance Corp.
Series 1996-M, Class A
9.000% 11/28/11 994 1,019,543
Household Credit Card Master Trust I
5.545% 01/15/97 780 781,404
Merrill Lynch Mortgage Series
1996-C2, Class A3
6.960% 11/21/28 290 287,961
COUPON MATURITY PAR
RATE (DOUBLE DAGGER) (000) VALUE(DAGGER)
------ --------------- ----- -------------
ASSET-BACKED SECURITIES (CONTINUED)
Standard Credit Card Master Trust
Series 1995-3A
7.850% 02/07/02 $ 250 $ 260,904
Standard Credit Card Master
Series 1994-3, Class B
7.000% 04/07/01 400 405,697
-----------
TOTAL-ASSET BACKED SECURITIES
(Cost $8,697,713) 8,758,422
-----------
COLLATERALIZED MORTGAGE OBLIGATIONS -- 9.4%
Federal Home Loan Mortgage Corp.
Series 1184, Class Z
8.000% 12/15/21 1,126 1,165,056
Federal Home Loan Mortgage Corp.
Series 1865
7.000% 07/15/26 750 721,100
Federal Home Loan Mortgage Corp.
Series 1871, Class H
7.000% 11/15/12 1,000 991,153
Federal National Mortgage Association
Series 1996-1, Class A
6.000% 12/25/08 800 737,625
Federal National Mortgage Association
7.000% 12/25/22 516 470,325
-----------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $1,183,443) 4,085,259
-----------
CORPORATE BONDS -- 23.1%
FINANCE -- 7.6%
Allstate Finance II
7.830% 12/01/45 600 588,180
Bank of America, Inc. Series 144A
8.070% 12/31/26 400 405,000
Banco Bibao Vizcaya, SA
International Finance
6.875% 10/27/05 250 244,375
General Motors Acceptance Corp.
6.625% 10/15/05 210 204,750
Lehman Brothers Holdings Co.
7.125% 09/15/03 400 399,500
Mellon Financial
6.300% 06/01/00 500 497,500
Merrill Lynch
6.500% 04/01/01 200 198,750
Smith Barney Holdings
6.500% 10/15/02 200 198,750
State Bank New South Wales
10.375% 04/26/99 500 542,250
-----------
3,279,055
-----------
INDUSTRIAL -- 12.9%
Abbey National PLC
7.350% 10/15/06 190 193,431
Comdisco, Inc.
6.050% 10/31/97 500 500,540
Dayton-Hudson Co.
9.750% 11/01/98 500 530,000
See Notes to Financial Statements.
32
<PAGE>
HARRIS INSIGHT FUNDS
BOND FUND
STATEMENT OF NET ASSETS (CONTINUED)
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
COUPON MATURITY PAR
RATE (DOUBLE DAGGER) (000) VALUE(DAGGER)
------ --------------- ----- -------------
CORPORATE BONDS (CONTINUED)
INDUSTRIAL (CONTINUED)
Ford Motor Co.
8.875% 01/15/22 $ 200 $ 230,750
Hertz Corp.
6.500% 04/01/00 500 500,000
Honeywell Inc.
7.350% 05/15/00 200 205,500
Lockheed Martin
7.650% 05/01/16 200 206,250
National Power Euro Bond
7.125% 07/11/01 500 507,500
Pepsico, Inc. Euro Bond
5.800% 08/31/98 500 498,150
Pohang Iron & Steel
7.125% 11/01/06 215 214,291
Procter & Gamble Euro Bond
9.625% 01/14/01 400 440,500
Ryder Systems, Inc.
5.770% 04/21/98 400 399,000
Telstra Corp. Ltd. Euro Bond
6.500% 11/28/05 750 733,125
Wal-Mart Stores Euro Bond
6.750% 05/24/02 125 127,188
Wal-Mart Stores
9.100% 07/15/00 100 108,375
Xerox Corp. Euro Bond
5.750% 07/21/00 200 195,200
-----------
5,589,800
-----------
UTILITIES -- 2.2%
Bell South Telecommunication
7.625% 05/15/35 215 215,000
British Gas Financial Euro Bond
8.375% 09/08/99 200 209,250
GTE Corp.
8.850% 03/01/98 500 515,625
-----------
939,875
-----------
YANKEE -- 0.4%
Quebec Province, Series NN
7.125% 02/09/24 200 190,750
-----------
TOTAL CORPORATE BONDS
(Cost $9,951,365) 9,999,480
-----------
U.S. TREASURY OBLIGATIONS -- 31.8%
U.S. Treasury Bonds
7.500% 11/15/16 2,970 3,218,232
-----------
COUPON MATURITY PAR
RATE (DOUBLE DAGGER) (000) VALUE(DAGGER)
------ --------------- ----- -------------
U.S. TREASURY OBLIGATIONS (CONTINUED)
U.S. Treasury Notes
5.125% 11/30/98 $ 1,000 $ 987,190
6.250% 08/31/00 1,950 1,957,995
5.625% 02/28/01 1,250 1,225,687
7.875% 11/15/04 5,480 5,983,611
7.500% 02/15/05 355 379,623
-----------
10,534,106
-----------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $13,664,510) 13,752,338
-----------
SHARES
--------
TEMPORARY INVESTMENTS -- 6.0%
Goldman Sachs Financial Square
Money Market Portfolio 612,198 612,198
Goldman Sachs Institutional Liquid
Assets Money Market Portfolio 1,964,957 1,964,957
-----------
TOTAL TEMPORARY INVESTMENTS
(Cost $2,577,155) 2,577,155
-----------
TOTAL INVESTMENTS-- 105.2% (Cost $45,335,822) 45,531,993
-----------
LIABILITIES IN EXCESS OF
OTHER ASSETS -- (5.2%)
Payable for Investments Purchased (2,576,702)
Other Assets and Liabilities, Net 317,231
-----------
Total Liabilities in Excess of
Other Assets (2,259,471)
-----------
NET ASSETS -- 100.0%
Applicable to 4,283,385 and 12,929
shares of beneficial interest
outstanding of Institutional Class
and Class A, respectively,
$.001 par value (Note 9) $ 43,272,522
============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER INSTITUTIONAL
CLASS SHARE ($43,142,310/4,283,385) $10.07
======
NET ASSET VALUE ANDREDEMPTION
PRICE PER CLASS A SHARE
($130,212/12,929) $10.07
======
MAXIMUM PUBLIC OFFERING PRICE
PER CLASS A SHARE (NOTE 6) $10.54
======
- ---------------
(DAGGER) See Note 2a to the Financial Statements.
(DOUBLE DAGGER) Maturity dates for asset-backed securities, including
collateralized mortgage obligations, represent weighted average
maturities of the underlying securities at December 31, 1996.
See Notes to Financial Statements.
33
<PAGE>
HARRIS INSIGHT FUNDS
INTERMEDIATE TAX-EXEMPT FUND
STATEMENT OF NET ASSETS
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
ANNUALIZED PAR
YIELD/RATE MATURITY (000) VALUE(DAGGER)
- ---------- -------- ------- ------------
MUNICIPAL BONDS -- 96.8%
ARIZONA -- 12.4%
Arizona State Transportation Highway
Revenue
6.500% 07/01/11 $6,300 $ 6,914,244
Maricopa County, Arizona, Unified
School District No. 48, Scottsdale
7.750% 07/01/02 1,570 1,815,313
Phoenix, Arizona, General Obligation
Bonds
7.500% 07/01/08 5,000 6,062,500
Salt River Project Arizona Agriculture
and Improvement District
6.500% 01/01/04 6,050 6,692,813
Tucson, Arizona, Street and Highway
User Revenue Series A
7.000% 07/01/11 1,800 2,112,750
7.000% 07/01/12 2,000 2,342,500
-----------
25,940,120
-----------
CALIFORNIA -- 7.1%
California State General Obligation Bonds
6.200% 09/01/02 1,750 1,896,563
6.750% 04/01/07 1,750 2,008,125
Riverside County, California, Transportation
Commission Sales Tax Revenue
Series A
6.000% 06/01/06 2,000 2,177,500
Riverside County, California, Transportation
Commission Sales Tax Revenue
Series A
6.000% 06/01/07 2,430 2,642,625
San Diego, California, Public Facilities
Financing Authority Sewer Revenue
6.000% 05/15/05 5,600 6,076,000
-----------
14,800,813
-----------
COLORADO -- 2.8%
Denver, Colorado, City and County
Airport Revenue Bond, Series A
7.500% 11/15/06 5,000 5,812,500
-----------
CONNECTICUT -- 1.0%
Connecticut State General Obligation
Bonds Series B
5.300% 09/15/07 2,000 2,050,000
-----------
DELAWARE -- 1.9%
Delaware State General Obligation Bonds
6.125% 04/01/01 3,700 3,963,625
-----------
FLORIDA -- 3.4%
Gainesville, Florida, Utilities System
Revenue Series A
5.750% 10/01/07 1,500 1,597,500
Reedy Creek, Florida, Improvement
Dist., Florida Utilities Revenue
6.500% 10/01/16 5,000 5,475,000
-----------
7,072,500
-----------
ANNUALIZED PAR
YIELD/RATE MATURITY (000) VALUE(DAGGER)
- ---------- -------- ------- ------------
MUNICIPAL BONDS (CONTINUED)
GEORGIA -- 3.4%
Georgia State General Obligation Bonds
Series F
6.500% 12/01/06 $3,370 $ 3,833,375
Georgia State General Obligation Bonds
6.500% 08/01/02 3,000 3,315,000
-----------
7,148,375
-----------
HAWAII -- 1.7%
Honolulu, Hawaii, City & County
Reference Series A
7.350% 07/01/05 3,000 3,536,250
-----------
ILLINOIS -- 11.3%
Chicago, Illinois, Metropolitan Water
Capital Improvement Bonds
6.600% 01/01/02 2,600 2,830,750
Chicago, Illinois, Metropolitan Water
Reclamation District-Greater Chicago
6.300% 12/01/09 2,000 2,155,000
Cook County, Illinois, General
Obligation Bonds
7.000% 11/01/00 2,000 2,217,500
DuPage County, Illinois, First
Preservation District
6.000% 11/01/03 2,000 2,165,000
Illinois Development Financial Authority
Revenue School District Rockford
School 205
6.550% 02/01/09 1,000 1,117,500
Illinois State Government General
Obligation Unlimited Bond
5.500% 08/01/01 3,500 3,640,000
Metropolitan Pier Illinois Revenue
6.000% 12/15/06 5,000 5,375,000
Sangamon County, Illinois School District
6.900% 01/01/07 2,700 3,101,625
University of Illinois Revenue Bonds
5.800% 10/01/97 1,000 1,016,140
-----------
23,618,515
-----------
INDIANA -- 4.4%
Indiana Health Facility Financing
Authority Hospital Revenue
5.150% 02/15/05 4,000 4,236,360
Indiana Municipal Power Agency,
Power Supply System Revenue
Reference Series B
6.000% 01/01/11 3,000 3,202,500
Indiana State Office Building
Commission Correctional Facilities
Revenue Service B Women's Prison
5.200% 07/01/08 1,835 1,828,119
-----------
9,266,979
-----------
KANSAS -- 1.4%
Kansas State Department of Transportation
Highway Revenue Bonds
7.250% 03/01/04 2,555 2,970,188
-----------
See Notes to Financial Statements.
34
<PAGE>
HARRIS INSIGHT FUNDS
INTERMEDIATE TAX-EXEMPT FUND
STATEMENT OF NET ASSETS (CONTINUED)
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
ANNUALIZED PAR
YIELD/RATE MATURITY (000) VALUE(DAGGER)
- ---------- -------- ------- ------------
MUNICIPAL BONDS (CONTINUED)
MARYLAND -- 2.8%
Maryland State Department of
Transportation
4.200% 06/15/03 $2,600 $ 2,551,250
Montgomery County, Maryland,
General Obligation Bonds
8.600% 05/01/03 1,000 1,220,000
Maryland State General Obligation Bonds
5.300% 10/15/99 2,000 2,065,000
-----------
5,836,250
-----------
MASSACHUSETTS -- 2.7%
Massachusetts State Health &
Education Facilities Authority
Revenue Bond
7.125% 10/01/10 1,500 1,651,875
Massachusetts State Water Residential
Authority Series A
6.500% 07/15/21 3,500 3,885,000
-----------
5,536,875
-----------
MICHIGAN -- 5.6%
Detroit, Michigan, Water System
5.200% 07/01/08 1,000 1,006,250
5.300% 07/01/09 1,625 1,639,219
Oakland County, Michigan, Economic
Development
6.375% 11/01/04 8,200 8,968,750
-----------
11,614,219
-----------
MINNESOTA -- 1.3%
Minnesota State General Obligation Bonds
4.900% 08/01/02 2,600 2,665,000
-----------
NEBRASKA -- 0.5%
Omaha Nebraska General Obligation Bonds
5.125% 12/01/99 1,070 1,099,425
-----------
NEW JERSEY -- 2.6%
New Jersey State Highway, Garden
State Parkway General Revenue
6.200% 01/01/10 5,000 5,456,250
-----------
NEW YORK -- 3.9%
New York State General Obligation Bonds
Series B
6.375% 08/15/00 3,750 3,998,438
New York State Housing Finance
Agency Special Health Facilities
New York City-Series A
6.700% 05/01/99 4,000 4,225,000
-----------
8,223,438
-----------
OHIO -- 4.1%
Warren Ohio Hospital Revenue Bond
Series B
7.300% 11/15/14 7,290 8,538,413
-----------
ANNUALIZED PAR
YIELD/RATE MATURITY (000) VALUE(DAGGER)
- ---------- -------- ------- ------------
MUNICIPAL BONDS (CONTINUED)
PENNSYLVANIA -- 1.1%
Washington County Authority Lease
Revenue Municipal Facilities-Pool
Capital C Subseries C-1C
7.450% 12/15/18 $2,000 $ 2,247,500
-----------
SOUTH CAROLINA -- 1.4%
South Carolina State Capital
Improvement Series V
6.500% 02/01/00 2,635 2,809,569
-----------
TENNESSEE -- 2.4%
Tennessee State General Obligation Bonds
Series B
5.500% 05/01/04 4,800 5,082,000
-----------
TEXAS -- 5.8%
Bexar County, Texas, Detention Facilities
7.250% 06/15/04 1,000 1,162,500
Harris County, Texas, General Obligation
Bonds
9.000% 06/01/02 1,250 1,507,813
Plano, Texas, Independent School District
5.900% 02/15/10 1,000 1,041,250
Spring Branch, Texas, Independent
School District
6.500% 02/01/02 1,750 1,905,313
University of Texas Revenue Financing
System Series B
6.000% 08/15/06 3,540 3,867,450
West Central Texas Municipal Water
District Revenue Water Transmission
Line Contract
6.750% 11/01/03 2,325 2,601,094
-----------
12,085,420
-----------
UTAH -- 4.6%
Utah State General Obligation Bonds
6.000% 07/01/01 5,000 5,356,250
Utah State Gereral Obligation Bonds
Series 1991
5.500% 07/01/98 4,100 4,197,375
-----------
9,553,625
-----------
WASHINGTON -- 1.4%
Washington State Refunding
5.600% 09/01/04 2,750 2,904,688
-----------
WISCONSIN -- 5.8%
Appleton, Wisconsin, Area School
District General Obligation Bonds
5.000% 04/01/09 2,000 1,970,000
Kenosha, Wisconsin Waterworks
Revenue
4.700% 12/01/01 3,000 3,011,250
Milwaukee, Wisconsin, General
Obligation Bonds
6.000% 02/01/09 1,380 1,481,775
See Notes to Financial Statements.
35
<PAGE>
HARRIS INSIGHT FUNDS
INTERMEDIATE TAX-EXEMPT FUND
STATEMENT OF NET ASSETS (CONTINUED)
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
ANNUALIZED PAR
YIELD/RATE MATURITY (000) VALUE(DAGGER)
- ---------- -------- ------- ------------
MUNICIPAL BONDS (CONTINUED)
WISCONSIN (CONTINUED)
Wisconsin State Transportation
Revenue Series A
7.500% 07/01/04 $2,000 $ 2,332,500
Wisconsin State Transportation Revenue
6.250% 07/01/02 3,135 3,381,881
------------
12,177,406
------------
TOTAL MUNICIPAL BONDS
(Cost $198,561,695) 202,009,943
------------
SHARES
--------
TEMPORARY INVESTMENTS -- 4.5%
Federated Tax-Free Obligation Fund 5,032,553 5,032,553
Goldman Sachs Financial Square Tax-
Exempt Money Market Portfolio 4,447,322 4,447,322
------------
TOTAL TEMPORARY INVESTMENTS
(Cost $9,479,875) 9,479,875
------------
TOTAL INVESTMENTS-- 101.3%
(Cost $208,041,570) 211,489,818
------------
LIABILITIES IN EXCESS OF
OTHER ASSETS-- (1.3%) (2,799,356)
------------
NET ASSETS -- 100.0%
Applicable to 19,725,200 and 4.655
shares of beneficial interest outstanding
of Institutional Class and Class A,
respectively, $.001 par value
(Note 9) $208,690,462
============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER INSTITUTIONAL
CLASS SHARE ($208,690,413/19,725,200) $10.58
======
NET ASSET VALUE AND REDEMPTION
PRICE PER CLASS A SHARE ($49.27/4.655) $10.58
======
MAXIMUM PUBLIC OFFERING PRICE PER
CLASS A SHARE (NOTE 6) $11.08
======
- ---------------
(DAGGER) See Note 2a to the Financial Statements.
See Notes to Financial Statements.
36
<PAGE>
HARRIS INSIGHT FUNDS
TAX-EXEMPT FUND
STATEMENT OF NET ASSETS
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
ANNUALIZED PAR
YIELD/RATE MATURITY (000) VALUE(DAGGER)
- ---------- -------- ------- ------------
MUNICIPAL BONDS -- 96.1%
ARIZONA -- 5.0%
Arizona State Transportation Board
Highway Revenue Series B
8.000% 07/01/06 $4,000 $ 4,949,998
Phoenix, Arizona, Civic Corporation
Water System Revenue
5.625% 07/01/09 3,345 3,424,444
-----------
8,374,442
-----------
CALIFORNIA -- 6.6%
California State, General Obligation
Bonds
5.900% 03/01/25 1,000 1,022,500
East Bay, California, Municipal
Utilities
District, Water System Revenue
5.000% 06/01/14 3,500 3,320,625
Los Angeles, California, Waste Water
System Revenue Series A
4.750% 02/01/09 4,000 3,820,000
Pasadena, California, Water Revenue
5.000% 07/01/18 3,000 2,718,750
-----------
10,881,875
-----------
CONNECTICUT -- 1.8%
Connecticut State Series B
6.000% 11/15/01 2,725 2,922,563
-----------
FLORIDA -- 8.6%
Broward County, Florida, General
Obligation Bonds
12.500% 01/01/06 4,000 6,175,000
Florida State, Broward County
Expressway Authority
9.875% 07/01/09 4,000 5,745,000
Orlando, Florida, Utilities Commission
Water and Electric Revenue BANS
Series 1985B
6.750% 10/01/17 1,000 1,168,750
Orlando, Florida, Utilities Commission
Water and Electric
6.000% 10/01/10 1,000 1,076,250
-----------
14,165,000
-----------
GEORGIA -- 3.2%
Atlanta, Georgia, Airport Revenue
6.000% 01/01/07 2,000 2,170,000
Metropolitan Atlanta Rapid
Transportation Authority, Georgia
Sales Tax Revenue
6.200% 07/01/10 2,890 3,146,488
-----------
5,316,488
-----------
HAWAII -- 1.1%
Hawaii State General Obligation Bonds
Series B
5.600% 10/01/03 1,755 1,858,106
-----------
ANNUALIZED PAR
YIELD/RATE MATURITY (000) VALUE(DAGGER)
- ---------- -------- ------- ------------
MUNICIPAL BONDS (CONTINUED)
ILLINOIS -- 11.9%
Cook County, Illinois, General
Obligation Bonds
5.875% 11/15/22 $6,280 $ 6,334,950
Illinois Development Finance Authority
Revenue School District PG-
Rockford School 205
6.550% 02/01/09 1,000 1,117,500
Illinois Development Finance Authority
Revenue, School District Number U46
9.000% 01/01/07 4,250 5,551,563
Illinois Development Finance Authority
Revenue
6.650% 02/01/11 4,000 4,520,000
Illinois State Sales Tax Revenue
Series V
6.375% 06/15/20 1,000 1,048,750
Metropolitan Pier & Exposition
Authority, Illinois Dedicated State
Tax Revenue
6.500% 06/01/06 1,000 1,108,750
-----------
19,681,513
-----------
INDIANA -- 4.9%
Indiana Municipal Power Agency
Supply System Revenue Series B
6.000% 01/01/11 6,455 6,890,713
Saint Joseph's County, Indiana,
Educational Facilities Revenue
University of Notre Dame
6.500% 03/01/26 1,000 1,133,750
-----------
8,024,463
-----------
MARYLAND -- 4.2%
Maryland State Department
Transportation Construction Revenue
4.125% 06/15/02 3,480 3,432,150
Maryland State Health and Higher
Education Facility Authority, Doctors
Community Hospital
8.750% 07/01/22 3,000 3,472,500
-----------
6,904,650
-----------
MICHIGAN -- 4.4%
Detroit, Michigan, Water Supply
System Revenue
6.500% 07/01/15 1,000 1,121,250
Michigan State Trunk Line Revenue
Series A
5.250% 11/15/04 3,035 3,122,256
Oakland County, Michigan, Economic
Development Corporation, Limited
Obligation Revenue
6.900% 11/01/14 2,725 3,065,625
-----------
7,309,131
-----------
See Notes to Financial Statements.
37
<PAGE>
HARRIS INSIGHT FUNDS
TAX-EXEMPT FUND
STATEMENT OF NET ASSETS (CONTINUED)
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
ANNUALIZED PAR
YIELD/RATE MATURITY (000) VALUE(DAGGER)
- ---------- -------- ------- ------------
MUNICIPAL BONDS (CONTINUED)
MINNESOTA -- 1.5%
Metropolitan Council Minneapolis-
St. Paul Metropolitan Area
5.150% 09/01/08 $2,425 $ 2,431,063
-----------
NEW JERSEY -- 3.1%
New Jersey State General Obligation
Bonds
6.250% 09/15/00 2,750 2,949,375
New Jersey State Highway Authority
6.200% 01/01/10 2,000 2,182,500
-----------
5,131,875
-----------
NEW YORK -- 8.1%
New York State General Obligation Bonds
Series B
6.375% 08/15/00 6,000 6,397,500
New York, New York, Municipal Water
Finance Authority Water and Sewage
Revenue
5.625% 06/15/19 3,000 2,936,250
Port Authority of New York and New
Jersey Consolidated Series One
Hundred Revenue
5.625% 10/15/17 4,000 4,030,000
-----------
13,363,750
-----------
OHIO -- 3.7%
Centerville, Ohio, General Obligation
Bonds
5.625% 12/01/26 1,930 1,939,650
Ohio State Higher Education Facilities
Community Revenue, Denison
University Project
5.350% 11/01/10 1,370 1,363,150
5.400% 11/01/11 1,000 995,000
Ohio State Water Development
Authority Revenue
5.000% 06/01/98 1,750 1,776,250
-----------
6,074,050
-----------
OKLAHOMA -- 2.0%
South Oklahoma City, Oklahoma
Hospital Treasury Revenue
9.750% 02/01/10 1,300 1,743,625
Tulsa, Oklahoma, Tulsa Industrial
Authority Revenue University of
Tulsa Series A
6.000% 10/01/16 1,500 1,597,500
-----------
3,341,125
-----------
SOUTH CAROLINA -- 2.1%
South Carolina State Public Service
Authority Revenue Series B
5.875% 01/01/23 3,450 3,514,688
-----------
ANNUALIZED PAR
YIELD/RATE MATURITY (000) VALUE(DAGGER)
- ---------- -------- ------- ------------
MUNICIPAL BONDS (CONTINUED)
SOUTH DAKOTA -- 3.2%
South Dakota State Building Authority
Lease Revenue Series A
4.800% 12/01/04 $5,375 $ 5,341,406
------------
TENNESSEE -- 1.3%
Shelby County, Tennessee, School
District, Series A
5.625% 06/01/07 2,000 2,097,500
------------
TEXAS -- 9.8%
Dallas, Texas, General Obligation Bonds
6.000% 02/15/03 2,320 2,514,300
Harris County, Texas, Unlimited Tax
Subordinate Lien on Revenues Toll
Road 1985 A, B, C, D, E
5.500% 10/01/12 2,540 2,543,175
Houston, Texas, Water and Sewage
Revenue
6.200% 12/01/23 4,750 4,963,750
Texas Municipal Power Agency Revenue
5.100% 09/01/03 6,000 6,150,000
------------
16,171,225
------------
VIRGINIA -- 2.9%
Norfolk, Virginia, Water Revenue
5.875% 11/01/15 2,400 2,469,000
Richmond, Virginia, General Obligation
Bonds Series B
6.500% 07/15/02 2,160 2,367,900
------------
4,836,900
------------
WASHINGTON -- 1.9%
Washington State Public Power Supply
System Nuclear Project No. 1 Revenue
6.000% 07/01/05 3,000 3,191,250
------------
WISCONSIN -- 4.8%
Kenosha, Wisconsin, Waterworks
Revenue
4.700% 12/01/01 3,000 3,011,250
Wisconsin State General Obligation
Bonds Series 3
5.250% 11/01/10 5,000 4,987,500
------------
7,998,750
------------
TOTAL MUNICIPAL BONDS
(Cost $153,448,568) 158,931,813
------------
See Notes to Financial Statements.
38
<PAGE>
HARRIS INSIGHT FUNDS
TAX-EXEMPT FUND
STATEMENT OF NET ASSETS (CONTINUED)
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
SHARES VALUE(DAGGER)
-------- -------------
TEMPORARY INVESTMENTS -- 2.7%
Federated Tax-Free Obligation Fund 1,953,722 $ 1,953,722
Goldman Sachs Financial Square
Tax-Exempt Money Market Portfolio 2,599,269 2,599,269
------------
TOTAL TEMPORARY INVESTMENTS
(Cost $4,552,991) 4,552,991
------------
TOTAL INVESTMENTS -- 98.8%
(Cost $158,001,559) 163,484,804
------------
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 1.2% 1,941,249
------------
NET ASSETS -- 100.0%
Applicable to 16,133,092 and 3,719
shares of beneficial interest outstanding
of Institutional Class and Class A,
respectively, $.001 par value (Note 9) $165,426,053
============
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER INSTITUTIONAL CLASS SHARE
($165,387,937/16,133,092) $10.25
======
NET ASSET VALUE AND REDEMPTION
PRICE PER CLASS A SHARE ($38,116/3,719) $10.25
======
MAXIMUM PUBLIC OFFERING PRICE PER
CLASS A SHARE (NOTE 6) $10.73
======
- ---------------
(DAGGER) See Note 2a to the Financial Statements.
BANS -- Bond Anticipation Note.
See Notes to Financial Statements.
39
<PAGE>
HARRIS INSIGHT FUNDS
CONVERTIBLE FUND
STATEMENT OF NET ASSETS
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
SHARES VALUE(DAGGER)
-------- -------------
COMMON STOCK -- 8.9%
ADVERTISING -- 2.8%
Omnicom Group, Inc. 728 $ 33,306
-----------
INDUSTRIAL -- 2.2%
U.S. Filter Corp.* 828 26,289
-----------
RETAIL -- 3.9%
Pier 1 Imports, Inc. 2,625 46,266
-----------
TOTAL COMMON STOCK
(Cost $61,885) 105,861
-----------
CONVERTIBLE PREFERRED STOCK -- 41.1%
BANKS AND SAVINGS AND LOANS -- 5.8%
Ahmanson, H.F. & Co. 230 16,042
First Chicago NBD Corp. 500 45,125
Sovereign Bancorp 100 6,937
-----------
68,104
-----------
BUILDING AND CONSTRUCTION -- 1.4%
Owens Corning Capital 300 17,100
-----------
COMMUNICATION SERVICES -- 2.8%
Airtouch Communications, Inc. 1,000 27,250
Cox Communications STRYPES 150 3,337
Triathlon Broadcasting Co. 300 2,550
-----------
33,137
-----------
FINANCIAL SERVICES -- 5.5%
Penncorp Financial Group, Inc. 300 25,200
The Money Store 1,000 27,375
Salomon, Inc.* 200 12,050
-----------
64,625
-----------
FOOD AND AGRICULTURE -- 2.4%
IMC Global, Inc. STRYPES 700 28,087
-----------
INDUSTRIAL -- 6.0%
Cooper Industries, Inc. 1,500 29,063
Corning Glass Works 200 12,725
GATX Corp. 500 29,188
-----------
70,976
-----------
INSURANCE -- 1.4%
American General 200 11,000
St. Paul Capital 100 5,538
-----------
16,538
-----------
LEISURE RELATED -- 0.9%
Tyco Toys 1,000 10,125
-----------
METALS -- 0.9%
TIMET Capital Trust 1 200 10,950
-----------
OIL-DOMESTIC -- 1.0%
Ultramar Diamond Shamrock Corp. 200 12,200
-----------
PACKAGING -- 4.4%
Crown Cork & Seal 1,000 52,000
-----------
SHARES VALUE(DAGGER)
-------- -------------
CONVERTIBLE PREFERRED STOCK (CONTINUED)
PAPER-FOREST PRODUCTS -- 3.5%
James River Corp. 800 $ 41,400
-----------
RETAIL -- 1.8%
Ann Taylor 400 20,850
-----------
TECHNOLOGY -- 2.5%
Seagate Technology, Inc.* 761 30,060
-----------
UTILITIES-ELECTRIC -- 0.8%
Citizens Utilities Trust 200 9,550
-----------
TOTAL CONVERTIBLE PREFERRED STOCK
(Cost $399,076) 485,702
-----------
COUPON PAR
RATE MATURITY (000) VALUE(DAGGER)
------ ---------- ----- -------------
CONVERTIBLE CORPORATE BONDS -- 37.1%
AIR TRANSPORTATION -- 2.9%
Alaska Air Group, Inc.
6.875% 06/15/14 $ 35 34,212
-----------
APPAREL -- 3.5%
Guilford Mills, Inc.
6.000% 09/15/12 40 41,500
-----------
FINANCIAL -- 1.7%
Pioneer Financial Services
6.500% 04/01/03 15 20,475
-----------
HEALTHCARE -- 0.8%
Alza Corp.
5.000% 05/01/06 10 9,688
-----------
INDUSTRIAL -- 3.4%
Trinova Corp.
6.000% 10/15/02 40 39,750
-----------
LODGING -- 2.2%
Hilton Hotels
5.000% 05/15/06 25 26,219
-----------
METALS -- 7.8%
Agnico Eagle Mines Ltd.
3.500% 01/27/04 34 30,898
GCV Stillwater Mining
7.000% 05/01/03 25 24,125
Inco Ltd.
7.750% 03/15/16 35 37,012
-----------
92,035
-----------
PETROLEUM-DOMESTIC -- 6.8%
Lomak Petroleum, Inc.
6.000% 02/01/07 25 26,875
Pennzoil Co.
4.750% 10/01/03 20 22,850
USX Corp.
7.000% 06/15/17 30 29,850
-----------
79,575
-----------
See Notes to Financial Statements.
40
<PAGE>
HARRIS INSIGHT FUNDS
CONVERTIBLE FUND
STATEMENT OF NET ASSETS (CONTINUED)
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
COUPON PAR
RATE MATURITY (000) VALUE(DAGGER)
------ ---------- ----- -------------
CONVERTIBLE CORPORATE BONDS (CONTINUED)
TECHNOLOGY -- 8.0%
Altera Corp.
5.750% 06/15/02 $ 15 $ 23,175
Integrated Device Technology
5.500% 06/01/02 15 12,206
Quantum Corp.
6.375% 04/01/02 20 31,550
S3, Inc.
5.750% 10/01/03 25 27,844
-----------
94,775
-----------
TOTAL CONVERTIBLE CORPORATE BONDS
(Cost $387,303) 438,229
-----------
AGENCY OBLIGATIONS -- 10.2%
Federal Farm Credit Bank Discount Note
(Cost $119,961)
5.850% 01/03/97 120 119,961
-----------
SHARES
--------
TEMPORARY INVESTMENTS -- 2.5%
Goldman Sachs Institutional Liquid
Assets Government Portfolio 2,019 2,019
Goldman Sachs Institutional Liquid
Assets Money Market Portfolio 27,289 27,289
-----------
TOTAL TEMPORARY INVESTMENTS
(Cost $29,308) 29,308
-----------
TOTAL INVESTMENTS -- 99.8%
(Cost $997,533) 1,179,061
-----------
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 0.2% 1,936
-----------
NET ASSETS -- 100.0%
Applicable to 107,373 shares
outstanding, $.001 par value;
100,000,000 shares authorized (Note 9) $ 1,180,997
===========
NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE ($1,180,997/107,373) $11.00
======
MAXIMUM PUBLIC OFFERING PRICE PER SHARE
(NOTE 6) $11.52
======
- ---------------
(DAGGER) See Note 2a to the Financial Statements.
* Non-income producing security.
STRYPES -- Structured Yield Product Exchangeable for Stock.
See Notes to Financial Statements.
41
<PAGE>
HARRIS INSIGHT FUNDS
EQUITY FUND
STATEMENT OF NET ASSETS
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
SHARES VALUE(DAGGER)
------ -------------
COMMON STOCK -- 96.9%
ADVERTISING -- 1.8%
Omnicom Group, Inc. 230,300 $ 10,536,225
------------
AEROSPACE -- 6.1%
Lockheed Martin Corp. 163,600 14,969,400
Northrop Grumman Corp. 72,100 5,966,275
Textron, Inc. 146,800 13,835,900
------------
34,771,575
------------
AIR TRANSPORTATION -- 2.8%
AMR Corp.* 48,200 4,247,625
British Airways P.L.C. ADR 115,100 11,826,525
------------
16,074,150
------------
APPAREL -- 1.9%
Fruit of the Loom, Inc.* 133,200 5,044,950
VF Corp. 91,200 6,156,000
------------
11,200,950
------------
AUTOMOTIVE -- 4.6%
Chrysler Corp. 472,400 15,589,200
Ford Motor Co. 338,200 10,780,125
------------
26,369,325
------------
BANKS AND SAVINGS AND LOANS -- 10.7%
Bank of Boston Corp. 194,000 12,464,500
BankAmerica Corp. 127,700 12,738,075
Chase Manhattan Corp. 173,280 15,465,240
Citicorp 40,700 4,192,100
Southtrust Corp. 165,700 5,758,075
Washington Mutual, Inc. 250,900 10,851,425
------------
61,469,415
------------
COAL-GAS-PIPELINES -- 3.3%
Coastal Corp. 394,300 19,271,413
------------
CONSUMER DURABLES -- 0.6%
Mark IV Industries, Inc. 157,400 3,561,175
------------
ELECTRONICS -- 2.2%
Avnet, Inc. 140,000 8,155,000
Harris Corp. 67,175 4,609,884
------------
12,764,884
------------
FINANCIAL SERVICES -- 4.1%
Bear Stearns Companies, Inc. 221,000 6,160,375
Edwards (A.G.), Inc. 92,100 3,096,862
Merrill Lynch & Co., Inc. 100,000 8,150,000
Travelers Group, Inc. 137,200 6,225,450
------------
23,632,687
------------
FOOD AND AGRICULTURE -- 5.0%
Conagra, Inc. 57,100 2,840,725
Dean Foods Co. 268,700 8,665,575
Dole Food, Inc. 231,300 7,835,288
SHARES VALUE(DAGGER)
------ -------------
COMMON STOCK (CONTINUED)
FOOD AND AGRICULTURE (CONTINUED)
IBP, Inc. 213,050 $ 5,166,462
Smithfield Foods, Inc.* 108,900 4,110,975
------------
28,619,025
------------
HOSPITAL SUPPLIES AND SERVICES -- 1.2%
Tenet Healthcare Corp.* 305,200 6,676,250
------------
INSURANCE -- 4.2%
Allstate Corp. 27,954 1,617,838
American Bankers Insurance Co. 87,500 4,451,563
Cigna Corp. 69,200 9,454,450
Conseco, Inc. 138,800 8,848,500
------------
24,372,351
------------
LEISURE RELATED -- 0.6%
Fleetwood Enterprises, Inc. 132,500 3,643,750
------------
OFFICE EQUIPMENT-SERVICES -- 6.3%
Compaq Computer Corp.* 70,500 5,234,625
Dell Computer Corp.* 100,100 5,317,813
Gateway 2000, Inc.* 73,800 3,948,300
International Business Machines
Corp. 122,000 18,422,000
Tech Data Corp.* 131,500 3,583,375
------------
36,506,113
------------
OIL-DOMESTIC -- 4.8%
Atlantic Richfield Co. 69,700 9,235,250
Phillips Petroleum Co. 410,500 18,164,625
------------
27,399,875
------------
OIL-INTERNATIONAL -- 5.3%
Exxon Corp. 39,200 3,841,600
Mobil Corp. 61,050 7,463,362
Texaco, Inc. 198,400 19,468,000
------------
30,772,962
------------
PHARMACEUTICALS -- 5.4%
American Home Products Corp. 106,000 6,214,250
Bergen Brunswig Corp. 280,900 8,005,650
Bristol-Myers Squibb Co. 101,000 10,983,750
Rhone-Poulenc Rorer, Inc. 78,400 6,125,000
------------
31,328,650
------------
PROFESSIONAL SERVICES -- 0.3%
Olsten Corp., Class B 98,050 1,483,006
------------
RETAIL-FOOD -- 3.7%
Safeway, Inc.* 505,400 21,605,850
------------
RETAIL-GENERAL -- 7.4%
Dayton-Hudson Corp. 150,500 5,907,125
Sears, Roebuck & Co. 201,300 9,284,963
T.J.X. Companies, Inc. 366,300 17,353,463
Toys "R" Us, Inc.* 143,100 4,293,000
Waban, Inc.* 216,100 5,618,600
------------
42,457,151
------------
See Notes to Financial Statements.
42
<PAGE>
HARRIS INSIGHT FUNDS
EQUITY FUND
STATEMENT OF NET ASSETS (CONTINUED)
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
SHARES VALUE(DAGGER)
------ -------------
COMMON STOCK (CONTINUED)
TECHNOLOGY -- 2.6%
Intel Corp. 59,300 $ 7,760,887
Western Digital Corp.* 128,200 7,291,375
------------
15,052,262
------------
TELECOMMUNICATIONS -- 0.3%
Lucent Technologies, Inc. 39,321 1,818,596
------------
TOBACCO -- 3.2%
Loews Corp. 45,500 4,288,375
Philip Morris Companies, Inc. 125,700 14,156,962
------------
18,445,337
------------
UTILITIES-ELECTRIC -- 4.3%
General Public Utilities Corp. 425,300 14,300,712
N.Y. State Electric & Gas Corp. 486,000 10,509,750
------------
24,810,462
------------
UTILITIES-TELEPHONE -- 4.2%
British Telecommunications
P.L.C. ADR 141,400 9,703,575
Southern New England
Telecommunications Corp. 196,025 7,620,472
Telefonica De Espania ADR 94,800 6,564,900
------------
23,888,947
------------
TOTAL COMMON STOCK
(Cost $433,100,330) 558,532,386
------------
TEMPORARY INVESTMENTS -- 3.0%
Goldman Sachs Institutional Liquid
Assets Government Portfolio 8,506,078 8,506,078
Goldman Sachs Institutional Liquid
Assets Money Market Portfolio 8,505,720 8,505,720
------------
TOTAL TEMPORARY INVESTMENTS
(Cost $17,011,798) 17,011,798
------------
TOTAL INVESTMENTS -- 99.9%
(Cost $450,112,128) 575,544,184
------------
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 0.1% 647,848
------------
NET ASSETS -- 100.0%
Applicable to 36,605,364 and 501,783
shares outstanding of Institutional
Class and Class A, respectively, $.001
par value; 200,000,000 authorized
shares (Note 9) $576,192,032
============
VALUE(DAGGER)
-------------
NET ASSET VALUE,OFFERING AND REDEMPTION
PRICE PER INSTITUTIONAL CLASS SHARE
($568,400,320/36,605,364) $15.53
======
NET ASSET VALUE AND REDEMPTION
PRICE PER CLASS A SHARE
($7,791,712/501,783) $15.53
======
MAXIMUM PUBLIC OFFERING PRICE
PER CLASS A SHARE (NOTE 6) $16.26
======
- ---------------
(DAGGER) See Note 2a to the Financial Statements.
* Non-income producing security.
ADR -- American Depository Receipt.
See Notes to Financial Statements.
43
<PAGE>
HARRIS INSIGHT FUNDS
EQUITY INCOME FUND
STATEMENT OF NET ASSETS
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
SHARES VALUE(DAGGER)
------ -------------
COMMON STOCK -- 97.3%
AEROSPACE -- 0.4%
Textron, Inc. 1,300 $ 122,522
------------
AUTOMOTIVE -- 3.2%
Chrysler Corp. 13,800 455,400
Ford Motor Co. 17,700 564,188
------------
1,019,588
------------
BANKS -- 2.2%
Chase Manhattan Corp. 7,800 696,150
------------
BEVERAGES -- 0.6%
Coca Cola Enterprises 3,700 179,450
------------
BUSINESS EQUIPMENT & SERVICE -- 0.4%
Cisco Systems, Inc.* 2,000 127,250
------------
CAPITAL GOODS -- 3.1%
Deere & Co. 7,800 316,875
General Electric Co. 6,700 662,463
------------
979,338
------------
COMPUTER AND OFFICE EQUIPMENT -- 6.8%
Compaq Computer Corp.* 5,700 423,225
Dell Computer Corp.* 5,000 265,625
International Business Machines Corp. 4,500 679,500
Seagate Technologies* 17,800 703,100
Sun Microsystems, Inc.* 4,400 112,750
------------
2,184,200
------------
ELECTRONICS -- 0.9%
Harris Corp. 4,100 281,363
------------
ENERGY -- 0.6%
Ogden Corp. 9,900 185,625
------------
ENERGY AND UTILITIES -- 0.9%
GPU, Inc. 9,000 302,625
------------
FINANCIAL SERVICES -- 12.5%
Banc One Corp. 10,930 469,990
Bankers Trust New York Corp. 8,900 767,625
First Chicago NBD Co. 16,471 885,316
Great Western Financial Corp.* 5,000 145,000
Keycorp 13,500 681,750
Merrill Lynch & Co. 9,300 757,950
Student Loan Marketing Association 3,200 298,000
------------
4,005,631
------------
FOOD AND AGRICULTURE -- 0.2%
Sara Lee Corp. 1,400 52,150
------------
HEALTH CARE -- 1.8%
American Home Products Corp. 10,000 586,250
------------
INSURANCE -- 5.1%
Cigna Corp. 7,700 1,052,013
Conseco, Inc. 9,300 592,875
------------
1,644,888
------------
SHARES VALUE(DAGGER)
------ -------------
COMMON STOCK (CONTINUED)
MANUFACTURING-CLOTHING -- 1.1%
VF Corp. 5,200 $ 351,000
------------
OFFICE EQUIPMENT-SERVICES -- 0.4%
Deluxe Corp. 4,000 131,000
------------
OIL-DOMESTIC -- 3.5%
Phillips Petroleum Co. 25,700 1,137,225
------------
OIL-INTERNATIONAL -- 6.4%
Exxon Corp. 13,300 1,303,400
Mobil Corp. 5,000 611,250
Sun Co. 6,155 150,028
------------
2,064,678
------------
PAPER AND FOREST PRODUCTS -- 1.7%
Georgia Pacific Corp. 7,700 554,400
------------
PHARMACEUTICALS -- 4.0%
Bristol-Myers Squibb Co. 11,900 1,294,125
------------
RAW MATERIALS -- 3.1%
Olin Corp. 10,400 391,300
USX-U.S. Steel Group, Inc. 19,200 602,400
------------
993,700
------------
RETAIL -- 4.8%
Penney, J. C. Co. 11,600 565,500
Sears, Roebuck and Co. 21,000 968,625
------------
1,534,125
------------
RETAIL-FOOD -- 0.3%
Safeway, Inc.* 2,500 106,875
------------
RETAIL-MERCHANDISING -- 2.2%
Dayton-Hudson Corp. 11,600 455,300
Waban, Inc.* 9,500 247,000
------------
702,300
------------
TECHNOLOGY -- 8.5%
Honeywell, Inc. 2,800 184,100
Intel Corp. 7,900 1,033,913
Microsoft Corp.* 1,600 132,200
United Technologies Corp. 14,400 950,400
Xerox Corp. 8,100 426,263
------------
2,726,876
------------
TIRES AND RUBBER -- 1.1%
Goodyear Tire & Rubber Co. 6,900 354,488
------------
TOBACCO -- 3.0%
Philip Morris Companies, Inc. 8,400 946,050
------------
TRANSPORTATION -- 3.2%
AMR Corp.* 7,500 660,938
British Airways P.L.C.ADR 3,700 380,175
------------
1,041,113
------------
See Notes to Financial Statements.
44
<PAGE>
HARRIS INSIGHT FUNDS
EQUITY INCOME FUND
STATEMENT OF NET ASSETS (CONTINUED)
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
SHARES VALUE(DAGGER)
------ -------------
COMMON STOCK (CONTINUED)
UTILITIES -- 8.6%
GTE Corp. 16,400 $ 746,200
Nicor, Inc. 3,000 107,250
Pacific Enterprises 20,400 619,650
Public Service Co. Colorado 15,400 598,675
Texas Utilities Co. 16,600 676,450
------------
2,748,225
------------
UTILITIES-ELECTRIC -- 1.5%
Entergy Corp.* 7,700 213,675
Unicom Corp. 10,400 282,100
------------
495,775
------------
UTILITIES-TELEPHONE -- 5.2%
AT&T Corp. 10,200 443,700
BCE, Inc. 4,200 200,550
British Telecommunications
P.L.C. ADR 3,100 212,737
NYNEX Corp. 16,600 798,875
------------
1,655,862
------------
TOTAL COMMON STOCK
(Cost $23,612,650) 31,204,847
------------
TEMPORARY INVESTMENTS -- 2.5%
Dreyfus Cash Management Plus #719 394,837 394,837
Goldman Sachs Financial Square
Money Market Portfolio 389,141 389,141
------------
TOTAL TEMPORARY INVESTMENTS
(Cost $783,978) 783,978
------------
TOTAL INVESTMENTS -- 99.8%
(Cost $24,396,628) 31,988,825
------------
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 0.2% 69,306
------------
NET ASSETS -- 100.0%
Applicable to 2,313,283 and 21,703
shares of beneficial interest
outstanding of Institutional
Class and Class A, respectively,
$.001 par value (Note 9) $ 32,058,131
============
NET ASSET VALUE,OFFERING AND
REDEMPTION PRICE PER INSTITUTIONAL
CLASS SHARE ($31,760,291/2,313,283) $13.73
======
NET ASSET VALUE AND REDEMPTION
PRICE PER CLASS A SHARE
($297,840/21,703) $13.72
======
MAXIMUM PUBLIC OFFERING PRICE
PER CLASS A SHARE (NOTE 6) $14.37
======
- ---------------
(DAGGER) See Note 2a to the Financial Statements.
* Non-income producing security.
ADR -- American Depository Receipt.
See Notes to Financial Statements.
45
<PAGE>
HARRIS INSIGHT FUNDS
GROWTH FUND
STATEMENT OF NET ASSETS
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
SHARES VALUE(DAGGER)
------ -------------
COMMON STOCK -- 99.2%
AEROSPACE -- 1.5%
Textron, Inc. 12,500 $ 1,178,122
------------
BUILDING AND CONSTRUCTION -- 1.4%
Fleetwood Enterprise, Inc. 15,000 412,500
Honeywell, Inc. 10,000 657,500
------------
1,070,000
------------
BUSINESS EQUIPMENT & SERVICE -- 9.3%
Automatic Data Processing, Inc. 10,000 428,750
Cisco Systems, Inc.* 45,000 2,863,125
Computer Sciences Corp.* 14,000 1,149,750
Compaq Computer Corp.* 10,000 742,500
Gateway 2000, Inc.* 7,000 374,500
International Business Machines Corp. 7,000 1,057,000
Xerox Corp. 10,000 526,250
------------
7,141,875
------------
CAPITAL GOODS -- 7.2%
General Electric Co. 28,000 2,768,500
Harnischfeger Industries, Inc. 19,000 914,375
Illinois Tool Works, Inc. 7,000 559,125
United Technologies Corp. 20,000 1,320,000
------------
5,562,000
------------
CHEMICALS -- 1.0%
Dow Chemical Co. 10,000 783,750
------------
CONSUMER NON-DURABLES -- 13.3%
Coca Cola Co. 14,000 736,750
Coca-Cola Enterprises, Inc. 10,000 485,000
Conagra, Inc. 26,700 1,328,325
Fruit of the Loom, Inc.* 10,000 378,750
Gillette Co. 20,000 1,555,000
IBP, Inc. 30,000 727,500
Kimberly-Clark Corp. 8,000 762,000
Pepsico, Inc. 26,000 760,500
Philip Morris Companies, Inc. 16,000 1,802,000
Procter & Gamble Co. 12,000 1,290,000
Service Corp. International 15,000 420,000
------------
10,245,825
------------
CONSUMER SERVICES -- 1.7%
Mattel, Inc. 20,062 556,721
McDonalds Corp. 15,972 722,733
------------
1,279,454
------------
ELECTRONICS -- 0.5%
Applied Materials, Inc.* 10,000 358,750
------------
FINANCIAL SERVICES -- 11.1%
AMBAC, Inc. 16,500 1,095,188
American International Group, Inc. 20,032 2,168,464
Bank of Boston Corp. 12,100 777,425
Beneficial Corp. 13,000 823,875
Citicorp 5,000 515,000
SHARES VALUE(DAGGER)
------ -------------
COMMON STOCK (CONTINUED)
FINANCIAL SERVICES (CONTINUED)
Federal Home Loan Mortgage Corp. 5,000 $ 550,625
Student Loan Marketing Association 7,500 698,438
Travelers Group, Inc. 33,333 1,512,485
Vesta Insurance Group, Inc. 12,150 381,206
------------
8,522,706
------------
FOOD AND AGRICULTURE -- 0.7%
Archer-Daniels-Midland Co. 25,000 550,000
------------
HEALTH CARE -- 14.8%
Abbott Laboratories, Inc. 35,332 1,793,099
American Home Products Corp. 10,000 586,250
Amgen, Inc.* 7,700 418,688
Bristol-Myers Squibb Co. 10,000 1,087,500
Columbia HCA Healthcare Corp. 30,050 1,224,538
Dura Pharmaceuticals, Inc.* 20,000 952,500
Johnson & Johnson 23,600 1,174,100
Medtronic, Inc. 10,000 680,000
Merck & Co., Inc. 6,000 475,500
Pfizer, Inc. 12,000 994,500
Schering Plough Corp. 31,200 2,020,200
------------
11,406,875
------------
INSURANCE -- 1.9%
Reliastar Financial Corp. 10,000 577,500
SunAmerica, Inc. 20,000 887,500
------------
1,465,000
------------
MACHINERY AND HEAVY EQUIPMENT -- 0.8%
Deere & Co. 15,000 609,375
------------
OIL-DOMESTIC -- 4.5%
Atlantic Richfield Co. 5,000 662,500
Phillips Petroleum Co. 50,000 2,212,500
Tosco Corp. 7,000 553,875
------------
3,428,875
------------
OIL-SUPPLIES AND CONSTRUCTION -- 0.5%
Global Marine, Inc.* 20,000 412,500
------------
PAPER-FOREST PRODUCTS -- 0.6%
Fort Howard Corp.* 15,000 414,375
------------
RETAIL -- 8.7%
Dayton-Hudson Corp. 20,000 785,000
Home Depot, Inc. 9,000 451,125
Price Costco Inc.* 15,000 376,875
Safeway, Inc.* 40,800 1,744,200
Sears, Roebuck & Co. 25,000 1,153,125
Sysco Corp. 20,400 665,550
TJX. Companies, Inc. 20,000 947,500
Walgreen Co. 15,000 600,000
------------
6,723,375
------------
TECHNOLOGY -- 11.5%
Andrew Corp.* 12,275 650,575
Hewlett Packard Co. 25,000 1,256,250
See Notes to Financial Statements.
46
<PAGE>
HARRIS INSIGHT FUNDS
GROWTH FUND
STATEMENT OF NET ASSETS (CONTINUED)
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
SHARES VALUE(DAGGER)
------ -------------
COMMON STOCK (CONTINUED)
TECHNOLOGY (CONTINUED)
Intel Corp. 22,500 $ 2,944,688
ITT Industries, Inc. 16,854 412,923
Microsoft Corp.* 24,000 1,983,000
Parker-Hannifin Corp. 15,000 581,250
Tellabs, Inc.* 26,000 978,250
------------
8,806,936
------------
TELECOMMUNICATIONS -- 1.1%
Frontier Corp. 20,000 452,500
Lucent Technologies, Inc. 9,139 422,679
------------
875,179
------------
TRANSPORTATION -- 1.1%
Conrail, Inc. 8,476 844,422
------------
UTILITIES -- 6.0%
AT&T Corp. 28,200 1,226,700
Coastal Corp. 25,000 1,221,875
GTE Corp. 17,500 796,250
Illinova Corp. 26,300 723,250
MCI Communications Corp. 20,000 652,500
------------
4,620,575
------------
TOTAL COMMON STOCK
(Cost $51,309,017) 76,299,969
------------
SHARES VALUE(DAGGER)
------ -------------
TEMPORARY INVESTMENTS -- 0.7%
Dreyfus Cash Management Plus #719 271,325 $ 271,325
Goldman Sachs Financial Square
Money Market Portfolio 270,532 270,532
------------
TOTAL TEMPORARY INVESTMENTS
(Cost $541,857) 541,857
------------
TOTAL INVESTMENTS -- 99.9%
(Cost $51,850,874) 76,841,826
------------
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 0.1% 71,131
------------
NET ASSETS -- 100.0%
Applicable to 4,093,320 and 21,247
shares of beneficial interest
outstanding of Institutional
Class and Class A, respectively,
$.001 par value (Note 9) $ 76,912,957
============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER INSTITUTIONAL
CLASS SHARE ($76,515,889/4,093,320) $18.69
======
NET ASSET VALUE AND REDEMPTION
PRICE PER CLASS A SHARE
($397,068/21,247) $18.69
======
MAXIMUM PUBLIC OFFERING PRICE
PER CLASS A SHARE (NOTE 6) $19.57
======
- ---------------
(DAGGER) See Note 2a to the Financial Statements.
* Non-income producing security.
See Notes to Financial Statements.
47
<PAGE>
HARRIS INSIGHT FUNDS
SMALL-CAP FUND
STATEMENT OF NET ASSETS
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
SHARES VALUE(DAGGER)
------ -------------
COMMON STOCK -- 98.0%
ADVERTISING -- 1.8%
Ha-Lo Industries Corp.* 40,625 $ 1,117,180
Omnicom Group, Inc. 36,000 1,647,000
------------
2,764,180
------------
APPAREL -- 0.2%
Vans, Inc.* 25,000 303,125
------------
AUTO PARTS -- 0.3%
Breed Technologies 8,900 231,400
Mascotech, Inc.* 10,000 163,750
------------
395,150
------------
BASIC-PAPER -- 0.6%
Wausau Paper Mills Co. 52,493 964,559
------------
BROADCASTING -- 0.8%
Infinity Broadcasting Corp.* 12,500 420,313
Univision Communications, Inc.* 10,000 370,000
Westwood One* 23,500 387,750
------------
1,178,063
------------
BUSINESS EQUIPMENT & SERVICES -- 1.4%
Comdisco, Inc. 37,500 1,190,625
Encad, Inc.* 10,000 407,500
G. & K. Services, Inc.* 10,000 375,000
Myer Industries, Inc. 5,000 84,375
------------
2,057,500
------------
BUSINESS SERVICES -- 1.7%
ABR Information Services, Inc.* 5,000 196,250
Merrill Corp.* 32,000 736,000
Mosinee Paper 29,000 1,022,250
Robert Half International, Inc.* 10,000 343,750
Superior Consulting Holdings* 10,000 240,000
------------
2,538,250
------------
CAPITAL GOODS -- 5.2%
Crane Co. 20,250 587,250
Graco, Inc. 1 25
Hubbell, Inc. 36,248 1,567,726
Idex Corp. 35,000 1,395,625
Precision Castparts Corp. 60,000 2,977,500
U. S. Filter Corp.* 25,000 793,750
Zycon Corp.* 25,000 443,750
------------
7,765,626
------------
CHEMICALS -- 0.1%
Hexcel Corp.* 10,000 162,500
------------
COMPUTER AND OFFICE EQUIPMENT -- 2.1%
Black Box Corp.* 40,000 1,620,000
CDW Computer Center Inc.* 2,500 148,125
Mastech Corp.* 40,000 760,000
Procom Technology, Inc.* 20,000 185,000
Quantum Corp.* 15,000 425,625
------------
3,138,750
------------
SHARES VALUE(DAGGER)
------ -------------
COMMON STOCK (CONTINUED)
CONSTRUCTION -- 0.2%
Triangle Pacific Corp.* 10,000 $ 240,000
------------
CONSUMER DURABLES -- 1.3%
K2, Inc. 25,000 687,500
Nautica Enterprises, Inc.* 30,000 750,000
St. John Knits, Inc. 13,200 574,200
------------
2,011,700
------------
CONSUMER NON-DURABLES -- 4.1%
Alberto Culver Co. Class A 25,000 1,031,250
Alberto Culver Co. Class B 2,600 124,800
Arbor Drugs, Inc. 90,500 1,549,813
First Brands Corp. 53,400 1,515,225
Morningstar Group, Inc.* 25,100 492,588
Robert Mondavi Corp.* 15,000 540,000
Springs Industries, Inc. 23,100 993,300
------------
6,246,976
------------
CONSUMER SERVICES -- 4.8%
Blyth Industries, Inc.* 15,000 684,375
Bush Industries, Inc. 4,500 86,625
CDI Corp.* 10,000 283,750
Checkpoint Systems, Inc.* 62,000 1,534,500
Corestaff, Inc.* 15,000 352,500
Delta & Pine Land Co. 4,000 128,000
Griffon Corp.* 58,000 710,500
Millipore Corp. 40,000 1,655,000
PHH Corp. 20,000 860,000
Prime Hospitality Corp.* 25,000 403,125
Robbins & Myers, Inc. 20,000 500,000
------------
7,198,375
------------
CONTAINERS -- 0.2%
Bemis, Inc. 10,000 368,750
------------
ELECTRONICS -- 5.4%
Amphenol Corp.* 20,000 445,000
Analog Devices, Inc.* 65,000 2,201,875
BMC Industries, Inc. 25,000 787,500
C-Cube Microsystems, Inc.* 5,000 184,375
Electronics for Imaging, Inc.* 5,000 407,500
Input/Output, Inc.* 7,500 138,750
MEMC Electronic Materials, Inc.* 5,000 112,500
Microchip Technology, Inc.* 30,000 1,522,500
Sanmina Corp.* 15,000 843,750
Vitesse Semiconductors Corp.* 32,500 1,478,750
------------
8,122,500
------------
ENERGY -- 4.2%
Global Industries, Ltd.* 10,000 182,500
Nuevo Energy Co.* 36,000 1,872,000
Stone Energy Corp.* 10,000 298,750
Tosco Corp. 21,000 1,661,625
United Meridian Corp.* 43,500 2,251,125
------------
6,266,000
------------
See Notes to Financial Statements.
48
<PAGE>
HARRIS INSIGHT FUNDS
SMALL-CAP FUND
STATEMENT OF NET ASSETS (CONTINUED)
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
SHARES VALUE(DAGGER)
------ -------------
COMMON STOCK (CONTINUED)
FINANCIAL SERVICES -- 14.8%
Aames Financial Corp. 5,000 $ 179,375
Alex. Brown, Inc. 23,700 1,718,250
Americredit Corp.* 62,400 1,279,200
City National Corp. 10,000 216,250
Commerce Bancshares, Inc. 51,051 2,361,109
Compass Bancshares, Inc. 10,000 397,500
Corrections Corp.* 40,000 1,225,000
Corus Bankshares, Inc. 17,000 548,250
Financial Federal Corp.* 30,000 502,500
Hibernia Corp. 25,000 331,250
Keystone Financial, Inc. 7,500 187,500
MAF Bancorp, Inc. 10,000 342,500
North Fork Bancorporation, Inc. 16,200 577,125
Old Kent Financial Corp. 49,999 2,381,202
Old Republic International Corp. 127,950 3,422,663
Provident Bancorp 11,250 376,875
Quick & Reilly Group, Inc. 47,130 1,408,009
RCSB Financial, Inc. 10,000 287,500
Reliastar Financial Corp. 28,200 1,628,550
Renaissance RE Holdings Ltd. 16,000 528,000
Southtrust Corp. 17,400 604,650
USLife Corp. 22,500 748,125
Washington National Corp. 22,000 605,000
West America Bancorporation 3,000 173,250
Zions Bancorp* 3,000 310,500
------------
22,340,133
------------
HEALTH CARE -- 9.5%
Beckman Instruments, Inc. 34,200 1,312,425
Bergen Brunswig Corp. 79,280 2,259,480
Healthcare Financial Partners, Inc.* 30,000 382,500
Mentor Corp. 64,600 1,889,550
Paraxel International Corp.* 20,000 1,025,000
Quintiles Transnational Corp.* 2,000 131,000
Rotech Medical Corp.* 25,000 518,750
Safeskin Corp.* 25,500 1,243,125
Shared Medical Systems Corp. 18,000 884,250
Tecnol Medical Products, Inc.* 40,050 590,738
Total Renal Care Holdings* 10,000 362,500
Universal Health Services, Inc.* 129,400 3,704,075
------------
14,303,393
------------
HOSPITAL SUPPLIES AND SERVICES -- 0.8%
Boston Science Corp.* 8,600 516,000
Hologic, Inc.* 5,000 123,125
Rexall Sundown, Inc.* 10,000 270,000
Ventana Medical Systems, Inc.* 18,000 261,000
------------
1,170,125
------------
INSURANCE -- 0.9%
Conseco, Inc. 21,885 1,395,169
------------
LEISURE RELATED -- 0.6%
Showboat, Inc. 10,000 172,500
Sodak Gaming, Inc.* 50,000 750,000
------------
922,500
------------
SHARES VALUE(DAGGER)
------ -------------
COMMON STOCK (CONTINUED)
MACHINERY AND HEAVY EQUIPMENT -- 0.4%
Miller Industries* 30,000 $ 600,000
------------
MANUFACTURING -- 0.7%
Apogee Enterprises, Inc. 10,000 395,000
Scotsman Industries, Inc. 30,000 708,750
------------
1,103,750
------------
MEDICAL INSTRUMENTS AND SUPPLIES -- 0.1%
Depuy, Inc.* 10,000 202,500
------------
METALS AND MINING -- 0.3%
Gibraltar Steel Corp.* 20,000 515,000
------------
OIL-DOMESTIC -- 3.0%
BJ Services Co.* 6,000 306,000
Chesapeake Energy Corp.* 22,500 1,251,563
Costilla Energy, Inc.* 5,000 66,250
Newfield Exploration Co.* 82,600 2,147,600
Norrell Corp.* 27,600 752,100
------------
4,523,513
------------
PHARMACEUTICALS -- 1.0%
American Medserve Corp.* 5,000 76,250
Caraustar Industries, Inc. 27,400 904,200
Jones Medical Industries, Inc.* 15,000 543,750
------------
1,524,200
------------
PUBLISHING -- 1.0%
Gartner Group, Inc.* 40,000 1,555,000
------------
RAW MATERIALS -- 0.9%
Ferro Corp. 49,645 1,408,677
------------
REAL ESTATE INVESTMENT TRUSTS -- 0.5%
First Industrial Realty Trust, Inc. 10,000 303,750
Innkeepers USA Trust, Inc. 21,500 298,313
Redwood Trust, Inc. 5,000 182,500
------------
784,563
------------
RETAIL -- 3.5%
Boston Chicken* 15,000 536,250
Claire's Store 22,500 292,500
Dominick's Supermarkets, Inc.* 20,000 435,000
Gymboree Corp.* 10,000 226,250
La-Z-Boy Chair Co. 38,800 1,144,600
Papa John's International, Inc.* 15,750 531,563
Pier 1 Imports 22,000 387,750
Regis Corp. 42,500 685,313
Ruddick Corp. 29,400 411,600
Ryan's Family Steak Houses, Inc.* 90,000 618,750
------------
5,269,576
------------
RETAIL-MERCHANDISING -- 2.5%
Eagle Hardware & Garden, Inc.* 10,000 206,250
Just for Feet, Inc.* 26,000 679,250
Meyer Fred., Inc.* 5,000 177,500
Neiman-Marcus Group* 48,000 1,224,000
The Sports Authority* 33,000 717,750
See Notes to Financial Statements.
49
<PAGE>
HARRIS INSIGHT FUNDS
SMALL-CAP FUND
STATEMENT OF NET ASSETS (CONTINUED)
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
SHARES VALUE(DAGGER)
------ -------------
COMMON STOCK (CONTINUED)
RETAIL-MERCHANDISING (CONTINUED)
Tiffany & Co.* 15,000 $ 549,375
Urban Outfitters* 10,000 130,000
Wet Seal Inc. - Class A* 2,500 52,500
------------
3,736,625
------------
SHELTER -- 1.2%
Centex Corp. 35,240 1,325,905
Fleetwood Enterprises, Inc. 14,925 410,438
------------
1,736,343
------------
TECHNOLOGY -- 18.6%
ACC Corp.* 3,750 112,969
ADC Telecommunications, Inc.* 111,600 3,459,600
Aspen Technology, Inc.* 7,500 596,250
Atmel Corp.* 15,000 496,875
Cable Design Technologies, Inc.* 17,500 538,125
CFM Technologies, Inc.* 66,800 1,386,100
Comsat Corp. 54,400 1,339,600
Comverse Technology, Inc.* 10,000 376,250
Cubic Corp. 14,995 346,759
Cytyc Corp.* 4,000 107,500
Dynatech Corp.* 37,600 1,654,400
Henry (Jack) & Associates, Inc. 30,000 1,057,500
Information Management Resources,
Inc.* 7,500 156,563
Logicon, Inc. 50,400 1,839,600
McAfee Associates, Inc.* 7,500 327,188
Micrel, Inc.* 10,000 310,000
MTS Systems Corp. 47,400 948,000
Pairgain Technologies, Inc.* 10,000 303,750
Pioneer Standard Electronics, Inc. 93,487 1,191,959
Quickturn Design Systems, Inc.* 20,000 410,000
Rational Software Corp.* 15,000 588,750
Remedy Corp.* 14,000 745,500
Reynolds & Reynolds Co. 199,000 5,174,000
Spyglass Inc.* 10,000 123,750
Systemsoft Corp.* 20,000 292,500
Tech Data Corp.* 25,000 681,250
Technology Solutions Co.* 15,000 615,000
Thiokol Corp. 40,000 1,790,000
Valmont Industries Inc. 20,000 815,000
Wyman-Gordon Co.* 10,000 221,250
------------
28,005,988
------------
TELECOMMUNICATIONS -- 1.5%
Dialogic Corp.* 60,000 1,860,000
Stanford Telecommunications* 5,000 169,375
TCSI Corp.* 30,000 187,500
------------
2,216,875
------------
TRANSPORTATION -- 0.6%
GATX Corp. 20,000 970,000
------------
SHARES VALUE(DAGGER)
------ -------------
COMMON STOCK (CONTINUED)
UTILITIES -- 1.2%
LCI International, Inc.* 15,600 $ 335,400
Piedmont Natural Gas Co., Inc. 26,100 610,088
Washington Water Power Co. 44,200 823,223
------------
1,768,711
------------
TOTAL COMMON STOCK
(Cost $99,879,939) 147,774,645
------------
PREFERRED STOCK -- 0.7%
OIL-DOMESTIC -- 0.7%
Cross Timbers Oil Series A Pfd.*
(Cost $987,859) 36,120 1,083,600
------------
TEMPORARY INVESTMENTS -- 1.3%
Dreyfus Cash Management Plus #719 969,164 969,164
Goldman Sachs Financial Square
Money Market Portfolio 956,845 956,845
------------
TOTAL TEMPORARY INVESTMENTS
(Cost $1,926,009) 1,926,009
------------
TOTAL INVESTMENTS -- 100.0%
(Cost $102,793,807) 150,784,254
------------
LIABILITIES IN EXCESS OF
OTHER ASSETS -- 0.0% (35,745)
------------
NET ASSETS -- 100.0%
Applicable to 9,685,493 and 28,513
shares of beneficial interest
outstanding of Institutional
Class and Class A, respectively,
$.001 par value (Note 9) $150,748,509
============
NET ASSET VALUE,OFFERING AND
REDEMPTION PRICE PER INSTITUTIONAL
CLASS SHARE ($150,306,160/9,685,493) $15.52
======
NET ASSET VALUE AND REDEMPTION
PRICE PER CLASS A SHARE
($442,349/28,513) $15.51
======
MAXIMUM PUBLIC OFFERING PRICE
PER CLASS A SHARE (NOTE 6) $16.24
======
- ---------------
(DAGGER) See Note 2a to the Financial Statements.
* Non-income producing security.
See Notes to Financial Statements.
50
<PAGE>
HARRIS INSIGHT FUNDS
INDEX FUND
STATEMENT OF NET ASSETS
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
SHARES VALUE(DAGGER)
------ -------------
COMMON STOCK -- 98.4%
ADVERTISING -- 0.1%
Interpublic Group of Cos., Inc. 2,000 $ 94,933
------------
AEROSPACE -- 1.8%
Boeing Co. 9,031 960,673
General Dynamics Corp. 1,600 112,800
Lockheed Martin Corp. 4,771 436,547
McDonnell Douglas Corp. 5,300 339,200
Northrop Grumman Corp. 1,400 115,850
Textron, Inc. 2,100 197,925
United Technologies Corp. 6,000 396,000
------------
2,558,995
------------
AIR TRANSPORTATION -- 0.4%
AMR Corp.* 2,300 202,688
Delta Air Lines, Inc. 1,900 134,663
Federal Express Corp.* 2,800 124,600
Southwest Airlines Co. 3,800 84,075
U.S. Air Group, Inc.* 1,600 37,400
------------
583,426
------------
APPAREL -- 0.8%
Charming Shoppes, Inc.* 2,600 13,000
Gap, Inc. 7,100 213,888
Limited, Inc. 6,813 125,189
Liz Claiborne, Inc. 1,900 73,388
Nike, Inc. 7,200 430,200
Reebok International, Ltd. 1,400 58,800
Russell Corp. 1,100 32,725
Springs Industries, Inc. - Class A 500 21,500
Stride Rite Corp. 1,300 13,000
VF Corp. 1,600 108,000
------------
1,089,690
------------
AUTOMOTIVE -- 2.2%
Chrysler Corp. 18,300 603,900
Cummins Engine Co., Inc. 1,100 50,600
Dana Corp. 2,600 84,825
Eaton Corp. 2,000 139,500
Echlin, Inc. 1,500 47,438
Ford Motor Co. 29,800 949,875
General Motors Corp. 19,000 1,059,250
Genuine Parts Co. 3,050 135,725
T.R.W., Inc. 3,200 158,400
------------
3,229,513
------------
BANKS -- 7.0%
Banc One Corp. 10,648 457,864
Bank of Boston Corp. 3,800 244,150
Bank of New York Co., Inc. 9,800 330,750
BankAmerica Corp. 8,988 896,553
Bankers Trust New York Corp. 2,000 172,500
Barnett Banks, Inc. 4,800 197,400
Boatmens Bancshares, Inc. 3,900 251,063
Chase Manhattan Corp. 10,984 980,322
Citicorp 11,800 1,215,400
Comerica, Inc. 2,700 141,413
SHARES VALUE(DAGGER)
------ -------------
COMMON STOCK (CONTINUED)
BANKS (CONTINUED)
CoreStates Financial Corp. 5,600 $ 290,500
Fifth Third Bancorp. 2,600 163,150
First Bank System, Inc. 3,400 232,050
First Chicago NBD Corp. 8,013 430,699
First Union Corp. 7,100 525,400
Fleet Financial Group, Inc. 6,655 331,918
Keycorp 5,656 285,628
MBNA Corp. 5,550 230,325
Mellon Bank Corp. 3,300 234,300
National City Corp. 5,500 246,813
NationsBank, Corp. 7,200 703,800
Norwest Corp. 9,300 404,550
Republic New York Corp. 1,400 114,275
Suntrust Banks, Inc. 5,600 275,800
U.S. Bancorp, Inc. 3,800 170,525
Wells Fargo & Co. 2,333 629,327
------------
10,156,475
------------
BEVERAGES -- 3.7%
Anheuser-Busch Cos., Inc. 12,600 504,000
Brown-Forman Corp. 1,800 82,350
Coca-Cola Co. 62,200 3,273,275
Coors Adolph Co. 1,100 20,900
Pepsico, Inc. 38,900 1,137,825
Seagram Co., Ltd 9,300 360,375
------------
5,378,725
------------
BROADCASTING -- 0.4%
Comcast Corp. - Class A 4,800 84,600
Comcast Corp. - Special Class A
Non-Voting 3,400 60,350
Tele-Communications, Inc. -
Class A* 16,600 215,800
Viacom, Inc. - Class A* 560 19,320
Viacom, Inc. - Class B* 8,243 287,475
------------
667,545
------------
BUSINESS MACHINES -- 1.8%
D.S.C. Communication Corp.* 2,900 51,838
Intergraph Corp.* 1,100 11,275
International Business Machines
Corp. 13,000 1,963,000
Pitney Bowes, Inc. 3,800 207,100
Unisys Corp.* 4,200 28,350
Xerox Corp. 8,200 431,525
------------
2,693,088
------------
BUSINESS SERVICES -- 0.8%
Alco Standard Corp. 3,200 165,200
Automatic Data Processing, Inc. 7,200 308,700
Deluxe Corp. 2,100 68,775
Ecolab, Inc. 1,600 60,200
First Data Corp. 11,400 416,100
John H. Harland Co. 800 26,400
Moore Corp., Ltd. 2,500 51,749
Shared Medical Systems Corp. 600 29,475
------------
1,126,599
------------
See Notes to Financial Statements.
51
<PAGE>
HARRIS INSIGHT FUNDS
INDEX FUND
STATEMENT OF NET ASSETS (CONTINUED)
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
SHARES VALUE(DAGGER)
------ -------------
COMMON STOCK (CONTINUED)
CAPITAL GOODS -- 0.0%
EMCor Group, Inc.* 8 $ 104
------------
CHEMICALS -- 3.1%
Air Products & Chemicals, Inc. 2,800 193,550
B.F. Goodrich Co. 1,400 56,700
Dow Chemical Co. 6,100 478,088
E.I. DuPont de Nemours & Co. 14,100 1,330,688
Eastman Chemical Co. 2,000 110,500
Engelhard Corp. 3,687 70,514
F.M.C. Corp.* 900 63,113
Great Lakes Chemical Corp. 1,600 74,800
Hercules, Inc. 2,600 112,450
Mallinckrodt Group, Inc. 1,900 83,838
Monsanto Co. 14,700 571,463
Morton International, Inc. 3,700 150,775
Nalco Chemical Co. 1,700 61,413
P.P.G. Industries, Inc. 4,600 258,175
Praxair, Inc. 3,900 179,888
Rohm & Haas Co. 1,600 130,600
Safety-Kleen Corp. 1,500 24,563
Sherwin Williams Co. 2,200 123,200
Sigma Aldrich Corp. 1,300 81,088
Union Carbide Corp. 3,200 130,800
W.R. Grace & Co. 2,200 113,850
------------
4,400,056
------------
COMPUTER AND OFFICE EQUIPMENT-- 6.5%
Amdahl Corp.* 2,900 35,163
Apple Computer, Inc.* 3,200 66,400
Bay Networks, Inc.* 4,800 100,200
Cabletron Systems, Inc.* 3,800 126,350
Ceridian Corp.* 1,700 68,850
Cisco Systems, Inc .* 16,300 1,037,088
Compaq Computer Corp.* 6,800 504,900
Computer Associates International,
Inc. 9,175 456,456
Computer Sciences Corp.* 1,900 156,038
Data General Corp.* 1,000 14,500
Digital Equipment Corp.* 3,800 138,225
Intel Corp. 20,500 2,682,938
Microsoft Corp.* 30,000 2,478,750
Novell, Inc.* 9,200 86,825
Oracle Corp.* 16,625 692,016
Silicon Graphics, Inc.* 4,154 105,927
Sun Microsystems, Inc.* 9,200 235,750
Tandem Computers, Inc.* 2,900 39,875
3Com Corp.* 4,200 307,650
------------
9,333,901
------------
CONGLOMERATES -- 0.1%
I.T.T. Industries, Inc. 3,100 75,950
------------
CONSTRUCTION -- 1.0%
Armstrong World Industries, Inc. 900 62,550
Centex Corp. 800 30,100
Corning, Inc. 5,700 263,625
Fluor Corp. 2,100 131,775
Foster Wheeler Corp. 1,000 37,125
SHARES VALUE(DAGGER)
------ -------------
COMMON STOCK (CONTINUED)
CONSTRUCTION (CONTINUED)
Halliburton Co. 3,100 $ 186,775
Home Depot, Inc. 11,966 599,796
Kaufman & Broad Home Corp. 900 11,588
Owens Corning 1,300 55,413
Pulte Corp. 700 21,525
------------
1,400,272
------------
CONSUMER DURABLES -- 0.2%
Black & Decker Corp. 2,200 66,275
Maytag Corp. 2,600 51,350
Newell Co. 4,000 126,000
Whirlpool Corp. 1,900 88,588
------------
332,213
------------
CONSUMER NON-DURABLES -- 0.4%
Brunswick Corp. 2,500 60,000
CUC International, Inc.* 9,450 224,438
Rubbermaid, Inc. 3,700 84,175
Service Corp. International 5,900 165,200
Tupperware Corp. 1,600 85,800
------------
619,613
------------
CONTAINERS -- 0.2%
Ball Corp. 900 23,400
Bemis Co., Inc. 1,400 51,625
Crown Cork & Seal Co., Inc. 3,200 174,000
------------
249,025
------------
DRUGS AND HEALTH CARE -- 8.8%
Abbott Laboratories 19,400 984,550
Allergan, Inc. 1,600 57,000
Alza Corp.* 2,100 54,338
American Home Products Corp. 16,100 943,863
Amgen, Inc.* 6,600 358,875
Bristol-Myers Squibb Co. 12,500 1,359,375
Columbia HCA Healthcare Corp. 16,782 683,867
Eli Lilly & Co. 13,800 1,007,400
Humana, Inc.* 4,000 76,500
Johnson & Johnson 33,300 1,656,675
Manor Care, Inc. 1,550 41,850
Merck & Co., Inc. 30,200 2,393,350
Pfizer, Inc. 16,200 1,342,575
Pharmacia & Upjohn, Inc. 12,880 510,370
Schering Plough Corp. 9,300 602,175
U.S. Surgical Corp. 1,500 59,063
Warner-Lambert Co. 6,800 510,000
------------
12,641,826
------------
ELECTRONICS -- 3.8%
Advanced Micro Devices, Inc.* 3,300 84,975
A.M.P., Inc. 5,496 210,909
Allegheny Teledyne, Inc. 4,395 101,085
Andrew Corp.* 1,525 80,825
Applied Materials, Inc.* 4,500 161,438
E.G. & G., Inc. 1,200 24,150
Emerson Electric Co. 5,700 551,475
See Notes to Financial Statements.
52
<PAGE>
HARRIS INSIGHT FUNDS
INDEX FUND
STATEMENT OF NET ASSETS (CONTINUED)
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
SHARES VALUE(DAGGER)
------ -------------
COMMON STOCK (CONTINUED)
ELECTRONICS (CONTINUED)
General Instruments Corp.* 3,100 $ 67,038
General Signal Corp. 1,200 51,300
Harris Corp. 1,000 68,625
Hewlett Packard Co. 25,400 1,276,350
Honeywell, Inc. 3,200 210,400
Johnson Controls, Inc. 1,000 82,875
LSI Logic Corp.* 3,200 85,600
Micron Technology, Inc. 5,200 151,450
Motorola, Inc. 15,000 920,625
National Semiconductor Corp.* 3,500 85,313
Raytheon Co. 6,100 293,563
Rockwell International Corp. 5,500 334,813
Scientific Atlanta, Inc. 2,000 30,000
Tektronix, Inc. 800 41,000
Texas Instruments, Inc. 4,800 306,000
Thomas & Betts Corp. 1,300 57,688
Westinghouse Electric Corp. 12,300 244,463
------------
5,521,960
------------
ENERGY AND RAW MATERIALS -- 2.4%
Baker Hughes, Inc. 3,500 120,750
Dresser Industries, Inc. 4,600 142,600
Eastern Enterprises 500 17,688
Helmerich & Payne, Inc. 700 36,488
Royal Dutch Petroleum Co. 13,400 2,288,050
Schlumberger, Ltd. 6,200 619,225
USX-Marathon Group, Inc. 7,500 179,063
------------
3,403,864
------------
ENERGY AND UTILITIES -- 3.7%
American Electric Power Co. 4,800 197,400
Baltimore Gas & Electric Co. 3,800 101,650
Carolina Power & Light Co. 3,900 142,350
Central & South West Corp. 5,400 138,375
Cinergy Corp. 4,036 134,702
Coastal Corp. 2,700 131,963
Consolidated Edison Co., Inc. 6,000 175,500
Consolidated Natural Gas Co. 2,400 132,600
Dominion Resources, Inc. 4,550 175,175
DTE Energy Co. 3,700 119,788
Duke Power Co. 5,100 235,875
Edison International 11,000 218,625
El Paso Natural Gas Co. 409 20,655
Enron Corp. 6,500 280,313
Enserch Corp. 1,800 41,400
Entergy Corp. 5,900 163,725
F.P.L. Group, Inc. 4,700 216,200
G.P.U., Inc. 3,100 104,238
Houston Industries, Inc. 6,000 135,750
Niagara Mohawk Power Corp.* 3,700 36,538
Nicor, Inc. 1,300 46,475
Noram Energy Corp. 3,500 53,813
Northern States Power Co. 1,800 82,575
Ohio Edison Co. 3,900 88,725
Oneok, Inc. 700 21,000
SHARES VALUE(DAGGER)
------ -------------
COMMON STOCK (CONTINUED)
ENERGY AND UTILITIES (CONTINUED)
Oryx Energy Co.* 2,600 $ 64,350
P.P.& L. Resources, Inc. 4,000 92,000
Pacific Enterprises 2,100 63,788
Pacific Gas & Electric Co. 10,500 220,500
Pacificorp 7,600 155,800
Panenergy Corp. 3,900 175,500
PECO Energy Co. 5,700 143,925
Peoples Energy Corp. 900 30,488
Public Service Enterprise Group, Inc. 6,100 166,225
Sonat, Inc. 2,200 113,300
Southern Co. 17,100 386,888
Texas Utilities Co. 5,700 232,275
Unicom Corp. 5,500 149,188
Union Electric Co. 2,600 100,100
------------
5,289,737
------------
FINANCE -- 4.0%
American Express Co. 11,900 672,350
Beneficial Corp. 1,300 82,388
Dean Witter Discover & Co. 4,052 268,445
Federal Home Loan Mortgage Corp. 4,500 495,563
Federal National Mortgage
Association 27,300 1,016,925
Golden West Financial Corp. 1,500 94,688
Great Western Financial Corp. 3,500 101,500
Green Tree Financial Corp. 3,500 135,188
H.F. Ahmanson & Co. 2,600 84,500
Household International, Inc. 2,400 221,400
J.P. Morgan & Co., Inc. 4,700 458,838
MBIA, Inc. 1,100 111,375
Merrill Lynch & Co., Inc. 4,100 334,150
MGIC Investment Corp. 1,500 114,000
Morgan Stanley Group, Inc. 3,900 222,788
PNC Bank Corp. 8,500 319,813
Salomon, Inc. 2,700 127,238
Travelers Group, Inc. 16,056 728,541
Wachovia Corp. 4,200 237,300
------------
5,826,990
------------
FOOD AND AGRICULTURE -- 2.6%
Archer-Daniels-Midland Co. 13,641 300,102
Campbell Soup Co. 5,800 465,450
Conagra, Inc. 6,050 300,988
CPC International, Inc. 3,600 279,000
Fleming Cos., Inc. 1,000 17,250
General Mills, Inc. 3,900 247,163
H.J. Heinz Co. 9,200 328,900
Hershey Foods Corp. 3,900 170,625
Kellogg Co. 5,300 347,813
Pioneer Hi-Bred International, Inc. 2,100 147,000
Quaker Oats Co. 3,300 125,813
Ralston Purina Group 2,700 198,113
Sara Lee Corp. 12,100 450,725
Sysco Corp. 4,600 150,075
W.M. Wrigley Jr., Co. 2,900 163,125
------------
3,692,142
------------
See Notes to Financial Statements.
53
<PAGE>
HARRIS INSIGHT FUNDS
INDEX FUND
STATEMENT OF NET ASSETS (CONTINUED)
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
SHARES VALUE(DAGGER)
------ -------------
COMMON STOCK (CONTINUED)
INSURANCE -- 3.6%
Aetna, Inc. 3,753 $ 300,240
Alexander & Alexander Services, Inc. 1,200 20,850
Allstate Corp. 11,170 646,464
American General Corp. 5,100 208,463
American International Group, Inc. 11,775 1,274,644
Aon Corp. 2,700 167,738
Chubb Corp. 4,400 236,500
Cigna Corp. 1,900 259,588
General Re Corp. 2,100 331,275
Jefferson-Pilot Corp. 1,800 101,925
Lincoln National Corp. 2,600 136,500
Loews Corp. 2,900 273,325
Marsh & McLennan Cos., Inc. 1,800 187,200
Providian Corp. 2,400 123,300
Safeco Corp. 3,200 125,600
St. Paul Cos., Inc. 2,100 123,113
Torchmark Corp. 1,750 88,375
Transamerica Corp. 1,700 134,300
U.S. Life Corp. 900 29,925
U.S.F.&G. Corp. 2,900 60,538
United Healthcare Corp. 4,600 207,000
UNUM Corp. 1,800 130,050
------------
5,166,913
------------
MACHINERY AND HEAVY EQUIPMENT -- 0.6%
Case Corp. 1,800 98,100
Caterpillar, Inc. 4,800 361,200
Deere & Co. 6,700 272,188
Giddings & Lewis, Inc. 900 11,588
McDermott International, Inc. 1,300 21,613
Thermo Electron Corp.* 2,700 111,375
------------
876,064
------------
MANUFACTURING -- 1.4%
Allied Signal, Inc. 7,200 482,400
Avery Dennison Corp. 2,600 91,975
Masco Corp. 4,000 144,000
Millipore Corp. 1,100 45,513
Minnesota Mining & Manufacturing Co. 10,500 870,188
Nacco Industries, Inc. 200 10,700
National Service Industries, Inc. 1,200 44,850
Tenneco, Inc.* 4,400 198,550
Whitman Corp. 2,700 61,763
------------
1,949,939
------------
MEDIA -- 1.0%
Gannett Co., Inc. 3,500 262,063
King World Productions, Inc.* 1,000 36,875
Knight-Ridder, Inc. 2,400 91,800
New York Times Co. 2,400 91,200
Time Warner, Inc. 14,200 532,500
Tribune Co. 1,600 126,200
U.S. West Media Group* 15,600 288,600
------------
1,429,238
------------
SHARES VALUE(DAGGER)
------ -------------
COMMON STOCK (CONTINUED)
MEDICAL AND MEDICAL SERVICES -- 0.2%
Beverly Enterprises, Inc.* 2,300 $ 29,325
Cognizant Corp. 4,200 138,600
Tenet Healthcare Corp.* 5,500 120,313
------------
288,238
------------
MEDICAL INSTRUMENTS AND SUPPLIES -- 1.0%
Bausch & Lomb, Inc. 1,500 52,500
Baxter International, Inc. 6,900 282,900
Becton, Dickinson & Co. 3,200 138,800
Biomet, Inc. 3,000 45,375
Boston Scientific Corp.* 4,500 270,000
C.R. Bard, Inc. 1,400 39,200
Guidant Corp. 1,900 108,300
Medtronic, Inc. 5,900 401,200
Perkin-Elmer Corp. 1,100 64,763
St. Jude Medical, Inc.* 2,000 85,250
------------
1,488,288
------------
METALS AND MINING -- 1.2%
Alcan Aluminium, Ltd. 5,600 188,300
Aluminum Co. of America 4,400 280,500
ASARCO, Inc. 1,100 27,363
Barrick Gold Corp. 8,800 253,000
Battle Mountain Gold Co. 5,700 39,188
Cyprus AMAX Minerals Co. 2,350 54,931
Echo Bay Mines, Ltd. 3,300 21,863
Freeport-McMoran Copper & Gold, Inc. 4,800 143,400
Homestake Mining Co. 3,600 51,300
Inco, Ltd. 4,300 137,063
Newmont Mining Corp. 2,445 109,414
Phelps Dodge Corp. 1,700 114,750
Placer Dome, Ltd. 5,900 128,325
Reynolds Metals Co. 1,600 90,200
Santa Fe Pacific Gold Corp. 3,520 54,120
------------
1,693,717
------------
OIL-DOMESTIC -- 1.4%
Ashland, Inc. 1,600 70,200
Atlantic Richfield Co. 4,000 530,000
Burlington Resources, Inc. 3,200 161,200
Kerr-McGee Corp. 1,300 93,600
Louisiana Land & Exploration Co. 800 42,900
Occidental Petroleum Corp. 8,100 189,338
Pennzoil Co. 1,200 67,800
Phillips Petroleum Co. 6,500 287,625
Rowan Cos., Inc.* 2,100 47,513
Santa Fe Energy Resources, Inc.* 2,400 33,300
Sun Co., Inc. 1,955 47,653
Unocal Corp. 6,100 247,813
Western Atlas, Inc.* 1,300 92,138
Williams Cos., Inc. 4,050 151,875
------------
2,062,955
------------
See Notes to Financial Statements.
54
<PAGE>
HARRIS INSIGHT FUNDS
INDEX FUND
STATEMENT OF NET ASSETS (CONTINUED)
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
SHARES VALUE(DAGGER)
------ -------------
COMMON STOCK (CONTINUED)
OIL-INTERNATIONAL -- 4.9%
Amerada Hess Corp. 2,400 $ 138,900
Amoco Corp. 12,400 998,200
Chevron Corp. 16,300 1,059,500
Exxon Corp. 31,100 3,047,800
Mobil Corp. 9,900 1,210,275
Texaco, Inc. 6,700 657,438
------------
7,112,113
------------
OIL-SUPPLIES AND CONSTRUCTION -- 0.1%
Union Pacific Resources Group 6,251 182,842
------------
PAPER AND FOREST PRODUCTS -- 1.5%
Boise Cascade Corp. 1,200 38,100
Champion International, Corp. 2,400 103,800
Georgia Pacific Corp. 2,300 165,600
International Paper Co. 7,307 295,020
James River Corp. 2,100 69,563
Kimberly-Clark Corp. 7,164 682,371
Louisiana-Pacific Corp. 2,800 59,150
Mead Corp. 1,400 81,375
Potlatch Corp. 700 30,100
Stone Container Corp. 2,554 37,991
Temple Inland, Inc. 1,400 75,775
Union Camp Corp. 1,800 85,950
Westvaco Corp. 2,500 71,875
Weyerhaeuser Co. 5,000 236,875
Willamette Industries, Inc. 1,400 97,300
------------
2,130,845
------------
PERSONAL SERVICES -- 0.1%
H & R Block, Inc. 2,700 78,300
------------
PHOTOGRAPHIC EQUIPMENT -- 0.5%
Eastman Kodak Co. 8,300 666,075
Polaroid Corp. 1,100 47,850
------------
713,925
------------
PRODUCER GOODS -- 3.9%
Briggs & Stratton Corp. 700 30,800
Cincinnati Milacron, Inc. 900 19,688
Cooper Industries, Inc. 2,700 113,738
Crane Co. 1,200 34,800
Dover Corp. 2,900 145,725
General Electric Co. 41,200 4,073,650
Harnischfeger Industries, Inc. 1,200 57,750
Illinois Tool Works, Inc. 3,000 239,625
Ingersoll Rand Co. 2,800 124,600
Paccar, Inc. 995 67,411
Pall Corp. 2,933 74,792
Parker-Hannifin Corp. 1,850 71,688
Raychem Corp. 1,100 88,138
Snap-On, Inc. 1,500 53,438
Stanley Works 2,200 59,400
Timken Co. 800 36,700
Trinova Corp. 800 29,100
Tyco International, Ltd. 3,900 206,213
SHARES VALUE(DAGGER)
------ -------------
COMMON STOCK (CONTINUED)
PRODUCER GOODS (CONTINUED)
W.W. Grainger, Inc. 1,300 $ 104,325
Worthington Industries, Inc. 2,450 44,406
------------
5,675,987
------------
PUBLISHING -- 0.4%
American Greetings Corp. 1,900 53,913
Dow Jones & Co., Inc. 2,500 84,688
Dun & Bradstreet Corp. 4,200 99,750
McGraw-Hill Companies, Inc. 2,500 115,313
Meredith Corp. 700 36,925
R.R. Donnelley & Sons, Inc. 3,800 119,225
Times Mirror Co. 2,500 124,375
------------
634,189
------------
RAILROADS AND SHIPPING -- 1.0%
Burlington Northern Santa Fe Corp. 3,831 330,903
Conrail, Inc. 2,048 204,032
C.S.X. Corp. 5,200 219,700
Newport News Shipbuilding, Inc.* 880 13,200
Norfolk Southern Corp. 3,100 271,250
Union Pacific Corp. 6,200 372,775
------------
1,411,860
------------
RESTAURANTS -- 0.6%
Darden Restaurants 4,100 35,875
Luby's Cafeterias, Inc. 600 11,925
McDonald's Corp. 17,400 787,350
Ryan's Family Steak Houses, Inc.* 1,300 8,938
Shoney's, Inc.* 1,200 8,400
Wendy's International, Inc. 3,100 63,550
------------
916,038
------------
RETAIL-MERCHANDISING -- 4.0%
Albertson's, Inc. 6,400 228,000
American Stores Co. 3,600 147,150
Autozone, Inc.* 2,700 74,250
Circuit City Stores, Inc. 2,500 75,313
Dayton Hudson Corp. 5,500 215,875
Dillard Department Stores, Inc. 2,900 89,538
Federated Department Stores, Inc.* 5,300 180,863
Fruit of the Loom, Inc.* 1,900 71,963
Giant Food, Inc. 1,500 51,750
Great Atlantic & Pacific Tea Co.,
Inc. 1,000 31,875
Harcourt General, Inc. 1,800 83,025
Hasbro, Inc. 2,200 85,525
J.C. Penney Co., Inc. 5,700 277,875
Jostens, Inc. 1,000 21,125
K Mart Corp.* 12,200 126,575
Kroger Co.* 3,100 144,150
Longs Drug Stores, Inc. 500 24,563
Lowe's Cos., Inc. 4,400 156,200
Mattel, Inc. 6,937 192,502
May Department Stores Co. 6,300 294,525
Melville Corp. 2,700 111,713
Mercantile Stores Co., Inc. 900 44,438
Nordstrom, Inc. 2,000 70,750
See Notes to Financial Statements.
55
<PAGE>
HARRIS INSIGHT FUNDS
INDEX FUND
STATEMENT OF NET ASSETS (CONTINUED)
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
SHARES VALUE(DAGGER)
------ -------------
COMMON STOCK (CONTINUED)
RETAIL-MERCHANDISING (CONTINUED)
Pep Boys-Manny, Moe & Jack 1,600 $ 49,200
Price Costco, Inc.* 5,021 126,153
Rite Aid Corp. 3,100 123,225
Sears, Roebuck & Co. 9,800 452,025
Supervalu, Inc. 1,700 48,238
Tandy Corp. 1,500 66,000
T.J.X. Cos., Inc. 1,800 85,275
Toys "R" Us, Inc.* 7,000 210,000
Wal-Mart Stores, Inc. 57,400 1,313,025
Walgreen Co. 6,300 252,000
Winn-Dixie Stores, Inc. 3,800 120,175
Woolworth Corp.* 3,300 72,188
------------
5,717,047
------------
SOAPS AND COSMETICS -- 3.0%
Alberto-Culver Co. 700 33,600
Avon Products, Inc. 3,400 194,225
Clorox Co. 1,300 130,488
Colgate-Palmolive Co. 3,700 341,325
Gillette Co. 13,200 1,026,300
International Flavors & Fragrances,
Inc. 2,800 126,000
Procter & Gamble Co. 17,100 1,838,250
Unilever N.V. 4,000 701,000
------------
4,391,188
------------
STEEL -- 0.2%
Armco, Inc.* 3,100 12,788
Bethlehem Steel Corp.* 2,900 26,100
Inland Steel Industries, Inc. 1,200 24,000
Nucor Corp. 2,300 117,300
USX-U.S. Steel Group, Inc. 2,000 62,750
------------
242,938
------------
TECHNOLOGY -- 0.5%
Autodesk, Inc. 1,200 33,600
Dell Computer Corp.* 4,600 244,375
EMC Corp.* 5,900 195,438
Seagate Technology, Inc.* 5,400 213,300
------------
686,713
------------
TELECOMMUNICATIONS -- 7.7%
AirTouch Communications, Inc.* 12,700 320,675
Alltel Corp. 4,900 153,738
Ameritech Corp. 13,700 830,563
AT&T Corp. 40,842 1,776,627
Bell Atlantic Corp. 11,100 718,725
BellSouth Corp. 24,800 1,001,300
Frontier Corp. 2,900 65,613
GTE Corp. 24,100 1,096,550
ITT Corp.* 3,000 130,125
ITT Hartford Group, Inc. 2,900 195,750
Lucent Technologies, Inc. 15,936 737,040
MCI Communications Corp. 17,100 557,888
SHARES VALUE(DAGGER)
------ -------------
COMMON STOCK (CONTINUED)
TELECOMMUNICATIONS (CONTINUED)
Northern Telecom, Ltd. 6,500 $ 402,188
NYNEX Corp. 11,100 534,188
Pacific Telesis Group 10,700 393,225
SBC Communications, Inc. 15,100 781,425
Sprint Corp. 10,800 430,650
TCI Satellite Entertainment, Inc.* 1,660 16,393
Tellabs, Inc.* 4,400 165,550
US West, Inc. 12,000 387,000
WorldCom, Inc.* 17,900 465,400
360 Communications Co.* 1 23
------------
11,160,636
------------
TIRES AND RUBBER -- 0.2%
Cooper Tire & Rubber Co. 2,200 43,450
Goodyear Tire & Rubber Co. 3,900 200,363
------------
243,813
------------
TOBACCO -- 1.9%
American Brands, Inc. 4,300 213,388
Philip Morris Cos., Inc. 20,400 2,297,550
UST, Inc. 4,900 158,638
------------
2,669,576
------------
TRAVEL AND RECREATION -- 1.2%
Fleetwood Enterprises, Inc. 1,200 33,000
Harrah's Entertainment, Inc.* 2,650 52,669
HFS, Inc.* 3,100 185,225
Hilton Hotels Corp. 6,200 161,975
Marriott International, Inc. 3,100 171,275
Walt Disney Co. 17,000 1,183,625
------------
1,787,769
------------
TRUCKING AND FREIGHT -- 0.1%
Caliber Systems, Inc. 1,000 19,250
Ryder System, Inc. 2,100 59,063
------------
78,313
------------
WASTE MANAGEMENT -- 0.4%
Browning-Ferris Industries, Inc. 5,400 141,750
Laidlaw, Inc. 7,200 83,703
WMX Technologies, Inc. 12,100 394,763
------------
620,216
------------
TOTAL COMMON STOCK
(Cost $85,096,081) 141,776,302
------------
See Notes to Financial Statements.
56
<PAGE>
HARRIS INSIGHT FUNDS
INDEX FUND
STATEMENT OF NET ASSETS (CONTINUED)
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
COUPON PAR
RATE MATURITY (000) VALUE(DAGGER)
------ --------- ----- -------------
U.S. TREASURY OBLIGATIONS -- 0.2%
U.S. Treasury Bills**
(Cost $289,595)
5.385% 08/21/97 $ 300 $ 290,076
------------
SHARES
---------
TEMPORARY INVESTMENTS -- 1.7%
Dreyfus Cash Management Plus #719 1,265,755 1,265,755
Goldman Sachs Financial Square
Money Market Portfolio 1,265,844 1,265,844
------------
TOTAL TEMPORARY INVESTMENTS
(Cost $2,531,599) 2,531,599
------------
TOTAL INVESTMENTS -- 100.3%
(Cost $87,917,275) 144,597,977
------------
LIABILITIES IN EXCESS OF
OTHER ASSETS -- (0.3%) (493,877)
------------
NET ASSETS -- 100.0%
Applicable to 7,790,232 and 8,134
shares of beneficial interest
outstanding of Institutional Class
and Class A, respectively,
$.001 par value (Note 9) $144,104,100
============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER INSTITUTIONAL
CLASS SHARE ($143,953,824/7,790,232) $18.48
======
NET ASSET VALUE AND REDEMPTION
PRICE PER CLASS A SHARE ($150,276/8,134) $18.48
======
MAXIMUM PUBLIC OFFERING PRICE
PER CLASS A SHARE (NOTE 6) $19.35
======
- ---------------
(DAGGER) See Note 2a to the Financial Statements.
* Non-income producing security.
**Security pledged as collateral for futures contracts.
NUMBER OF UNREALIZED
CONTRACTS DEPRECIATION
--------- ------------
Futures Contracts -- Long Position
S&P 500 Index, March 1997 6 ($24,550)
= ========
See Notes to Financial Statements.
57
<PAGE>
HARRIS INSIGHT FUNDS
INTERNATIONAL FUND
STATEMENT OF NET ASSETS
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
SHARES VALUE(DAGGER)
------ -------------
COMMON STOCK -- 98.2%
AUSTRALIA -- 2.9%
Amcor, Ltd. 15,021 $ 96,578
Boral, Ltd. 40,922 116,432
Brambles Industries, Ltd. 8,111 158,256
Broken Hill Proprietary Co., Ltd. 40,130 571,532
Coca Cola Amatil, Ltd. 10,393 111,095
Coles Myer, Ltd. 35,216 144,978
CRA, Ltd. 10,404 163,305
CSR, Ltd. 20,458 71,540
Lend Lease Corp., Ltd. 8,518 165,181
MIM Holdings, Ltd. 42,075 58,853
National Australia Bank, Ltd. 37,497 441,054
The News Corp., Ltd. 38,415 202,723
The News Corp., Ltd.-Pref. 26,758 119,090
North Limited NBH 36,085 105,538
Pacific Dunlop, Ltd. 31,014 78,875
Pioneer International, Ltd. 55,515 165,453
Westpac Banking Corp. 49,443 281,353
WMC Limited 25,048 157,863
-----------
3,209,699
-----------
BELGIUM -- 1.2%
Bekaert SA 35 22,143
Cies Reunies Electrobel et Tractabel
SA 400 185,557
Electrabel SA 1,000 235,793
Etablissement Delhaize Freres & Cie
Le Lion SA 1,140 67,469
Fortis AG 614 98,124
Generale de Banque SA 450 160,714
Groupe Bruxelles Lambert SA 682 87,472
Kredietbank NV 263 85,878
Petrofina SA 456 144,603
Royale Belge SA 319 65,603
Solvay et Cie SA 247 150,643
-----------
1,303,999
-----------
DENMARK -- 0.8%
Carlsberg AS 667 44,880
Dampskibsselskabet AF 1912 AS 5 128,064
Dampskibsselskabet Svendborg 4 149,451
Danisco AS 1,432 86,670
Den Danske Bank AS 1,000 80,304
FLS Industries 177 22,593
Novo-Nordisk AS 557 104,526
SAS Danmark AS 1,200 14,810
Sophus Berendsen AS 550 70,482
Tele Danmark AS- `B' 2,700 148,352
Unidanmark AS 1,100 56,720
-----------
906,852
-----------
FINLAND -- 0.6%
Cultor OY 500 27,100
Kesko OY 2,000 28,141
Merita, Ltd.-A* 10,000 31,003
Metra OY 500 28,076
Outokumpu OY 3,000 51,057
SHARES VALUE(DAGGER)
------ -------------
COMMON STOCK (CONTINUED)
FINLAND (CONTINUED)
OY Nokia AB Series A 4,400 $ 254,508
OY Nokia AB Series K 2,000 115,339
Sampo Insurance Co., Ltd. 300 23,610
UPM-Kymmene Corp.* 6,500 135,989
-----------
694,823
-----------
FRANCE -- 6.8%
Accor SA 1,000 126,152
Alcatel Alsthom Cie Generale
D'electricite SA 3,000 240,092
AXA SA 3,300 209,101
Banque Nationale de Paris 4,100 158,080
Bouygues 650 67,147
Canal Plus SA 439 96,600
Carrefour Supermarche SA 891 577,576
Cie Bancaire 950 112,001
Cie Financiere de Paribas SA 2,400 161,705
Cie Generale Des Eaux 2,350 290,140
Cie Generale Des Etablissements
Michelin SA 3,150 169,415
Compagnie De St. Gobain 2,107 296,954
Compagnie De Suez SA 3,350 141,899
Compagnie UAP SA 7,647 190,147
CSF (Thomson-CSF) 2,500 80,789
Elf Aquitaine SA 5,450 494,246
Eridania Beghin-Say SA 650 104,215
Groupe Danone 1,500 208,237
Havas SA 1,150 80,376
Immindo SA 1,400 121,774
L'air Liquide 2,331 362,525
L'Oreal 1,595 598,431
Lafarge SA 2,050 122,536
Legrand SA 526 89,283
LVMH (Louis Vuitton Moet Hennessey) 1,938 539,202
Lyonnaise De Eaux SA 1,500 139,084
Peugeot SA 1,400 156,989
Pinault Printemps 600 237,097
Promodes 488 137,273
Rhone-Poulenc SA 6,850 232,674
Sanofi SA 2,150 213,018
Schneider SA 3,202 147,496
SEFIMEG Ste. Francaise
D'investissaments
Immobiliers & De Gestion 1,650 119,124
Total SA 4,550 368,683
Usinor Sacilor 5,131 74,384
-----------
7,464,445
-----------
GERMANY -- 8.1%
Aktiengesellschaft Holding 400 719,481
AMB Aachener und Muenchener
Beteiligungs AG 100 71,429
BASF AG 12,500 478,896
Bayer AG 15,000 608,279
Bayerische Vereinsbank AG 6,378 258,433
Beiersdorf AG 2,000 99,091
See Notes to Financial Statements.
58
<PAGE>
HARRIS INSIGHT FUNDS
INTERNATIONAL FUND
STATEMENT OF NET ASSETS (CONTINUED)
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
SHARES VALUE(DAGGER)
------ -------------
COMMON STOCK (CONTINUED)
GERMANY (CONTINUED)
Daimler-Benz AG 10,500 $ 719,318
Degussa Benz AG 250 113,636
Deutsche Bank AG 10,600 494,208
Deutsche Lufthansa AG 7,000 94,455
Deutsche Telekom AG 43,500 906,721
Dresdner Bank AG 9,050 270,325
Heidelberger Zement AG 1,440 116,135
Hochtief AG 3,430 134,750
Karstadt AG 500 166,234
Linde AG 200 121,429
M.A.N. AG 400 96,494
Mannesmann AG 850 365,500
Merck KGAA 3,255 116,990
Metro AG 1,810 141,627
Muenchener Rueckver 150 363,799
Preussag AG 600 135,584
RWE Aktiengesellschaft 7,500 313,636
RWE Aktiengesellschaft 5,000 167,208
SAP AG 1,496 204,486
Schering AG 1,400 118,091
Siemens AG 11,500 533,331
Thyssen AG 750 132,906
Veba AG 7,321 420,720
Viag AG 500 195,617
Volkswagen AG 600 248,377
------------
8,927,186
------------
HONG KONG -- 3.6%
Bank of East Asia, Ltd. 38,280 170,210
Cathay Pacific Airways, Ltd. 46,000 72,539
Cheung Kong Holdings, Ltd. 50,000 444,322
China Light & Power Co., Ltd. 39,000 173,412
Hang Seng Bank, Ltd. 37,300 453,202
Hong Kong & China Gas Co., Ltd. 74,400 143,770
Hong Kong & Shanghai Hotels, Ltd. 44,000 83,035
Hong Kong Telecommunications, Ltd. 224,000 360,473
Hopewell Holdings, Ltd. 80,000 51,703
Hutchison Whampoa, Ltd. 75,000 588,929
New World Development Co., Ltd. 29,000 195,857
Shangri-La Asia, Ltd. 28,000 41,440
Sun Hung Kai Properties, Ltd. 47,000 575,616
Swire Pacific, Ltd. 36,500 347,945
Television Broadcasts, Ltd. 11,000 43,935
The Wharf Holdings, Ltd. 44,000 219,531
------------
3,965,919
------------
ITALY -- 3.1%
Assicurazioni Generali SPA 22,550 425,821
Banca Commerciale Italiana SPA 36,000 65,261
Banco Ambrosiano Veneto SPA 9,000 21,576
Benetton Group SPA 6,500 81,928
Credito Italiano SPA 57,500 62,920
Edison SPA 18,000 113,498
Eni SPA 153,000 782,335
Fiat SPA 24,000 72,355
Fiat SPA - D 19,000 33,195
SHARES VALUE(DAGGER)
------ -------------
COMMON STOCK (CONTINUED)
ITALY (CONTINUED)
Fiat SPA - PRIV 96,000 $ 157,951
Istituto Bancario San Paola Torino
SPA 25,500 155,764
Italgas Sta Italiana Per Il Gas SPA 22,000 91,540
Mediaset SPA* 27,000 124,138
Mediobanca SPA 15,500 83,328
Montedison SPA* 111,000 75,385
Pirelli SPA 40,000 73,957
Riunione Adriatica Disicurta RAS SPA 9,250 85,969
Sirti SPA 6,500 39,278
SNIA BPD SPA 35,000 36,092
Telecom Italia Mobile SPA 138,031 347,684
Telecom Italia SPA 145,000 375,238
Telecom Italia-RNC 40,000 77,767
------------
3,382,980
------------
JAPAN -- 32.3%
Ajinomoto Co., Inc. 36,000 367,156
Aoki Corp.* 25,000 52,074
Asahi Bank, Ltd. 42,000 373,898
Asahi Chemical Industry Co., Ltd. 61,000 345,860
Asahi Glass Co., Ltd. 23,000 216,681
Ashikaga Bank, Ltd. 20,000 96,629
Bank of Tokyo-Mitsubishi, Ltd. 83,600 1,553,500
Bank of Yokohama, Ltd. 37,000 239,844
Bridgestone Corp. 22,000 418,323
Canon, Inc. 19,000 420,398
Chiba Bank, Ltd. 12,000 81,936
Chugai Pharmaceutical Co., Ltd. 14,000 117,373
Citizen Watch Co., Ltd. 18,000 129,127
Dai Nippon Printing Co., Ltd. 20,000 350,908
Daiei, Inc. 18,000 137,684
Daikin Industries, Ltd. 14,000 124,633
Daiwa House Industry Co., Ltd. 13,000 167,416
Daiwa Securities Co., Ltd. 35,000 311,582
Denki Kagaku Kogyo, K.K. 48,000 118,237
Fanuc, Ltd. 6,300 202,014
Fuji Bank, Ltd. 58,000 847,191
Fuji Photo Film Co., Ltd. 10,000 330,164
Fujita Corp. 9,000 25,903
Fujitsu, Ltd. 59,000 550,735
Furukawa Electric Co., Ltd. 38,000 180,311
Gunma Bank, Ltd. 20,000 174,589
Hitachi, Ltd. 77,000 718,755
Honda Motor Co., Ltd. 20,000 572,169
Industrial Bank of Japan 45,000 781,763
Ito-Yokado Co., Ltd. 9,000 392,048
Itochu Corp. 66,000 354,814
Japan Airlines, Co., Ltd.* 58,000 308,297
Japan Energy Corp. 45,000 122,515
Joyo Bank, Ltd. 17,000 102,558
Jusco Co., Ltd. 12,000 407,606
Kajima Corp. 28,000 200,380
Kaneka Corp. 21,000 107,632
Kansai Electric Power Co., Inc. 16,800 348,487
Kao Corp. 20,000 233,362
Kawasaki Kisen Kaisha, Ltd.* 12,000 27,381
See Notes to Financial Statements.
59
<PAGE>
HARRIS INSIGHT FUNDS
INTERNATIONAL FUND
STATEMENT OF NET ASSETS (CONTINUED)
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
SHARES VALUE(DAGGER)
------ -------------
COMMON STOCK (CONTINUED)
JAPAN (CONTINUED)
Kawasaki Steel Corp. 71,000 $ 204,347
Kinki Nippon Railway Co., Ltd. 53,560 334,692
Kirin Brewery Co., Ltd. 29,000 285,739
Komatsu, Ltd. 21,000 172,429
Kubota Corp. 67,000 323,708
Kumagai Gumi Co., Ltd. 26,000 64,494
Kyocera Corp. 4,000 249,611
Kyowa Hakko Kogyo Co., Ltd. 21,000 160,449
Kyushu Electric Power Co., Inc. 90 1,750
Marubeni Corp. 38,000 163,561
Marui Co., Ltd. 11,000 198,704
Matsushita Electric Industrial Co.,
Ltd. 40,000 653,414
Meiji Seika Kaisha, Ltd. 24,000 124,667
Misawa Homes Co., Ltd. 6,000 42,005
Mitsubishi Chemical Corp. 40,000 129,646
Mitsubishi Corp. 38,000 394,123
Mitsubishi Electric Corp. 51,000 304,149
Mitsubishi Estate Co., Ltd. 30,000 308,557
Mitsubishi Heavy Industries, Ltd. 78,000 620,225
Mitsubishi Trust & Banking Corp. 28,000 375,108
Mitsui Engineering & Shipbuilding
Co., Ltd.* 48,000 97,908
Mitsui Fudosan Co., Ltd. 17,000 170,441
Mitsui Osk Lines, Ltd.* 29,000 69,430
Mitsui Toatsu Chemicals, Inc. 22,000 67,122
Mitsui Trust and Banking Co., Ltd. 11,000 86,041
Mitsukoshi, Ltd. 24,000 170,510
Nagoya Railroad Co., Ltd. 28,000 107,692
NEC Corp. 43,000 520,311
New Oji Paper Co., Ltd. 32,000 202,731
Nichirei Corp. 16,000 77,857
Nippon Express Co., Ltd. 25,000 171,564
Nippon Light Metal Co., Ltd. 37,000 152,221
Nippon Oil Co., Ltd. 67,000 344,555
Nippon Sheet Glass Co., Ltd. 64,000 227,347
Nippon Steel Corp. 121,000 357,666
Nippon Yusen K.K. 26,000 117,753
Nippon Denso Co., Ltd. 31,000 747,537
Nissan Motors Co., Ltd. 45,000 261,366
NKK Corp. 130,000 293,258
Nomura Securities Co., Ltd. 46,000 691,789
Odakyu Electric Railway Co., Ltd. 40,870 245,503
Olympus Optical Co., Ltd. 15,000 142,610
Osaka Gas Co., Ltd. 47,000 128,773
Penta-Ocean Construction Co., Ltd. 15,000 66,897
Rohm Co., Ltd. 4,000 262,748
Sakura Bank, Ltd. 63,000 450,856
Sankyo Co., Ltd. 8,000 226,793
Sanyo Electric Co., Ltd. 65,000 269,663
Sekisui Chemical Co., Ltd. 21,000 212,360
Sekisui House, Ltd. 17,000 173,379
Seven-Eleven Japan Co., Ltd. 800 46,880
Sharp Corp. 28,000 399,309
Shimizu Corp. 37,000 276,621
Shizuoka Bank, Ltd. 18,000 191,357
Showa Denko K.K.* 54,000 124,149
SHARES VALUE(DAGGER)
------ -------------
COMMON STOCK (CONTINUED)
JAPAN (CONTINUED)
Sony Corp. 10,000 $ 656,007
Sumitomo Bank, Ltd. 61,000 880,467
Sumitomo Chemical Co., Ltd. 44,000 174,555
Sumitomo Corp. 32,000 252,515
Sumitomo Electrical Industries, Ltd. 29,000 406,050
Sumitomo Metal Industries, Ltd. 93,000 229,084
Sumitomo Metal Mining Co., Ltd. 11,000 74,252
Taisho Pharmaceutical Co., Ltd. 19,000 448,315
Takashimaya Co., Ltd. 16,000 192,221
Takeda Chemical Industries, Ltd. 31,000 651,080
Tobu Railway Co., Ltd. 52,000 254,831
Tohoku Electric Power Co., Inc. 4,500 89,455
Tokai Bank, Ltd. 41,000 428,781
Tokio Marine & Fire Insurance Co.,
Ltd. 41,000 386,258
Tokyo Electric Power Co., Inc. 19,200 421,504
Tokyo Gas Co., Ltd. 60,000 162,835
Tokyu Corp. 44,000 250,233
Toppan Printing Co., Ltd. 30,000 375,972
Toray Industries, Inc. 43,000 265,730
Tostem Corp. 6,000 165,946
Toto, Ltd. 10,000 114,088
Toyobo Co., Inc. 48,000 144,373
Toyota Motor Corp. 69,000 1,985,912
Yamaichi Securities Co., Ltd. 35,000 155,791
Yamanouchi Pharmaceutical Co., Ltd. 13,000 267,416
Yamato Transport Co., Ltd. 25,000 259,291
Yasuda Trust & Banking Co., Ltd. 24,000 101,850
------------
35,671,120
------------
MALAYSIA -- 2.5%
AMMB Holdings BHD 24,000 201,425
DCB Holdings BHD 23,000 78,761
Edaran Otomobil Nasional BHD 11,000 109,956
Golden Hope Plantations BHD 49,000 83,413
Hong Leong Properties BHD 53,000 70,079
Land & General BHD 28,000 67,063
Magnum Corp., Berhad 55,500 107,660
Malayan Banking BHD 28,000 310,372
Malaysian International Shipping
Corp., BHD 30,000 89,074
Multi Purpose Holdings BHD 46,000 89,232
Perusahaan Otomobil Nasional BHD
Proton 25,000 158,353
Public Bank Berhad 52,000 110,135
Resorts World BHD 25,000 113,816
Sime Darby Berhad 62,000 244,220
Technology Resources (Industries)
BHD* 21,000 41,401
Telekom Malaysia BHD 41,000 365,202
Tenaga Nasional BHD 64,000 306,572
United Engineers (Malaysia) BHD 17,000 153,444
YTL Corp., Berhad 19,500 104,988
------------
2,805,166
------------
NETHERLANDS -- 4.6%
ABN AMRO Bank NV 7,666 497,005
Elsevier NV 15,016 252,908
See Notes to Financial Statements.
60
<PAGE>
HARRIS INSIGHT FUNDS
INTERNATIONAL FUND
STATEMENT OF NET ASSETS (CONTINUED)
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
SHARES VALUE(DAGGER)
------ -------------
COMMON STOCK (CONTINUED)
NETHERLANDS (CONTINUED)
ING Groep NV 16,965 $ 608,654
Koninklijke PTT Nederland NV 9,300 353,504
Philips Electronics NV 9,930 400,934
Royal Dutch Petroleum Co. 12,586 2,198,938
Unilever NV 4,614 813,312
------------
5,125,255
------------
SINGAPORE -- 1.7%
Amcol Holdings, Ltd. 3,000 5,618
City Developments, Ltd. 14,000 126,090
Cycle & Carriage, Ltd. 4,000 48,892
D.B.S. Land, Ltd. 15,000 55,218
Development Bank of Singapore, Ltd. 14,000 189,135
First Capital Corporation, Ltd. 7,000 21,115
Fraser & Neave, Ltd. 6,600 67,934
Hotel Properties, Ltd. 11,000 17,770
Jurong Shipyard, Ltd. 2,000 10,079
Keppel Corp., Ltd. 12,000 93,495
Natsteel, Ltd. 10,000 22,731
Neptune Orient Lines, Ltd. 36,000 31,137
Oversea-Chinese Banking Corp., Ltd. 20,000 248,749
Parkway Holdings, Ltd. 3,000 11,794
Singapore Airlines, Ltd. 26,000 236,026
Singapore Press Holdings 7,000 138,099
Singapore Telecommunications, Ltd. 120,000 283,059
Straits Trading Co., Ltd. 14,000 34,024
United Industrial Corp., Ltd. 37,000 31,208
United Overseas Bank, Ltd. 17,232 192,151
United Overseas Land, Ltd. 4,000 6,090
------------
1,870,414
------------
SPAIN -- 2.2%
Autopistas Concesionaria Espanola SA 4,464 61,395
Banco Bilbao Vizcaya SA 4,783 257,617
Banco Central Hispano Americano SA 4,066 104,188
Banco Santander SA 3,050 194,741
Corporacion Bancaria de Espana SA 2,474 110,441
Corporacion Financiera Alba SA 686 69,153
Empresa Nacional de Electricidad SA 4,627 328,494
Fomento de Construcciones y
Contratas SA 707 65,730
Gas Natural SDG SA 748 173,566
Iberdrola SA 25,428 359,489
Repsol SA 5,801 221,967
Tabacalera SA 861 36,980
Telefonica de Espana SA 18,224 422,169
------------
2,405,930
------------
SWEDEN -- 2.4%
AB Astra-A 9,600 473,052
AB Astra-B 3,100 149,130
AB Electrolux 600 34,742
AB Skanska/Frueher 2,500 110,213
AB Volvo-A 2,950 64,271
AB Volvo-B 6,100 134,237
AGA AB 6,050 91,117
ASEA AB 1,600 180,143
SHARES VALUE(DAGGER)
------ -------------
COMMON STOCK (CONTINUED)
SWEDEN (CONTINUED)
ASEA AB Series `B' 350 $ 39,509
Enskilda Banken 12,000 122,825
Foersaekrings AB 2,100 59,263
Mauritz AB 702 96,898
Stadshypotek AB 2,193 59,964
Stora Kopparbergs Berglags AB 11,650 160,126
Svenska Cellulosa AB 7,200 145,811
Svenska Handelsbanken 4,800 137,564
Swedish Match AB* 9,050 31,759
Telefon AB L.M. Ericsson 17,500 539,918
------------
2,630,542
------------
SWITZERLAND -- 5.5%
ABB AG 200 248,137
CS Holding 3,860 395,492
Holderbank Financiere Glarus AG 329 234,370
Nestle SA 838 897,322
Novartis AG 1,256 1,435,524
Novartis AG-B 53 60,504
Roche Holding AG-Basel 37 416,319
Roche Holding AG-Basel-Bearer 144 1,117,556
Schweizerische Bankgesellschaft (SBG) 410 358,368
Schweizerische Bankgesellschaft (SBG) 600 105,291
Schweizerische Rueckversicherungs-
Gesellschaft 250 266,207
Schweizerischer Bankverein 1,500 284,463
Zurich Versicherungs-Gesellschaft 800 221,759
------------
6,041,312
------------
UNITED KINGDOM -- 19.9%
Abbey National 29,254 383,693
Arjo Wiggins Appleton P.L.C. 28,604 87,784
Barclays P.L.C. 29,024 497,865
Bass P.L.C. 27,787 391,131
BAT Industries P.L.C. 61,989 514,927
Bicc P.L.C. 15,116 71,788
Boc Group P.L.C. 14,763 221,093
Boots Co., P.L.C.. 31,456 324,936
British Aerospace P.L.C. 13,032 285,995
British Airways P.L.C. 25,984 269,748
British Gas P.L.C. 87,820 338,024
British Petroleum Co., P.L.C. 114,518 1,375,369
British Sky Broadcasting Group,
P.L.C. 34,821 311,637
British Steel P.L.C. 48,774 134,215
British Telecommunications P.L.C. 117,681 795,959
BTR P.L.C. 77,651 378,097
Cable & Wireless P.L.C. 48,470 403,459
Cadbury Schweppes P.L.C. 21,655 182,853
Caradon P.L.C. 21,119 86,538
Coats Viyella P.L.C. 42,075 95,943
Commercial Union P.L.C. 16,982 199,005
De La Rue P.L.C. 2,677 26,276
East Midlands Electricity 5,255 59,960
EMI Group P.L.C. 11,495 271,973
General Electric Co., P.L.C. 60,816 398,308
Glaxo Wellcome P.L.C. 65,069 1,057,596
Granada Group P.L.C. 7,490 110,638
See Notes to Financial Statements.
61
<PAGE>
HARRIS INSIGHT FUNDS
INTERNATIONAL FUND
STATEMENT OF NET ASSETS (CONTINUED)
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
SHARES VALUE(DAGGER)
------ -------------
COMMON STOCK (CONTINUED)
UNITED KINGDOM (CONTINUED)
Grand Metropolitan P.L.C. 47,425 $ 373,214
Great Universal Stores P.L.C. 28,636 300,470
Guinness P.L.C. 50,992 399,973
Hanson P.L.C. 128,196 179,131
HSBC Holdings P.L.C. 35,126 766,043
HSBC Holdings P.L.C. (75P) 18,706 418,853
Imperial Chemical Industries P.L.C. 20,487 269,935
Imperial Tobacco Group P.L.C. 11,022 71,243
Kingfisher P.L.C. 19,852 214,939
Ladbroke Group P.L.C. 32,024 126,831
Land Securities P.L.C. 15,836 202,002
Legal & General Group P.L.C. 23,478 149,738
Lloyds TSB P.L.C. 159,904 1,180,239
Marks & Spencer P.L.C. 63,580 535,229
National Grid Group P.L.C. 48,148 161,385
National Power P.L.C. 26,998 226,349
Pearson P.L.C. 15,545 199,756
Peninsular & Oriental Steam
Navigation Co. 17,264 174,635
Prudential Corp.,P.L.C. 49,327 415,667
Rank Group P.L.C. 23,567 175,966
Redland P.L.C. 23,527 147,835
Reed International P.L.C. 23,877 450,922
Reuters Holdings P.L.C. 24,032 309,640
Rexam P.L.C. 6,400 39,557
RMC Group P.L.C. 10,882 186,105
Rolls-Royce P.L.C. 38,075 168,095
Royal Bank of Scotland Group P.L.C. 28,380 274,185
RTZ Corp. P.L.C. 27,356 439,236
Safeway P.L.C. 17,868 123,764
Sainsbury (J.) P.L.C. 32,897 218,839
Schroders P.L.C. 4,883 126,834
Scottish & Newcastle P.L.C. 37,135 437,081
Scottish Power P.L.C. 25,090 151,419
Sears P.L.C. 83,910 136,671
Smith Industries P.L.C. 17,363 238,449
Smithkline Beecham P.L.C. 51,802 718,954
Tesco P.L.C. 38,477 233,859
Thames Water P.L.C. 14,032 147,354
Thorn EMI P.L.C. 11,495 49,566
Unilever P.L.C. Holdings 13,489 327,592
United Biscuits Holdings P.L.C. 30,481 109,745
United Utilities P.L.C. 11,214 119,396
Vodafone Group P.L.C. 68,537 289,654
Wolseley P.L.C. 15,355 121,627
Zeneca Group P.L.C. 19,153 541,003
------------
21,923,790
------------
UNITED STATES -- 0.0%
Millennium Chemicals 1,574 27,939
------------
TOTAL COMMON STOCK
(Cost $100,979,182) 108,357,371
------------
SHARES VALUE(DAGGER)
------ -------------
RIGHTS AND WARRANTS -- 0.0%
Hong Kong China Gas Warrants
(Cost $0) 6,200 $ 0
------------
TEMPORARY INVESTMENTS -- 1.5%
Dreyfus Cash Management Plus #719 808,524 808,524
Goldman Sachs Financial Square
Money Market Portfolio 807,652 807,652
------------
TOTAL TEMPORARY INVESTMENTS
(Cost $1,616,176) 1,616,176
------------
TOTAL INVESTMENTS -- 99.7%
(Cost $102,595,358) 109,973,547
------------
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 0.3% 371,009
------------
NET ASSETS -- 100.0%
Applicable to 7,099,806 and 38,644
shares of beneficial interest
outstanding of Institutional
Class and Class A, respectively,
$.001 par value (Note 9) $110,344,556
============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER INSTITUTIONAL
($109,747,217/7,099,806) $15.46
======
NET ASSET VALUE ANDREDEMPTION
PRICE PER CLASS A SHARE
($597,339/38,644) $15.46
======
MAXIMUM PUBLIC OFFERING PRICE
PER CLASS A SHARE (NOTE 6) $16.19
======
- ---------------
(DAGGER) See Note 2a to the Financial Statements.
* Non-income producing security.
See Notes to Financial Statements.
62
<PAGE>
HARRIS INSIGHT FUNDS
HEMISPHERE FUND
STATEMENT OF NET ASSETS
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
SHARES VALUE(DAGGER)
------ -------------
UNITED STATES -- COMMON STOCK -- 41.2%
AEROSPACE -- 0.4%
Litton Industries, Inc.* 800 $ 38,100
------------
APPAREL -- 2.0%
Galey & Lord Inc.* 3,000 44,625
Nike, Inc. 2,400 143,400
Tultex Corp.* 4,000 28,000
------------
216,025
------------
AUTO PARTS -- 0.2%
Arvin Industries, Inc. 1,000 24,750
------------
AUTOMOTIVE -- 2.4%
Chrysler Corp. 2,600 85,800
Ford Motor Co. 2,800 89,250
General Motors Corp. 1,700 94,775
------------
269,825
------------
BUSINESS EQUIPMENT & SERVICE -- 0.9%
Comdisco,Inc. 3,200 101,600
------------
CHEMICALS -- 0.5%
Olin Corp. 1,600 60,200
------------
COMPUTER AND OFFICE EQUIPMENT -- 3.3%
Compaq Computer Corp.* 1,500 111,375
Dell Computer Corp.* 2,000 106,250
International Business Machines Corp. 700 105,700
Storage Technology Corp.* 1,000 47,625
------------
370,950
------------
CONGLOMERATES -- 1.8%
Philip Morris Co., Inc. 600 67,575
Textron, Inc. 1,400 131,950
------------
199,525
------------
CONTAINERS -- 0.4%
Owens-Illinois, Inc.* 2,200 50,050
------------
ELECTRONICS -- 1.5%
Avnet , Inc. 2,300 133,975
Esco Electronics Corp.* 1,000 10,000
Harmon Industries, Inc. 1,000 18,625
------------
162,600
------------
ENERGY -- 1.1%
Mobil Corp. 1,000 122,250
------------
FINANCIAL SERVICES -- 9.5%
Aviall, Inc.* 1,000 9,250
BankAmerica Corp. 1,700 169,575
Bear Stearns Companies, Inc. 5,040 140,490
Chase Manhattan Corp. 1,900 169,575
Cigna Corp. 2,000 273,250
Merrill Lynch & Co., Inc. 1,100 89,650
NationsBank, Inc. 1,400 136,850
Travelers Group, Inc. 1,600 72,598
------------
1,061,238
------------
SHARES VALUE(DAGGER)
------ -------------
UNITED STATES -- COMMON STOCK (CONTINUED)
FOOD AND AGRICULTURE -- 1.3%
IBP, Inc. 4,600 $ 111,550
Supervalu, Inc. 1,000 28,375
------------
139,925
------------
HEALTH CARE -- 0.1%
Allegiance Corp. 580 16,023
------------
HOSPITAL SUPPLIES AND SERVICES -- 1.0%
Becton, Dickinson & Co. 2,600 112,775
------------
MACHINERY AND HEAVY EQUIPMENT -- 1.0%
Gardner Denver Machinery, Inc.* 3,200 109,600
------------
MANUFACTURING -- 0.4%
Dexter Corp. 1,500 47,813
------------
MULTI-INDUSTRY -- 1.1%
Gencorp, Inc. 7,000 126,875
------------
OIL-DOMESTIC -- 0.5%
El Paso Natural Gas 1,000 50,500
------------
OIL-INTERNATIONAL -- 4.1%
Phillips Petroleum Co. 6,000 265,500
Texaco, Inc. 2,000 196,250
------------
461,750
------------
PAPER AND FOREST PRODUCTS -- 1.6%
Georgia Pacific Corp. 2,500 179,999
------------
PHARMACEUTICALS -- 2.5%
Bristol-Myers Squibb Co. 1,000 108,750
Merck & Co., Inc. 900 71,325
Rhone-Poulenc Rorer, Inc. 1,000 78,125
Schering Plough Corp. 300 19,425
------------
277,625
------------
RETAIL -- 0.6%
Dayton-Hudson Corp. 400 15,700
Sears, Roebuck & Co. 1,000 46,125
------------
61,825
------------
TELECOMMUNICATIONS -- 2.0%
AT&T Corp. 1,900 82,650
Lucent Technologies, Inc. 615 28,444
Sprint Corp. 2,800 111,650
------------
222,744
------------
UTILITIES-ELECTRIC -- 1.0%
Edison International 5,800 115,275
------------
TOTAL UNITED STATES -- COMMON STOCK
(Cost $3,951,066) 4,599,842
------------
See Notes to Financial Statements.
63
<PAGE>
HARRIS INSIGHT FUNDS
HEMISPHERE FUND
STATEMENT OF NET ASSETS (CONTINUED)
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
SHARES VALUE(DAGGER)
------ -------------
UNITED STATES -- TEMPORARY INVESTMENTS -- 1.4%
Dreyfus Cash Management Plus #719 76,377 $ 76,377
Goldman Sachs Financial Square
Money Market Portfolio 77,133 77,133
------------
TOTAL UNITED STATES TEMPORARY INVESTMENTS
(Cost $153,510) 153,510
------------
CANADA -- COMMON STOCK -- 30.1%
BANKING -- 1.2%
Bank of Nova Scotia 4,000 133,673
------------
CHEMICALS -- 0.6%
Nova Corp. 7,900 69,960
------------
CONSUMER DURABLES -- 1.0%
CCL Industries, Inc. 10,000 109,329
------------
CONSUMER NON-DURABLES -- 0.7%
Loewen Group, Inc. 2,000 77,988
------------
CONSUMER SERVICES -- 1.4%
Cinram Ltd. 5,600 153,061
------------
ELECTRICAL EQUIPMENT -- 1.2%
Northern Telecom Ltd. 2,200 136,618
------------
ELECTRONICS -- 1.0%
CAE, Inc. 14,000 105,612
------------
FINANCIAL SERVICES -- 1.1%
Newcourt Credit Group, Inc. 3,700 127,558
------------
HEALTH CARE -- 0.8%
Extendicare, Inc.* 8,000 93,878
------------
INDUSTRIAL EQUIPMENT -- 0.6%
United Dominion Industries, Ltd. 3,000 70,517
------------
MACHINERY AND HEAVY EQUIPMENT -- 1.1%
ATS Automation Tooling System, Inc.* 7,400 117,311
------------
METALS AND MINING -- 6.4%
Alcan Aluminium Ltd. 3,600 121,356
Barrick Gold Corp. 3,500 100,128
Cameco Corp. 2,250 90,033
Dayton Mining Corp.* 15,000 99,490
Dofasco, Inc. 5,800 109,490
Inco, Ltd. 3,000 95,663
Teck Corp. 4,300 99,508
------------
715,668
------------
MULTI-INDUSTRY -- 2.5%
Bombardier, Inc. 8,700 160,430
Canadian Pacific, Ltd. 4,500 118,240
------------
278,670
------------
SHARES VALUE(DAGGER)
------ -------------
CANADA -- COMMON STOCK (CONTINUED)
OIL-DOMESTIC -- 5.8%
Berkley Petroleum Corp.* 8,000 $ 193,003
Canadian Natural Resources Ltd.* 3,300 90,437
Northstar Energy Corp.* 9,300 108,116
Renaissance Energy Ltd.* 4,500 153,007
Startech Energy, Inc.* 13,500 105,776
------------
650,339
------------
PAPER AND FOREST PRODUCTS -- 1.3%
Donohue, Inc. 4,300 77,569
International Forest Products
Ltd.-Class A 9,100 71,301
------------
148,870
------------
PUBLISHING -- 1.0%
Thomson Corp. 5,300 116,855
------------
TELECOMMUNICATIONS -- 0.8%
Fonorola, Inc.* 7,200 85,277
------------
UTILITIES -- 1.6%
BCE, Inc. 3,700 176,101
------------
TOTAL CANADA -- COMMON STOCK
(Cost $2,867,720) 3,367,285
------------
MEXICO -- COMMON STOCK -- 25.8%
AUTO PARTS -- 1.3%
San Luis Corp. S.A. de C.V. 23,000 142,889
------------
BEVERAGES -- 4.4%
Coca Cola Femsa S.A. de C.V. 54,000 156,741
Fomento Economico Mexicano
S.A.-Series B 49,000 167,180
Grupo Modelo S.A. de C.V.-
Series C 29,000 167,244
------------
491,165
------------
BROADCASTING -- 2.1%
Grupo Televisa S.A. de C.V.* 8,000 102,966
Telefonos de Mexico S.A. de C.V. 79,000 130,342
------------
233,308
------------
BUILDING AND CONSTRUCTION -- 3.4%
Apasco S.A. de C.V. 23,000 158,116
Empresas ICA Sociedad Controladora
S.A. de C.V.* 11,000 161,464
Grupo Cementos de Chihuahua
S.A. de C.V.-Series B* 58,000 67,488
------------
387,068
------------
CONGLOMERATES -- 0.3%
Cydsa S.A.-Series A 22,000 40,051
------------
ELECTRONICS -- 1.1%
Grupo Elektra S.A. de C.V.-CPO 16,000 126,085
------------
See Notes to Financial Statements.
64
<PAGE>
HARRIS INSIGHT FUNDS
HEMISPHERE FUND
STATEMENT OF NET ASSETS (CONTINUED)
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
SHARES VALUE(DAGGER)
------ -------------
MEXICO -- COMMON STOCK (CONTINUED)
FOOD AND AGRICULTURE -- 1.5%
Grupo Industrial Maseca S.A.
de C.V.-Series B 133,000 $ 167,626
------------
METALS AND MINING -- 3.3%
Altos Hornos de Mexico S.A.* 47,500 93,730
Grupo Mexico S.A.-Series B* 19,000 60,955
Hylsamex S.A. de C.V.-BCP 28,000 110,681
Industrias Penoles S.A.-CP 31,000 110,108
------------
375,474
------------
MULTI-INDUSTRY -- 3.3%
Alfa, S.A. de C.V.-Series A 34,573 159,331
Carso Global Telecom S.A.
de C.V.-Series A-1* 22,841 52,632
Grupo Carso S.A. de C.V.-
Series A-1 29,000 151,369
------------
363,332
------------
PAPER AND FOREST PRODUCTS -- 1.4%
Kimberly-Clark de Mexico S.A. de
C.V.-Series A 8,000 155,621
------------
RAW MATERIALS -- 1.3%
Cemex S.A. de C.V.-CPO 39,000 140,261
------------
RETAIL -- 0.9%
Cifra S.A. de C.V.-Series C* 82,000 99,590
------------
TOBACCO -- 0.9%
Empresas La Moderna S.A. de C.V. 20,000 97,645
------------
TRANSPORTATION -- 0.6%
Transportacion Maritima Mexicana
S.A. de C.V. 12,000 63,399
------------
TOTAL MEXICO -- COMMON STOCK
(Cost $2,855,973) 2,883,514
------------
COUPON MATURITY PAR
RATE (DOUBLE DAGGER) (000) VALUE(DAGGER)
------ --------------- ----- -------------
MEXICO -- TREASURY BILLS -- 0.9%
Cetes
28.500% 01/23/97 MXP 555 $ 70,710
28.800% 01/23/97 253 32,250
------------
TOTAL MEXICO -- TREASURY BILLS
(Cost $102,416) 102,960
------------
TOTAL INVESTMENTS -- 99.4%
(Cost $9,930,685) 11,107,111
------------
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 0.6% 62,084
------------
NET ASSETS -- 100.0%
Applicable to 1,000,001 and 12,290
shares outstanding of Institutional
Class and Class A, respectively,
$.001 par value; 100,000,000
authorized shares (Note 9) $ 11,169,195
============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER INSTITUTIONAL
CLASS SHARE ($11,033,867/1,000,001) $11.03
======
NET ASSET VALUE AND REDEMPTION
PRICE PER CLASS A SHARE ($135,328/12,290) $11.01
======
MAXIMUM PUBLIC OFFERING PRICE
PER CLASS A SHARE (NOTE 6) $11.53
======
- ---------------
(DAGGER) See Note 2a to the Financial Statements.
* Non-income producing.
MXP -- Mexican Pesos.
See Notes to Financial Statements.
65
<PAGE>
HARRIS INSIGHT FUNDS
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
MONEY MARKET FUNDS
---------------------------------------
GOVERNMENT MONEY TAX-EXEMPT
MONEY FUND FUND MONEY FUND
----------- ----------- -----------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest ......................... $13,694,891 $43,398,812 $21,495,618
Dividends ........................ -- -- --
Foreign taxes withheld ........... -- -- --
----------- ----------- -----------
Total investment income ........ 13,694,891 43,398,812 21,495,618
----------- ----------- -----------
EXPENSES:
Investment advisory fee
(Note 4) ....................... 292,088 825,619 667,922
Rule 12b-1 fee-Class A
(Note 5) ....................... 757,429 1,628,803 633,999
Shareholder services fee
(Note 4) ....................... 43,781 110,520 99,394
Administration fee (Note 4) ...... 289,773 878,336 717,310
Custodian fee (Note 4) ........... 65,204 110,000 90,468
Directors' fees and expenses ..... 16,033 45,838 37,510
Audit fee ........................ 14,235 34,962 32,799
Legal fee ........................ 7,887 32,305 18,248
Amortization of organization
expenses (Note 2f) ............. -- -- --
Reports to shareholders .......... 6,396 14,513 12,073
Registration fees ................ 19,255 51,317 76,189
Miscellaneous .................... 45,881 76,617 50,206
----------- ----------- -----------
Total expenses ................... 1,557,962 3,808,830 2,436,118
Less fee waivers and expense
reimbursements
(Notes 4,5) .................... (278,478) (531,439) (187,894)
----------- ----------- -----------
Net expenses ................... 1,279,484 3,277,391 2,248,224
----------- ----------- -----------
NET INVESTMENT INCOME .......... 12,415,407 40,121,421 19,247,394
----------- ----------- -----------
NET REALIZED AND UNREALIZED
GAIN/(LOSS) ON INVESTMENTS
(NOTE 7):
Net realized gain/(loss) from:
Investment transactions ........ (72) (2,590) 11,969
Futures contracts .............. -- -- --
Foreign currency transactions .. -- -- --
Net change in unrealized
appreciation/(depreciation) on:
Investments .................... -- -- --
Futures contracts .............. -- -- --
Foreign currency transactions .. -- -- --
----------- ----------- -----------
NET REALIZED AND UNREALIZED
GAIN/(LOSS) ON INVESTMENTS ....... (72) (2,590) 11,969
----------- ----------- -----------
INCREASE IN NET ASSETS
FROM OPERATIONS .................. $12,415,335 $40,118,831 $19,259,363
=========== =========== ===========
</TABLE>
See Notes to Financial Statements.
<TABLE>
<CAPTION>
FIXED INCOME FUNDS
----------------------------------------------------------------
SHORT/ INTERMEDIATE
INTERMEDIATE BOND TAX-EXEMPT TAX-EXEMPT CONVERTIBLE
FUND FUND(3) FUND(1) FUND(1) FUND
----------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest ......................... $15,067,852 $1,513,358 $9,408,108 $7,443,819 $ 39,819
Dividends ........................ -- -- -- -- 18,595
Foreign taxes withheld ........... -- -- -- -- --
----------- ---------- ---------- ---------- --------
Total investment income ........ 15,067,852 1,513,358 9,408,108 7,443,819 58,414
----------- ---------- ---------- ---------- --------
EXPENSES:
Investment advisory fee
(Note 4) ....................... 1,594,951 148,028 1,120,322 829,656 8,054
Rule 12b-1 fee-Class A
(Note 5) ....................... 5,554 65 -- 2 --
Shareholder services fee
(Note 4) ....................... 27,712 3,566 27,121 18,501 5,031
Administration fee (Note 4) ...... 260,768 24,268 201,598 155,225 1,252
Custodian fee (Note 4) ........... 39,279 10,267 27,170 20,798 186
Directors' fees and expenses ..... 13,698 1,391 11,272 8,394 659
Audit fee ........................ 13,729 1,562 11,254 8,504 60
Legal fee ........................ 6,598 675 5,472 4,075 35
Amortization of organization
expenses (Note 2f) ............. 430 2,846 3,394 3,350 --
Reports to shareholders .......... 18,727 361 5,053 3,272 15
Registration fees ................ 69,978 25,028 83,208 64,308 3,621
Miscellaneous .................... 9,123 8,034 22,834 17,219 3,716
----------- ---------- ---------- ---------- --------
Total expenses ................... 2,060,547 226,091 1,518,698 1,133,304 22,629
Less fee waivers and expense
reimbursements
(Notes 4,5) .................... (699,386) (90,370) (44,999) (35,107) (13,403)
----------- ---------- ---------- ---------- --------
Net expenses ................... 1,361,161 135,721 1,473,699 1,098,197 9,226
----------- ---------- ---------- ---------- --------
NET INVESTMENT INCOME .......... 13,706,691 1,377,637 7,934,409 6,345,622 49,188
----------- ---------- ---------- ---------- --------
NET REALIZED AND UNREALIZED
GAIN/(LOSS) ON INVESTMENTS
(NOTE 7):
Net realized gain/(loss) from:
Investment transactions ........ (952,341) 250,406 846,717 3,668,482 74,470
Futures contracts .............. -- -- -- -- --
Foreign currency transactions .. -- -- -- -- --
Net change in unrealized
appreciation/(depreciation) on:
Investments .................... (3,937,487) 196,171 (3,615,528) (5,155,162) 94,688
Futures contracts .............. -- -- -- -- --
Foreign currency transactions .. -- -- -- -- --
----------- ---------- ---------- ---------- --------
NET REALIZED AND UNREALIZED
GAIN/(LOSS) ON INVESTMENTS ....... (4,889,828) 446,577 (2,768,811) (1,486,680) 169,158
----------- ---------- ---------- ---------- --------
INCREASE IN NET ASSETS
FROM OPERATIONS .................. $ 8,816,863 $1,824,214 $5,165,598 $4,858,942 $218,346
=========== ========== ========== ========== ========
</TABLE>
See Notes to Financial Statements.
<TABLE>
<CAPTION>
EQUITY FUNDS
-----------------------------------------------------------------------------------------
EQUITY
EQUITY INCOME GROWTH SMALL-CAP INDEX INTERNATIONAL HEMISPHERE
FUND FUND(1) FUND(1) FUND(1) FUND(1) FUND(1) FUND(2)
---------- ---------- ---------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest ......................... $ 421,531 $ 57,921 $ 66,922 $ 587,062 $ 132,054 $ 167,430 $ 64,170
Dividends ........................ 11,393,667 802,675 828,833 1,302,223 2,449,648 2,119,155 118,531
Foreign taxes withheld ........... -- -- -- -- (2,621) (191,849) (6,031)
----------- ---------- ----------- ----------- ----------- ---------- ----------
Total investment income ........ 11,815,198 860,596 895,755 1,889,285 2,579,081 2,094,736 176,670
----------- ---------- ----------- ----------- ----------- ---------- ----------
EXPENSES:
Investment advisory fee
(Note 4) ....................... 3,549,319 182,866 529,786 1,137,914 280,516 934,699 68,081
Rule 12b-1 fee-Class A
(Note 5) ....................... 9,326 310 315 292 121 512 136
Shareholder services fee
(Note 4) ....................... 79,404 4,697 9,786 16,803 16,594 14,354 1,360
Administration fee (Note 4) ...... 573,867 28,389 64,717 126,884 125,126 109,741 9,076
Custodian fee (Note 4) ........... 73,571 8,197 14,893 28,310 25,631 63,128 18,020
Directors' fees and expenses ..... 30,691 1,588 3,578 6,921 6,820 5,414 463
Audit fee ........................ 31,215 1,641 3,725 7,159 7,026 5,497 492
Legal fee ........................ 14,980 771 1,737 3,360 3,311 2,628 225
Amortization of organization
expenses (Note 2f) ............. -- 3,394 3,394 3,394 3,394 3,394 5,031
Reports to shareholders .......... 15,540 482 928 1,795 1,769 1,404 120
Registration fees ................ 182,017 17,989 33,810 50,110 55,598 45,752 12,663
Miscellaneous .................... 14,428 3,494 3,889 10,303 21,951 46,418 7,741
----------- ---------- ----------- ----------- ----------- ---------- ----------
Total expenses ................... 4,574,358 253,818 670,558 1,393,245 547,857 1,232,941 123,408
Less fee waivers and expense
reimbursements
(Notes 4,5) .................... -- (9,997) (20,952) (23,743) (41,424) (17,146) (5,701)
----------- ---------- ----------- ----------- ----------- ---------- ----------
Net expenses ................... 4,574,358 243,821 649,606 1,369,502 506,433 1,215,795 117,707
----------- ---------- ----------- ----------- ----------- ---------- ----------
NET INVESTMENT INCOME .......... 7,240,840 616,775 246,149 519,783 2,072,648 878,941 58,963
----------- ---------- ----------- ----------- ----------- ---------- ----------
NET REALIZED AND UNREALIZED
GAIN/(LOSS) ON INVESTMENTS
(NOTE 7):
Net realized gain/(loss) from:
Investment transactions ........ 95,158,144 2,728,461 6,832,984 9,632,120 3,647,135 511,200 (126,382)
Futures contracts .............. -- -- -- -- 417,492 -- --
Foreign currency transactions .. -- -- -- -- -- (13,529) (64,726)
Net change in unrealized
appreciation/(depreciation) on:
Investments .................... (18,411,180) 568,752 4,142,193 8,437,066 12,150,974 2,845,921 1,176,426
Futures contracts .............. -- -- -- -- (24,550) -- --
Foreign currency transactions .. -- -- -- -- -- 11,569 (1,249)
----------- ---------- ----------- ----------- ----------- ---------- ----------
NET REALIZED AND UNREALIZED
GAIN/(LOSS) ON INVESTMENTS ....... 76,746,964 3,297,213 10,975,177 18,069,186 16,191,051 3,355,161 984,069
----------- ---------- ----------- ----------- ----------- ---------- ----------
INCREASE IN NET ASSETS
FROM OPERATIONS .................. $83,987,804 $3,913,988 $11,221,326 $18,588,969 $18,263,699 $4,234,102 $1,043,032
=========== ========== =========== =========== =========== ========== ==========
<FN>
- ----------
(1) For the period 02/26/96 (commencement of operations) to 12/31/96.
(2) For the period 04/09/96 (commencement of operations) to 12/31/96.
(3) For the period 04/16/96 (commencement of operations) to 12/31/96.
</FN>
</TABLE>
See Notes to Financial Statements.
66-67
<PAGE>
HARRIS INSIGHT FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
MONEY MARKET FUNDS
------------------------------------------
GOVERNMENT MONEY TAX-EXEMPT
MONEY FUND FUND MONEY FUND
------------ ------------ ------------
<S> <C> <C> <C>
INCREASE/(DECREASE) IN
NET ASSETS
OPERATIONS:
Net investment income ............... $ 12,415,407 $ 40,121,421 $ 19,247,394
Net realized gain/(loss) on
investment transactions,
futures contracts and foreign
currency transactions ............. (72) (2,590) 11,969
Net change in unrealized
appreciation/(depreciation)
of investment transactions,
futures contracts, and foreign
currency transactions ............. -- -- --
------------ ------------ ------------
Increase in net assets
from operations ................... 12,415,335 40,118,831 19,259,363
------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
(NOTES 2C AND 2D):
Net investment income:
Institutional Class ............... (1,831,254) (16,876,839) (14,006,346)
Class A(4) ........................ (10,584,153) (23,255,431) (5,241,048)
------------ ------------ ------------
Total distributions from net
investment income ................. (12,415,407) (40,132,270) (19,247,394)
------------ ------------ ------------
Net realized gains on investments:
Institutional Class ............... -- -- --
Class A ........................... -- -- --
------------ ------------ ------------
Total distributions from net
realized gains .................... -- -- --
------------ ------------ ------------
CAPITAL SHARE TRANSACTIONS:
Increase/(decrease) in net
assets from capital share
transactions in:
Institutional Class ............... 18,802,992 270,581,554 176,249,984
Class A ........................... (58,353,363) 37,636,908 8,274,685
------------ ------------ ------------
Increase/(decrease) in net
assets from capital share
transactions ...................... (39,550,371) 308,218,462 184,524,669
------------ ------------ ------------
Total increase/(decrease) in
net assets ........................ (39,550,443) 308,205,023 184,536,638
NET ASSETS:
Beginning of period ................. 282,792,779 522,425,299 382,716,459
------------ ------------ ------------
End of period ....................... $243,242,336 $830,630,322 $567,253,097
============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
FIXED INCOME FUNDS
----------------------------------------------------------------------
SHORT/ INTERMEDIATE
INTERMEDIATE BOND TAX-EXEMPT TAX-EXEMPT CONVERTIBLE
FUND FUND(3) FUND(1) FUND(1) FUND
------------ ----------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C>
INCREASE/(DECREASE) IN
NET ASSETS
OPERATIONS:
Net investment income ............... $ 13,706,691 $ 1,377,637 $ 7,934,409 $ 6,345,622 $ 49,188
Net realized gain/(loss) on
investment transactions,
futures contracts and foreign
currency transactions ............. (952,341) 250,406 846,717 3,668,482 74,470
Net change in unrealized
appreciation/(depreciation)
of investment transactions,
futures contracts, and foreign
currency transactions ............. (3,937,487) 196,171 (3,615,528) (5,155,162) 94,688
------------ ----------- ------------ ------------ ----------
Increase in net assets
from operations ................... 8,816,863 1,824,214 5,165,598 4,858,942 218,346
------------ ----------- ------------ ------------ ----------
DISTRIBUTIONS TO SHAREHOLDERS
(NOTES 2C AND 2D):
Net investment income:
Institutional Class ............... (12,576,121) (1,376,263) (7,932,978) (6,345,578) --
Class A(4) ........................ (1,124,909) (1,730) (1,431) (44) (49,323)
------------ ----------- ------------ ------------ ----------
Total distributions from net
investment income ................. (13,701,030) (1,377,993) (7,934,409) (6,345,622) (49,323)
------------ ----------- ------------ ------------ ----------
Net realized gains on investments:
Institutional Class ............... -- (139,009) (720,399) (3,479,679) --
Class A ........................... -- (378) -- (767) --
------------ ----------- ------------ ------------ ----------
Total distributions from net
realized gains .................... -- (139,387) (720,399) (3,480,446) --
------------ ----------- ------------ ------------ ----------
CAPITAL SHARE TRANSACTIONS :
Increase/(decrease) in net
assets from capital share
transactions in:
Institutional Class ............... 258,641,418 42,834,580 212,178,045 170,354,303 --
Class A ........................... (45,565,951) 131,068 1,527 38,776 (158,714)
------------ ----------- ------------ ------------ ----------
Increase/(decrease) in net
assets from capital share
transactions ...................... 213,075,467 42,965,648 212,179,572 170,393,079 (158,714)
------------ ----------- ------------ ------------ ----------
Total increase/(decrease) in
net assets ........................ 208,191,300 43,272,482 208,690,36 165,425,953 10,309
NET ASSETS:
Beginning of period ................. 51,814,058 40 100 100 1,170,688
------------ ----------- ------------ ------------ ----------
End of period ....................... $260,005,358 $43,272,522 $208,690,462 $165,426,053 $1,180,997
============ =========== ============ ============ ==========
</TABLE>
See Notes to Financial Statements.
<TABLE>
<CAPTION>
EQUITY FUNDS
--------------------------------------------------------------------------------------------
EQUITY
EQUITY INCOME GROWTH SMALL-CAP INDEX INTERNATIONAL HEMISPHERE
FUND FUND(1) FUND(1) FUND(1) FUND(1) FUND(1) FUND(2)
------------ ----------- ----------- ------------ ------------ ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
INCREASE/(DECREASE) IN
NET ASSETS
OPERATIONS:
Net investment income ............... $ 7,240,840 $ 616,775 $ 246,149 $ 519,783 $ 2,072,648 $ 878,941 $ 58,963
Net realized gain/(loss) on
investment transactions,
futures contracts and foreign
currency transactions ............. 95,158,144 2,728,461 6,832,984 9,632,120 4,064,627 497,671 (191,108)
Net change in unrealized
appreciation/(depreciation)
of investment transactions,
futures contracts, and foreign
currency transactions ............. (18,411,180) 568,752 4,142,193 8,437,066 12,126,424 2,857,490 1,175,177
------------ ----------- ----------- ------------ ------------ ------------ -----------
Increase in net assets
from operations ................... 83,987,804 3,913,988 11,221,326 18,588,969 18,263,699 4,234,102 1,043,032
------------ ----------- ----------- ------------ ------------ ------------ -----------
DISTRIBUTIONS TO SHAREHOLDERS
(NOTES 2C AND 2D):
Net investment income:
Institutional Class ............... (6,952,962) (611,754) (249,564) (521,897) (2,071,983) (857,914) --
Class A(4) ........................ (294,553) (3,860) (492) (612) (1,087) (1,643) --
------------ ----------- ----------- ------------ ------------ ------------ -----------
Total distributions from net
investment income ................. (7,247,515) (615,614) (250,056) (522,509) (2,073,070) (859,557) --
------------ ----------- ----------- ------------ ------------ ------------ -----------
Net realized gains on investments:
Institutional Class ............... (754,414) (2,299,750) (4,338,062) (6,804,684) (2,672,444) (475,914) --
Class A ........................... (60,143,772) (20,638) (21,411) (19,522) (2,645) (2,596) --
------------ ----------- ----------- ------------ ------------ ------------ -----------
Total distributions from net
realized gains .................... (60,898,186) (2,320,388) (4,359,473) (6,824,206) (2,675,089) (478,510) --
------------ ----------- ----------- ------------ ------------ ------------ -----------
CAPITAL SHARE TRANSACTIONS :
Increase/(decrease) in net
assets from capital share
transactions in:
Institutional Class ............... 557,058,547 30,791,846 69,917,221 139,069,249 130,446,451 106,861,336 10,000,000
Class A ........................... (57,964,695) 189,249 383,809 436,806 141,909 586,985 126,143
------------ ----------- ----------- ------------ ------------ ------------ -----------
Increase/(decrease) in net
assets from capital share
transactions ...................... 499,093,852 30,981,095 70,301,030 139,506,055 130,588,360 107,448,321 10,126,143
------------ ----------- ----------- ------------ ------------ ------------ -----------
Total increase/(decrease) in
net assets ........................ 514,935,955 31,959,081 76,912,827 150,748,309 144,103,900 110,344,356 11,169,175
NET ASSETS:
Beginning of period ................. 61,256,077 99,050 130 200 200 200 20
------------ ----------- ----------- ------------ ------------ ------------ -----------
End of period ....................... $576,192,032 $32,058,131 $76,912,957 $150,748,509 $144,104,100 $110,344,556 $11,169,195
============ =========== =========== ============ ============ ============ ===========
<FN>
- -------------
(1) For the period 02/26/96 (commencement of operations) to 12/31/96.
(2) For the period 04/09/96 (commencement of operations) to 12/31/96.
(3) For the period 04/16/96 (commencement of operations) to 12/31/96.
(4) Shares of Convertible Fund are not designated as Class A shares.
</FN>
</TABLE>
See Notes to Financial Statements.
68-69
<PAGE>
HARRIS INSIGHT FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
TAX-EXEMPT SHORT/
GOVERNMENT MONEY MONEY INTERMEDIATE CONVERTIBLE EQUITY
MONEY FUND FUND FUND FUND FUND FUND
------------ ------------ ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
INCREASE/(DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income..................... $ 16,350,982 $ 35,155,654 $ 14,426,474 $ 2,765,514 $ 74,101 $ 916,856
Net realized gain/(loss) on investment
transactions............................ -- 11,705 (968) 835,603 (2,487) 4,873,879
Net change in unrealized appreciation
on investments.......................... -- -- -- 2,423,206 159,092 10,034,375
------------ ------------ ------------ ----------- ---------- -----------
Increase in net assets from operations.... 16,350,982 35,167,359 14,425,506 6,024,323 230,706 15,825,110
------------ ------------ ------------ ----------- ---------- -----------
DISTRIBUTIONS TO SHAREHOLDERS
(NOTES 2C AND 2D):
Net investment income:
Institutional Class................... (1,525,847) (6,754,027) (9,438,847) -- -- --
Class A(1)............................ (14,825,135) (28,401,627) (4,987,627) (2,736,934) (112,506) (926,271)
Realized net gain on investments.......... -- -- -- -- -- (4,885,308)
------------ ------------ ------------ ----------- ---------- -----------
Total distributions....................... (16,350,982) (35,155,654) (14,426,474) (2,736,934) (112,506) (5,811,579)
------------ ------------ ------------ ----------- ---------- -----------
CAPITAL SHARE TRANSACTIONS:
Increase/(decrease) in net assets from
capital share transactions in:
Institutional Class................... 8,749,235 66,847,015 (24,954,287) -- -- --
Class A(1)............................ 34,807,179 (106,789,241) 47,071,146 4,194,142 (363,477) 12,322,500
------------ ------------ ------------ ----------- ---------- -----------
Increase/(decrease) in net assets from
capital share transactions.............. 43,556,414 (39,942,226) 22,116,859 4,194,142 (363,477) 12,322,500
------------ ------------ ------------ ----------- ---------- -----------
Total increase/(decrease) in net assets... 43,556,414 (39,930,521) 22,115,891 7,481,531 (245,277) 22,336,031
------------ ------------ ------------ ----------- ---------- -----------
NET ASSETS:
Beginning of year......................... 239,236,365 562,355,820 360,600,568 44,332,527 1,415,965 38,920,046
------------ ------------ ------------ ----------- ---------- -----------
End of year............................... $282,792,779 $522,425,299 $382,716,459 $51,814,058 $1,170,688 $61,256,077
============ ============ ============ =========== ========== ===========
<FN>
- --------------
(1) Shares of Convertible Fund are not designated as Class A shares.
</FN>
</TABLE>
See Notes to Financial Statements.
70
<PAGE>
HARRIS INSIGHT FUNDS
STATEMENTS OF CHANGES -- CAPITAL STOCK ACTIVITY
FOR THE PERIOD ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
FIXED INCOME FUNDS
--------------------------------------------------------------------------------
SHORT/ INTERMEDIATE
INTERMEDIATE BOND TAX-EXEMPT TAX-EXEMPT CONVERTIBLE
FUND FUND(2) FUND(1) FUND(1) FUND
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
AMOUNT
- ------
INSTITUTIONAL CLASS:
Sold .............................. $ 315,836,583 $ 43,202,747 $ 255,651,844 $ 190,808,486 --
Issued as reinvestment of dividends 1,181,698 102,573 8,778 21,152 --
Redeemed .......................... (58,376,863) (470,740) (43,482,577) (20,475,335) --
------------- ------------- ------------- ------------- -------------
Net Increase/(decrease) ........... $ 258,641,418 $ 42,834,580 $ 212,178,045 $ 170,354,303 --
============= ============= ============= ============= =============
CLASS A:(3)
Sold .............................. $ 11,894,136 $ 222,006 $ 179,000 $ 38,000 $ 136,902
Issued as reinvestment of dividends 637,887 1,569 -- 776 31,632
Redeemed .......................... (58,097,974) (92,507) (177,473) -- (327,248)
------------- ------------- ------------- ------------- -------------
Net Increase/(decrease) ........... $ (45,565,951) $ 131,068 $ 1,527 $ 38,776 $ (158,714)
============= ============= ============= ============= =============
=======================================================================================================================
SHARES
- ------
INSTITUTIONAL CLASS:
Sold .............................. 30,880,397 4,319,806 23,864,232 18,118,214 --
Issued as reinvestment of dividends 117,417 10,179 828 2,055 --
Redeemed .......................... (5,793,296) (46,602) (4,139,865) (1,987,182) --
------------- ------------- ------------- ------------- -------------
Net Increase/(decrease) ........... 25,204,518 4,283,383 19,725,195 16,133,087 --
============= ============= ============= ============= =============
CLASS A:(3)
Sold .............................. 1,167,686 21,973 16,967 3,639 13,417
Issued as reinvestment of dividends 62,690 156 -- 75 3,160
Redeemed .......................... (5,787,240) (9,202) (16,967) -- (32,229)
------------- ------------- ------------- ------------- -------------
Net Increase/(decrease) ........... (4,556,864) 12,927 -- 3,714 (15,652)
============= ============= ============= ============= =============
<FN>
- -----------
(1) For the Period 02/26/96 (commencement of operations) to 12/31/96.
(2) For the Period 04/16/96 (commencement of operations) to 12/31/96.
(3) Shares of Convertible Fund are not designated as Class A shares.
</FN>
</TABLE>
See Notes to Financial Statements.
71
<PAGE>
HARRIS INSIGHT FUNDS
STATEMENTS OF CHANGES -- CAPITAL STOCK ACTIVITY (CONTINUED)
FOR THE PERIOD ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
EQUITY FUNDS
---------------------------------------------------------------------------------------------
EQUITY
EQUITY INCOME GROWTH SMALL CAP INDEX INTERNATIONAL HEMISPHERE
FUND FUND(1) FUND(1) FUND(1) FUND(1) FUND(1) FUND(2)
------------ ----------- ----------- ------------ ------------ ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
AMOUNT
- ------
INSTITUTIONAL CLASS:
Sold ...................... $629,627,359 $33,736,818 $72,754,630 $147,029,490 $142,845,246 $123,388,071 $10,000,000
Issued as reinvestment of
dividends ............... 6,744,978 137,826 186,112 854,418 18,093 52,160 --
Redeemed .................. (79,313,790) (3,082,798) (3,023,521) (8,814,659) (12,416,888) (16,578,895) --
------------ ----------- ----------- ------------ ------------ ------------ -----------
Net Increase/(decrease) ... $557,058,547 $30,791,846 $69,917,221 $139,069,249 $130,446,451 $106,861,336 $10,000,000
============ =========== =========== ============ ============ ============ ===========
CLASS A:
Sold ...................... $ 18,931,677 $ 174,475 $ 363,832 $ 423,415 $ 140,207 $ 583,595 $ 126,143
Issued as reinvestment of
dividends ............... 4,041,336 15,196 21,898 17,777 3,612 3,390 --
Redeemed .................. (80,937,708) (422) (1,921) (4,386) (1,910) -- --
------------ ----------- ----------- ------------ ------------ ------------ -----------
Net Increase/(decrease) ... $(57,964,695) $ 189,249 $ 383,809 $ 436,806 $ 141,909 $ 586,985 $ 126,143
============ =========== =========== ============ ============ ============ ===========
==========================================================================================================================
SHARES
- ------
INSTITUTIONAL CLASS:
Sold ...................... 41,238,231 2,529,504 4,258,723 10,230,022 8,512,544 8,037,422 1,000,000
Issued as reinvestment of
dividends ............... 430,491 9,907 9,805 55,551 1,010 149,248 --
Redeemed .................. (5,063,358) (226,133) (175,213) (600,090) (723,332) (1,086,874) --
------------ ----------- ----------- ------------ ------------ ------------ -----------
Net Increase /(decrease) .. 36,605,364 2,313,278 4,093,315 9,685,483 7,790,222 7,099,796 1,000,000
============ =========== =========== ============ ============ ============ ===========
CLASS A:
Sold ...................... 1,274,610 13,218 20,199 27,633 8,047 38,413 12,289
Issued as reinvestment of
dividends ............... 283,639 1,094 1,154 1,156 194 221 --
Redeemed .................. (5,435,092) (30) (114) (286) (117) -- --
------------ ----------- ----------- ------------ ------------ ------------ -----------
Net Increase/(decrease) ... (3,876,843) 14,282 21,239 28,503 8,124 38,634 12,289
============ =========== =========== ============ ============ ============ ===========
<FN>
- ------------
(1) For the Period 02/26/96 (commencement of operations) to 12/31/96.
(2) For the Period 04/09/96 (commencement of operations) to 12/31/96.
</FN>
</TABLE>
See Notes to Financial Statements.
72
<PAGE>
HARRIS INSIGHT FUNDS
STATEMENTS OF CHANGES -- CAPITAL STOCK ACTIVITY (CONTINUED)
Since the Money Market Funds have sold and redeemed shares only at a
constant net asset value of $1.00 per share, the number of shares represented by
such sales and redemptions is the same as the amounts shown below for such
transactions.
<TABLE>
<CAPTION>
MONEY MARKET FUNDS
------------------------------------------------------------------------------------------------------
GOVERNMENT MONEY FUND MONEY FUND TAX-EXEMPT MONEY FUND
--------------------------------- --------------------------------- -----------------------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
12/31/96 12/31/95 12/31/96 12/31/95 12/31/96 12/31/95
--------------- --------------- --------------- --------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
INSTITUTIONAL CLASS:
Sold ...................... $ 232,771,120 $ 131,707,872 $ 993,846,629 $ 582,600,924 $ 902,032,719 $ 557,879,624
Issued as reinvestment of
dividends ............... 10,764 -- 282,379 -- 2,813 --
Redeemed .................. (213,978,892) (122,958,637) (723,547,454) (515,753,909) (725,785,548) (582,833,911)
--------------- --------------- --------------- --------------- ------------- -------------
Net Increase/(decrease) ... $ 18,802,992 $ 8,749,235 $ 270,581,554 $ 66,847,015 $ 176,249,984 $ (24,954,287)
=============== =============== =============== =============== ============= =============
CLASS A :
Sold ...................... $ 1,159,556,974 $ 1,616,444,970 $ 2,226,243,194 $ 2,220,465,314 $ 453,682,137 $ 375,279,584
Issued as reinvestment of
dividends ............... 4,846,048 3,971,290 12,457,401 6,557,546 3,504,283 3,268,939
Redeemed .................. (1,222,756,385) (1,585,609,081) (2,201,063,687) (2,333,812,101) (448,911,735) (331,477,377)
--------------- --------------- --------------- --------------- ------------- -------------
Net Increase/(decrease) ... $ (58,353,363) $ 34,807,179 $ 37,636,908 $ (106,789,241) $ 8,274,685 $ 47,071,146
=============== =============== =============== =============== ============= =============
</TABLE>
================================================================================
STATEMENTS OF CHANGES -- CAPITAL STOCK ACTIVITY
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
CONVERTIBLE FUND EQUITY FUND SHORT/INTERMEDIATE FUND
-------------------- ------------------------ ------------------------
SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS
------- --------- ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Sold .......................... 13,659 $ 127,741 2,589,189 $ 34,629,202 1,490,117 $ 15,074,161
Issued as reinvestment of
dividends ................... 4,101 38,901 16,147 215,680 135,887 1,372,471
Redeemed ...................... (55,971) (530,119) (1,678,367) (22,522,382) (1,219,880) (12,252,490)
------- --------- ---------- ------------ ---------- ------------
Net Increase/(decrease) ....... (38,211) $(363,477) 926,969 $ 12,322,500 406,124 $ 4,194,142
======= ========= ========== ============ ========== ============
</TABLE>
See Notes to Financial Statements.
73
<PAGE>
HARRIS INSIGHT FUNDS
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS CLASS A
-------------------------------- --------------------------------------------------------
YEAR YEAR PERIOD YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
GOVERNMENT MONEY FUND 12/31/96 12/31/95 12/31/94(4) 12/31/96 12/31/95 12/31/94 12/31/93 12/31/92
-------- -------- ---------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period .......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------ -------- -------- ------- -------- --------
INCOME FROM INVESTMENT
OPERATIONS:
Net Investment Income ............. 0.051 0.056 0.028 0.049 0.054 0.037 0.026 0.033
------- ------- ------ -------- -------- ------- -------- --------
Total from Investment
Operations ...................... 0.051 0.056 0.028 0.049 0.054 0.037 0.026 0.033
------- ------- ------ -------- -------- ------- -------- --------
LESS DISTRIBUTIONS:
Net Investment Income ............. (0.051) (0.056) (0.028) (0.049) (0.054) (0.037) (0.026) (0.033)
------- ------- ------ -------- -------- ------- -------- --------
Total Distributions ............... (0.051) (0.056) (0.028) (0.049) (0.054) (0.037) (0.026) (0.033)
------- ------- ------ -------- -------- ------- -------- --------
Net Asset Value, End of Period .... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ====== ======== ======== ======= ======== ========
TOTAL RETURN 5.24% 5.79% 2.82%(3) 5.00% 5.51% 3.72% 2.62% 3.42%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000) ... $37,169 $18,367 $9,617 $206,073 $264,426 $229,619 $263,909 $140,134
Ratios of Expenses to
Average Net Assets(1) ........... 0.31% 0.31% 0.29%(2) 0.54% 0.57% 0.60% 0.61% 0.66%
Ratio of Net Investment Income to
Average Net Assets .............. 5.12% 5.62% 4.52%(2) 4.89% 5.36% 3.62% 2.57% 3.34%
<FN>
- ----------
(1) Without the voluntary waiver of fees, the expense ratios for the years
ended December 31, 1996, 1995, and the period ended December 31, 1994 for
the Institutional Class shares would have been 0.32%, 0.32% and 0.31%
(annualized), respectively, and for the years ended December 31, 1996,
1995, 1994, 1993 and 1992 for the Class A shares would have been 0.67% ,
0.67%, 0.66%, 0.70%, and 0.70%, respectively.
(2) Annualized.
(3) Total returns for periods less than one year are not annualized.
(4) Commenced operations on May 16, 1994.
</FN>
</TABLE>
See Notes to Financial Statements.
74
<PAGE>
HARRIS INSIGHT FUNDS
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS CLASS A
-------------------------------- ----------------------------------------------------
YEAR YEAR PERIOD YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
MONEY FUND 12/31/96 12/31/95 12/31/94(4) 12/31/96 12/31/95 12/31/94 12/31/93 12/31/92
-------- -------- ---------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period ......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- ------- ------- -------- -------- -------- -------- --------
INCOME FROM INVESTMENT
OPERATIONS:
Net Investment Income ............ 0.052 0.057 0.039 0.050 0.054 0.037 0.027 0.034
-------- ------- ------- -------- -------- -------- -------- --------
Total from Investment
Operations ..................... 0.052 0.057 0.039 0.050 0.054 0.037 0.027 0.034
-------- ------- ------- -------- -------- -------- -------- --------
LESS DISTRIBUTIONS:
Net Investment Income ............ (0.052) (0.057) (0.039) (0.050) (0.054) (0.037) (0.027) (0.034)
-------- ------- ------- -------- -------- -------- -------- --------
Total Distributions .............. (0.052) (0.057) (0.039) (0.050) (0.054) (0.037) (0.027) (0.034)
-------- ------- ------- -------- -------- -------- -------- --------
Net Asset Value,
End of Period .................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======= ======= ======== ======== ======== ======== ========
TOTAL RETURN ..................... 5.38% 5.86% 4.08%(3) 5.11% 5.58% 3.79% 2.69% 3.41%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000) .. $369,417 $98,837 $31,990 $461,213 $423,588 $530,366 $348,984 $383,280
Ratios of Expenses to
Average Net Assets(1) .......... 0.27% 0.29% 0.29%(2) 0.52% 0.56% 0.55% 0.57% 0.60%
Ratio of Net Investment Income to
Average Net Assets ............. 5.23% 5.69% 4.79%(2) 5.00% 5.42% 3.79% 2.66% 3.34%
<FN>
- ----------
(1) Without the voluntary waiver of fees, the expense ratios for the years
ended December 31, 1996 and 1995 and the period ended December 31, 1994 for
the Institutional Class shares would have been 0.28%, 0.30% and 0.30%
(annualized), respectively, and for the years ended December 31, 1996,
1995, 1994, 1993 and 1992 for the Class A shares would have been 0.63%,
0.65%, 0.65%, 0.72% and 0.73% , respectively.
(2) Annualized.
(3) Total returns for periods less than one year are not annualized.
(4) Commenced operations on January 5, 1994.
</FN>
</TABLE>
See Notes to Financial Statements.
75
<PAGE>
HARRIS INSIGHT FUNDS
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS CLASS A
-------------------------------- ---------------------------------------------------
YEAR YEAR PERIOD YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
TAX-EXEMPT MONEY FUND 12/31/96 12/31/95 12/31/94(4) 12/31/96 12/31/95 12/31/94 12/31/93 12/31/92
-------- -------- ---------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period ......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- -------- -------- --------
INCOME FROM INVESTMENT
OPERATIONS:
Net Investment Income ............ 0.031 0.035 0.025 0.029 0.033 0.023 0.020 0.025
-------- -------- -------- -------- -------- -------- -------- --------
Total from Investment Operations . 0.031 0.035 0.025 0.029 0.033 0.023 0.020 0.025
-------- -------- -------- -------- -------- -------- -------- --------
LESS DISTRIBUTIONS:
Net Investment Income ............ (0.031) (0.035) (0.025) (0.029) (0.033) (0.023) (0.020) (0.025)
-------- -------- -------- -------- -------- -------- -------- --------
Total Distributions .............. (0.031) (0.035) (0.025) (0.029) (0.033) (0.023) (0.020) (0.025)
-------- -------- -------- -------- -------- -------- -------- --------
Net Asset Value, End of Period ... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ======== ======== ========
TOTAL RETURN ..................... 3.19% 3.60% 2.56%(3) 2.94% 3.31% 2.30% 1.99% 2.54%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000) .. $388,404 $212,146 $237,100 $178,849 $170,570 $123,501 $168,440 $152,821
Ratios of Expenses to Average
Net Assets(1) .................... 0.29% 0.29% 0.28%(2) 0.53% 0.56% 0.54% 0.54% 0.62%
Ratio of Net Investment Income to
Average Net Assets ............... 3.14% 3.52% 2.99%(2) 2.89% 3.25% 2.20% 1.97% 2.50%
<FN>
- -----------
(1) Without the voluntary waiver of fees, the expense ratios for the years
ended December 31, 1996 and 1995, and the period ended December 31, 1994
for the Institutional Class shares would have been 0.29%, 0.29% and 0.30%
(annualized), respectively, and for the years ended December 31, 1996,
1995, 1994, 1993, and 1992 for the Class A shares would have been 0.64%,
0.65%, 0.65%, 0.71%, and 0.73%, respectively.
(2) Annualized.
(3) Total returns for periods less than one year are not annualized.
(4) Commenced operations on January 5, 1994.
</FN>
</TABLE>
See Notes to Financial Statements.
76
<PAGE>
HARRIS INSIGHT FUNDS
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS CLASS A
------------------- -------------------------------------------------------------
FOR THE PERIOD YEAR YEAR YEAR YEAR YEAR
02/26/96(5) ENDED ENDED ENDED ENDED ENDED
SHORT/INTERMEDIATE FUND TO 12/31/96 12/31/96 12/31/95 12/31/94 12/31/93 12/31/92
------------------- -------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period .......................... $ 10.30 $10.38 $ 9.66 $ 10.34 $ 10.22 $ 10.57
-------- ------ ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income ............. 0.517 0.594 0.588 0.559 0.563 0.630
Net Realized and Unrealized
Gain/(Loss) on Investments ...... (0.160) (0.247) 0.720 (0.694) 0.435 (0.087)
-------- ------ ------- ------- ------- -------
Total from Investment Operations .. 0.357 0.347 1.308 (0.135) 0.998 0.543
-------- ------ ------- ------- ------- -------
LESS DISTRIBUTIONS:
Net Investment Income ............. (0.517) (0.587) (0.588) (0.545) (0.564) (0.631)
Net Realized Gains ................ 0.000 0.000 0.000 0.000 (0.314) (0.262)
-------- ------ ------- ------- ------- -------
Total Distributions ............... (0.517) (0.587) (0.588) (0.545) (0.878) (0.893)
-------- ------ ------- ------- ------- -------
Net Asset Value, End of Period .... $ 10.14 $10.14 $ 10.38 $ 9.66 $ 10.34 $ 10.22
======== ====== ======= ======= ======= =======
TOTAL RETURN(4) ................... 3.61%(3) 3.51% 13.88% (1.29)% 9.91% 5.28%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000) ... $255,573 $4,432 $51,814 $44,333 $74,057 $71,848
Ratios of Expenses to Average
Net Assets(1) ................... 0.60%(2) 0.62% 0.60% 0.60% 0.60% 0.60%
Ratio of Net Investment Income to
Average Net Assets .............. 6.06%(2) 5.59% 5.91% 5.29% 5.32% 6.07%
Portfolio Turnover Rate ........... 186.02% 186.02% 194.94% 140.99% 215.07% 133.78%
<FN>
- ------------
(1) Without the voluntary waiver of fees, the expense ratios for the period
ended December 31, 1996 for the Institutional Class shares would have been
0.90% (annualized) and for the years ended December 31, 1996, 1995, 1994,
1993, and 1992 for the Class A shares would have been 0.92%, 0.96%, 0.92%,
0.94%, and 0.93%, respectively.
(2) Annualized.
(3) Total returns for periods less than one year are not annualized.
(4) Sales load is not reflected in total return.
(5) Date commenced operations.
</FN>
</TABLE>
See Notes to Financial Statements.
77
<PAGE>
HARRIS INSIGHT FUNDS
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
INTERMEDIATE
BOND FUND TAX-EXEMPT FUND TAX-EXEMPT FUND
------------------------------ ------------------------------ ------------------------------
INSTITUTIONAL INSTITUTIONAL INSTITUTIONAL
CLASS CLASS A CLASS CLASS A CLASS CLASS A
-------------- -------------- -------------- -------------- -------------- --------------
FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD
04/16/96(5) 04/22/96(5) 02/26/96(5) 03/13/96(5) 02/26/96(5) 10/2/96(5)
TO 12/31/96 TO 12/31/96 TO 12/31/96 TO 12/31/96 TO 12/31/96 TO 12/31/96
-------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period ............................. $ 10.00 $ 9.99 $ 10.74 $ 10.55 $ 10.56 $10.33
------- ------- -------- ------- -------- ------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income ................ 0.425 0.402 0.381 0.084 0.402 0.105
Net Realized and Unrealized Gain/
(Loss) on Investments .............. 0.103 0.113 (0.124) 0.066 (0.094) 0.136
------- ------- -------- ------- -------- ------
Total from Investment Operations ..... 0.528 0.515 0.257 0.150 0.308 0.241
------- ------- -------- ------- -------- ------
LESS DISTRIBUTIONS:
Net Investment Income ................ (0.425) (0.402) (0.381) (0.084) (0.402) (0.105)
Net Realized Gains ................... (0.033) (0.033) (0.036) (0.036) (0.216) (0.216)
------- ------- -------- ------- -------- ------
Total Distributions .................. (0.458) (0.435) (0.417) (0.120) (0.618) (0.321)
------- ------- -------- ------- -------- ------
Net Asset Value, End of Period ....... $ 10.07 $ 10.07 $ 10.58 $ 10.58 $ 10.25 $10.25
======= ======= ======== ======= ======== ======
TOTAL RETURN(3)(4) ................... 5.40% 5.27% 2.49% 1.44% 3.04% 2.34%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000) ...... $43,142 $ 130 $208,690 -- $165,388 $ 38
Ratios of Expenses to Average
Net Assets(1)(2) ................... 0.60% 0.85% 0.79% 1.04% 0.80% 1.05%
Ratio of Net Investment Income to
Average Net Assets(2) .............. 6.03% 5.87% 4.28% 4.33% 4.60% 4.35%
Portfolio Turnover Rate .............. 116.02% 116.02% 57.23% 57.23% 61.60% 61.60%
<FN>
- -----------
(1) Without the voluntary waiver of fees, the annualized expense ratios for the
period ended December 31, 1996 for the Institutional Class shares of the
Bond Fund, Intermediate Tax-Exempt Fund and Tax-Exempt Fund would have been
0.98%, 0.82% and 0.81%, respectively, and for the Class A shares of the
Bond Fund, Intermediate Tax-Exempt Fund, and Tax-Exempt Fund would have
been 1.23%, 1.07%, and 1.06% respectively.
(2) Annualized.
(3) Total returns for periods less than one year are not annualized.
(4) Sales load is not reflected in total return.
(5) Date commenced operations.
</FN>
</TABLE>
See Notes to Financial Statements.
78
<PAGE>
HARRIS INSIGHT FUNDS
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
CONVERTIBLE FUND
--------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
12/31/96 12/31/95 12/31/94 12/31/93 12/31/92
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period .......... $ 9.52 $ 8.78 $ 9.84 $ 9.16 $ 8.41
------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income ......................... 0.445 0.621 0.669 0.538 0.487
Net Realized and Unrealized Gain/(Loss) on
Investments ................................. 1.481 0.975 (1.049) 0.680 0.783
------- ------- ------- ------- -------
Total from Investment Operations .............. 1.926 1.596 (0.380) 1.218 1.270
------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Net Investment Income ......................... (0.446) (0.856) (0.680) (0.538) (0.520)
------- ------- ------- ------- -------
Total Distributions ........................... (0.446) (0.856) (0.680) (0.538) (0.520)
------- ------- ------- ------- -------
Net Asset Value, End of Period ................ $ 11.00 $ 9.52 $ 8.78 $ 9.84 $ 9.16
======= ======= ======= ======= =======
TOTAL RETURN(2) ............................... 20.62% 18.52% (4.01)% 13.50% 15.40%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000) ............... $ 1,181 $ 1,171 $ 1,416 $ 6,064 $ 7,354
Ratios of Expenses to Average Net Assets(1) ... 0.80% 0.80% 0.80% 0.80% 0.80%
Ratio of Net Investment Income to
Average Net Assets .......................... 4.28% 5.68% 5.21% 5.16% 5.83%
Portfolio Turnover Rate ....................... 38.73% 35.59% 31.63% 81.04% 21.27%
Average Commission Rate(3) .................... $ 0.059 -- -- -- --
<FN>
- -------------
(1) Without the voluntary waiver of fees and expense reimbursements, the
expense ratios for the years ended December 31, 1996, 1995, 1994, 1993, and
1992 would have been 1.97%, 2.58%, 1.26%, 1.20%, and 1.26%, respectively.
(2) Sales load is not reflected in total return.
(3) Computed by dividing the total amount of commission paid by the total
number of shares purchased and sold during the period.
</FN>
</TABLE>
See Notes to Financial Statements.
79
<PAGE>
HARRIS INSIGHT FUNDS
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS CLASS A
------------------- -------------------------------------------------------------
FOR THE PERIOD YEAR YEAR YEAR YEAR YEAR
02/26/96(5) ENDED ENDED ENDED ENDED ENDED
EQUITY FUND TO 12/31/96 12/31/96 12/31/95 12/31/94 12/31/93 12/31/92
------------------- -------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period ...................... $ 15.30 $ 13.99 $ 11.28 $ 12.86 $ 11.57 $ 12.08
-------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income ............. 0.189 0.451 0.229 0.263 0.197 0.267
Net Realized and Unrealized Gain/
(Loss) on Investments ........... 1.898 2.926 3.827 (0.514) 1.904 0.703
-------- ------- ------- ------- ------- -------
Total from Investment Operations .. 2.087 3.377 4.056 (0.251) 2.101 0.970
-------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Net Investment Income ............. (0.193) (0.173) (0.232) (0.263) (0.204) (0.290)
Net Realized Gains ................ (1.664) (1.664) (1.114) (1.066) (0.607) (1.190)
-------- ------- ------- ------- ------- -------
Total Distributions ............... (1.857) (1.837) (1.346) (1.329) (0.811) (1.480)
-------- ------- ------- ------- ------- -------
Net Asset Value, End of Period .... $ 15.53 $ 15.53 $ 13.99 $ 11.28 $ 12.86 $ 11.57
======== ======= ======= ======= ======= =======
TOTAL RETURN(4) ................... 13.66%(3) 24.15% 36.26% (2.05)% 18.23% 8.19%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000) ... $568,400 $ 7,792 $61,256 $38,920 $47,241 $31,809
Ratios of Expenses to Average
Net Assets(1) ................... 0.90%(2) 0.94% 0.96% 0.90% 0.93% 0.96%
Ratio of Net Investment Income to
Average Net Assets .............. 1.43%(2) 1.47% 1.75% 1.94% 1.59% 2.16%
Portfolio Turnover Rate ........... 75.20% 75.20% 75.93% 87.83% 57.31% 63.79%
Average Commission Rate(6) ........ $ 0.056 $ 0.056 -- -- -- --
<FN>
- -----------
(1) Without the voluntary waiver of fees, the expense ratios for the years
ended December 31, 1995, 1994, 1993 and 1992 for the Class A shares would
have been 0.97%, 0.92%, 0.96% and 0.98% respectively.
(2) Annualized.
(3) Total returns for periods of less than one year are not annualized.
(4) Sales load is not reflected in total return.
(5) Date commenced operations.
(6) Computed by dividing the total amount of commission paid by the total
number of shares purchased and sold during the period.
</FN>
</TABLE>
See Notes to Financial Statements.
80
<PAGE>
HARRIS INSIGHT FUNDS
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
EQITY INCOME FUND GROWTH FUND SMALL-CAP FUND
------------------------------ ------------------------------ ------------------------------
INSTITUTIONAL INSTITUTIONAL INSTITUTIONAL
CLASS CLASS A CLASS CLASS A CLASS CLASS A
-------------- -------------- -------------- -------------- -------------- --------------
FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD
04/26/96(6) 04/18/96(6) 02/26/96(6) 04/19/96(6) 02/26/96(6) 04/19/96(6)
TO 12/31/96 TO 12/31/96 TO 12/31/96 TO 12/31/96 TO 12/31/96 TO 12/31/96
-------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period ....................... $ 13.34 $ 13.02 $ 17.01 $ 16.49 $ 14.24 $ 14.25
------- ------- -------- ------- -------- ------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income .............. 0.270 0.179 0.062 0.030 0.057 0.032
Net Realized and Unrealized Gain
on Investments ................... 1.387 1.732 2.746 3.273 1.998 1.996
------- ------- -------- ------- -------- ------
Total from Investment Operations ... 1.657 1.911 2.808 3.303 2.055 2.028
------- ------- -------- ------- -------- ------
LESS DISTRIBUTIONS:
Net Investment Income .............. (0.269) (0.213) (0.063) (0.038) (0.057) (0.050)
Net Realized Gains ................. (0.998) (0.998) (1.065) (1.065) (0.718) (0.718)
------- ------- -------- ------- -------- ------
Total Distributions ................ (1.267) (1.211) (1.128) (1.103) (0.775) (0.768)
------- ------- -------- ------- -------- ------
Net Asset Value, End of Period ..... $ 13.73 $ 13.72 $ 18.69 $ 18.69 $ 15.52 $ 5.51
======= ======= ======== ======= ======== ======
TOTAL RETURN(3)(4) ................. 12.46% 14.67% 16.43% 19.95% 14.49% 14.29%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000) .... $31,760 $ 298 $ 76,516 $ 397 $150,306 $ 443
Ratios of Expenses to Average
Net Assets(1)(2) ................. 0.93% 1.18% 1.10% 1.35% 1.20% 1.45%
Ratio of Net Investment Income to
Average Net Assets(2) ............ 2.36% 2.11% 0.42% 0.17% 0.46% 0.10%
Portfolio Turnover Rate ............ 52.77% 52.77% 35.36% 35.36% 46.13% 46.13%
Average Commission Rate(5) ......... $ 0.059 $ 0.059 $ 0.058 $ 0.058 $ 0.058 $ 0.058
<FN>
- -------------
(1) Without the voluntary waiver of fees, the annualized expense ratios for the
period ended December 31, 1996 for the Institutional Class shares of the
Equity Income Fund, Growth Fund and Small-Cap Fund, would have been 0.97%,
1.14% and 1.22% respectively, and for the Class A shares of the Equity
Income Fund, Growth Fund and Small-Cap Fund would have been 1.19%, 1.39%
and 1.47%, respectively.
(2) Annualized.
(3) Total returns for periods less than one year are not annualized.
(4) Sales load is not reflected in total return.
(5) Computed by dividing the total amount of commission paid by the total
number of shares purchased and sold during the period.
(6) Date commenced operations.
</FN>
</TABLE>
See Notes to Financial Statements.
81
<PAGE>
HARRIS INSIGHT FUNDS
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
INDEX FUND INTERNATIONAL FUND HEMISPHERE FUND
------------------------------ ------------------------------ ------------------------------
INSTITUTIONAL INSTITUTIONAL INSTITUTIONAL
CLASS CLASS A CLASS CLASS A CLASS CLASS A
-------------- -------------- -------------- -------------- -------------- --------------
FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD
02/26/96(6) 04/19/96(6) 02/26/96(6) 03/13/96(6) 04/09/96(6) 04/11/96(6)
TO 12/31/96 TO 12/31/96 TO 12/31/96 TO 12/31/96 TO 12/31/96 TO 12/31/96
-------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period........................ $ 16.72 $ 16.35 $ 15.04 $ 14.69 $ 10.00 $10.00
-------- ------- -------- ------- ------- ------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income............... 0.268 0.188 0.128 0.091 0.059 0.018
Net Realized and Unrealized Gain
on Investments.................... 2.104 2.511 0.485 0.860 0.971 0.992
-------- ------- -------- ------- ------- ------
Total from Investment Operations.... 2.372 2.699 0.613 0.951 1.030 1.010
-------- ------- -------- ------- ------- ------
LESS DISTRIBUTIONS:
Net Investment Income............... (0.268) (0.225) (0.125) (0.113) -- --
Net Realized Gains.................. (0.344) (0.344) (0.068) (0.068) -- --
-------- ------- -------- ------- ------- ------
Total Distributions................. (0.612) (0.569) (0.193) (0.181) 0.000 0.000
-------- ------- -------- ------- ------- ------
Net Asset Value, End of Period...... $ 18.48 $ 18.48 $ 15.46 $ 15.46 $ 11.03 $11.01
======== ======= ======== ======= ======= ======
TOTAL RETURN(3)(4).................. 14.26% 16.56% 4.08% 6.48% 10.30% 10.10%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000)..... $143,954 $ 150 $109,747 $ 597 $11,034 $ 135
Ratios of Expenses to Average
Net Assets(1)(2).................. 0.45% 0.70% 1.36% 1.61% 1.55% 1.80%
Ratio of Net Investment Income to
Average Net Assets(2)............. 1.85% 1.60% 0.99% 0.35% 0.78% 0.53%
Portfolio Turnover Rate............. 4.71% 4.71% 6.72% 6.72% 33.15% 33.15%
Average Commission Rate(5).......... $ 0.038 $ 0.038 $ 0.020 $ 0.020 $ 0.024 $0.024
<FN>
- ------------
(1) Without the voluntary waiver of fees, the annualized expense ratios for the
period ended December 31, 1996 for the Institutional Shares of the Index
Fund, International Fund and Hemisphere Fund would have been 0.49%,1.38%
and 1.63%, respectively and for the Class A shares of the Index Fund,
International Fund and Hemisphere Fund would have been 0.74%, 1.63% and
1.88%, respectively.
(2) Annualized.
(3) Total returns for periods less than one year are not annualized.
(4) Sales load is not reflected in total return.
(5) Computed by dividing the total amount of commission paid by the total
number of shares purchased and sold during the period.
(6) Date commenced operations.
</FN>
</TABLE>
See Notes to Financial Statements.
82
<PAGE>
HARRIS INSIGHT FUNDS
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
1. ORGANIZATION
HT Insight Funds, Inc., doing business as Harris Insight Funds (the
"Company") was incorporated in Maryland on September 16, 1987 as an open-end
diversified management investment company and currently offers seven investment
portfolios. Harris Insight Funds Trust (the "Trust") was organized as a business
trust under the laws of The Commonwealth of Massachusetts on December 6, 1995 as
an open-end diversified management investment company and is registered with
twelve investment portfolios. On February 9, 1996, Funds Distributor, Inc.
deposited $100,000 amongst certain portfolios of the Trust against issue of
initial shares of each Class of shares of the respective portfolios of the
Trust. The portfolios of the Company and the Trust (each a "Fund" and
collectively, the "Funds") are as follows:
COMPANY:
EQUITY FUNDS:
Harris Insight Equity Fund ("Equity Fund")
Harris Insight Hemisphere Free Trade Fund ("Hemisphere Fund")
FIXED INCOME FUNDS:
Harris Insight Convertible Fund ("Convertible Fund")
Harris Insight Short/Intermediate Bond Fund ("Short/Intermediate Fund",
formerly named the Harris Insight Managed Fixed Income Fund)
MONEY MARKET FUNDS:
Harris Insight Government Money Market Fund ("Government Money Fund",
formerly named the Harris Insight Government Assets Fund)
Harris Insight Money Market Fund ("Money Fund",
formerly named the Harris Insight Cash Management Fund)
Harris Insight Tax-Exempt Money Market Fund ("Tax-Exempt Money Fund",
formerly named the Harris Insight Tax-Free Money Market Fund)
TRUST:
EQUITY FUNDS:
Harris Insight Equity Income Fund ("Equity Income Fund")
Harris Insight Growth Fund ("Growth Fund")
Harris Insight Small-Cap Opportunity Fund ("Small-Cap Fund")
Harris Insight Small-Cap Value Fund ("Small-Cap Value Fund")
Harris Insight Index Fund ("Index Fund")
Harris Insight International Fund ("International Fund")
Harris Insight Balanced Fund ("Balanced Fund")
FIXED INCOME FUNDS:
Harris Insight Convertible Securities Fund ("Convertible Securities
Fund")
Harris Insight Bond Fund ("Bond Fund")
Harris Insight Intermediate Government Bond Fund ("Intermediate
Government Fund")
Harris Insight Intermediate Tax-Exempt Bond Fund ("Intermediate
Tax-Exempt Fund")
Harris Insight Tax-Exempt Bond Fund ("Tax-Exempt Fund")
The Intermediate Government Fund, Convertible Securities Fund, Balanced
Fund and Small-Cap Value Fund have not commenced operations as of December 31,
1996. Each of the other Funds, except for the Convertible Fund, currently offers
two classes of shares: Class A shares and Institutional shares (formerly
designated as Class C shares). Each of the Money Market Funds also has
registered Class B shares but does not currently offer those shares for sale.
Shares of each class of a Fund represent equal pro rata interests in
83
<PAGE>
HARRIS INSIGHT FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
the Fund and are identical in all respects except that Class A and Class B
shares are subject to certain service organization/agent fees as described in
Note 5. Institutional shares are not subject to service organization/ agent
fees.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies used by the
Funds in the preparation of the financial statements which are in accordance
with generally accepted accounting principles. The preparation of financial
statements in accordance with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results could differ from
those estimates.
(a) SECURITY VALUATION -- The value of securities (other than bonds and
debt obligations maturing in 60 days or less) of the Funds other than Money
Market Funds is determined based on the last sales price on the principal
exchange on which the securities are traded as of the close of regular trading
on the New York Stock Exchange (which is currently 4:00 P.M., Eastern time). In
the absence of any sale on the valuation date, the securities are valued at the
closing bid price. Securities traded only on the over-the-counter markets are
valued at the closing over-the-counter bid prices. Portfolio securities which
are primarily traded on foreign securities exchanges are generally valued at the
closing values of such securities on their respective exchanges, except when an
occurrence subsequent to the time a value was so established is likely to have
changed such value. In such an event, the fair value of those securities will be
determined through the consideration of other factors by or under the direction
of the Board of Trustees and Board of Directors of the Funds. Bonds are valued
at the mean of the last bid and asked prices. In the event that such prices are
not readily available, securities are valued at fair value as determined in good
faith by the Board of Trustees or Board of Directors, as the case may be. Prices
used for valuations of securities are provided by independent pricing services
and brokers. Debt obligations with remaining maturities of 60 days or less are
valued at amortized cost when the Trust's Board of Trustees or the Company's
Board of Directors, as the case may be, has determined that amortized cost
valuation represents fair value.
Each of the Money Market Funds values its investments using the amortized
cost method, which involves initially valuing investments at cost and thereafter
assuming a constant amortization to maturity of any premium or discount. This
method approximates market value.
(b) FOREIGN CURRENCY TRANSLATION -- The books and records of the
International Fund and the Hemisphere Fund are maintained in U.S. dollars.
Foreign currency amounts are translated into U.S. dollars on the following
basis:
(i) market value of investment securities, other assets and
liabilities at the current rate of exchange on the valuation date; and
(ii) purchases and sales of investment securities, income and expenses
at the relevant rates of exchange prevailing on the respective dates of
such transactions.
The International Fund and the Hemisphere Fund do not isolate that portion
of gains and losses on investments in securities which is due to changes in the
foreign exchange rates from that which is due to changes in the market prices of
such securities. The International Fund and the Hemisphere Fund report gains and
losses on foreign currency related transactions as realized and unrealized gains
and losses for financial reporting purposes, whereas such gains and losses, to
the extent realized, are treated as ordinary income or loss for federal income
tax purposes.
84
<PAGE>
HARRIS INSIGHT FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
(c) FEDERAL INCOME TAXES -- Each Fund intends to continue to qualify as a
regulated investment company under the Internal Revenue Code and to distribute
substantially all of its net investment income and net realized capital gains to
shareholders. Accordingly, no provision for federal income tax is required.
(d) DISTRIBUTIONS -- Each of the Funds declares dividends from net
investment income. The Money Market Funds and the Fixed Income Funds (other than
the Convertible Fund and Convertible Securities Fund) declare dividends each
business day to shareholders of record that day for payment on the first
business day of the following month. Dividends from the Convertible Fund,
Convertible Securities Fund and Equity Funds (other than Small-Cap Fund,
Small-Cap Value Fund, International Fund and Hemisphere Fund) are declared and
paid quarterly. Dividends from the Small-Cap Fund, Small-Cap Value Fund and the
International Fund are declared and paid semi-annually. Dividends from the
Hemisphere Fund are declared and paid annually. Each Fund's net realized capital
gains, if any, are distributed at least annually. Distributions to shareholders
are recorded on the ex-dividend dates.
The amounts of distributions from net investment income and net realized
capital gains are determined in accordance with federal income tax regulations,
which may differ from those amounts determined under generally accepted
accounting principles. These book/tax differences are either temporary or
permanent in nature. To the extent these differences are permanent, they are
reclassified within the capital accounts to conform to their tax treatment in
the period that the difference arises.
(e) FUTURES CONTRACTS -- The Funds may seek to hedge all or a portion of
their investments through the use of securities index and financial futures
contracts. Upon entering into a futures contract, a Fund is required to deposit
an amount ("initial margin") equal to a certain percentage of the contract
value. Subsequent payments ("variation margin") are made or received by the
Funds each day, reflecting the daily change in the value of the contracts and
are recorded as an unrealized gain or loss. When the contract is closed, the
Funds will recognize a realized gain or loss.
Futures contracts are subject to the risk associated with the imperfect
correlation between movements in the price of the future contract and the price
of the securities being hedged. The risk of imperfect correlation increases with
respect to securities index futures as the composition of the Fund's portfolio
diverges from composition of the index underlying such index futures. In
addition, there is no assurance that a liquid secondary market will exist at the
time the Fund elects to close out a futures position.
(f) ORGANIZATION EXPENSES -- Each Fund's share of the costs incurred in
connection with the organization of the Company and the Trust have been deferred
and are being amortized over 60 months from commencement of operations of the
respective Fund.
(g) ALLOCATION OF EXPENSES -- Expenses which have not been directly charged
to a specific Fund are generally allocated among the Funds primarily on the
basis of relative net assets.Expenses relating to a particular class of shares
are charged to the respective class of shares of a Fund.Non-class specific
expenses are allocated between the classes of shares of a Fund based upon the
relative net assets of the classes of shares of a Fund.
(h) DOLLAR ROLLS -- The Funds may enter into mortgage dollar rolls in which
a Fund sells mortgage securities for delivery in the current month, realizing a
gain or loss, and simultaneously contracts to repurchase somewhat similar (same
type, coupon and maturity) securities on a specified future date. During the
roll period the Fund forgoes principal and interest paid on the securities. The
Fund is compensated by the interest earned on the cash proceeds of the initial
sale and by the lower repurchase price at the future date.
(i) OTHER -- Investment transactions are recorded on trade date. Interest
income, including the amortization of discount or premium, is recorded as
earned. Discounts and premiums on securities purchased are amortized over the
lives of the respective securities. Dividend income is recorded on the
ex-dividend date.
85
<PAGE>
HARRIS INSIGHT FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
3. REPURCHASE AGREEMENTS
Certain Funds invest in repurchase agreements. Securities pledged as
collateral for repurchase agreements are held by the custodian bank until
maturity of the repurchase agreements. Provisions of the repurchase agreements
and procedures adopted by the Funds require that the market value of the
collateral, including accrued interest thereon, is sufficient in the event of
default by the counterparty. If the counterparty defaults and the value of the
collateral declines or if the counterparty enters an insolvency proceeding,
realization of the collateral by the Funds may be delayed or limited.
4. ADVISORY, ADMINISTRATION AND DISTRIBUTION ARRANGEMENTS
The Company and the Trust retain Harris Trust and Savings Bank ("Harris
Trust") as investment adviser (the "Adviser"), pursuant to advisory contracts
for each Fund. As Adviser, Harris Trust is entitled to receive fees payable
monthly, based upon the average daily net asset value of each Fund, at the
following annual rates:
Each Money Market Fund 0.14% of the first $100 million
of net assets and 0.10%
of net assets over $100 million
Short/Intermediate Fund 0.70%
Bond Fund 0.65%
Intermediate Tax-Exempt Fund 0.60%
Tax-Exempt Fund 0.60%
Convertible Fund 0.70%
Equity Fund 0.70%
Equity Income Fund 0.70%
Growth Fund 0.90%
Small-Cap Fund 1.00%
Index Fund 0.25%
International Fund 1.05%
Hemisphere Fund 0.90%
Harris Trust may at its discretion, voluntarily waive all or any portion of
its respective advisory fees for any Fund. For the period ended December 31,
1996, advisory fees and waivers for certain Funds were as follows:
GROSS NET
ADVISORY FEE WAIVER ADVISORY FEE
------------ ---------- ------------
Short/Intermediate Fund .... $1,594,951 $ 684,243 $ 910,708
Bond Fund .................. 148,028 88,847 59,181
Intermediate Tax-Exempt Fund 1,120,322 32,722 1,087,600
Tax-Exempt Fund ............ 829,656 26,205 803,451
Convertible Fund ........... 8,054 8,054 --
Equity Income Fund ......... 182,866 9,997 172,869
Growth Fund ................ 529,786 20,952 508,834
Small-Cap Fund ............. 1,137,914 23,743 1,114,171
Index Fund ................. 280,516 41,424 239,092
International Fund ......... 934,699 17,146 917,553
Hemisphere Fund ............ 68,081 5,701 62,380
There were no advisory fee waivers for other than the above Funds.
86
<PAGE>
HARRIS INSIGHT FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
For the period ended December 31, 1996, Harris Trust also reimbursed
expenses of $5,349 for the Convertible Fund.
Harris Trust has entered into Portfolio Management Agreements with Harris
Investment Management, Inc. ("HIM") under which HIM undertakes to furnish
investment guidance and policy direction in connection with the daily portfolio
management of the Funds, other than the Tax-Exempt Money Fund. HIM, as portfolio
manager, receives a fee directly from Harris Trust, not from the Funds. HIM is a
subsidiary of Harris Trust.
Jones Heward Investment Counsel Inc. ("JHICI") and Bancomer Asesora de
Fondos, S.A. de C.V. ("Bancomer") have each entered into an Investment
Sub-Advisory Agreement with HIM with respect to the Hemisphere Fund. Pursuant to
these agreements JHICI selects and manages the Canadian securities and Bancomer
selects and manages the Mexican securities in which the Hemisphere Fund invests.
Payments made to JHICI and Bancomer for these services are made by HIM, and are
not separate expenses of the Hemisphere Fund.
Prior to July 1, 1996, pursuant to an Administration and Accounting Service
Agreement and an Administration Agreement, the Company and the Trust retained
PFPC Inc. ("PFPC") and First Data Investor Services Group, Inc. ("First Data")
as Co-Administrator and Accounting Service Agent and Co-Administrator (the
"Co-Administrators"), respectively. PFPC also served as the transfer and
dividend disbursing agent (the "Transfer Agent") of the Funds. PNC Bank, N. A.,
served as the custodian (the "Custodian") of the Funds. PFPC and the Custodian
are indirect, wholly-owned subsidiaries of PNC Bank Corp. As compensation for
their services, the Co-Administrators, the Transfer Agent and the Custodian were
entitled to receive a combined fee based on the aggregate average daily net
assets of the Funds, payable monthly at an annual rate of 0.17% of the first
$300 million of average daily net assets; 0.15% of the next $300 million; and
0.13% of the average net assets in excess of $600 million. In addition, a
separate fee was charged by PFPC for certain retail transfer agent services and
for various custody transactional charges.
Effective July 1, 1996, the Company and the Trust each entered into an
Administration Agreement with Harris Trust (the "Administrator"). In its
capacity as the Administrator, Harris Trust generally assists the Funds in all
aspects of their administration and operation. The Administrator has entered
into a Sub-Administration Agreement with Funds Distributor, Inc. ("Funds
Distributor" or the "Sub-Administrator"), pursuant to which the
Sub-Administrator performs certain administrative services for the Funds. The
Administrator has also entered into a Sub-Administration and Accounting Services
Agreement with PFPC (the "Sub-Administrator and Accounting Services Agent").
Under these Agreements, the Administrator compensates the Sub-Administrator and
the Sub-Administrator and the Accounting Services Agent for providing such
services. Harris Trust also serves as the transfer and dividend disbursing agent
of the Funds (the "Transfer Agent"). Harris Trust has also entered into a
Sub-Transfer Agency Services Agreement with PFPC (the "Sub-Transfer Agent"),
pursuant to which the Sub-Transfer Agent continues to perform certain transfer
agency and dividend disbursing agency services. Harris Trust compensates the
Sub-Transfer Agent for providing such services. PNC Bank, N.A. continues to
serve as the Custodian of the assets of the Funds. Under the new agreements, as
compensation for their services, Harris Trust, in its capacity as the
Administrator and Transfer Agent, and the Custodian are entitled to receive a
combined fee based on the aggregate average daily net assets of the Funds,
payable monthly at an annual rate of 0.17% of the first $300 million of average
daily net assets; 0.15% of the next $300 million; and 0.13% of the average net
assets in excess of $600 million. These fees are similar to those in effect
prior to July 1, 1996.
Funds Distributor provides services as distributor (the "Distributor") in
connection with sales of shares of the Funds. For the period ended December 31,
1996, fees for services rendered by the Distributor were
87
<PAGE>
HARRIS INSIGHT FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
paid by the Co-Administrators and the Administrator. For the period ended
December 31, 1996, Funds Distributor advised the Funds it had received
commissions aggregating approximately $1,145 and paid concessions of
approximately $18,193 to selling dealer firms. Commissions received and
concessions paid are as follows:
COMMISSIONS CONCESSIONS
----------- -----------
Equity Fund ................. $728 $11,919
Growth Fund ................. 27 425
Small-Cap Fund .............. 84 1,318
Index Fund .................. 13 234
International Fund .......... 13 212
Short/Intermediate Fund ..... 280 4,085
The Company and the Trust have a compensation arrangement under which
payment of directors' and trustees' fees may be deferred by the Directors or
Trustees. Interest is accrued on the deferred balances and is included in
directors' and trustees' fees and expenses. The accumulated balance of deferred
directors' and trustees' fees and interest thereon relating to the Funds
comprising the Company, excluding the Hemisphere Fund, on December 31, 1996
aggregated approximately $188,500, an applicable portion of which is included in
accrued expenses of each applicable Fund.
Certain employees of First Data were officers of the Funds during the
period ended June 30, 1996. Effective July 1, 1996, certain employees of PFPC
and Funds Distributor became officers of the Funds. TheAdministration fee for
the period ended December 31, 1996 includes aggregate fees paid by the Funds
(before voluntary waivers) to PFPC, Funds Distributor and First Data of
$1,436,310, $1,746,823, and $383,197, respectively, for services rendered under
various agreements described above. The shareholder services fee and the
custodian fee represent fees and expenses payable to PFPC for services rendered
as Transfer Agent/Sub-Transfer Agent and Custodian, respectively. For the period
ended December 31, 1996, PFPC voluntarily waived fees of $15,143 for the
Short/Intermediate Fund, $1,523 for the Bond Fund, $12,277 for the Intermediate
Tax-Exempt Fund and $8,902 for the Tax-Exempt Fund. During the year ended
December 31, 1996, Funds Distributor voluntarily waived fees of $23,295 for the
Government Money Fund and $73,647 for the Money Fund.
5. RULE 12B-1 OR SERVICE PLANS
The Company and the Trust have adopted Service Plans pursuant to Rule 12b-1
under the Investment Company Act of 1940, as amended, (the "Plan") for the Funds
other than with respect to Institutional shares of the Funds.
Under the Plan for Money Market Funds, each Money Market Fund may enter
into service agreements with banks and other institutions (each a "Service
Organization") that require the Service Organization to provide certain
shareholder support services and distribution assistance in consideration of the
Fund's payment of up to 0.35% and 0.25% per annum of the average daily net asset
value of the Class A and Class B shares, respectively, held by or for the
benefit of customers of the Service Organization. Service Organization fees paid
to Harris Trust for the year ended December 31, 1996 were $502,246, $1,171,011
and $446,105 (net of voluntary waivers of $255,183, $457,792 and $187,894) for
the Class A shares of Government Money Fund, Money Fund and Tax-Exempt Money
Fund, respectively. There were no Service Organization fees payable during the
year ended December 31, 1996 for the Class B shares of the Money Market Funds.
88
<PAGE>
HARRIS INSIGHT FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
Under each of the Non-Money Market Fund Plans, each Non-Money Market Fund
may enter into service agreements with banks and other institutions
(individually, "Service Agent"). A Service Agent may receive fees with respect
to a Non-Money Market Fund's shares owned by shareholders for whom the Service
Agent is the dealer or holder of record, or with whom the Service Agent has a
servicing relationship. Funds Distributor may act as a Service Agent and receive
fees. Fees to a Service Agent may be up to a rate of 0.25% per annum of the
average daily net asset value of Class A shares attributable to the Service
Agent. In addition to the fees paid by Class A shares of the Non-Money Market
Funds, a Non-Money Market Fund may, pursuant to the Service Plan, defray all or
part of the cost of preparing, printing and delivering promotional materials,
prospectuses and statements of additional information to prospective
shareholders of Class A shares of the Funds by paying on an annual basis up to
the greater of $100,000 or 0.05% of a Fund's average daily net assets (but not
in any case greater than such costs). For the period ended December 31, 1996,
Service Agent fees for the Non-Money Market Funds, including fees paid to Harris
Trust, were as follows:
Short/Intermediate Fund $2,130
Bond Fund 65
Tax-Exempt Fund 2
Equity Fund 5,063
Equity Income Fund 310
Growth Fund 315
Small-Cap Fund 292
Index Fund 121
International Fund 512
Hemisphere Fund 136
6. PUBLIC OFFERING PRICE
Class A shares of the Non-Money Market Funds and shares of the Convertible
Fund are sold at a public offering price which is equal to the current net asset
value of such shares with a maximum sales load of 4.5%. There is no sales load
on Class A and Class B shares of Money Market Funds and the Institutional shares
of the Funds.
89
<PAGE>
HARRIS INSIGHT FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
7. INVESTMENT TRANSACTIONS
The cost of investments at December 31, 1996 and the net realized gains and
losses on securities sold for the period then ended for each of the Funds for
federal income tax purposes was not materially different from the amounts
reported for financial reporting purposes.
Purchases and sales of investment securities of the Non-Money Market Funds
(excluding short-term investments and U.S. government securities) during the
period ended December 31, 1996 were as follows:
PURCHASES SALES
------------ ------------
Short/Intermediate Fund ........... $160,768,940 $ 81,687,411
Bond Fund ......................... 24,901,843 6,191,930
Intermediate Tax-Exempt Fund ...... 120,296,762 127,198,877
Tax-Exempt Fund ................... 98,927,202 95,659,734
Convertible Fund .................. 411,312 745,767
Equity Fund ....................... 373,471,699 469,998,897
Equity Income Fund ................ 15,512,014 16,781,916
Growth Fund ....................... 25,624,330 24,081,118
Small-Cap Fund .................... 71,825,836 57,394,920
Index Fund ........................ 6,103,206 7,850,782
International Fund ................ 11,988,754 6,853,836
Hemisphere Fund ................... 13,130,446 3,326,305
Purchases and sales of U.S. government securities, excluding short-term
securities, of the Non-Money Market Funds during the period ended December 31,
1996 were as follows:
PURCHASES SALES
------------ ------------
Short/Intermediate Fund ........... $239,620,806 $327,277,012
Bond Fund ......................... 45,574,299 23,954,854
At December 31, 1996, gross unrealized appreciation (depreciation) for each
Fund was as follows:
UNREALIZED UNREALIZED NET UNREALIZED
APPRECIATION DEPRECIATION APPRECIATION
------------ ------------ --------------
Short/Intermediate Fund ....... $ 2,024,172 $(1,078,989) $ 945,183
Bond Fund ..................... 274,557 (78,386) 196,171
Intermediate Tax-Exempt Fund .. 4,350,671 (902,423) 3,448,248
Tax-Exempt Bond Fund .......... 5,630,108 (146,863) 5,483,245
Convertible Fund .............. 187,342 (5,814) 181,528
Equity Fund ................... 132,213,646 (6,781,590) 125,432,056
Equity Income Fund ............ 7,751,572 (159,375) 7,592,197
Growth Fund ................... 25,403,343 (412,391) 24,990,952
Small-Cap Fund ................ 52,130,543 (4,140,096) 47,990,447
Index Fund .................... 58,751,230 (2,095,078) 56,656,152
International Fund ............ 15,921,379 (8,531,621) 7,389,758
Hemisphere Fund ............... 1,498,833 (323,656) 1,175,177
90
<PAGE>
HARRIS INSIGHT FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
At December 31, 1996, the Convertible Fund, the Short/Intermediate Fund and
the Hemisphere Fund had available capital loss carryforwards of approximately
$2,620,000, $3,052,000, and $126,000 respectively, that may be used to offset
future net capital gains through 1999, 2004, and 2004 respectively. Net capital
losses utilized by the Convertible Fund during the year ending December 31, 1996
were approximately $74,470.
8. IN-KIND TRANSFER OF SECURITIES
On February 23, 1996, the following Funds issued shares of beneficial
interest in a tax-free exchange for portfolio securities at their current value
from common trust funds managed by Harris Trust. The tax basis of the securities
exchanged for the shares of the Funds was carried over to the respective Funds.
The number of shares issued, the current value on the date of transfer and the
unrealized gain on securities included in the transfer are as follows:
NUMBER
OF SHARES UNREALIZED
ISSUED VALUE APPRECIATION
---------- ------------ ------------
Short/Intermediate Fund ........ 22,385,111 $230,561,882 $ 3,625,568
Intermediate Tax-Exempt Fund ... 21,132,582 226,884,514 7,063,776
Tax-Exempt Fund ................ 15,689,395 165,704,780 10,638,407
Equity Fund .................... 33,693,907 515,516,776 131,133,983
Equity Income Fund ............. 2,191,705 29,234,220 7,023,445
Growth Fund .................... 3,778,213 64,284,254 20,848,759
Small-Cap Fund ................. 8,237,828 117,276,469 39,553,381
Index Fund ..................... 7,687,741 128,542,619 44,529,728
International Fund ............. 6,850,804 103,009,222 4,532,268
9. NET ASSETS
At December 31, 1996, net assets of each Fund consisted of:
GOVERNMENT TAX-EXEMPT
MONEY FUND MONEY FUND MONEY FUND
------------ ------------ ------------
Capital Stock at Par Value .......... $ 243,242 $ 830,633 $ 567,247
Paid-in Capital ..................... 242,999,166 829,802,279 566,680,057
Undistributed Net Investment
Income ........................... -- -- --
Accumulated Net Realized
Gain (Loss) ...................... (72) (2,590) 5,793
Unrealized Appreciation/
(Depreciation) on Investment
Transactions, Futures Contracts
and Foreign Currency
Transactions...................... -- -- --
------------ ------------ ------------
Net Assets .......................... $243,242,336 $830,630,322 $567,253,097
============ ============ ============
91
<PAGE>
HARRIS INSIGHT FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
<TABLE>
<CAPTION>
SHORT/ INTERMEDIATE
INTERMEDIATE TAX-EXEMPT TAX-EXEMPT
FUND BOND FUND FUND FUND
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Capital Stock or Beneficial Interest at
Par Value ................................ $ 25,642 $ 4,296 $ 19,725 $ 16,136
Paid-in Capital ............................. 262,077,835 42,961,392 205,096,171 159,738,636
Undistributed Net Investment Income ......... 8,950 (356) -- --
Accumulated Net Realized Gain (Loss) ........ (3,052,252) 111,019 126,318 188,036
Unrealized Appreciation/(Depreciation) on
Investment Transactions, Futures Contracts
and Foreign Currency Transactions ........ 945,183 196,171 3,448,248 5,483,245
------------- ------------- ------------- -------------
Net Assets .................................. $ 260,005,358 $ 43,272,522 $ 208,690,462 $ 165,426,053
============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
EQUITY
CONVERTIBLE EQUITY INCOME GROWTH
FUND FUND FUND FUND
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Capital Stock or Beneficial Interest at
Par Value ................................ $ 107 $ 37,107 $ 2,335 $ 4,115
Paid-in Capital ............................. 3,619,656 416,480,819 24,054,365 49,448,286
Undistributed Net Investment Income ......... (135) (6,479) 1,161 (3,907)
Accumulated Net Realized Gain (Loss) ........ (2,620,159) 34,248,529 408,073 2,473,511
Unrealized Appreciation/(Depreciation) on
Investment Transactions, Futures Contracts
and Foreign Currency Transactions ........ 181,528 125,432,056 7,592,197 24,990,952
------------- ------------- ------------- -------------
Net Assets .................................. $ 1,180,997 $ 576,192,032 $ 32,058,131 $ 76,912,957
============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
SMALL-CAP INDEX INTERNATIONAL HEMISPHERE
FUND FUND FUND FUND
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Capital Stock or Beneficial Interest at
Par Value ................................ $ 9,714 $ 7,799 $ 7,139 $ 1,012
Paid-in Capital ............................. 99,943,160 86,051,033 102,909,114 10,119,388
Undistributed Net Investment Income ......... (2,726) (422) 5,855 --
Accumulated Net Realized Gain (Loss) ........ 2,807,914 1,389,538 32,690 (126,382)
Unrealized Appreciation/(Depreciation) on
Investment Transactions, Futures Contracts
and Foreign Currency Transactions ........ 47,990,447 56,656,152 7,389,758 1,175,177
------------- ------------- ------------- -------------
Net Assets .................................. $ 150,748,509 $ 144,104,100 $ 110,344,556 $ 11,169,195
============= ============= ============= =============
</TABLE>
10. CONCENTRATION OF RISKS
The Tax-Exempt Money Fund, Intermediate Tax-Exempt Fund and Tax-Exempt Bond
Fund invest primarily in a diversified portfolio of municipal securities,
including municipal bonds and debentures. The Fixed Income Funds and the Money
Market Funds invest in debt instruments. The issuers' abilities to meet their
obligations may be affected by political and economic developments in a specific
state or region or their respective industries.
92
<PAGE>
HARRIS INSIGHT FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
The International Fund and the Hemisphere Fund invest in securities of
foreign issuers in various countries. These investments may involve certain
considerations and risks not typically associated with investments in the U.S.,
as a result of, among other factors, the possibility of future political and
economic developments and the level of governmental supervision and regulation
of securities markets in the respective countries.
93
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
THE SHAREHOLDERS, BOARD OF DIRECTORS AND BOARD OF TRUSTEES OF
HARRIS INSIGHT FUNDS
HARRIS INSIGHT FUNDS TRUST
In our opinion, the accompanying statements of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
Harris Insight Government Money Market Fund, Harris Insight Money Market Fund,
Harris Insight Tax-Exempt Money Market Fund, Harris Insight Short/Intermediate
Bond Fund, Harris Insight Convertible Fund, Harris Insight Equity Fund and
Harris Insight Hemisphere Free Trade Fund (comprising Harris Insight Funds) and
Harris Insight Bond Fund, Harris Insight Intermediate Tax-Exempt Bond Fund,
Harris Insight Tax-Exempt Bond Fund, Harris Insight Equity Income Fund, Harris
Insight Growth Fund, Harris Insight Small-Cap Opportunity Fund, Harris Insight
Index Fund and Harris Insight International Fund (comprising Harris Insight
Funds Trust) (hereafter referred to collectively as the "Funds") at December 31,
1996, and the results of each of their operations, the changes in each of their
net assets and the financial highlights for each of the periods indicated, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Funds' 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 generally
accepted auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at December 31, 1996 by
correspondence with the custodians and brokers and, with respect to unsettled
securities transactions, the application of alternative auditing procedures,
provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Thirty South Seventeenth Street
Philadelphia, Pennsylvania
February 18, 1997
94
<PAGE>
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<PAGE>
HARRIS INSIGHT(REGISTRATION MARK) FUNDS
60 STATE STREET, SUITE 1300
BOSTON, MASSACHUSETTS 02109
TELEPHONE: (800) 982-8782
INVESTMENT ADVISER, ADMINISTRATOR,
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
Harris Trust and Savings Bank
111 West Monroe Street
Chicago, Illinois 60603
PORTFOLIO MANAGEMENT AGENT
Harris Investment Management, Inc.
190 South LaSalle Street
Chicago, Illinois 60603
SUB-ADMINISTRATOR AND ACCOUNTING
SERVICES AGENT, SUB-TRANSFER AGENT
AND DIVIDEND DISBURSING AGENT
PFPC Inc.
103 Bellevue Parkway
Wilmington, Delaware 19809
SUB-ADMINISTRATOR AND DISTRIBUTOR
FUNDS DISTRIBUTOR, INC.
60 State Street, Suite 1300
Boston, Massachusetts 02109
CUSTODIAN
PNC Bank, N.A.
Broad & Chestnut Streets
Philadelphia, Pennsylvania 19101
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
30 South 17th Street
Philadelphia, Pennsylvania 19103
LEGAL COUNSEL
Bell, Boyd & Lloyd
Three First National Plaza
70 West Madison Street
Chicago, Illinois 60602-4207
BOARD OF DIRECTORS AND BOARD OF TRUSTEES
C. GARY GERST
Chairman of the Board of Directors and Board of Trustees;
Chairman Emeritus, LaSalle Partners, Ltd.
(real estate developer and manager).
EDGAR R. FIEDLER
Senior Fellow and Economic Counsellor, The Conference Board.
JOHN W. MCCARTER, JR.
President and Chief Executive Officer, The Field Museum of Natural History
(Chicago); Senior Vice President and former Director, Booz-Allen & Hamilton,
Inc. (consulting firm); Director of W.W. Grainger, Inc. and A.M. Castle, Inc.
ERNEST M. ROTH
Consultant; Retired Senior Vice President and Chief Financial Officer,
Commonwealth Edison Company.
OFFICERS
RICHARD W. INGRAM
President, Treasurer and
Chief Financial Officer
JOHN E. PELLETIER
Vice President and Secretary
CHRISTOPHER J. KELLEY
Vice President and
Assistant Secretary
MARY A. NELSON
Assistant Treasurer
THOMAS J. RYAN
Assistant Treasurer
ELIZABETH A. KEELEY
Assistant Secretary
JOSEPH T. GRAMLICH
Assistant Secretary
KAREN JACOPPO-WOOD
Assistant Secretary
ANDREA M. PASSARELLA
Assistant Secretary
SHARON A. VANDIVER
Assistant Secretary
<PAGE>
This report is submitted for the general information of the shareholders of the
Harris Insight Funds. It is not authorized for distribution to prospective
investors unless accompanied or preceded by a prospectus of the Harris Insight
Funds. Please read the prospectus carefully before you invest or send money.
DISTRIBUTOR:
Funds Distributor Inc.
HA1296
