<PAGE>
CAPITOL SQUARE
FUNDS
Semi-Annual Report
March 31, 1997
(Unaudited)
(Artist's Rendition of Capitol Square)
"A View from Broad and High"
-------------------------
Dillon Capital Management
-------------------------
Investment Counsel
<PAGE>
<TABLE>
CAPITOL SQUARE FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
March 31, 1997 (Unaudited)
<CAPTION>
Capitol Square Capitol Square Capitol Square
Large Cap Small Cap Bond
Fund Fund Fund
<S> <C> <C> <C>
ASSETS
Investments in securities:
At acquisition cost $ 163,726 $ 195,472 $ 484,210
============= ============= =============
At value (Note 1) $ 159,039 $ 199,834 $ 474,458
Cash 10,082 19,988 ------
Dividends and interest receivable 257 128 10,314
------------- ------------- -------------
TOTAL ASSETS 169,378 219,950 484,772
------------- ------------- -------------
LIABILITIES
Payable for securities purchased ------ 7,928 ------
Payable to Adviser (Note 3) 222 315 412
------------- ------------- -------------
TOTAL LIABILITIES 222 8,243 412
------------- ------------- -------------
NET ASSETS $ 169,156 $ 211,707 $ 484,360
============= ============= =============
Net assets consist of:
Capital shares $ 171,076 $ 206,145 $ 494,114
Undistributed net investment income 824 420 ------
Undistributed net realized gains (losses)
from securities transactions 1,943 780 (2)
Net unrealized appreciation (depreciation)
on investments (4,687) 4,362 (9,752)
------------- ------------- --------------
Net assets $ 169,156 $ 211,707 $ 484,360
============= ============= =============
Shares of beneficial interest outstanding
(unlimited number of shares authorized,
no par value) 16,857 20,497 48,099
============= ============= =============
Net asset value, redemption price and
offering price per share (Note 1) $ 10.03 $ 10.33 $ 10.07
============= ============= =============
<FN>
See accompanying notes to financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
CAPITOL SQUARE FUNDS
STATEMENTS OF OPERATIONS
For the Six Months Ended March 31, 1997 (Unaudited)
<CAPTION>
Capitol Square Capitol Square Capitol Square
Large Cap Small Cap Bond
Fund Fund Fund
<S> <C> <C> <C>
INVESTMENT INCOME
Dividends $ 1,369 $ 1,037 $ 87
Interest 171 292 10,489
------------- ------------- -------------
TOTAL INVESTMENT INCOME 1,540 1,329 10,576
------------- ------------- -------------
EXPENSES
Investment management fees 716 909 1,749
------------- ------------- -------------
NET INVESTMENT INCOME 824 420 8,827
------------- ------------- -------------
REALIZED AND UNREALIZED GAINS (LOSSES)
ON INVESTMENTS
Net realized gains (losses) from security
transactions 1,943 780 (2)
Net change in unrealized appreciation/
depreciation on investments (4,687) 4,362 (9,752)
------------- ------------- -------------
NET REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS (2,744) 5,142 (9,754)
------------- ------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS $ (1,920) $ 5,562 $ (927)
============= ============= =============
<FN>
See accompanying notes to financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
CAPITOL SQUARE FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ended March 31, 1997 (Unaudited)
<CAPTION>
Capitol Square Capitol Square Capitol Square
Large Cap Small Cap Bond
Fund Fund Fund
<S> <C> <C> <C>
FROM OPERATIONS:
Net investment income $ 824 $ 420 $ 8,827
Net realized gains (losses) from security
transactions 1,943 780 (2)
Net change in unrealized appreciation/
depreciation on investments (4,687) 4,362 (9,752)
------------- ------------- -------------
Net increase (decrease) in net assets from
operations (1,920) 5,562 (927)
------------- ------------- -------------
FROM DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income ----- ----- (8,827)
------------- ------------- -------------
Decrease in net assets from distributions to
shareholders ----- ----- (8,827)
------------- ------------- -------------
FROM CAPITAL SHARE TRANSACTIONS (A):
Proceeds from shares sold 141,076 176,145 486,830
Net asset value of shares issued in
reinvestment of distributions to
shareholders ----- ----- 8,689
Payments for shares redeemed ----- ----- (41,405)
------------- ------------- -------------
Net increase in net assets from capital share
transactions 141,076 176,145 454,114
------------- ------------- -------------
TOTAL INCREASE IN NET ASSETS 139,156 181,707 444,360
NET ASSETS:
Beginning of period (Note 1) 30,000 30,000 40,000
------------- ------------- -------------
End of period $ 169,156 $ 211,707 $ 484,360
============= ============= =============
UNDISTRIBUTED NET INVESTMENT INCOME $ 824 $ 420 $ -----
============= ============= =============
(A)SUMMARY OF CAPITAL SHARE ACTIVITY:
Shares sold 13,857 17,497 47,283
Shares issued in reinvestment of
distributions to shareholders ----- ----- 852
Shares redeemed ----- ----- (4,036)
------------- ------------- -------------
Net increase in shares outstanding 13,857 17,497 44,099
Shares outstanding, beginning of
period (Note 1) 3,000 3,000 4,000
------------- ------------- -------------
Shares outstanding, end of period 16,857 20,497 48,099
============= ============= =============
<FN>
See accompanying notes to financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
CAPITOL SQUARE FUNDS
FINANCIAL HIGHLIGHTS
For the Periods Ended March 31, 1997 (A) (Unaudited)
<CAPTION>
Capitol Square Capitol Square Capitol Square
Large Cap Small Cap Bond
Fund Fund Fund
Per share data for a share outstanding
throughout each period:
<S> <C> <C> <C>
Net asset value at beginning of period $ 10.00 $ 10.00 $ 10.00
-------------- ------------- --------------
Income from investment operations:
Net investment income 0.05 0.02 0.26
Net realized and unrealized gains
(losses) on investments (0.02) 0.31 0.07
-------------- ------------- --------------
Total from investment operations 0.03 0.33 0.33
-------------- ------------- --------------
Less distributions:
Dividends from net investment income ---- ---- (0.26)
-------------- -------------- --------------
Total distributions ---- ---- (0.26)
-------------- -------------- --------------
Net asset value at end of period $ 10.03 $ 10.33 $ 10.07
============== ============== ==============
Ratios and supplemental data:
Total return (not annualized) 0.30% 3.30% 3.28%
============== ============== ==============
Net assets at end of period $ 169,156 $ 211,707 $ 484,360
============== ============== ==============
Ratio of expenses to average net
assets (annualized) 1.50% 1.75% 1.00%
Ratio of net investment income to
average net assets (annualized) 1.71% 0.80% 5.00%
Portfolio turnover rate (annualized) 33% 10% 0%
Average commission rate per share $0.0649 $0.0548 ----
<FN>
(A)Represents the period from the initial public offering of shares (November 25, 1996 for the
Large Cap Fund and Small Cap Fund and October 1, 1996 for the Bond Fund) through March 31, 1997.
See accompanying notes to financial statements.
</FN>
</TABLE>
<PAGE>
CAPITOL SQUARE FUNDS
NOTES TO FINANCIAL STATEMENTS
March 31, 1997 (Unaudited)
1. Significant Accounting Policies
Capitol Square Funds (the Trust) is registered under the Investment Company Act
of 1940, as amended (the 1940 Act), as an open-end management investment
company. The Trust was organized as an Ohio business trust on July 2, 1996. The
Trust currently offers three diversified series of shares to investors: the
Capitol Square Large Cap Fund, the Capitol Square Small Cap Fund and the Capitol
Square Bond Fund (collectively, the Funds). The Trust was capitalized on August
23, 1996, when an affiliate of the Funds' investment adviser, Dillon Capital
Management (the Adviser), purchased the initial shares of each Fund at $10.00
per share. The public offering of shares of the Bond Fund commenced on October
1, 1996 and the public offering of shares of each of the Large Cap Fund and the
Small Cap Fund commenced on November 25, 1996. The Trust had no operations prior
to the public offering of shares except for the initial issuance of shares.
The Capitol Square Large Cap Fund seeks long-term capital appreciation through
investment in common stocks of companies whose market value is greater than one
billion dollars. Dividend and interest income is only an incidental
consideration to the Fund's investment objective. The Capital Square Small Cap
Fund seeks long-term capital appreciation through investment in common stocks of
companies whose market value is less than one billion dollars. Dividend and
interest income is only an incidental consideration to the Fund's investment
objective. The Capitol Square Bond Fund seeks both income and capital
appreciation through investment in fixed income securities. Under normal market
conditions, at least 65% of its total assets will be invested in U.S. Government
obligations and other debt securities rated BBB or higher by Standard & Poor's
Ratings Group or Baa by Moody's Investors Service, Inc., or the equivalent.
The following is a summary of the Funds' significant accounting policies:
Organization costs -- All expenses associated with the organization of the Trust
were paid by the Adviser.
Securities valuation -- Each Fund's portfolio securities are valued as of the
close of business of the regular session of trading on the New York Stock
Exchange (currently 4:00 p.m., Eastern time). Securities which are traded
over-the-counter are valued based on the last sales price, if available,
otherwise, at the last quoted bid price. Securities traded on a national stock
exchange are valued based on the closing price on the principal exchange where
the security is traded.
Share valuation -- The net asset value per share of each Fund is calculated
daily by dividing the total value of each Fund's assets, less liabilities, by
the number of shares outstanding, rounded to the nearest cent. The offering and
redemption price per share of each Fund is equal to the net asset value per
share.
Investment income -- Dividend income is recorded on the ex-dividend date.
Interest income is accrued as earned.
<PAGE>
CAPITOL SQUARE FUNDS
NOTES TO FINANCIAL STATEMENTS
March 31, 1997 (Unaudited)
Distributions to shareholders -- The Large Cap Fund and Small Cap Fund each
expects to distribute substantially all of its net investment income, if any, on
an annual basis. All of the net investment income of the Bond Fund is declared
as a dividend to shareholders of record on each business day of the Trust and
paid monthly. Each Fund expects to distribute any net realized long-term capital
gains at least once each year. Management will determine the timing and
frequency of the distributions of any net realized short-term capital gains.
Dividends from net investment income and capital gain distributions are
determined in accordance with income tax regulations, which may differ from
generally accepted accounting principles.
Security transactions -- Security transactions are accounted for on the trade
date. Securities sold are valued on a specific identification basis.
Estimates -- The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
Federal income tax -- It is each Fund's policy to comply with the special
provisions of the Internal Revenue Code (the Code) available to regulated
investment companies. As provided therein, in any fiscal year in which the Fund
so qualifies and distributes at least 90% of its taxable net income, the Fund
(but not the shareholders) will be relieved of federal income tax on the income
distributed. Accordingly, no provision for income taxes has been made.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also each Fund's intention to declare as dividends
in each calendar year at least 98% of its net investment income (earned during
the calendar year) and 98% of its net realized capital gains (earned during the
twelve months ended October 31) plus undistributed amounts from prior years.
The following information is based upon the federal income tax cost of portfolio
investments as of March 31, 1997:
Capitol Square Capitol Square Capitol Square
Large Cap Fund Small Cap Fund Bond Fund
Gross unrealized appreciation $ 2,873 $ 10,410 $ -----
Gross unrealized depreciation (7,560) (6,048) (9,752)
--------- --------- ---------
Net unrealized appreciation
(depreciation) $ (4,687) $ 4,362 $ (9,752)
========= ========= =========
Federal income tax cost of
portfolio investments $ 163,726 $ 195,472 $ 484,210
========= ========= =========
<PAGE>
CAPITOL SQUARE FUNDS
NOTES TO FINANCIAL STATEMENTS
March 31, 1997 (Unaudited)
2. Investment Transactions
During the period ended March 31, 1997, purchases and proceeds from sales of
portfolio securities, other than short-term investments, amounted to $172,108
and $11,883, respectively, for the Capitol Square Large Cap Fund, $195,416 and
$3,615, respectively, for the Capitol Square Small Cap Fund, and $476,138 and
$0, respectively, for the Capitol Square Bond Fund.
3. Transactions with Affiliates
The President of the Trust is also the President of the Adviser. Certain other
trustees and officers of the Trust are also officers of the Adviser or of
Countrywide Fund Services, Inc. (CFS), the administrative services agent,
shareholder servicing and transfer agent, and accounting services agent for the
Trust, or of Countrywide Investments, Inc., the sub-adviser for the Capitol
Square Bond Fund.
INVESTMENT ADVISORY AGREEMENT
The Fund's investments are managed by the Adviser pursuant to the terms of an
Investment Advisory Agreement. The Capitol Square Large Cap Fund pays the
Adviser a fee equal to the annual rate of 1.50% of the average value of its
daily net assets up to $50 million; 1.35% of such assets from $50 million to
$100 million; and 1.20% of such assets in excess of $100 million. The Capitol
Square Small Cap Fund pays the Adviser a fee equal to the annual rate of 1.75%
of the average value of its daily net assets up to $50 million; 1.60% of such
assets from $50 million to $100 million; and 1.45% of such assets in excess of
$100 million. The Capitol Square Bond Fund pays the Adviser a fee equal to the
annual rate of 1.00% of the average value of its daily net assets up to $50
million; 0.90% of such assets from $50 million to $100 million; and 0.80% of
such assets in excess of $100 million. The Adviser pays all operating expenses
of each Fund except brokerage commissions, taxes, interest, fees and expenses of
independent Trustees and any extraordinary expenses.
In addition, the Adviser is contractually obligated to reduce its investment
management fee in an amount equal to the fees and expenses, if any, of the
Trust's independent Trustees.
Countrywide Investments, Inc. (the Sub-Adviser) has been retained by the Adviser
to manage the Bond Fund's investments. The Adviser (not the Fund) pays the
Sub-Adviser a monthly fee at the rate of 12 1/2% of the "net management fees"
the Adviser receives for its services to the Bond Fund. For purposes of
calculating this fee, "net management fees" are defined as the advisory fees
paid to the Adviser less the Adviser's operating costs, which include audit
fees, legal fees, custody fees, Trustee fees and expenses, insurance costs,
state registration filing fees, SEC filing fees and expenses, pricing fees,
costs of reports to shareholders, transfer agent out-of-pocket expenses, fund
accounting licensing fees, and any other direct costs incurred by the Adviser in
the operation and administration of the Trust.
<PAGE>
CAPITOL SQUARE FUNDS
NOTES TO FINANCIAL STATEMENTS
March 31, 1997 (Unaudited)
ADMINISTRATION, ACCOUNTING AND TRANSFER AGENCY AGREEMENT
Under the terms of the Administration, Accounting, and Transfer Agency Agreement
between the Trust, the Adviser and CFS, CFS supplies non-investment related
statistical and research data, internal regulatory compliance services and
executive and administrative services for each Fund. CFS supervises the
preparation of tax returns for each Fund, reports to shareholders of each Fund,
reports to and filings with the Securities and Exchange Commission and state
securities commissions and materials for meetings of the Board of Trustees. In
addition, CFS maintains the records of each shareholder's account, answers
shareholders' inquiries concerning their accounts, processes purchases and
redemptions of each Fund's shares, acts as dividend and distribution disbursing
agent and performs other shareholder service functions. CFS also calculates the
daily net asset value per share and maintains the financial books and records of
each Fund. For the performance of these services, the Adviser (not the Funds)
pays CFS a monthly fee at the rate of 50% of the "net management fees" (as
defined above) the Adviser receives for its services with respect to the Large
Cap Fund and the Small Cap Fund, and 37 1/2% of the "net management fees" it
receives for its services with respect to the Bond Fund.
<PAGE>
CAPITOL SQUARE LARGE CAP FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 1997 (Unaudited)
Market
Shares COMMON STOCK -- 93.1% Value
------- ------------------------------ ------------
BASIC MATERIALS - 12.3%
50 Dow Chemical Company $ 4,000
50 Georgia-Pacific Corp. 3,625
250 RPM, Inc. 4,156
100 USX-US Steel Group, Inc. 2,663
100 Williamette Industries, Inc. 6,250
-----------
20,694
-----------
ENERGY - 5.0%
150 MAPCO, Inc. 4,650
200 Oryx Energy Company * 3,850
-----------
8,500
-----------
INDUSTRIAL - 15.4%
200 Cincinnati Milacron, Inc. 3,750
100 Fluor Corp. 5,250
150 Illinois Central Corp. 4,725
100 Lincoln Electric Company - Class A 3,225
200 Martin Marietta Materials, Inc. 5,150
100 Olin Corp. 3,975
-----------
26,075
-----------
CONSUMER, CYCLICAL - 11.7%
50 Arrow Electronics, Inc. * 2,819
200 AutoZone, Inc. * 4,500
150 Chrysler Corp. 4,500
300 Clayton Homes, Inc. 3,825
100 Dayton-Hudson Corp. 4,175
-----------
19,819
-----------
CONSUMER, NON-CYCLICAL - 16.2%
200 Black & Decker Corp. 6,425
100 Newell Company 3,350
100 Pharmecia & Upjohn, Inc. 3,663
50 Philip Morris Companies., Inc. 5,706
100 Tupperware Corp. 3,350
200 Whitman Corp. 4,900
-----------
27,394
-----------
<PAGE>
Market
Shares COMMON STOCK -- 93.1% Value
------- ------------------------------ ------------
TECHNOLOGY - 19.9%
100 AT&T Corp. $ 3,475
200 Atmel Corp. * 4,788
100 Ceridian Corp. 3,587
100 Computer Associates International, Inc. 3,888
200 General Instrument Corp. * 4,575
50 IBM Corp. 6,869
50 Phelps Dodge Corp. 3,656
50 Xerox Corp. 2,843
-----------
33,681
-----------
FINANCIAL SERVICES - 7.2%
100 Banc One Corp. 3,975
150 Countrywide Credit Industries, Inc. 3,712
100 Hartford Steam Boiler Inspection &
Insurance Company 4,475
-----------
12,162
-----------
UTILITIES - 5.4%
150 CMS Energy Corp. 4,931
200 Southern Company 4,225
-----------
9,156
-----------
TOTAL COMMON STOCK (COST $162,168) 157,481
-----------
CASH EQUIVALENTS - .9%
1,558 Star Treasury Money Market Fund (Cost $1,558) 1,558
------- -----------
TOTAL INVESTMENTS - 94.0% (COST $163,726) 159,039
-----------
OTHER ASSETS AND LIABILITIES, NET -- 6.0% 10,117
-----------
NET ASSETS -- 100.0% $ 169,156
===========
* Non-income producing securities.
See accompanying notes to financial statements.
<PAGE>
CAPITOL SQUARE SMALL CAP FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 1997 (Unaudited)
Market
Shares COMMON STOCK -- 93.0% Value
------- ------------------------------ ------------
BASIC MATERIALS - 10.8%
100 Cambrex Corp. $ 3,350
100 Carpenter Technology Corp. 3,825
150 Mississippi Chemical Corp. 3,581
400 Wellman, Inc. 7,000
200 Wolverine Tube, Inc. * 5,200
-----------
22,956
-----------
ENERGY - 7.1%
200 Benton Oil & Gas Company * 3,100
200 MAPCO, Inc. 6,200
300 Oryx Energy Co. * 5,775
-----------
15,075
-----------
INDUSTRIAL - 14.1%
200 Cincinnati Milacron, Inc. 3,750
350 Figgie International, Inc. - Class B * 3,937
150 Lincoln Electric Company - Class A 4,838
200 Olin Corp. 7,950
200 Pittston Brink's Group 5,050
200 Silicon Valley Group, Inc. * 4,300
-----------
29,825
-----------
CONSUMER, CYCLICAL - 12.5%
200 AutoZone, Inc. * 4,500
300 Clayton Homes, Inc. 3,825
200 Friedman's, Inc. - Class A * 3,175
200 Heritage Media Corp. * 3,675
400 Titan Wheel International, Inc. 5,900
300 Walbro Corp. 5,288
-----------
26,363
-----------
CONSUMER, NON-CYCLICAL - 17.5%
300 Access Health, Inc. * 4,313
200 Black & Decker Corp. 6,425
400 Healthsource, Inc. * 8,200
400 Michael Foods, Inc. 4,150
400 Sun Healthcare Group, Inc. * 5,750
100 Tupperware Corp. 3,350
200 Whitman Corp. 4,900
-----------
37,088
-----------
<PAGE>
Market
Shares COMMON STOCK -- 93.0% Value
------- ------------------------------ ------------
TECHNOLOGY - 10.5%
200 Atmel Corp. * $ 4,787
100 Ceridian Corp. 3,588
100 Lam Research Corp. * 3,375
200 Marshall Industries * 6,300
200 SEI Investments Company 4,200
-----------
22,250
-----------
FINANCIAL SERVICES - 14.2%
200 Coast Savings Financial, Inc. * 7,875
200 Countrywide Credit Industries, Inc. 4,950
200 First Republic Bancorp, Inc. * 4,450
300 Gryphon Holdings, Inc. * 4,275
100 Hartford Steam Boiler Inspection &
Insurance Company 4,475
200 Stewart Information Services Corp. 4,125
-----------
30,150
-----------
UTILITIES - 6.3%
300 Cabot Oil & Gas Corp. 5,250
200 Nevada Power Company 3,975
300 Southwestern Energy Company 4,012
-----------
13,237
-----------
TOTAL COMMON STOCK (COST $192,582) 196,944
-----------
CASH EQUIVALENTS -- 1.4%
2,890 Star Treasury Money Market Fund (Cost $2,890) 2,890
------- -----------
TOTAL INVESTMENTS - 94.4% (COST $195,472) 199,834
-----------
OTHER ASSETS AND LIABILITIES, NET -- 5.6% 11,873
-----------
NET ASSETS -- 100.0% $ 211,707
===========
* Non-income producing securities.
See accompanying notes to financial statements.
<PAGE>
CAPITOL SQUARE BOND FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 1997 (Unaudited)
Par Market
Value U.S. GOVERNMENT & AGENCY BONDS -- 96.2% Value
- --------------------------------------------------------------------------------
U.S. TREASURY NOTES -- 55.3%
$ 84,000 U.S. Treasury Notes, 6.00%, 8/15/99 $ 83,029
150,000 U.S. Treasury Notes, 6.25%, 10/31/01 146,953
38,000 U.S. Treasury Notes, 7.00%, 7/15/06 38,071
- ---------- -----------
272,000 TOTAL U.S. TREASURY NOTES (COST $274,756) 268,053
- ---------- -----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 40.9%
150,000 Federal National Mortgage Assoc., 6.74%, 5/7/01 149,230
50,000 Federal National Mortgage Assoc., 6.50%, 11/27/01 48,878
- ---------- -----------
200,000 TOTAL FEDERAL NATIONAL MORTGAGE ASSOC. (COST $201,157) 198,108
- ---------- -----------
CASH EQUIVALENTS -- 1.7%
8,297 Star Treasury Money Market Fund (Cost $8,297) 8,297
- ---------- -----------
TOTAL INVESTMENTS - 97.9% (COST $484,210) 474,458
-----------
OTHER ASSETS AND LIABILITIES, NET -- 2.1% 9,902
-----------
NET ASSETS -- 100.0% $ 484,360
===========
See accompanying notes to financial statements.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0001018134
<NAME> CAPITOL SQUARE FUNDS
<SERIES>
<NUMBER> 1
<NAME> CAPITOL SQUARE LARGE CAP FUND
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> MAR-31-1997
<INVESTMENTS-AT-COST> 163,726
<INVESTMENTS-AT-VALUE> 159,039
<RECEIVABLES> 257
<ASSETS-OTHER> 10,082
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 169,378
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 222
<TOTAL-LIABILITIES> 222
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 171,076
<SHARES-COMMON-STOCK> 16,857
<SHARES-COMMON-PRIOR> 3,000
<ACCUMULATED-NII-CURRENT> 824
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1,943
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (4,687)
<NET-ASSETS> 169,156
<DIVIDEND-INCOME> 1,369
<INTEREST-INCOME> 171
<OTHER-INCOME> 0
<EXPENSES-NET> 716
<NET-INVESTMENT-INCOME> 824
<REALIZED-GAINS-CURRENT> 1,943
<APPREC-INCREASE-CURRENT> (4,687)
<NET-CHANGE-FROM-OPS> (1,920)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 13,857
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 139,156
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 716
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 716
<AVERAGE-NET-ASSETS> 138,330
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> .05
<PER-SHARE-GAIN-APPREC> (.02)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.03
<EXPENSE-RATIO> 1.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0001018134
<NAME> CAPITOL SQUARE FUNDS
<SERIES>
<NUMBER> 2
<NAME> CAPITOL SQUARE SMALL CAP FUND
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> MAR-31-1997
<INVESTMENTS-AT-COST> 195,472
<INVESTMENTS-AT-VALUE> 199,834
<RECEIVABLES> 128
<ASSETS-OTHER> 19,988
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 219,950
<PAYABLE-FOR-SECURITIES> 7,928
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 315
<TOTAL-LIABILITIES> 8,243
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 206,145
<SHARES-COMMON-STOCK> 20,497
<SHARES-COMMON-PRIOR> 3,000
<ACCUMULATED-NII-CURRENT> 420
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 780
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 4,362
<NET-ASSETS> 211,707
<DIVIDEND-INCOME> 1,037
<INTEREST-INCOME> 292
<OTHER-INCOME> 0
<EXPENSES-NET> 909
<NET-INVESTMENT-INCOME> 420
<REALIZED-GAINS-CURRENT> 780
<APPREC-INCREASE-CURRENT> 4,362
<NET-CHANGE-FROM-OPS> 5,562
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 17,497
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 181,707
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 909
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 909
<AVERAGE-NET-ASSETS> 150,700
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> .02
<PER-SHARE-GAIN-APPREC> .31
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.33
<EXPENSE-RATIO> 1.75
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0001018134
<NAME> CAPITOL SQUARE FUNDS
<SERIES>
<NUMBER> 3
<NAME> CAPITOL SQUARE BOND FUND
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> MAR-31-1997
<INVESTMENTS-AT-COST> 484,210
<INVESTMENTS-AT-VALUE> 474,458
<RECEIVABLES> 10,314
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 484,772
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 412
<TOTAL-LIABILITIES> 412
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 494,114
<SHARES-COMMON-STOCK> 48,099
<SHARES-COMMON-PRIOR> 4,000
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (2)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (9,752)
<NET-ASSETS> 484,360
<DIVIDEND-INCOME> 87
<INTEREST-INCOME> 10,489
<OTHER-INCOME> 0
<EXPENSES-NET> 1,749
<NET-INVESTMENT-INCOME> 8,827
<REALIZED-GAINS-CURRENT> (2)
<APPREC-INCREASE-CURRENT> (9,752)
<NET-CHANGE-FROM-OPS> (927)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 8,827
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 47,283
<NUMBER-OF-SHARES-REDEEMED> 4,036
<SHARES-REINVESTED> 852
<NET-CHANGE-IN-ASSETS> 444,360
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,749
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,749
<AVERAGE-NET-ASSETS> 353,728
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> .26
<PER-SHARE-GAIN-APPREC> .07
<PER-SHARE-DIVIDEND> (.26)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.07
<EXPENSE-RATIO> 1.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
