<PAGE> 1
[SENECA FUNDS LOGO]
SEMI-ANNUAL
REPORT
MARCH 31, 1997
<PAGE> 2
Mission Statement
Teamwork and dedication are the cornerstones of our success
The pursuit of excellence is our motivation
Honesty, professionalism and ethical values guide our actions
Commitment and hard work are the means of achievement
Quality and action supercede quantity and intentions
Good judgment is the result of experience
Our goal is the continual attainment of higher levels of service
Our clients are our partners in success
<PAGE> 3
Dear Fellow Shareholders,
It is my pleasure to write to you as the Seneca Funds complete their first
full year of operation as of March 31, 1997. Overall, fund assets have grown to
$68.8 million, up over 250% from the end of our first fiscal year on September
30, 1996. The Seneca Funds' client base also continues to expand with over 1,500
shareholders today.
Notable milestones in our first year included having several of the Seneca
Funds in the NASDAQ pricing list published daily in the Wall Street Journal. In
addition, the financial press has chronicled the exemplary performance results
of the Seneca Funds. Articles in Barron's, Fortune, Investors Business Daily,
Money, Mutual Funds and other magazines continue to highlight the disciplined
investment philosophy successfully utilized by our team of twenty professionals
at the Seneca Funds.
This consistent, disciplined approach has helped us navigate the difficult
periods in the capital markets, such as the beginning of 1997. With the Federal
Reserve raising interest rates in March, and inflation fears roiling the
markets, the equity markets suffered a decline of nearly 10%. Fixed Income and
Real Estate securities also declined. While this has been a difficult quarter,
the Seneca Funds continue to perform well, with positive returns in three of our
four funds. Only our Earnings Driven Growth ("EDGE"(sm)) Fund, which invests in
smaller companies, experienced a decline, as did the entire small capitalization
market. Over the past year, the Seneca Funds' performance results rank among the
leaders in each of their respective categories according to Morningstar.
With the fundamental tenets of this bull market intact - moderate
inflation, improved corporate earnings and continued capital inflows - our
outlook continues to be positive. On behalf of all of the professionals here at
the Seneca Funds, we thank you for your continued support, and appreciate the
trust you have placed in us by becoming a shareholder in the Seneca Funds.
Please feel free to contact us at (800) 990-9331 if we can answer any questions
or provide any additional information.
Sincerely,
Gail P. Seneca
President
The Seneca Funds
<PAGE> 4
SENECA FUNDS
SENECA GROWTH FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
- -------------------------------------------------- ------- -----------
<S> <C> <C> <C>
COMMON STOCKS -- 85.5%
ADVERTISING -- (1.3%)
Outdoor Systems, Incorporated (1)............. 13,220 $ 394,948
-----------
AEROSPACE -- (1.4%)
United Technologies Corporation............... 5,510 414,628
-----------
AIRLINES -- (1.2%)
UAL Corporation (1)........................... 5,830 377,493
-----------
CHEMICALS -- (5.3%)
Air Products & Chemicals, Incorporated........ 9,260 628,522
Clorox Company................................ 5,150 577,444
E.I. Dupont de Nemours & Company.............. 3,780 400,680
-----------
1,606,646
-----------
COMMERCIAL SERVICES -- (0.4%)
Envoy Corporation New (1)..................... 5,600 130,900
-----------
COMPUTERS -- (1.7%)
International Business Machines Corporation... 3,780 519,277
-----------
COMPUTER SOFTWARE -- (4.7%)
Intel Corporation............................. 5,510 766,579
Microsoft Corporation (1)..................... 6,850 628,059
-----------
1,394,638
-----------
CONSUMER NON-DURABLE -- (4.6%)
Colgate-Palmolive Company..................... 8,010 797,996
Johnson & Johnson............................. 11,570 611,764
-----------
1,409,760
-----------
DRUGS & HEALTH CARE -- (8.2%)
Eli Lilly & Company........................... 10,020 824,145
HEALTHSOUTH Corporation (1)................... 29,270 559,789
McKesson Corporation.......................... 3,800 243,200
Merck & Company, Incorporated................. 10,235 862,299
-----------
2,489,433
-----------
</TABLE>
See notes to financial statements.
1
<PAGE> 5
SENECA FUNDS
SENECA GROWTH FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 1997
(CONTINUED)
(UNAUDITED)
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
- -------------------------------------------------- ------- -----------
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
ELECTRIC UTILITIES -- (0.9%)
Texas Utilities Company....................... 8,110 277,768
-----------
ELECTRICAL EQUIPMENT -- (5.2%)
General Electric Company...................... 9,280 921,040
Honeywell, Incorporated....................... 9,430 640,061
-----------
1,561,101
-----------
ELECTRONICS -- (3.2%)
Emerson Electric Company...................... 6,000 270,000
Motorola, Incorporated........................ 11,460 691,897
-----------
961,897
-----------
FINANCIAL SERVICES -- (10.9%)
American Express Company...................... 8,250 493,969
BankAmerica Corporation....................... 5,880 592,410
Charles Schwab Corporation.................... 15,607 497,473
Chase Manhattan Corporation New............... 5,580 522,427
Citicorp...................................... 6,310 683,057
Federal National Mortgage Association......... 14,350 518,394
-----------
3,307,730
-----------
FOOD & BEVERAGES -- (8.7%)
General Mills, Incorporated................... 12,640 785,260
Hershey Foods Corporation..................... 13,410 670,500
PepsiCo, Incorporated......................... 19,180 625,748
Safeway, Incorporated (1)..................... 11,950 554,181
-----------
2,635,689
-----------
FORESTRY -- (1.3%)
Georgia Pacific Corporation................... 5,350 387,875
-----------
HOTELS & RESTAURANTS -- (1.7%)
HFS, Incorporated (1)......................... 8,520 501,615
-----------
INSURANCE -- (4.4%)
Aetna, Incorporated........................... 8,040 690,435
Allstate Corporation.......................... 10,740 637,687
-----------
1,328,122
-----------
</TABLE>
See notes to financial statements.
2
<PAGE> 6
SENECA FUNDS
SENECA GROWTH FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 1997
(CONTINUED)
(UNAUDITED)
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
- -------------------------------------------------- ------- -----------
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
MANUFACTURING -- (1.2%)
Illinois Tool Works, Incorporated............. 4,560 372,210
-----------
OIL -- (7.2%)
Atlantic Richfield Company.................... 6,000 810,000
Mobil Corporation............................. 6,370 832,081
Royal Dutch Petroleum Company................. 3,090 540,750
-----------
2,182,831
-----------
PETROLEUM SERVICES -- (1.6%)
Schlumberger Limited.......................... 4,530 485,843
-----------
REAL ESTATE -- (1.6%)
Arden Realty Group, Incorporated.............. 3,400 92,650
Brandywine Realty Trust....................... 20,000 405,000
-----------
497,650
-----------
RETAIL TRADE -- (2.6%)
TJX Companies, Incorporated................... 18,660 797,715
-----------
TELECOMMUNICATIONS -- (6.2%)
Bell Atlantic Corporation..................... 15,580 948,432
BellSouth Corporation......................... 22,260 940,485
-----------
1,888,917
-----------
TOTAL COMMON STOCKS -- (COST $25,835,026)......... 25,924,686
-----------
</TABLE>
See notes to financial statements.
3
<PAGE> 7
SENECA FUNDS
SENECA GROWTH FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 1997
(CONTINUED)
(UNAUDITED)
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE VALUE
- -------------------------------------------------- -----------
<S> <C> <C> <C>
SHORT TERM INVESTMENT -- (12.1%)
REPURCHASE AGREEMENT (Cost $3,688,660)
State Street Bank and Trust Company, 4.25%, to
be repurchased at $3,689,095 on 04/01/97
(collateralized by $3,650,000 par value U.S.
Treasury Note 7.25% due 05/15/16 with a
value of $3,767,096)........................ 3,688,660
-----------
TOTAL INVESTMENTS -- (COST $29,523,686*).......... 97.6% 29,613,346
OTHER ASSETS LESS LIABILITIES..................... 2.4% 725,758
----- -----------
NET ASSETS........................................ 100.0% $30,339,104
===== ===========
</TABLE>
- ---------------
(1) Non-income producing security.
* At March 31, 1997, the aggregate cost of investment in securities and
repurchase agreements for income tax purposes was $29,523,686. Net
unrealized appreciation aggregated $89,660, of which $1,122,577 related to
appreciated investment securities and $1,032,917 related to depreciated
investment securities.
See notes to financial statements.
4
<PAGE> 8
SENECA FUNDS
SENECA MID-CAP "EDGE"(SM) FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
- ------------------------------------------------- ------- -----------
<S> <C> <C> <C>
COMMON STOCKS -- 94.3%
ADVERTISING SERVICES -- (2.9%)
Outdoor Systems, Incorporated (1)............ 10,160 $ 303,530
-----------
AIRLINES -- (1.3%)
US Airways Group, Incorporated (1)........... 5,800 142,100
-----------
AEROSPACE -- (3.0%)
Precision Castparts Corporation.............. 6,100 311,100
-----------
APPAREL MANUFACTURER -- (6.2%)
Fruit of the Loom, Incorporated (1).......... 5,910 245,265
Jones Apparel Group, Incorporated (1)........ 4,100 152,213
Tommy Hilfiger Corporation (1)............... 4,950 258,637
-----------
656,115
-----------
AUTO PARTS -- (0.8%)
Miller Industries, Incorporated (1).......... 6,950 83,400
-----------
BROADCASTING -- (2.0%)
Evergreen Media Corporation Class A (1)...... 7,185 209,712
-----------
CHEMICALS -- (4.9%)
BetzDearborn, Incorporated................... 3,730 235,456
Praxair, Incorporated........................ 6,220 279,122
-----------
514,578
-----------
COMMERCIAL SERVICES -- (3.1%)
Envoy Corporation New (1).................... 7,820 182,793
TeleSpectrum Worldwide, Incorporated (1)..... 11,640 138,225
-----------
321,018
-----------
COMPUTER SOFTWARE -- (4.8%)
Intel Corporation............................ 1,930 268,511
Parametric Technology Company (1)............ 5,270 237,809
-----------
506,320
-----------
</TABLE>
See notes to financial statements.
5
<PAGE> 9
SENECA FUNDS
SENECA MID-CAP "EDGE"(SM) FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 1997
(CONTINUED)
(UNAUDITED)
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
- ------------------------------------------------- ------- -----------
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
COMPUTERS -- (3.8%)
Read-Rite Corporation (1).................... 8,990 $ 226,997
Sun Microsystems, Incorporated (1)........... 6,020 173,828
-----------
400,825
-----------
DRUGS & HEALTH CARE -- (5.3%)
McKesson Corporation......................... 4,470 286,080
PacifiCare Health Systems, Incorporated
(1)........................................ 1,790 154,387
Teva Pharmaceutical Industries Limited....... 2,110 117,105
-----------
557,572
-----------
ELECTRIC UTILITY -- (0.8%)
Texas Utilities Company...................... 2,470 84,598
-----------
ELECTRONICS -- (7.9%)
Altera Corporation (1)....................... 7,470 321,210
Applied Materials, Incorporated (1).......... 5,000 231,875
Maxim Integrated Products, Incorporated
(1)........................................ 4,950 239,456
Sanmina Corporation (1)...................... 810 36,248
-----------
828,789
-----------
FINANCIAL SERVICES -- (11.3%)
Charles Schwab Corporation................... 9,103 290,158
CMAC Investment Corporation.................. 7,340 244,972
Coast Savings Financial, Incorporated (1).... 7,510 297,584
Comerica, Incorporated....................... 6,290 354,599
-----------
1,187,313
-----------
HOME FURNISHINGS -- (2.4%)
Furniture Brands International, Incorporated
(1)........................................ 16,670 250,050
-----------
HOTELS & RESTAURANTS -- (2.5%)
HFS, Incorporated (1)........................ 4,490 264,349
-----------
HUMAN RESOURCES -- (0.4%)
AccuStaff, Incorporated (1).................. 2,850 47,738
-----------
</TABLE>
See notes to financial statements.
6
<PAGE> 10
SENECA FUNDS
SENECA MID-CAP "EDGE"(SM) FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 1997
(CONTINUED)
(UNAUDITED)
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
- ------------------------------------------------- ------- -----------
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
INSURANCE -- (2.4%)
SunAmerica, Incorporated..................... 6,770 $ 254,721
-----------
LEISURE -- (3.0%)
Callaway Golf Company........................ 3,630 103,909
Carnival Corporation......................... 5,700 210,900
-----------
314,809
-----------
MACHINERY -- (1.4%)
JLG Industries, Incorporated................. 7,650 150,131
-----------
MEDICAL PRODUCTS -- (1.8%)
IDEXX Laboratories, Incorporated (1)......... 6,390 89,460
Nitinol Medical Technologies, Incorporated
(1)........................................ 12,150 97,200
-----------
186,660
-----------
OIL -- (4.9%)
Seacor Holdings (1).......................... 5,340 286,358
Vintage Petroleum, Incorporated.............. 7,560 226,800
-----------
513,158
-----------
RETAIL TRADE -- (8.1%)
CVS Corporation.............................. 4,340 200,182
Footstar, Incorporated (1)................... 11,590 343,354
TJX Companies, Incorporated.................. 7,080 302,670
-----------
846,206
-----------
SOFTWARE -- (5.3%)
HNC Software, Incorporated (1)............... 11,430 298,609
Peoplesoft, Incorporated (1)................. 6,340 253,600
-----------
552,209
-----------
THEATERS -- (1.9%)
Regal Cinemas, Incorporated (1).............. 7,235 195,345
-----------
WATER TREATMENT SYSTEMS -- (2.1%)
U.S. Filter Corporation (1).................. 7,060 217,977
-----------
TOTAL COMMON STOCKS -- (COST $10,324,942)........ 9,900,323
-----------
</TABLE>
See notes to financial statements.
7
<PAGE> 11
SENECA FUNDS
SENECA MID-CAP "EDGE"(SM) FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 1997
(CONTINUED)
(UNAUDITED)
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE VALUE
- ------------------------------------------------- -----------
<S> <C> <C> <C>
SHORT TERM INVESTMENT -- (4.1%)
REPURCHASE AGREEMENT(Cost $427,726)
State Street Bank and Trust Company, 4.25%,
to be repurchased at $427,777 on 04/01/97
(collateralized by $425,000 par value U.S.
Treasury Note 7.25% due 05/15/16 with a
value of $438,634)......................... $ 427,726
-----------
TOTAL INVESTMENTS -- (COST $10,752,668*)......... 98.4% 10,328,049
OTHER ASSETS LESS LIABILITIES.................... 1.6% 170,936
----- -----------
NET ASSETS....................................... 100.0% $10,498,985
===== ===========
</TABLE>
- ---------------
(1) Non-income producing security.
* At March 31, 1997, the aggregate cost of investment in securities and
repurchase agreements for income tax purposes was $10,752,668. Net
unrealized depreciation aggregated $(424,619), of which $437,670, related to
appreciated investment securities and $862,289, related to depreciated
investment securities.
See notes to financial statements.
8
<PAGE> 12
SENECA FUNDS
SENECA BOND FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
NAME OF ISSUER INTEREST MATURITY PRINCIPAL
AND TITLE OF ISSUE RATE DATE AMOUNT VALUE
- ------------------------------ -------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C>
CORPORATE BONDS -- 77.0%
AIRLINES -- (5.0%)
Alaska Airlines,
Incorporated............ 9.500% 04/12/2010 121,979 $ 128,078
United Airlines,
Incorporated............ 10.110% 02/19/2006 23,107 25,307
United Airlines,
Incorporated............ 9.760% 05/27/2006 93,012 101,156
United Airlines,
Incorporated............ 9.020% 04/19/2012 94,463 99,085
----------
353,626
----------
ASSET BACKED -- (4.8%)
Chrysler Financial
Corporation Grantor
Trust, Series 11A, Class
A....................... 8.900% 08/15/1997 96,684 97,325
General Electric Capital
Mortgage Services,
Incorporated, Series
1994-21, Class B1....... 6.500% 08/25/2009 35,224 32,934
General Motors Acceptance
Corporation Series
1994-A, Class A......... 6.300% 06/15/1999 50,415 50,607
Olympic Automobile
Receivable Trust Series
1996-B.................. 6.900% 02/15/2004 120,000 120,361
Standard Credit Card
Master Trust I, Series
1993-2, Class A......... 5.950% 10/07/2004 40,000 37,575
----------
338,802
----------
BROADCASTING -- (8.3%)
Chancellor Broadcasting
Corporation............. 12.500% 10/01/2004 50,000 56,250
Chancellor Broadcasting
Corporation............. 9.375% 10/01/2004 75,000 75,187
Commodore Media,
Incorporated............ 7.500% 05/01/2003 150,000 163,500
Jacor, Incorporated....... 10.125% 06/15/2006 100,000 101,000
SFX Broadcasting,
Incorporated............ 10.750% 05/15/2006 100,000 104,250
</TABLE>
See notes to financial statements.
9
<PAGE> 13
SENECA FUNDS
SENECA BOND FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 1997
(CONTINUED)
(UNAUDITED)
<TABLE>
<CAPTION>
NAME OF ISSUER INTEREST MATURITY PRINCIPAL
AND TITLE OF ISSUE RATE DATE AMOUNT VALUE
- ------------------------------ -------- ---------- --------- ----------
CORPORATE BONDS (CONTINUED)
<S> <C> <C> <C> <C> <C>
BROADCASTING (CONTINUED)
Young Broadcasting
Corporation............. 11.750% 11/15/2004 75,000 $ 80,625
----------
580,812
----------
COMMERCIAL SERVICES -- (1.5%)
Iron Mountain,
Incorporated............ 10.125% 10/01/2006 100,000 103,250
----------
DRUGS & HEALTH CARE -- (0.5%)
Abbey Healthcare Group.... 9.500% 11/01/2002 25,000 26,000
Quorum Health Group,
Incorporated............ 11.875% 12/15/2002 5,000 5,481
----------
31,481
----------
DEFENSE -- (1.4%)
Tracor, Incorporated...... 8.500% 03/01/2007 100,000 97,500
----------
ENERGY -- (7.3%)
El Paso Tenneco........... 9.140% 12/31/2001 300,000 300,000
SFP Pipeline Holdings..... 11.160% 08/15/2010 175,000 211,496
----------
511,496
----------
FINANCE & BANKING -- (16.1%)
Aetna Services,
Incorporated............ 7.625% 08/15/2026 75,000 72,088
Countrywide Capital
Incorporated............ 8.000% 12/15/2026 200,000 192,527
Countrywide Funding....... 5.900% 04/22/1999 30,000 29,942
Bear Stearns Company,
Incorporated............ 5.520% 08/26/1997 60,000 59,969
Dollar Financial Group.... 10.875% 11/15/2006 150,000 151,500
Donaldson Lufkin &
Jenrette................ 6.875% 11/01/2005 50,000 47,585
Lehman Brothers
Holdings................ 8.800% 03/01/2015 80,000 87,234
Security Capital Pacific
Trust................... 7.900% 02/15/2016 200,000 189,874
Societe Generale New
York.................... 7.400% 06/01/2006 90,000 89,021
</TABLE>
See notes to financial statements.
10
<PAGE> 14
SENECA FUNDS
SENECA BOND FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 1997
(CONTINUED)
(UNAUDITED)
<TABLE>
<CAPTION>
NAME OF ISSUER INTEREST MATURITY PRINCIPAL
AND TITLE OF ISSUE RATE DATE AMOUNT VALUE
- ------------------------------ -------- ---------- --------- ----------
CORPORATE BONDS (CONTINUED)
<S> <C> <C> <C> <C> <C>
FINANCE & BANKING (CONTINUED)
Wells Fargo Capital A..... 8.125% 12/01/2026 100,000 $ 96,942
Wells Fargo Capital B..... 7.950% 12/01/2026 125,000 119,194
----------
1,135,876
----------
GAMES, TOYS -- (2.2%)
Mattel, Incorporated...... 10.125% 08/15/2002 150,000 156,938
----------
GROCERY STORES -- (1.3%)
Smith's Food & Drug
Centers, Incorporated... 8.640% 07/02/2012 100,000 94,500
----------
HOTELS -- (8.5%)
Caesars World............. 8.875% 08/15/2002 220,000 229,900
California Hotels
Finance................. 11.000% 12/01/2002 75,000 78,750
Casino America............ 11.500% 11/15/2001 75,000 80,133
John Q. Hammons Hotels.... 8.875% 02/15/2004 30,000 29,475
John Q. Hammons Hotels.... 9.750% 10/01/2005 100,000 101,750
Wyndham Hotel
Corporation............. 10.500% 05/15/2006 75,000 78,938
----------
598,946
----------
INDUSTRIAL -- (0.5%)
MVE, Incorporated......... 12.500% 02/15/2002 30,000 32,100
----------
MULITMEDIA -- (8.0%)
Cablevision Industries
Corporation............. 9.250% 04/01/2008 90,000 93,432
Continental Cablevision... 10.625% 06/15/2002 115,000 122,007
Continental Cablevision... 8.875% 09/15/2005 100,000 107,619
Continental Cablevision... 8.300% 05/15/2006 30,000 31,107
News Corporation
Limited................. 0.000% 06/15/1999 200,000 172,000
Time Warner,
Incorporated............ 9.125% 01/15/2013 35,000 37,178
----------
563,343
----------
</TABLE>
See notes to financial statements.
11
<PAGE> 15
SENECA FUNDS
SENECA BOND FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 1997
(CONTINUED)
(UNAUDITED)
<TABLE>
<CAPTION>
NAME OF ISSUER INTEREST MATURITY PRINCIPAL
AND TITLE OF ISSUE RATE DATE AMOUNT VALUE
- ------------------------------ -------- ---------- --------- ----------
CORPORATE BONDS (CONTINUED)
<S> <C> <C> <C> <C> <C>
OFFICE SUPPLIES -- (1.6%)
Corporate Express,
Incorporated............ 9.125% 03/15/2004 75,000 $ 74,062
Scotsman Group............ 9.500% 12/15/2000 40,000 40,900
----------
114,962
----------
REAL ESTATE -- (5.2%)
ERP Operating Limited
Partnership............. 7.570% 08/15/2026 150,000 149,979
Spieker Properties,
Incorporated............ 8.000% 07/19/2005 100,000 101,179
Property Trust America.... 6.875% 02/15/2008 5,000 4,742
Washington REIT........... 7.125% 08/13/2003 110,000 108,202
----------
364,102
----------
THEATERS -- (4.8%)
Cobb Theaters,
Incorporated............ 10.625% 03/01/2003 100,000 103,250
Plitt Theaters,
Incorporated............ 10.875% 06/15/2004 75,000 76,313
United Artists Theatre
Circuit, Incorporated
Sr. Secured Notes,
Series B................ 11.500% 05/01/2002 150,000 157,688
----------
337,251
----------
TOTAL CORPORATE BONDS -- (COST $5,429,286)......... 5,414,985
----------
U.S. GOVERNMENT AGENCIES -- (8.8%)
COLLATERALIZED MORTGAGE OBLIGATION -- (8.5%)
Federal Home Loan Mortgage
Corporation, REMIC,
Series 151, Class E..... 9.000% 09/15/2020 35,227 35,814
Federal Home Loan Mortgage
Corporation, REMIC,
Series 1032, Class E.... 8.750% 12/15/2020 36,590 37,643
</TABLE>
See notes to financial statements.
12
<PAGE> 16
SENECA FUNDS
SENECA BOND FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 1997
(CONTINUED)
(UNAUDITED)
<TABLE>
<CAPTION>
NAME OF ISSUER INTEREST MATURITY PRINCIPAL
AND TITLE OF ISSUE RATE DATE AMOUNT VALUE
- ------------------------------ -------- ---------- --------- ----------
U.S. GOVERNMENT AGENCIES (CONTINUED)
COLLATERALIZED MORTGAGE OBLIGATION (CONTINUED)
<S> <C> <C> <C> <C> <C>
Federal Home Loan Mortgage
Corporation, REMIC,
Series 1142, Class H.... 7.950% 12/15/2020 300,000 $ 305,126
Federal National Mortgage
Association, REMIC,
Series 1989-80, Class
E....................... 9.000% 09/25/2018 88,782 91,112
Federal National Mortgage
Association, REMIC,
Series 1990-4, Class
G....................... 8.750% 05/25/2017 90,070 92,473
Federal National Mortgage
Association, I.O........ 2.844% 10/25/2023 722,764 33,880
----------
596,048
----------
MORTGAGE-BACKED PASS-THROUGH SECURITY -- (0.3%)
Government National
Mortgage Association,
Pool #408215............ 7.000% 02/15/2026 24,037 22,940
----------
TOTAL U.S. GOVERNMENT AGENCIES -- (COST
$622,868)........................................ 618,988
----------
FOREIGN BONDS -- (2.4%)
CORPORATE -- (2.0%)
NAV Canada................ 6.450% 06/01/2004 200,000 143,100
----------
GOVERNMENT -- (0.4%)
Republic of Brazil........ 6.500% 01/01/2001 26,100 25,545
----------
TOTAL FOREIGN BONDS -- (COST $170,711)............. 168,645
----------
SHARES
------
PREFERRED STOCK -- 2.3% -- (COST $159,750)
Microsoft Corporation, Pfd
Series A................ 2,000 162,250
----------
</TABLE>
See notes to financial statements.
13
<PAGE> 17
SENECA FUNDS
SENECA BOND FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 1997
(CONTINUED)
(UNAUDITED)
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
- ------------------------------ --------- ----------
<S> <C> <C> <C> <C> <C>
OPTIONS -- 0.2% (COST $12,546)
Canadian Dollar Put Option,
Expire 3/98.................................. 206,324 $ 13,700
----------
WARRANTS -- 0.0% (COST $0)
MVE, Incorporated, Expire 2/02................. 30 0
----------
TOTAL INVESTMENTS IN SECURITIES -- (COST
$6,395,161)...................................... 6,378,568
----------
SHORT TERM INVESTMENTS -- 5.0% (Cost $351,649)
INTEREST MATURITY PRINCIPAL
RATE DATE AMOUNT
-------- ---------- ---------
COMMERCIAL PAPER
Airtouch Communications... 6.85% 04/01/1997 300,000 300,000
----------
REPURCHASE AGREEMENT
State Street Bank and Trust Company, 4.25%, to
be repurchased at $51,655 on 04/01/97
(collateralized by $52,000 par value U.S.
Treasury Note 7.25% due 05/15/16, with a
value of $53,668)............................ 51,649
----------
TOTAL SHORT TERM INVESTMENTS....................... 351,649
----------
TOTAL INVESTMENTS -- (COST $6,746,810*)............ 95.7% 6,730,217
OTHER ASSETS LESS LIABILITIES...................... 4.3% 306,364
----- ----------
NET ASSETS......................................... 100.0% $7,036,581
===== ==========
</TABLE>
- ---------------
* At March 31, 1997, the aggregate cost of investment in securities and
repurchase agreements for income tax purposes was $6,746,810. Net unrealized
depreciation aggregated $(16,593), of which $49,097 related to appreciated
investment securities and $65,690 related to depreciated investment
securities.
See notes to financial statements.
14
<PAGE> 18
SENECA FUNDS
SENECA REAL ESTATE SECURITIES FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
- ----------------------------------------------- ------- -----------
<S> <C> <C> <C>
COMMON STOCKS -- 95.6%
FINANCIAL SERVICES -- 3.0%
Federal National Mortgage Association...... 11,000 $ 397,375
Green Tree Financial Corporation........... 7,700 259,875
-----------
657,250
-----------
HOTELS AND RESTAURANTS -- 4.7%
Circus Circus Entertainment(1)............. 19,400 504,400
Host Marriott Corporation(1)............... 29,000 493,000
-----------
997,400
-----------
REAL ESTATE DEVELOPMENT -- 3.8%
Catellus Development Corporation(1)........ 52,400 799,100
-----------
REAL ESTATE INVESTMENT TRUSTS -- 84.1%
Ambassador Apartments, Incorporated........ 20,300 507,500
American General Hospitality Corporation... 18,000 490,500
Apartment Investment and Management Company
Class A.................................. 17,470 508,814
Avalon Properties, Incorporated............ 13,100 360,250
Bedford Property Investors, Incorporated... 17,000 335,750
Cali Realty Corporation.................... 26,000 832,000
CarrAmerica Realty Corporation............. 10,000 307,500
CBL & Associates Properties,
Incorporated............................. 7,000 171,500
Centerpoint Properties..................... 19,700 603,312
Developers Diversified Realty
Corporation.............................. 12,200 460,550
Equity Residential Properties Trust........ 19,900 883,062
Evans Withycombe Residential,
Incorporated............................. 28,000 577,500
Felcor Suite Hotels, Incorporated.......... 19,275 708,356
First Industrial Realty Trust,
Incorporated............................. 14,000 442,750
Glenborough Realty Trust, Incorporated..... 13,000 260,000
Highwoods Properties, Incorporated......... 14,975 501,662
Irvine Apartment Communities,
Incorporated............................. 13,436 381,247
Liberty Property Trust..................... 29,550 723,975
Manufactured Home Communities.............. 27,700 605,938
Pacific Gulf Properties, Incorporated...... 31,750 690,562
Patriot American Hospitality,
Incorporated............................. 46,360 1,124,230
Prentiss Properties Trust.................. 16,200 411,075
</TABLE>
See notes to financial statements.
15
<PAGE> 19
SENECA FUNDS
SENECA REAL ESTATE SECURITIES FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 1997
(CONTINUED)
(UNAUDITED)
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
- ----------------------------------------------- ------- -----------
<S> <C> <C> <C>
(CONTINUED)REAL ESTATE INVESTMENT TRUSTS
(CONTINUED)
Redwood Trust, Incorporated................ 14,800 $ 684,600
Security Capital Atlantic, Incorporated.... 16,800 373,800
Security Capital Pacific Trust............. 23,600 575,250
Simon Debartolo Group, Incorporated........ 20,615 623,604
Speiker Properties, Incorporated........... 32,000 1,248,000
Sunstone Hotel Investors, Incorporated..... 28,900 379,313
The Macerich Company....................... 20,000 560,000
Thornburg Mortgage Asset Association....... 23,700 450,300
TriNet Corporate Realty Trust,
Incorporated............................. 21,500 679,938
Urban Shopping Centers, Incorporated....... 15,000 450,000
-----------
17,912,838
-----------
TOTAL COMMON STOCKS -- (COST $19,409,477)...... 20,366,588
-----------
SHORT TERM INVESTMENT -- 7.5%
REPURCHASE AGREEMENT (Cost $1,593,315)
State Street Bank and Trust Company, 4.25%,
to be repurchased at $1,593,503 on
04/01/97 (collateralized by $1,575,000
par value U.S. Treasury Note 7.25% due
05/15/16, with a value of $1,625,528).... 1,593,315
-----------
TOTAL INVESTMENTS -- (COST $21,002,792*)....... 103.1% 21,959,903
OTHER ASSETS LESS LIABILITIES.................. (3.1)% (666,509)
----- -----------
NET ASSETS..................................... 100.0% $21,293,394
===== ===========
</TABLE>
- ---------------
(1) Non-income producing security.
* At March 31, 1997, the aggregate cost of investment in securities and
repurchase agreements for income tax purposes was $21,002,792. Net
unrealized appreciation aggregated $957,111, of which $1,448,436 related to
appreciated investment securities and $491,326 related to depreciated
investment securities.
See notes to financial statements.
16
<PAGE> 20
SENECA FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
MID-CAP REAL ESTATE
"EDGE"(SM) SECURITIES
GROWTH FUND FUND BOND FUND FUND
----------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
ASSETS
Investments in securities, at
value (Note 2)............. $25,924,686 $ 9,900,323 $6,378,568 $20,366,588
Short Term Investments....... 3,688,660 427,726 351,649 1,593,315
Cash......................... -- -- -- 12,593
Dividends and interest
receivable................. 20,798 7,105 128,520 107,537
Receivable for securities
sold....................... 409,177 150,890 29,500 --
Receivable for Fund shares
sold....................... 1,388,364 201,953 390,853 100,602
Deferred organizational costs
(Note 5)................... 40,740 41,112 40,740 40,740
Due from Investment Manager
(Note 3)................... 13,644 40,853 47,053 64,839
----------- ----------- ---------- -----------
TOTAL ASSETS............... 31,486,069 10,769,962 7,366,883 22,286,214
LIABILITIES
Payable for securities
purchased.................. 1,083,551 227,237 305,438 915,332
Payable for fund shares
redeemed................... 1,000 4,141 1,341 18,948
Trustees fees payable (Note
3)......................... 2,476 2,475 2,476 2,476
Distribution fees payable
(Note 3)................... 1,726 1,784 -- 1,071
Other accrued expenses....... 58,212 35,340 21,047 54,993
----------- ----------- ---------- -----------
TOTAL LIABILITIES.......... 1,146,965 270,977 330,302 992,820
----------- ----------- ---------- -----------
NET ASSETS................. $30,339,104 $10,498,985 $7,036,581 $21,293,394
=========== =========== ========== ===========
NET ASSETS
Capital paid-in.............. $30,006,228 $11,413,652 $7,033,332 $19,928,855
Undistributed net investment
income..................... (7,768) (58,848) (14,604) (8,326)
Accumulated net realized gain
(loss) on investments...... 250,984 (431,200) 34,446 415,754
Net unrealized appreciation
(depreciation) of
investments................ 89,660 (424,619) (16,593) 957,111
----------- ----------- ---------- -----------
NET ASSETS................. $30,339,104 $10,498,985 $7,036,581 $21,293,394
=========== =========== ========== ===========
INVESTMENTS IN SECURITIES, AT
COST....................... $25,835,026 $10,324,942 $6,395,161 $19,409,477
INSTITUTIONAL SHARES:
Net Assets................. $26,253,892 $ 8,112,750 $7,036,581 $18,780,885
Total shares outstanding... 1,992,400 661,953 701,807 1,457,227
Net asset value, offering and
redemption price per
Institutional share........ $ 13.18 $ 12.26 $ 10.03 $ 12.89
=========== =========== ========== ===========
</TABLE>
See notes to financial statements.
17
<PAGE> 21
SENECA FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 1997
(CONTINUED)
(UNAUDITED)
<TABLE>
<CAPTION>
MID-CAP REAL ESTATE
"EDGE"(SM) SECURITIES
GROWTH FUND FUND BOND FUND FUND
----------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
ADMINISTRATIVE SHARES:
Net Assets................. $ 4,085,212 $ 2,386,235 $ -- $ 2,512,509
Total shares outstanding... 311,837 194,011 -- 195,261
Net asset value, offering and
redemption price per
Administrative share....... $ 13.10 $ 12.30 $ -- $ 12.87
=========== =========== ========== ===========
</TABLE>
See notes to financial statements.
18
<PAGE> 22
SENECA FUNDS
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED MARCH 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
MID-CAP REAL ESTATE
GROWTH "EDGE"(SM) BOND SECURITIES
FUND FUND FUND FUND
--------- ----------- --------- -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends..................... $ 116,385 $ 12,519 $ 1,013 $ 267,257
Interest...................... 70,075 33,209 230,033 51,719
--------- ----------- --------- ----------
TOTAL INCOME................ 186,460 45,728 231,046 318,976
========= =========== ========= ==========
EXPENSES
Management fee(Note 3)........ 74,087 42,872 14,502 55,447
Administrative fee(Note 3).... 32,973 32,338 32,582 32,752
Transfer agent fees........... 27,653 29,662 12,042 19,905
Custodian fees................ 22,080 20,838 19,048 21,560
Distribution fees(Note 3)..... 2,036 2,867 139 1,324
Registration and filing
fees........................ 9,930 8,410 8,090 8,694
Audit fees.................... 8,945 8,945 7,445 7,445
Legal fees.................... 12,638 12,638 12,638 12,638
Trustees fees................. 4,979 4,979 4,979 4,979
Amortization of organization
expenses(Note 5)............ 23,663 23,505 23,663 23,663
Other......................... 1,942 1,950 2,192 2,392
--------- ----------- --------- ----------
Expenses before waiver and
reimbursement............... 220,926 189,004 137,320 190,799
Fees waived and expenses
reimbursed by Investment
Manager (Note 3)............ (75,835) (109,069) (106,399) (70,123)
--------- ----------- --------- ----------
TOTAL EXPENSES.............. 145,091 79,935 30,921 120,676
--------- ----------- --------- ----------
NET INVESTMENT INCOME....... 41,369 (34,207) 200,125 198,300
--------- ----------- --------- ----------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Net realized gain (loss) on
investments................. 302,111 (431,241) 35,346 422,877
Change in net unrealized
appreciation of
investments................. (529,759) (1,442,394) (66,198) 892,945
--------- ----------- --------- ----------
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS....... (227,648) (1,873,635) (30,852) 1,315,822
--------- ----------- --------- ----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS..... $(186,279) $(1,907,842) $ 169,273 $1,514,122
========= =========== ========= ==========
</TABLE>
See notes to financial statements.
19
<PAGE> 23
SENECA FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
MID-CAP
GROWTH "EDGE" (SM)
FUND FUND
--------------------------- ---------------------------
SIX MONTHS SIX MONTHS
ENDED PERIOD ENDED PERIOD
MARCH 31, ENDED MARCH 31, ENDED
1997 SEPTEMBER 30, 1997 SEPTEMBER 30,
(UNAUDITED) 1996* (UNAUDITED) 1996*
------------ ------------- ------------ -------------
<S> <C> <C> <C> <C>
INCREASE IN NET ASSETS
From operations:
Net investment
income............. $ 41,369 $ 32,326 $ (34,207) $ 4,615
Net realized gain
(loss) on
investments........ 302,111 965,464 (431,241) 77,414
Change in net
unrealized
appreciation of
investments........ (529,759) 619,419 (1,442,394) 1,017,775
----------- ----------- ----------- -----------
Net (decrease)
increase in net
assets resulting
from operations.... (186,279) 1,617,209 (1,907,842) 1,099,804
Dividends and
Distributions to
shareholders from
Net investment
income:
Administrative
Shares........... (328) -- (7) --
Institutional
Shares........... (99,420) -- (47,399) --
Net realized gains:
Administrative
Shares........... (18,738) -- (12,055) --
Institutional
Shares........... (997,853) -- (65,318) --
Net increase from Fund
share transactions
(Note 6)............. 18,255,796 11,743,717 3,748,457 7,658,345
----------- ----------- ----------- -----------
TOTAL INCREASE... 16,953,178 13,360,926 1,715,836 8,758,149
Net Assets
Beginning of
period............. 13,385,926 25,000 8,783,149 25,000
----------- ----------- ----------- -----------
End of period (a).... $30,339,104 $13,385,926 $10,498,985 $ 8,783,149
=========== =========== =========== ===========
(a) Including
undistributed net
investment
income............. $ (7,768) $ 50,611 $ (58,848) $ 22,765
</TABLE>
- ---------------
* The Growth, Mid-Cap "EDGE"(SM), Bond, and Real Estate Securities Funds
commenced investment operations on March 8, 1996, March 8, 1996, March 7,
1996, and March 12, 1996, respectively.
See notes to financial statements.
20
<PAGE> 24
SENECA FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
REAL ESTATE
BOND SECURITIES
FUND FUND
-------------------------- ---------------------------
SIX MONTHS SIX MONTHS
ENDED PERIOD ENDED PERIOD
MARCH 31, ENDED MARCH 31, ENDED
1997 SEPTEMBER 30, 1997 SEPTEMBER 30,
(UNAUDITED) 1996* (UNAUDITED) 1996*
----------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
INCREASE IN NET ASSETS
From operations:
Net investment
income............. $ 200,125 $ 93,149 $ 198,300 $ 8,501
Net realized gain
(loss) on
investments........ 35,346 13,694 422,877 (2,568)
Change in net
unrealized
appreciation of
investments........ (66,198) 49,605 892,945 64,166
---------- ----------- ----------- -----------
Net increase in net
assets resulting
from operations.... 169,273 156,448 1,514,122 70,099
Dividends and
Distributions to
shareholders from
Net investment
income:
Administrative
Shares........... (2,145) (1,994) (14,219) (1,227)
Institutional
Shares........... (232,011) (90,013) (210,788) (7,178)
Net realized gains:
Administrative
Shares........... (672) -- (194) --
Institutional
Shares........... (13,922) -- (4,361) --
Net increase from Fund
share transactions
(Note 6)............. 2,993,464 4,033,153 18,713,271 1,208,869
---------- ----------- ----------- -----------
TOTAL INCREASE... 2,913,987 4,097,594 19,997,831 1,270,563
Net Assets
Beginning of
period............. 4,122,594 25,000 1,295,563 25,000
---------- ----------- ----------- -----------
End of period (a).... $7,036,581 $ 4,122,594 $21,293,394 $ 1,295,563
========== =========== =========== ===========
(a) Including
undistributed net
investment
income............. $ (14,604) $ 19,427 $ (8,326) $ 18,381
</TABLE>
- ---------------
* The Growth, Mid-Cap "EDGE"(SM), Bond, and Real Estate Securities Funds
commenced investment operations on March 8, 1996, March 8, 1996, March 7,
1996, and March 12, 1996, respectively.
See notes to financial statements.
21
<PAGE> 25
SENECA FUNDS
FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
<TABLE>
<CAPTION>
MID-CAP
GROWTH FUND "EDGE"(SM) FUND
-------------------------- --------------------------
SIX MONTHS SIX MONTHS
ENDED PERIOD ENDED PERIOD
MARCH 31, ENDED MARCH 31, ENDED
1997 SEPTEMBER 30, 1997 SEPTEMBER 30,
(UNAUDITED) 1996* (UNAUDITED) 1996*
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Net Asset Value at Beginning of
Period........................ $ 13.74 $ 10.00 $ 14.97 $ 10.00
----------- ----------- ---------- ----------
Income from Investment
Operations:
Net Investment Income
(Loss) (1)................... (0.01) 0.03 (0.03) 0.01
Net Realized and Unrealized
Gain on Investments.......... 0.29 3.71 (2.51) 4.96
----------- ----------- ---------- ----------
Total from Investment
Operations................... 0.28 3.74 (2.54) 4.97
----------- ----------- ---------- ----------
Distributions to Shareholders
from Net Investment Income..... (0.07) -- (0.07) --
Net Realized Gains............. (0.77) -- (0.10) --
----------- ----------- ---------- ----------
Total Distribution............. (0.84) -- (0.17) --
----------- ----------- ---------- ----------
Net Asset Value at End of
Period......................... $ 13.18 $ 13.74 $ 12.26 $ 14.97
=========== =========== ========== ==========
Total Return (2)................ 2.09% 37.40% (17.15)% 49.70%
Ratios & Supplemental Data
Net Assets at End of Period.... $26,253,892 $12,919,525 $8,112,750 $ 7,427,656
Ratio of Operating Expenses to
Average Net Assets (3)....... 1.30% 0.81% 1.34% 0.90%
Ratio of Operating Expenses to
Average Net Assets (3)(4).... 1.93% 3.49% 3.19% 5.73%
Ratio of Net Investment Income
(Loss) to Average Net Assets
(3).......................... 0.46% 0.76% (.49)% 0.27%
Portfolio Turnover Rate........ 72.23% 87.66% 112.29% 72.34%
Average Commission Rate (5).... $ 0.0598 $ 0.0598 $ 0.0591 $ 0.0595
</TABLE>
- ---------------
* The Growth, Mid-Cap "EDGE"(SM), Bond, and Real Estate Securities Funds
commenced investment operations on March 8, 1996, March 8, 1996, March 7,
1996, and March 12, 1996, respectively.
(1)-(5) See page 23.
See notes to financial statements.
22
<PAGE> 26
SENECA FUNDS
FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
(CONTINUED)
(1) Net investment income (loss) is after waiver of certain fees and
reimbursement of certain expenses by the Investment Manager (see Note 3 to
the financial statements). If the Investment Manager had not waived fees and
reimbursed expenses, net investment income (loss) per share would have been
as follows for the six months ended March 31, 1997 and the period ended
September 30, 1996, respectively: $(0.02) and $(0.09) for the Growth Fund;
$(0.19) and $(0.19) for the Mid-Cap "EDGE"(SM) Fund.
(2) Total return represents total return for the period indicated. The total
return would have been lower if certain fees and expenses had not been
waived or reimbursed by the advisor.
(3) Annualized.
(4) If the Investment Manager had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been as
indicated.
(5) The average commission paid is applicable for the Funds that invest greater
than 10% of average net assets in equity securities transactions on which
commissions are charged.
See notes to financial statements.
23
<PAGE> 27
SENECA FUNDS
FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
<TABLE>
<CAPTION>
REAL ESTATE
BOND FUND SECURITIES FUND
-------------------------- ---------------------------
SIX MONTHS SIX MONTHS
ENDED PERIOD ENDED PERIOD
MARCH 31, ENDED MARCH 31, ENDED
1997 SEPTEMBER 30, 1997 SEPTEMBER 30,
(UNAUDITED) 1996* (UNAUDITED) 1996*
----------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
Net Asset Value at Beginning
of Period................... $ 10.09 $ 10.00 $ 11.10 $ 10.00
---------- ----------- ----------- -----------
Income from Investment
Operations:
Net Investment Income (1).... 0.32 0.31 -- 0.13
Net Realized and Unrealized
Gain on Investments........ 0.03 0.08 1.97 1.10
---------- ----------- ----------- -----------
Total from Investment
Operations................. 0.35 0.39 1.97 1.23
---------- ----------- ----------- -----------
Distributions to Shareholders from
Net Investment Income........ (0.39) (0.30) (0.17) (0.13)
Net Realized Gains........... (0.02) -- (0.01) --
---------- ----------- ----------- -----------
Total Distribution........... (0.41) (0.30) (0.18) (0.13)
---------- ----------- ----------- -----------
Net Asset Value at End of
Period....................... $ 10.03 $ 10.09 $ 12.89 $ 11.10
========== =========== =========== ===========
Total Return (2)........... 3.47% 4.02% 17.70% 12.39%
Ratios & Supplemental Data
Net Assets at End of
Period..................... $7,036,581 $ 3,926,664 $18,780,885 $ 1,073,080
Ratio of Operating Expenses
to Average Net Assets
(3)........................ 1.09% 0.56% 1.79% 1.00%
Ratio of Operating Expenses
to Average Net Assets
(3)(4)..................... 4.71% 9.31% 2.69% 53.04%
Ratio of Net Investment
Income (Loss) to Average
Net Assets (3)............. 6.99% 7.54% 3.11% 4.39%
Portfolio Turnover Rate...... 63.27% 52.82% 63.99% 30.70%
Average Commission Rate
(5)........................ N/A N/A $ 0.0564 $ 0.0564
</TABLE>
- ---------------
* The Growth, Mid-Cap "EDGE"(SM), Bond, and Real Estate Securities Funds
commenced investment operations on March 8, 1996, March 8, 1996, March 7,
1996, and March 12, 1996, respectively.
(1)-(5) See page 25.
See notes to financial statements.
24
<PAGE> 28
SENECA FUNDS
FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
(CONTINUED)
(1) Net investment income is after waiver of certain fees and reimbursement of
certain expenses by the Investment Manager (see Note 3 to the financial
statements). If the Investment Manager had not waived fees and reimbursed
expenses, net investment income (loss) per share would have been as follows
for the six months ended March 31, 1997 and the period ended September 30,
1996, respectively: $0.16 and $(0.05) for the Bond Fund; $0.00 and $(1.45)
for the Real Estate Securities Fund.
(2) Total return represents total return for the period indicated. The total
return would have been lower if certain fees and expenses had not been
waived or reimbursed by the advisor.
(3) Annualized.
(4) If the Investment Manager had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been as
indicated.
(5) The average commission paid is applicable for the Funds that invest greater
than 10% of average net assets in equity securities transactions on which
commissions are charged.
See notes to financial statements.
25
<PAGE> 29
SENECA FUNDS
FINANCIAL HIGHLIGHTS
ADMINISTRATIVE SHARES
<TABLE>
<CAPTION>
MID-CAP
GROWTH FUND "EDGE"(SM) FUND
-------------------------- --------------------------
SIX MONTHS SIX MONTHS
ENDED PERIOD ENDED PERIOD
MARCH 31, ENDED MARCH 31, ENDED
1997 SEPTEMBER 30, 1997 SEPTEMBER 30,
(UNAUDITED) 1996* (UNAUDITED) 1996*
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Net Asset Value at Beginning
of Period................... $ 13.63 $ 10.00 $ 14.94 $ 10.00
---------- -------- ---------- ----------
Income from Investment
Operations:
Net Investment Income (Loss)
(1)....................... (0.03) -- (0.08) (0.01)
Net Realized and Unrealized
Gain on Investments....... 0.27 3.63 (2.46) 4.95
---------- -------- ---------- ----------
Total from Investment
Operations................ 0.24 3.63 (2.54) 4.94
---------- -------- ---------- ----------
Distributions to Shareholders
from
Net Investment Income....... -- -- -- --
Net Realized Gains.......... (0.77) -- (0.10) --
---------- -------- ---------- ----------
Total Distribution.......... (0.77) -- (0.10) --
---------- -------- ---------- ----------
Net Asset Value at End of
Period...................... $ 13.10 $ 13.63 $ 12.30 $ 14.94
========== ========= ========== ===========
Total Return (2).......... 1.80% 36.30% (17.02)% 49.30%
Ratios & Supplemental Data
Net Assets at End of
Period.................... $4,085,212 $ 466,401 $2,386,235 $ 1,355,493
Ratio of Operating Expenses
to Average Net Assets
(3)....................... 2.25% 1.46% 2.05% 1.55%
Ratio of Operating Expenses
to Average Net Assets
(3)(4).................... 3.93% 14.01% 4.75% 9.73%
Ratio of Net Investment
Income (Loss) to Average
Net Assets (3)............ (0.44)% 0.16% (1.19)% (0.46)%
Portfolio Turnover Rate..... 72.23% 87.66% 112.29% 72.34%
Average Commission
Rate (5).................. $ 0.0598 $ 0.0598 $ 0.0591 $ 0.0595
</TABLE>
- ---------------
* The Growth, Mid-Cap "EDGE"(SM), Bond, and Real Estate Securities Funds
commenced investment operations on March 8, 1996, March 8, 1996, March 7,
1996, and March 12, 1996, respectively.
(1)-(5) See page 27.
See notes to financial statements.
26
<PAGE> 30
SENECA FUNDS
FINANCIAL HIGHLIGHTS
ADMINISTRATIVE SHARES
(CONTINUED)
(1) Net investment income (loss) is after waiver of certain fees and
reimbursement of certain expenses by the Investment Manager (see Note 3 to
the financial statements). If the Investment Manager had not waived fees and
reimbursed expenses, net investment income (loss) per share would have been
as follows for the six months ended March 31, 1997 and the period ended
September 30, 1996, respectively: $(0.16) and $(0.34) for the Growth Fund;
$(0.27) and $(0.20) for Mid-Cap "EDGE"(SM) Fund.
(2) Total return represents total return for the period indicated. The total
return would have been lower if certain fees and expenses had not been
waived or reimbursed by the advisor.
(3) Annualized.
(4) If the Investment Manager had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been as
indicated.
(5) The average commission paid is applicable for the Funds that invest greater
than 10% of average net assets in equity securities transactions on which
commissions are charged.
See notes to financial statements.
27
<PAGE> 31
SENECA FUNDS
FINANCIAL HIGHLIGHTS
ADMINISTRATIVE SHARES
<TABLE>
<CAPTION>
REAL ESTATE
BOND FUND SECURITIES FUND
--------------------------- ---------------------------
SIX MONTHS PERIOD
ENDED PERIOD ENDED PERIOD
DECEMBER 26, ENDED MARCH 31, ENDED
1996** SEPTEMBER 30, 1997 SEPTEMBER 30,
(UNAUDITED) 1996* (UNAUDITED) 1996*
------------ ------------- ------------ -------------
<S> <C> <C> <C> <C>
Net Asset Value at Beginning of
Period........................ $ 10.09 $ 10.00 $ 11.08 $ 10.00
-------- --------- ---------- ---------
Income from Investment
Operations:
Net Investment Income (Loss)
(1)......................... 0.06 0.29 (0.03) 0.13
Net Realized and Unrealized
Gain on Investments......... 0.21 0.09 1.95 1.08
-------- --------- ---------- ---------
Total from Investment
Operations.................. 0.27 0.38 1.92 1.21
-------- --------- ---------- ---------
Distributions to Shareholders
from
Net Investment Income......... (0.11) (0.29) (0.12) (0.13)
Net Realized Gains............ (0.02) -- (0.01) --
-------- --------- ---------- ---------
Total Distribution............ (0.13) (0.29) (0.13) (0.13)
-------- --------- ---------- ---------
Net Asset Value at End of
Period........................ $ 10.23 $ 10.09 $ 12.87 $ 11.08
======== ========= ========== =========
Total Return(2)............. 2.70% 3.86% 17.34% 12.22%
Ratios & Supplemental Data
Net Assets at End of Period... $250,425 $ 195,930 $2,512,509 $ 222,483
Ratio of Operating Expenses to
Average Net Assets (3)...... 1.30% 1.21% 2.54% 1.65%
Ratio of Operating Expenses to
Average Net Assets (3)(4)... 6.02% 39.23% 5.58% 73.01%
Ratio of Net Investment Income
to Average Net Assets (3)... 2.35% 6.46% 2.24% 4.61%
Portfolio Turnover Rate....... 63.27% 52.82% 63.99% 30.70%
Average Commission Rate (5)... N/A N/A $ 0.0564 $ 0.0564
</TABLE>
- ---------------
* The Growth, Mid-Cap "EDGE"(SM), Bond, and Real Estate Securities Funds
commenced investment operations on March 8, 1996, March 8, 1996, March 7,
1996, and March 12, 1996, respectively.
** As of December 26, 1996, the Bond Fund Administrative Shares merged with Bond
Fund Institutional Shares.
(1)-(5) See page 29.
See notes to financial statements.
28
<PAGE> 32
SENECA FUNDS
FINANCIAL HIGHLIGHTS
ADMINISTRATIVE SHARES
(CONTINUED)
(1) Net investment income (loss) is after waiver of certain fees and
reimbursement of certain expenses by the Investment Manager (see Note 3 to
the financial statements). If the Investment Manager had not waived fees and
reimbursed expenses, net investment income (loss) per share would have been
As follows for the six months ended March 31, 1997 and the period ended
September 30, 1996, respectively: $(0.06) and $(1.41) for the Bond Fund;
$(0.35) and $(1.96) for the Real Estate Securities Fund.
(2) Total return represents total return for the period indicated. The total
return would have been lower if certain fees and expenses had not been
waived or reimbursed by the advisor.
(3) Annualized.
(4) If the Investment Manager had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been as
indicated.
(5) The average commission paid is applicable for the Funds that invest greater
than 10% of average net assets in equity securities transactions on which
commissions are charged.
See notes to financial statements.
29
<PAGE> 33
SENECA FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1997
(UNAUDITED)
NOTE 1 -- ORGANIZATION
Seneca Funds (the "Trust") is registered under the Investment Company Act
of 1940, as amended, as an open-end management investment company. The Trust was
organized as a Delaware business trust on December 18, 1995 and was declared
effective as March 1, 1996. The Trust consists of four series: Seneca Growth
Fund, Seneca Mid-Cap "EDGE"(sm) Fund, Seneca Bond Fund and Seneca Real Estate
Securities Fund (individually, the "Fund," and collectively, the "Funds.") The
Board of Trustees has authorized each Fund to issue two classes of common
shares: Administrative Shares and Institutional Shares.
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES
VALUATION OF INVESTMENTS: Equity securities traded on a national securities
exchange are valued at their last sales price on the exchange on which they are
traded most extensively; or if no sales are reported, at the mean between the
most recent high bid and the most recent low asked quotations (the "Calculated
Mean") on such exchange. Securities traded on the National Association of
Securities Dealers Automated Quotation ("Nasdaq") system will be valued at the
most recent sales price reported on such system on the valuation date or, if
there are no sales reported, the Calculated Mean based on quotations reported on
Nasdaq. Securities not quoted on Nasdaq but traded in an over-the-counter market
will be valued at the most recent sale price if the sales price for any sales of
the security on the valuation date are reported on such market or, if there are
no such sales, the Calculated Mean based on quotations reported on such market.
In each case, if there is no Calculated Mean, the value shall be the most recent
bid quotation on the relevant market. Fixed income securities, other than those
having a maturity of 60 days or less, are valued on the basis of quotes obtained
from brokers or pricing services. Short-term investments having a maturity of 60
days or less will be valued at amortized cost. If, in the Investment Manager's
opinion, the fair market value of an investment cannot be determined pursuant to
the foregoing procedures, the value will be an amount that, in the opinion of
the Trustees,
30
<PAGE> 34
SENECA FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1997
(CONTINUED)
(UNAUDITED)
represents the fair market value determined based on all available information.
REPURCHASE AGREEMENTS: Each Fund may enter into repurchase agreements. In a
repurchase agreement, a Fund buys a security and the seller simultaneously
agrees to repurchase the security on a specified future date at an agreed upon
price. Because the security constitutes collateral for the repurchase
obligation, a repurchase agreement can be considered a collateralized loan.
Securities pledged as collateral for the repurchase agreement are held by the
Fund's Custodian until maturity date of the repurchase agreement. The Fund's
risk is the ability of the seller to pay the agreed-upon price on delivery date.
The Trustees have established criteria to evaluate the creditworthiness of
parties with whom the Funds may enter into repurchase agreements. The Funds
limit the repurchase agreements to securities issued by the United States
Government, its agencies, and its instrumentalities. The market value of the
underlying security throughout the term of the agreement will always equal or
exceed the agreed-upon repurchase price.
SECURITY TRANSACTIONS, INVESTMENT INCOME and EXPENSES: Investment security
transactions are recorded as of trade date. Realized gains and losses on
investment security sales are determined on the basis of identified cost.
Dividend income is recorded on the ex-dividend date. Interest income and
expenses are recorded daily on an accrual basis. Fund expenses not directly
attributable to a specific fund are allocated evenly among all funds. Fund
expenses that are not related to the distribution of shares of a particular
class or to services provided specifically to a particular class are allocated
between the classes on the basis of relative average daily net assets of each
class. Expenses that relate to the distribution or services provided to a
particular class are allocated to that class. Investment income and realized and
unrealized gains/losses are allocated between the classes on the basis of net
assets of each class.
DIVIDENDS AND DISTRIBUTIONS: Dividends from net investment income on shares
of the Seneca Bond Fund are determined at
31
<PAGE> 35
SENECA FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1997
(CONTINUED)
(UNAUDITED)
the fund level and are declared and paid monthly. Dividends from net investment
income on shares of the Seneca Real Estate Securities Fund are determined at the
class level and are declared and paid quarterly. Dividends from net investment
income on shares of the Seneca Growth Fund and Seneca Mid-Cap "EDGE"(SM) Fund
are determined at the class level and are declared and paid annually. Each Fund
distributes net realized capital gains, if any, at least annually.
FEDERAL INCOME TAXES: Each Fund intends to qualify as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986, as
amended, by distributing to shareholders substantially all of its taxable
income. Therefore, no Federal income or excise tax provision is required. Income
and capital gain distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments for market discount,
losses deferred due to wash sales and excise tax regulations.
Income and capital gain distribution requirements are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles. These differences, which may result in distribution
reclassifications, are primarily due to differing treatment for organizational
expenses. Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to capital paid-in. Undistributed
net investment income and accumulated net realized gain (loss) may include
temporary book and tax basis differences which will reverse in a subsequent
period.
ESTIMATES: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of income and
expenses during the reporting period. Actual results could differ from these
estimates.
32
<PAGE> 36
SENECA FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1997
(CONTINUED)
(UNAUDITED)
NOTE 3 -- AGREEMENTS AND TRANSACTIONS WITH AFFILIATES
The Trust has an Investment Management Agreement with GMG/Seneca Capital
Management LLC ("GMG/Seneca"), under which GMG/Seneca manages the investments of
each Fund. For its services, GMG/Seneca receives a fee from each Fund at an
annual percentage of the average daily net assets of each Fund. Such investment
management fees are 0.70%, 0.80%, 0.50%, and 0.85% for the Growth Fund, Mid-Cap
"EDGE"(SM) Fund, Bond Fund, and Real Estate Securities Fund, respectively.
The Trust has a Distribution and Services Agreement (the "Agreement") with
Genesis Merchant Group Securities LLC ("GMG Securities"), and Seneca
Distributors LLC ("Seneca Distributors"), affiliates of GMG/Seneca, under which
GMG Securities and Seneca Distributors serve as the distributors and principal
underwriters of each Fund's shares. Pursuant to the Agreement, GMG Securities
and Seneca Distributors receive an aggregate fee from each Fund at an annual
rate of 0.25% of the average daily net assets attributable to the Administrative
Shares of each Fund.
The Trust has an Administrative Services Agreement with GMG/Seneca pursuant
to which GMG/Seneca is responsible for the day-to-day administrative functions
of the Trust. For these services, GMG/Seneca receives a fee from each Fund at an
annual rate of 0.08% of the first $125 million, 0.06% of the next $125 million,
and 0.04% thereafter, subject to certain minimums which GMG/Seneca has agreed to
waive through March 31, 1997. GMG/Seneca has entered into an agreement with
State Street Bank & Trust Company ("State Street") to provide most of the
administrative functions for the Trust.
GMG/Seneca had agreed to voluntarily waive its Management and
Administrative fees and reimburse other operating expenses of each Fund (other
than certain extraordinary or non-recurring expenses) until the earlier of March
31, 1997, or such time as the Trust's aggregate assets exceeded $60 million, to
the extent necessary to prevent the
33
<PAGE> 37
SENECA FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1997
(CONTINUED)
(UNAUDITED)
expenses for each Fund and class from exceeding the following percentages of
average daily net assets:
<TABLE>
<CAPTION>
ADMINISTRATIVE INSTITUTIONAL
FUND CLASS CLASS
----------------------------------- -------------- -------------
<S> <C> <C>
Seneca Growth Fund................. 1.50% 0.85%
Seneca Mid-Cap "EDGE"(SM) Fund..... 1.60 0.95
Seneca Bond Fund................... 1.30 0.65
Seneca Real Estate Securities
Fund............................. 1.70 1.05
</TABLE>
These percentages were in effect from October 1, 1996 through January 31,
1997 at which time the aggregate assets of the Trust exceeded $60 million. From
February 1, 1997 to March 31, 1997, GMG/Seneca voluntarily waived its Management
and Administrative fees and reimbursed other operating expenses of each Fund to
the extent necessary to prevent the expenses for each Fund and class from
exceeding the following percentages of average daily net assets:
<TABLE>
<CAPTION>
ADMINISTRATIVE INSTITUTIONAL
FUND CLASS CLASS
----------------------------------- -------------- -------------
<S> <C> <C>
Seneca Growth Fund................. 2.55% 1.95%
Seneca Mid-Cap "EDGE"(SM) Fund..... 2.70 2.10
Seneca Bond Fund................... -- 1.85
Seneca Real Estate Securities
Fund............................. 3.05 2.35
</TABLE>
For the Six Months ended March 31, 1997, GMG/Seneca waived and reimbursed
expenses as follows:
<TABLE>
<CAPTION>
MANAGEMENT
FEES ADMINISTRATIVE EXPENSES
WAIVED FEES WAIVE REIMBURSED TOTAL
---------- -------------- ---------- --------
<S> <C> <C> <C> <C>
Seneca Growth Fund.... $ -- $ -- $ 75,835 $ 75,835
Seneca Mid-Cap
"EDGE"(SM)Fund...... -- -- 109,069 109,069
Seneca Bond Fund...... 8,081 8,082 90,236 106,399
Seneca Real Estate
Securities Fund..... -- -- 70,123 70,123
</TABLE>
34
<PAGE> 38
SENECA FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1997
(CONTINUED)
(UNAUDITED)
Each Trustee of the Trust who is not an interested person receives a fee of
$2,500 for each regular, quarterly meeting attended and is reimbursed for
expenses incurred in connection with such attendance.
NOTE 4 -- INVESTMENT TRANSACTIONS
Purchases and proceeds from sales and maturities of investments, excluding
short term securities, for the Trust, for the six months ended March 31, 1997
were as follows:
<TABLE>
<CAPTION>
NON- NON-
GOVERNMENT GOVERNMENT GOVERNMENT GOVERNMENT
PURCHASES PURCHASES SALES SALES
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Seneca Growth
Fund............... $27,294,602 $ -- $12,914,121 $ --
Seneca Mid-Cap
"EDGE"(SM) Fund.... 14,305,804 -- 10,385,569 --
Seneca Bond Fund..... 5,103,693 903,238 2,952,400 499,998
Seneca Real Estate
Securities Fund.... 24,824,038 -- 5,953,827 953,148
</TABLE>
NOTE 5 -- ORGANIZATION COSTS
The Trust bears all costs in connection with its organization. The
organization costs are amortized on a straight-line basis over a period of sixty
months from the commencement of investment operations. The costs associated with
state registration of shares will be amortized on a straight-line basis over a
period of twelve months. If any of the initial shares are redeemed before the
end of the amortization period, the proceeds of the redemption will be reduced
by the pro rata share of unamortized organization and state registration costs.
35
<PAGE> 39
SENECA FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1997
(CONTINUED)
(UNAUDITED)
NOTE 6 -- CAPITAL STOCK TRANSACTIONS
Capital stock transactions for the period from commencement of investment
operations through March 31, 1997 are as follows:
GROWTH FUND (1)
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 1997 SEPTEMBER 30, 1996
----------------------- ---------------------
SHARES AMOUNT SHARES AMOUNT
--------- ----------- ------- -----------
<S> <C> <C> <C> <C>
INSTITUTIONAL SHARES
Shares sold............ 998,065 $13,770,510 944,161 $11,381,366
Shares issued upon
reinvestment of
dividends............ 83,095 1,095,100 -- --
Shares redeemed........ (28,865) (396,824) (5,306) (70,645)
--------- ----------- ------- -----------
Net increase........... 1,052,295 $14,468,786 938,855 $11,310,621
========= =========== ======= ===========
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 1997 SEPTEMBER 30, 1996
----------------------- ---------------------
SHARES AMOUNT SHARES AMOUNT
--------- ----------- ------- -----------
<S> <C> <C> <C> <C>
ADMINISTRATIVE SHARES
Shares sold............ 313,127 $ 4,279,057 55,186 $ 721,427
Shares issued upon
reinvestment of
dividends............ 1,364 17,844 -- --
Shares redeemed........ (36,876) (509,891) (22,214) (288,331)
--------- ----------- ------- -----------
Net increase........... 277,615 $ 3,787,010 32,972 $ 433,096
========= =========== ======= ===========
</TABLE>
- ---------------
(1) Fund commenced investment operations on March 8, 1996.
36
<PAGE> 40
SENECA FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1997
(CONTINUED)
(UNAUDITED)
NOTE 6 -- CAPITAL STOCK TRANSACTIONS (CONTINUED)
MID-CAP "EDGE"(SM) FUND (1)
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED SEPTEMBER
MARCH 31, 1997 30, 1996
---------------------- --------------------
SHARES AMOUNT SHARES AMOUNT
-------- ----------- ------- ----------
<S> <C> <C> <C> <C>
INSTITUTIONAL SHARES
Shares sold............. 274,410 $ 3,787,647 509,221 $6,613,122
Shares issued upon
reinvestment of
dividends............. 7,880 109,784 -- --
Shares redeemed......... (116,432) (1,590,930) (14,376) (188,718)
-------- ----------- ------- ----------
Net increase............ 165,858 $ 2,306,501 494,845 $6,424,404
======== =========== ======= ==========
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED SEPTEMBER
MARCH 31, 1997 30, 1996
---------------------- --------------------
SHARES AMOUNT SHARES AMOUNT
-------- ----------- ------- ----------
<S> <C> <C> <C> <C>
ADMINISTRATIVE SHARES
Shares sold............. 279,608 $ 3,872,343 104,231 $1,422,572
Shares issued upon
reinvestment of
dividends............. 851 11,877 -- --
Shares redeemed......... (177,204) (2,442,264) (14,725) (188,631)
-------- ----------- ------- ----------
Net increase............ 103,255 $ 1,441,956 89,506 $1,233,941
======== =========== ======= ==========
</TABLE>
- ---------------
(1) Fund commenced investment operations on March 8, 1996.
37
<PAGE> 41
SENECA FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1997
(CONTINUED)
(UNAUDITED)
NOTE 6 -- CAPITAL STOCK TRANSACTIONS (CONTINUED)
BOND FUND (2)
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED SEPTEMBER
MARCH 31, 1997 30, 1996
-------------------- --------------------
SHARES AMOUNT SHARES AMOUNT
------- ---------- ------- ----------
<S> <C> <C> <C> <C>
INSTITUTIONAL SHARES
Shares sold............... 283,688 $2,888,961 385,776 $3,831,086
Shares merged (4)......... 23,704 250,425 -- --
Shares issued upon
reinvestment of
dividends............... 23,453 237,759 8,635 85,975
Shares redeemed........... (18,245) (190,184) (6,454) (64,905)
------- ---------- ------- ----------
Net increase.............. 312,600 $3,186,961 387,957 $3,852,156
======= ========== ======= ==========
</TABLE>
<TABLE>
<CAPTION>
PERIOD ENDED YEAR ENDED SEPTEMBER
DECEMBER 26, 1996 30, 1996
-------------------- --------------------
SHARES AMOUNT SHARES AMOUNT
------- ---------- ------- ----------
<S> <C> <C> <C> <C>
ADMINISTRATIVE SHARES
Shares sold............... 7,990 $ 82,034 18,065 $ 179,966
Shares issued upon
reinvestment of
dividends............... 140 1,437 104 1,031
Shares merged (4)......... (24,954) (250,425) -- --
Shares redeemed........... (2,595) (26,543) -- --
------- ---------- ------- ----------
Net increase/(decrease)... (19,419) $ (193,497) 18,169 $ 180,997
======= ========== ======= ==========
</TABLE>
- ---------------
(2) Fund commenced investment operations on March 7, 1996.
(4) As of December 26, 1996, the Bond Fund Administration Shares merged with
Bond Fund Institutional Shares in a tax free transaction.
38
<PAGE> 42
SENECA FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1997
(CONTINUED)
(UNAUDITED)
NOTE 6 -- CAPITAL STOCK TRANSACTIONS (CONTINUED)
REAL ESTATE SECURITIES FUND (3)
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED SEPTEMBER
MARCH 31, 1997 30, 1996
------------------------ --------------------
SHARES AMOUNT SHARES AMOUNT
--------- ------------ ------- ----------
<S> <C> <C> <C> <C>
INSTITUTIONAL SHARES
Shares sold............ 2,128,334 $ 26,301,415 94,875 $1,001,801
Shares issued upon
reinvestment of
dividends............ 16,751 212,830 583 6,370
Shares redeemed........ (784,566) (10,011,974) -- --
--------- ----------- ------- ----------
Net increase........... 1,360,519 $ 16,502,271 95,458 $1,008,171
========= =========== ======= ==========
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED SEPTEMBER
MARCH 31, 1997 30, 1996
----------------------- --------------------
SHARES AMOUNT SHARES AMOUNT
--------- ----------- ------- ----------
<S> <C> <C> <C> <C>
ADMINISTRATIVE SHARES
Shares sold............. 178,852 $ 2,258,992 18,779 $ 200,099
Shares issued upon
reinvestment of
dividends............. 1,033 13,157 56 599
Shares redeemed......... (4,709) (61,149) -- --
--------- ----------- ------- ----------
Net increase............ 175,176 $ 2,211,000 18,835 $ 200,698
========= =========== ======= ==========
</TABLE>
- ---------------
(3) Fund commenced investment operations on March 12, 1996.
39
<PAGE> 43
SENECA FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1997
(CONTINUED)
(UNAUDITED)
NOTE 7 -- SHARES OF BENEFICIAL INTEREST
At March 31, 1997, certain shareholders were record owners of more than 10%
of total outstanding shares of the following Funds:
<TABLE>
<CAPTION>
PERCENTAGE
NUMBER OF OF
NAME OF PORTFOLIO SHAREHOLDERS SHARES OWNED
- ---------------------------------------- ------------- ------------
<S> <C> <C>
Growth Fund............................. -- --
Mid-Cap "EDGE"(SM) Fund................. 1 24%
Bond Fund............................... 2 23%
Real Estate Securities Fund............. 2 34%
</TABLE>
40
<PAGE> 44
(THIS PAGE INTENTIONALLY LEFT BLANK)
<PAGE> 45
(THIS PAGE INTENTIONALLY LEFT BLANK)
<PAGE> 46
DIRECTORY OF FUNDS' SERVICE PROVIDERS
ADMINISTRATOR:
State Street Bank & Trust Company
P.O. 9110
Boston, MA 02209-9110
CUSTODIAN & TRANSFER AGENT:
Investors Fiduciary Trust Company
811 Main Street
Kansas City, MO 64105-2005
AUDITOR:
Deloitte & Touche LLP
50 Fremont Street
San Francisco, CA 94105-2230
COUNSEL:
Howard Rice, Nemernvski, Canady, Falk & Rabkin
Three Embarcadero Center, 6th Floor
San Francisco, CA 94111-4065
DISTRIBUTOR:
Seneca Distributors LLC
Genesis Merchant Group Securities LLC
909 Montgomery Street, Suite 600
San Francisco, CA 94133-4625
INVESTMENT ADVISOR:
GMG/Seneca Capital Management LLC
909 Montgomery Street, Suite 500
San Francisco, CA 94133-4625
<PAGE> 47
[SENECA FUNDS LOGO]
P.O. Box 419565
Kansas City, MO 64141-6565
(800) 990-9331
http://www.senecafunds.com
