A Message from the FIRSTAR Select REIT-Plus Fund
Dear Shareholder:
The FIRSTAR Select REIT-Plus Fund (REITs)seeks to provide consistent total
return by focusing on appreciation and income. The Fund seeks to achieve these
results through a consistent investment commitment to Real Estate Investment
Trusts.
Performance for the REITs sector over the 1999/2000 Fiscal Year ending March
closed with positive momentum as investors renewed their interest in the sector
during the last quarter of the fiscal year. REITs, as measured by the Morgan
Stanley REIT Index, rose 2.95% during the fiscal year as compared to 2.87% for
the Lipper Average Real Estate Fund. The Firstar REIT-Plus Fund outperformed the
Lipper Average Real Estate Fund manager with a fiscal year return of 4.22% for
the "Y" class and 3.97% for the "B" class. The Morgan Stanley REIT Index is a
total-return index comprised of the most actively traded real estate investment
trusts. It is designed to be a measure of real estate equity performance. The
index was developed as of December 31, 1994 and is currently comprised of over
125+ real estate investment trusts.
The fundamentals for REITs remain attractive as valuations remain low for these
stocks despite their positive earnings growth trends and historically high
dividend yields. Construction trends remain attractive, in general, for most
sectors, including residential and office/industrial, which remain the highest
weighted sectors in the Firstar REIT-Plus Fund. In addition, REIT public
offerings are now substantially less than the levels seen over the past three
years while most sectors of the real estate market are witnessing an attractive
level of growth in line with the U.S. economy as measured by Gross Domestic
Product growth.
The FIRSTAR Select REIT-Plus Fund is managed using both quantitative and
fundamental analysis to aid us in meeting investors' long-term goals of both
price appreciation and income. These tools allow us to focus on those sectors
that will most benefit our investors in achieving these objectives. Above
average earnings growth rates, low levels of debt to capital and attractive
income yields coupled with low levels of new supply in this sector offer
attractive reasons for investors to consider REITs in achieving their investment
objectives.
Karen L. Bowie, CFA
Vice President, Fund Manager
<PAGE>
Growth of a $10,000 Investment
Firstar Select REIT-Plus Fund (Class Y Shares)
vs.
Morgan Stanley REIT Index
AVERAGE ANNUAL TOTAL RETURNS
As of 3/31/00
Class Y Shares
---------------------------- ----------------------
Since Inception (6/24/97) -2.92%
---------------------------- ----------------------
---------------------------- ----------------------
1 Year 4.22%
---------------------------- ----------------------
Class B Shares NAV CDSC
---------------------------- ---------------------- ----------------------
Since Inception (4/1/98) -9.16% -14.16%
---------------------------- ---------------------- ----------------------
---------------------------- ---------------------- ----------------------
1 Year 3.97% -1.97%
---------------------------- ---------------------- ----------------------
Past performance is not predictive of future performance. Market volatility can
significantly impact short-term performance. The results of an investment made
today may differ substantially from the historical performance shown. The
performance of the Fund's Class B shares will differ from that of its Class Y
shares due to differing fees and expenses. At the end of the same time period, a
$10,000 investment on April 1, 1998 in the Fund's Class B shares would have been
valued at $8,251. After the effect of the contingent deferred sales charge,
redemption proceeds would have been $7,921.
<PAGE>
INVESTMENTS-FIRSTAR SELECT REIT-PLUS FUND
-----------------------------------------
Statement of Net Assets March 31, 2000
<TABLE>
<S> <C> <C> <C> <C> <C>
Number Market Number Market
of Shares Value of Shares Value
---------- ------- --------- ------
COMMON STOCKS - 92.90% Lasalle Hotel Properties REIT 55,000 $687,500
---------------------- Liberty Property Trust REIT 24,450 585,273
Mack-Cali Reality Corp. REIT 15,500 395,250
Lodging - 2.08% Merristar Hospitality 33,162 586,553
--------------- Mills Corp. REIT 35,000 636,562
New Plan Realty Trust REIT 38,500 517,344
Starwood Hotels & Resorts Worldwide Inc. 23,300 $599,975 Pacific Gulf Properties, Inc. REIT 42,000 824,250
Prentiss Properties Trust REIT 24,000 537,000
Property Investment & Management - 1.68% Public Storage Inc. REIT 22,660 481,525
---------------------------------------- RFS Hotel Investors, Inc. REIT 21,100 228,144
Realty Income Corp. REIT 23,000 451,375
Catellus Development Corp.* 35,000 485,625 Reckson Associates Realty Corp. REIT 35,000 660,625
Simon Property Group, Inc. REIT 34,040 799,940
Real Estate Development - 2.08% Sizeler Property Investors, Inc. REIT 41,300 273,612
-------------------------------- Spieker Properties, Inc. REIT 22,000 979,000
Storage USA, Inc. REIT 15,240 465,773
TrizecHahn Corp. 40,000 600,000 Summit Properties Inc. REIT 18,000 352,125
Sun Communities Inc. REIT 9,000 261,562
Real Estate Investment Trusts - 87.06% Vornado Realty Trust REIT 15,000 502,500
--------------------------------------
Apartment Investment and TOTAL COMMON STOCKS
Management Co. REIT 25,000 954,687 (Cost $30,349,650) 26,849,980
Archstone Communities, Trust REIT 39,000 784,875 ----------
Arden Realty Group, Inc. REIT 13,251 276,615
Avalon Bay Communities, Inc. REIT 24,512 897,752 PREFERRED STOCK - .78%
Bedford Property Investors, Inc. REIT 21,000 338,625 ---------------------
Brandywine Realty Trust REIT 35,000 599,375
BRE Properties Inc. REIT 32,200 831,163 Real Estate Investment Trusts - .78%
Camden Properties Trust REIT 25,000 676,562 ------------------------------------
CBL & Associates Properties, REIT 20,500 424,094
Chelsea GCA Realty Inc. REIT 26,200 771,263 Realty Income Corp. REIT 10,000 226,250
Developers Diversified Rlty Trust REIT 48,000 666,000 (Cost $250,000)
Duke Weeks Realty Corp. REIT 45,000 852,187
EastGroup Properties, Inc. REIT 48,000 1,032,000 REPURCHASE AGREEMENTS - 5.63%
Equity Office Properties Trust REIT 47,600 1,192,975 -----------------------------
Equity Residential Properties Trust REIT 21,000 841,312
Felcor Lodging Trust, Inc. REIT 32,500 574,844 Donaldson(DLJ)($1,628,000, 6.12% Federal Natl. Mtg. Assn.
Franchise Fin. Corp. REIT 10,000 231,250 Bank 31359MEQ2,04/23/04)Purchase Date 03/31/00, Maturity
Healthcare Realty Trust REIT 20,000 338,750 Date 04/01/00 Amount Payable at Maturity $1,628,277
Home Properties NY Inc. REIT 10,000 268,750
Hospitality Properties Trust REIT 21,000 425,250
Host Marriott Corp. 20,000 178,750 Total Repurchase Agreements
JDN Realty Corp. REIT 18,868 193,397 (Cost $1,628,000) 1,628,000
Kilroy Realty Corp. REIT 23,000 491,625 ----------
Kimco Realty Corp. REIT 20,070 750,116 Total Investments - 99.31%
Koger Equity, Inc. REIT 20,000 346,250 (Cost $32,227,650) 28,704,230
Other Assets and Liabilities, Net - .69% 198,978
---------------------------------------- ---------
Net Assets - 100% $28,903,208
===========
</TABLE>
*Non-income producing securities
The accompanying notes are an integral part of these financial statements.
<PAGE>
FIRSTAR SELECT REIT-PLUS FUND
STATEMENT OF ASSETS AND LIABILITIES
March 31, 2000
ASSETS
Investments, at value (cost $32,227,650) ................ $ 28,704,230
Cash .................................................... 122
Dividend receivable ..................................... 254,109
Interest receivable...................................... 277
Receivable for shares of beneficial interest sold........ 300
Receivable for investments sold.......................... 205,319
Deferred organization costs (Note 2) .................... 16,098
Prepaid expenses......................................... 10,386
------------
Total assets ............................................ 29,190,841
LIABILITIES
Payable for Investments purchased....................... 234,463
Payable for shares of beneficial interest redeemed....... 6,271
Accrued expenses ........................................ 46,899
-------------
Total liabilities........................................ 287,633
-------------
NET ASSETS ................................................... $ 28,903,208
===========
Net assets consist of:
Paid-in capital ......................................... 34,486,633
Accumulated undistributed income......................... 9,056
Accumulated net realized gain (loss)on investments....... (2,069,061)
Net unrealized depreciation in
value of investments.................................... (3,523,420)
------------
Net assets ................................................... $ 28,903,208
===========
NET ASSET VALUE PER SHARE
Class B Shares:
Net asset value and offering price per share (based on net assets of
$89,946 and 11,572 shares of beneficial interest outstanding). $7.77
Minimum redemption price per share (net asset value x 95%).... $7.38
Class Y Shares:
Net asset value, offering and redemption price per share (based on net assets of
$28,813,262 and 3,719,089 shares of beneficial interest outstanding) $7.75
The accompanying notes are an integral part of these financial statements.
<PAGE>
FIRSTAR SELECT REIT-PLUS FUND
STATEMENT OF OPERATIONS
For the year ended March 31, 2000
INVESTMENT INCOME
Income:
Interest ................................................ $ 48,626
Dividends ............................................... 2,442,508
-----------
Total income ...................................... 2,491,134
-----------
EXPENSES:
Administrative service fees (Note 3)
Class B............................................... 6,024
Class Y............................................... 30,503
Auditing fees ....................................... 20,761
Custodian fees (Note 3) ................................. 14,541
Fund accounting fees
Class B............................................... 6,024
Class Y............................................... 24,402
Insurance ............................................... 5,295
Servicing fees .......................................... 24,908
Legal fees .............................................. 31,142
Investment adviser fees (Note 3) ........................ 229,393
Trustee's fees .......................................... 20,673
Pricing fees............................................. 4,264
Amortization of organization expenses.................... 7,506
Postage ................................................. 3,505
Registration and filing fees
Class B............................................... 670
Class Y............................................... 19,577
Printing................................................. 33,200
Transfer agent fees (Note 3)
Class B............................................... 6,024
Class Y............................................... 21,352
Other expenses ....................................... 807
---------
Total net expenses ................................. 510,571
---------
Less Expense Reimbursement from adviser (Note 2)............ 18,408
---------
NET INVESTMENT INCOME ....................................... 1,998,971
-----------
REALIZED AND UNREALIZED GAIN/LOSS
ON INVESTMENTS
Net realized loss on investments ........................ (757,592)
Change in net unrealized
appreciation of investments ........................ (101,216)
-----------
Net loss on investments ................................. (858,808)
-----------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ...............................$ 1,140,163
=================
The accompanying notes are an integral part of these financial statements.
<PAGE>
FIRSTAR SELECT REIT-PLUS FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<S> <C> <C>
Year Year
Ended Ended
March 31, March 31,
2000 1999
---- ----
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income ................................... $ 1,989,915 $ 1,627,343
Net realized (gain) loss on investments ................. (748,536) (978,775)
Change in net unrealized appreciation of investments..... (101,216) (9,338,684)
------------ ------------
Increase (Decrease) in net assets resulting from operations 1,140,163 (8,690,116)
------------
Dividends and distributions to shareholders from:
Net investment Income
Class B............................................... (6,000) (4,932)
Class Y............................................... (1,983,915) (1,622,429)
Realized Capital Gain
Class B .............................................. --- (995)
Class Y............................................... --- (338,154)
------------ -----------
Total Distributions ................... (1,989,915) (1,966,510)
------------ -----------
TOTAL INCREASE (DECREASE) ................................... (849,752) (10,656,626)
----------- ------------
Capital share transactions:
Proceeds from shares sold
Class B .............................................. 2,362 135,414
Class Y............................................... 10,071,675 8,402,387
Value of shares issued to shareholders in
reinvestment of dividends and distributions
Class B............................................... 4,835 5,927
Class Y............................................... 402,148 406,984
Cost of shares redeemed
Class B............................................... (5,520) (18,491)
Class Y............................................... (11,379,893) (11,598,765)
------------ ------------
Net decrease in net assets resulting from
capital share transactions ......................... (904,393) (2,666,544)
------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS ..................... (1,754,145) (13,323,170)
------------ ------------
NET ASSETS:
Beginning of period ..................................... $ 30,657,353 $ 43,980,523
End of period .......................................... $ 28,903,208 $ 30,657,353
============= =============
Shares of capital stock of the Fund sold and redeemed:
Shares sold
Class B............................................... 287 12,909
Class Y............................................... 1,252,567 936,347
Shares issued to shareholders in reinvestment dividends
and distributions:
Class B............................................... 631 677
Class Y............................................... 52,735 46,905
Shares redeemed
Class B............................................... (686) (2,246)
Class Y............................................... (1,426,547) (1,296,991)
----------- -----------
NET INCREASE (DECREASE) IN NUMBER OF SHARES OUTSTANDING (121,013) (302,399)
============ ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
FIRSTAR SELECT REIT-PLUS FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<S> <C> <C> <C>
Class Y (c)
Year Year Year
Ended Ended Ended
March 31, March 31, March 31,
2000 1999 1998(a)
---- ---- -------
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning ................................... $ 7.96 $10.59 $10.00
Income from investment operations:
Net investment income ................................... 0.53 0.40 0.35
Net realized and unrealized
gain (loss) on investments.......................... (0.21) (2.55) 0.86
-------- ------ -------
Total from investment income ................................. 0.32 (2.15) 1.21
Less distributions:
Dividends from net
investment income .................................. (0.53) (0.40) (0.35)
Distributions from net realized
gains on investments................................ 0.00 (0.08) (0.27)
---- ------ ------
Total from distributions ..................................... (0.53) (0.48) (0.62)
------- ------ ------
Net asset value at end of period ............................. $ 7.75 $ 7.96 $ 10.59
====== ===== =====
TOTAL RETURN.................................................. 4.22% (20.59%) 14.96%(b)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands).................... 28,813 30,566 43,981
Ratio of total expenses to
average net assets ................................. 1.61% 1.47% 1.52%(b)
Ratio of total expenses to
average net assets (after reimbursement) ........... 1.61% 1.47% 1.52%(b)
Ratio of net investment
income to average net assets........................ 6.53% 4.35% 4.29%(b)
Ratio of net investment
income to average net assets (after reimbursement) . --- --- ---
Portfolio turnover ...................................... 18.57% 45.48% 29.50%(b)
</TABLE>
(a) For the period June 24, 1997 (commencement of operations) to March 31, 1998.
(b) Annualized.
(c) Class C shares changed to class Y shares.
The accompanying notes are an integral part of these financial statements.
FIRSTAR SELECT REIT-PLUS FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<S> <C> <C>
Class B
-------
Year Year
Ended Ended
March 31, March 31,
2000 1999
---- ----
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning ................................... $ 7.99 $10.59
Income from investment operations:
Net investment income ................................... 0.53 0.40
Net realized and unrealized
gain (loss) on investments.......................... (0.22) (2.54)
-------- ------
Total from investment income ................................. 0.31 (2.14)
Less distributions:
Dividends from net
investment income .................................. (0.53) (0.38)
Distributions from net realized
gains on investments................................ 0.00 (0.08)
----- ------
Total from distributions ..................................... (0.53) (0.46)
------- ------
Net asset value at end of period ............................. $ 7.77 $ 7.99
===== =====
TOTAL RETURN.................................................. 3.97% (20.65%)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands).................... 90 91
Ratio of total expenses to
average net assets ................................. 21.55% 13.38%
Ratio of total expenses to
average net assets (after reimbursement) ........... 1.60% 1.45%
Ratio of net investment
income to average net assets........................ (12.11)% (7.53)%
Ratio of net investment
income to average net assets (after reimbursement) . 7.84% 4.39%
Portfolio turnover ...................................... 18.57% 45.48%
The accompanying notes are an integral part of these financial statements.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
Note 1 - General
Firstar Select REIT-Plus Fund (the "Fund") was organized as a series of Star
Select Funds, an Ohio business trust (the "Trust") on February 28, 1997. On
March 1, 1999 Star Select REIT-Plus Fund was changed to Firstar Select REIT-Plus
Fund. The investment objective of the Fund is to provide shareholders with above
average income and long term growth of capital. The Fund offers Class B and
Class Y shares. Class B shares may be subject to a contingent deferred sales
charge. Class Y shares are no-load where there are no sales charges or
commissions. All classes of shares have indentical rights to earnings, assets
and voting privileges, except that each class has its own expenses directly
attributable to that class.
Note 2 - Significant Accounting Policies
The following is a summary of the significant accounting policies followed by
the Fund in the preparation of its financial statements.
A) Security Valuations
The procedures and pricing service used to value securities are established and
approved by the Board of Trustees. Portfolio securities are valued using the
current market valuations: either the last reported sales price, or in the case
of securities for which there is no reported last sale, the mean of the closing
bid and asked prices. Bid price is used when no ask price is available.
B) Securities Transactions and Related Income
Securities transactions are recorded on a trade date basis. Realized gains and
losses from securities transactions are recorded on the identified cost basis.
Interest income is recorded on the accrual basis and dividend income is recorded
on the ex-dividend date.
C) Dividends and Distributions to Shareholders
The Fund intends to distribute substantially all of its net investment income as
dividends to its shareholders on a quarterly basis, and intends to distribute
its net capital gains at least once a year. However, to the extent that net
realized gains of the Fund can be reduced by any capital loss carry-overs, such
gains will not be distributed.
D) Federal Income Taxes
It is the policy of the Fund to meet the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
taxable income to its shareholders.
E) Expenses
Organizational costs represent costs incurred in connection with the
organization and the initial public offering of the Class Y shares of the Fund.
Organizational costs are deferred and will be amortized on a straight-line basis
over five years. In the event that the original shareholder (or any subsequent
transferee) redeems any of its original capital (seed capital) prior to these
organizational costs being fully amortized, the redemption proceeds will be
reduced by a pro-rata portion of any then unamortized organizational costs. At
March 31, 2000, the unamortized balance was $10,386.
The Adviser has committed to reimburse other expenses of class B shares through
July 31, 2000 to the extent necessary to maintain total operating expense as
indicated in the prospectus. Total reimbursement for the period ended March 31,
2000 is $18,408.
Note 2 - Significant Accounting Policies (continued)
F) Distribution
The Trust has adopted a 12b-1 plan, which permits the Fund to pay up to 0.25% of
average net assets as a 12b-1 fee to the Fund's Distributor. The Fund expenses
will not be affected by the 12b-1 plan because the Adviser does not intend to
activate the plan through July 31, 2000.
G) Allocation of Income, Expenses, and Gains and Losses
Income, expenses (other than those attributable to a specific class) and gains
and losses are allocated daily to each class of shares based upon the relative
proportion of net assets represented by such class. Operating expenses directly
attributable to a specific class are charged against the operations of that
class.
H) Estimates
Preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
I) Repurchase Agreement
Under the terms of a typical repurchase agreement, a Fund writes a financial
contract with a counterparty and takes possession of a government debt
obligation as collateral. The Fund also agrees with the counterparty to allow
the counterparty to repurchase the financial contract at a specific date and
price, thereby determining the yield during the Fund's holding period. This
arrangement will result in a fixed-rate of return not subject to the market's
fluctuation during the holding period indicated in the contract. The value of
the collateral is at least equal to the total amount of the repurchase
obligation, including interest. In the event of a default by the counterparty, a
Fund has the right to use the collateral to offset any losses incurred.
Note 3 - Agreements and Other Transactions with Affiliates
The Fund retains Firstar Bank (formerly Star Bank), N.A. (the "Adviser" or
"Firstar Bank") to manage the Fund's investments. The Adviser continually
conducts investment research and supervision for the Fund and is responsible for
the purchase or sale of portfolio instruments, for which it receives an annual
fee from the Fund. The Fund is authorized to pay the Adviser a monthly fee equal
to an annual average rate of 0.75% of its average daily net assets. For the year
ended March 31, 2000 the fund paid the Advisor $229,393.
The Fund also retains Firstar Bank to act as shareholder servicing agent on its
behalf. The Fund is authorized to pay Firstar Bank up to 0.25% of its average
daily net assets to provide shareholder support services and to maintain
shareholder accounts. Firstar Bank currently receives 0.10% of the Fund's
average daily net assets for shareholder services and it is anticipated that the
fee will remain at 0.10% for the foreseeable future. Firstar Bank also acts as
the Fund's custodian, for which it receives a monthly fee equal to an annual
average rate of 0.025% of its average daily net assets. The fund paid Firstar
bank $14,541 for custodian fees.
The Fund retains Unified Fund Services, Inc. ("Unified") to act as the Fund's
administrator and transfer agent. As administrator, Unified manages the Fund's
business affairs and provides the Fund with administrative services, including
compliance and accounting services and all regulatory reporting, and necessary
office equipment, personnel and facilities to operate the Fund. For these
administrative and transfer agency services, Unified receives a monthly fee from
the Fund equal to an annual average rate of 0.25% of the Fund's average daily
net assets. The Fund retains Unified Management Corporation to act as the
principal distributor of the Fund's shares.
<PAGE>
Note 3 - Agreements and Other Transactions with Affiliates (continued)
For the twelve months ended March 31, 2000, there were no commissions (sales
charges paid by investors) paid on the Class B shares.
Certain trustees and officers of the Trust are "interested persons" (as defined
in the Investment Company Act of 1940) of the Trust. Each "non-interested"
trustee is entitled to receive a quarterly Board of Trustees meeting fee of
$1,000 plus expenses for services relating to the Trust.
Note 4- Securities Transactions
For the period ended March 31, 2000, purchases and sales of investment
securities, excluding short-term investments were as follows:
Purchases Sales
----------- -------
The Firstar Select REIT-Plus Fund $ 5,503,042 $7,734,325
Note 5- Unrealized Appreciation (Depreciation)
At March 31, 2000, the composition of unrealized appreciation (depreciation) of
investment securities was as follows:
Appreciation Depreciation Net
------------- ------------ ------
The Firstar Select REIT-Plus Fund $ 827,981 ($ 4,351,401) ($3,523,420)
Note 6- Federal Tax Information
At March 31, 2000, the Fund has unused capital loss carryforwards of $1,751,915
available to offset future gains, if any, for Federal income tax purposes. The
capita. Loss carryforward expieres as follows: $994,323 in 2007 and $757,592 in
2008.
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To The Shareholders and
Board of Trustees
Firstar Select REIT-Plus Fund:
We have audited the accompanying statement of assets and liabilities of Firstar
Select REIT-Plus Fund, including the schedule of portfolio investments, as of
March 31, 2000, the related statement of operations for the year then ended, the
statement of changes in net assets for each of the two years in the period then
ended and the financial highlights for each of the two years then ended and for
the period from June 24, 1997 (commencement of operations) to March 31, 1998 in
the period then ended. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments and cash held by
the custodian as of March 31, 2000, by correspondence with the custodian. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Firstar Select REIT-Plus Fund as of March 31, 2000, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended and the financial highlights for each of
the two years then ended and for the period from June 24, 1997 (commencement of
operations) to March 31, 1998 in the period then ended, in conformity with
generally accepted accounting principles.
McCurdy & Associates CPA's, Inc.
Westlake, Ohio
April 13, 2000
