ANNUAL
REPORT
FEBRUARY 28, 1998
TIP Institutional Funds [Logo omitted]
--------------------------------------
TRUSTED INSTITUTIONAL PARTNERS
======================================
Turner Short Duration
Government Funds--One Year Portfolio
======================================
Turner Short Duration
Government Funds--Three Year Portfolio
======================================
<PAGE>
TO OUR SHAREHOLDERS:
- --------------------------------------------------------------------------------
We are pleased to report on the performance of the Turner Short Duration
Government Funds (the "Funds") for the TIP Institutional Funds' fiscal year
ended February 28, 1998.
During that period the One Year Portfolio achieved a cumulative return of
6.34%. It also compares favorably with the cumulative return of 5.31% during
that same time by the Merrill Lynch 3-Month U.S. Treasury Bill Index*.
Management has selected the Merrill Lynch 3-Month U.S. Treasury Bill Index as a
benchmark because this index closely approximates the risk return profile of the
Fund. The Three Year Portfolio achieved a cumulative return of 7.07%. The Three
Year Portfolio is ranked fourth in its Lipper universe of 104 short U.S.
Government bond funds** for the period since its inception. It also compares
favorably with the cumulative return of 7.00% during that same time by the
Lehman Government 1-3 Year Index***.
We are very proud of these performance figures. This last year has been an
exciting year in the life of the Funds. The transition from Solon Asset
Management, L.P. to Turner Investment Partners, Inc. continues to go smoothly.
Under the continuing management of James Midanek, the portfolio management team
has pledged to pursue the same disciplined, consistent method they've applied
since the Funds' inception -- a method which emphasizes liquidity, high credit
quality, and full analysis of all aspects of investment risk.
Please let us know what we can do to serve you better. We appreciate your
confidence in the TIP Institutional Funds and Turner Investment Partners, Inc.
and look forward to another interesting year.
Sincerely,
/S/Signature
Robert E. Turner
CHAIRMAN
TURNER INVESTMENT PARTNERS, INC.
* The Merrill Lynch 3-Month U.S. Treasury Bill Index is an unmanaged index
that assumes reinvestment of all dividends.
** Source: Lipper Analytical Services, Inc.
*** The Lehman Government 1-3 Year Index is an unmanaged index that assumes the
reinvestment of all dividends.
1
<PAGE>
INVESTMENT REVIEW
TIP INSTITUTIONAL FUNDS
- --------------------------------------------------------------------------------
For the year ended February 28, 1998 the Three Year and One Year Portfolios of
the Turner Short Duration Government Funds provided annual returns of 7.07% and
6.34% respectively.
We are pleased with these results, which were provided while strictly
adhering to our low risk approach to fixed income investing.
For the period, rates along the yield curve fell between 28 basis points
(One Year Treasury Bill) to 94 basis points (Ten Year Treasury Note). The curve
flattened, with the yield difference between the two year and ten year treasury
notes falling from 47 basis points to 9 basis points. During the period the
Federal Reserve acted once to raise the funds rate from 5.25% to 5.50%.
Mortgage securities, which together with U.S. Treasuries make up the bulk
of our portfolios, performed well with yield spreads to Treasuries generally
tightening slightly.
The new fiscal year is guaranteed to be interesting. There are many
questions that will be answered in the next twelve months which can have a
significant impact on the level of interest rates, especially at the short end
of the curve. Can the U.S. economy continue its impressive growth at 3-4% or
even higher for another year? With unemployment at long-term lows will wage
inflation begin to disrupt the incredible drop in inflation? Will the "Asian
Crisis" worsen, leading to a worldwide deflationary spiral?
The worldwide economic environment clearly calls for excessive caution. We
believe that the economy will continue to grow at a brisk pace and that wage
inflation is likely to force the Fed to raise rates sometime in the next 6
months. As a result we will continue our short to neutral bias as to interest
rate risk, believing that there is more to be lost than gained through added
exposure.
We look forward to the next year and appreciate the opportunity to provide
our shareholders with the highest possible total returns consistent with prudent
management principles.
/S/Signature
James I. Midanek
Chief Investment Officer -- Fixed Income
2
<PAGE>
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN THE TURNER
SHORT DURATION GOVERNMENT FUNDS--ONE YEAR PORTFOLIO, INSTITUTIONAL CLASS,
VERSUS THE MERRILL LYNCH 3-MONTH U.S. TREASURY BILL INDEX AND THE
LEHMAN 1-3 YEAR GOVERNMENT BOND INDEX
-----------------------------------------------------
Annualized Annualized
One-Year Three-Year Inception
Return Return to Date*
-----------------------------------------------------
One Year Portfolio 6.34% 6.63% 6.28%
-----------------------------------------------------
[Line graph omitted--plot points as follows:]
<TABLE>
<CAPTION>
Turner Short Duration Government Merrill Lynch 3-Month Lehman 1-3 Year
Funds--One Year Portfolio,Institutional U.S. Treasury Bill Index Government Bond Index
--------------------------------------- ------------------------ ---------------------
<S> <C> <C> <C>
Mar 94 $10,000 $10,000 $10,000
Feb 95 10,519 10,472 10,377
Feb 96 11,270 11,089 11,246
Feb 97 11,994 11,677 11,851
Feb 98 12,754 12,297 12,681
</TABLE>
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN THE
TURNER SHORT DURATION GOVERNMENT FUNDS--THREE YEAR PORTFOLIO,
INSTITUTIONAL CLASS, VERSUS THE LEHMAN 1-3 YEAR GOVERNMENT BOND INDEX
-------------------------------------------------------
Annualized Annualized
One-Year Three-Year Inception
Return Return to Date*
-------------------------------------------------------
Three Year Portfolio 7.07% 7.19% 6.41%
-------------------------------------------------------
[Line graph omitted--plot points as follows:]
Turner Short Duration Government Lehman 1-3 Year
Funds--Three Year Portfolio,Institutional Government Bond Index
----------------------------------------- ---------------------
Mar 94 $10,000 $10,000
Feb 95 10,472 10,377
Feb 96 11,390 11,246
Feb 97 12,047 11,851
Feb 98 12,899 12,681
These figures represent past performance. Past performance is no guarantee of
future results. The investment return and principal value of an investment will
fluctuate, so an investor's shares, when redeemed, may be worth more or less
than their original cost.
*Commenced operations March 1, 1994.
3
<PAGE>
STATEMENT OF NET ASSETS TIP INSTITUTIONAL FUNDS
February 28, 1998
TURNER SHORT DURATION Face
GOVERNMENT FUNDS-- Amount Value
ONE YEAR PORTFOLIO (000) (000)
- ------------------------------------------------------
U.S. TREASURY OBLIGATIONS (0.4%)
U.S. Treasury Note
6.375%, 05/15/00 $ 5 $ 5
------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $5) 5
------
U.S. GOVERNMENT AGENCY OBLIGATIONS (88.8%)
FFCB
5.487%, 03/12/98 18 18
5.537%, 03/13/98 24 24
FHLMC
6.000%, 12/15/04 9 10
6.100%, 11/15/16 26 26
FHLMC CMO/REMIC
6.000%, 08/15/01 99 99
6.750%, 10/15/13 129 129
6.000%, 09/15/14 81 81
FHLMC Discount Notes
5.410%, 03/04/98 33 33
5.485%, 03/09/98 75 75
5.400%, 03/10/98 25 25
FNMA
7.000%, 08/25/18 25 25
FNMA CMO/REMIC
6.750%, 08/25/05 5 5
5.500%, 04/25/14 11 10
5.500%, 12/25/14 50 50
5.700%, 06/25/16 4 4
FNMA CMO/REMIC ARM (A)
6.156%, 03/25/98 36 37
FNMA Discount Notes
5.400%, 03/18/98 15 15
GNMA
7.000%, 03/20/16 94 97
7.000%, 12/20/17 95 98
Face
Amount Value
(000) (000)
- ------------------------------------------------------
GNMA ARM (A)
7.000%, 03/15/98 $55 $ 57
7.375%, 03/15/98 90 93
TVA
6.000%, 10/08/99 50 50
------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $1,059) 1,061
------
COLLATERALIZED MORTGAGE OBLIGATIONS (4.8%)
RFMSI, Ser 1993-S36, Cl A3
5.065%, 10/25/08 25 24
Salomon Brothers Mortgage
Securities VII, Ser 1994-10, Cl A1
6.650%, 05/25/24 34 33
------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $57) 57
------
ASSET-BACKED SECURITIES (3.7%)
Advanta Credit Card Master
Trust, Ser 1993-4, Cl A (A)
5.875%, 03/15/98 44 44
------
TOTAL ASSET-BACKED SECURITIES
(Cost $44) 44
------
TOTAL INVESTMENTS (97.7%)
(Cost $1,165) 1,167
------
OTHER ASSETS AND LIABILITIES, NET (2.3%) 28
------
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
STATEMENT OF NET ASSETS TIP INSTITUTIONAL FUNDS
February 28, 1998
TURNER SHORT DURATION
GOVERNMENT FUNDS-- Value
ONE YEAR PORTFOLIO (Concluded) (000)
- ------------------------------------------------------
NET ASSETS:
Portfolio Shares of Institutional Class
(unlimited authorization -- par
value of $.01 per share) based on
118,607 outstanding shares of
beneficial interest $1,190
Accumulated net realized gain
on investments 3
Net unrealized appreciation
on investments 2
------
TOTAL NET ASSETS (100.0%) $1,195
======
Net Asset Value, Offering and
Redemption Price Per Share $10.08
======
THE RATE ILLUSTRATED REPRESENTS DISCOUNT RATE FOR DISCOUNT
SECURITIES, AND COUPON FOR COUPON-BEARING SECURITIES.
(A) FLOATING RATE SECURITY--THE RATE REFLECTED ON THE
STATEMENT OF NET ASSETS IS THE RATE IN EFFECT ON
FEBRUARY 28, 1998. THE MATURITY DATE SHOWN IS THE
NEXT SCHEDULED RESET DATE.
ARM -- ADJUSTABLE RATE MORTGAGE
CL -- CLASS
CMO -- COLLATERALIZED MORTGAGE OBLIGATION
FFCB -- FEDERAL FARM CREDIT BANK
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
GNMA -- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
REMIC -- REAL ESTATE MORTGAGE INVESTMENT CONDUIT
RMFSI -- RESIDENTIAL FUNDING MORTGAGE SECTION I
SER -- SERIES
TVA -- TENNESSEE VALLEY AUTHORITY
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
STATEMENT OF NET ASSETS TIP INSTITUTIONAL FUNDS
February 28, 1998
TURNER SHORT DURATION Face
GOVERNMENT FUNDS-- Amount Value
THREE YEAR PORTFOLIO (000) (000)
- ------------------------------------------------------
U.S. TREASURY OBLIGATIONS (25.6%)
U.S. Treasury Notes
6.375%, 05/15/99 $1,175 $ 1,186
6.375%, 05/15/00 1,147 1,166
6.250%, 06/30/02 1,302 1,332
7.000%, 07/15/06 270 292
-------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $3,952) 3,976
-------
U.S. GOVERNMENT AGENCY OBLIGATIONS (61.1%)
FHLMC
6.250%, 04/15/03 41 41
6.000%, 12/15/04 310 310
7.000%, 10/01/12 630 642
6.100%, 11/15/16 802 802
5.400%, 04/15/24 265 264
FHLMC CMO/REMIC
6.000%, 08/15/01 95 95
5.500%, 12/15/02 444 442
6.750%, 10/15/13 138 138
6.000%, 09/15/14 478 477
10.000%, 06/15/20 213 225
FNMA
5.650%, 02/12/01 175 174
6.000%, 10/01/08 830 826
7.000%, 08/25/18 362 362
9.000%, 04/01/16 423 454
FNMA ARM (A)
7.772%, 03/15/98 147 147
FNMA CMO/REMIC
5.700%, 06/25/16 387 386
9.400%, 10/25/17 5 5
FNMA CMO/REMIC ARM (A)
6.156%, 03/25/98 392 393
FNMA Medium Term Notes
6.710%, 03/11/02 360 366
6.240%, 07/29/02 175 178
FNMA TBA (B)
6.500%, 02/27/28 500 494
GNMA
7.000%, 03/20/16 148 152
6.875%, 11/20/18 268 274
Face
Amount Value
(000) (000)
- ------------------------------------------------------
GNMA ARM (A)
7.000%, 03/15/98 $122 $ 126
GNMA TBA (B)
8.000%, 02/01/28 500 518
7.500%, 02/17/28 250 257
TVA
6.000%, 10/08/99 950 950
-------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $9,414) 9,498
-------
COLLATERALIZED MORTGAGE OBLIGATIONS (5.9%)
Citicorp Mortgage Securities,
Ser 1994-10, Cl A4
6.250%, 06/25/24 677 677
Countrywide Funding,
Ser 1994-10, Cl A1
6.000%, 05/25/09 106 106
GE Capital Mortgage Services,
Ser 1994-17, Cl A3
7.000%, 05/25/24 78 78
Salomon Brothers Mortgage
Securities VII, Ser 1994-10, Cl A1
6.650%, 05/25/24 64 64
-------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $916) 925
-------
ASSET-BACKED SECURITIES (7.9%)
Advanta Credit Card Master Trust,
Ser 1993-4, Cl A (A)
5.875%, 03/15/98 479 479
AT&T Universal Card Master
Trust, Ser 1995-3, Cl A (A)
5.815%, 04/17/98 750 754
-------
TOTAL ASSET-BACKED SECURITIES
(Cost $1,233) 1,233
-------
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
STATEMENT OF NET ASSETS TIP INSTITUTIONAL FUNDS
February 28, 1998
TURNER SHORT DURATION Face
GOVERNMENT FUNDS-- Amount Value
THREE YEAR PORTFOLIO (Concluded) (000) (000)
- ------------------------------------------------------
REPURCHASE AGREEMENT (11.2%)
Paine Webber
5.65%, dated 02/27/98, matures
03/02/98, repurchase price
$1,736,817 (collateralized by
FNMA, par value $1,775,681,
6.1875%, matures 08/18/27:
market value $1,774,633) $1,736 $ 1,736
-------
TOTAL REPURCHASE AGREEMENT
(Cost $1,736) 1,736
-------
TOTAL INVESTMENTS (111.7%)
(Cost $17,251) 17,368
-------
INVESTMENT SECURITIES PURCHASED (-16.4%) (2,562)
OTHER ASSETS AND LIABILITIES, NET (4.7%) 738
-------
NET ASSETS:
Portfolio Shares of Institutional Class
(unlimited authorization -- par
value of $.01 per share) based on
1,539,586 outstanding shares of
beneficial interest 15,413
Undistributed net investment income 2
Accumulated net realized gain
on investments 12
Net unrealized appreciation
on investments 117
-------
TOTAL NET ASSETS (100.0%) $15,544
=======
Net Asset Value, Offering and
Redemption Price Per Share $10.10
=======
(A) FLOATING RATE SECURITY--THE RATE REFLECTED ON THE
STATEMENT OF NET ASSETS IS THE RATE IN EFFECT ON
FEBRUARY 28, 1998. THE MATURITY DATE SHOWN IS THE
NEXT SCHEDULED RESET DATE.
(B) WHEN ISSUED SECURITY.
ARM -- ADJUSTABLE RATE MORTGAGE
CL -- CLASS
CMO -- COLLATERALIZED MORTGAGE OBLIGATION
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
GNMA -- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
REMIC -- REAL ESTATE MORTGAGE INVESTMENT CONDUIT
SER -- SERIES
TBA -- TO BE ANNOUNCED
TVA -- TENNESSEE VALLEY AUTHORITY
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
STATEMENT OF OPERATIONS (000) TIP INSTITUTIONAL FUNDS
TURNER SHORT DURATION
GOVERNMENT FUNDS:
ONE YEAR THREE YEAR
PORTFOLIO PORTFOLIO
------------ ------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
2/28/98 2/28/98
- --------------------------------------------------------------------------------
Investment Income:
Interest ..................................... $ 66 $1,007
- --------------------------------------------------------------------------------
Total Investment Income..................... 66 1,007
- --------------------------------------------------------------------------------
Expenses:
Investment Advisory Fees ..................... 3 42
Investment Advisory Fee Waiver ............... (3) (42)
Reimbursements by Advisor..................... (94) (117)
Administrator Fees ........................... 1 12
Custodian Fees ............................... 29 39
Transfer Agent Fees .......................... 8 8
Professional Fees ............................ 32 36
Trustee Fees ................................. 4 4
Registration Fees ............................ 14 18
Pricing Fees ................................. 1 2
Shareholder Service Fees...................... 2 35
Insurance and Other Fees ..................... 3 3
- --------------------------------------------------------------------------------
Total Expenses ............................. -- 40
- --------------------------------------------------------------------------------
Net Investment Income .................. 66 967
- --------------------------------------------------------------------------------
Net Realized Gain From Securities Sold ....... 1 54
Net Unrealized Appreciation
of Investment Securities ................... 1 98
- --------------------------------------------------------------------------------
Net Realized and Unrealized Gain
on Investments ........................... 2 152
- --------------------------------------------------------------------------------
Net Increase in Net Assets Resulting
From Operations ........................... 68 1,119
================================================================================
Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (000) TIP INSTITUTIONAL FUNDS
<TABLE>
<CAPTION>
TURNER SHORT DURATION
GOVERNMENT FUNDS:
ONE YEAR PORTFOLIO THREE YEAR PORTFOLIO
-------------------- ----------------------
FOR THE YEAR ENDED FOR THE YEAR ENDED
2/28/98 2/28/97 2/28/98 2/28/97
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Activities:
Net Investment Income ....................................... $ 66 $ 39 $ 967 $ 746
Net Realized Gain (Loss) from Securities Sold ............... 1 1 54 (37)
Net Unrealized Appreciation of
Investments ............................................... 1 1 98 11
- ------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting
from Operations ......................................... 68 41 1,119 720
- ------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders:
Net Investment Income ....................................... (66) (39) (966) (750)
Realized Capital Gains ...................................... -- -- -- (21)
- ------------------------------------------------------------------------------------------------------------------
Total Distributions ....................................... (66) (39) (966) (771)
- ------------------------------------------------------------------------------------------------------------------
Capital Share Transactions:
Proceeds from Shares Issued ................................. 827 462 3,854 7,303
Proceeds from Shares Issued in Lieu of Cash Distributions.... 66 39 967 773
Cost of Shares Redeemed....................................... (564) (37) (7,239) (1,242)
- ------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets From Capital
Share Transactions......................................... 329 464 (2,418) 6,834
- ------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets ................... 331 466 (2,265) 6,783
- ------------------------------------------------------------------------------------------------------------------
Net Assets:
Beginning of Year.......................................... 864 398 17,809 11,026
- ------------------------------------------------------------------------------------------------------------------
End of Year................................................ $1,195 $864 $15,544(1) $17,809
==================================================================================================================
Shares Issued and Redeemed:
Issued ...................................................... 82 46 383 730
Issued in Lieu of Cash Distributions......................... 7 4 96 77
Redeemed...................................................... (56) (4) (722) (124)
- ------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Capital Shares.................... 33 46 (241) 683
- ------------------------------------------------------------------------------------------------------------------
<FN>
Amounts designated as "--" are either $0 or have been rounded to $0.
(1) Includes undistributed net investment income of $2.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
FINANCIAL HIGHLIGHTS TIP INSTITUTIONAL FUNDS
For a Share Outstanding Throughout each Period
<TABLE>
<CAPTION>
Net Realized and Net Net
Asset Unrealized Distributions Distributions Asset Assets Ratio
Value, Net Gains from Net from Value End of Expenses
Beginning Investment (Losses) on Investment Capital End of Period to Average
of Period Income Investments Income Gains of Period Total Return (000) Net Assets
--------- ---------- ------------- ------------- ------------- --------- ------------ --------- -----------
- ----------------------------------------------------------
TURNER SHORT DURATION GOVERNMENT FUNDS--ONE YEAR PORTFOLIO
- ----------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998(2) $10.06 0.60 0.02 (0.60) -- $10.08 6.34% $1,195 0.00%
1997 $10.03 0.60 0.03 (0.60) -- $10.06 6.32% $ 865 0.00%
1996 $ 9.99 0.64 0.05 (0.65) -- $10.03 7.09% $ 398 0.00%
1995(1) $10.00 0.53 (0.02) (0.52) -- $ 9.99 5.21% $ 145 0.00%
- ------------------------------------------------------------
TURNER SHORT DURATION GOVERNMENT FUNDS--THREE YEAR PORTFOLIO
- ------------------------------------------------------------
1998(2) $10.00 0.59 0.10 (0.59) -- $10.10 7.07% $15,544 0.24%
1997 $10.04 0.58 (0.01) (0.59) (0.02) $10.00 5.45% $17,809 0.24%
1996 $ 9.80 0.60 0.23 (0.59) -- $10.04 8.73% $11,027 0.24%
1995(1) $10.00 0.61 (0.22) (0.59) -- $ 9.80 4.08% $ 7,065 0.15%
</TABLE>
<TABLE>
<CAPTION>
Ratio of Net
Ratio of Investment
Expenses Income (Loss)
Ratio of Net to Average to Average Average Average Average
Investment Net Assets Net Assets Debt Debt Shares
Income (Excluding (Excluding Per Share Outstanding Outstanding Portfolio
to Average Waivers and Waivers and Interest During the During the During Turnover
Net Assets Reimbursements) Reimbursements) Expense Period (3) Period (3)(4) the Period Rate
------------ --------------- --------------- -------- ---------- ------------- ----------- ---------
- ----------------------------------------------------------
TURNER SHORT DURATION GOVERNMENT FUNDS--ONE YEAR PORTFOLIO
- ----------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998(2) 5.97% 8.83% (2.86)% -- -- -- -- 68.80%
1997 5.91% 10.25% (4.34)% -- -- -- -- 81.82%
1996 6.46% 16.47% (10.01)% -- -- -- -- --
1995(1) 5.74% 27.89% (22.15)% -- -- -- -- --
- ------------------------------------------------------------
TURNER SHORT DURATION GOVERNMENT FUNDS--THREE YEAR PORTFOLIO
- ------------------------------------------------------------
1998(2) 5.85% 1.21% 4.88% -- -- -- -- 197.03%
1997 5.80% 1.21% 4.83% 0.02% $0.04 $ 56,238 1,320,830 279.00%
1996 6.18% 1.45% 4.97% 0.12% $0.28 $256,115 901,238 251.00%
1995(1) 6.21% 1.18% 5.18% 0.04% $0.08 $ 75,604 895,472 405.00%
<FN>
Amounts designated as "--" are either $0 or have been rounded to $0.
(1) Commenced operations on March 1, 1994.
(2) On January 22, 1998, shareholders of each Fund approved a change in the
advisor from Solon Asset Management, L.P. to Turner Investment Partners, Inc.
(3) Average based upon amounts outstanding at each month end.
(4) There was no debt outstanding at the end of any period presented.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
NOTES TO FINANCIAL STATEMENTS TIP INSTITUTIONAL FUNDS
February 28, 1998
1. ORGANIZATION:
The TIP Institutional Funds (the "Trust") a Delaware Business Trust, registered
under the Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. As of February 28, 1998, The TIP Institutional
Funds had two series: Turner Short Duration Government Funds--One Year Portfolio
(the "One Year Portfolio") and Turner Short Duration Government Funds--Three
Year Portfolio (the "Three Year Portfolio") (each a "Fund" and collectively the
"Funds"). As of March 1, 1998, each Fund is registered to offer two classes of
shares, Institutional Shares and Advisory Shares. The Advisory Shares had not
commenced operations as of February 28, 1998. The assets of each Fund are
segregated and a shareholder's interest is limited to the Fund in which shares
are held. The Funds' prospectus provides a description of each Fund's investment
objectives, policies and strategies.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of the significant accounting policies followed by
the Funds.
SECURITY VALUATION -- It is the policy of the Funds to value portfolio
securities at market value. Market value is determined on the basis of last
reported sales price, or if no sales are reported, as is the case with most
securities traded over the counter, the mean between representative bid and
asked quotations. Short-term securities with maturities of 60 days or less
may be carried at amortized cost, which approximates market value.Fixed
income securities for which market quotations are not readily available may
be valued, pursuant to guidelines established by the Board of Trustees,
with reference to fixed income securities whose prices are more readily
obtainable and whose durations are comparable to the securities being
valued. Subject to the foregoing, other securities for which market
quotations are not readily available are valued at fair value as determined
in good faith by the Board of Trustees.
FEDERAL INCOME TAXES -- It is each Fund's intention to qualify as a
regulated investment company by complying with the appropriate provisions
of the Internal Revenue Code of 1986, as amended. Accordingly, no provision
for Federal income taxes is required.
SECURITY TRANSACTIONS AND RELATED INCOME -- Security transactions are
accounted for as of trade date. Realized gains and losses are determined on
the specific identified cost basis. Interest income includes amortization
of discounts and premiums. Securities purchased on a when-issued or delayed
delivery basis may be settled a month or more after the trade date. Such
securities are included in the portfolio and are subject to market
fluctuations during this period. On the date of the commitment to purchase
or sell, the Funds designate specific assets with a current value at least
equal to the amount of the commitment to be used for settling the
commitment.
NET ASSET VALUE PER SHARE -- The net asset value per share of each Fund is
calculated on each business day, by dividing the total value of the Fund's
assets, less liabilities, by the number of shares outstanding.
REPURCHASE AGREEMENTS -- Securities pledged as collateral for repurchase
agreements are held by the custodian bank until the respective agreements
mature. Provisions of the repurchase agreements ensure that the market
value of the collateral, including accrued interest
11
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED) TIP INSTITUTIONAL FUNDS
February 28, 1998
thereon, is sufficient in the event of default of 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.
EXPENSES -- Expenses that are directly related to one of the Funds are
charged to that Fund. Other operating expenses of the Trust are allocated
equally between the Funds.
DISTRIBUTIONS TO SHAREHOLDERS -- Distributions from net investment income
are declared daily and paid monthly to Shareholders. Any net realized
capital gains on sales of securities are distributed to Shareholders at
least annually.
Dividends from net investment income and distributions from net realized
capital gains are determined in accordance with U.S. 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 charged or credited to paid-in-capital or accumulated
net realized gain, as appropriate, in the period that the differences
arise.
USE OF ESTIMATES -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements, and the reported amounts of income and
expenses during the period. Actual results could differ from those
estimates.
3. TRANSACTIONS WITH AFFILIATES:
Certain officers of the Trust are also officers of SEI Fund Resources (the
"Administrator") and/or SEI Investments Distribution Co. (the "Distributor").
Such officers are paid no fees by the Trust for serving as officers and trustees
of the Trust.
4. ADMINISTRATION, SHAREHOLDER SERVICING, AND DISTRIBUTION AGREEMENTS:
The TIP Institutional Funds and SEI Fund Resources (the "Administrator") are
parties to an agreement under which the Administrator provides management and
administrative services for an annual fee of 0.08% for the first year.
Thereafter, the annual fee will be: 0.10% of the average daily net assets of the
Funds up to $250 million, 0.08% on the next $250 million, and 0.07% of such
assets in excess of $500 million. There is a minimum annual fee of $75,000 per
fund payable to the Administrator for services rendered to the Funds under the
Administration Agreement. For the first year of the Administration Agreement the
annual minimum fee is being waived by the Administrator.
Prior to January 1, 1998, administrative services were provided to the Trust by
Solon Asset Management, L.P. for an annual fee of .07% of the average daily net
assets of the funds.
On January 1, 1998 DST Systems, Inc. (the "Transfer Agent") became the transfer
agent and dividend disbursing agent for the Funds under a transfer agency
agreement with the Trust.
Prior to January 1, 1998, Solon Asset Management, L.P. was the transfer agent
and dividend disbursing agent for the Funds.
12
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED) TIP INSTITUTIONAL FUNDS
February 28, 1998
The Trust and SEI Investments Distribution Co. (the "Distributor") are parties
to a Distribution Agreement dated January 1, 1998. The Distributor receives no
fees for its distribution services under this agreement.
5. INVESTMENT ADVISORY AND CUSTODIAN AGREEMENTS:
The Trust and Turner Investment Partners, Inc. (the "Advisor") are parties to an
Investment Advisory Agreement dated January 1, 1998, under which the Advisor
receives an annual fee equal to 0.25% of the average daily net assets of the
Funds. The Advisor has voluntarily agreed to waive all or a portion of its fees
and to reimburse expenses of the Funds in order to limit total operating
expenses to not more than 0.36% of the average daily net assets on an annualized
basis. Fee waivers and expense reimbursements are voluntary and may be
terminated at any time.
On January 1, 1998 Turner Investment Partners, Inc. acquired substantially all
of the assets and liabilities of Solon Asset Management L.P. (the Trust's prior
investment advisor).
On January 22, 1998 shareholders of each Fund approved a change in the advisor
from Solon Asset Management, L.P. to Turner Investment Partners, Inc.
On January 1, 1998 CoreStates Bank, N.A. became the Custodian (the "Custodian")
for the Funds. Fees of the Custodian are being paid on the basis of the net
assets of the Funds. The Custodian plays no role in determining the investment
policies of the Funds or which securities are to be purchased or sold in the
Funds.
6. INVESTMENT TRANSACTIONS:
The cost of security purchases and the proceeds from security sales including
government securities, other than short-term investments, for the year ended
February 28, 1998, are as follows (000):
TURNER TURNER
SHORT DURATION SHORT DURATION
GOVERNMENT GOVERNMENT
PORTFOLIO PORTFOLIO
ONE YEAR THREE YEAR
------------------------------
Purchases .......... $1,667 $37,177
Sales .............. $ 588 $31,274
At February 28, 1998, the total cost of securities and the net realized gains or
losses on securities sold for Federal income tax purposes was not materially
different from amounts reported for financial reporting purposes. The aggregate
gross unrealized appreciation and depreciation for securities held by the Funds
at February 28, 1998, are as follows (000):
TURNER TURNER
SHORT DURATION SHORT DURATION
GOVERNMENT GOVERNMENT
PORTFOLIO PORTFOLIO
ONE YEAR THREE YEAR
------------------------------
Aggregate gross
unrealized
appreciation ..... $2 $121
Aggregate gross
unrealized
depreciation ..... -- (4)
----- ------
Net unrealized
appreciation ..... $2 $117
===== ======
13
<PAGE>
REPORT OF INDEPENDENT AUDITORS TIP INSTITUTIONAL FUNDS
February 28, 1998
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS:
TIP INSTITUTIONAL FUNDS
We have audited the statements of net assets of the TIP Institutional Funds
(comprising, respectively, the Turner Short Duration Government Funds--One Year
Portfolio and the Turner Short Duration Government Funds--Three Year Portfolio)
(the "Funds") as of February 28, 1998, and the related statements of operations
for the year then ended, the statements of changes in net assets for each of the
two years in the period then ended, and financial highlights for each of the
four years in the period then ended. These 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 in accordance with generally accepted auditing
standards. Those standards 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. Our procedures included
confirmation of securities owned as of February 28, 1998, by correspondence with
the custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of each of the respective
portfolios constituting the TIP Institutional Funds at February 28, 1998, the
results of their operations for the year then ended, the changes in their net
assets for each of the two years in the period then ended, and financial
highlights for each of the four years in the period then ended, in conformity
with generally accepted accounting principles.
/S/Ernst & Young LLP
Philadelphia, Pennsylvania
March 30, 1998
14
<PAGE>
NOTICE TO SHAREHOLDERS
OF
TIP INSTITUTIONAL FUNDS
(UNAUDITED)
SHAREHOLDER'S VOTING RESULTS
There was a special meeting of shareholders on January 22, 1998 to approve a new
Advisory Agreement and to elect the Board of Trustees. The results were as
follows:
New Advisory Agreement:
SHARES VOTED % OF % OF
FOR VOTED TOTAL
-------------- -------- --------
One Year Portfolio
For 65,195 100% 52.96%
Against 0 0% 0%
Abstain 0 0% 0%
Three Year Portfolio
For 1,429,808 99.53% 84.59%
Against 0 0% 0%
Abstain 6,748 .47% .40%
Election of Trustees:
SHARES VOTED % OF % OF
FOR VOTED TOTAL
-------------- -------- --------
Robert E. Turner:
For 1,495,003 99.55% 82.44%
Against 0 0% 0%
Abstain 6,748 .45% .37%
Alfred C. Salvato:
For 1,495,003 99.55% 82.44%
Against 0 0% 0%
Abstain 6,748 .45% .37%
Ron Filante:
For 1,495,003 99.55% 82.44%
Against 0 0% 0%
Abstain 6,748 .45% .37%
Katherine Ginswold:
For 1,495,003 99.55% 82.44%
Against 0 0% 0%
Abstain 6,748 .45% .37%
15
<PAGE>
NOTICE TO SHAREHOLDERS
OF
TIP INSTITUTIONAL FUNDS
(UNAUDITED)
For the shareholders that do not have a February 28, 1998 taxable year end, this
notice is for informational purposes only. For shareholders with a February 28,
1998 taxable year end, please consult your tax adviser as to the pertinence of
this notice.
For the fiscal year ended February 28, 1998, the portfolio is designating long
term capital gains, qualifying dividends, and exempt interest income with regard
to distributions paid during the year as follows:
<TABLE>
<CAPTION>
(A) (B)
LONG TERM ORDINARY (C)
CAPITAL GAIN INCOME TOTAL
DISTRIBUTIONS DISTRIBUTIONS DISTRIBUTIONS
PORTFOLIO (TAX BASIS) (TAX BASIS) (TAX BASIS)
--------- -------------- ------------- -------------
<S> <C> <C> <C>
Turner Short Duration Government Funds--
One Year Portfolio ....................... 0% 100% 100%
Turner Short Duration Government Funds--
Three Year Portfolio ..................... 0% 100% 100%
(D) (E) (F)
QUALIFYING TAX EXEMPT FOREIGN
PORTFOLIO DIVIDENDS (1) INTEREST TAX CREDIT
--------- ------------- ------------- -------------
Turner Short Duration Government Funds--
One Year Portfolio ....................... 0% 0% 0%
Turner Short Duration Government Funds--
Three Year Portfolio ..................... 0% 0% 0%
<FN>
- ----------
(1) Qualifying dividends represent dividends which qualify for the corporate dividends received deduction.
* Items (A) and (B) are based on a percentage of the portfolio's total distributions.
** Items (D), (E) and (F) are based on a percentage of ordinary income distributions of the portfolio.
</FN>
</TABLE>
16
<PAGE>
NOTES
17
<PAGE>
NOTES
18
<PAGE>
<PAGE>
TRUST
TIP Institutional Funds
P.O. Box 419805
Kansas City, MO 64141-6805
INVESTMENT ADVISOR
Turner Investment Partners, Inc.
DISTRIBUTOR
SEI Investments Distribution Co.
ADMINISTRATOR
SEI Fund Resources
LEGAL COUNSEL
Morgan, Lewis & Bockius LLP
INDEPENDENT AUDITORS
Ernst & Young LLP
[Logo Omitted]
TURNER
INVESTMENT PARTNERS,
INC.
To open an account, receive account information,
make inquiries, or request literature:
1-888-TIP-7654
THIS REPORT WAS PREPARED FOR SHAREHOLDERS IN THE
TIP INSTITUTIONAL FUNDS. IT MAY BE DISTRIBUTED
TO OTHERS ONLY IF PRECEDED OR ACCOMPANIED BY A
TIP INSTITUTIONAL FUNDS PROSPECTUS, WHICH
CONTAINS DETAILED INFORMATION.
TPI-F-005-01
