ANNUAL
REPORT
SEPTEMBER 30, 2000
[LOGO OF CLOVER FUNDS OMITTED]
------------------------------
PORTFOLIOS OF THE TIP FUNDS
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Clover Small Cap Value Fund
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Clover Equity Value Fund
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Clover Max Cap Value Fund
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Clover Fixed Income Fund
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<PAGE>
CONTENTS
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2 Investment Review 24 Financial Highlights
10 Statement of Net Assets 25 Notes to Financial Statements
21 Statements of Operations 29 Report of Independent Auditors
22 Statements of Changes in Net Assets 30 Notice to Shareholders
CLOVER FUNDS
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The TIP Funds offer a series of 19 no-load mutual funds to institutional
and retail investors. The minimum initial investment in a Clover Fund is $2,500.
Clover Capital Management, Inc., based in Pittsford, NY, serves as the
investment advisor to four of theTIP Funds. The firm, founded in 1984, manages
approximately $1.2 billion of assets for individuals, employee benefits plans,
endowments and foundations. Clover Capital Management, Inc. advises the Clover
Small Cap Value Fund, Clover Equity Value Fund, Clover Max Cap Value Fund and
the Clover Fixed Income Fund. Separate investment firms manage the other mutual
funds in the TIP Funds family.
SHAREHOLDER SERVICES
--------------------------------------------------------------------------------
TIP Funds shareholders receive annual and semiannual reports and monthly
account statements. Shareholders who have questions about their accounts may
call a toll-free telephone number, 1-800-224-6312. Or they may write to TIP
Funds, P.O. Box 219805, Kansas City, Missouri 64121-9805.
1
<PAGE>
INVESTMENT REVIEW
CLOVER SMALL CAP VALUE FUND
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The Clover Small Cap Value Fund seeks attractive returns through investment in a
diversified portfolio of stocks. The Fund's focus is on relatively unknown
companies whose market capitalizations fall in the small and micro-cap
categories. Within this sector we isolate and invest in companies that trade at
attractive values relative to a firm's book value, cash flow, debt commitment,
peers, and company specific historical valuation. It is our belief that within
this sector of small, inexpensive, and relatively obscure stocks, rewarding
investment gains can be realized.
For the fiscal year ended September 30, 2000 the Clover Small Cap Value
Fund gained 29.59%, compared with a gain of 23.39% for the benchmark Russell
2000 Index. Fund performance was aided by the appreciation of stocks from a
broad variety of sectors. Investment efforts were focused on small, undervalued
and relatively obscure companies with reasonable prospects for share price
appreciation. Although no industry sectors were specifically targeted for
investment, depressed valuations in several sectors led to emphasis in those
areas. Sectors that made significant contributions to Fund performance included
the technology, energy and financial sectors. Fund performance was also aided by
a significant amount of merger and acquisition activity involving Fund holdings.
Looking ahead, the Fund will continue to consistently apply its core
investment methodology. This involves isolation of individual companies with
inexpensive share prices relative to their fundamental statistics and future
operating potential. We believe that there is no value gained by attempting to
forecast broad market movements, interest rates or macroeconomic changes, and
therefore intend to keep levels of cash reasonably low at all times. Despite
volatile equity markets in the past year, we were able to opportunistically
purchase the shares of undervalued companies, and anticipate additional
opportunities in the months ahead.
2
<PAGE>
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN THE
CLOVER SMALL CAP VALUE FUND, VERSUS THE RUSSELL 2000 INDEX AND THE
RUSSELL 2000 VALUE INDEX
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC AS FOLLOWS:
----------------------------------
One Annualized Annualized
Year 3 Year Inception to
Return Return Date(1)
----------------------------------
29.59% 7.52% 16.45%
----------------------------------
Clover
Small Cap Russell Russell 2000
Value 2000 Index(2) Value Index(3)
--------- ------------- -------------
2/29/96 $10,000 $10,000 $10,000
9/30/96 10,838 10,752 10,785
9/30/97 16,169 14,320 15,385
9/30/98 12,733 11,596 13,417
9/30/99 15,511 13,808 14,199
9/30/00 20,101 17,037 16,381
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.
(1) The Clover Small Cap Value Fund began operations on February 28, 1996.
(2) The Russell 2000 Index is a widely-recognized index of the 2,000 smallest
U.S. companies out of the 3,000 largest companies.
(3) The Russell 2000 Value Index is an unmanaged index that measures the
performance of those securities in the Russell 2000 Index with lower price
to book ratios and lower forecasted growth values.
3
<PAGE>
INVESTMENT REVIEW
CLOVER EQUITY VALUE FUND
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The Clover Equity Value Fund utilizes a research-driven, value-oriented approach
to equity investing. The Fund invests in equity securities that possess
favorable valuation attributes relative to the stock market averages or the
valuation characteristics of the company's stock in past years. Valuations are
measured by a stock's price relative to the company's per share cash flows,
revenues, book value, earnings and its liquidation value on the private market.
Earnings and cash flow are normalized in the case of companies where profit
margins are temporarily depressed and improvements are anticipated.
In order for Clover Capital Management, Inc., the Fund's Adviser, to move
towards greater uniformity in its reporting of benchmark indices, the Clover
Equity Value Fund has changed its benchmark index from the S&P 400 Mid-Cap Index
to the Russell Midcap Index. We do not perceive there to be a material
difference between these indices, and as such this new index continues to be a
meaningful reference for shareholders. In addition, the Russell Midcap Value
Index will be used to better reflect the Fund's value investment universe.
For the fiscal year ended September 30, 2000 the Equity Value Fund posted a
total return of 13.67% versus a total return for the Russell Midcap Value Index
of 13.00% and a return of 31.62% for the Russell Midcap Index. During the fiscal
year, the Fund and other value managers continued to produce positive results
relative to growth strategies following the domination of technology growth
stocks through the first half of 1999. Value strategies have over time provided
solid performance and if history is a guide, this outperformance is likely to go
on for an extended period. Many high quality, well-known companies now trade at
absolute levels not seen in years and at significant discounts to growth sector
valuations in terms of price/earnings, price/book value and price/cash flow.
These are great values in any market and while we continue to proceed
cautiously, we are taking advantage of current conditions aggressively.
4
<PAGE>
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN THE
CLOVER EQUITY VALUE FUND, VERSUS THE RUSSELL MID-CAP INDEX,
THE RUSSELL MID-CAP VALUE INDEX AND THE S&P 400 MID-CAP INDEX
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC AS FOLLOWS:
----------------------------------------------
One Annualized Annualized Annualized
Year 3 Year 5 Year Inception to
Return Return Return Date(1)
----------------------------------------------
13.67% 4.28% 9.75% 12.64%
----------------------------------------------
Russell Russell S&P 400
Clover Equity Mid-Cap Mid-Cap Mid-Cap
Value Fund Index (3) Value Index (4) Index (2)
------------- --------- --------------- --------
12/31/91 $10,000 $10,000 $10,000 $10,000
9/30/92 10,014 10,529 11,083 10,017
9/30/93 11,145 13,127 14,102 12,420
9/30/94 13,471 13,344 14,245 12,615
9/30/95 16,892 16,959 17,771 15,867
9/30/96 18,759 19,679 20,568 18,088
9/30/97 23,717 26,576 28,847 25,159
9/30/98 22,294 24,979 27,777 23,572
9/30/99 23,660 29,837 30,366 29,580
9/30/00 26,895 39,272 34,313 42,361
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.
(1) The Clover Equity Value Fund began operations on December 6, 1991.
(2) The S&P 400 Mid-Cap Index is a widely-recognized, capitalization-weighted
index of the 400 domestic mid cap stocks chosen for market size, liquidity,
and industry group representation.
(3) The Russell Mid-Cap Index measures the performance of the 800 smallest
companies in the Russell 1000 Index.
(4) The Russell Mid-Cap Value Index measures the performance of those Russell
Midcap companies with lower price-to-book ratios and lower forecasted
growth values.
5
<PAGE>
INVESTMENT REVIEW
CLOVER MAX CAP VALUE FUND
--------------------------------------------------------------------------------
The Clover Max Cap Value Fund utilizes a value-driven selection process to
construct a portfolio of large, high-quality equities with low valuations based
on price/book value and price/cash flow. For the fiscal year ended September 30,
2000 the Fund posted a total return of 19.84%, well ahead of the Fund's
benchmark, the S&P 500 Composite Index return of 13.28%, as well as the
S&P/BARRA Value Index return of 13.75%.
The outlook for the economy and corporate profits growth slowed throughout
the fiscal year as tight monetary policy, slowing demand and international
uncertainty took a toll. The broader market averages moved lower as the lowered
earnings expectations were reflected in stock prices.
For the year, value strategies continued to produce positive results
compared to growth strategies, continuing a trend begun last year. If history is
a guide, this outperformance is likely to go on for an extended period. Many
high-quality, well-known companies now trade at absolute levels not seen in
years and at significant discounts to growth stocks. These are great values in
any market environment and the Fund has collected and will continue to collect a
broadly diversified portfolio of these high-quality, highly liquid companies.
6
<PAGE>
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
IN THE CLOVER MAX CAP VALUE FUND, VERSUS THE S&P 500/BARRA
VALUE INDEX AND THE S&P 500 INDEX
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC AS FOLLOWS:
---------------------
One Annualized
Year Inception to
Return Date(1)
---------------------
19.84% 12.59%
---------------------
Clover S&P
Max Cap 500/BARRA S&P 500
Value Fund Value Index (3) Index (2)
---------- --------------- ---------
10/31/97 $10,000 $10,000 $10,000
9/30/96 9,347 10,362 11,284
9/30/99 11,793 12,587 14,421
9/30/00 14,133 14,318 16,336
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.
(1) The Clover Max Cap Value Fund began operations on October 31, 1997.
(2) The S&P 500 Index is a widely-recognized, market value-weighted index of
500 stocks designed to mimic the overall equity market's industry
weightings.
(3) The S&P 500/BARRA Value Index is a capitalization-weighted index of all of
the stocks in the S&P 500 that have low price-to-book ratios.
7
<PAGE>
INVESTMENT REVIEW
CLOVER FIXED INCOME FUND
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The Clover Fixed Income Fund produced a total rate of return for the fiscal year
ended September 30, 2000 of 7.21%, outperforming the 6.94% total rate of return
recorded by the Merrill Lynch U.S. Domestic Master Bond Index (DMI), the
benchmark performance index for the Fund.
Interest rates on short-term U.S. Treasury issues rose sharply during the
fiscal year. The bond market remained focused on economic growth that was very
strong, increasing fears of higher inflation and even tighter monetary policy by
the Federal Reserve. In total, the Fed raised short-term interest rates (Fed
Funds rate) six times since the middle of 1999. The table below profiles the
change in interest rates for selected maturities of various U.S. Treasury debt
issues over the twelve-month period ended September 30, 2000.
--------------------------------------------------------------------------------
9/30/99 9/30/00
--------------------------------------------------------------------------------
6-month Bills 4.96% 6.27%
--------------------------------------------------------------------------------
1-year Bills 5.18% 6.08%
--------------------------------------------------------------------------------
3-year Notes 5.70% 5.85%
--------------------------------------------------------------------------------
5-year Notes 5.76% 5.84%
--------------------------------------------------------------------------------
10-year Notes 5.88% 5.80%
--------------------------------------------------------------------------------
30-year Bonds 6.05% 5.88%
--------------------------------------------------------------------------------
The Fund was very well positioned for the market environment that developed
over the fiscal year, resulting in the 29 basis point outperformance as compared
to the benchmark (net of fees). This outperformance was primarily the result of
the Fund maintaining a strong bias to high quality, non-cyclical corporate bonds
and United States Treasury issues. During this same period, lower quality
cyclical and financial credits underperformed dramatically. The outperformance
is noteworthy when you evaluate the three major segments of the DMI benchmark
index as noted below:
--------------------------------------------------------------------------------
Total Return
10/1/99 - 9/30/00
--------------------------------------------------------------------------------
Merrill Lynch U.S. Domestic Master 6.94%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Merrill Lynch Government Master 7.09%
--------------------------------------------------------------------------------
Merrill Lynch U.S. Corporate Master 5.67%
--------------------------------------------------------------------------------
Merrill Lynch U.S. Mortgage Master 7.37%
--------------------------------------------------------------------------------
As with most bond funds, the Clover Capital Fixed Income Fund invests a
significant portion of its assets in corporate bonds. As demonstrated in the
table above, corporate bonds underperformed the DMI Index by 125 basis points
during the fiscal year making it very difficult for many bond funds to
outperform an aggregate index such as the DMI.
Looking forward, the bond market continues to focus on economic data that
it hopes will confirm the economy has moved to a lower rate of growth - an event
that will keep the Fed from any further tightening. In addition, the market
remains concerned over credit quality deterior-ation in the financial sector and
the effect that higher energy prices will have on inflation. Over the ensuing
months we look to continue to use our current portfolio position of having
mostly high quality non-cyclical credits to take advantage of the much wider
spreads we are seeing in cyclicals, financials and lower rated credits.
Since inception on December 6, 1991, the Fund has earned a net (after all
fees) annualized return of 7.07%, nearly equal to the 7.09% return of the
benchmark index.
8
<PAGE>
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN
THE CLOVER FIXED INCOME FUND, VERSUS THE MERRILL LYNCH U.S.
DOMESTIC MASTER BOND INDEX
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC AS FOLLOWS:
-------------------------------------------------
One Annualized Annualized Annualized
Year 3 Year 5 Year Inception to
Return Return Return Date(1)
-------------------------------------------------
7.21% 5.44% 6.21% 7.07%
-------------------------------------------------
Merrill Lynch
Clover Fixed U.S. Domestic
Income Fund Master Bond Index (2)
------------ ---------------------
12/31/91 $10,000 $10,000
9/30/92 10,741 10,731
9/30/93 11,929 11,822
9/30/94 11,607 11,449
9/30/95 13,211 13,064
9/30/96 13,897 13,702
9/30/97 15,235 15,040
9/30/98 16,960 16,785
9/30/99 16,658 16,718
9/30/00 17,859 17,878
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.
(1) The Clover Fixed Income Fund began operations on December 6, 1991.
(2) The Merrill Lynch U.S. Domestic Master Bond Index is a widely recognized
indicator of the performance of the investment grade U.S. domestic bond
market.
9
<PAGE>
STATEMENT OF NET ASSETS CLOVER FUNDS
September 30, 2000
Value
CLOVER SMALL CAP VALUE FUND Shares (000)
--------------------------------------------------------------------------------
COMMON STOCKS (97.2%)
AEROSPACE & DEFENSE (1.4%)
Avteam, Cl A* 17,000 $ 20
BE Aerospace* 30,000 484
------
504
------
AIR TRANSPORTATION (0.6%)
Mesa Air Group* 40,000 219
------
APPAREL/TEXTILES (2.1%)
Ashworth* 60,500 476
Dan River, Cl A* 8,200 35
Nautica Enterprises* 20,000 259
------
770
------
AUTO PARTS & EQUIPMENT (3.0%)
ArvinMeritor 18,000 264
Exide 50,000 453
Monro Muffler Brake* 16,000 174
TBC* 37,000 180
------
1,071
------
BANKS (12.9%)
Associated Banc-Corp 21,500 564
Astoria Financial 12,100 467
BancorpSouth 26,000 374
Banknorth Group 19,500 349
Business Bancorp* 3,750 36
Citizens Banking of Michigan 8,000 184
Clovis Community Bank
of California* 2,750 38
First Citizens BancShares, Cl A 5,100 365
First Federal Savings & Loan
of Alpena 3,000 25
First Sentinel Bancorp 33,500 319
First Washington Bancorp 18,200 286
Hibernia, Cl A 44,000 539
National Bankshares of Virginia 196 3
People's Bank 25,500 537
Queens County Bancorp 7,600 219
Ridgestone Financial Services* 2,625 13
Wake Forest Bancshares 2,000 24
Washington Federal 14,200 323
------
4,665
------
Value
Shares (000)
--------------------------------------------------------------------------------
BEAUTY PRODUCTS (0.7%)
Inter Parfums* 29,250 $ 256
------
BROADCASTING, NEWSPAPERS & ADVERTISING (0.7%)
Spectrian* 6,000 93
ValueVision International, Cl A* 6,000 151
------
244
------
CHEMICALS (1.7%)
Agrium 21,500 220
CPAC 21,000 168
TETRA Technologies* 15,000 228
------
616
------
COMMERCIAL SERVICES (0.1%)
Billing Concepts* 17,000 54
------
COMMUNICATIONS EQUIPMENT (1.3%)
Cobra Electronics* 35,000 208
Performance Technologies* 14,400 202
TII Industries* 21,500 44
------
454
------
COMPUTERS & SERVICES (5.1%)
4Front Technologies* 6,000 109
Analysts International 9,600 69
CIBER* 31,000 256
Computer Horizons* 36,000 245
Dot Hill Systems* 30,000 195
eLoyalty* 20,000 255
ENCAD* 19,000 43
Epicor Software* 35,000 122
Intelligroup* 6,500 10
MicroTouch Systems* 5,500 34
QAD* 18,000 46
SeraNova* 6,500 34
SPSS* 3,000 80
Syntel* 30,500 239
Versant* 25,000 116
------
1,853
------
CONSUMER PRODUCTS (5.0%)
Central Garden And Pet* 12,000 83
Helen Of Troy* 44,000 313
Vans* 90,000 1,384
------
1,780
------
10
<PAGE>
STATEMENT OF NET ASSETS CLOVER FUNDS
September 30, 2000
CLOVER SMALL CAP VALUE FUND Value
(Continued) Shares (000)
-------------------------------------------------------
CORRECTION FACILITIES (0.0%)
Wackenhut Corrections* 1,200 $ 9
------
DRUGS (2.5%)
Anesta* 4,100 94
Herbalife International, Cl B 30,000 257
Nature's Sunshine Products 30,000 223
Scios* 18,000 187
Twinlab* 34,000 149
------
910
------
ELECTRICAL PRODUCTS & SERVICES (2.2%)
Calpine* 4,000 417
Hubbell, Cl B 12,500 313
NSTAR 1,489 60
------
790
------
ELECTRONICS (1.8%)
Barringer Technologies* 30,000 276
Checkpoint Systems* 36,700 278
II-VI* 6,200 116
------
670
------
ENVIRONMENTAL SERVICES (1.0%)
Calgon Carbon 54,500 371
------
FOOD, BEVERAGE & TOBACCO (3.4%)
Genesee, Cl B 14,000 563
International Multifoods 23,000 400
M&F Worldwide* 19,000 110
Pilgrims Pride, Cl B 25,000 172
------
1,245
------
FUNERAL SERVICES (1.0%)
Rock of Ages* 32,000 176
York Group* 30,000 180
------
356
------
GAS/NATURAL GAS (1.5%)
Cascade Natural Gas 8,000 140
HS Resources* 7,500 252
Madison Gas & Electric 6,000 136
------
528
------
Value
Shares (000)
-------------------------------------------------------
HOTELS & LODGING (0.4%)
Suburban Lodges of America* 20,000 $ 135
------
INSURANCE (4.6%)
Acceptance Insurance* 33,000 219
ACE 6,300 247
Commerce Group 7,700 223
FPIC Insurance Group* 34,500 483
Healthcare Recoveries* 35,000 153
Highlands Insurance Group* 25,000 234
Standard Management* 10,000 34
Trenwick Group Limited 3,500 66
------
1,659
------
IRON & STEEL (1.9%)
Brush Engineered Materials 16,000 346
Wolverine Tube* 23,000 342
------
688
------
LEISURE PRODUCTS (2.5%)
K2* 63,000 563
Oakley* 14,000 246
Riddell Sports* 21,500 108
------
917
------
MACHINERY (2.3%)
DT Industries* (A) 25,000 123
Hardinge 4,400 53
MagneTek* 46,500 494
Ultratech Stepper* 11,000 177
------
847
------
MANUFACTURING (0.6%)
Thermo Electron* 7,785 202
------
MARINE TRANSPORTATION (0.2%)
Maritrans 13,300 73
------
MEDICAL PRODUCTS & SERVICES (10.0%)
ADAC Laboratories* 15,000 312
AmeriPath* 35,000 508
Bio-Rad Laboratories, Cl A* 3,500 79
Block Drug, Cl A 4,243 183
CHRONIMED* 14,500 107
Cyberonics* 13,000 279
11
<PAGE>
STATEMENT OF NET ASSETS CLOVER FUNDS
September 30, 2000
CLOVER SMALL CAP VALUE FUND Value
(Continued) Shares (000)
-------------------------------------------------------
Eclipse Surgical Technologies* 12,000 $ 48
Hanger Orthopedic Group* 33,000 124
Henry Schein* 39,000 778
Hologic* 20,000 149
Laserscope* 25,000 47
Matria Healthcare* 35,000 123
Omnicare 22,000 355
Pediatrix Medical Group* 13,000 168
US Oncology* 77,200 350
------
3,610
------
NUTRITION PRODUCTS (0.1%)
Nutraceutical International* 20,000 53
------
OFFICE SUPPLIES (0.2%)
Hunt 10,000 71
------
PAPER & PAPER PRODUCTS (1.9%)
Gaylord Container, Cl A* 160,000 270
Packaging Corporation
of America* 28,000 310
Rock-Tenn, Cl A 12,000 119
------
699
------
PETROLEUM & FUEL PRODUCTS (10.7%)
Cabot Oil & Gas, Cl A 32,500 662
Chesapeake Energy 25,000 180
Grey Wolf* 90,000 518
Key Energy Services* 100,000 981
Parker Drilling* 61,000 427
Seitel* 53,000 762
Tesoro Petroleum* 23,300 232
USEC 28,000 119
------
3,881
------
PRINTING & PUBLISHING (0.9%)
Cadmus Communications 40,900 332
------
PROFESSIONAL SERVICES (2.4%)
ICT Group* 35,200 376
Modis Professional Services* 20,000 104
Personnel Group Of America* 30,000 94
ProMedCo Management* 45,000 34
Right Management Consultants* 17,000 196
Unifirst 7,000 70
------
874
------
Value
Shares (000)
-------------------------------------------------------
REAL ESTATE (0.5%)
Trammell Crow* 11,500 $ 173
------
REAL ESTATE INVESTMENT TRUSTS (3.0%)
EastGroup Properties 6,000 134
Entertainment Properties Trust 30,000 319
Home Properties of NY 18,100 541
National Golf Properties 5,000 103
------
1,097
------
RESTAURANTS (0.9%)
Dave and Buster's* 43,000 341
------
RETAIL (3.4%)
Burlington Coat Factory
Warehouse 26,000 372
Cache* 23,800 65
Duckwall-ALCO Stores* 18,000 162
J.Jill Group* 20,000 258
Tandycrafts* 104,700 242
West Marine* 15,000 124
------
1,223
------
SEMI-CONDUCTORS/INSTRUMENTS (0.8%)
Cohu 6,300 96
Tegal* 55,700 188
------
284
------
SPECIALTY MACHINERY (0.6%)
Lennox International 22,110 207
------
TRUCKING (0.4%)
Celadon Group* 11,500 102
OLD Dominion Freight Line* 5,000 51
------
153
------
VETERINARY SERVICES (0.3%)
Heska* 40,000 118
------
WHOLESALE (0.6%)
Brightpoint* 34,500 174
PrimeSource 12,000 60
------
234
------
TOTAL COMMON STOCKS
(Cost $33,062) 35,236
------
12
<PAGE>
STATEMENT OF NET ASSETS CLOVER FUNDS
September 30, 2000
Face
CLOVER SMALL CAP VALUE FUND Amount Value
(Concluded) (000) (000)
-------------------------------------------------------
REPURCHASE AGREEMENT (1.5%)
Morgan Stanley Dean Witter,
6.30%, dated 09/29/00
matures 10/02/00, repurchase
price $549, 804 (collateralized
by U.S. Treasury Note, par
value $548,700, 9.875%,
matures 11/15/15: market
value $563,476) $550 $ 550
-------
TOTAL REPURCHASE AGREEMENT
(Cost $550) 550
-------
TOTAL INVESTMENTS (98.7%)
(Cost $33,612) 35,786
-------
OTHER ASSETS AND LIABILITIES, NET (1.3%) 468
-------
NET ASSETS:
Portfolio Shares (unlimited
authorization-- no par value)
based on 2,216,625 outstanding
shares of beneficial interest 31,497
Accumulated net realized gain
on investments 2,583
Net unrealized appreciation
on investments 2,174
-------
TOTAL NET ASSETS (100.0%) $36,254
=======
Net Asset Value, Offering and
Redemption Price Per Share $16.36
=======
*NON-INCOME PRODUCING SECURITY
CL -- CLASS
(A) SECURITY FAIR VALUED USING METHODS DETERMINED IN GOOD FAITH BY THE
VALUATION COMMITTEE OF THE BOARD OF TRUSTEES. (SEE NOTE 2 IN FOOTNOTES TO
FINANCIAL STATEMENTS)
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL
STATEMENTS.
13
<PAGE>
STATEMENT OF NET ASSETS CLOVER FUNDS
September 30, 2000
Value
CLOVER EQUITY VALUE FUND Shares (000)
-------------------------------------------------------
COMMON STOCKS (87.6%)
AEROSPACE & DEFENSE (2.0%)
Litton Industries* 20,000 $ 894
-------
BANKS (6.5%)
Banknorth Group 40,000 715
Union Planters 10,000 331
Washington Mutual 19,000 756
Wells Fargo 25,000 1,148
-------
2,950
-------
CHEMICALS (2.8%)
Cytec Industries* 20,000 669
Omnova Solutions 110,000 612
-------
1,281
-------
COMMUNICATIONS (5.0%)
ALLTEL 6,000 313
Broadwing* 10,000 256
Citizens Communications* 90,000 1,209
Global Crossing* 10,000 310
RCN* 10,000 207
-------
2,295
-------
COMPUTERS & SERVICES (23.4%)
Bell & Howell* 25,000 547
Ceridian* 50,000 1,403
Convergys* 48,000 1,866
Equifax 35,000 943
First Data 10,000 391
MAPICS* 76,500 516
National Data 19,000 623
Network Associates* 60,000 1,357
NOVA/Georgia* 70,000 1,199
Reynolds & Reynolds, Cl A 57,000 1,133
Sungard Data Systems* 15,000 642
-------
10,620
-------
Value
Shares (000)
-------------------------------------------------------
CONSUMER PRODUCTS (7.3%)
Dial 90,000 $ 1,046
Energizer Holdings* 36,000 882
Harman International 20,000 782
Sherwin-Williams 30,000 641
-------
3,351
-------
FOOD, BEVERAGE & TOBACCO (0.6%)
Universal Corp-Va 10,000 294
-------
GAS/NATURAL GAS (6.7%)
Dynegy, Cl A 54,000 3,078
-------
INSURANCE (3.7%)
PMI Group 25,000 1,694
-------
MANUFACTURING (3.1%)
Thermo Electron* 55,000 1,430
-------
MEDICAL PRODUCTS & SERVICES (8.1%)
Becton Dickinson 20,000 529
HEALTHSOUTH* 125,000 1,016
IMS Health 36,000 747
Omnicare 60,000 968
US Oncology* 100,000 453
-------
3,713
-------
PETROLEUM & FUEL PRODUCTS (6.5%)
Devon Energy 22,000 1,323
Pioneer Natural Resources* 65,000 922
Transocean Sedco Forex 12,000 703
-------
2,948
-------
PETROLEUM REFINING (2.8%)
Sunoco 28,000 754
Ultramar Diamond Shamrock 20,000 508
-------
1,262
-------
REAL ESTATE INVESTMENT TRUSTS (1.0%)
Meditrust* 150,000 441
-------
14
<PAGE>
STATEMENT OF NET ASSETS CLOVER FUNDS
September 30, 2000
Shares/
CLOVER EQUITY VALUEFUND Face Amount Value
(Concluded) (000) (000)
-------------------------------------------------------
RETAIL (3.6%)
Neiman-Marcus Group, Cl A* 35,000 $ 1,135
Shop At Home* 200,000 488
-------
1,623
-------
RETAIL - FOOD (2.7%)
Kroger* 55,000 1,241
-------
SPECIALTY MACHINERY (0.5%)
York International 10,000 249
-------
TRUCKING (1.3%)
Yellow* 40,000 605
-------
TOTAL COMMON STOCKS
(Cost $31,386) 39,969
-------
CONVERTIBLE BOND (1.2%)
Meditrust
7.500%, 03/01/01 $ 600 569
-------
TOTAL CONVERTIBLE BOND
(Cost $599) 569
-------
REPURCHASE AGREEMENT (9.2%)
Morgan Stanley Dean Witter,
6.30%, dated 09/29/00,
matures 10/02/00, repurchase
price $4,192,850 (collateralized
by U.S. Treasury Note, par
value $4,184,435, 9.875%,
matures 11/15/15: market
value $4,297,117) 4,192 4,192
-------
TOTAL REPURCHASE AGREEMENT
(Cost $4,192) 4,192
-------
TOTAL INVESTMENTS (98.0%)
(Cost $36,177) 44,730
-------
OTHER ASSETS AND LIABILITIES, NET (2.0%) 927
-------
Value
(000)
-------------------------------------------------------
NET ASSETS:
Portfolio Shares (unlimited
authorization-- no par value)
based on 3,208,169 outstanding
shares of beneficial interest $37,796
Distributions in excess of net
investment income (71)
Accumulated net realized loss
on investments (621)
Net unrealized appreciation
on investments 8,553
-------
TOTAL NET ASSETS (100.0%) $45,657
=======
Net Asset Value, Offering and
Redemption Price Per Share $14.23
=======
*NON-INCOME PRODUCING SECURITY
CL -- CLASS
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
15
<PAGE>
STATEMENT OF NET ASSETS CLOVER FUNDS
September 30, 2000
Value
CLOVER MAX CAP VALUE FUND Shares (000)
-------------------------------------------------------
COMMON STOCKS (99.3%)
AEROSPACE & DEFENSE (4.0%)
Boeing 725 $ 46
Northrop Grumman 900 82
United Technologies 1,125 78
----
206
----
APPAREL/TEXTILES (0.8%)
Liz Claiborne 1,100 42
----
AUTOMOTIVE (0.5%)
Ford Motor 1,000 25
----
BANKS (9.9%)
Bank of America 1,225 64
Bank of New York 550 31
Bank One 2,075 80
Chase Manhattan 900 42
FleetBoston Financial 650 25
Washington Mutual 4,050 161
Wells Fargo 2,350 108
----
511
----
BASIC MATERIALS (0.9%)
Amex Basic Industries Selector
Sector, SPDR 2,500 45
----
CHEMICALS (0.4%)
IMC Global 1,300 19
----
COMMUNICATIONS (2.1%)
US Cellular* 1,050 73
WorldCom* 1,200 36
----
109
----
COMMUNICATIONS EQUIPMENT (0.7%)
Motorola 1,350 38
----
COMPUTERS & SERVICES (5.6%)
Adobe Systems 200 31
BroadVision* 700 18
Compaq Computer 2,500 69
First Data 400 16
Hewlett-Packard 800 78
International Business Machines 200 22
Network Associates* 1,150 26
Seagate Technology* 425 29
----
289
----
Value
Shares (000)
-------------------------------------------------------
CONSUMER PRODUCTS (4.8%)
Kimberly-Clark 800 $ 45
Procter & Gamble 1,450 97
Unilever 2,150 104
----
246
----
DRUGS (0.9%)
Pharmacia 775 47
----
ELECTRICAL SERVICES (1.3%)
Allegheny Energy 1,800 69
----
ELECTRICAL UTILITIES (0.6%)
FPL Group 450 30
----
ENTERTAINMENT (3.7%)
Mattel 9,500 106
Walt Disney 2,200 84
----
190
----
FINANCIAL SERVICES (10.6%)
American Express 1,625 99
Citigroup 5,100 276
Merrill Lynch 1,300 86
Morgan Stanley Dean Witter 950 87
----
548
----
FOOD, BEVERAGE & TOBACCO (0.9%)
Philip Morris Companies 1,625 48
----
GAS/NATURAL GAS (4.3%)
Dynegy, Cl A 2,000 114
EL Paso Energy 1,350 83
Northwest Natural Gas 1,100 25
----
222
----
INSURANCE (10.0%)
Allstate 1,550 54
American International Group 3,037 291
SAFECO 6,300 172
----
517
----
MACHINERY (0.9%)
Dover 975 46
----
16
<PAGE>
STATEMENT OF NET ASSETS CLOVER FUNDS
September 30, 2000
CLOVER MAX CAP VALUE FUND Value
(Concluded) Shares (000)
-------------------------------------------------------
MANUFACTURING (1.0%)
Tyco International 1,000 $ 52
-----
MEDICAL PRODUCTS & SERVICES (6.0%)
Baxter International 625 50
Becton Dickinson 1,350 36
Humana* 6,775 73
Oxford Health Plans* 2,300 71
Tenet Healthcare* 1,125 41
United Health Group 400 39
-----
310
-----
NETWORKING PRODUCTS (0.4%)
Adaptec* 1,050 21
-----
PAPER & PAPER PRODUCTS (1.4%)
International Paper 2,425 70
-----
PETROLEUM & FUEL PRODUCTS (4.8%)
Devon Energy 2,250 135
Phillips Petroleum 900 56
Schlumberger 700 58
-----
249
-----
PETROLEUM REFINING (12.0%)
BP Amoco, Sponsored ADR 1,400 74
Diamond Offshore Drilling 1,375 56
Exxon Mobil 4,000 356
Royal Dutch Petroleum 1,500 90
Total Fina Elf, Sponsored ADR 625 46
-----
622
-----
RESTAURANTS (1.0%)
Wendy's International 2,700 54
-----
RETAIL (0.8%)
CVS 850 39
-----
RETAIL - FOOD (2.1%)
Kroger* 4,700 106
-----
SEMI-CONDUCTORS/INSTRUMENTS (1.3%)
Analog Devices* 400 33
Applied Materials* 325 19
Intel 400 17
-----
69
-----
Value
Shares (000)
-------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT (1.2%)
Nippon Telegraph & Telephone,
Sponsored ADR 750 $ 37
Qualcomm* 375 27
------
64
------
TELEPHONES & TELECOMMUNICATIONS (4.4%)
AT&T 1,550 45
BellSouth 1,175 47
SBC Communications 1,625 81
Verizon Communications* 1,094 53
------
226
------
TOTAL COMMON STOCKS
(Cost $4,777) 5,129
------
TOTAL INVESTMENTS (99.3%)
(Cost $4,777) 5,129
------
OTHER ASSETS AND LIABILITIES, NET (0.7%) 34
------
NET ASSETS:
Portfolio Shares (unlimited
authorization-- no par value)
based on 415,053 outstanding
shares of beneficial interest 4,556
Distributions in excess of net
investment income (1)
Accumulated net realized gain
on investments 256
Net unrealized appreciation
on investments 352
------
TOTAL NET ASSETS (100.0%) $5,163
======
Net Asset Value, Offering and
Redemption Price Per Share $12.44
======
*NON-INCOME PRODUCING SECURITY
ADR -- AMERICAN DEPOSITORY RECEIPT
CL -- CLASS
SPDR -- STANDARD & POOR'S DEPOSITARY RECEIPT
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
17
<PAGE>
STATEMENT OF NET ASSETS CLOVER FUNDS
September 30, 2000
Face
Amount Value
CLOVER FIXED INCOME FUND (000) (000)
-------------------------------------------------------
CORPORATE OBLIGATIONS (49.5%)
BUILDING & CONSTRUCTION PRODUCTS (0.6%)
Masco
6.125%, 09/15/03 $ 200 $ 192
------
COMPUTERS & SERVICES (2.1%)
First Data, MTN
5.800%, 12/15/08 750 675
------
ELECTRICAL PRODUCTS & SERVICES (5.6%)
Emerson Electric
7.125%, 08/15/10 1,250 1,253
Pacific Gas & Electric, Ser 92-A
7.875%, 03/01/02 500 504
------
1,757
------
FINANCIAL SERVICES (1.5%)
Pitney Bowes Credit
5.650%, 01/15/03 500 488
------
FOOD, BEVERAGE & TOBACCO (6.3%)
Anheuser-Busch
6.750%, 08/01/03 750 755
Canandaigua Brands
8.750%, 12/15/03 1,250 1,242
------
1,997
------
GAS/NATURAL GAS (10.7%)
Amoco Canada
6.750%, 02/15/05 1,500 1,494
Chevron
8.110%, 12/01/04 360 370
Columbia Gas Systems, Ser B
6.610%, 11/28/02 1,000 985
Texaco Capital, MTN
7.420%, 07/15/02 500 504
------
3,353
------
MEDICAL PRODUCTS & SERVICES (8.2%)
Abbott Laboratories
5.600%, 10/01/03 700 683
Eli Lilly
8.125%, 12/01/01 250 253
6.250%, 03/15/03 1,150 1,140
Zeneca Wilmington
6.300%, 06/15/03 500 500
------
2,576
------
Face
Amount Value
(000) (000)
-------------------------------------------------------
PRINTING & PUBLISHING (0.6%)
Knight Ridder
8.500%, 09/01/01 $ 189 $ 190
------
RETAIL (4.7%)
Wal-Mart Stores
8.625%, 04/01/01 400 404
6.875%, 08/10/09 1,100 1,086
------
1,490
------
UTILITIES (9.2%)
Detroit Edison
6.560%, 05/01/01 500 499
Northern Illinois Gas
6.750%, 06/01/02 1,000 1,001
Northern States Power
7.875%, 10/01/01 650 655
5.875%, 03/01/03 750 729
------
2,884
------
TOTAL CORPORATE OBLIGATIONS
(Cost $15,700) 15,602
------
U.S. GOVERNMENT MORTGAGE-BACKED BONDS (18.9%)
FHLMC
Pool # 277449
8.500%, 09/01/09 6 6
FHLMC, CMO/REMIC
Ser 1546, Cl H
7.000%, 12/15/22 390 377
Ser 1561, Cl H
6.500%, 05/15/08 750 743
FNMA
Pool # 369214
5.000%, 04/01/09 291 271
FNMA, REMIC
Ser 1992-193, Cl HC
7.000%, 01/25/07 1,000 1,000
Ser 1993-118, Cl G
6.500%, 11/25/06 759 754
Ser 1993-95, Cl PE
6.500%, 10/25/07 617 613
Ser 1994-17, Cl H
6.000%, 02/25/09 750 731
Ser G93-21, Cl VE
6.600%, 11/25/07 184 178
18
<PAGE>
STATEMENT OF NET ASSETS CLOVER FUNDS
September 30, 2000
Face
CLOVER FIXED INCOME FUND Amount Value
(Concluded) (000) (000)
-------------------------------------------------------
GNMA
Pool # 13125
8.000%, 10/15/06 $ 23 $ 24
Pool # 187899
8.000%, 05/15/17 109 111
Pool # 196477
10.000%, 04/15/10 57 59
Pool # 202886
8.000%, 03/15/17 125 127
Pool # 221235
8.500%, 07/15/17 66 68
Pool # 331786
8.000%, 08/15/22 136 139
Pool # 376400
6.500%, 02/15/24 783 755
-------
TOTAL U.S. GOVERNMENT MORTGAGE-BACKED BONDS
(Cost $6,037) 5,956
-------
U.S. TREASURY OBLIGATIONS (27.2%)
U.S. Treasury Bonds
8.125%, 05/15/21 750 924
7.500%, 11/15/16 1,000 1,139
7.250%, 05/15/16 2,000 2,226
7.250%, 08/15/22 1,500 1,705
6.375%, 08/15/27 1,750 1,822
U.S. Treasury Notes
5.625%, 02/15/06 750 741
-------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $8,839) 8,557
-------
U.S. GOVERNMENT AGENCY OBLIGATIONS (2.6%)
FNMA, MTN
6.920%, 03/19/07 555 560
Private Export Funding
6.620%, 10/01/05 250 250
-------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $854) 810
-------
Face
Amount Value
(000) (000)
-------------------------------------------------------
REPURCHASE AGREEMENT (0.4%)
Morgan Stanley Dean Witter,
6.30%, dated 09/29/00,
matures 10/02/00, repurchase
price $111,764 (collateralized
by U.S. Treasury Note, par
value $111,540, 9.875%,
matures 11/15/15: market
value $114,543) $ 112 $ 112
-------
TOTAL REPURCHASE AGREEMENT
(Cost $112) 112
-------
TOTAL INVESTMENTS (98.6%)
(Cost $31,542) 31,037
-------
OTHER ASSETS AND LIABILITIES, NET (1.4%) 449
-------
NET ASSETS:
Portfolio Shares (unlimited
authorization-- no par value)
based on 3,274,561 outstanding
shares of beneficial interest 32,142
Undistributed net investment income 1
Accumulated net realized loss
on investments (152)
Net unrealized depreciation
on investments (505)
-------
TOTAL NET ASSETS (100.0%) $31,486
=======
Net Asset Value, Offering and
Redemption Price Per Share $9.62
=======
CL -- CLASS
CMO -- COLLATERALIZED MORTGAGE OBLIGATION
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
GNMA -- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
MTN -- MEDIUM TERM NOTE
REMIC -- REAL ESTATE MORTGAGE INVESTMENT CONDUIT
SER -- SERIES
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
19
<PAGE>
This page intentionally left blank
20
<PAGE>
STATEMENTS OF OPERATIONS (000) CLOVER FUNDS
September 30, 2000
<TABLE>
<CAPTION>
CLOVER CLOVER CLOVER CLOVER
SMALL CAP EQUITY MAX CAP FIXED
VALUE VALUE VALUE INCOME
FUND FUND FUND FUND
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Income:
Dividends .............................................. $ 256 $ 602 $ 62 $ --
Interest ............................................... 78 122 7 2,116
--------------------------------------------------------------------------------------------------------------
Total Investment Income .............................. 334 724 69 2,116
--------------------------------------------------------------------------------------------------------------
Expenses:
Investment Advisory Fees ............................... 221 373 30 147
Investment Advisory Fee Waiver ......................... (17) (5) (30) (90)
Administration Fees .................................... 65 65 65 65
Custodian Fees ......................................... 6 5 4 5
Transfer Agent Fees .................................... 39 66 29 64
Professional Fees ...................................... 19 24 21 25
Trustee Fees ........................................... 2 -- 1 1
Registration Fees ...................................... 14 11 8 11
Pricing Fees ........................................... 1 1 -- 3
Printing Expense ....................................... 11 12 -- 11
Amortization of Deferred Organizational Costs .......... 3 3 4 3
--------------------------------------------------------------------------------------------------------------
Total Expenses ....................................... 364 555 132 245
Less: Reimbursements by Adviser ........................ -- -- (93) --
--------------------------------------------------------------------------------------------------------------
Total Net Expenses ................................... 364 555 39 245
--------------------------------------------------------------------------------------------------------------
Net Investment Income (Loss) ..................... (30) 169 30 1,871
--------------------------------------------------------------------------------------------------------------
Net Realized Gain (Loss) From Securities Sold .......... 2,634 (92) 264 4
Net Unrealized Appreciation of Investment Securities ... 2,106 6,536 403 375
--------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain
on Investments ................................... 4,740 6,444 667 379
--------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting
From Operations ..................................... $4,710 $6,613 $697 $2,250
==============================================================================================================
<FN>
Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
</FN>
</TABLE>
21
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (000) CLOVER FUNDS
For the Years Ended September 30,
<TABLE>
<CAPTION>
CLOVER SMALL CAP CLOVER EQUITY
VALUE FUND VALUE FUND
------------------- -------------------
2000 1999 2000 1999
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Activities:
Net Investment Income Gain (Loss) ............... $ (30) $ (17) $ 169 $ 928
Net Realized Gain (Loss) on Securities Sold ..... 2,634 1,818 (92) 14,773
Net Unrealized Appreciation (Depreciation) of
Investment Securities ......................... 2,106 1,161 6,536 (10,436)
------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting
from Operations ............................. 4,710 2,962 6,613 5,265
------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders:
Net Investment Income ........................... -- -- (238) (927)
Realized Capital Gain ........................... (1,422) (327) (11,807) (3,802)
------------------------------------------------------------------------------------------------------------------
Total Distributions ........................... (1,422) (327) (12,045) (4,729)
------------------------------------------------------------------------------------------------------------------
Capital Share Transactions:
Proceeds from Shares Issued ..................... 30,919 3,059 21,894 21,142
Proceeds from Shares Issued in Lieu of
Cash Distributions ............................ 1,408 323 11,460 4,641
Cost of Shares Redeemed ......................... (15,855) (5,185) (41,867) (57,523)
------------------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From
Capital Share Transactions .................. 16,472 (1,803) (8,513) (31,740)
------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets ....... 19,760 832 (13,945) (31,204)
------------------------------------------------------------------------------------------------------------------
Net Assets:
Beginning of Period ........................... 16,494 15,662 59,602 90,806
------------------------------------------------------------------------------------------------------------------
End of Period(1) .............................. $ 36,254 $ 16,494 $ 45,657 $ 59,602
==================================================================================================================
Shares Issued and Redeemed:
Issued .......................................... 1,904 240 1,510 1,323
Issued in Lieu of Cash Distributions ............ 97 27 878 295
Redeemed ........................................ (987) (427) (2,923) (3,603)
------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Share Transactions . 1,014 (160) (535) (1,985)
==================================================================================================================
<CAPTION>
CLOVER MAX CAP CLOVER FIXED
VALUE FUND INCOME FUND
------------------- --------------------
2000 1999 2000 1999
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Activities:
Net Investment Income Gain (Loss) ............... $ 30 $ 30 $ 1,871 $ 1,807
Net Realized Gain (Loss) on Securities Sold ..... 264 278 4 (138)
Net Unrealized Appreciation (Depreciation) of
Investment Securities ......................... 403 158 375 (2,256)
----------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting
from Operations ............................. 697 466 2,250 (587)
----------------------------------------------------------------------------------------------------------------
Distributions to Shareholders:
Net Investment Income ........................... (31) (30) (1,870) (1,807)
Realized Capital Gain ........................... (274) (12) -- (653)
----------------------------------------------------------------------------------------------------------------
Total Distributions ........................... (305) (42) (1,870) (2,460)
----------------------------------------------------------------------------------------------------------------
Capital Share Transactions:
Proceeds from Shares Issued ..................... 2,542 1,117 8,168 11,824
Proceeds from Shares Issued in Lieu of
Cash Distributions ............................ 301 51 1,771 2,316
Cost of Shares Redeemed ......................... (797) (643) (11,562) (11,739)
----------------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From
Capital Share Transactions .................. 2,046 525 (1,623) 2,401
----------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets ....... 2,438 949 (1,243) (646)
----------------------------------------------------------------------------------------------------------------
Net Assets:
Beginning of Period ........................... 2,725 1,776 32,729 33,375
----------------------------------------------------------------------------------------------------------------
End of Period(1) .............................. $ 5,163 $ 2,725 $ 31,486 $ 32,729
================================================================================================================
Shares Issued and Redeemed:
Issued .......................................... 218 97 867 1,204
Issued in Lieu of Cash Distributions ............ 27 5 187 235
Redeemed ........................................ (68) (57) (1,223) (1,202)
----------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Share Transactions . 177 45 (169) 237
================================================================================================================
<FN>
(1) Includes undistributed net investment income (loss) and/or distributions in
excess of net investment income (000) of $0 and $0 for the Clover Small Cap
Value Fund, $(71) and $80 for the Clover Equity Value Fund, $(1) and $0 for the
Max Cap Value Fund, and $1 and $7 for the Clover Fixed Income Fund, as of
September 30, 2000, and September 30, 1999, respectively.
Amounts designated as "--" are either $0 or have been rounded to $0. The
accompanying notes are an integral part of the financial statements.
</FN>
</TABLE>
22-23
<PAGE>
FINANCIAL HIGHLIGHTS CLOVER FUNDS
For a Share Outstanding Throughout each Period
<TABLE>
<CAPTION>
Net Realized and Net Net
Asset Net Unrealized Distributions Asset Assets
Value Investment Gains or ------------------ Value End of
Beginning Income (Losses) on Investment Capital End of Total Period
of Period (Loss) Investments Income Gains Period Return+ (000)
---------------------------------------------------------------------------------
---------------------------
CLOVER SMALL CAP VALUE FUND
---------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
2000(4) $13.71 $(0.02) $3.91 $ -- $(1.24) $16.36 29.59% $ 36,254
1999 11.49 (0.01) 2.48 -- (0.25) 13.71 21.82 16,494
1998 15.94 (0.06) (3.22) -- (1.17) 11.49 (21.25) 15,662
1997(1) 10.87 (0.04) 5.24 -- (0.13) 15.94 48.23 15,279
1996(2) 10.00 0.02 0.88 (0.03) -- 10.87 8.97 4,495
------------------------
CLOVER EQUITY VALUE FUND
------------------------
2000 $15.92 $ 0.05 $1.79 $(0.07) $(3.46) $14.23 13.67% $ 45,657
1999 15.85 0.21 0.74 (0.21) (0.67) 15.92 6.13 59,602
1998 18.99 0.15 (1.12) (0.15) (2.02) 15.85 (6.00) 90,806
1997(1) 16.20 0.18 3.54 (0.18) (0.75) 18.99 23.86 117,859
1996 15.29 0.19 2.15 (0.22) (1.21) 16.20 16.47 85,050
1995 13.74 0.24 2.46 (0.22) (0.93) 15.29 21.25 51,647
-------------------------
CLOVER MAX CAP VALUE FUND
-------------------------
2000 $11.43 $ 0.08 $2.06 $(0.09) $(1.04) $12.44 19.84% $ 5,163
1999 9.21 0.13 2.27 (0.13) (0.05) 11.43 26.17 2,725
1998(3) 10.00 0.15 (0.79) (0.15) -- 9.21 (6.52) 1,776
------------------------
CLOVER FIXED INCOME FUND
------------------------
2000 $ 9.50 $ 0.54 $0.12 $(0.54) $ -- $ 9.62 7.21% $ 31,486
1999 10.41 0.53 (0.71) (0.53) (0.20) 9.50 (1.78) 32,729
1998 9.92 0.57 0.51 (0.57) (0.02) 10.41 11.32 33,375
1997(1) 9.85 0.54 0.16 (0.54) (0.09) 9.92 7.43 23,677
1996 9.89 0.59 0.01 (0.59) (0.05) 9.85 6.26 19,731
1995 9.14 0.58 0.77 (0.58) (0.02) 9.89 15.27 14,685
<CAPTION>
Ratio of Net
Ratio of Investment
Ratio of Net Expenses Income (Loss)
Investment to Average to Average
Ratio of Income Net Assets Net Assets
Expenses or (Loss) (Excluding (Excluding Portfolio
to Average to Average Waivers and Waivers and Turnover
Net Assets Net Assets Reimbursements) Reimbursements) Rate
--------------------------------------------------------------------
---------------------------
CLOVER SMALL CAP VALUE FUND
---------------------------
<S> <C> <C> <C> <C> <C>
2000(4) 1.40% (0.11)% 1.47% (0.18)% 85.80%
1999 1.40 (0.10) 1.72 (0.42) 79.93
1998 1.40 (0.50) 1.84 (0.94) 70.02
1997(1) 1.40 (0.64) 2.43 (1.67) 59.03
1996(2) 1.40 (0.03) 5.29 (3.92) 14.17
------------------------
CLOVER EQUITY VALUE FUND
------------------------
2000 1.10% 0.34% 1.11% 0.33% 90.15%
1999 0.95 1.21 0.95 1.21 98.85
1998 1.10 0.82 1.12 0.80 42.10
1997(1) 1.10 1.18 1.15 1.13 51.64
1996 1.10 1.32 1.21 1.21 51.36
1995 1.10 1.82 1.20 1.72 84.76
-------------------------
CLOVER MAX CAP VALUE FUND
-------------------------
2000 0.95% 0.75% 3.98% (2.28)% 153.58%
1999 0.95 1.20 4.13 (1.98) 92.2
1998(3) 0.95 1.82 11.40 (8.63) 62.71
------------------------
CLOVER FIXED INCOME FUND
------------------------
2000 0.75% 5.72% 1.02% 5.45% 42.40%
1999 0.75 5.40 0.97 5.18 28.47
1998 0.75 5.67 0.99 5.43 27.07
1997(1) 0.75 6.03 1.02 5.76 11.83
1996 0.80 6.00 1.11 5.69 24.52
1995 0.80 6.13 1.40 5.53 35.84
<FN>
+ Returns are for the period indicated and have not been annualized.
(1) On June 25, 1997 the Board of Trustees of the TIP Funds approved a change
in the Clover Funds' fiscal year end from October 31 to September 30,
effective September 30, 1997. All ratios are for the period indicated and
have been annualized.
(2) The Clover Small Cap Value Fund commenced operations on February 28, 1996.
All ratios are for the period indicated and have been annualized.
(3) The Clover Max Cap Value Fund commenced operations on October 31, 1997. All
ratios are for the period indicated and have been annualized.
(4) Per share amounts calculated using the average shares method.
Amounts designated as "--" are either $0 or have been rounded to $0. The
accompanying notes are an integral part of the financial statements.
</FN>
</TABLE>
24
<PAGE>
NOTES TO FINANCIAL STATEMENTS CLOVER FUNDS
September 30, 2000
1. ORGANIZATION:
TIP FUNDS (the "Trust") is organized as a Massachusetts business trust. The
Trust is registered under the Investment Company Act of 1940, as amended, as a
diversified open-end management investment company with 19 portfolios. The
financial statements included herein are those of the Clover Small Cap Value
Fund, the Clover Equity Value Fund, the Clover Max Cap Value Fund and the Clover
Fixed Income Fund (the "Funds"). The financial statements of the remaining
portfolios are presented separately. The assets of each portfolio are
segregated, and a Shareholder's interest is limited to the portfolio 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 -- Investments in equity securities which are traded on
a national exchange (or reported on the NASDAQ national market system) are
stated at the last quoted sales price if readily available for such equity
securities on each business day; other equity securities traded in the
over-the-counter market and listed equity securities for which no sale was
reported on that date are stated at the last quoted bid price. Debt
obligations exceeding sixty days to maturity for which market quotations
are readily available are valued at the most recently quoted bid price.
Debt obligations with sixty days or less remaining until maturity may be
valued at their amortized cost, which approximates market value. Subject to
the foregoing, other securities for which quotations are not readily
available or securities whose market quotations do not reflect market
value, are valued at fair value as determined in good faith by the Board of
Trustees. At September 30, 2000, the Small Cap Value Fund held DT
Industries Inc., valued under this valuation method.
FEDERAL INCOME TAXES -- It is each Fund's intention to continue to qualify
as a regulated investment company by complying with the appropriate
provisions of the Internal Revenue Code of 1986, as amended. Accordingly,
no provisions for Federal income taxes are required.
SECURITY TRANSACTIONS AND RELATED INCOME -- Security transactions are
accounted for on the date the security is purchased or sold (trade date).
Dividend income is recognized on the ex-dividend date, and interest income
is recognized on the accrual basis. Costs used in determining realized
gains and losses on the sales of investment securities are those of the
specific securities sold adjusted for the accretion and amortization of
purchase discounts and premiums during the respective holding period.
Purchase discounts and premiums on securities held by the Funds are
accreted and amortized to maturity using the scientific interest method,
which approximates the effective interest method.
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 thereon, is sufficient
in the event of the default of the counterparty. If the counterparty
defaults and the value of the collateral
25
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued) CLOVER FUNDS
September 30, 2000
declines or if the counterparty enters an insolvency proceeding,
realization of the collateral by the Funds may be delayed or limited.
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 each Fund's
assets, less liabilities, by the number of shares outstanding.
EXPENSES -- Expenses that are directly related to one of the Funds are
charged to that Fund. Other operating expenses of the Trust are prorated to
the Funds on the basis of relative daily net assets.
DISTRIBUTIONS TO SHAREHOLDERS -- Distributions from net investment income
are declared and paid quarterly to Shareholders for the Clover Small Cap
Value Fund, the Clover Equity Value Fund, and the Clover Max Cap Value Fund
and declared daily and paid monthly for the Clover Fixed Income Fund. Any
net realized capital gains on sales of securities are distributed to
Shareholders at least annually.
Distributions from net investment income and net realized capital gains are
determined in accordance with the U.S. Federal income tax regulations.
Certain 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 in the period that the differences arise. These
classifications have no effect on net assets or net asset value.
Accordingly, the following permanent differences, primarily attributable to
net operating losses and the classification of short-term capital gains and
ordinary income for tax purposes, have been reclassified to/from the
following accounts:
UNDISTRIBUTED ACCUMULATED
PAID IN NET INVESTMENT REALIZED
CAPITAL INCOME GAIN (LOSS)
FUND (000) (000) (000)
------ ------------ -------------- -----------
Small Cap Value (30) 30 --
Equity Value (31) (82) 113
Fixed Income -- (8) 8
USE OF ESTIMATES -- The preparation of financial statements in conformity
with accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the reported
amount of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
3. ORGANIZATION COSTS AND TRANSACTIONS WITH AFFILIATES:
Organization costs have been capitalized by the Funds and are being amortized
over sixty months. In the event any of the initial shares of a Fund are redeemed
by any holder thereof during the period that such Fund is amortizing its
organizational costs, the redemption proceeds payable to the holder thereof by
the Fund will be reduced by the unamortized organizational costs in the same
ratio as the number of initial shares being redeemed bears to the number of
initial shares outstanding at the time of redemption.
Certain officers of the Trust are also officers of SEI Investments Mutual Funds
Services (the "Administrator"). Such officers are paid no fees by the Trust for
serving as officers of the Trust.
26
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Concluded) CLOVER FUNDS
September 30, 2000
4. ADMINISTRATION, SHAREHOLDER SERVICING AND DISTRIBUTION AGREEMENTS:
The Trust and the Administrator are parties to an agreement under which the
Administrator provides management and administrative services for an annual fee
of .09% of the average daily net assets of the Trust up to $250 million, .07% on
the next $250 million, .06% on the next $250 million, .05% on the next $1.25
billion and .04% of such assets in excess of $2 billion. There is a minimum
annual fee of $65,000 per Fund payable to the Administrator for services
rendered to the Funds under The Administration Agreement. The Administrator may,
at its sole discretion waive all or a portion of its fees.
DST Systems, Inc. (the "Transfer Agent") serves as the transfer agent and
dividend distributing agent for the Funds under a transfer agency agreement with
the Trust.
The Trust and the Distributor (CCM Securities, Inc.) are parties to a
Distribution Agreement dated June 25, 1997. The Distributor receives no fees for
its distribution services under this agreement.
5. INVESTMENT ADVISORY AGREEMENT:
The Trust and Clover Capital Management, Inc. (the "Adviser") are parties to an
Investment Advisory Agreement under which the Adviser receives an annual fee
equal to .85% of the average daily net assets of the Clover Small Cap Value
Fund, .74% of the average daily net assets of the Clover Equity Value Fund and
the Clover Max Cap Value Fund, and .45% of the average daily net assets of the
Clover Fixed Income Fund. The Adviser has voluntarily agreed to waive all or a
portion of its fees (and to reimburse the expenses of the Funds) in order to
limit operating expenses to not more than 1.20% of the average daily net assets
for net assets below $20 million and to not more than 1.10% for net assets of
$20 million or more for the Clover Equity Value Fund. Operating expenses for the
Clover Fixed Income Fund are limited to not more than .80% of the average daily
net assets for net assets below $20 million and to not more than .75% for net
assets of $20 million or more. Operating expenses for the Clover Small Cap Value
Fund and the Clover Max Cap Value Fund are limited to 1.40% and .95%,
respectively, of the Portfolio's average daily net assets. Fee waivers and
expense reimbursements are voluntary and may be terminated at any time.
6. INVESTMENT TRANSACTIONS:
The cost of security purchases and the proceeds from security sales, other than
short-term investments, for the period ended September 30, 2000, are as follows:
CLOVER CLOVER CLOVER CLOVER
SMALL CAP EQUITY MAX CAP FIXED
VALUE VALUE VALUE INCOME
FUND FUND FUND FUND
(000) (000) (000) (000)
--------- ------ ------- ------
Purchases
Government $ -- $ -- $ -- $7,277
Other 35,979 43,946 7,792 5,634
Sales
Government $ -- $ -- $ -- $9,097
Other 21,027 66,356 6,057 3,605
The total cost of securities for federal income tax purposes at September 30,
2000 is as follows:
CLOVER CLOVER CLOVER CLOVER
SMALL CAP EQUITY MAX CAP FIXED
VALUE VALUE VALUE INCOME
FUND FUND FUND FUND
(000) (000) (000) (000)
--------- ------ ------- ------
Tax cost $33,638 $36,455 $4,779 $31,542
27
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Concluded) CLOVER FUNDS
September 30, 2000
The aggregate gross unrealized appreciation and depreciation for securities held
by the Funds at September 30, 2000, is as follows:
CLOVER CLOVER CLOVER CLOVER
SMALL CAP EQUITY MAX CAP FIXED
VALUE VALUE VALUE INCOME
FUND FUND FUND FUND
(000) (000) (000) (000)
--------- ------ ------ ------
Aggregate
gross
unrealized
appreciation $ 6,803 $10,747 $ 527 $ 40
Aggregate
gross
unrealized
depreciation (4,629) (2,194) (175) (545)
------- ------- ----- -----
Book net
unrealized
appreciation/
(depreciation) 2,174 8,553 352 (505)
Less: tax basis
adjustments (26) (278) (2) --
------- ------- ----- -----
Tax net unrealized
appreciation/
(depreciation) $2,148 $ 8,275 $ 350 $(505)
======= ======= ===== =====
For Federal income tax purposes the Clover Fixed Income Fund had a capital loss
carryforward of $151,519 at September 30, 2000 which may be carried forward and
applied against future capital gains. The capital loss carryforward expires in
2008.
7. CONCENTRATION OF CREDIT RISK:
The Clover Fixed Income Fund invests primarily in fixed income securities which
are rated in the top four rating categories by either Moody's Investors
Services, Inc. ("Moody's") or Standard & Poor's Ratings Group ("S&P"), or if not
rated, determined by the Adviser to be of comparable quality. The ability of the
issuers of the securities held by the Fund to meet their obligations may be
affected by economic developments in a specific industry, state or region.
The summary of credit quality rating for securities held by the Fund at
September 30, 2000, is as follows:
S&P MOODY'S
--------------- --------------
Bonds: AAA 49.34% AAA 48.95%
AA 27.37% AA 32.40%
A 11.92% A 12.26%
BBB 3.17% BBB 0.00%
B 4.00% B 4.00%
NR 4.20% NR 2.39%
------ -------
100.00% 100.00%
28
<PAGE>
REPORT OF INDEPENDENT AUDITORS
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES
TIP FUNDS -- CLOVER SMALL CAP VALUE FUND, CLOVER EQUITY VALUE FUND, CLOVER MAX
CAP VALUE FUND, AND CLOVER FIXED INCOME FUND
We have audited the accompanying statements of net assets of the TIP Funds
- Clover Small Cap Value Fund, Clover Equity Value Fund, Clover Max Cap Value
Fund, and Clover Fixed Income Fund as of September 30, 2000, and the related
statements of operations, the statements of changes in net assets, and the
financial highlights for the periods presented therein, except for the financial
highlights for the years ended October 31, 1995 and October 31, 1996 for Clover
Equity Value Fund, Clover Small Cap Value Fund, and Clover Fixed Income Fund.
These financial statements and financial highlights are the responsibility of
the Funds' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits. The financial
highlights for the periods ended October 31, 1995 and October 31, 1996 for
Clover Equity Value Fund, Clover Small Cap Value Fund, and Clover Fixed Income
Fund were audited by other auditors whose report dated December 6, 1996
expressed an unqualified opinion on those statements and financial highlights.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
and financial highlights 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 September 30, 2000, 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 and financial highlights referred
to above present fairly, in all material respects, the financial position of the
TIP Funds -- Clover Small Cap Value Fund, Clover Equity Value Fund, Clover Max
Cap Value Fund, and Clover Fixed Income Fund at September 30, 2000, the results
of their operations, the changes in their net assets for each the periods
presented therein and their financial highlights for the periods ended September
30, 1997 through September 30, 2000, in conformity with accounting principles
generally accepted in the United States.
/S/ SIGNATURE ERNST & YOUNG LLP
Philadelphia, Pennsylvania
November 10, 2000
29
<PAGE>
NOTICE TO SHAREHOLDERS
OF
CLOVER FUNDS
(UNAUDITED)
For shareholders that do not have a September 30, 2000 tax year end, this notice
is for informational purposes only. For shareholders with a September 30, 2000
taxable year end, please consult your tax advisor as to the pertinence of this
notice. For the fiscal year ended September 30, 2000, each portfolio is
designating the following items with regard to distributions paid during the
year.
LONG TERM
(20% RATE) ORDINARY
CAPITAL GAIN INCOME TAX EXEMPT
PORTFOLIO DISTRIBUTIONS DISTRIBUTIONS INTEREST
--------- ------------- ------------- ----------
Clover Small Cap Value Fund 81.44% 18.56% 0.00%
Clover Equity Value Fund 94.71% 5.29% 0.00%
Clover Max Cap Value Fund 9.35% 90.65% 0.00%
Clover Fixed Income Fund 0.00% 100.00% 0.00%
TOTAL QUALIFYING
PORTFOLIO DISTRIBUTIONS DIVIDENDS (1)
--------- ------------- -------------
Clover Small Cap Value Fund 100.00% 65.73%
Clover Equity Value Fund 100.00% 100.00%
Clover Max Cap Value Fund 100.00% 45.54%
Clover Fixed Income Fund 100.00% 0.00%
----------
(1) Qualifying dividends represent dividends which qualify for the corporate
dividends received deduction and are reflected as a percentage of "Ordinary
Income Distributions".
30
<PAGE>
TRUST
TIP Funds
P.O. Box 219805
Kansas City, MO 64121-9805
INVESTMENT ADVISER
Clover Capital Management, Inc.
DISTRIBUTOR
CCM Securities, Inc.
ADMINISTRATOR
SEI Investments Mutual Funds Services
LEGAL COUNSEL
Morgan, Lewis & Bockius LLP
INDEPENDENT AUDITORS
Ernst & Young LLP
To open an account, receive account information, make inquiries, or request
literature simply call 1-800-224-6312
THIS REPORT WAS PREPARED FOR SHAREHOLDERS IN THE CLOVER FUNDS. IT MAY BE
DISTRIBUTED TO OTHERS ONLY IF PRECEDED OR ACCOMPANIED BY A PROSPECTUS, WHICH
CONTAINS DETAILED INFORMATION.
