<PAGE> 1
SEMI-ANNUAL REPORT
As of June 30, 1997
[Pacific Innovations Trust Logo]
--------------------
Not FDIC Insured
--------------------
<PAGE> 2
SEMI-ANNUAL REPORT SHAREHOLDER LETTER
August 11, 1997
Dear Shareholders:
We are pleased to share with you the first semi-annual report, dated June
30, 1997, for the Pacific Innovations Variable Annuity and Pacific Innovations
Trust (both "Pacific Innovations"). Offered by Pacific Mutual Life Insurance
Company, Pacific Innovations is a flexible premium deferred variable annuity
contract available to individuals as well as certain tax-qualified retirement
plans.
In addition to a Fixed Investment Option, seven Variable Investment Options
are currently available, each one investing in shares of a corresponding Fund of
the Pacific Innovations Trust. Five of the Funds are advised by Bank of America:
Money Market Fund, Capital Income Fund, Blue Chip Fund, Mid-Cap Equity Fund and
Aggressive Growth Fund. Two other funds, the Managed Bond Fund and the
International Fund, are sub-advised by Scudder, Stevens & Clark, Inc., and
Wellington Management Company, LLP, respectively.
Thank you for your support of Pacific Innovations. We look forward to
continued growth in assets for the remainder of 1997 and beyond.
Sincerely,
/s/ Edward S. Bottum
Edward S. Bottum
Chairman
Pacific Innovations Trust
<PAGE> 3
PACIFIC INNOVATIONS TRUST
SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 1997 (UNAUDITED)
MONEY MARKET FUND
MANAGED BOND FUND
CAPITAL INCOME FUND
BLUE CHIP FUND
MID-CAP EQUITY FUND
AGGRESSIVE GROWTH FUND
INTERNATIONAL FUND
1
<PAGE> 4
MONEY MARKET FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MATURITY PAR
DATE (000) VALUE
-------- ------ ----------
<S> <C> <C> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 67.7%
FEDERAL AGRICULTURAL MORTGAGE CORP. -- 3.9%
5.43%....................... 07/21/97 $ 212 $ 211,360
----------
FEDERAL FARM CREDIT BANK -- 13.5%
5.48%....................... 07/11/97 100 99,848
5.42%....................... 07/23/97 140 139,536
5.44%....................... 08/08/97 100 99,426
5.44%....................... 09/04/97 100 99,018
5.93%....................... 07/01/97 300 300,000
----------
TOTAL FEDERAL FARM CREDIT BANK.......... 737,828
----------
FEDERAL HOME LOAN BANK -- 17.9%
5.50%....................... 08/07/97 125 124,293
5.47%....................... 09/03/97 100 99,028
5.43%....................... 11/07/97 100 98,054
5.47%....................... 12/11/97 175 170,666
6.00%....................... 09/24/97 100 100,067
6.00%....................... 09/30/97 385 385,252
----------
TOTAL FEDERAL HOME LOAN BANK............ 977,360
----------
FEDERAL HOME LOAN MORTGAGE CORP. -- 13.9%
5.43%....................... 07/21/97 46 45,861
5.53%....................... 08/06/97 167 166,077
5.42%....................... 08/13/97 100 99,353
5.44%....................... 08/13/97 100 99,350
5.43%....................... 09/04/97 150 148,529
5.47%....................... 09/04/97 50 49,506
5.49%....................... 09/04/97 100 99,009
5.44%....................... 09/16/97 50 49,418
----------
TOTAL FEDERAL HOME LOAN MORTGAGE
CORP.................................. 757,103
----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 18.5%
5.51%....................... 08/27/97 180 178,430
5.47%....................... 09/05/97 150 148,496
5.49%....................... 09/05/97 50 49,497
5.55%....................... 09/18/97 60 59,269
5.43%....................... 10/20/97 400 393,303
5.48%....................... 10/20/97 180 176,959
----------
TOTAL FEDERAL NATIONAL MORTGAGE DISCOUNT
NOTES................................. 1,005,954
----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(COST $3,689,605)......................... 3,689,605
----------
<CAPTION>
MATURITY PAR
DATE (000) VALUE
-------- ------ ----------
<S> <C> <C> <C>
REPURCHASE AGREEMENTS -- 31.9%
Dean Witter Reynolds, Inc.
6.15% dated 06/30/97,
repurchase price $1,250,214
(collateralized by Federal
National Mortgage Association,
par value $439,835 and
$926,566, market value
$443,010 and $831,990 due
02/01/17 and 12/01/25,
respectively)................. 07/01/97 $1,250 $1,250,000
HSBC Securities, Inc.
6.15% dated 06/30/97,
repurchase price $489,084
(collateralized by Federal
National Mortgage Association,
par value $150,000, $331,143
and $135,000, market value
$106,607, $268,448 and
$127,138 due 02/01/09,
09/01/10 and 09/01/11,
respectively)................. 07/01/97 489 489,000
----------
TOTAL REPURCHASE AGREEMENTS (COST
$1,739,000)............................... 1,739,000
----------
TOTAL INVESTMENTS -- 99.6%
(COST $5,428,605)......................... 5,428,605
----------
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 0.4%....................... 21,732
----------
NET ASSETS -- 100.0%........................ $5,450,337
==========
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
2
<PAGE> 5
MANAGED BOND FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MATURITY PAR
DATE (000) VALUE
-------- ------- ----------
<S> <C> <C> <C>
CORPORATE OBLIGATIONS -- 23.0%
AEROSPACE -- 2.3%
Northrop Gruman Corp. Notes
7.00%...................... 03/01/06 $ 150 $ 147,423
----------
FINANCIAL -- BANK & TRUST -- 10.3%
Deutsche Bank Financial Notes
7.50%...................... 04/25/09 250 254,063
Royal Bank of Scotland Notes
7.38%...................... 04/01/06 250 246,563
Wells Fargo Global Notes
6.13%...................... 11/01/03 150 143,438
----------
TOTAL FINANCIAL -- BANK & TRUST........ 644,064
----------
REAL ESTATE -- 6.3%
Avalon Properties Notes
7.38%...................... 09/15/02 100 100,625
Simon Debartolo Group Notes
6.88%...................... 11/15/06 100 97,250
Spieker Properties Notes
7.13%...................... 12/01/06 100 96,750
Taubman Realty Group Medium
Term Notes
7.22%...................... 06/15/01 100 100,000
----------
TOTAL REAL ESTATE...................... 394,625
----------
RETAIL & MERCHANDISING -- 4.1%
Penney J.C. & Co. Notes
7.25%...................... 04/01/02 250 253,750
----------
TOTAL CORPORATE OBLIGATIONS
(COST $1,421,789)........................ 1,439,862
----------
ASSET BACKED SECURITIES -- 25.8%
Advanta Series 1997-1
7.10%...................... 04/25/00 250 251,250
CFAC Grantor Trust Series
1989-A
9.25%...................... 05/15/98 66 66,735
CIT RV Trust Series 1996-A
5.40%...................... 12/15/11 51 50,315
Green Tree Financial Corp.
Series 1995-8
7.30%...................... 12/15/26 250 250,938
Green Tree Financial Corp.
Series 1996-2
7.90%...................... 04/15/27 250 250,625
Green Tree Home Improvement
Loan Trust Series 1995-D
7.45%...................... 09/15/25 40 39,775
Green Tree Home Improvement
Loan Trust Series 1997-A
6.75%...................... 08/15/23 150 150,327
Union Acceptance Corp. Series
1997-B
6.37%...................... 04/10/01 250 250,056
UCFC Home Equity Loan Series
1997-A1
6.98%...................... 04/15/16 150 151,031
<CAPTION>
MATURITY PAR
DATE (000) VALUE
-------- ------- ----------
<S> <C> <C> <C>
Western Financial
Series 1997-A
6.50%...................... 09/20/01 $ 150 $ 150,362
----------
TOTAL ASSET BACKED SECURITIES
(COST $1,593,189)........................ 1,611,414
----------
COLLATERALIZED MORTGAGE OBLIGATIONS -- 7.6%
Merrill Lynch Trust Series 45
9.10%...................... 09/20/14 120 125,043
Painewebber Mortgage Series
1993-6
6.90%...................... 08/25/08 100 100,115
Residential Funding Mortgage
Series 1996-S15
7.75%...................... 01/25/07 246 249,392
----------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(COST $469,808).......................... 474,550
----------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 18.4%
FEDERAL HOME LOAN MORTGAGE CORP. -- 2.4%
9.00%........................ 11/01/01 26 27,402
9.00%........................ 10/01/02 61 63,485
9.00%........................ 12/01/04 56 57,596
----------
TOTAL FEDERAL HOME LOAN MORTGAGE
CORP. ............................... 148,483
----------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 16.0%
9.00%........................ 02/15/20 389 416,573
9.00%........................ 04/15/20 106 112,145
10.00%....................... 07/15/22 428 470,369
----------
TOTAL GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION.......................... 999,087
----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(COST $1,148,303)........................ 1,147,570
----------
U.S. TREASURY OBLIGATIONS -- 18.8%
U.S. TREASURY BILLS -- 1.6%
4.70%........................ 07/24/97 100 99,695
----------
U.S. TREASURY NOTES -- 17.2%
5.88%........................ 02/28/99 625 623,531
6.50%........................ 05/31/02 450 451,552
----------
TOTAL U.S. TREASURY NOTES.............. 1,075,083
----------
TOTAL U.S. TREASURY OBLIGATIONS
(COST $1,176,076)........................ 1,174,778
----------
<CAPTION>
SHARES
-------
<S> <C> <C> <C>
SHORT TERM INVESTMENTS -- 5.1%
Temporary Investment Cash
Fund....................... 160,450 160,450
Temporary Investment Fund.... 160,450 160,450
----------
TOTAL SHORT TERM INVESTMENTS
(COST $320,900).......................... 320,900
----------
TOTAL INVESTMENTS -- 98.7%
(COST $6,130,065)........................ 6,169,074
----------
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 1.3%...................... 80,123
----------
NET ASSETS -- 100.0%....................... $6,249,197
==========
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
3
<PAGE> 6
CAPITAL INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MATURITY PAR
DATE (000) VALUE
-------- ------- ----------
<S> <C> <C> <C>
CONVERTIBLE BONDS -- 41.5%
BASICS -- 0.6%
Agnico Eagle Mines Ltd.
3.50%...................... 01/27/04 $ 65 $ 51,431
----------
CAPITAL GOODS -- 4.4%
Thermo Electron Corp. 144A
4.25%...................... 01/01/03 90 96,975
Trinova Corp.
6.00%...................... 10/15/02 25 25,969
United Waste Systems, Inc.
4.50%...................... 06/01/01 65 87,669
US Filter Corp.
4.50%...................... 12/15/01 70 67,900
US Waste Services, Inc.
4.00%...................... 02/01/02 75 80,625
----------
TOTAL CAPITAL GOODS.................... 359,138
----------
CONSUMER CYCLICALS -- 8.8%
CUC International, Inc. 144A
3.00%...................... 02/15/02 90 95,287
Hilton Hotels
5.00%...................... 05/15/06 85 90,525
Home Depot, Inc.
3.25%...................... 10/01/01 75 85,687
Magna International, Inc.
5.00%...................... 10/15/02 70 84,087
Nine West Group, Inc. 144A
5.50%...................... 07/15/03 75 67,594
Personnel Group
5.75%...................... 07/01/04 75 80,531
Pier 1 Imports, Inc.
5.75%...................... 10/01/03 40 62,800
Protection One Alarm
Monitoring
6.75%...................... 09/15/03 65 66,219
Saks Holdings, Inc.
5.50%...................... 09/15/06 90 78,525
----------
TOTAL CONSUMER CYCLICALS............... 711,255
----------
CONSUMERS STAPLES -- 1.7%
Boston Chicken, Inc.
7.75%...................... 05/01/04 70 63,962
Grand Metropolitan PLC 144A
6.50%...................... 01/31/00 50 69,375
----------
TOTAL CONSUMERS STAPLES................ 133,337
----------
ENERGY -- 4.6%
Diamond Offshore Drilling,
Inc.
3.75%...................... 02/15/07 75 87,000
Nabors Industries, Inc.
5.00%...................... 05/15/06 50 75,375
Pennzoil Co.
4.75%...................... 10/01/03 50 64,312
Seacor Holdings, Inc. 144A
5.38%...................... 11/15/06 50 52,500
Seacor Holdings, Inc.
5.38%...................... 11/15/06 20 21,000
Swift Energy Co.
6.25%...................... 11/15/06 75 74,625
----------
TOTAL ENERGY........................... 374,812
----------
<CAPTION>
MATURITY PAR
DATE (000) VALUE
-------- ------- ----------
<S> <C> <C> <C>
FINANCIAL SERVICES -- 3.6%
Berkshire Hathaway, Inc.
1.00%...................... 12/02/01 $ 75 $ 77,812
Nac Re Corp. 144A
5.25%...................... 12/15/02 55 60,775
Penn Treaty American Corp.
144A
6.25%...................... 12/01/03 15 18,862
Penn Treaty American Corp.
6.25%...................... 12/01/03 40 50,300
Westbridge
7.50%...................... 05/01/04 75 82,125
----------
TOTAL FINANCIAL SERVICES............... 289,874
----------
HEALTH CARE -- 4.2%
Alza Corp.
5.00%...................... 05/01/06 85 86,169
Phycor, Inc.
4.50%...................... 02/15/03 80 86,600
Sandoz Capital Ltd
2.00%...................... 10/06/02 50 75,750
Tenet Healthcare Corp.
6.00%...................... 12/01/05 70 88,025
----------
TOTAL HEALTH CARE...................... 336,544
----------
HEALTHCARE SERVICES -- 3.7%
Alternative Living
7.00%...................... 06/01/04 70 84,087
Arv Assisted Living
6.75%...................... 04/01/06 40 36,000
FPA Medical Management 144A
6.50%...................... 12/15/01 75 85,594
Sunrise Assisted Living Inc.
5.50%...................... 06/15/02 85 96,263
----------
TOTAL HEALTHCARE SERVICES.............. 301,944
----------
TECHNOLOGY -- 8.0%
Adaptec, Inc. 144A
4.75%...................... 02/01/04 75 74,344
Adaptec Inc.
4.75%...................... 02/01/04 10 9,912
Analog Devices, Inc.
3.50%...................... 12/01/00 50 71,812
Atmel Corp.[STEP] [A]
3.43%...................... 06/01/02 80 85,600
EMC Corp. 144A
3.25%...................... 03/15/02 80 86,600
Itron, Inc. 144A
6.75%...................... 03/31/04 55 69,712
Photronics Inc.
6.00%...................... 06/01/04 75 81,656
Solectron Corp. 144A
6.00%...................... 03/01/06 75 93,094
Xilinx, Inc.
5.25%...................... 11/01/02 65 74,912
----------
TOTAL TECHNOLOGY....................... 647,642
----------
</TABLE>
4
<PAGE> 7
CAPITAL INCOME FUND (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MATURITY PAR
DATE (000) VALUE
-------- ------- ----------
<S> <C> <C> <C>
TRANSPORTATION -- 1.9%
Airborne Freight Corp.
6.75%...................... 08/15/01 $ 55 $ 65,794
Alaska Air Group, Inc.
6.88%...................... 06/15/14 90 88,650
----------
TOTAL TRANSPORTATION................... 154,444
----------
TOTAL CONVERTIBLE BONDS
(COST $3,181,355)........................ 3,360,421
----------
CONVERTIBLE ZERO COUPON BONDS [A] -- 7.7%
CONSUMER CYCLICALS -- 3.1%
Marriott International
1.83%...................... 03/25/11 130 79,950
Pep Boys, Inc.
4.23%...................... 09/20/11 150 84,750
Times Mirror Co.
4.68%...................... 04/15/17 220 89,375
----------
TOTAL CONSUMER CYCLICALS............... 254,075
----------
ENERGY -- 1.0%
Baker Hughes, Inc.
2.38%...................... 05/05/08 100 79,875
----------
HEALTH CARE -- 2.2%
Alza Corp.
4.84%...................... 07/14/14 155 68,975
Roche Holdings, Inc. 144A
6.37%...................... 05/06/12 140 60,375
Roche Holdings, Inc.
5.94%...................... 04/20/10 100 50,000
----------
TOTAL HEALTH CARE...................... 179,350
----------
TECHNOLOGY -- 1.4%
Motorola, Inc.
1.83%...................... 09/27/13 130 115,700
----------
TOTAL CONVERTIBLE ZERO COUPON BONDS
(COST $590,921).......................... 629,000
----------
SHARES
-------
COMMON STOCK -- 8.6%
CONSUMER PRODUCTS & SERVICES -- 1.1%
Colgate-Palmolive Co. ................. 1,300 $ 84,825
----------
FINANCIAL -- BANK & TRUST -- 2.9%
Barnett Banks, Inc. ................... 1,500 78,750
Fifth Third Bancorp.................... 1,000 82,031
Wells Fargo & Co. ..................... 275 74,113
----------
TOTAL FINANCIAL -- BANK & TRUST........ 234,894
----------
HEALTH CARE -- 4.6%
American Home Products Corp. .......... 975 74,588
Bristol-Meyers Squibb Co. ............. 1,000 81,000
Schering-Plough Corp. ................. 1,720 82,345
Warner-Lambert Co. .................... 1,100 136,675
----------
TOTAL HEALTH CARE...................... 374,608
----------
TOTAL COMMON STOCK
(COST $642,468).......................... 694,327
----------
<CAPTION>
SHARES VALUE
------- ----------
<S> <C> <C> <C>
CONVERTIBLE PREFERRED STOCK -- 32.9%
BASICS -- 3.2%
Cyprus AMAX Minerals................... 1,500 $ 81,375
Freeport -- Mcmoran, Inc. ............. 3,200 87,600
International Paper Co. ............... 1,700 90,100
----------
TOTAL BASICS........................... 259,075
----------
CAPITAL GOODS -- 3.2%
Corning Glass Works.................... 1,000 87,000
Elsag Baily............................ 2,000 82,250
Mcdermott International, Inc. Series
C.................................... 1,900 90,488
----------
TOTAL CAPITAL GOODS.................... 259,738
----------
CONSUMER CYCLICALS -- 4.7%
Felcor Suite Hotels, Inc. Series C..... 3,000 88,875
Kmart Financing, Inc. ................. 900 49,388
Owens Corning Capital 144A............. 1,500 86,063
SFX Broadcasting, Inc. ................ 1,300 72,800
Wendy's Financing, Inc. ............... 1,400 82,075
----------
TOTAL CONSUMER CYCLICALS............... 379,201
----------
CONSUMER STAPLES -- 1.1%
AJL Peps Trust......................... 4,900 85,444
----------
ENERGY -- 3.2%
MCN Corp. ............................. 3,300 91,988
Occidental Petroleum Corp. 144A........ 1,400 81,900
Unocal Corp. .......................... 1,450 83,738
----------
TOTAL ENERGY........................... 257,626
----------
FINANCIAL -- 9.1%
Ahmanson, H.F. ........................ 700 64,750
American Bankers Insurance Group....... 1,200 87,000
Frontier Insurance 144A................ 2,150 160,175
Glendale Federal Savings Bank of
Ca. ................................. 1,650 107,250
Integon Corp. ......................... 1,000 66,375
Penncorp Financial 144A................ 1,400 88,375
Sovereign Bancorp...................... 900 85,388
St. Paul Capital Corp. ................ 1,200 83,100
----------
TOTAL FINANCIAL........................ 742,413
----------
HEALTH CARE -- 0.9%
Aetna, Inc. Cl C....................... 800 75,000
----------
INSURANCE -- 1.1%
American Life Heritage................. 1,600 88,000
----------
TECHNOLOGY -- 1.5%
Loral Space and Communications 144A.... 860 42,570
Microsoft Corp.*....................... 900 78,244
----------
TOTAL TECHNOLOGY....................... 120,814
----------
TRANSPORTATION -- 0.9%
CNF Transportation Inc. ............... 1,300 72,800
----------
</TABLE>
5
<PAGE> 8
CAPITAL INCOME FUND (CONCLUDED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------- ----------
<S> <C> <C> <C>
UTILITIES -- ELECTRIC -- 4.0%
Airtouch Communications Class C........ 1,800 $ 86,400
Calenergy Capital Trust II 144A........ 1,400 78,050
Citizens Utilities Trust............... 2,100 91,875
Sprint Corp. .......................... 2,000 72,250
----------
TOTAL UTILITIES -- ELECTRIC............ 328,575
----------
TOTAL CONVERTIBLE PREFERRED STOCK
(COST $2,474,926)........................ 2,668,686
----------
SHORT TERM INVESTMENTS -- 9.7%
Temporary Investment Cash Fund......... 391,135 391,135
Temporary Investment Fund.............. 391,135 391,135
----------
TOTAL SHORT TERM INVESTMENTS
(COST $782,270)...................... 782,270
----------
TOTAL INVESTMENTS -- 100.4%
(COST $7,671,940)........................ 8,134,704
----------
LIABILITIES IN EXCESS OF OTHER
ASSETS -- 0.4%........................... (29,664)
----------
NET ASSETS -- 100.0%....................... $8,105,040
=========
</TABLE>
- --------------------------------------------------------------------------------
* Non-income producing securities.
[STEP] -- Stepped Coupon Bond
[A] Rates shown are the effective yields at purchase date
144A -- Security was purchased pursuant to Rule 144A under the Securities Act of
1933 and may not be resold subject to that rule except to qualified
institutional buyers. At the end of the period, these securities
amounted to 18.1% of net assets.
See Notes to Financial Statements.
6
<PAGE> 9
BLUE CHIP FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------- ----------
<S> <C> <C>
COMMON STOCK -- 88.4%
AEROSPACE -- 2.1%
Lockheed Martin Corp. ................ 700 $ 72,494
United Technologies Corp. ............ 1,300 107,900
-------
TOTAL AEROSPACE....................... 180,394
-------
AIRLINES -- 0.3%
UAL Corp. ............................ 400 28,625
-------
AUTOMOBILE MANUFACTURERS -- 1.6%
Ford Motor Co. ....................... 2,200 83,050
General Motors Corp. ................. 900 50,119
-------
TOTAL AUTOMOBILE MANUFACTURERS........ 133,169
-------
AUTOMOTIVE PARTS -- 0.5%
Dana Corp. ........................... 1,200 45,600
-------
BEVERAGES -- 3.6%
Anheuser-Busch Cos., Inc. ............ 600 25,162
Coca-Cola Co. ........................ 3,200 216,000
PepsiCo, Inc. ........................ 1,600 60,100
-------
TOTAL BEVERAGES....................... 301,262
-------
BUILDING MATERIALS -- 0.3%
Armstrong World Industries, Inc. ..... 300 22,012
-------
CHEMICALS -- 2.8%
Air Products & Chemicals, Inc. ....... 700 56,875
Dow Chemical Co. ..................... 300 26,137
Dupont, (E.I.) de Nemours & Co. ...... 2,400 150,900
-------
TOTAL CHEMICALS....................... 233,912
-------
CLOTHING & APPAREL -- 1.3%
Nike, Inc. ........................... 100 5,838
TJX Companies, Inc. .................. 2,600 68,575
Tommy Hilfiger Corp.*................. 800 32,150
-------
TOTAL CLOTHING & APPAREL.............. 106,563
-------
COMPUTER HARDWARE -- 4.0%
Compaq Computer Corp.*................ 900 89,325
Dell Computer Corp.*.................. 800 93,925
International Business Machines
Corp. .............................. 500 45,094
Sun Microsystems, Inc.*............... 1,500 55,828
Xerox Corp. .......................... 700 55,213
-------
TOTAL COMPUTER HARDWARE............... 339,385
-------
CONSUMER PRODUCTS & SERVICES -- 2.5%
Avon Products, Inc. .................. 800 56,450
Philip Morris Cos., Inc. ............. 3,400 150,875
-------
TOTAL CONSUMER PRODUCTS & SERVICES.... 207,325
-------
COMPUTER SERVICES & SOFTWARE -- 3.4%
HBO & Co. ............................ 600 41,325
Microsoft Corp.*...................... 1,800 227,644
Oracle Corp.*......................... 300 15,103
Parametric Technology Corp.*.......... 100 4,253
-------
TOTAL COMPUTER SERVICES & SOFTWARE.... 288,325
-------
ELECTRONIC COMPONENTS & EQUIPMENT -- 2.8%
General Electric Co. ................. 3,600 235,350
-------
ENERGY -- 0.8%
Tidewater, Inc........................ 1,500 66,000
-------
ENTERTAINMENT & LEISURE -- 1.8%
King World Productions, Inc. ......... 600 21,000
Hasbro, Inc. ......................... 1,750 49,656
Walt Disney Co. ...................... 1,000 80,250
-------
TOTAL ENTERTAINMENT & LEISURE......... 150,906
-------
<CAPTION>
SHARES VALUE
------- ----------
<S> <C> <C>
FINANCIAL -- BANK & TRUST -- 7.8%
Barnett Banks, Inc. .................. 1,700 $ 89,250
Chase Manhattan Corp. ................ 900 87,356
Citicorp.............................. 500 60,281
Comerica, Inc. ....................... 1,400 95,200
First Union Corp. .................... 1,200 111,000
Fleet Financial Group, Inc. .......... 600 37,950
Mellon Bank Corp. .................... 1,900 85,737
NationsBank Corp. .................... 800 51,600
State Street Corp. ................... 1,000 46,250
-------
TOTAL FINANCIAL -- BANK & TRUST....... 664,624
-------
FINANCIAL SERVICES -- 1.2%
Morgan Stanley Dean Witter Discover &
Co. ................................ 2,400 103,350
-------
FOOD -- 2.9%
American Stores Co. .................. 1,200 59,250
Conagra, Inc. ........................ 1,200 76,950
Hershey Foods Corp. .................. 800 44,250
Sara Lee Corp. ....................... 1,500 62,437
-------
TOTAL FOOD............................ 242,887
-------
HEALTHCARE SERVICES -- 1.0%
PhyCor, Inc.*......................... 1,500 51,609
Tenet Healthcare Corp.*............... 1,100 32,519
-------
TOTAL HEALTHCARE SERVICES............. 84,128
-------
HOTELS & MOTELS -- 0.5%
HFS, Inc.*............................ 700 40,600
-------
HOUSEHOLD PRODUCTS -- 2.8%
Clorox Co. ........................... 500 66,000
Procter & Gamble Co. ................. 1,200 169,500
-------
TOTAL HOUSEHOLD PRODUCTS.............. 235,500
-------
INSURANCE -- 3.9%
Allstate Corp. ....................... 1,100 80,300
CIGNA Corp. .......................... 300 53,250
Conseco, Inc. ........................ 1,700 62,900
Equitable Cos., Inc. ................. 1,700 56,525
Travelers Group, Inc. ................ 1,200 75,675
-------
TOTAL INSURANCE....................... 328,650
-------
MACHINERY & EQUIPMENT -- 1.5%
Caterpillar, Inc. .................... 500 53,687
Ingersoll Rand Co. ................... 600 37,050
Parker Hannifin Corp. ................ 600 36,412
-------
TOTAL MACHINERY & EQUIPMENT........... 127,149
-------
MEDICAL SUPPLIES & EQUIPMENT -- 2.7%
Abbott Laboratories................... 900 60,075
Johnson & Johnson Co. ................ 2,200 141,625
U.S. Surgical Corp. .................. 800 29,800
-------
TOTAL MEDICAL SUPPLIES & EQUIPMENT.... 231,500
-------
METALS & MINING -- 1.1%
Phelps Dodge Corp. ................... 600 51,113
USX-U.S. Steel Group, Inc. ........... 1,300 45,581
-------
TOTAL METALS & MINING................. 96,694
-------
MULTI-INDUSTRY -- 2.1%
Honeywell, Inc. ...................... 900 68,288
Tyco International, Ltd. ............. 1,600 111,300
-------
TOTAL MULTI-INDUSTRY.................. 179,588
-------
</TABLE>
7
<PAGE> 10
BLUE CHIP FUND (CONCLUDED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------- ----------
<S> <C> <C>
OIL (DOMESTIC) -- 1.5%
Phillips Petroleum Co. ............... 1,600 $ 70,000
USX -- Marathon Group................. 2,100 60,638
-------
TOTAL OIL (DOMESTIC).................. 130,638
-------
OIL (INTERNATIONAL) -- 5.5%
Exxon Corp. .......................... 2,800 172,200
Mobil Corp. .......................... 1,400 97,825
Pennzoil Co. ......................... 300 23,025
Royal Dutch Petroleum Co. ............ 1,600 87,000
Texaco, Inc. ......................... 800 87,000
-------
TOTAL OIL (INTERNATIONAL)............. 467,050
-------
PAPER & FOREST PRODUCTS -- 1.0%
James River Corp. of Virginia......... 1,200 44,400
Mead Corp. ........................... 600 37,350
-------
TOTAL PAPER & FOREST PRODUCTS......... 81,750
-------
PHARMACEUTICALS -- 6.4%
Bristol-Meyers Squibb Co. ............ 1,900 153,900
Pfizer, Inc. ......................... 600 71,700
Merck & Co., Inc. .................... 2,000 207,000
Schering-Plough Corp. ................ 2,400 114,900
-------
TOTAL PHARMACEUTICALS................. 547,500
-------
PRINTING & PUBLISHING -- 0.8%
New York Times Co. ................... 1,400 69,300
-------
RAILROADS -- 0.9%
Norfolk Southern Corp. ............... 800 80,600
-------
RETAIL & MERCHANDISING -- 3.2%
Bed, Bath & Beyond, Inc.*............. 1,500 45,609
CUC International, Inc.*.............. 2,000 51,625
Dayton Hudson Corp. .................. 1,100 58,506
Home Depot, Inc. ..................... 1,600 110,300
Sears Roebuck & Co. .................. 100 5,375
-------
TOTAL RETAIL & MERCHANDISING.......... 271,415
-------
SEMI-CONDUCTORS -- 3.4%
Applied Materials, Inc.*.............. 600 42,469
Harris Corp. ......................... 700 58,800
Intel Corp. .......................... 200 $ 28,319
Motorola, Inc. ....................... 2,100 159,600
-------
TOTAL SEMI-CONDUCTORS................. 289,188
-------
TELECOMMUNICATIONS -- 2.3%
3Com Corp.*........................... 1,200 53,963
Lucent Technologies, Inc. ............ 1,000 72,063
Tellabs, Inc.*........................ 1,200 66,975
-------
TOTAL TELECOMMUNICATIONS.............. 193,001
-------
UTILITIES -- ELECTRIC -- 2.0%
Consolidated Edison Co. of New York,
Inc. ............................... 1,400 41,213
FPL Group, Inc. ...................... 1,500 69,094
GPU, Inc. ............................ 1,700 60,988
-------
TOTAL UTILITIES -- ELECTRIC........... 171,295
-------
UTILITIES -- GAS -- 0.6%
Columbia Gas System, Inc. ............ 600 39,150
Consolidated Natural Gas Co. ......... 300 16,144
-------
TOTAL UTILITIES -- GAS................ 55,294
-------
UTILITIES -- TELEPHONE -- 5.5%
Ameritech Corp. ...................... 1,500 101,906
BellSouth Corp. ...................... 2,400 111,300
SBC Communications, Inc. ............. 1,600 99,000
U.S. WEST Communications Group........ 1,500 56,531
WorldCom, Inc.*....................... 3,000 95,906
-------
TOTAL UTILITIES -- TELEPHONE.......... 464,643
-------
TOTAL COMMON STOCK (COST $6,810,915)...... 7,495,172
-------
SHORT TERM INVESTMENTS -- 5.0%
Temporary Investment Cash Fund (Cost
$420,113)........................... 420,113 420,113
-------
TOTAL INVESTMENTS -- 93.4% (COST
$7,231,028)............................. 7,915,285
-------
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 6.6%..................... 560,609
-------
NET ASSETS -- 100.0%...................... $8,475,894
=======
</TABLE>
- --------------------------------------------------------------------------------
* Non-income producing securities.
See Notes to Financial Statements.
8
<PAGE> 11
MID-CAP EQUITY FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------- ----------
<S> <C> <C>
COMMON STOCK -- 87.1%
AEROSPACE -- 1.8%
Precision Castparts Corp. ............ 1,100 $ 65,588
Thiokol Corp. ........................ 800 56,000
----------
TOTAL AEROSPACE....................... 121,588
----------
AUTOMOTIVE PARTS -- 0.6%
Magna International, Inc. ............ 600 36,112
----------
BEVERAGES -- 0.8%
Coca-Cola Enterprises, Inc. .......... 1,200 27,600
Coors, (Adolph) Co. Cl-B.............. 1,000 26,500
----------
TOTAL BEVERAGES....................... 54,100
----------
BUILDING MATERIALS -- 2.6%
Leggett & Platt, Inc. ................ 2,400 103,200
Southdown, Inc. ...................... 1,600 69,800
----------
TOTAL BUILDING MATERIALS.............. 173,000
----------
CHEMICALS -- 3.8%
Cytec Industries, Inc.*............... 1,500 56,062
Ecolab, Inc. ......................... 1,300 62,075
Lubrizol Corp. ....................... 2,100 88,069
Nalco Chemical Co. ................... 1,200 46,350
----------
TOTAL CHEMICALS....................... 252,556
----------
CLOTHING & APPAREL -- 2.5%
Jones Apparel Group, Inc.*............ 1,400 66,850
Liz Claiborne, Inc. .................. 700 32,637
TJX Companies, Inc. .................. 2,400 63,300
----------
TOTAL CLOTHING & APPAREL.............. 162,787
----------
COMMERCIAL SERVICES -- 3.4%
Accustaff, Inc.*...................... 1,900 45,006
ACNielsen Corp.*...................... 1,200 23,550
Omnicom Group, Inc. .................. 1,900 117,088
Pittston Brink Group.................. 1,300 39,000
----------
TOTAL COMMERCIAL SERVICES............. 224,644
----------
COMPUTER HARDWARE -- 2.7%
Quantum Corp.*........................ 3,200 65,100
Solectron Corp.*...................... 700 49,044
Stratus Computer, Inc.*............... 1,200 60,000
----------
TOTAL COMPUTER HARDWARE............... 174,144
----------
CONSUMER PRODUCTS & SERVICES -- 0.8%
Dial Corp. ........................... 3,400 53,125
----------
COMPUTER SOFTWARE -- 5.0%
BMC Software, Inc.*................... 1,600 88,700
Cadence Design Systems, Inc.*......... 1,600 53,600
Compuware Corp.*...................... 1,400 67,025
HBO & Co. ............................ 800 55,100
McAfee Associates, Inc.*.............. 600 37,837
SCI Systems, Inc.*.................... 400 25,500
----------
TOTAL COMPUTER SOFTWARE............... 327,762
----------
DIVERSIFIED OPERATIONS -- 0.7%
MCN Corp. ............................ 1,600 49,000
----------
ELECTRONIC COMPONENTS & EQUIPMENT -- 4.2%
Adaptec, Inc.*........................ 1,300 45,175
Altera Corp.*......................... 1,200 60,637
Maxim Integrated Products, Inc.*...... 1,100 62,494
Teradyne, Inc.*....................... 1,900 74,575
Xilinx, Inc.*......................... 700 34,322
----------
TOTAL ELECTRONIC COMPONENTS &
EQUIPMENT........................... 277,203
----------
ENERGY SERVICES -- 3.4%
Camco International, Inc. ............ 900 49,275
Ensco International, Inc.*............ 1,100 58,025
Smith International, Inc.*............ 1,000 60,750
Tidewater, Inc. ...................... 1,200 52,800
----------
TOTAL ENERGY SERVICES................. 220,850
----------
<CAPTION>
SHARES VALUE
------- ----------
<S> <C> <C>
ENTERTAINMENT & LEISURE -- 1.4%
Callaway Golf Co. .................... 800 $ 28,400
King World Productions, Inc. ......... 500 17,500
Polaris Industries, Inc. ............. 1,400 45,587
----------
TOTAL ENTERTAINMENT & LEISURE......... 91,487
----------
FINANCIAL -- BANK & TRUST -- 7.7%
AmSouth Bancorporation................ 1,800 68,062
First of America Bank Corp. .......... 1,650 75,487
Marshall & Ilsley Corp. .............. 1,300 52,853
Mercantile Bankshares Corp. .......... 1,200 48,000
Northern Trust Corp. ................. 1,700 82,291
Regions Financial Corp. .............. 2,400 76,050
State Street Corp. ................... 2,200 101,750
----------
TOTAL FINANCIAL -- BANK & TRUST....... 504,493
----------
FINANCIAL SERVICES -- 2.8%
Bear Stearns Companies, Inc. ......... 3,300 112,819
Franklin Resources, Inc. ............. 1,000 72,563
----------
TOTAL FINANCIAL SERVICES.............. 185,382
----------
FOOD -- 2.8%
Dean Foods Co. ....................... 1,600 64,600
Dekalb Genetics Corp. Cl-B............ 400 31,912
Interstate Bakeries Corp. ............ 1,200 71,175
Universal Corp. ...................... 600 19,050
----------
TOTAL FOOD............................ 186,737
----------
HEALTHCARE SERVICES -- 3.0%
Health Care & Retirement Corp.*....... 1,000 33,375
HealthCare COMPARE Corp.*............. 1,400 73,413
Oxford Health Plans, Inc.*............ 1,300 93,316
----------
TOTAL HEALTHCARE SERVICES............. 200,104
----------
HOTELS & MOTELS -- 1.1%
MGM Grand, Inc.*...................... 900 33,300
Promus Hotel Corp.*................... 1,000 38,750
----------
TOTAL HOTELS & MOTELS................. 72,050
----------
INSURANCE -- 3.8%
Exel Limited.......................... 1,400 73,850
SunAmerica, Inc. ..................... 2,100 102,375
Torchmark Corp. ...................... 1,000 71,250
----------
TOTAL INSURANCE....................... 247,475
----------
MACHINERY & EQUIPMENT -- 3.0%
AGCO, Inc. ........................... 1,700 61,094
Harsco Corp. ......................... 1,300 52,650
Timken Co. ........................... 1,400 49,788
Trinity Industries, Inc. ............. 1,100 34,925
----------
TOTAL MACHINERY & EQUIPMENT........... 198,457
----------
MEDICAL SUPPLIES & EQUIPMENT -- 2.0%
Allegiance Corp. ..................... 1,000 27,250
Beckman Instruments, Inc. ............ 1,200 57,900
Bergen Brunswig Corp. ................ 1,750 48,781
----------
TOTAL MEDICAL SUPPLIES & EQUIPMENT.... 133,931
----------
METALS & MINING -- 0.6%
AK Steel Holding Corp. ............... 900 39,713
----------
MULTI-INDUSTRY -- 0.8%
Crane Co. ............................ 1,200 50,175
----------
</TABLE>
9
<PAGE> 12
MID-CAP EQUITY FUND (CONCLUDED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------- ----------
<S> <C> <C>
OIL (DOMESTIC) -- 2.6%
Kerr-McGee Corp. ..................... 300 $ 19,012
Murphy Oil Corp. ..................... 300 14,625
Parker & Parsley Petroleum Co. ....... 2,200 77,825
Valero Energy Corp. .................. 1,600 58,000
----------
TOTAL OIL (DOMESTIC).................. 169,462
----------
PAPER & FOREST PRODUCTS -- 1.7%
American Greetings Corp. ............. 400 14,825
James River Corp. of Virginia......... 1,200 44,400
Owens-Illinois, Inc.*................. 1,700 52,700
----------
TOTAL PAPER & FOREST PRODUCTS......... 111,925
----------
PHARMACEUTICALS -- 2.4%
Cardinal Health, Inc. ................ 1,000 57,250
Perrigo Co.*.......................... 3,900 48,994
Watson Pharmaceuticals, Inc.*......... 1,200 50,625
----------
TOTAL PHARMACEUTICALS................. 156,869
----------
PRINTING & PUBLISHING -- 1.2%
Houghton Mifflin Co. ................. 300 20,025
Washington Post Co. .................. 150 59,700
----------
TOTAL PRINTING & PUBLISHING........... 79,725
----------
RESTAURANTS -- 0.8%
Applebee's International, Inc. ....... 1,900 50,944
----------
RETAIL & MERCHANDISING -- 3.3%
Family Dollar Stores, Inc. ........... 1,800 49,050
OfficeMax, Inc.*...................... 3,900 56,306
Ross Stores, Inc. .................... 2,400 78,375
U.S. Office Products Co.*............. 1,200 36,563
----------
TOTAL RETAIL & MERCHANDISING.......... 220,294
----------
SEMI-CONDUCTORS -- 0.6%
Harris Corp. ......................... 500 42,000
----------
TELECOMMUNICATIONS -- 0.8%
ADC Telecommunications, Inc.*......... 1,600 53,500
----------
TRANSPORTATION -- 1.2%
Airborne Freight Corp. ............... 800 $ 33,500
Consolidated Freightways, Inc. ....... 1,300 41,925
----------
TOTAL TRANSPORTATION.................. 75,425
----------
UTILITIES -- ELECTRIC -- 8.4%
Boston Edison Co. .................... 2,900 76,487
CMS Energy Corp. ..................... 3,100 109,275
DQE, Inc. ............................ 2,900 81,925
GPU, Inc. ............................ 2,600 93,275
Illinova Corp. ....................... 3,200 70,400
Northern States Power Co. ............ 1,100 56,925
Public Service Co. of New Mexico...... 3,800 67,925
----------
TOTAL UTILITIES -- ELECTRIC............... 556,212
----------
UTILITIES -- GAS -- 0.8%
NICOR, Inc. .......................... 1,400 50,225
----------
UTILITIES -- TELEPHONE -- 2.0%
LCI International, Inc.*.............. 3,800 83,125
Southern New England
Telecommunications Corp. ........... 1,300 50,538
----------
TOTAL UTILITIES -- TELEPHONE.......... 133,663
----------
TOTAL COMMON STOCK
(COST $5,112,122)....................... 5,737,119
----------
SHORT TERM INVESTMENTS -- 5.1%
Temporary Investment Cash Fund (Cost
$337,663)........................... 337,663 337,663
----------
TOTAL INVESTMENTS -- 92.2%
(COST $5,449,785)....................... 6,074,782
----------
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 7.8%..................... 511,967
----------
NET ASSETS -- 100.0%...................... $6,586,749
==========
</TABLE>
- --------------------------------------------------------------------------------
* Non-income producing securities
See Notes to Financial Statements.
10
<PAGE> 13
AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------- ----------
<S> <C> <C>
COMMON STOCK -- 86.7%
AEROSPACE/DEFENSE -- EQUIPMENT -- 2.6%
BE Aerospace, Inc.*.................... 2,050 $ 64,703
REMEC, Inc. ........................... 4,050 93,656
----------
TOTAL AEROSPACE/DEFENSE -- EQUIPMENT... 158,359
----------
AIRLINES -- 1.8%
Airways Corp.*......................... 2,900 15,316
Mesaba Holdings, Inc.*................. 6,200 92,612
----------
TOTAL AIRLINES......................... 107,928
----------
AGRICULTURAL OPERATIONS -- 1.5%
Northland Cranberries, Inc. ........... 5,800 94,612
----------
BIOTECHNOLOGY -- 2.6%
Genome Therapeutics Corp.*............. 4,300 36,550
Human Genome Sciences, Inc.*........... 1,250 41,641
Protein Design Lab, Inc.*.............. 2,850 80,513
----------
TOTAL BIOTECHNOLOGY.................... 158,704
----------
BROADCASTING -- 2.2%
Cablevision Systems Corp.*............. 1,250 66,875
United International Holdings, Inc.*... 6,450 66,516
----------
TOTAL BROADCASTING..................... 133,391
----------
BUSINESS SERVICES -- 3.0%
Accustaff, Inc.*....................... 5,250 124,359
Select Appointments Holdings Public
Limited Co. ......................... 3,850 60,637
----------
TOTAL BUSINESS SERVICES................ 184,996
----------
CLOTHING & APPAREL -- 2.3%
Farah, Inc.*........................... 4,000 25,500
Quicksilver, Inc.*..................... 3,700 117,937
----------
TOTAL CLOTHING & APPAREL............... 143,437
----------
COMMERCIAL SERVICES -- 1.8%
PMT Services, Inc.*.................... 7,300 111,097
----------
COMPUTER SERVICES & SOFTWARE -- 5.6%
3D Labs, Inc., Ltd.*................... 3,450 100,481
Cimatron, Ltd.*........................ 13,650 68,250
Computervision Corp.*.................. 4,550 21,044
DataWorks Corp.*....................... 3,100 67,619
Rogue Wave Software, Inc.*............. 5,250 66,609
Spectrum Holobyte, Inc.*............... 4,550 22,039
----------
TOTAL COMPUTER SERVICES & SOFTWARE..... 346,042
----------
COMPUTERS -- PERIPHERAL EQUIPMENT -- 1.1%
Cybex Computer Products Corp.*......... 3,800 68,400
----------
CONSUMER PRODUCTS & SERVICES -- 0.5%
Meade Instruments Corp.*............... 4,450 32,262
----------
CONSUMER SERVICES -- OTHER -- 1.3%
Equity Corp. International*............ 3,400 82,025
----------
DIVERSIFIED OPERATIONS -- 2.2%
Volt Information Sciences, Inc.*....... 2,700 136,350
----------
ELECTRONIC COMPONENTS & EQUIPMENT -- 4.4%
Actel Corp.*........................... 2,150 36,550
C-COR Electronics, Inc.*............... 4,100 40,744
EMCORE Corp.*.......................... 4,100 69,187
International Rectifier Corp.*......... 4,800 89,400
Ultrak, Inc.*.......................... 3,850 34,048
----------
TOTAL ELECTRONIC COMPONENTS &
EQUIPMENT............................ 269,929
----------
ENTERTAINMENT & LEISURE -- 8.1%
All American Communications, Inc.*..... 4,550 55,738
Family Golf Centers, Inc.*............. 3,350 76,945
Galoob Toys, Inc.*..................... 4,050 76,444
Gaylord Entertainment Co., Inc. ....... 1,800 41,513
Iwerks Entertainment, Inc.*............ 10,550 46,816
Sodak Gaming, Inc.*.................... 2,900 42,594
WMS Industries, Inc.*.................. 6,300 157,894
----------
TOTAL ENTERTAINMENT & LEISURE.......... 497,944
----------
<CAPTION>
SHARES VALUE
------- ----------
<S> <C> <C>
ENVIRONMENTAL SERVICES -- 2.2%
Air & Water Technologies Corp.*........ 12,750 $ 38,250
Culligan Water Technologies, Inc.*..... 1,300 58,175
Osmonics, Inc.*........................ 2,050 37,797
----------
TOTAL ENVIRONMENTAL SERVICES........... 134,222
----------
FINANCIAL SERVICES -- 4.2%
Consumer Portfolio Services, Inc.*..... 2,200 26,675
Imperial Credit Industries, Inc.*...... 5,400 111,206
SEI Investments Co. ................... 5,100 123,675
----------
TOTAL FINANCIAL SERVICES............... 261,556
----------
FOOD -- 0.7%
Unimark Group, Inc.*................... 5,500 44,344
----------
HEALTHCARE SERVICES -- 3.9%
Emeritus Corp.*........................ 4,250 62,688
Envoy Corp.*........................... 3,300 110,138
Orthodontic Centers of America,
Inc.*................................ 2,900 52,834
ProMedeCo Management Co.*.............. 1,700 14,662
----------
TOTAL HEALTHCARE SERVICES.............. 240,322
----------
HOUSEHOLD PRODUCTS -- 0.9%
Lifetime Hoan Corp.*................... 6,450 55,228
----------
INSTRUMENTS -- CONTROLS -- 0.6%
Metrika Systems Corp.*................. 2,500 38,906
----------
MEDICAL SUPPLIES & EQUIPMENT -- 2.6%
EndoSonics Corp.*...................... 4,950 54,141
SeaMed Corp.*.......................... 5,300 107,656
----------
TOTAL MEDICAL SUPPLIES & EQUIPMENT..... 161,797
----------
METALS & MINING -- 1.2%
Titanium Metals Corp.*................. 2,300 72,666
----------
OIL & GAS -- 4.7%
Aquila Gas Pipeline Corp. ............. 6,950 96,866
Costilla Energy, Inc.*................. 5,400 68,681
Ocean Energy, Inc.*.................... 1,300 60,125
United Meridian Corp.*................. 2,200 66,000
----------
TOTAL OIL & GAS........................ 291,672
----------
PHARMACEUTICALS -- 1.2%
Algos Pharmaceutical Corp.*............ 2,750 50,359
SEQUUS Pharmaceuticals, Inc.*.......... 3,650 23,269
----------
TOTAL PHARMACEUTICALS.................. 73,628
----------
RESTAURANTS -- 1.6%
Landry's Seafood Restaurants, Inc.*.... 4,350 100,050
----------
RETAIL & MERCHANDISING -- 5.4%
Kenneth Cole Productions, Inc.*........ 5,050 82,378
Petco Animal Supplies, Inc.*........... 3,900 116,878
RDO Equipment Co.*..................... 2,000 44,750
Stage Stores, Inc.*.................... 3,500 91,328
----------
TOTAL RETAIL & MERCHANDISING........... 335,334
----------
SCHOOLS -- 0.4%
Youth Services International, Inc.*.... 2,150 26,472
----------
</TABLE>
11
<PAGE> 14
AGGRESSIVE GROWTH FUND (CONCLUDED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------- ----------
<S> <C> <C>
TELECOMMUNICATIONS -- SERVICES/EQUIPMENT -- 13.8%
ANTEC Corp.*........................... 8,300 $ 97,266
Brooks Fiber Properties, Inc.*......... 1,900 64,244
Gilat Satellite Networks*.............. 4,100 135,044
Harmonic Lightwaves, Inc.*............. 4,550 77,634
Intermedia Communications, Inc.*....... 1,950 63,131
Iridium World Communications, Ltd.*.... 3,700 67,063
LCC International, Inc.*............... 3,300 51,150
NICE Systems, Ltd.*.................... 3,000 90,188
Ortel Corp.*........................... 5,200 92,950
RF Micro Devices, Inc.*................ 100 1,906
Teledata Communications, Ltd.*......... 3,250 111,109
----------
TOTAL TELECOMMUNICATIONS --
SERVICES/EQUIPMENT................. 851,685
----------
TRANSPORTATION -- COMMERCIAL SERVICES -- 1.6%
Budget Group, Inc.*.................... 2,850 $ 98,325
----------
WHOLESALE DISTRIBUTORS -- 0.7%
NuCo2, Inc.*........................... 2,400 41,400
----------
TOTAL COMMON STOCK (COST $5,138,935)....... 5,353,083
----------
SHORT TERM INVESTMENTS -- 12.4%
Temporary Investment Cash Fund......... 384,313 384,313
Temporary Investment Fund.............. 384,313 384,313
----------
TOTAL SHORT TERM INVESTMENTS (COST
$768,626)................................ 768,626
----------
TOTAL INVESTMENTS -- 99.1% (COST
$5,907,561).............................. 6,121,709
----------
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 0.9%...................... 56,637
----------
NET ASSETS -- 100.0%....................... $6,178,346
==========
</TABLE>
- --------------------------------------------------------------------------------
* Non-income producing securities.
See Notes to Financial Statements.
12
<PAGE> 15
INTERNATIONAL FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ ----------
<S> <C> <C>
FOREIGN STOCKS -- 91.2%
ARGENTINA -- 1.1%
Banco de Galicia....................... 4,000 $ 26,600
Quilmes Industrial ADR................. 3,600 41,850
----------
TOTAL ARGENTINA........................ 68,450
----------
AUSTRALIA -- 3.6%
Boral Ltd. ............................ 11,234 35,419
Broken Hill Proprietary Co. Ltd. ...... 4,049 59,645
Crown Ltd.*............................ 21,257 34,234
Goodman Fielder Ltd. .................. 41,763 61,574
Pioneer International Ltd. ............ 10,000 38,712
----------
TOTAL AUSTRALIA........................ 229,584
----------
AUSTRIA -- 0.9%
OMV AG................................. 450 57,622
----------
BELGIUM -- 0.6%
Credit Communal Holding/Dexia.......... 365 39,198
----------
BRAZIL -- 1.8%
Aracruz Cellulose ADR.................. 800 16,300
Centrais Electricas Brasileiras ADR.... 950 26,562
Companhia Energetica de Minas Gerais
ADR.................................. 200 10,069
Petroleo Brasiliero ADR................ 1,000 27,402
Telebras ADR........................... 230 34,902
----------
TOTAL BRAZIL........................... 115,235
----------
CANADA -- 2.3%
Alcan Aluminium Ltd. .................. 600 20,726
Canadian Imperial Bank Of Commerce..... 900 22,681
Canadian Pacific, Ltd. ................ 2,800 79,625
CanWest Global Communications Corp. ... 1,700 25,181
----------
TOTAL CANADA........................... 148,213
----------
CHILE -- 0.9%
Embotelladora Andia S.A. ADR........... 400 8,575
Embotelladora Andina S.A. Series B
ADR.................................. 800 16,700
Enersis S.A. ADR....................... 900 32,006
----------
TOTAL CHILE............................ 57,281
----------
DENMARK -- 2.4%
Tele Danmark A/S....................... 1,600 41,800
Unidanmark A/S......................... 2,000 112,371
----------
TOTAL DENMARK.......................... 154,171
----------
FINLAND -- 2.9%
Kesko.................................. 2,400 33,880
Metsa Serla-B Shares................... 9,000 73,418
Nokia Corp. ADR........................ 600 44,250
Rauma Oy............................... 1,500 34,424
----------
TOTAL FINLAND.......................... 185,972
----------
FRANCE -- 8.0%
Assurances Generales de France......... 1,720 54,961
Banque Nationale de Paris.............. 1,700 70,057
Credit Commercial de France............ 1,059 44,867
Elf Aquitaine.......................... 300 32,362
Havas SA............................... 900 64,852
PSA Peugeot Citroen.................... 330 31,893
Remy Cointreau......................... 1,600 38,413
Rhone-Poulenc.......................... 1,531 62,520
Societe Generale....................... 649 72,440
Total S.A.............................. 400 40,427
----------
TOTAL FRANCE........................... 512,792
----------
GERMANY -- 5.0%
Bayer AG............................... 1,100 42,383
Degussa................................ 500 26,432
Deutsche Lufthansa AG.................. 1,900 36,549
Hornbach Holdings AG................... 766 63,903
Karstadt AG............................ 200 72,244
Mannesmann AG.......................... 50 22,332
Metallgesellschaft AG*................. 2,650 54,775
----------
TOTAL GERMANY.......................... 318,618
----------
<CAPTION>
SHARES VALUE
------ ----------
<S> <C> <C>
HONG KONG -- 3.1%
Hutchinson Whampoa Ltd. ............... 6,000 $ 51,892
Hysan Development Co. Ltd. ............ 11,000 32,446
New World Development Co. Ltd. ........ 3,000 17,891
Sun Hung Kai Properties................ 3,000 36,112
Swire Pacific Ltd. .................... 5,000 45,019
Tingyi (Cayman Islands) Holding Co. ... 76,000 18,934
----------
TOTAL HONG KONG........................ 202,294
----------
INDONESIA -- 1.5%
Indonesia Satellite ADR................ 1,200 35,925
Jaya Real Property..................... 19,000 25,607
Kalbe Farma............................ 24,000 32,099
----------
TOTAL INDONESIA........................ 93,631
----------
IRELAND -- 1.5%
Bank of Ireland........................ 1,300 14,321
Jefferson Smurfit Group PLC............ 29,000 84,514
----------
TOTAL IRELAND.......................... 98,835
----------
ITALY -- 3.5%
Fiat SPA............................... 24,000 86,400
Istituto Bancario San Paolo di Torino
144A................................. 4,800 34,636
Istituto Bancario San Paolo di
Torino............................... 1,600 11,661
Mondadori (Arnoldo) Editore SPA........ 5,000 28,882
STET................................... 11,000 64,059
----------
TOTAL ITALY............................ 225,638
----------
JAPAN -- 21.0%
Aisin Seiko Co., Ltd. ................. 3,000 45,812
Asahi Organic Chemicals Industry Co.,
Ltd. ................................ 4,000 20,698
Dai Nippon Printing Co., Ltd. ......... 1,000 22,600
Daibiru Corp. ......................... 2,000 24,084
Eisai Co., Ltd. ....................... 3,000 56,806
Exedy Corp. ........................... 1,000 12,740
Fuji Machine Manufacturing Co. ........ 3,000 108,639
Hitachi Ltd. .......................... 3,000 33,508
JGC Corp. ............................. 5,000 34,468
Kyudenko Co., Ltd. .................... 1,000 8,429
Mabuchi Motor.......................... 2,000 116,056
Maruichi Steel Tube.................... 3,000 49,738
Matsumotokiyoshi....................... 1,000 42,408
Matsushita Electric Industrial Co.,
Ltd. ................................ 3,000 60,471
Mazda Motor Corp.*..................... 11,000 38,395
Mitsubishi Heavy Industries, Ltd. ..... 4,000 30,681
Murata Manufacturing Co., Ltd. ........ 2,000 79,581
Namco Ltd. ............................ 2,000 77,138
NGK Spark Plug Co. .................... 4,000 43,630
Nikko Securities Co., Ltd. ............ 5,000 30,759
Nippon Express Co., Ltd. .............. 6,000 47,906
Okumura................................ 3,000 15,890
Royal Ltd.............................. 100 2,103
Sakura Bank Ltd........................ 8,000 61,291
Sanwa Bank............................. 2,000 29,668
Shimachu............................... 1,000 30,017
Sony Music Entertainment, Inc. ........ 1,000 46,859
Square Co. Ltd......................... 600 29,581
Sumitomo Rubber Industries............. 6,000 40,366
Tokyo Steel Manufacturing.............. 600 6,702
Toyo Ink Manufacturing................. 10,000 39,965
Yamato Kogyo Co., Ltd.................. 6,000 59,162
----------
TOTAL JAPAN............................ 1,346,151
----------
</TABLE>
13
<PAGE> 16
INTERNATIONAL FUND (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ ----------
<S> <C> <C>
MALAYSIA -- 1.3%
Bumi Armada Berhad*.................... 143 $ 351
Land & General Holdings................ 13,000 14,938
Renong Berhad.......................... 7,000 9,153
Resorts World Berhad................... 4,000 12,045
Sime Darby Berhad...................... 12,000 39,940
Sungei Way Holdings Berhad............. 5,000 9,430
----------
TOTAL MALAYSIA......................... 85,857
----------
MEXICO -- 3.2%
Cemex. S.A. de C.V. ................... 5,000 21,397
Corporacion Geo, S.A. de C.V.*......... 5,000 28,571
Fomento Economico Mexicano, S.A. de
C.V. ................................ 4,000 23,814
Grupo Financiero Bancomer, S.A. de
C.V.*................................ 37,000 17,883
Grupo Televisa S.A.*................... 2,000 30,308
Kimberly Clark de Mexico, S.A. de
C.V. ................................ 11,500 45,595
Panamerican Beverages, Inc. ........... 1,100 35,613
----------
TOTAL MEXICO........................... 203,181
----------
NETHERLANDS -- 2.7%
AKZO Nobel............................. 300 41,104
ING Groep NV........................... 1,621 74,721
Polygram NV............................ 1,100 57,709
----------
TOTAL NETHERLANDS...................... 173,534
----------
NEW ZEALAND -- 0.9%
Air New Zealand Ltd. .................. 4,000 12,227
Brierley Investments Ltd. ............. 14,000 13,694
Carter Holt Harvey Ltd. ............... 12,000 31,055
----------
TOTAL NEW ZEALAND...................... 56,976
----------
NORWAY -- 1.8%
Nycomed ASA............................ 4,100 60,431
Saga Petroleum ASA..................... 3,000 56,910
----------
TOTAL NORWAY........................... 117,341
----------
PERU -- 0.7%
Compania de Minas Buenaventura S.A.
ADR.................................. 2,300 45,281
----------
PHILIPPINES -- 0.7%
Philippine Long Distance Telephone Co.
ADR.................................. 400 25,700
Pilipino Telephone Corp.*.............. 34,000 17,077
----------
TOTAL PHILIPPINES...................... 42,777
----------
SINGAPORE -- 2.0%
Development Bank of Singapore Ltd. .... 3,000 37,770
Keppel Fels Ltd. ...................... 2,000 6,771
Keppel Corp. Ltd. ..................... 8,750 38,863
Keppel Land Limited ................... 10,000 26,579
United Overseas Bank Ltd. ............. 2,000 20,564
----------
TOTAL SINGAPORE........................ 130,547
----------
SPAIN -- 0.5%
Empresa Nacional de Electridad,
S.A. ................................ 225 18,890
Telefonica de Espana................... 500 14,456
----------
TOTAL SPAIN............................ 33,346
----------
SWEDEN -- 2.1%
Nordbanken AB.......................... 1,300 43,755
Pharmacia & Upjohn, Inc. .............. 2,300 77,711
Sparbanken Sverige AB, Swedbank........ 660 14,696
----------
TOTAL SWEDEN........................... 136,162
----------
SWITZERLAND -- 2.0%
Ciba Specialty Chemicals AG*........... 10 $ 924
Nestle SA.............................. 26 34,289
Sulzer AG.............................. 70 59,915
Sairgroup*............................. 30 33,607
----------
TOTAL SWITZERLAND...................... 128,735
----------
THAILAND -- 0.6%
Land & House Public Co., Ltd. ......... 8,000 17,349
Siam City Cement Public Co., Ltd. ..... 2,000 6,506
Siam Commercial Bank & Public Co.,
Ltd. ................................ 4,000 17,028
----------
TOTAL THAILAND......................... 40,883
----------
UNITED KINGDOM -- 12.6%
Associated British Foods PLC........... 8,500 73,394
Bass PLC............................... 2,300 28,076
BOC Group PLC.......................... 3,100 53,948
Boots Co. PLC.......................... 5,100 59,749
British Petroleum Co. PLC.............. 700 8,708
British Telecom PLC.................... 4,000 29,709
BTR PLC................................ 12,000 41,066
Burmah Castrol PLC..................... 2,700 45,750
Carlton Communications PLC............. 6,000 50,709
Centrica PLC*.......................... 38,500 46,964
Cookson Group PLC...................... 14,230 50,120
De La Rue PLC.......................... 7,500 46,087
Guinness PLC........................... 8,000 78,336
PowerGen PLC........................... 2,800 33,339
Rank Group PLC......................... 9,000 57,028
Reckitt & Colman PLC................... 2,700 40,265
Royal & Sun Alliance Group PLC......... 2,000 14,755
Sainsbury (J) PLC...................... 8,000 48,560
----------
TOTAL UNITED KINGDOM................... 806,563
----------
TOTAL FOREIGN STOCKS (COST $5,474,937)..... 5,854,868
----------
RIGHTS -- 0.0%
Sulzer Rights*......................... 70 0
----------
</TABLE>
<TABLE>
<CAPTION>
PAR
(000)
------
<S> <C> <C>
REPURCHASE AGREEMENTS -- 10.0%
Lehman Brothers
6.00% dated 06/30/97, repurchase
price $642,107 (collateralized by
U.S. Treasury Strips, par value
$2,095,000, market value $668,012,
due 07/01/97) (Cost $642,000)...... $ 642 $ 642,000
----------
TOTAL INVESTMENTS -- 101.2% (COST
$6,116,937).............................. 6,496,868
----------
LIABILITIES IN EXCESS OF OTHER
ASSETS -- 1.2%........................... (74,533)
----------
NET ASSETS -- 100.0%....................... $6,422,335
==========
Unless otherwise noted, all foreign
stocks are common stock.
</TABLE>
14
<PAGE> 17
INTERNATIONAL FUND (CONCLUDED)
- --------------------------------------------------------------------------------
Foreign currency exchange contracts outstanding at June 30, 1997:
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT CONTRACTED UNREALIZED
COVERED EXCHANGE EXPIRATION APPRECIATION
TYPE BY CONTRACT RATE MONTH (DEPRECIATION)
- ------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Buy JPY $ 3,428 114.56400 7/97 $ (4)
Buy GBP 53,795 0.60052 7/97 87
Buy GBP 30,660 0.60054 7/97 (3)
Buy FRF 9,790 5.86436 7/97 (92)
Buy FRF 1,076 5.87500 7/97 (13)
Buy NZD 3,911 1.47229 7/97 (30)
Buy AUD 317 1.32260 7/97 2
Buy AUD 9,984 1.32257 7/97 54
Buy AUD 61 1.32256 7/97 --
----
$ 1
====
Sell CHF $13,941 1.46040 7/97 $207
Sell CHF 5,622 1.46003 7/97 32
Sell FRF 15,067 5.86436 7/97 30
Sell NZD 2,060 1.47221 7/97 14
Sell NZD 7,383 1.47233 7/97 84
----
$367
====
</TABLE>
- --------------------------------------------------------------------------------
* Non-income producing securities.
144A -- Security was purchased pursuant to Rule 144A under the Securities Act of
1933 and may not be resold subject to that rule except to qualified
institutional buyers. At the end of the period, these securities
amounted to 0.5% of net assets.
ADR -- American Depository Receipt
Countries/Currencies:
AUD -- Australia/Australian Dollar
CHF -- Switzerland/Swiss Franc
FRF -- France/French Franc
GBP -- United Kingdom/British Pound
JPY -- Japan/Japanese Yen
NZD -- New Zealand/New Zealand Dollar
See Notes to Financial Statements.
15
<PAGE> 18
PACIFIC INNOVATIONS TRUST
STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY MARKET MANAGED
FUND BOND FUND
-----------------------------
<S> <C> <C>
ASSETS
Investments in securities at value................................. $5,428,605 $6,169,074
Cash in bank, including foreign currency holdings.................. 641 --
Receivable for:
Securities sold................................................. -- --
Dividends and interest.......................................... 16,624 56,201
Fund shares sold................................................ -- 70,889
Due from Pacific Mutual............................................ 7,321 3,876
Other assets....................................................... 1,459 3,064
Unrealized appreciation on foreign currency exchange contracts..... -- --
---------- ----------
Total Assets............................................... 5,454,650 6,303,104
---------- ----------
LIABILITIES
Cash Overdraft....................................................... -- --
Payable for:
Securities purchased............................................ -- 49,665
Accrued expenses................................................ 3,533 4,242
Accrued dividends............................................... 780 --
---------- ----------
Total Liabilities.......................................... 4,313 53,907
---------- ----------
Net Assets........................................................... $5,450,337 $6,249,197
========== ==========
COMPONENTS OF NET ASSETS
Common stock (unlimited number of shares authorized, $.001 par value
per share)......................................................... $ 5,450 $ 625
Additional paid-in capital........................................... 5,444,887 6,250,682
Undistributed net investment income (loss)........................... 0 0
Accumulated net realized gain (loss) on investments and foreign
currency transactions.............................................. 0 (41,119)
Accumulated net unrealized appreciation on investments, foreign
currency transactions, and forward currency contracts.............. 0 39,009
---------- ----------
Net Assets........................................................... $5,450,337 $6,249,197
========== ==========
Shares outstanding................................................... 5,450,337 625,140
Net asset value, offering and redemption price per share............. $ 1.00 $ 10.00
========== ==========
Investments at cost.................................................. $5,428,605 $6,130,065
========== ==========
</TABLE>
See Notes to Financial Statements.
16
<PAGE> 19
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CAPITAL
INCOME BLUE CHIP MID-CAP AGGRESSIVE INTERNATIONAL
FUND FUND EQUITY FUND GROWTH FUND FUND
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$8,134,704 $7,915,285 $6,074,782 $6,121,709 $ 6,496,868
-- 447,037 505,476 -- 802
52,442 28,623 140,026 1,041,941 66,059
43,566 8,390 7,280 2,353 21,277
63,922 122,354 17,513 9,262 30,312
1,997 848 1,200 -- 396
3,016 2,929 2,973 2,827 3,017
-- -- -- -- 368
---------- ---------- ---------- ---------- ----------
8,299,647 8,525,466 6,749,250 7,178,092 6,619,099
---------- ---------- ---------- ---------- ----------
1,969 -- -- 12,808 --
187,791 44,617 158,539 982,361 186,403
4,847 4,955 3,962 4,577 10,361
-- -- -- -- --
---------- ---------- ---------- ---------- ----------
194,607 49,572 162,501 999,746 196,764
---------- ---------- ---------- ---------- ----------
$8,105,040 $8,475,894 $6,586,749 $6,178,346 $ 6,422,335
========== ========== ========== ========== ==========
$ 747 $ 758 $ 597 $ 568 $ 587
7,592,379 7,808,803 6,042,412 5,715,326 5,927,506
53,530 21,293 15,804 (5,158) 50,682
(4,380) (39,217) (97,061) 253,462 64,519
462,764 684,257 624,997 214,148 379,041
---------- ---------- ---------- ---------- ----------
$8,105,040 $8,475,894 $6,586,749 $6,178,346 $ 6,422,335
========== ========== ========== ========== ==========
746,885 758,365 596,866 568,470 586,666
$ 10.85 $ 11.18 $ 11.04 $ 10.87 $ 10.95
========== ========== ========== ========== ==========
$7,671,940 $7,231,028 $5,449,785 $5,907,561 $ 6,116,937
========== ========== ========== ========== ==========
</TABLE>
17
<PAGE> 20
PACIFIC INNOVATIONS TRUST
STATEMENTS OF OPERATIONS
FOR THE PERIOD FROM MARCH 1, 1997 TO
JUNE 30, 1997(1) (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY MARKET MANAGED
FUND BOND FUND
----------------------------
<S> <C> <C>
INVESTMENT INCOME
Interest........................................................... $ 92,782 $117,660
Dividends.......................................................... -- --
Less Foreign withholding taxes.................................. -- --
------------ ---------
Total Investment Income.................................... 92,782 117,660
------------ ---------
EXPENSES
Investment advisory fees........................................... 3,709 6,350
Shareholder servicing fees......................................... 2,698 2,746
Accounting fees.................................................... 1,602 1,630
Custodian fees..................................................... 2,713 1,843
Professional fees.................................................. 6,311 6,388
Trustees' fees and expenses........................................ 2,881 2,918
Insurance fees..................................................... 1,488 1,492
Miscellaneous expenses............................................. 2,728 2,756
------------ ---------
Total Expenses............................................. 24,130 26,123
Less: Advisory fee waivers and expense reimbursements...... (14,013) (13,251)
------------ ---------
Net Expenses............................................... 10,117 12,872
------------ ---------
Net Investment Income (Loss)......................................... 82,665 104,788
------------ ---------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS
Net realized gain (loss) on:
Investments and foreign currency transactions................... -- (41,119)
Net change in unrealized appreciation on investments and foreign
currency transactions........................................... -- 39,009
------------ ---------
Net Realized and Unrealized Gain (Loss) on Investments and Foreign
Currency Transactions.............................................. 0 (2,110)
------------ ---------
Net Increase in Net Assets from Operations......................... $ 82,665 $102,678
============= ==========
</TABLE>
- --------------------------------------------------------------------------------
(1) Commenced operations on March 1, 1997.
See Notes to Financial Statements.
18
<PAGE> 21
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CAPITAL
INCOME BLUE CHIP MID-CAP AGGRESSIVE INTERNATIONAL
FUND FUND EQUITY FUND GROWTH FUND FUND
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 33,583 $ 7,708 $ 6,662 $ 10,537 $ 14,284
36,082 31,353 25,577 1,591 65,210
-- (147) (19) -- (7,148)
-------- --------- ----------- ----------- -------------
69,665 38,914 32,220 12,128 72,346
-------- --------- ----------- ----------- -------------
8,902 9,935 9,256 10,237 11,531
2,967 2,999 2,794 2,685 2,795
1,762 1,781 1,659 1,594 1,660
2,248 2,486 2,514 2,589 6,905
6,857 6,899 6,478 6,253 6,513
3,133 3,152 2,959 2,856 2,975
1,492 1,492 1,492 1,492 1,492
2,903 2,919 2,785 2,712 2,792
-------- --------- ----------- ----------- -------------
30,264 31,663 29,937 30,418 36,663
(14,129) (14,042) (13,521) (13,132) (14,999)
-------- --------- ----------- ----------- -------------
16,135 17,621 16,416 17,286 21,664
-------- --------- ----------- ----------- -------------
53,530 21,293 15,804 (5,158) 50,682
-------- --------- ----------- ----------- -------------
(4,380) (39,217) (97,061) 253,462 64,519
462,764 684,257 624,997 214,148 379,041
-------- --------- ----------- ----------- -------------
458,384 645,040 527,936 467,610 443,560
-------- --------- ----------- ----------- -------------
$511,914 $666,333 $ 543,740 $ 462,452 $ 494,242
======== ========= =========== ============ ===========
</TABLE>
- --------------------------------------------------------------------------------
19
<PAGE> 22
PACIFIC INNOVATIONS TRUST
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD FROM MARCH 1, 1997 TO
JUNE 30, 1997(1) (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY MARKET MANAGED
FUND BOND FUND
-----------------------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss)....................................... $ 82,665 $ 104,788
Net realized gain (loss) on investments and foreign currency
transactions.................................................... -- (41,119)
Net change in unrealized appreciation on investments and foreign
exchange transactions........................................... -- 39,009
------------ ----------
Net Increase in Net Assets from Operations...................... 82,665 102,678
------------ ----------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends to shareholders from net investment income............... (82,665) (104,788)
------------ ----------
CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold.......................................... 5,364,876 6,146,514
Net asset value of shares issued in reinvestment of dividends and
distributions................................................... 81,885 104,789
Cost of shares redeemed............................................ (96,364) (6)
------------ ----------
Increase in Net Assets from Capital Share Transactions.......... 5,350,397 6,251,297
------------ ----------
Total Increase in Net Assets.................................. 5,350,397 6,249,187
NET ASSETS
Beginning of Period................................................ 99,940 10
------------ ----------
End of Period...................................................... $5,450,337 $6,249,197
============= ==========
SHARES ISSUED AND REDEEMED
Shares sold........................................................ 5,364,876 614,606
Shares issued in reinvestment of dividends and distributions....... 81,885 10,534
Shares redeemed.................................................... (96,364) (1)
------------ ----------
Net Increase in Shares Outstanding.............................. 5,350,397 625,139
============= ==========
</TABLE>
- --------------------------------------------------------------------------------
(1) Commenced operations on March 1, 1997.
See Notes to Financial Statements.
20
<PAGE> 23
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CAPITAL
INCOME BLUE CHIP MID-CAP AGGRESSIVE INTERNATIONAL
FUND FUND EQUITY FUND GROWTH FUND FUND
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 53,530 $ 21,293 $ 15,804 $ (5,158) $ 50,682
(4,380) (39,217) (97,061) 253,462 64,519
462,764 684,257 624,997 214,148 379,041
---------- ---------- ----------- ----------- -------------
511,914 666,333 543,740 462,452 494,242
---------- ---------- ----------- ----------- -------------
-- -- -- -- --
---------- ---------- ----------- ----------- -------------
7,593,122 7,809,556 6,043,038 5,717,962 5,928,089
-- -- -- -- --
(6) (5) (39) (2,078) (6)
---------- ---------- ----------- ----------- -------------
7,593,116 7,809,551 6,042,999 5,715,884 5,928,083
---------- ---------- ----------- ----------- -------------
8,105,030 8,475,884 6,586,739 6,178,336 6,422,325
10 10 10 10 10
---------- ---------- ----------- ----------- -------------
$8,105,040 $8,475,894 $6,586,749 $6,178,346 $ 6,422,335
========= ========= =========== ============ ===========
746,885 758,365 596,868 568,677 586,666
-- -- -- -- --
(1) (1) (3) (208) (1)
---------- ---------- ----------- ----------- -------------
746,884 758,364 596,865 568,469 586,665
========= ========= =========== ============ ===========
</TABLE>
- --------------------------------------------------------------------------------
21
<PAGE> 24
PACIFIC INNOVATIONS TRUST
FINANCIAL HIGHLIGHTS
FOR THE PERIOD FROM MARCH 1, 1997 TO
JUNE 30, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY MARKET MANAGED
FUND BOND FUND
------------ ---------
1997(1) 1997(1)
----------------------------
<S> <C> <C>
Net Asset Value, beginning of period................................. $ 1.00 $ 10.00
------------ ---------
Net investment income (loss)......................................... 0.02 0.19
Net realized and unrealized gain on investments and foreign currency
transactions....................................................... 0.00 0.00
------------ ---------
Total from investment operations..................................... 0.02 0.19
------------ ---------
Dividends from net investment income................................. (0.02) (0.19)
------------ ---------
Total distributions.................................................. (0.02) (0.19)
------------ ---------
Net Asset Value, end of period....................................... $ 1.00 $ 10.00
============= ==========
Total return......................................................... 1.62% 1.96%
============= ==========
Net assets, end of period (in thousands)............................. $ 5,450 $ 6,249
============= ==========
Ratio of expenses to average net assets:
After fee waivers and reimbursements............................... 0.60%* 0.75%*
============= ==========
Before fee waivers and reimbursements.............................. 1.43%* 1.52%*
============= ==========
Ratio of net investment income to average net assets:
After fee waivers and reimbursements............................... 4.90%* 6.11%*
============= ==========
Before fee waivers and reimbursements.............................. 4.07%* 5.33%*
============= ==========
Portfolio turnover rate.............................................. -- 107.02%
============= ==========
</TABLE>
- --------------------------------------------------------------------------------
(1) Commenced operations on March 1, 1997.
* Annualized.
See Notes to Financial Statements.
22
<PAGE> 25
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CAPITAL
INCOME BLUE CHIP MID-CAP AGGRESSIVE INTERNATIONAL
FUND FUND EQUITY FUND GROWTH FUND FUND
------ -------- ---------- ----------- -----------
1997(1) 1997(1) 1997(1) 1997(1) 1997(1)
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00
------- --------- ----------- ----------- -------------
0.07 0.03 0.03 (0.01) 0.09
0.78 1.15 1.01 0.88 0.86
------- --------- ----------- ----------- -------------
0.85 1.18 1.04 0.87 0.95
------- --------- ----------- ----------- -------------
-- -- -- -- --
------- --------- ----------- ----------- -------------
0.00 0.00 0.00 0.00 0.00
------- --------- ----------- ----------- -------------
$ 10.85 $ 11.18 $ 11.04 $ 10.87 $ 10.95
======= ======= ========= ========= =========
8.50% 11.80% 10.40% 8.70% 9.50%
======= ======= ========= ========= =========
$ 8,105 $ 8,476 $ 6,587 $ 6,178 $ 6,422
======= ======= ========= ========= =========
0.87%* 0.94%* 0.94%* 1.03%* 1.24%*
======= ======= ========= ========= =========
1.63%* 1.69%* 1.71%* 1.81%* 2.10%*
======= ======= ========= ========= =========
2.89%* 1.14%* 0.90%* -0.31%* 2.90%*
======= ======= ========= ========= =========
2.12%* 0.39%* 0.13%* -1.90%* 2.04%*
======= ======= ========= ========= =========
13.68% 20.96% 24.59% 44.34% 19.67%
======= ======= ========= ========= =========
</TABLE>
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23
<PAGE> 26
PACIFIC INNOVATIONS TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Pacific Innovations Trust (the "Trust"), was organized under the laws of the
State of Delaware on September 25, 1996, as a "Delaware Business Trust". The
Trust is registered under the Investment Company Act of 1940, as amended, as an
open-end management investment company. The Trust commenced operations on March
1, 1997 and operates as a series company comprising seven funds: Money Market
Fund, Managed Bond Fund, Capital Income Fund, Blue Chip Fund, Mid-Cap Equity
Fund, Aggressive Growth Fund and International Fund.
The Trust is the funding vehicle for variable annuity contracts offered by
Pacific Mutual Life Insurance Company. Bank of America National Trust and
Savings Association, a subsidiary of BankAmerica Corporation, serves as the
Funds' investment advisor. Scudder, Stevens & Clark and Wellington Management
Company, LLP serve as sub-advisors to the Managed Bond Fund and the
International Fund, respectively.
The following is a summary of the significant accounting policies followed by
the Funds in the preparation of their financial statements. The policies are in
conformity with generally accepted accounting principals.
Security Valuation
Portfolio securities listed on an exchange and over the counter securities
quoted on the NASDAQ system are valued at the close of regular trading on each
business day the New York Stock Exchange ("NYSE") is open. Securities are valued
at the last sale price on the securities exchange or securities market in which
such securities primarily are traded. Equity securities not listed on an
exchange or securities market, or securities on which there were no
transactions, are valued at the average of the most recent bid and asked prices.
U.S. Government and bond securities are valued at the bid price. Any securities
or other assets for which recent market quotations are not readily available are
valued as determined in good faith by or at the direction of the Board of
Trustees.
Short Term obligations which mature in sixty days or less are valued at
amortized cost. Short Term obligations with more than sixty days to maturity are
valued at current market value until the sixtieth day prior to maturity, and
thereafter are valued on an amortized cost basis based on the value on such
date.
The Money Market Fund values investments utilizing the amortized cost valuation
technique permitted in accordance with Rule 2a-7 under the Investment Company
Act of 1940, which requires the Fund to comply with certain conditions. This
technique involves valuing a portfolio security initially at its cost and
thereafter assuming a constant amortization to maturity of any discount or
premium.
Investment Transactions and Investment Income
Security transactions are accounted for on the trade date. Realized gains and
losses from security transactions are recognized on the specific identification
basis. Dividend income is recorded on the ex-dividend date. Corporate actions,
including dividends, on foreign securities are recorded as soon as reliable
information is available from the Trust's sources. All premium and discount
amortization/accretions are determined by the effective yield method.
Foreign Currency Translation and Foreign Currency Exchange Contracts
The books and records of the Funds are maintained in U.S. dollars. All assets
and liabilities of a Fund that are initially expressed in foreign currencies are
translated into U.S. dollars each business day using the current exchange rates
determined prior to the close of the NYSE. Purchases and sales of foreign
securities and income and expenses relating to the foreign securities are
converted into U.S. dollars based upon currency exchange rates prevailing on the
respective date of such transactions. Gains and losses attributable to changes
in foreign currency exchange rates are included for financial statement purposes
in the net realized gains and losses on investments and foreign currency
transactions.
A forward foreign currency exchange contract ("forward contract") is a
commitment to purchase or sell a foreign currency at a future date, at a
negotiated rate. The International Fund generally enters into forward contracts
as a hedge, in connection with the purchase or sale of a security denominated in
a foreign currency. Forward contracts are valued daily based on the effective
exchange rate and unrealized appreciation or depreciation is recorded. The Fund
will realize a gain or loss upon the
24
<PAGE> 27
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closing or settlement of the forward transaction. Risks of entering into forward
contracts include the potential inability of the counter party to meet the terms
of the contract, and the Fund giving up opportunity for profit.
There are certain additional risks involved when investing in foreign securities
that are not inherent in domestic securities. These risks involve foreign
currency exchange rate fluctuations, adverse political and economic
developments, and the imposition of unfavorable foreign governmental laws and
regulations.
Dividends and Distributions to Shareholders
The Funds record dividends and distributions to shareholders on the ex-date.
Each Fund, with the exception of the Money Market Fund and the Managed Bond Fund
declare and pay dividends arising from net investment income gains on an annual
basis. Dividends from net investment income are declared and paid daily by the
Money Market Fund, and monthly by the Managed Bond Fund. Distributions for net
realized capital gains, if any, are declared and paid on an annual basis, for
each of the Funds.
The amount of distributions from net investment income and net realized capital
gains, if any, are determined in accordance with federal income tax regulations,
which may differ from generally accepted accounting principles. Key differences
include the treatment of short-term capital gains, wash sales, and the treatment
of foreign currencies. To the extent that these differences are permanent in
nature, such amounts are reclassified within the capital accounts based on their
federal tax-basis treatment. Distributions which exceed net investment income
and net realized capital gains for financial reporting purposes but not for tax
purposes are reported as distributions in excess of net investment income or net
realized capital gains. To the extent they exceed net investment income and net
realized capital gains for tax purposes, they are reported as distributions of
paid-in-capital.
Repurchase Agreements
Under a repurchase agreement a Fund may acquire securities from financial
institutions, subject to the sellers agreement to repurchase such securities at
a mutually agreed upon time and price. The resale price is in excess of the
purchase price and reflects an agreed upon interest rate for the period of time
the agreement is outstanding. The Funds' custodian takes possession of the
collateral pledged for investments in repurchase agreements on behalf of the
Funds. It is the policy of the Funds to value the underlying collateral daily on
a mark-to-market basis to determine that the value, including accrued interest,
is at least equal to the repurchase price. If the counter-party to the agreement
defaults, a Fund might incur a loss or delay in the realization of proceeds if
the value of the collateral securing the repurchase agreement declines or incur
disposition costs in liquidating the collateral.
Use of Estimates
Management of the Funds has made certain estimates and assumptions relating to
the reporting of assets and liabilities to prepare these financial statements in
conformity with generally accepted accounting principles. Actual results could
differ from these estimates.
2. INVESTMENT MANAGEMENT AGREEMENTS,
INVESTMENT SUB-ADVISORY AGREEMENTS
AND TRANSACTIONS WITH AFFILIATES
The Funds have entered into Investment Management Agreements with Bank of
America National Trust and Savings Association ("Investment Manager") which
provide that the Investment Manager will furnish each Fund with investment
advisory and administrative services. The Investment Manager receives a fee
computed daily and paid monthly based on annual rates of 0.22%, 0.37%, 0.48%,
0.53%, 0.53%, 0.61%, and 0.66% of the average daily net assets of the Money
Market Fund, Managed Bond Fund, Capital Income Fund, Blue Chip Fund, Mid-Cap
Equity Fund, Aggressive Growth Fund, and International Fund, respectively.
The Investment Manager has engaged Scudder, Stevens, & Clark and Wellington
Management Company, LLP to serve as sub-advisors for the Managed Bond Fund and
International Fund, respectively. The sub advisors receive a fee from the
Investment Manager computed daily and paid monthly based on an annual rate of
0.20% and 0.40% for the Managed Bond Fund and International Fund, respectively.
The Investment Manager and Pacific Mutual Life Insurance Company have
voluntarily agreed to waive fees
25
<PAGE> 28
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and reimburse Fund expenses, excluding interest, taxes, brokerage, and other
portfolio transactions costs, so that the expenses will not exceed 0.60%, 0.75%,
0.87%, 0.94%, 0.94%, 1.03%, and 1.24% of the average net assets based on annual
basis of the Money Market Fund, Managed Bond Fund, Capital Income Fund, Blue
Chip Fund, Mid-Cap Equity Fund, Aggressive Growth Fund, and International Fund,
respectively.
The Investment Management Agreement with each Portfolio provides that the
Investment Manager will reimburse the Portfolio to prevent its expenses from
exceeding a specific percentage limit. During the period ended June 30, 1997,
the Investment Manager reimbursed all of the Portfolios for expenses pursuant to
those provisions.
PNC Bank, N.A. ("PNC Bank") serves as custodian for the Funds. As custodian of
the Trust's assets, PNC Bank performs a variety of custodial services including
maintaining a separate account for each Fund, holding and disbursing portfolio
securities, receiving and disbursing money, and collecting income and other
payments and distributions on account of the portfolio securities.
PFPC, Inc. ("PFPC") serves as accounting agent for the Funds. Under the
Accounting Services Agreement, PFPC has agreed to provide certain accounting,
bookkeeping, pricing, dividend distribution calculation, and disbursing services
with respect to the Trust. PNC Bank and PFPC are affiliates of PNC Bank Corp.
Pacific Mutual Life is the transfer agent for the Trust and also provides
shareholder support services.
Certain officers and/or Trustees of the Trust are also officers and/or directors
of the Investment Manager, sub-administrator and accounting agent. During the
period ended June 30, 1997, the Trust made no direct payments to its officers or
interested Trustees.
3. PURCHASES AND SALES OF SECURITIES
The cost of securities purchased and proceeds from securities sold, excluding
short-term obligations, during the period ended June 30, 1997 were: $10,670,920
and $4,933,452 for Managed Bond Fund; $7,644,972 and $748,453 for Capital Income
Fund; $8,052,350 and $1,202,262 for Blue Chip Fund; $6,473,936 and $1,269,874
for Mid-Cap Equity Fund; $6,866,132 and $1,980,661 for Aggressive Growth Fund;
and $6,402,284 and $998,382 for International Fund, respectively.
4. TAX MATTERS
It is the Trust's policy to comply with the requirements of the Internal Revenue
Code pertaining to regulated investment companies and to distribute all of its
taxable income, as well as any net realized gains, to its shareholders.
Therefore, no federal income or excise tax provision has been made. Foreign
taxes have been provided for on dividend and interest income earned on foreign
investments in accordance with the applicable country's tax rates and, to the
extent unrecoverable, are recorded as a reduction of investment income.
Tax Cost of Investments
At June 30, 1997, the net unrealized appreciation or depreciation based on the
cost of investments for federal income tax purposes was as follows:
<TABLE>
<CAPTION>
TAX GROSS GROSS NET UNREALIZED
COST OF UNREALIZED UNREALIZED APPRECIATION
INVESTMENTS APPRECIATION DEPRECIATION (DEPRECIATION)
----------- ------------ ------------ --------------
<S> <C> <C> <C> <C>
Money Market Fund.... $ 5,429,605 $ 0 $ (0) $ 0
Managed Bond Fund.... 6,130,065 43,561 (4,552) 39,009
Capital Income
Fund................ 7,671,940 541,230 (78,466) 462,764
Blue Chip Fund....... 7,231,028 710,708 (26,451) 684,257
Mid-Cap Equity
Fund................ 5,449,785 666,582 (41,585) 624,997
Aggressive Growth
Fund................ 5,907,561 436,123 (221,975) 214,148
International Fund... 6,116,937 535,550 (155,619) 379,931
</TABLE>
26
<PAGE> 29
Semi-Annual Report
As of June 30, 1997
PACIFIC INNOVATIONS TRUST
- --------------------
BULK RATE
U.S. POSTAGE
PAID
PACIFIC MUTUAL
- --------------------
Pacific Mutual Life Insurance Company
Variable Annuity Department
P.O. Box 7187
Pasadena, California 91109-7187
