GE INSTITUTIONAL FUNDS, N-30D, 1998-06-05

GE INSTITUTIONAL FUNDS
N-30D, 1998-06-05

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GE LOGO
GE INSTITUTIONAL FUNDS
- --------------------------------------------------------------------------------
GE Institutional Funds

Semi-Annual Report
March 31, 1998

Emerging Markets Fund
International Equity Fund
U.S. Equity Fund
Mid-Cap Growth Fund
S&P 500 Index Fund
Income Fund
Money Market Fund

<PAGE>

GE INSTITUTIONAL FUNDS
- --------------------------------------------------------------------------------

UNDERSTANDING YOUR REPORT
- --------------------------------------------------------------------------------

A LETTER FROM THE PRESIDENT 1

REVIEW OF PERFORMANCE AND SCHEDULES OF INVESTMENTS
GE Institutional Funds' Portfolio Manager's Q&A and
Schedules of Investments

EMERGING MARKETS FUND 3

INTERNATIONAL EQUITY FUND 8

U.S. EQUITY FUND 12

MID-CAP GROWTH FUND 18

S&P 500 INDEX FUND 22

INCOME FUNDS 28
INCOME FUND
MONEY MARKET FUND

NOTES TO PERFORMANCE AND NOTES TO SCHEDULES OF
INVESTMENTS 35

FINANCIAL STATEMENTS 36

Financial Highlights and Statements of Assets and
Liabilities, Operations, and Changes in Net Assets

NOTES TO THE FINANCIAL STATEMENTS 44

GE INSTITUTIONAL FUNDS' INVESTMENT TEAM INSIDE BACK COVER

This report has been prepared for shareholders and may be distributed to others
only if preceded or accompanied by a current prospectus.

<PAGE>

A Letter from the President
- --------------------------------------------------------------------------------

Dear Shareholder:

We are pleased to provide you with our first GE Institutional Funds shareholder
report.

Since the funds were introduced last November, the U.S. economy has continued to
show strength in the face of serious financial problems in Asia. Interest rates
continued to trend lower due to concerns over global deflation. Inflation
remained benign, and corporate earnings, despite some disappointments, were,
generally good. As has been the case in recent years, asset flows into mutual
funds were strong, and in turn, the stock market continued to reach record
levels.

Will the trend continue? This report provides an overview of where we've been
and what we expect for the months ahead.

Market Overview

The end of 1997 marked the third consecutive year in which the Dow Jones
Industrial Average ("Dow") recorded a double-digit percentage gain. It also
marked the end of the best consecutive three-year performance period in stock
market history. Given this backdrop, some market watchers at the start of 1998
wondered if the stock market could maintain its torrid pace. Thus far it has.

Despite a slow start in January, the Dow posted double-digit percentage gains in
the first three months of 1998. Financial services stocks were among the better
market performers just as they have been over the last few years. These stocks
benefited from the sharp increase in the number of Americans saving and
investing to help secure their financial future.

Some of the other sectors that turned in solid gains included healthcare and
utilities stocks. Oil stocks fell, as a result of a decline in oil prices.
Technology stocks turned in mixed investment results, as a number of major
companies in this sector announced earnings shortfalls due to the economic
problems in Asia.

European stocks also registered impressive investment results, thanks in large
part to a generally favorable economic environment on the Continent. Other
positive factors that helped bolster prices included the wave of restructurings
taking place in Europe and the fact that plans designed to lead to a single
currency by next year remain on schedule.

The Japanese stock market finished 1997 on a down note, but showed considerable
strength in January, driven largely by technical factors that suggested prices
might be bottoming. However, investors' negative reaction to government economic
reform proposals put pressure on equity prices in March, wiping out a large
portion of their early-year gains.

While the Asian economic crisis had a substantial effect on the financial
markets in the last quarter of 1997, they had little bearing on global equity
prices during the first three months of this year. However, the underlying
problems in Asia remain a source of concern to investors.

Bonds also recorded solid performance, as long-term interest rates continued to
decline. Federal Reserve ("Fed") Chairman Alan Greenspan helped the bond market
in January by suggesting disinflation may creep into the economy due to the
Asian economic crisis.

During the period, the Fed maintained its neutral monetary policy. The Fed has
not raised short-term interest rates since late March 1997 and has not lowered
these rates since late January 1996.

The bond market rally was not without some concerns along the way. For example,
interest rates trended higher in early February resulting from a
stronger-than-expected employment report released in early February.

1
<PAGE>

A Letter from the President
- --------------------------------------------------------------------------------

Our Outlook

With the U.S. inflation rate still under control and the economy on solid
ground, the underpinnings of a healthy market remain in place. However, given
the current level of valuations, stock market gains are likely to return to more
modest levels in the months ahead. Given this scenario, we intend to employ a
cautious approach to investing. In this environment, stock selection will be
critically important in achieving investment success.

Continuing low inflation should be good news for bonds. Additionally, while
Asia's economic woes did not pose a significant threat to the global markets
during the first three months of 1998, they continue to hang heavy over the
markets. And as long as they do, we would not be surprised to see a Federal
Reserve rate cut in the coming months.

Our outlook for European equities continues to be favorable, as the facts that
have helped buoy prices on the Continent remain in place. Finally, the health of
the Japanese economy holds the key on whether stock prices there will show signs
of a sustainable rebound anytime soon.

Sincerely,

/s/ Michael J. Cosgrove
- -------------------------
Michael J. Cosgrove

Mike Cosgrove is the President of the Investment Services Group of GE Financial
Assurance Holdings, Inc. and GE Investment Distributors, Inc., the funds'
distributor. In this role, he is responsible for the marketing, product
development and sales of the funds. Mike is also a Trustee of the GE Pension
Trust and GE's employee savings program.

In Mike's previous position as Chief Financial Officer of GE Investments and
Assistant Treasurer-GE Company, he had financial responsibility for all assets
under GE Investments' management. Mike joined GE in 1970. After completing the
GE Financial Management Program he held a number of managerial positions in
finance and sales in the International Operation, including serving as Vice
President and Treasurer and later as the Vice President - Countertrade and
Barter for GE Trading Company.

Mike graduated from Fordham University in 1970 with a B.S. degree in Economics
and received his M.B.A. degree from St. John's University in 1973.

2
<PAGE>
Emerging Markets Fund
- --------------------------------------------------------------------------------

Q&A

Ralph Layman manages the international equity investment process at GE
Investments. Total assets under management exceeding $10 billion. He leads a
team of portfolio managers for the Emerging Markets Fund. Prior to joining GE
Investments in 1991, Ralph was Executive Vice President and Partner and
Portfolio Manager of International Equity Operations at Northern Capital
Management. Previously, he was a Vice President and Portfolio Manager at
Templeton Investment Counsel, Inc. He was instrumental in forming Templeton's
Emerging Markets Fund, the first listed emerging markets equity fund in the U.S.
Ralph is a Trustee of the GE Pension Trust, and GE's employee savings program,
and serves on the GE Investments' Asset Allocation Committee. He is a Chartered
Financial Analyst (CFA), a charter member of the International Society of
Security Analysts and a member of the New York Society of Security Analysts.
Ralph is a graduate of the University of Wisconsin with a B.S. in Economics and
a M.S. in Finance.

Q. HOW DID THE EMERGING MARKETS FUND PERFORM COMPARED TO ITS BENCHMARK FOR THE
PERIOD SINCE INCEPTION, NOVEMBER 25, 1997, THROUGH MARCH 31, 1998?

A. The Emerging Markets Fund posted a total return of 10.69% since its
inception, November 25, 1997. This compares with a 10.03% return for the
Morgan Stanley Emerging Markets Free Index for the same period.

Q. WHAT DROVE THE FUND'S PERFORMANCE?

A. Strong stock selection in Israel, Brazil and Asia and an underweighting in
Russia led the fund to outperform its benchmark. Our bottom up stock
selection process has also contributed to the fund's performance as we
found attractive investment opportunities even in declining markets.

Q. WHICH INVESTMENTS STAND OUT?

A. Three technology companies, MEMCO Software, a leading developer of security
software, Prokom Software and Dimension Data Holdings, two leading
information technology companies, were top performers for the fund. With
solid distribution agreements and growing information technology
expenditures, we believe that these companies will continue to experience
strong growth in the future.

Q. WHAT IS YOUR INVESTMENT STRATEGY?

A. The core of our investment philosophy for the Emerging Markets Fund is
active stock selection within the emerging markets countries. We utilize a
fundamental, bottom-up approach to select growth stocks trading at
reasonable valuations and then apply a top-down macro-economic overlay to
control overall risk. Stock selection is based on detailed knowledge of the
company gained through extensive research, direct contact with company
management, and access to GE's global, multi-industry network.

We seek to identify stocks which are undervalued relative to their Cash
Earnings Growth Potential and to sell stocks when they are fairly valued
relative to their potential.

The initial stock selection "screen" is based on the Price-to-Cash Earnings
Ratio compared to the company's three to five year projected growth rate.

Detailed company, industry and country analysis, along with company
management meetings are conducted to evaluate the company both
qualitatively and quantitatively. An analysis of a company's growth
potential and ability of management to execute its plan are important
factors in this analysis.

Lastly, we look for a catalyst which will cause the market to recognize our
calculated value for each stock. The catalyst may be the introduction of a
new product with excellent earnings potential, a new management team or
privatization. Generally, the best ideas with the highest level of
conviction are purchased for the portfolio. The size of each position is
based on strength of conviction, the stock's liquidity, potential of the
idea and currency, industry and country exposure. Part of the stock
selection process includes analysis of the political, economic and currency
risk of a country. This analysis is factored into the stock selection
process and aids in the prudent diversification of the fund.

Country allocation, a by-product of the stock selection process within each
region, is examined to diversify risk relative to the benchmark.

Q. WHAT IS YOUR OUTLOOK FOR THE FUND AND HOW HAVE YOU POSITIONED IT GOING
FORWARD?

A. The fund will remain overweighted in Greece and Poland as ongoing corporate
restructuring and economic convergence in Europe provide further upside in
line with superior earnings. The fund will also remain overweighted in
Israel and Brazil due to an abundance of bottom up stock selection and
greater opportunities. Malaysia,Taiwan, and South Africa will remain
under-weighted since valuations there are relatively high and earnings
visibility has been reduced.
3
<PAGE>

Emerging Markets Fund
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- --------------------------------------------------------------------------------
Regional Allocation
As of March 31, 1998
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[GRAPHIC OMITTED]

Latin America 44.4%
Asia 18.9%
Middle East and Africa 17.1%
Europe 15.4%
Cash and Other 4.2%

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Aggregate Total Return
For The Periods Ended March 31, 1998
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Three Since
Month Inception Commencement
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Emerging Markets Fund 8.35% 10.69% 11/25/97
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MSCI EMF 6.19% 10.03%
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Top Ten Largest Holdings March 31, 1998
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Telecomunicacoes Brasiliero
S.A. ADR 5.84%
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Telecomunicacoes de Sao Paulo S.A. -
Telesp 4.25%
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Taiwan Fund Inc. 2.77%
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Companhia Paranaense de Energia-Copel
ADR (Pfd. shares) 2.55%
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Grupo Financiero Bancomer S.A. ADR
(Series C) 2.02%
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Companhia Energetica de Minas Gerais
ADR 1.64%
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Companhia de Saneamento Basico de
Estado de Sao Paulo 1.55%
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Panamerican Beverages Inc. (Class A) 1.45%
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MEMCO Software Ltd. 1.43%
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Grupo Casa Autrey S.A. de C.V. ADR 1.41%
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Investment Profile

A mutual fund designed for investors
who seek long-term growth of capital
by investing primarily in equity securities
of issuers that are located in emerging
markets countries.

SEE PAGE 35 FOR NOTES TO PERFORMANCE.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.

4
<PAGE>

Schedule of Investments March 31, 1998 (unaudited)
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EMERGING MARKETS FUND

NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------

COMMON STOCK -- 95.8%
- --------------------------------------------------------------------------------

ARGENTINA -- 2.5%
Banco De Galicia y Buenos
Aires S.R. ADR (Class B) 2,585 $ 63,332
Disco S.A. ADR 1,400 56,350 (a)
YPF S.A. ADR (Class D) 1,800 61,200

180,882
[GRAPHIC OMITTED] BRAZIL -- 23.1%
Banco Itau S.A. (Pfd. shares) 150,000 96,306
Companhia Cerveja
Ria Brahma ADR 4,800 74,400
Companhia de Saneamento
Basico de Estado
de Sao Paulo 483,644 111,025
Companhia Energetica de
Minas Gerais (Pfd. shares) 360,000 17,478
Companhia Energetica de Minas
Gerais ADR 2,500 117,812
Companhia Paranaense de
Energia-Copel ADR
(Pfd. shares) 12,600 183,487
Companhia Riograndense de
Telecomunicacoes (Pfd. shares) 31,800 39,995
Light-Servicos de Eletricidade S.A. 160,000 61,214
Petroleo Brasiliero S.A. (Pfd. shares) 60,000 14,301
Petroleo Brasiliero S.A. ADR 3,700 87,875
Telecomunicacoes Brasiliero
S.A. ADR 3,234 419,814
Telecomunicacoes de Rio de
Janeiro S.A. (Pfd. shares) 300,000 42,269
Telecomunicacoes de Sao
Paulo S.A. - Telesp 940,000 305,066
Uniao de Banco Brasiliero
S.A. GDR 2,490 90,262

1,661,304

CHILE -- 1.1%
Companhia de Telecomunicaciones
de Chile S.A. ADR 2,770 76,348

CROATIA -- 0.7%
Zagrebacka Banka GDR 1,600 47,800 (b)

<PAGE>

NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------

CZECH REPUBLIC -- 0.7%
CKD Praha Diz 1,279 $ 48,777

EGYPT -- 1.4%
Commercial International Bank
Egypt SAE GDR 2,308 42,929 (b)
Olympic Group Financial
Investment Co. 12,175 56,453 (a)

99,382

FINLAND -- 0.7%
OY Hartwall AB 431 50,666

[GRAPHIC OMITTED] GREECE -- 4.4%
A.G. Petzetakis S.A. 11,100 58,869
Alfa Beta Vassilopoulos S.A.
(Regd.) 2,410 23,376
Alpha Credit Bank (Regd.) 800 61,953
Attica Enterprises S.A. 7,240 57,098 (a)
Delta Informatics S.A. 2,300 55,737
Intrasoft S.A. 2,200 59,474

316,507

HONG KONG -- 0.1%
Founder Hong Kong Ltd. 8,000 6,711

HUNGARY -- 1.5%
Mezogazdasagi Gepgyarto RT 2,700 62,024 (a)
North American Business
Intelligence Systems Inc. 1,800 42,109 (a)

104,133

INDIA -- 3.2%
BSES Ltd. GDR 4,600 79,810
India Fund Inc. 6,000 43,500
Mahanagar Telephone Nigam
Ltd. GDR 1,849 31,757 (a)
Pentafour Software & Exports
Ltd. GDR 1,000 10,000
Ranbaxy Laboratories Ltd. GDR 2,500 65,325 (b)

230,392

INDONESIA -- 1.4%
PT Astra International Inc. 174,500 43,373
PT Bank International 208,500 16,873
PT Gudang Garam 2,500 3,461
PT Hanjaya Mandala Sampoerna 11,000 9,983
PT International Nickel 8,500 10,318
PT Modern Photo Film Co. 41,000 9,006
PT Mulia Industrindo 118,500 10,959

103,973

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See Notes to Schedules of Investments on page 35 and Notes to Financial
Statements on page 44.

5
<PAGE>

Emerging Markets Fund
- --------------------------------------------------------------------------------

NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------

[GRAPHIC OMITTED] ISRAEL -- 11.6%
Comverse Technology Inc. 1,777 $ 86,851 (a)
ECI Telecommunications Ltd. 2,568 78,966
Formula Systems Ltd. 1,600 65,446 (a)
Fundtech Ltd. 396 7,128 (a)
Geo Interactive Media Group PLC 13,070 30,193 (a)
MEMCO Software Ltd. 3,298 103,062 (a)
New Dimension Software Ltd. 4,533 101,142 (a)
NICE Systems Ltd. ADR 1,766 81,236 (a)
Orbotech Ltd. 2,829 91,589 (a)
Tecnomatix Technologies Ltd. 2,200 82,775 (a)
Teva Pharmaceutical Industries
Ltd. ADR 1,500 64,125
ZAG Industries Ltd. 3,882 44,158 (a)

836,671
KAZAKHSTAN -- 1.6%
Efes Sinai Yatirim Holding A.S. 490,000 86,667
Kazkommertsbank GDR 1,047 28,405 (a)

115,072
MALAYSIA -- 0.8%
PPB Oil Palms Berhad 27,000 26,482

26,482
[GRAPHIC OMITTED] MEXICO -- 15.3%
Controladora Comercial Mexicana
S.A. de C.V. 55,000 67,168
Fomento Economico Mexicano
S.A. de C.V. 10,729 77,985
Geo S.A. de C.V. 13,217 86,758 (a)
Gruma S.A. de C.V. (Series B) 24,584 64,809
Grupo Carso S.A. de C.V. ADR 6,368 78,804
Grupo Casa Autrey S.A. de C.V. ADR 6,872 101,362
Grupo Continental S.A. 27,000 95,115
Grupo Financiero Banamex Accival
S.A. de C.V. 37,000 94,281 (a)
Grupo Financiero Bancomer
S.A. ADR (Series C) 12,200 144,875 (a,b)
Grupo Financiero Banorte S.A.
de C.V. 37,105 60,128 (a)
Kimberly Clark de Mexico 17,258 89,168
Sanluis S.A. de C.V. 13,900 70,349
Tubos de Acero de Mexico
S.A. ADR 3,688 68,919 (a)

1,099,721
PAKISTAN -- 0.3%
Hub Power Co. 23,582 24,965

<PAGE>

NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------

PANAMA -- 2.4%
Banco Latinoamericano de
Exportaciones S.A. (Class E) 1,900 $ 71,487
Panamerican Beverages Inc. (Class A) 2,600 104,325

175,812
PHILIPPINES -- 2.1%
C & P Homes Inc. 322,000 28,811
Metropolitan Bank & Trust Co. 5,100 46,974
Philippine Commercial
International Bank 10,000 49,474
Pilipino Telephone Corp. 60,000 10,105 (a)
San Miguel S.A. 10,500 18,237
Solid Group Inc. 437,600 23,722

177,323
POLAND -- 2.4%
Bank Handlowy W. Warszawie 3,455 55,564 (a)
Okocimskie Zaklady Piwowarskie S.A. 5,194 42,744
Prokom Software S.A. GDR 4,022 74,407 (a,b)

172,715
RUSSIA -- 1.4%
PLD Telekom Inc. 9,735 73,013 (a)
Sun Brewing Ltd. GDR 1,789 27,760 (a)

100,773
SINGAPORE -- 1.0%
Datacraft Asia Ltd. 23,000 74,520

SOUTH AFRICA -- 4.1%
Dimension Data Holdings Ltd. 14,408 92,276
Liberty Life Association of Africa 2,252 76,028
Metro Cash & Carry Ltd. 53,208 50,720
Nedcor Ltd. 2,500 73,478

292,502
SOUTH KOREA -- 4.0%
Dae Duck Electronics Co. 530 42,094
Hyundai Heavy Industries 1,548 57,561
Medison Co. Ltd. 7,600 65,300
Pohang Iron & Steel Co. Ltd. 560 30,584
S1 Corp. 80 10,975
Samsung Display Devices Co.
(Pfd. Shares) 1,020 47,870 (a)
Sindo Ricoh Co. 870 34,925

289,309
[GRAPHIC OMITTED] TAIWAN -- 4.7%
Asustek Computer Inc. GDR 2,000 47,450 (a)
Taiwan Fund Inc. 11,116 198,698
Taiwan Semiconductor
Manufacturing Co. 14,000 68,989
Taiwan Semiconductor
Manufacturing Co. ADR 1,000 25,875 (a)

341,012

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See Notes to Schedules of Investments on page 35 and Notes to Financial
Statements on page 44.

6
<PAGE>

Schedule of Investments March 31, 1998 (unaudited)
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NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------

THAILAND -- 1.3%
Banpu Public Co. Ltd. 5,000 $ 35,070
Hana Microelectronics Public
Co. Ltd. 1,300 4,790
Industrial Finance Corp.
of Thailand 24,000 14,028
Land & House Public Co. Ltd. 6,500 3,221
Siam Cement Public Co. Ltd. 1,500 20,737
TelecomAsia Corp. Public Co. Ltd. 33,000 12,999

90,845

TURKEY -- 2.0%
Aksigorta A.S. 520,000 27,806
Global Menkul Degerler A.S. 1,700,000 30,418
Tansas A.S. 119,145 62,485
Yatas Yatak ve Yorgan Sanayi ve
Ticaret A.S. 490,000 22,674

143,383

TOTAL INVESTMENTS IN SECURITIES
(Cost $6,198,801) 6,887,980

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SHORT-TERM INVESTMENTS -- 2.7%
- --------------------------------------------------------------------------------
GEI Short Term Investment Fund
(Cost $193,478) 193,478 193,478

OTHER ASSETS AND LIABILITIES,
NET 1.5% 104,936
- --------------------------------------------------------------------------------

NET ASSETS -- 100% $7,186,394
================================================================================

- ----------
See Notes to Schedules of Investments on page 35 and Notes to Financial
Statements on page 44.

Icons represent the top five country weightings in the Emerging Markets Fund at
March 31, 1998.

7
<PAGE>

International Equity Fund
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Q&A

Ralph Layman leads a team of portfolio managers for the International Equity
Fund. Refer to page 3 for his biographical details.

Q. How did the International Equity Fund perform compared to its benchmark for
the period since inception, November 25, 1997, through March 31, 1998?

A. The International Equity Fund posted a total return of 20.27% since its
inception, November 25, 1997. This compares with a 17.09% return for the
MSCI EAFE Index for the same period.

Q. What drove the fund's performance?

A. The fund avoided the weakness of the Japanese economy and the collapse of
the Asian economies in the second half of 1997 because of its start up
date. The fund entered 1998 with a very low exposure to the Far Eastern
markets and the fund's performance was only marginally affected by the
region's poor market performance. Conversely, the fund's overweighted
position in Continental Europe reaped the benefits of European economies
recovering after a long period of slow growth. The most important factor
driving the European stock markets is the convergence of the economies in
preparation for the introduction of a common currency in January 1999.

Q. Which investments stand out?

A. Financial stocks, such as ING Groep, an attractively priced global asset
management company, and AXA-UAP, the world's largest insurance company in
terms of assets and second in terms of premium income, contributed
favorably to performance. Other notable investments included Cap Gemini, a
global computer services company that specializes in systems integration,
and Mannesmann, a German-based engineering and telecommunications firm.

Q. What is your investment strategy?

A. Our team employs the same bottom-up stock selection process described for
the Emerging Markets Fund on page 3 but applies it to a broader
international market.

Q. What is your outlook for the fund and how have you positioned it going
forward?

A. Because of the continued economic weakness in Asia and Japan and resulting
lack of earnings growth, we foresee that our discipline of seeking
undervalued companies relative to their long term growth will continue to
cause the fund to remain overweighted in Europe. We are excited by the
ongoing corporate restructuring and economic convergence in Europe and
expect to see further upside, in line with superior earnings growth.

8
<PAGE>

International Equity Fund
- --------------------------------------------------------------------------------

[GRAPHIC OMITTED]

Japan 6.7%
Cash & Other 2.0%
Europe 73.9%
Other Regins 10.6%
Pacfic Rim 6.8%

Three Since
Month Inception Commencement
- --------------------------------------------------------------------------------

International Equity Fund 17.15% 20.27% 11/25/97
- --------------------------------------------------------------------------------

MSCI EAFE 14.71% 17.09%
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- --------------------------------------------------------------------------------
Top Ten Largest Holdings at March 31, 1998
- --------------------------------------------------------------------------------

AXA-UAP 2.93%
- --------------------------------------------------------------------------------
Siebe PLC 2.75%
- --------------------------------------------------------------------------------
Total S.A. (Class B) 2.59%
- --------------------------------------------------------------------------------
ING Groep N.V. 2.54%
- --------------------------------------------------------------------------------
Mannesmann AG 2.41%
- --------------------------------------------------------------------------------
Repsol S.A. 2.16%
- --------------------------------------------------------------------------------
Airtours PLC 2.15%
- --------------------------------------------------------------------------------
Cap Gemini S.A. 2.11%
- --------------------------------------------------------------------------------
Sony Corp. 2.02%
- --------------------------------------------------------------------------------
Schneider S.A. 2.01%
- --------------------------------------------------------------------------------

Investment Profile

A mutual fund designed for investors
who seek long-term growth of capital
by investing primarily in foreign
equity securities.

SEE PAGE 35 FOR NOTES TO PERFORMANCE.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.

9
<PAGE>

Schedule of Investments March 31, 1998 (unaudited)
- --------------------------------------------------------------------------------

INTERNATIONAL EQUITY FUND

NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------

COMMON STOCK --98.0%
- --------------------------------------------------------------------------------

AUSTRALIA -- 2.0%
Brambles Industries Ltd. 72,663 $ 1,511,351
Coca Cola Amatil Ltd. 141,902 1,112,085

2,623,436

AUSTRIA -- 1.5%
OMV AG 2,630 338,944
VA Technologie AG 10,052 1,583,600

1,922,544

BRAZIL -- 3.0%
Telecomunicacoes Brasileiras
S.A. ADR 13,295 1,725,857
Telecomunicacoes de Rio de
Janiero S.A. (Pfd. shares) 1,073,064 151,192
Telecomunicacoes de
Sao Paulo S.A. - Telesp 2,791,710 906,017
Uniao de Banco Brasiliero
S.A. GDR 30,629 1,110,301

3,893,367

DENMARK -- 0.9%
Den Danske Bank 9,460 1,236,173

FINLAND -- 3.2%
Merita Ltd. (Series A) 232,546 1,399,969
Nokia Ab Oy (Series A) (Pfd. shares) 18,742 2,011,249
Pohjola Insurance Group (Series B) 5,438 251,829
Sampo Insurance Co. Ltd. (Series A) 12,617 498,886

4,161,933
[GRAPHIC OMITTED] FRANCE -- 18.7%
AXA-UAP 36,672 3,775,189
Cap Gemini S.A. 45,224 2,726,028 (a)
Carrefour S.A. 3,184 1,875,208
Coflexip S.A. ADR 26,268 1,622,049
Lyonnaise Des Eaux S.A. 13,558 1,957,952
Michelin CGDE (Regd.) (Class B) 25,564 1,525,796
Renault S.A. 34,378 1,530,993
Rhone-Poulenc India Ltd. 30,923 1,571,223
Schneider S.A. 33,777 2,599,698
Societe Generale 7,787 1,558,028
Total S.A. (Class B) 27,865 3,345,149

24,087,313

<PAGE>

NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------

[GRAPHIC OMITTED] GERMANY -- 8.0%
Bayerische Vereinsbank AG 23,210 $ 1,694,115
Daimler-Benz AG 19,607 1,802,163
Fresenius Medical Care AG 12,789 904,437
Fresenius Medical Care AG
(Pfd. shares) 6,229 343,520
Mannesmann AG 4,247 3,109,101
Preussag AG 2,443 832,803
SGL Carbon AG 12,892 1,427,526
Veba AG 2,387 169,325

10,282,990
GREECE -- 0.4%
Alpha Credit Bank (Regd.) 6,380 494,071

HONG KONG -- 1.9%
Cheung Kong (Holdings) Ltd. 28,000 83,471
Giordano International Ltd. 548,000 140,734
HSBC Holdings PLC (Regd.) 50,400 1,541,503
Johnson Electric Holdings 155,000 662,103

2,427,811
INDONESIA -- 0.1%
PT Astra International Inc. 308,000 76,555
PT Mulia Industrindo 106,000 9,803

86,358
ISRAEL -- 2.7%
Comverse Technology Inc. 17,518 856,192 (a)
ECI Telecommunications Ltd. 55,943 1,720,248
Teva Pharmaceutical Industries
Ltd. ADR 21,348 912,627

3,489,067
[GRAPHIC OMITTED] ITALY -- 6.3%
Banca Intesa S.p.A. 209,114 1,263,402
Credito Italiano 385,336 1,903,429
ENI S.p.A. (Regd.) 32,420 220,876
Industrie Natuzzi S.p.A. ADR 10,151 280,421
Montedison S.p.A. 1,271,361 1,872,520
Saipem 51,620 307,228
Telecom Italia Mobile S.p.A. 425,784 2,287,742

8,135,618
[GRAPHIC OMITTED] JAPAN -- 6.7%
Canon Inc. 87,000 1,965,622
Credit Saison Co. Ltd. 19,500 431,788
Honda Motor Co. 36,000 1,297,054
Minebea Co. Ltd. 27,000 295,890
NTT Data Corp. 23 1,023,757
Sony Corp. 30,700 2,603,941
Sumitomo Realty & Development 72,000 424,785
Takefuji Corp. 13,000 614,749

8,657,586

- ----------
See Notes to Schedules of Investments on page 35 and Notes to Financial
Statements on page 44.

10
<PAGE>

Schedule of Investments March 31, 1998 (unaudited)
- --------------------------------------------------------------------------------

NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------

MEXICO -- 1.6%
Gruma S.A. de C.V. (Series B) 83,677 $ 220,590
Grupo Carso S.A. de C.V. ADR 92,518 1,144,910
Grupo Financiero Bancomer S.A.
ADR (Series C) 55,988 664,858 (a,b)

2,030,358

NETHERLANDS -- 4.4%
IHC Caland N.V. 24,807 1,369,474
ING Groep N.V. 57,847 3,282,237
Ispat International N.V. (Regd.)
(Class A) 5,768 164,388 (a)
Philips Electronics N.V. 12,083 886,688

5,702,787

NORWAY -- 0.8%
Den Norske Bank ASA 186,185 1,013,388

PANAMA -- 1.0%
Panamerican Beverages Inc. (Class A) 33,478 1,343,305

PERU -- 0.8%
Telefonica del Peru S.A. ADR
(Class B) 49,451 1,066,287

PHILIPPINES -- 0.6%
Metro Bank & Trust Co. 55,200 508,421
San Miguel Corp. 161,600 280,674

789,095

PORTUGAL -- 1.6%
Banco Comercial Portugues 56,489 180,837 (a)
Banco Comercial Portugues (Regd.) 58,370 1,885,041

2,065,878

SOUTH AFRICA -- 1.5%
Barlow Ltd. 63,773 519,252
Dimension Data Holdings Ltd. 212,454 1,360,667
Iscor Ltd. 233,519 64,461

1,944,380

SOUTH KOREA -- 1.2%
Hyundai Heavy Industries Co. 24,755 920,493
Pohang Iron & Steel Co. 860 46,968
Samsung Display Devices Co. 12,260 575,379 (a)

1,542,840

SPAIN -- 3.7%
Argentaria S.A. 10,329 855,703
Banco Santander S.A. (Regd.) 22,000 1,096,355
Repsol S.A. 54,615 2,787,829

4,739,887

<PAGE>

NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------

SWEDEN -- 3.2%
Autoliv Inc. SDR 42,383 $ 1,314,612
Electrolux AB (Series B) 3,034 250,446
Ericson LM Telephone (Series B) 15,531 738,138
Investor AB (Series B) 4,212 225,996
Kinnevik AB (Series B) 7,000 163,279
NetCom Systems AB (Series B) 24,789 722,386
Pharmacia & Upjohn Inc. 16,386 716,888

4,131,745
SWITZERLAND -- 6.0%
ABB AG 1,541 2,302,655
Novartis AG (Regd.) 1,274 2,254,675
Roche Holdings AG 20 216,464
Schw Rueckversicher (Regd.) 365 801,827
Zurich Versicherungsgesellschaft
(Regd.) 3,739 2,170,558

7,746,179
TAIWAN -- 1.0%
Taiwan Semiconductor
Manufacturing Co. 252,000 1,241,795

[GRAPHIC OMITTED] UNITED KINGDOM -- 15.2%
Airtours PLC 333,173 2,771,924
Bank of Scotland PLC 103,532 1,227,052
Commercial Union PLC 52,407 1,023,800
Granada Group PLC 136,567 2,455,303
Johnson Matthey PLC 16,574 170,908
LucasVarity PLC 486,339 1,962,055
Medeva PLC 55,983 156,505
National Westminster Bank PLC 26,656 487,720
Railtrack Group PLC 71,060 1,165,753
Reed International PLC 140,956 1,429,919
Royal & Sun Alliance Insurance
Group PLC 156,276 1,988,204
Saatchi & Saatchi PLC 97,207 259,545 (a)
SEMA Group PLC 4,294 169,497
Siebe PLC 162,767 3,553,032
Vodafone Group PLC 78,434 814,707

19,635,924

TOTAL INVESTMENTS IN SECURITIES
(Cost $114,232,471) 126,492,115

- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 1.6%
- --------------------------------------------------------------------------------
GEI Short Term Investment Fund
(Cost $1,987,377) 1,987,377 1,987,377

OTHER ASSETS AND LIABILITIES,
NET 0.4% 552,105
- --------------------------------------------------------------------------------

NET ASSETS -- 100% $129,031,597
================================================================================

- ----------
See Notes to Schedules of Investments on page 35 and Notes to Financial
Statements on page 44.

Icons represent the top five country weightings in the International Equity Fund
at March 31, 1998.

11
<PAGE>

U.S. Equity Fund
- --------------------------------------------------------------------------------

Q&A

Gene Bolton is responsible for the overall management of the U.S. equity
investment process at GE Investments with total assets of over $30 billion. He
leads a team of portfolio managers for the U.S. Equity Fund. Gene joined GE in
1964. After completing GE's Financial Management Program, he held a number of
financial and strategic planning positions in the U.S. and Europe. Joining GE
Investments in 1984 as Chief Financial Officer, he moved to equities as a
Portfolio Manager in 1986 and was named to his present position in 1991. Gene is
a Trustee of the GE Pension Trust and GE's employee savings program, as well as
Chairman of the Asset Allocation Committee of GE Investments. He also serves as
a Trustee of the Investment Management Workshop, sponsored by the Association
for Investment Management and Research. Gene is a graduate of Mundelein College
with a B.A. in Business Management.

Q. How did the U.S. Equity Fund perform compared to its benchmark for the
period since inception, November 25, 1997, through March 31, 1998?

A. The U.S. Equity Fund posted a total return of 15.29% since its inception,
November 25, 1997. This compares with a 16.49% return for the Standard &
Poor's 500 Index for the same period.

Q. What factors contributed to the stock market's performance?

A. Financial services companies continued to benefit from low inflation,
declining interest rates and consolidation within the industry. Retail
stocks also registered strong gains, thanks largely to the strength of the
U.S economy. The aging of America's population helped prop up the values of
attractively priced healthcare stocks, while utility stocks benefited from
declining interest rates and a move to safe, domestic equities. Despite
their attractive valuations and above-average dividend yields, energy
stocks were hurt by falling oil prices.

Q. Which stocks contributed to the fund's total return?

A. Morgan Stanley, Dean Witter recorded solid investment results during the
period. The retail stocks that served us well included Sears Roebuck and
Lowes Cos., a building materials supplier. Superior returns were recorded
by Pfizer and Bristol-Myers Squibb in the healthcare sector. Our better
performing technology stocks included Xerox and Cisco Systems. Other
contributors to the fund's positive investment results were
Tele-Communications, Inc., a cable operator, and Airtouch Communications,
our best performer in the utility sector.

Q. Please comment on other noteworthy positions in the portfolio?

A. Temporary weakness in IBM, Equifax, and First Data gave us the opportunity
to purchase these stocks at favorable prices. In the energy sector, we
bought Schlumberger, R&B Falcon, and Burlington Resources and sold
positions in Amoco, Atlantic Richfield, Texaco, and Union Pacific
Resources. In the healthcare and consumer-stable sectors, we took advantage
of high prices to reduce our exposure to Schering Plough and Proctor &
Gamble, respectively.

Q. What is your outlook for the fund?

A. While not a significant factor in the direction of U.S. stock prices for
the first quarter of 1998, the Asian crisis remains a threat to our economy
and, therefore, to the domestic financial markets. The crisis, in our
judgment, is unlikely to have a major impact on our economy, but it is
likely to offset profit growth in certain industries. In turn, we expect
inflation to be moderate, earnings growth to slow and stock price gains to
return to more modest levels. In this environment, stock selection will be
critically important in seeking to deliver superior investment results.

12
<PAGE>

U.S. Equity Fund
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
Sector Allocation
As of March 31, 1998
- --------------------------------------------------------------------------------

[GRAPHIC OMITTED]

Utilities 7.8%
Transportation 2.4%
Cash & Other 2.4%
Financial Services 18.5%
Capital Goods 11.1%
Consumer 16.9%
Healthcare 13.0%
Technology 10.8%
Energy & Basic Materials 12.6%
Retail Trade 4.5%

Three Since
Month Inception Commencement
- --------------------------------------------------------------------------------

U.S. Equity Fund 11.95% 15.29% 11/25/97
- --------------------------------------------------------------------------------

S&P 500 Index 13.96% 16.49%
- --------------------------------------------------------------------------------

Travelers Group Inc. 2.11%
- --------------------------------------------------------------------------------
Federal National Mortgage Assoc. 1.97%
- --------------------------------------------------------------------------------
Bristol-Myers Squibb Co. 1.94%
- --------------------------------------------------------------------------------
AlliedSignal Inc. 1.90%
- --------------------------------------------------------------------------------
Merck & Co. Inc. 1.86%
- --------------------------------------------------------------------------------
International Business Machines 1.79%
- --------------------------------------------------------------------------------
Johnson & Johnson 1.73%
- --------------------------------------------------------------------------------
Du Pont de Nemours (E.I.) & Co. 1.57%
- --------------------------------------------------------------------------------
Dover Corp. 1.54%
- --------------------------------------------------------------------------------
Schlumberger Ltd. 1.51%
- --------------------------------------------------------------------------------

Investment Profile

A mutual fund designed for investors
who seek long-term growth of capital
by investing primarily in equity securities
of U.S. companies.

SEE PAGE 35 FOR NOTES TO PERFORMANCE.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.

13
<PAGE>

Schedule of Investments March 31, 1998 (unaudited)
- --------------------------------------------------------------------------------

U.S. EQUITY FUND

NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------

COMMON STOCK -- 97.6%
- --------------------------------------------------------------------------------

BASIC MATERIALS -- 3.7%
Air Products & Chemicals Inc. 4,287 $ 355,285
Airgas Inc. 7,970 137,482 (a)
Barrick Gold Corp. 6,519 140,973
Champion International Corp. 1,733 94,124
Du Pont de Nemours (E.I.) & Co. 26,412 1,796,016 (h)
FMC Corp. 406 31,871 (a)
Great Lakes Chemical Corp. 815 44,010
IMC Global Inc. 3,260 124,084
Mead Corp. 6,845 245,137
Morton International Inc. 12,648 415,012
Newmont Mining Corp. 12,720 388,755
Rayonier Inc. 4,180 190,974
Union Camp Corp. 1,222 73,015
W.R. Grace & Co. 979 81,930 (a)
Weyerhaeuser Co. 2,444 138,086

4,256,754
[GRAPHIC OMITTED] CAPITAL GOODS -- 11.1%
AlliedSignal Inc. 51,631 2,168,502 (h)
AMP Inc. 1,712 75,007
Armstrong World Industries Inc. 1,520 131,575
Avery Dennison Corp. 2,225 118,759
Boeing Co. 2,363 123,171
Cooper Industries Inc. 4,643 275,968
Deere & Co. 8,313 514,887
Dover Corp. 46,226 1,756,588
Emerson Electric Co. 20,795 1,355,574
Hubbell Inc. (Class B) 23,038 1,160,539
Jacobs Engineering Group Inc. 1,713 55,458 (a)
Lockheed Martin Corp. 2,527 284,288
Mannesmann AG 118 86,384
Martin Marietta Materials Inc. 13,200 570,075
Masco Corp. 1,109 65,986
Molex Inc. (Class A) 8,032 215,358
National Service Industries Inc. 2,283 134,269
Parker Hannifin Corp. 2,281 116,901
Sherwin-Williams Co. 14,680 521,140
Textron Inc. 18,779 1,445,983
Timken Co. 2,771 93,694
Tyco International Ltd. 2,991 163,383
U.S.A. Waste Services Inc. 7,416 330,476 (a)
United Technologies Corp. 7,237 668,066
Waste Management Inc. 8,069 248,626

12,680,657

<PAGE>

NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------

[GRAPHIC OMITTED] CONSUMER - CYCLICAL -- 8.9%
ACNielsen Corp. 8,271 $ 218,665 (a)
Carnival Corp. (Class A) 3,423 238,754
Catalina Marketing Corp. 3,096 162,927 (a)
Cendant Corp. 5,752 227,923 (a)
Circus Circus Enterprises Inc. 6,192 130,032 (a)
Comcast Corp. (Class A) 11,483 405,493
Comcast UK Cable Partners Ltd.
(Class A) 7,008 93,732 (a)
Echlin Inc. 1,775 93,077
Federal-Mogul Corp. 612 32,551
Ford Motor Co. 7,792 505,019
Gannett Inc. 13,885 997,984
General Motors Corp. 1,222 82,409
Goodyear Tire & Rubber Co. 3,585 271,564
Harman International
Industries Inc. 3,079 135,476
Interpublic Group Cos. Inc. 13,092 813,340
ITT Industries Inc. 4,482 170,596
Knight-Ridder Inc. 3,669 205,005
McDonald's Corp. 12,825 769,500
Metromedia International
Group Inc. 1,868 28,370 (a)
NTL Inc. 16,403 709,430 (a)
Safety-Kleen Corp. 2,445 69,377
Stanley Works 7,042 392,591
Tele-Communications Inc.(Series A) 17,521 544,794
Tele-Communications Inc. Liberty
Media Group (SeriesA) 6,549 225,122 (a)
Tele-Communications TCI
Ventures Group 5,380 94,486 (a)
Time Warner Inc. 4,704 338,688
Viad Corp. 1,631 39,552
Walt Disney Co. 12,188 1,301,069
Xerox Corp. 8,215 874,384

10,171,910
CONSUMER - STABLE -- 8.0%
Anheuser Busch Cos. Inc. 17,212 797,131
Archer-Daniels Midland Co. 7,335 160,911
Avon Products Inc. 4,866 379,548
Bestfoods 4,361 509,692
Coca Cola Co. 687 53,200
Colgate-Palmolive Co. 5,317 460,585
Conagra Inc. 8,965 288,001
General Mills Inc. 4,060 308,560
Gillette Co. 1,317 156,311
Hershey Foods Corp. 1,589 113,812
International Multifoods Corp. 1,222 36,584
Kellogg Co. 1,834 79,091
Kimberly Clark Corp. 21,319 1,068,615
Nestle S.A. (Regd.) 124 236,938

- ----------
See Notes to Schedules of Investments on page 35 and Notes to Financial
Statements on page 44.

14
<PAGE>

Schedule of Investments March 31, 1998 (unaudited)
- --------------------------------------------------------------------------------

NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------

Pepsico Inc. 33,388 $ 1,425,250
Philip Morris Cos. Inc. 25,411 1,059,321
Procter & Gamble Co. 8,441 712,209
Ralston Purina Co. 3,985 422,410
Sara Lee Corp. 9,169 565,040
Sysco Corp. 4,566 117,004
Unilever N.V. 2,855 195,924

9,146,137
[GRAPHIC OMITTED] ENERGY -- 8.9%
Amoco Corp. 3,362 290,393
Anadarko Petroleum Co. 2,608 179,952
Atlantic Richfield Co. 4,399 345,871
Baker Hughes Inc. 13,448 541,282
British Petroleum PLC ADR 4,810 413,961
Burlington Resources Inc. 15,980 766,041
Diamond Offshore Drilling Inc. 1,141 51,773
Elf Aquitaine S.A. ADR 1,426 92,334
Exxon Corp. 24,516 1,657,895
Halliburton Co. 1,629 81,755
Mobil Corp. 13,256 1,015,741
Nabors Industries Inc. 8,773 207,810 (a)
Occidental Petroleum Corp. 3,260 95,559
Pennzoil Co. 978 63,203
R & B Falcon Corp. 5,869 173,869 (a)
Royal Dutch Petroleum Co. ADR 19,234 1,092,732
Schlumberger Ltd. 22,746 1,723,009
Texaco Inc. 7,408 446,332
Tosco Corp. 2,851 100,498
Total S.A. ADR 3,749 225,174
Unocal Corp. 12,779 494,388
Valero Energy Corp. 1,547 51,631
YPF S.A. ADR (Class D) 3,260 110,840

10,222,043
[GRAPHIC OMITTED] FINANCIAL -- 12.5%
American Express Co. 12,413 1,139,669
AmSouth Bancorp. 1,525 90,070
Bank of New York Inc. 5,353 336,235
BankAmerica Corp. 6,205 512,688
BankBoston Corp. 6,274 691,708
Beneficial Corp. 326 40,526
Chase Manhattan Corp. 5,084 685,704
Citicorp 10,541 1,496,822
Comerica Inc. 815 86,237
CoreStates Financial Corp. 1,630 146,293
Countrywide Credit Industries 1,858 98,822
Crestar Financial Corp. 1,785 105,538
Edwards A.G. Inc. 3,158 138,163
Federal National Mortgage Assoc. 35,634 2,253,850

<PAGE>

NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------

First Chicago NBD Corp. 2,038 $ 179,599
First of America Bank Corp. 1,641 141,947
First Union Corp. 1,630 92,503
Fleet Financial Group Inc. 1,467 124,787
GATX Corp. 546 42,588
ING Groep N.V. ADR 2,445 139,212
Mellon Bank Corp. 5,367 340,805
Merrill Lynch & Co. Inc. 1,468 121,844
Morgan Stanley, Dean Witter 17,301 1,260,810
National City Corp. 2,038 149,411
Norwest Corp. 3,422 142,227
State Street Corp. 4,949 336,841
Summit Bancorp. 1,142 57,171
T. Rowe Price & Associates 1,317 92,684
Travelers Group Inc. 40,195 2,411,700
United States Bancorp. 2,526 315,119
Wachovia Corp. 1,630 138,244
Waddell & Reed Financial Inc.
(Class A) 738 19,188 (a)
Wells Fargo & Co. 1,179 390,544

14,319,549
[GRAPHIC OMITTED] HEALTHCARE -- 13.0%
Abbott Laboratories 20,449 1,540,065
Allergan Inc. 18,470 701,860
Alza Corp. 1,467 65,740
American Home Products Corp. 3,921 373,965
Baxter International Inc. 4,288 236,376
Bristol-Myers Squibb Co. 21,235 2,215,076
Cardinal Health Inc. 8,736 770,406
Columbia/HCA Healthcare Corp. 1,304 42,054
Dentsply International Inc. 5,460 170,284
Eli Lilly & Co. 2,149 128,134
Johnson & Johnson 26,923 1,973,792
Lincare Holdings Inc. 3,257 230,026 (a)
Merck & Co. Inc. 16,550 2,124,606
Omnicare Inc. 816 32,334
Pfizer Inc. 13,692 1,364,921
Pharmacia & Upjohn Inc. 4,483 196,131
Scherer (R.P.) Corp. 4,171 281,543 (a)
Schering Plough Corp. 8,721 712,397
Shire Pharmaceuticals Group
PLC ADR 1,304 27,955 (a)
Smithkline Beecham PLC ADR 11,189 700,012
Sun Healthcare Group Inc. 3,534 65,821 (a)
Sybron International Corp. 4,889 127,725 (a)
Tenet Healthcare Corp. 3,179 115,437 (a)
Watson Pharmaceuticals Inc. 18,778 676,008

14,872,668

- ----------
See Notes to Schedules of Investments on page 35 and Notes to Financial
Statements on page 44.

15
<PAGE>

U.S. Equity Fund
- --------------------------------------------------------------------------------

NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------

INSURANCE -- 6.0%
American International Group Inc. 9,777 $ 1,231,291
AXA-UAP 1,304 134,240
Chubb Corp. 7,727 605,604
CIGNA Corp. 407 83,435
Equitable Cos. Inc. 1,386 78,222
General Reinsurance Corp. 5,580 1,231,087
Hartford Financial Services
Group Inc. 1,594 172,949
Jefferson-Pilot Corp. 978 86,981
Lincoln National Corp. 4,426 375,657
Loews Corp. 9,797 1,021,337
Marsh & McLennan Cos. Inc. 8,576 748,792
Provident Cos. Inc. 16,136 553,666
Reliastar Financial Corp. 5,673 261,313
UNUM Corp. 4,212 232,450

6,817,024

RETAIL TRADE -- 4.5%
Arbor Drugs Inc. 9,533 224,621
Costco Cos. Inc. 5,215 278,351 (a)
Dayton Hudson Corp. 6,562 577,456
Federated Department Stores Inc. 8,068 418,023 (a)
Home Depot Inc. 12,860 867,246
Lowes Cos. Inc. 6,099 428,074
Sears Roebuck & Co. 12,761 732,960
Toys 'R Us Inc. 3,261 98,034 (a)
Wal-Mart Stores Inc. 30,266 1,537,891

5,162,656

TECHNOLOGY - ELECTRONICS AND EQUIPMENT -- 6.2%
Analog Devices Inc. 3,093 102,842 (a)
Applied Materials Inc. 2,604 91,954 (a)
Cisco Systems Inc. 13,542 925,934 (a)
EG & G Inc. 2,037 59,200
EMC Corp. 6,683 252,701 (a)
Hewlett Packard Co. 8,673 549,652
Intel Corp. 17,440 1,361,410
International Business Machines 19,723 2,048,727
Perkin Elmer Corp. 2,281 164,945
Pitney Bowes Inc. 16,284 817,253
Storage Technology Corp. 1,793 136,380 (a)
Sun Microsystems Inc. 8,149 339,966 (a)
Varian Associates Inc. 4,645 257,217

7,108,181

TECHNOLOGY - SOFTWARE & SERVICES -- 4.6%
Automatic Data Processing Inc. 14,234 968,802
Computer Associates
International Inc. 4,401 254,158
Computer Sciences Corp. 652 35,860

<PAGE>

NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------

Equifax Inc. 39,663 $ 1,447,699
First Data Corp. 47,364 1,539,330
Microsoft Corp. 2,804 250,958 (a)
Reuters Group PLC ADR 9,318 601,593
Symantec Corp. 1,957 52,717 (a)
UNOVA Inc. 2,445 48,900 (a)

5,200,017

TRANSPORTATION -- 2.4%
Burlington Northern Santa Fe 8,301 863,304
Canadian Pacific Ltd. 14,669 432,736
Continental Airlines Inc.(Class B) 11,083 651,819 (a)
Delta Air Lines Inc. 979 115,767
FDX Corp. 978 69,560 (a)
KLM Royal Dutch Airlines N.V. 2,445 99,328
Pittston Brinks Group 3,178 121,161
U.S. Airways Group Inc. 571 42,325 (a)
UAL Corp. 3,260 302,976 (a)

2,698,976

UTILITIES -- 7.8%
Airtouch Communications Inc. 31,655 1,549,117 (a,h)
American Electric Power Inc. 5,542 278,485
American Telephone &
Telegraph Corp. 9,103 597,384
Bell Atlantic Corp. 9,121 934,902
Bellsouth Corp. 5,053 341,393
CMS Energy Corp. 3,748 175,922
Duke Energy Corp. 8,556 509,617
Edison International 1,793 52,669
El Paso Natural Gas Co. 2,617 184,662
Florida Progress Corp. 5,541 230,990
FPL Group Inc. 4,214 270,750
GTE Corp. 8,354 500,196
Illinova Corp. 1,630 49,206
MCI Communications Corp. 1,304 64,548
MCN Corp. 3,829 143,109
New Century Energies Inc. 3,422 172,383
Northern States Power Co. 2,282 134,638
Pinnacle West Capital Corp. 3,259 144,822
SBC Communications Inc. 28,918 1,261,548
Sonat Inc. 2,934 127,629
Sprint Corp. 4,564 308,926
Teleport Communications
Group Inc. 1,304 76,610 (a)
U.S. WEST Communications
Group 4,889 267,673
WorldCom Inc. 12,532 539,659

8,916,838

TOTAL COMMON STOCK
(Cost $97,748,368) 111,573,410

- ----------
See Notes to Schedules of Investments on page 35 and Notes to Financial
Statements on page 44.

16
<PAGE>

Schedule of Investments March 31, 1998 (unaudited)
- --------------------------------------------------------------------------------

NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------

PREFERRED STOCK -- 0.6%
- --------------------------------------------------------------------------------
Microsoft Corp. (Series A), $2.20
(Cost $638,234) 7,171 $ 663,317

TOTAL INVESTMENTS IN SECURITIES
(Cost $98,386,602) 112,236,727

- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 2.2%
- --------------------------------------------------------------------------------
GEI Short Term Investment Fund
(Cost $2,456,407) 2,456,407 2,456,407

OTHER ASSETS AND LIABILITIES,
NET (0.4%) (400,077)
- --------------------------------------------------------------------------------

NET ASSETS -- 100% $114,293,057
================================================================================

Other Information
- --------------------------------------------------------------------------------

The U.S. Equity Fund had the following long futures contracts open at March 31,
1998:

Number
Expiration of Underlying Unrealized
Description Date Contracts Face Value Gain
- --------------------------------------------------------------------------------

S&P 500 June 1998 4 $1,110,500 $20,283

- ----------
See Notes to Schedules of Investments on page 35 and Notes to Financial
Statements on page 44.

Icons represent the top five industry weightings in the U.S. Equity Fund at
March 31, 1998.

17
<PAGE>

Mid-Cap Growth Fund
- --------------------------------------------------------------------------------

Q&A

Elaine G. Harris is the Portfolio Manager of the Mid-Cap Growth Fund. Elaine is
currently a Senior Vice President of GE Investments and manages equity assets
exceeding $1 billion. She has more than 14 years of investment experience and
has held positions with GE Investments since 1993. From 1991 to 1993, Elaine
served as Senior Vice President and Portfolio Manager at SunAmerica Asset
Management and, before that, as Portfolio Manager at Alliance Capital Management
Company and as an analyst and a Portfolio Manager at Fidelity Investments.
Elaine is a member of the New York Society of Security Analysts. She holds an
MBA in Finance from the Wharton School and a BA in Math and Computer Science
from Tufts University.

Q. How did the Mid-Cap Growth Fund perform compared to its industry benchmark
for the period since inception, November 25, 1997, through March 31, 1998?

A. The Mid-Cap Growth Fund posted a total return of 12.77% since its
inception, November 25, 1997. This compares with a 15.92% return for the
Standard & Poor's Mid-Cap 400 Index for the same period.

Q. Please elaborate on the fund's performance.

A. Retail stocks contributed favorably to our investment results. Brand name
apparel makers were among the better performers within the retail group.
Specifically, we enjoyed good investment results from our exposure to Jones
Apparel, St. John Knits and Wolverine Worldwide. Other stocks that
contributed to our investment results include United Rentals, an equipment
rental company that is rapidly expanding through acquisitions; HealthCare
Financial Partners, a specialty lender; Compuware, a mainframe software
company; and Gilat Satellite Networks, a satellite company based in Israel
that specializes in setting up telephone service in third-world countries.

Fearing an economic backlash from the Asian financial crisis, we maintained
an underweighting in technology stocks. Many of these companies depend on
Asia for a significant portion of their revenues. This strategy proved
effective late in the period as companies that failed to meet analysts'
earnings expectations weighed heavily on stock prices in this sector.

Q. What is your outlook for the fund?

A. Our outlook for mid-cap stocks remains positive. Since mid-cap stocks have
not kept pace with their large-cap counterparts for many quarters, values
can still be found. The major threat remains a flare-up in the Asian
economic crisis. While the stock market shrugged off the Asian flu in
recent months, uncertainty about the future course of events continues to
pose a threat to the U.S. economy. Continuing economic problems in Asia may
result in a flood of cheap Asian products into the U.S., which would put
pressure on U.S. corporations to lower prices, thereby impacting their
earnings potential. Furthermore, with the U.S. dollar already strong
against most major currencies, any downturn in Asian demand would put
pressure on U.S. corporations with a strong export business. Given this
scenario, we intend to focus on high-quality companies with broadly
diversified global exposure.

18
<PAGE>

Mid-Cap Growth Fund
- --------------------------------------------------------------------------------

[GRAPHIC OMITTED]

Consumer 8.5%
Transportation 4.2%
Utilities 2.3%
Financial Services 18.6%
Capital Goods 15.4%
Healthcare 11.7%
Technology 10.2%
Energy & Basic Material 9.6%
Cash & Other 9.3%+
Retail Trade 9.2%

+ Includes cash equitized with futures of 1.3%.

Three Since
Month Inception Commencement
- --------------------------------------------------------------------------------

Mid-Cap Growth Fund 11.25% 12.77% 11/25/97
- --------------------------------------------------------------------------------

S&P 400 Mid-Cap Index 10.82% 15.92%
- --------------------------------------------------------------------------------

Healthcare Financial Partners, Inc. 1.46%
- --------------------------------------------------------------------------------
First Commerce Corp. 1.43%
- --------------------------------------------------------------------------------
HBO & Co. 1.36%
- --------------------------------------------------------------------------------
Barnes & Noble Inc. 1.35%
- --------------------------------------------------------------------------------
SunGard Data Systems Inc. 1.33%
- --------------------------------------------------------------------------------
Comdisco Inc. 1.27%
- --------------------------------------------------------------------------------
Sterling Commerce Inc. 1.25%
- --------------------------------------------------------------------------------
Tyco International Ltd. 1.23%
- --------------------------------------------------------------------------------
Equitable Cos. Inc. 1.23%
- --------------------------------------------------------------------------------
Airtouch Communications Inc. 1.23%
- --------------------------------------------------------------------------------

Investment Profile

A mutual fund designed for investors
who seek long-term growth of capital
by investing primarily in equity securities
of companies with medium-sized market
capitalization that have the potential
for above-average growth.

SEE PAGE 35 FOR NOTES TO PERFORMANCE.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.

19
<PAGE>

Schedule of Investments March 31, 1998 (unaudited)
- --------------------------------------------------------------------------------

MID-CAP GROWTH FUND

NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------

COMMON STOCK -- 90.7%
- --------------------------------------------------------------------------------

BASIC MATERIALS -- 2.9%
Crompton & Knowles Corp. 5,260 $ 152,211
Minerals Technologies Inc. 2,975 149,866
Morton International Inc. 3,825 125,508

427,585
[GRAPHIC OMITTED] CAPITAL GOODS -- 16.4%
AlliedSignal Inc. 3,188 133,896
AVX Corp. 3,931 79,111
Berg Electronics Corp. 5,844 150,118 (a)
Case Corp. 1,966 133,934
Deere & Co. 2,444 151,375
Dover Corp. 4,038 153,444
Hexcel Corp. 4,516 124,190 (a)
Hubbell Inc. (Class B) 2,816 141,856
Kennametal Inc. 2,709 142,561
Martin Marietta Materials Inc. 3,772 162,903
Masco Corp. 2,869 170,705
Molex Inc. (Class A) 4,183 112,157
Textron Inc. 2,072 159,544
Thermo Electron Corp. 3,400 137,275 (a)
Thomas & Betts Corp. 2,391 153,024
Tyco International Ltd. 3,294 179,935
U.S. Filter Corp. 3,188 111,979 (a)

2,398,007
[GRAPHIC OMITTED] CONSUMER - CYCLICAL -- 7.4%
Cendant Corp. 4,338 171,893 (a)
CKS Group Inc. 3,400 63,963 (a)
Interpublic Group Cos. Inc. 2,709 168,297
Jacor Communications Inc. 2,975 175,525 (a)
Jones Apparel Group Inc. 2,550 140,409 (a)
Sunbeam Corp. 3,028 133,421
United Rentals Inc. 3,453 89,778 (a)
Wolverine World Wide Inc. 4,994 141,080

1,084,366

CONSUMER - STABLE -- 1.1%
Sealed Air Corp. 2,444 160,082 (a)

ENERGY -- 6.7%
Anadarko Petroleum Co. 1,859 128,271
Apache Corp. 3,188 117,159
BJ Services Co. 3,612 131,612 (a)
Burlington Resources Inc. 2,593 124,302
Nabors Industries Inc. 3,400 80,538 (a)

<PAGE>

NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------

Schlumberger Ltd. 1,647 $ 124,760
Tosco Corp. 3,985 140,471
USX-Marathon Group 3,613 135,939

983,052
[GRAPHIC OMITTED] FINANCIAL -- 14.1%
American Express Co. 1,647 151,215
Comdisco Inc. 4,250 185,406
Crestar Financial Corp. 2,816 166,496
FINOVA Group Inc. 2,869 168,912
First American Corp. 2,816 137,984
First Commerce Corp. 2,444 209,573
Firstar Corp. 3,613 142,714
GATX Corp. 2,072 161,616
HealthCare Financial Partners Inc. 4,516 213,946 (a)
Imperial Credit Industries Inc. 5,260 124,596 (a)
New Century Financial Corp. 7,544 74,497 (a)
Summit Bancorp. 3,028 151,589
Travelers Group Inc. 2,869 172,140

2,060,684
[GRAPHIC OMITTED] HEALTHCARE -- 11.7%
Baxter International Inc. 2,550 140,569
Cardinal Health Inc. 1,913 168,703
Covance Inc. 6,322 155,284 (a)
HBO & Co. 3,294 198,875
Henry Schein Inc. 3,772 156,538 (a)
McKesson Corp. 2,656 153,384
MedPartners Inc. 2,390 24,498 (a)
Mylan Laboratories Inc. 4,383 100,809
Sybron International Corp. 6,268 163,752 (a)
Tenet Healthcare Corp. 4,728 171,685 (a)
Teva Pharmaceutical
Industries Ltd. ADR 2,391 102,215
United Healthcare Corp. 2,603 168,544

1,704,856

INSURANCE -- 4.5%
American International Group Inc. 1,328 167,245 (h)
Equitable Cos. Inc. 3,188 179,923
Hartford Financial Services
Group Inc. 1,541 167,199
Provident Cos. Inc. 3,931 134,882

649,249
[GRAPHIC OMITTED] RETAIL TRADE -- 9.2%
Barnes & Noble Inc. 5,047 196,833 (a)
Consolidated Stores Corp. 3,134 134,566 (a)
Federated Department Stores Inc. 3,028 156,888 (a)
General Nutrition Cos. Inc. 4,463 177,404 (a)
Pier 1 Imports Inc. 4,250 115,281

- ----------
See Notes to Schedules of Investments on page 35 and Notes to Financial
Statements on page 44.

20
<PAGE>

Schedule of Investments March 31, 1998 (unaudited)
- --------------------------------------------------------------------------------

NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------

Polo Ralph Lauren Corp. (Class A) 2,825 $ 84,927 (a)
Samsonite Corp. 1,859 54,608 (a)
St. John Knits Inc. 2,922 138,065
Tiffany & Co. 2,975 144,845
Zale Corp. 4,835 139,611 (a)

1,343,028

TECHNOLOGY - ELECTRONICS AND EQUIPMENT -- 4.9%
Analog Devices Inc. 3,931 130,706 (a)
Gilat Satellite Networks Ltd. 3,666 133,809 (a)
Nokia Corp. ADR 1,488 160,611
Northern Telecom Ltd. 2,550 164,794
Perkin Elmer Corp. 1,806 130,596

720,516

TECHNOLOGY - SOFTWARE & SERVICES -- 5.3%
Cadence Design Systems Inc. 4,994 172,917 (a)
Compuware Corp. 1,780 87,888 (a)
National Data Corp. 3,453 143,515
Sterling Commerce Inc. 3,931 182,300 (a)
SunGard Data Systems Inc. 5,260 193,634 (a)

780,254

TRANSPORTATION -- 4.2%
Canadian Pacific Ltd. 4,516 133,222
CNF Transportation Inc. 3,188 114,569
Laidlaw Inc. 8,447 134,096
U.S. Xpress Enterprises Inc.(Class A) 5,313 110,245 (a)
Wisconsin Central
Transportation Corp. 4,038 113,695 (a)

605,827

UTILITIES -- 2.3%
Airtouch Communications Inc. 3,666 179,405 (a,h)
WorldCom Inc. 3,666 157,867

337,272

TOTAL INVESTMENTS IN SECURITIES
(Cost $11,516,845) 13,254,778

- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 9.2%
- --------------------------------------------------------------------------------
GEI Short Term Investment Fund
(Cost $1,347,319) 1,347,319 1,347,319

OTHER ASSETS AND LIABILITIES,
NET 0.1% 10,358
- --------------------------------------------------------------------------------

NET ASSETS -- 100% $14,612,455
================================================================================

Other Information
- --------------------------------------------------------------------------------

The Mid-Cap Growth Fund had the following long futures contracts open at March
31, 1998:

Number
Expiration of Underlying Unrealized
Description Date Contracts Face Value Loss
- --------------------------------------------------------------------------------

S&P Mid-Cap 400 June 1998 1 $186,725 $625

- ----------
See Notes to Schedules of Investments on page 35 and Notes to Financial
Statements on page 44.

Icons represent the top five industry weightings in the Mid-Cap Growth Fund at
March 31, 1998.

21
<PAGE>

S&P 500 Index Fund
- --------------------------------------------------------------------------------

Q&A

James B. May leads a team of portfolio managers at State Street Global Advisors,
the sub-adviser, for the S&P 500 Index Fund. Since 1994, James has been an
investment officer and portfolio manager in the U.S. Structured Products Group
at State Street Bank and Trust Company with total assets under management
exceeding $470 billion. From 1991 to 1993, James served as an Investment Support
Analyst in the U.S. Passive Services Group at State Street. James holds a B.S.
in finance from Bentley College and an M.B.A. from Boston College.

Q. How did the S&P 500 Index Fund perform compared to its benchmark for the
period since inception, November 25, 1997, through March 31, 1998?

A. The S&P 500 Index Fund posted a return of 16.44% for the period since
inception, November 25, 1997. This compares with a 16.49% return for the
Standard & Poor's 500 Index over the same period.

Q. What factors contributed to the fund's performance?

A. A good environment for stocks was the main reason for the fund's
performance. The economy remained strong, inflation continued to be benign
and corporate earnings, while slightly lower-than-expected, were still
generally good.

Q. What is your strategy for selecting stocks for the fund?

A. Our investment technique played a significant role in the fund's
performance. Due to the current fund size, we employed an optimization
approach rather than full replication. The optimization approach enables
the fund to gain representation in approximately 300 of the 500 stocks that
comprise the index, or roughly 90% of the S&P 500's total capitalization.
Optimization is a common strategy employed by index funds in the early
stages of building assets because it minimizes trading and custody costs
while providing tight tracking to the index.

Q. What were some of the better performing industries and stocks?

A. Technology was the best industry performer, despite some
lower-than-expected earnings reports by key companies in the sector. The
top performer in this group and for the entire period was Apple Computer,
which advanced on better-than-expected earnings and news that founder
Steven Jobs would remain the company's acting chief executive officer.
Other top performers that enjoyed strong gains on improving earnings
included Advanced Micro Devices and Dell Computer. The healthy economy also
propped up the prices of steel companies, such as Inland Steel and
Bethlehem Steel.

Q. What is your outlook for the fund?

A. While the Asian crisis did not have a significant impact on the financial
markets, it still remains a threat to the U.S. economy. If that threat
should materialize, it could result in slower economic growth and perhaps
lower-than-expected earnings growth, which may lead to a temporary pullback
in stock prices. With continued uncertainty in the marketplace, volatily is
likely to persist. Due to the passive nature of the fund's strategy, it
will remain properly positioned to track the return of S&P 500 Index.

22
<PAGE>

S&P 500 Index Fund
- --------------------------------------------------------------------------------

[GRAPHIC OMITTED]

Capital Goods 9.5%
Retail Trade 5.1%
Cash & Other 3.3%
Transportation 1.2%
Consumer 19.3%
Financial Services 16.1%
Technology 12.8%
Energy & Basic Materials 11.6%
Healthcare 11.1%
Utilities 10.0%

Three Since
Month Inception Commencement
- --------------------------------------------------------------------------------

S&P 500 Index Fund 14.02% 16.44% 11/25/97
- --------------------------------------------------------------------------------

S&P 500 Index 13.96% 16.49%
- --------------------------------------------------------------------------------

General Electric Co. 3.08%
- --------------------------------------------------------------------------------
Microsoft Corp. 2.40%
- --------------------------------------------------------------------------------
Coca Cola Co. 2.12%
- --------------------------------------------------------------------------------
Exxon Corp. 1.88%
- --------------------------------------------------------------------------------
Merck & Co. Inc. 1.72%
- --------------------------------------------------------------------------------
Pfizer Inc. 1.44%
- --------------------------------------------------------------------------------
Intel Corp. 1.44%
- --------------------------------------------------------------------------------
Royal Dutch Petroleum Co. ADR 1.36%
- --------------------------------------------------------------------------------
Wal-Mart Stores Inc. 1.29%
- --------------------------------------------------------------------------------
Procter & Gamble Co. 1.26%
- --------------------------------------------------------------------------------

Investment Profile

A mutual fund designed for investors
who seek growth of capital and
accumulation of income that
corresponds to the investment
return of the Standard's & Poor's 500
Composite Price Index by investing
in common stocks comprising that Index.

SEE PAGE 35 FOR NOTES TO PERFORMANCE.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.

23
<PAGE>

Schedule of Investments March 31, 1998 (unaudited)
- --------------------------------------------------------------------------------

S&P 500 INDEX FUND

NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------

COMMON STOCK -- 96.7%
- --------------------------------------------------------------------------------

BASIC MATERIALS -- 4.0%
Air Products & Chemicals Inc. 400 $ 33,150
Aluminum Co. of America 700 48,169
Barrick Gold Corp. 1,500 32,437
Champion International Corp. 400 21,725
Dow Chemical Co. 600 58,350
Du Pont de Nemours (E.I.) & Co. 2,600 176,800
Eastman Chemical Co. 400 26,975
Fort James Corp. 700 32,069
Freeport McMoran Copper &
Gold Inc. (Class B) 1,500 29,906
Georgia Pacific Corp. 300 19,425
Hercules Inc. 400 19,750
International Paper Co. 800 37,450
Monsanto Co. 1,400 72,800
Phelps Dodge Corp. 400 25,825
PPG Industries Inc. 600 40,762
Praxair Inc. 500 25,719
Rohm Co. 200 20,663
Union Camp Corp. 400 23,900
Union Carbide Corp. 500 25,063
Weyerhaeuser Co. 600 33,900

804,838
[GRAPHIC OMITTED] CAPITAL GOODS -- 9.5%
AlliedSignal Inc. 1,400 58,800
AMP Inc. 700 30,669
Boeing Co. 2,300 119,887
Browning-Ferris Industries Inc. 700 22,838
Case Corp. 300 20,438
Caterpillar Inc. 900 49,556
CBS Corp. 1,800 61,087
Cooper Industries Inc. 500 29,719
Corning Inc. 600 26,550
Deere & Co. 700 43,356
Dover Corp. 800 30,400
Eaton Corp. 300 28,556
Emerson Electric Co. 1,100 71,706
General Electric Co. 7,200 620,550
Grainger (W.W.) Inc. 200 20,563
Honeywell Inc. 400 33,075
Illinois Tool Works Inc. 700 45,325
Ingersoll Rand Co. 600 28,762
Lockheed Martin Corp. 500 56,250
Masco Corp. 600 35,700

<PAGE>

NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------

Minnesota Mining &
Manufacturing Co. 900 $ 82,069
Northrop Grumman Corp. 200 21,488
Parker Hannifin Corp. 500 25,625
Raytheon Co. (Class A) 108 6,143
Raytheon Co. (Class B) 700 40,862
Rockwell International Corp. 600 34,425
Sherwin-Williams Co. 700 24,850
Tenneco Inc. 600 25,613
Textron Inc. 500 38,500
Thermo Electron Corp. 500 20,188 (a)
Tyco International Ltd. 1,300 71,012
United Technologies Corp. 600 55,387
Waste Management Inc. 1,200 36,975

1,916,924

CONSUMER - CYCLICAL -- 8.7%
Cendant Corp. 2,061 81,667 (a)
Chrysler Corp. 1,700 70,656
Clear Channel Communications Inc. 300 29,400 (a)
Cognizant Corp. 500 28,687
Comcast Corp. (Class A) 1,000 35,312
Dana Corp. 400 23,275
Donnelley (R.R.) & Sons Co. 600 24,638
Dow Jones & Co. Inc. 400 21,175
Dun & Bradstreet Corp. 900 30,769
Eastman Kodak Co. 800 51,900
Ford Motor Co. 2,700 174,994
Gannett Inc. 700 50,312
General Motors Corp. 1,700 114,644
Genuine Parts Co. 900 34,312
Goodyear Tire & Rubber Co. 500 37,875
Hilton Hotels Corp. 800 25,500
Marriott International Inc. 400 14,875 (a)
Marriott International Inc. (Class A) 400 14,325 (a)
Mattel Inc. 800 31,700
McDonald's Corp. 1,600 96,000
McGraw Hill Cos. Inc. 300 22,819
New York Times Co. 300 21,000
Newell Co. 500 24,219
Nike Inc. 800 35,400
Service Corp. International 800 33,950
Sodexho Marriott Services Inc. 100 2,656
Tele-Communications Inc. (Series A) 1,300 40,422
Time Warner Inc. 1,300 93,600
Times Mirror Co. 400 25,350
Tribune Co. 400 28,200
Tricon Global Restaurants Inc. 600 18,038 (a)
TRW Inc. 500 27,563
U.S. WEST Media Group 1,700 59,075 (a)
VF Corp. 600 31,537
Viacom Inc. (Class B) 1,000 53,750 (a)

- ----------
See Notes to Schedules of Investments on page 35 and Notes to Financial
Statements on page 44.

24
<PAGE>

Schedule of Investments March 31, 1998 (unaudited)
- --------------------------------------------------------------------------------

NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------

Walt Disney Co. 1,500 $ 160,125
Xerox Corp. 800 85,150

1,754,870
[GRAPHIC OMITTED] CONSUMER - STABLE -- 10.6%
Anheuser Busch Cos. Inc. 1,100 50,944
Archer-Daniels Midland Co. 1,400 30,713
Avon Products Inc. 400 31,200
Bestfoods 300 35,063
Campbell Soup Co. 1,100 62,425
Clorox Co. 300 25,706
Coca Cola Co. 5,500 425,906
Colgate-Palmolive Co.. 700 60,637
Conagra Inc. 1,100 35,338
Crown Cork & Seal Inc. 400 21,400
Fortune Brands Inc. 700 27,913
General Mills Inc. 400 30,400
Gillette Co. 1,300 154,294
Heinz (H.J.) Co. 800 46,700
Hershey Foods Corp. 400 28,650
Kellogg Co. 1,000 43,125
Kimberly Clark Corp. 1,300 65,162
Pepsico Inc. 3,400 145,137
Philip Morris Cos. Inc. 5,300 220,944
Procter & Gamble Co. 3,000 253,125
Quaker Oats Co. 500 28,625
Ralston Purina Co. 300 31,800
Sara Lee Corp. 1,100 67,787
Seagram Ltd. 1,000 38,187
Sysco Corp. 1,200 30,750
Unilever N.V. 1,400 96,075
UST Inc. 800 25,800
Vlasic Foods International Inc. 110 2,812 (a)
Wrigley (W.M.) Junior Co. 300 24,525

2,141,143

ENERGY -- 7.6%
Amerada Hess Corp. 400 23,325
Amoco Corp. 1,100 95,012
Atlantic Richfield Co. 800 62,900
Baker Hughes Inc. 500 20,125
Burlington Resources Inc. 600 28,763
Chevron Corp. 1,500 120,469
Dresser Industries Inc. 600 28,837
Exxon Corp. 5,600 378,700
Halliburton Co. 600 30,112
Mobil Corp. 1,800 137,925
Occidental Petroleum Corp. 1,100 32,244
Phillips Petroleum Co. 700 34,956
Royal Dutch Petroleum Co. ADR 4,800 272,700
Schlumberger Ltd. 1,100 83,325

<PAGE>

NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------

Texaco Inc. 1,400 $ 84,350
Union Pacific Resources Group Inc. 900 21,488
Unocal Corp. 900 34,819
USX-Marathon Group 800 30,100

1,520,150
[GRAPHIC OMITTED] FINANCIAL -- 12.5%
Ahmanson (H.F.) & Co. 400 31,000
American Express Co. 1,100 100,994
American General Corp. 600 38,813
Banc One Corp. 1,430 90,447
Bank of New York Inc. 900 56,531
BankAmerica Corp. 1,500 123,937
BankBoston Corp. 400 44,100
Bankers Trust New York Corp. 300 36,094
Charles Schwab Corp. 700 26,600
Chase Manhattan Corp. 900 121,387
Citicorp 1,000 142,000
Comerica Inc. 300 31,744
CoreStates Financial Corp. 500 44,875
Countrywide Credit Industries 600 31,913
Federal Home Loan Mortgage Corp. 1,700 80,644
Federal National Mortgage Assoc. 2,400 151,800
Fifth Third Bancorp 400 34,200
First Chicago NBD Corp. 700 61,687
First Union Corp. 1,200 68,100
Fleet Financial Group Inc. 600 51,038
Household International Inc. 300 41,325
KeyCorp 1,000 37,813
Mellon Bank Corp. 600 38,100
Merrill Lynch & Co. Inc. 800 66,400
MGIC Investment Corp. 400 26,275
Morgan (J.P.) & Co. Inc. 400 53,725
Morgan Stanley, Dean Witter 1,300 94,737
National City Corp. 500 36,656
NationsBank Corp. 2,193 159,952
Norwest Corp. 1,700 70,656
PNC Bank Corp. 700 41,956
Republic of New York Corp. 200 26,675
State Street Corp. 400 27,225
Suntrust Banks Inc. 500 37,688
Transamerica Corp. 200 23,300
Travelers Group Inc. 2,708 162,480
United States Bancorp. 500 62,375
Wachovia Corp. 400 33,925
Washington Mutual Inc. 500 35,859
Wells Fargo & Co. 200 66,250

2,511,276
[GRAPHIC OMITTED] HEALTHCARE -- 11.1%
Abbott Laboratories 1,700 128,031
American Home Products Corp. 1,400 133,525

- ----------
See Notes to Schedules of Investments on page 35 and Notes to Financial
Statements on page 44.

25
<PAGE>

S&P 500 Index Fund
- --------------------------------------------------------------------------------

NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------

Amgen Inc. 700 $ 42,613
Baxter International Inc. 700 38,588
Becton Dickinson & Co. 500 34,031
Boston Scientific Corp. 500 33,750 (a)
Bristol-Myers Squibb Co. 2,200 229,487
Cardinal Health Inc. 300 26,456
Columbia/HCA Healthcare Corp. 1,600 51,600
Eli Lilly & Co. 2,500 149,062
Guidant Corp. 500 36,688
HBO & Co. 600 36,225
Healthsouth Corp. 1,100 30,869 (a)
Johnson & Johnson 2,900 212,606
Medtronic Inc. 1,200 62,250
Merck & Co. Inc. 2,700 346,612
Pfizer Inc. 2,900 289,094
Pharmacia & Upjohn Inc. 1,300 56,875
Schering Plough Corp. 1,700 138,869
Tenet Healthcare Corp. 900 32,681 (a)
United Healthcare Corp. 500 32,375
Warner-Lambert Co. 600 102,188

2,244,475

INSURANCE -- 3.6%
Aetna Inc. 400 33,375
Allstate Corp. 1,000 91,937
American International Group Inc. 1,500 188,906
Aon Corp. 400 25,900
Chubb Corp. 400 31,350
CIGNA Corp. 200 41,000
Conseco Inc. 500 28,312
General Reinsurance Corp. 200 44,125
Hartford Financial Services
Group Inc. 400 43,400
Lincoln National Corp. 300 25,463
Loews Corp. 300 31,275
Marsh & McLennan Cos. Inc. 400 34,925
Progressive Corp. 200 26,938
St. Paul Cos. Inc. 300 26,738
SunAmerica Inc. 600 28,725
UNUM Corp. 400 22,075

724,444

RETAIL TRADE -- 5.1%
Albertsons Inc. 800 42,100
Costco Cos. Inc. 600 32,025 (a)
CVS Corp. 500 37,750
Dayton Hudson Corp. 600 52,800
Federated Department Stores Inc. 600 31,088 (a)
Gap Inc. 1,050 47,250
Home Depot Inc. 1,700 114,644
J.C. Penney Company Inc. 600 45,412

<PAGE>
NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------

K Mart Corp. 1,600 $ 26,700 (a)
Kroger Co. 700 32,331 (a)
Limited Inc. 900 25,819
Lowes Cos. Inc. 500 35,094
May Department Stores Co. 600 38,100
Rite Aid Corp. 800 27,400
Sears Roebuck & Co. 1,000 57,437
TJX Cos. Inc. 500 22,625
Toys 'R Us Inc. 800 24,050 (a)
Wal-Mart Stores Inc. 5,100 259,144
Walgreen Co. 1,300 45,744
Winn Dixie Stores Inc. 600 27,825

1,025,338

TECHNOLOGY - ELECTRONICS AND EQUIPMENT -- 8.9%

3Com Corp. 900 32,344 (a)
Applied Materials Inc. 1,000 35,312 (a)
Bay Networks Inc. 700 18,988 (a)
Cisco Systems Inc. 2,400 164,100 (a)
Compaq Computer Corp. 3,600 93,150
Dell Computer Corp. 1,600 108,400 (a)
Digital Equipment Corp. 500 26,156 (a)
EMC Corp. 1,300 49,156 (a)
Hewlett Packard Co. 2,400 152,100
Intel Corp. 3,700 288,831
International Business Machines 2,300 238,912
Lucent Technologies Inc. 1,600 204,600
Motorola Inc. 1,400 84,875
National Semiconductor Corp. 500 10,469 (a)
Northern Telecom Ltd. 1,400 90,475
Pitney Bowes Inc. 800 40,150
Seagate Technology 800 20,200 (a)
Sun Microsystems Inc. 1,000 41,719 (a)
Tellabs Inc. 500 33,563 (a)
Texas Instruments Inc. 1,000 54,125

1,787,625

TECHNOLOGY - SOFTWARE & SERVICES -- 3.9%
Automatic Data Processing Inc. 800 54,450
Computer Associates
International Inc. 1,350 77,962
Computer Sciences Corp. 600 33,000
First Data Corp. 1,200 39,000
Microsoft Corp. 5,400 483,300 (a)
Oracle Systems Corp. 2,300 72,594 (a)
Parametric Technology Corp. 800 26,650 (a)

786,956

TRANSPORTATION -- 1.2%
AMR Corp. 300 42,956 (a)
Burlington Northern Santa Fe 400 41,600
CSX Corp. 600 35,700

- ----------
See Notes to Schedules of Investments on page 35 and Notes to Financial
Statements on page 44.

26
<PAGE>

Schedule of Investments March 31, 1998 (unaudited)
- --------------------------------------------------------------------------------

NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------

Delta Air Lines Inc. 400 $ 47,300
Norfolk Southern Corp. 1,000 37,375
Union Pacific Corp. N.V. 600 33,713

238,644
[GRAPHIC OMITTED] UTILITIES -- 10.0%
Airtouch Communications Inc. 1,400 68,513 (a)
Alltel Corp. 700 30,581
American Electric Power Inc. 500 25,125
American Telephone &
Telegraph Corp. 3,600 236,250
Ameritech Corp. 2,600 128,537
Bell Atlantic Corp. 1,700 174,250
Bellsouth Corp. 2,200 148,637
Central & South West Corp. 1,000 26,750
Coastal Corp. 400 26,050
Consolidated Edison Inc. 700 32,725
Consolidated Natural Gas Co. 400 23,075
Duke Energy Corp. 800 47,650
Edison International 1,000 29,375
Enron Corp. 700 32,463
Entergy Corp. 1,000 29,750
FPL Group Inc. 400 25,700
Frontier Corp. 800 26,050
GPU Inc. 700 30,975
GTE Corp. 2,100 125,737
Houston Industries Inc. 1,100 31,625
MCI Communications Corp. 1,700 84,150
Nextel Communications Inc. 500 16,791 (a)
Peco Energy Co. 1,100 24,338
PG&E Corp. 1,100 36,300
SBC Communications Inc. 4,000 174,500
Southern Co. 1,500 41,531
Sprint Corp. 1,100 74,456
Texas Utilities Co. 700 27,519
U.S. WEST Communications Group 1,200 65,700
Unicom Corp. 1,000 35,000
Williams Cos. Inc. 1,000 32,000
WorldCom Inc. 2,200 94,738

2,006,841

TOTAL COMMON STOCK
(Cost $16,786,416) 19,463,524

<PAGE>

NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------

PREFERRED STOCK -- 0.3%
- --------------------------------------------------------------------------------
MBNA Corp.
(Cost $34,446) 1,300 $ 46,556

TOTAL INVESTMENTS IN SECURITIES
(Cost $16,820,862) 19,510,080

- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 3.0%
- --------------------------------------------------------------------------------
GEI Short Term Investment Fund 249,380 249,380
Money Market Obligations Trust 327,470 327,470

PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------
U.S. GOVERNMENT
U.S. Treasury Bill
5.01% 06/18/98 $ 30,000 29,674(d),(h)
TOTAL SHORT-TERM INVESTMENTS
(Cost $606,524) 606,524

OTHER ASSETS AND LIABILITIES,
NET 0.0% 8,419
- --------------------------------------------------------------------------------

NET ASSETS -- 100% $20,125,023
- --------------------------------------------------------------------------------

Other Information
- --------------------------------------------------------------------------------

The S&P 500 Index Fund had the following long futures contracts open at March
31, 1998:

Number
Expiration of Underlying Unrealized
Description Date Contracts Face Value Gain
- --------------------------------------------------------------------------------

S&P 500 June 1998 2 $555,250 $8,875

- ----------
See Notes to Schedules of Investments on page 35 and Notes to Financial
Statements on page 44.

Icons represent the top five industry weightings in the S&P 500 Index Fund at
March 31, 1998.

27
<PAGE>

Income Funds
- --------------------------------------------------------------------------------

Q&A

Bob MacDougall leads the fixed income team at GE Investments. Assets under
management exceed $23 billion. His responsibilities include managing the Income
and Money Market Funds. Bob joined GE Investments in 1986 as a Mutual Fund
Portfolio Manager and was appointed to head the Taxable Fixed Income team in
1992, and the Tax-exempt Fixed Income team in 1997. Previously he was with GE's
Corporate Treasury Operation managing the Company's $2 billion portfolio of
marketable securities and supporting the Treasurer in the areas of debt
management and capital structure planning. Prior to that, Bob held various
financial management positions since joining GE in 1973. He holds Bachelor's and
Master's degrees in Business Administration from the University of
Massachusetts.

Q. Describe what happened in the fixed income markets over the four month
period ended March 31, 1998.

A. Volatility in Asian markets dominated the financial news during the fourth
quarter of 1997. As investors assessed the impact of the Asian crisis on
the U.S. economy and inflation, they were attracted to U.S. Treasury bonds
for their good value and their high quality. This rallied the market,
bringing the 30-year Treasury yield to a low of 5.7% in early January.
Since that time, however, the market has traded in a narrow range. The
anticipated slowdown in the U.S. economy has yet to materialize. While
inflation remains benign, tight labor markets continue to concern both the
bond market and the Federal Reserve.

INCOME FUND

Q. How did the Income Fund's performance compare with its market benchmark for
the period since inception, November 21, 1997, through March 31, 1998?

A. The Income Fund returned 2.91% for the period since inception, November 21,
1997 while the Lehman Brothers Aggregate Bond Index returned 2.57% over the
same period.

Q. What were the drivers of the fund's performance?

A. Returns across the various sectors of the high grade bond market were
consistent during this period. Our outperformance was attributable
primarily to favorable security selection, particularly in lower rated
corporate bonds.

MONEY MARKET FUND

Q. How did the Money Market Fund perform relative to its benchmark since its
inception, December 2, 1997, through March 31, 1998?

A. The Money Market Fund had a total return of 1.79% compared with 1.71% for
90-day Treasury Bill for the same period.

OVERALL

Q. What is your outlook for the bond market?

A. The growth of U.S. economy has been surprisingly strong. As a result the
unemployment rate has fallen to levels not seen since the 1970's. While
this has obvious implications for labor costs, we believe that global
competition and productivity improvements will limit price increases and
keep inflation under control. If so, bonds at recent yield levels have good
value.

28
<PAGE>

Income Fund
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
Asset Allocation
As of March 31, 1998
- --------------------------------------------------------------------------------

[GRAPHIC OMITTED]

Cash and Other 9.3%
U.S. Government Agencies 40.5%
Mortgage Backed 29.5%
Corporate Notes 20.7%

Three Since
Month Inception Commencement
- --------------------------------------------------------------------------------

Income Fund 1.77% 2.91% 11/21/97
- --------------------------------------------------------------------------------

LB Aggregate 1.54% 2.57%
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
Quality Ratings at March 31, 1998
- --------------------------------------------------------------------------------

Moody's/ Percentage of
S&P Rating+ Net Assets
- --------------------------------------------------------------------------------
Aaa/AAA and better 80.0%
- --------------------------------------------------------------------------------
Aa/AA to A/A 7.3%
- --------------------------------------------------------------------------------
Below A/A 12.7%
- --------------------------------------------------------------------------------

+ Moody's Investors Services, Inc. and Standard & Poor's are nationally
recognized statistical rating organizations.

Investment Profile

A mutual fund designed for investors
who seek maximum income consistent with
prudent investment management and the
preservation of capital by investing in
fixed income securities.

SEE PAGE 35 FOR NOTES TO PERFORMANCE.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.

- ----------
See Notes to Schedules of Investments on page 35 and Notes to Financial
Statements on page 44.

29
<PAGE>

Schedule of Investments March 31, 1998 (unaudited)
- --------------------------------------------------------------------------------

INCOME FUND

PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------

BONDS AND NOTES -- 90.8%
- --------------------------------------------------------------------------------

FEDERAL AGENCIES -- 4.3%
Federal Home Loan Mortgage Corp.
6.22% 03/18/08 $ 210,000 $ 209,049
Federal National Mortgage Assoc.
5.60% 03/27/00 1,100,000 1,096,733
5.38% 01/16/01 185,000 183,033
6.27% 02/05/08 275,000 272,680
1,552,446
Small Business Administration
6.55% 12/01/17 485,000 490,001
6.125% 01/10/18 340,000 335,325
825,326

TOTAL FEDERAL AGENCIES
(Cost $2,593,323) 2,586,821

U.S. TREASURIES -- 36.2%
U.S. Treasury Bonds
11.875% 11/15/03 77,000 99,426
12.50% 08/15/14 920,000 1,416,368
10.625% 08/15/15 1,430,000 2,144,557
6.125% 11/15/27 3,221,000 3,303,039 (h)
6,963,390
U.S. Treasury Notes
5.625% 10/31/99 5,780,000 5,780,925 (h)
5.375% 01/31/00 3,427,000 3,414,149
5.75% 11/15/00 840,000 842,360
6.625% 07/31/01 400,000 411,564
6.625% 03/31/02 361,000 373,014
5.75% 11/30/02 1,125,000 1,128,341
5.375% 02/28/03 894,000 888,690
5.50% 03/31/03 1,164,000 1,157,633
6.625% 05/15/07 194,000 205,943
5.50% 02/15/08 19,000 18,768
14,221,387
U.S. Treasury STRIP
6.02% 02/15/12 1,020,000 447,596 (d)

TOTAL U.S. TREASURIES
(Cost $21,660,126) 21,632,373

ASSET BACKED -- 0.1%
California Infrastructure
6.42% 12/26/09
(Cost $43,974) 44,000 44,777

<PAGE>

PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------

CORPORATE NOTES -- 20.7%
Abbey National PLC
7.35% 10/29/49 $ 200,000 $ 209,742
AFC Capital Trust
8.207% 02/03/27 295,000 329,308
Ameritech Capital Funding Corp.
6.55% 01/15/28 250,000 245,457
Applied Materials Inc.
7.125% 10/15/17 100,000 100,875
Arizona Public Service Co.
6.25% 01/15/05 80,000 78,174
Arvin Industries Inc.
6.75% 03/15/08 65,000 64,203
Associated Estates Reality Corp.
6.18% 09/27/99 332,000 333,301
Atlantic City Electric Co.
6.19% 01/17/06 205,000 203,093
Bank of Scotland
7.00% 11/29/49 130,000 131,138 (b)
Bell Telephone Co. - Pennsylvania
8.35% 12/15/30 368,000 456,740
Boston University
7.625% 07/15/97 40,000 44,900
Brascan Ltd.
7.375% 10/01/02 80,000 82,757
BT Preferred Capital Trust
7.875% 02/25/27 300,000 306,303
Conseco Inc.
8.70% 11/15/26 274,000 304,702
Continental Cablevision Inc.
8.30% 05/15/06 344,000 377,901
Corporacion Andina De Fomento
6.75% 03/15/05 130,000 129,201
Digital Equipment Corp.
7.125% 10/15/02 40,000 41,026
Dow Chemical Co.
8.55% 10/15/09 80,000 92,328
Farmers Insurance Exchange
8.625% 05/01/24 150,000 172,440 (b)
Goldman Sachs Group L.P.
6.20% 12/15/00 130,000 130,000 (b)
Hydro-Quebec
8.05% 07/07/24 302,000 350,694
Landeskreditbank Baden
7.875% 04/15/04 292,000 317,553
LCI International Inc.
7.25% 06/15/07 90,000 90,189
Lehman Brothers Holdings Inc.
6.90% 03/30/01 332,000 337,601
Loewen Group International Inc.
7.50% 04/15/01 473,000 482,484

- ----------
See Notes to Schedules of Investments on page 35 and Notes to Financial
Statements on page 44.

30
<PAGE>

Schedule of Investments March 31, 1998 (unaudited)
- --------------------------------------------------------------------------------

PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------

Loewen Pass Through Asset Trust
6.70% 10/01/99 $ 411,000 $ 409,619 (b)
Nabisco Inc.
6.125% 02/01/33 95,000 93,292
National Westminster Bank PLC
7.75% 04/29/49 271,000 290,488
New York State Dormitory Authority Revenue
6.32% 04/01/99 331,000 331,973
News America Holdings Inc.
8.15% 10/17/36 368,000 401,856
Norfolk Southern Corp.
7.90% 05/15/97 439,000 495,912
NWCG Holding Corp.
6.66% 06/15/99 379,000 351,856 (d)
Philip Morris Cos. Inc.
7.25% 09/15/01 80,000 82,254
RJR Nabisco Inc.
7.625% 09/15/03 225,000 227,122
Stop & Shop Companies Inc.
9.75% 02/01/02 50,000 56,125
Sun Life Canada Capital Trust
8.526% 05/29/49 301,000 329,475 (b)
Suntrust Banks Inc.
6.00% 01/15/28 80,000 77,960
Talisman Energy Inc.
7.25% 10/15/27 75,000 75,632
Taubman Realty Group L.P.
8.00% 06/15/99 399,000 406,673
TCI Communications Inc.
8.00% 08/01/05 180,000 193,500
Time Warner Entertainment Co. L.P.
10.15% 05/01/12 263,000 338,728
Time Warner Inc.
4.90% 07/29/99 600,000 588,546 (b)
Toledo Edison Co.
7.38% 03/31/00 411,000 415,451
US West Capital Funding Inc.
7.90% 02/01/27 60,000 67,196
USX Marathon Group
9.80% 07/01/01 80,000 88,020
8.125% 07/15/23 80,000 87,731
Viacom Inc.
7.75% 06/01/05 557,000 584,154
Westdeutsche Landesbank
6.75% 06/15/05 150,000 154,137
Williams Cos. Inc.
6.125% 02/15/02 155,000 153,805
Yale University Notes
7.375% 04/15/96 461,000 518,104

<PAGE>

PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------

Zurich Capital Trust
8.376% 06/01/37 100,000 108,445 (b)

TOTAL CORPORATE NOTES
(Cost $12,338,466) $12,340,164

MORTGAGE BACKED -- 29.5%
Agency Mortgage Backed
Federal National Mortgage Assoc.
9.00% 05/01/25 $ 395,462 419,313
7.00% 10/01/27 - 12/01/27 2,292,259 2,321,629
6.103% 03/01/33 209,953 211,265 (e)
6.00% TBA 550,000 541,063 (c)
7.00% TBA 5,235,000 5,287,350 (c)
8,780,620
Government National Mortgage Assoc.
8.50% 10/15/17 457,674 489,848
9.00% 12/15/17 366,536 396,998
6.50% 03/15/24 559,282 555,434
1,442,280

TOTAL Agency Mortgage Backed 10,222,900

Agency Collateralized Mortgage Obligations
Federal Home Loan Mortgage Corp.
6.247% 03/25/21 223,000 221,745
7.50% 04/15/21 301,899 308,215
4.93% 04/01/27 813,880 601,000 (d,f)
1,130,960
Federal National Mortgage Assoc. REMIC
6.909% 06/25/16 2,008,000 2,062,592
Federal National Mortgage Association STRIP
6.00% 08/25/23 318,871 96,159 (g)
6.32% 12/15/24 318,871 213,245 (d,f)
309,404

TOTAL Agency Collateralized Mortgage
Obligations 3,502,956

Non-Agency Mortgage Backed
BHN Mortgage Trust
7.916% 02/15/12 206,639 204,702 (b)
GS Mortgage Securities Corp.
6.46% 07/13/30 250,000 255,742 (d)
Merrill Lynch Mortgage Investors Inc.
6.36% 11/15/26 114,000 114,214
Morgan Stanley Capital Inc.
6.52% 01/15/08 130,000 131,482 (b)
6.86% 07/15/29 295,798 302,938 (b)
Salomon Brothers Mortgage Securities Inc.
7.00% 10/01/27 759,904 762,936
Sawgrass Finance REMIC Trust
6.45% 01/20/06 334,000 337,236
Vornado Finance Corp.
6.36% 12/01/00 640,000 642,400 (b)

TOTAL Non-Agency Mortgage Backed 2,751,650

- ----------
See Notes to Schedules of Investments on page 35 and Notes to Financial
Statements on page 44.

31
<PAGE>
Income Fund
- --------------------------------------------------------------------------------

PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------

Non-Agency Collateralized Mortgage Obligations
Blackrock Capital Finance
7.22% 11/25/28 $ 350,000 $ 355,469
7.25% 11/25/28 212,022 205,860
5.476% 11/25/38 141,212 142,316
Residential Assets Securitization Trust
7.75% 04/25/27 390,000 399,384

TOTAL Non-Agency Collateralized
Mortgage Obligations 1,103,029

TOTAL MORTGAGE BACKED
(Cost $17,529,500) 17,580,535

TOTAL BONDS AND NOTES
(Cost $54,165,389) 54,184,670

NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------
PREFERRED STOCK -- 0.8%
- --------------------------------------------------------------------------------
Banesto Holdings Ltd.
(Series A), 10.50% 3,000 98,400 (b)
New Plan Realty Trust, 7.80% 278 13,897
Pinto Totta International
Finance Ltd., 7.777% 273 273,846 (b)
Travelers Group Inc., 6.213% 1,500 80,250

TOTAL PREFERRED STOCK
(Cost $474,902) 466,393

TOTAL INVESTMENTS IN SECURITIES
(Cost $54,640,291) 54,651,063

- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 18.4%
- --------------------------------------------------------------------------------
GEI Short Term Investment Fund 87,047 87,047

PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------
U.S. Government Agency
Federal Home Loan Bank
5.90% 04/01/98 $10,900,000 $10,900,000

TOTAL SHORT-TERM INVESTMENTS
(Cost $10,987,047) 10,987,047

NUMBER
EXPIRATION DATE/ OF
STRIKE PRICE CONTRACTS VALUE
- --------------------------------------------------------------------------------

CALL OPTIONS WRITTEN -- 0.0%
- --------------------------------------------------------------------------------
U.S. Treasury Bond Apr. 98/105.69 475,000 (1,151)
(Premium $(1,337))

- --------------------------------------------------------------------------------
PUT OPTIONS WRITTEN -- 0.0%
- --------------------------------------------------------------------------------
U.S. Treasury Bond Apr. 98/99.69 475,000 (1,447)
(Premium $(1,484))

OTHER ASSETS AND LIABILITIES,
NET (10.0%) (5,943,145)
- --------------------------------------------------------------------------------

NET ASSETS -- 100% $59,692,367
================================================================================

- ----------
See Notes to Schedules of Investments on page 35 and Notes to Financial
Statements on page 44.

32
<PAGE>

Money Market Fund
- --------------------------------------------------------------------------------

[GRAPHIC OMITTED]

U.S. Government 80.8%
Commercial Paper 17.3%
Certificates of Deposit 1.9%

Three Since
Month Inception Commencement
- --------------------------------------------------------------------------------
Money Market Fund 1.33% 1.79% 12/2/97
- --------------------------------------------------------------------------------
90 day T-Bill 1.27% 1.71%
- --------------------------------------------------------------------------------

Investment Profile

A mutual fund designed for investors who seek a
high level of current income consistent with the preservation of capital and
maintenance of liguidity by investing in U.S. dollar denominated,
short-term money market instruments.

- --------------------------------------------------------------------------------
Fund Yield At March 31, 1998
- --------------------------------------------------------------------------------

Fund IBC Money Fund
- --------------------------------------------------------------------------------
7 day current 5.35%+ 5.05%
- --------------------------------------------------------------------------------
7 day effective 5.49% 5.18%
- --------------------------------------------------------------------------------

CURRENT YIELD represents income earned on an investment in the Money Market Fund
for a seven day period and then annualized.

EFFECTIVE YIELD is calculated similarly but is slightly higher because it
reflects the compounding effect of earnings on reinvested dividends.

An investment in the Money Market Fund is neither insured or guaranteed by the
U.S. Government, and no assurance can be given that the Money Market Fund will
be able to maintain a stable net asset value of $1.00 per share.

+ The seven day current yield, rather than the total return, more closely
reflects the current earnings of the Money Market Fund at March 31, 1998.

SEE PAGE 35 FOR NOTES TO PERFORMANCE.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.

33
<PAGE>

Schedule of Investments March 31, 1998 (unaudited)
- --------------------------------------------------------------------------------

MONEY MARKET FUND

Principal Amortized
Amount Cost
- --------------------------------------------------------------------------------

SHORT-TERM INVESTMENTS -- 100.0%
- --------------------------------------------------------------------------------

U.S. GOVERNMENTS(d) -- 80.8%
Federal Home Loan Bank
5.42% 04/13/98 $ 170,000 $ 169,697
5.72% 04/17/98 100,000 99,753
5.47% 07/29/98 110,000 108,076
377,526
Federal Home Loan Mortgage Corp.
5.90% 04/01/98 23,820,000 23,820,000
5.58% 04/24/98 1,300,000 1,295,490
5.38% 04/30/98 170,000 169,264
25,284,754
Federal National Mortgage Assoc.
5.71% 04/06/98 150,000 149,884
5.42% 04/22/98 160,000 159,502
5.58% 08/24/98 300,000 293,548
602,934

TOTAL U.S. GOVERNMENTS
(Cost $26,265,214) 26,265,214

COMMERCIAL PAPER(d) -- 17.3%
Abbey National PLC
5.43% 04/17/98 180,000 179,572
Associates Corp. of North America
5.55% 07/01/98 170,000 167,649
Bank of Nova Scotia
5.49% 05/01/98 180,000 179,188
Credit Suisse
5.53% 05/22/98 170,000 168,688
Halifax Building Society
5.54% 07/01/98 220,000 216,964
Koch Industries
6.05% 04/01/98 1,500,000 1,500,000
Merrill Lynch & Co. Inc.
5.53% 05/14/98 180,000 178,828
Morgan (J.P.) & Co. Inc.
5.56% 05/15/98 200,000 198,653
Morgan Stanley Group Inc.
5.58% 06/15/98 200,000 197,708
NationsBank Corp.
5.53% 06/04/98 180,000 178,256
Norwest Corp.
5.57% 04/09/98 565,000 564,305
5.58% 05/22/98 200,000 198,436
Toronto Dominion Bank
5.56% 06/23/98 200,000 197,473

<PAGE>

Principal Amortized
Amount Cost
- --------------------------------------------------------------------------------

UBS Finance Delaware Inc.
6.00% 04/01/98 $1,500,000 $ 1,500,000

TOTAL COMMERCIAL PAPER
(Cost $5,625,720) 5,625,720

CERTIFICATES OF DEPOSIT -- 1.9%
Bank of Montreal
5.54% 04/13/98 170,000 170,000
Bayerische Vereinsbank AG
5.62% 04/10/98 180,000 180,000
Deutsche Bank AG
5.56% 04/13/98 100,000 100,000
Societe Generale
5.49% 04/23/98 180,000 180,000

TOTAL CERTIFICATES OF DEPOSIT
(Cost $630,000) 630,000

TOTAL SHORT-TERM INVESTMENTS
(Cost $32,520,934) 32,520,934

OTHER ASSETS AND LIABILITIES,
NET 0.0% 10,951
- --------------------------------------------------------------------------------

NET ASSETS -- 100% $32,531,885
================================================================================

- ----------
See Notes to Schedules of Investments on page 35 and Notes to Financial
Statements on page 44.

34
<PAGE>

Notes to Performance March 31, 1998 (unaudited)
- --------------------------------------------------------------------------------

Total returns take into account changes in share price and assume reinvestment
of dividends and capital gains, if any. Investment returns and net asset values
on an investment will fluctuate and you may have a gain or loss when you sell
your shares.

The Standard & Poor's ("S&P") 500 Composite Price Index of stocks (S&P 500
Index), S&P Composite Index of 400 mid-cap stocks (S&P Mid-Cap 400 Index), 90
Day U.S. Treasury Index (90 Day T-Bill), Morgan Stanley Capital International
Emerging Markets Free Index (MSCI EMF), Morgan Stanley Capital International
EAFE Index (MSCI EAFE), and Lehman Brothers Aggregate Bond Index (LB Aggregate)
are unmanaged indices and do not reflect the actual cost of investing in the
instruments that comprise each index. The S&P 500 Index is a composite of the
prices of 500 widely held stocks recognized by investors to be representative of
the stock market in general. The S&P Mid-Cap 400 Index is a
capitalization-weighted index of 400 U.S. stocks with a median market
capitalization of approximately $700 million. The 90 Day T-Bill is the average
return on three month U.S. Treasury Bills. The MSCI EMF Index is an index of
emerging markets securities in countries open to non-local investors. MSCI EAFE
Index is a composite of 1,109 stocks of companies from 21 countries representing
stock markets of Europe, Australasia, New Zealand and the Far East. The LB
Aggregate is a composite index of short-, medium-, and long-term bond
performance and is widely recognized as a barometer of the bond market in
general. The IBC Money Fund Report yields represent the average yields of 889
taxable money market funds. The results shown for the foregoing indices assume
the reinvestment of net dividends or interest and are unaudited.

Broad market index returns are calculated from the month end nearest to some of
the funds' inception date. A number of the broad market returns are not
available from the funds' commencement of investment operations through March
31, 1998.

The views expressed in this document reflect our judgment as of the publication
date and are subject to change at any time without notice. The securities cited
may not represent future holdings and should not be considered as a
recommendation to purchase or sell a particular security. See the prospectus for
complete descriptions of investment objectives, policies, risks and permissible
investments.

S&P 500 is a registered trademark of The McGraw-Hill Companies, Inc. and has
been licensed for use. The S&P 500 Index Fund is not sponsored, endorsed, sold
or promoted by S&P and S&P makes no representation regarding the advisability of
investing in the S&P 500 Index Fund.

<PAGE>

Notes to Schedules of Investments (unaudited)
- --------------------------------------------------------------------------------

(a) Non-income producing security.

(b) Pursuant to Rule 144A of the Securities Act of 1933, these securities may
be only resold in transactions exempt from registration, normally to
qualified institutional buyers. At March 31, 1998, these securities
amounted to $375,336, $664,858 and $3,523,431 or 5.2%, 0.5% and 5.9% of net
assets for the Emerging Markets Fund, International Equity Fund, and Income
Fund, respectively. These securities have been determined to be liquid
using guidelines established by the Board of Directors.

(d) Coupon amount represents effective yield.

(e) Adjustable rate mortgage coupon. The stated rate represents the rate at
March 31, 1998.

(f) Principal only securities represent the right to receive the monthly
principal payments on an underlying pool of mortgages. No payments of
interest on the pool are passed through to the "principal only" holder.

(g) Interest only securities represent the right to receive the monthly
interest payments on an underlying pool of mortgages. Payments of principal
on the pool reduce the value of the interest only holding.

(h) At March 31, 1998, all or a portion of this security was pledged to cover
collateral requirements for futures, options and TBA's.

Abbreviations:
ADR -- American Depositary Receipt
GDR -- Global Depositary Receipt
Pfd. -- Preferred
Regd. -- Registered
REMIC -- Real Estate Mortgage Investment Conduit
SDR -- Special Drawing Rights
STRIPS -- Separate Trading of Registered
Interest and Principal of Securities

35
<PAGE>

Financial Highlights

Selected data based on a share outstanding throughout the period indicated (unaudited)

- ------------------------------------------------------------------------------------------------------------------------------------
EMERGING INTERNATIONAL U.S. MID-CAP S&P 500 MONEY
MARKETS EQUITY EQUITY GROWTH INDEX INCOME MARKET
FUND FUND FUND FUND FUND FUND FUND
3/31/98(c) 3/31/98(c) 3/31/98(c) 3/31/98(c) 3/31/98(c) 3/31/98(d) 3/31/98(e)
- ------------------------------------------------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C> <C> <C>
Inception date 11/25/97 11/25/97 11/25/97 11/25/97 11/25/97 11/21/97 12/2/97

Net asset value, beginning of period $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $ 1.00
Income (loss) from investment operations:
Net investment income 0.03 0.03 0.05 0.02 0.05 0.21 0.02
Net realized and unrealized gains
(losses) on investments 1.03 2.00 1.48 1.26 1.59 0.08 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from
investment operations 1.06 2.03 1.53 1.28 1.64 0.29 0.02
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions from:
Net investment income 0.03 0.01 0.01 0.01 0.01 0.21 0.02
Net realized gains 0.00 0.00 0.00 0.00 0.00 0.00 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions 0.03 0.01 0.01 0.01 0.01 0.21 0.02
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.03 $12.02 $11.52 $11.27 $11.63 $10.08 $ 1.00
====================================================================================================================================
TOTAL RETURN (a) 10.69% 20.27% 15.29% 12.77% 16.44% 2.91% 1.79%

RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $7,186 $129,032 $114,293 $14,612 $20,125 $59,692 $32,532
Ratios to average net assets:
Net investment income* 0.93% 1.22% 1.38% 0.53% 1.42% 5.79% 5.44%
Net expenses* 1.06% 0.68% 0.43% 0.56% 0.21% 0.32% 0.24%
Portfolio turnover rate 32% 19% 13% 8% 1% 187% N/A
Average brokerage commissions (b) $ 0.003 $0.010 $0.043 $0.055 $0.042 N/A N/A
</TABLE>

- ----------
See Notes to Financial Statements on page 44.

- ----------
Notes to Financial Highlights

(a) Total returns are historical and assume changes in share price,
reinvestment of dividends and capital gains, and assume no sales charge.
Periods less than one year are not annualized.#

(b) Mark-ups, mark-downs and spreads on shares traded on a principal basis are
not included unless they are disclosed on confirmations prepared in
accordance with rule 10b-10 under the 1934 Act.

(d) Information is for the period November 21, 1997, inception of investment
operations, through March 31, 1998.

(e) Information is for the period December 2, 1997, inception of investment
operations, through March 31, 1998.

* Annualized for periods less than one year.

36 & 37
<PAGE>

Statements Of Assets And Liabilities
March 31, 1998 (unaudited)

- ------------------------------------------------------------------------------------------------------------------------------------
EMERGING INTERNATIONAL U.S.
MARKETS EQUITY EQUITY
FUND FUND FUND
- ------------------------------------------------------------------------------------------------------------------------------------

<S> <C> <C> <C>
ASSETS
Investments in securities, at market cost $6,198,801; $114,232,471;
$98,386,602; $11,516,845; $16,820,862; and $54,640,291; respectively) $6,887,980 $126,492,115 $112,236,727
Short-term investments (at amortized cost) 193,478 1,987,377 2,456,407
Cash 4,665 993 127
Foreign currency (cost $209,432; $374,809; $0; $0; $0; $0;
and $0; respectively) 213,813 372,124 -
Receivable for investments sold 6,924 409,446 359,816
Income receivables 25,908 263,012 120,390
Receivable for fund shares sold 927 - -
Variation margin receivable - - 4,800
- ----------------------------------------------------------------------------------------------------------------------------
Total assets 7,333,695 129,525,067 115,178,267
- ----------------------------------------------------------------------------------------------------------------------------

LIABILITIES
Options written, at market - - -
Distributions payable to shareholders - - -
Payable for investments purchased 140,162 427,374 307,180
Payable for fund shares redeemed 1,011 - 537,563
Payable to GEIM 6,128 66,096 40,467
- ----------------------------------------------------------------------------------------------------------------------------
Total liabilities 147,301 493,470 885,210
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSETS $7,186,394 $129,031,597 $114,293,057
============================================================================================================================

NET ASSETS CONSIST OF:
Capital paid in $6,512,700 $116,035,637 $ 99,450,663
Undistributed (overdistributed) net investment income (1,085) 218,643 416,871
Accumulated net realized gain (loss) (18,632) 513,814 555,121
Net unrealized appreciation / (depreciation) on:
Investments 689,179 12,259,644 13,850,125
Futures - - 20,283
Written options - - -
Foreign currency related transactions 4,232 3,859 (6)
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSETS $7,186,394 $129,031,597 $114,293,057
============================================================================================================================

Shares outstanding ($.001 par value) 651,336 10,736,035 9,921,765
Net asset value per share $ 11.03 $ 12.02 $ 11.52

</TABLE>

<PAGE>

- ------------------------------------------------------------------------------------------------------------------------------------
MID-CAP S&P 500 MONEY
GROWTH INDEX INCOME MARKET
FUND FUND FUND FUND
- ------------------------------------------------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C>
ASSETS
Investments in securities, at market cost $6,198,801;
$114,232,471; $98,386,602; $11,516,845; $16,820,862;
and $54,640,291; respectively) $13,254,778 $19,510,080 $54,651,063$ $ -
Short-term investments (at amortized cost) 1,347,319 606,524 10,987,047 32,520,934
Cash 101 3,068 36 38,484
Foreign currency (cost $209,432; $374,809; $0; $0; $0; $0;
and $0; respectively) - - - -
Receivable for investments sold - - 327,895 -
Income receivables 15,343 23,188 743,575 7,738
Receivable for fund shares sold - - - -
Variation margin receivable 1,725 2,400 - -
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets 14,619,266 20,145,260 66,709,616 32,567,156
- ------------------------------------------------------------------------------------------------------------------------------------

LIABILITIES
Options written, at market - - 2,598* -
Distributions payable to shareholders - - 53,081 28,675
Payable for investments purchased - 16,791 6,945,385 -
Payable for fund shares redeemed - - - -
Payable to GEIM 6,811 3,446 16,185 6,596
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 6,811 20,237 7,017,249 35,271
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $14,612,455 $20,125,023 $59,692,367 $32,531,885
====================================================================================================================================

NET ASSETS CONSIST OF:
Capital paid in $12,958,413 $17,308,257 $59,241,089 $32,531,885
Undistributed (overdistributed) net investment income 17,082 68,080 3,165 -
Accumulated net realized gain (loss) (100,346) 50,593 437,118 -
Net unrealized appreciation / (depreciation) on:
Investments 1,737,933 2,689,218 10,772 -
Futures (625) 8,875 - -
Written options - - 223 -
Foreign currency related transactions (2) - - -
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $14,612,455 $20,125,023 $59,692,367 $32,531,885
====================================================================================================================================

Shares outstanding ($.001 par value) 1,296,109 1,730,949 5,922,100 32,531,885
Net asset value per share $ 11.27 $ 11.63 $ 10.08 $ 1.00

</TABLE>

* Premium received for the Income Fund was $2,821.

- ----------
See Notes to Financial Statements on page 44

38 & 39
<PAGE>

Statements Of Operations

March For the period ended March 31, 1998 (unaudited)

- ------------------------------------------------------------------------------------------------------------------------------------
EMERGING INTERNATIONAL U.S. MID-CAP S&P 500 MONEY
MARKETS EQUITY EQUITY GROWTH INDEX INCOME MARKET
FUND* FUND* FUND* FUND* FUND* FUND** FUND***
- ------------------------------------------------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Income:
Dividends $ 40,639 $ 344,990 $ 577,124 $ 34,851 $ 94,163 $ 10,994 $ -
Interest 7,195 60,659 77,816 16,333 7,475 1,246,870 265,338
Less: Foreign taxes withheld (2,338) (31,795) (3,105) (580) (81) - -
- ------------------------------------------------------------------------------------------------------------------------------------
Total income 45,496 373,854 651,835 50,604 101,557 1,257,864 265,338
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses:
Advisory and administration fees 24,049 132,727 152,031 25,597 12,520 64,731 11,256
Trustees' fees 171 904 2,672 342 456 1,564 107
- ------------------------------------------------------------------------------------------------------------------------------------
Total expenses 24,220 133,631 154,703 25,939 12,976 66,295 11,363
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income 21,276 240,223 497,132 24,665 88,581 1,191,569 253,975
====================================================================================================================================
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Realized gain (loss) on:
Investments (11,029) 460,003 427,269 (118,667) 4,243 420,171 -
Futures - - 126,300 18,325 46,350 - -
Written options - - - - - 16,947 -
Foreign currency
related transactions (7,603) 53,811 1,552 (4) - - -
Increase (decrease) in unrealized
appreciation/depreciation on:
Investments 689,179 12,259,644 13,850,125 1,737,933 2,689,218 10,772 -
Futures - - 20,283 (625) 8,875 - -
Written options - - - - - 223 -
Foreign currency
related transactions 4,232 3,859 (6) (2) - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain on investments 674,779 12,777,317 14,425,523 1,636,960 2,748,686 448,113 -
- ------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $696,055 $13,017,540 $14,922,655 $1,661,625 $2,837,267 $1,639,682 $253,975
====================================================================================================================================
</TABLE>

* For the period November 25, 1997 (inception) through March 31, 1998.

** For the period November 21, 1997 (inception) through March 31, 1998.

*** For the period December 2, 1997 (inception) through March 31, 1998.

- ----------
See Notes to Financial Statements on page 44.

40 & 41
<PAGE>

Statements Of Changes In Net Assets (unaudited)

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
EMERGING INTERNATIONAL U.S.
MARKETS EQUITY EQUITY
FUND* FUND* FUND*
- ------------------------------------------------------------------------------------------------------------------------------------
PERIOD ENDED PERIOD ENDED PERIOD ENDED
MARCH 31, 1998 MARCH 31, 1998 MARCH 31, 1998
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income $ 21,276 $ 240,223 $ 497,132
Net realized gain (loss) on investments, futures, and foreign
currency related transactions (18,632) 513,814 555,121
Net increase (decrease) in unrealized appreciation/depreciation 693,411 12,263,503 13,870,402
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase from operations 696,055 13,017,540 14,922,655
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from:
Net invesment income (22,361) (21,580) (80,261)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (22,361) (21,580) (80,261)
- ------------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from operations and distributions 673,694 12,995,960 14,842,394
- ------------------------------------------------------------------------------------------------------------------------------------
Share transactions:
Proceeds from sale of shares 6,510,947 116,185,861 100,919,794
Value of distributions reinvested 22,362 21,579 80,294
Cost of shares redeemed (20,609) (171,803) (1,549,425)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase from share transactions 6,512,700 116,035,637 99,450,663
- ------------------------------------------------------------------------------------------------------------------------------------
Total increase in net assets 7,186,394 129,031,597 114,293,057

NET ASSETS
Beginning of period - - -
- ------------------------------------------------------------------------------------------------------------------------------------
End of period $7,186,394 $129,031,597 $114,293,057
====================================================================================================================================

Undistributed (overdistributed) net investment income, end of period $ (1,085) $ 218,643 $ 416,871
- ------------------------------------------------------------------------------------------------------------------------------------

Changes in Fund shares:
Shares sold by subscription 651,039 10,749,976 10,054,252
Issued for distributions reinvested 2,224 2,109 7,973
Shares redeemed (1,927) (16,050) (140,460)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in fund shares 651,336 10,736,035 9,921,765
====================================================================================================================================

</TABLE>

<PAGE>

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
MID-CAP S&P 500 MONEY
GROWTH INDEX INCOME MARKET
FUND* FUND* FUND** FUND***
- ------------------------------------------------------------------------------------------------------------------------------------
PERIOD ENDED PERIOD ENDED PERIOD ENDED PERIOD ENDED
MARCH 31, 1998 MARCH 31, 1998 MARCH 31, 1998 MARCH 31, 1998
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income $ 24,665 $ 88,581 $ 1,191,569 $ 253,975
Net realized gain (loss) on investments,
futures, and foreign
currency related transactions (100,346) 50,593 437,118 -
Net increase (decrease) in unrealized
appreciation/depreciation 1,737,306 2,698,093 10,995 -
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase from operations 1,661,625 2,837,267 1,639,682 253,975
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from:
Net invesment income (7,583) (20,501) (1,188,404) (253,975)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (7,583) (20,501) (1,188,404) (253,975)
- ------------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from
operations and distributions 1,654,042 2,816,766 451,278 -
- ------------------------------------------------------------------------------------------------------------------------------------
Share transactions:
Proceeds from sale of shares 13,090,021 17,340,021 58,508,511 32,451,943
Value of distributions reinvested 7,587 20,496 1,148,830 93,007
Cost of shares redeemed (139,195) (52,260) (416,252) (13,065)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase from share transactions 12,958,413 17,308,257 59,241,089 32,531,885
- ------------------------------------------------------------------------------------------------------------------------------------
Total increase in net assets 14,612,455 20,125,023 59,692,367 32,531,885

NET ASSETS
Beginning of period - - - -
- ------------------------------------------------------------------------------------------------------------------------------------
End of period $14,612,455 $20,125,023 $59,692,367 $32,531,885
====================================================================================================================================

Undistributed (overdistributed) net
investment income, end of period $ 17,082 $ 68,080 $ 3,165 $ -
- ------------------------------------------------------------------------------------------------------------------------------------

Changes in Fund shares:
Shares sold by subscription 1,309,002 1,734,002 5,849,271 32,451,943
Issued for distributions reinvested 772 2,045 114,020 93,007
Shares redeemed (13,665) (5,098) (41,191) (13,065)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in fund shares 1,296,109 1,730,949 5,922,100 32,531,885
====================================================================================================================================
</TABLE>

* For the period November 25, 1997 (inception) through March 31, 1998.

** For the period November 21, 1997 (inception) through March 31, 1998.

*** For the period December 2, 1997 (inception) through March 31, 1998.

- ----------
See Notes to Financial Statements on page 44.

42 & 43
<PAGE>
Notes To Financial Statements March 31, 1998 (unaudited)
- --------------------------------------------------------------------------------
1. ORGANIZATION OF THE FUNDS

GE Institutional Funds (the "Trust") is registered under the Investment Company
Act of 1940 (as amended) (the "1940 Act") as an open-end management investment
company. The Trust was organized as a Delaware business trust on May 23, 1997,
and is authorized to issue an unlimited number of shares. It is currently
comprised of ten investment funds (each a "Fund" and collectively the "Funds")
only seven of which are currently active, as follows: Emerging Markets Fund,
International Equity Fund, U.S. Equity Fund, Mid-Cap Growth Fund, S&P 500 Index
Fund, Income Fund and Money Market Fund. The Funds (except Money Market Fund)
are presently authorized to issue two classes of shares - the Investment Class
and the Service Class. However, as of March 31, 1998, only the Investment Class
has investors.

The commencement dates of the Funds were as follows: Emerging Markets Fund,
International Equity Fund, U.S. Equity Fund, Mid-Cap Growth Fund, S&P 500 Index
Fund - November 25, 1997; Income Fund - November 21, 1997; and Money Market Fund
- - December 2, 1997.

These financial statements only represent the activities of the Investment
Class.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The following summarizes the significant accounting policies of the Trust:

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results may differ from those estimates, but are
expected to be immaterial.

Security Valuation and Transactions

Securities for which exchange quotations are readily available are valued at the
last sale price, or if no sales occurred on that day, at the last quoted bid
price. Certain fixed income securities are valued by a dealer or by a pricing
service based upon a computerized matrix system, which considers market
transactions and dealer supplied valuations. Futures contracts are valued at the
settlement price established each day by the board of trade or exchange on which
they are principally traded. Options are valued at the last sale price, or if no
sales occurred on that day, at the last traded bid price. Forward foreign
currency contracts are valued at the mean between the bid and the offered
forward rates as last quoted by a recognized dealer. Short-term investments
maturing within 60 days are valued at amortized cost. Fund positions which
cannot be valued as set forth above are valued at fair value determined under
procedures approved by the Board of Trustees of the Funds.

The Money Market Fund values its securities using the amortized cost method, in
accordance with Rule 2a-7 of the 1940 Act, which values securities initially at
cost and thereafter assumes a constant amortization to maturity of any discount
or premium. Amortized cost approximates fair value.

Transactions are accounted for as of the trade date. Realized gains and losses
on investments sold are recorded on the basis of specific identification cost
for both financial statement and federal tax purposes.

Foreign Currency

Accounting records of the Funds are maintained in U.S. dollars. Investment
securities and other assets and liabilities denominated in a foreign currency
are translated to U.S. dollars at the prevailing rates of exchange at period
end. Purchases and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the respective
dates of transactions.

The Funds do not isolate the portion of the results of operations resulting from
changes in foreign exchange rates on investments from the fluctuations arising
from changes in their market prices. Such fluctuations are included in net
realized and unrealized gain or loss from investments. Reported net realized
exchange gains or losses from foreign currency transactions represent sale of
foreign currencies, currency gains or losses between the trade date and the
settlement date on securities transactions, net realized gains and losses on
sales and maturities of forward foreign currency contracts, and the difference
between the amounts of net investment income accrued on the Fund's books and the
U.S. dollar equivalent of the amounts actually received or paid. Net unrealized
foreign exchange gains and losses arise from changes in the value of assets and
liabilities, other than investments in securities as a result of changes in
exchange rates.

44
<PAGE>

Notes To Financial Statements March 31, 1998 (unaudited)
- --------------------------------------------------------------------------------

Income Taxes

The Funds intend to comply with all sections of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
taxable income and gains to its shareholders and, therefore, no provision for
federal income tax has been made. Each Fund is treated as a separate taxpayer
for federal income tax purposes. Any net capital and currency losses incurred
after October 31, within each Fund's tax year, are deemed to arise on the first
day of the Fund's next tax year if the Fund so elects to defer such losses.

Investment Income

Corporate actions (including cash dividends) are recorded net of nonreclaimable
tax withholdings on the ex-dividend date, except for certain foreign securities
for which corporate actions are recorded as soon after ex-dividend date as such
information is available. Interest income is recorded on the accrual basis. All
discounts and premiums on taxable bonds are accreted or amortized to call or
maturity date, whichever is shorter, using the effective yield method.

Distributions to Shareholders

The Income Fund and Money Market Fund declare investment income dividends daily
and pay them monthly. All other Funds declare and pay dividends of net
investment income annually. All Funds declare and pay net realized capital gain
distributions annually. The character of income and gains to be distributed is
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences include treatment of
realized and unrealized gains and losses on forward foreign currency contracts,
paydown gains and losses on mortgage-backed securities and losses deferred due
to wash sale transactions. Reclassifications are made to the Funds' capital
accounts to reflect income and gains available for distribution (or available
capital loss carryovers) under income tax regulations. The calculation of net
investment income per share in the Financial Highlights table excludes these
adjustments. During any particular year, net realized gains from investment
transactions in excess of any applicable capital loss carryforwards would be
taxable to the Funds if not distributed and, therefore, will be declared and
paid to their shareholders annually.

When-Issued Securities

The Funds may purchase or sell securities on a when-issued or forward commitment
basis. Payment and delivery may take place a month or more after the date of the
transaction. The price of the underlying securities and the date when the
securities will be delivered and paid for are fixed at the time the transaction
is negotiated. This may increase the risk if the other party involved in the
transaction fails to deliver and causes the Fund to subsequently invest at less
advantageous yields. In connection with such purchases, the Fund is required to
hold liquid assets as collateral with the Funds' custodian sufficient to cover
the purchase price, unless they enter into an offsetting contract for the sale
of equal securities and value.

FORWARD FOREIGN CURRENCY CONTRACTS

Each Fund, other than the Money Market Fund, generally use foreign forward
currency contracts to facilitate transactions in foreign denominated securities.
Each non-money market fund, other than the S&P 500 Index Fund and Premier Growth
Fund, may engage in currency exchange transactions to manage the Funds' currency
exposure. No fund will enter into forward currency transactions for speculative
purposes. Contracts to sell are generally used to hedge the Funds' investments
against currency fluctuations or to offset a previous contract to buy. Contracts
to buy are generally used to hedge exposure to foreign currencies or to offset
previous contracts to sell. Losses may arise from changes in the value of
foreign currency or if the counterparties do not perform under the contracts'
terms.

Daily fluctuations in the value of such contracts are recorded as unrealized
gains or losses. When the contract is closed, the Fund records a gain or loss
equal to the difference between the value at the time it was opened and the
value at the time it was closed. Such gains and losses are disclosed in the
realized or unrealized gain (loss) on foreign currency related transactions in
the accompanying Statements of Operations.

Repurchase Agreements

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. In the event of default of the obligation to repurchase, the Funds have
the right to liquidate the collateral and apply the proceeds in satisfaction of
the obligation.

Futures and Options

Each Fund, other than the Money Market Fund, may invest in futures contracts and
purchase and write options, subject to certain limitations. The Funds may invest
in futures

45
<PAGE>

Notes To Financial Statements March 31, 1998 (unaudited)
- --------------------------------------------------------------------------------

contracts for the following reasons: (1) for the purpose of hedging against the
effects of changes in the value of portfolio securities or other investments due
to anticipated changes in interest rates, stock market conditions and currency
market conditions, (2) to gain stock, bond, or currency market exposure for
accumulating and residual cash positions, (3) for duration management, and (4)
when such transactions are an economically appropriate way to reduce risks
inherent in the management of a Fund. A Fund will not enter into a transaction
involving futures and options on futures for speculative purposes. These
investments involve, to varying degrees, elements of market risk and risks in
excess of the amount recognized in the Statements of Assets and Liabilities. The
face or contract amounts, shown in the Schedule of Investments under the
captions "Other Information", "Call Options Written" and "Put Options Written"
reflect the extent of the involvement the Funds have in the particular classes
of these instruments. Losses may be caused by an imperfect correlation between
movements in the price of the instruments and the price of the underlying
securities and interest rates. Losses also may arise if there is an illiquid
secondary market for the instruments, or an inability of counterparties to
perform.

Upon entering into a futures contract, the Funds are required to deposit with
the Funds' custodian in a segregated account either cash or securities in an
amount (initial margin) equal to a certain percentage of the contract value.
Subsequent payments (variation margin) are made or received by the Funds each
day. The variation margin payments are equal to the daily change in the contract
value and are recorded as unrealized gains and losses. The Funds recognize a
realized gain or loss when the futures contract is closed. The Funds will
realize a gain or loss upon the expiration or closing of an option transaction.
When an option is exercised, the proceeds on sales for a written call option,
the purchase cost for a written put option, or the proceeds on the sale of the
security for a purchased put or cost of the security for a call option is
adjusted by the amount of premium received or paid.

Security Lending

The Funds may loan securities to brokers, dealers, and financial institutions
determined by GEIM to be creditworthy, up to a maximum of 30% of the total value
of the Fund's assets. The loans of securities will be secured by collateral in
the form of cash or other liquid assets, which will be segregated and maintained
with the custodian in an amount at least equal to the current market value of
the loaned securities. The Funds receive a lender fee in addition to the
interest and dividends on the loaned securities during the term of the loan. The
Funds will receive any gain or loss in the market value of its loaned securities
and of securities in which cash collateral is invested during the term of the
loan. In the event the counterparty (borrower) does not meet its contracted
obligation to return the securities, the Fund may be exposed to the risk of loss
of reacquiring the loaned securities at prevailing market prices.

Foreign Securities

There are certain additional risks involved when investing in foreign securities
that are not inherent in domestic securities. These risks may involve foreign
currency exchange rate fluctuations, adverse political and economic developments
and the imposition of unfavorable foreign governmental laws and restrictions.

3. FEES AND COMPENSATION PAID TO AFFILIATES

Advisory and Administration Fees

Compensation of GEIM, the Fund's investment adviser and administrator, a
wholly-owned subsidiary of General Electric Company, for investment advisory and
administrative services, is paid monthly based on the average daily net assets
of each Fund. The advisory and administration fee for each Fund, except the S&P
500 Index Fund, declines incrementally as Fund assets increase. A Fund's
advisory and administration fee is intended to be a "unitary" fee that

46
<PAGE>

Notes To Financial Statements March 31, 1998 (unaudited)
- --------------------------------------------------------------------------------

includes any other operating expenses payable by a Fund, except for fees paid to
the Trust's independent Trustees, brokerage fees, and expenses that are not
normal operating expenses of the Funds (such as extraordinary expenses, interest
and taxes). The advisory and administration fee or fees for the Investment class
of each Fund, and the relevant breakpoints, are stated in the following
schedule:

Annualized based on average daily net assets

Average Daily Advisory and
Net Assets of Fund Administration Fees
- --------------------------------------------------------------------------------

Emerging Markets
Fund First $50 million 1.05%
Over $50 million .95%

International
Equity Fund First $25 million .75%
Next $50 million .65%
Over $75 million .55%

U.S. Equity Fund First $25 million .55%
Mid-Cap Growth Fund Next $25 million .45%
Over $50 million .35%

S&P 500 Index Fund All assets .15%

Income Fund First $25 million .35%
Next $25 million .30%
Next $50 million .25%
Over $100 million .20%

Money Market Fund First $25 million .25%
Next $25 million .20%
Next $50 million .15%
Over $100 million .10%

From time to time, GEIM may waive or reimburse advisory or administrative fees
paid by a Fund.

Distribution and Shareholder Servicing Fees

With respect to the Service Class shares, the Funds have adopted a Shareholder
Servicing and Distribution Plan ("the Plan") pursuant to Rule 12b-1 under the
Investment Company Act of 1940 with respect to each fund except the Money Market
Fund. Each fund pays GE Investment Distributors, Inc. (the "Distributor") and
the Funds' principal underwriter, a monthly fee for distribution and/or
shareholder services provided, at an annual rate of .25% of the average daily
net assets attributable to the Service Class of shares.

Trustee Compensation

The Funds pay no compensation to their Trustees who are officers or employees of
GEIM. Trustees who are not officers or employees receive an annual fee of $5,000
and an additional fee of $500 per Trustees' meeting attended in person and an
additional fee of $250 for each Trustees' conference call meeting attended.

4. SUB-ADVISORY FEES

Pursuant to an investment sub-advisory agreement with GEIM, effective November
25, 1997, State Street Global Advisors ("SSGA") is the investment sub-adviser to
the S&P 500 Index Fund. For its services GEIM pays SSGA monthly compensation in
the form of an investment sub-advisory fee. SSGA is responsible for the
day-to-day portfolio management of the S&P 500 Index Fund's assets, including
the responsibility for making decisions and placing orders to buy, sell or hold
a particular security, under the general supervision of GEIM and the Board.

47
<PAGE>

Notes To Financial Statements March 31, 1998 (unaudited)
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5. AGGREGATE UNREALIZED APPRECIATION AND DEPRECIATION

Aggregate gross unrealized appreciation/(depreciation) of investments for each
Fund at March 31, 1998, were as follows:

Gross Gross Net
Unrealized Unrealized Unrealized
Appreciation Depreciation Appreciation
- --------------------------------------------------------------------------------

Emerging Markets
Fund $ 913,813 $ 224,634 $ 689,179

International
Equity Fund 13,485,117 1,225,473 12,259,644

U.S. Equity Fund 14,580,060 729,935 13,850,125

Mid-Cap
Growth Fund 1,959,281 221,348 1,737,933

S&P 500
Index Fund 2,806,364 117,146 2,689,218

Income Fund 164,884 154,112 10,772

The aggregate cost of each Fund's investments was substantially the same for
book and federal income tax purposes at March 31, 1998.

6. OPTIONS

During the period ended March 31, 1998, the following option contracts were
written:

Income Fund
- --------------------------------------------------------------------------------
Number
of Contracts Premium
- --------------------------------------------------------------------------------

Balance as of September 30, 1997 0 $ 0

Written 5,570 19,769

Closed and Expired (4,620) (16,948)

Exercised (0) (0)
- --------------------------------------------------------------------------------

Balance as of March 31, 1998 950 $ 2,821
- --------------------------------------------------------------------------------

7. INVESTMENT TRANSACTIONS

The cost of purchases and the proceeds from sales of investments, other than
U.S. Government securities, short-term securities and options, for the period
ended March 31, 1998, were as follows:

Purchases Sales
- ------------------------------------------------------------------------

Emerging Markets Fund $ 7,823,928 $ 1,599,535

International Equity Fund 124,559,308 10,787,072

U.S. Equity Fund 109,000,628 11,041,294

Mid-Cap Growth Fund 12,458,549 823,037

S&P 500 Index Fund 16,860,452 43,834

Income Fund 17,652,137 1,212,177

The cost of purchases and the proceeds from sales of long-term U.S. Government
securities for the period ended March 31, 1998, were as follows:

Purchases Sales
- --------------------------------------------------------------------------------

S&P 500 Index Fund $ 98,496 $ 100,000

Income Fund 118,012,805 80,125,330

48
<PAGE>

GE Institutional Funds' Investment Team
- --------------------------------------------------------------------------------

PORTFOLIO MANAGERS

Emerging Markets Fund
International Equity Fund
Team led by
Ralph R. Layman

U.S. Equity Fund
Team led by
Eugene K. Bolton

Mid-Cap Growth Fund
Elaine G. Harris

S&P 500 Index Fund
Team led by
James B. May
State Street Global Advisors

Income Fund
Money Market Fund
Team led by
Robert A. MacDougall

INVESTMENT ADVISER
AND ADMINISTRATOR
GE Investment Management Incorporated

TRUSTEES
Michael J. Cosgrove
John R. Costantino
Alan M. Lewis
William J. Lucas
Robert P. Quinn

SECRETARY
Matthew J. Simpson

TREASURER
Jeffrey A. Groh

ASSISTANT TREASURER
Robert J. Zalucki

DISTRIBUTOR
GE Investment Distributors, Inc.
Member NASD and SIPC

COUNSEL
Willkie Farr & Gallagher

CUSTODIAN
State Street Bank & Trust Company

INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP

OFFICERS OF THE INVESTMENT ADVISER
John H. Myers, Chairman of the Board and President
Eugene K. Bolton, EVP, Domestic Equities
Michael J. Cosgrove, EVP, Mutual Funds
Ralph R. Layman, EVP, International Equities
Alan M. Lewis, EVP, General Counsel and Secretary
Robert A. MacDougall, EVP, Fixed Income
Geoffrey R. Norman, EVP, Institutional Marketing
Thomas J. Szkutak, EVP, Chief Financial Officer
Don W. Torey, EVP, Alternative Investments and Real Estate

<PAGE>

INVESTMENT ADVISER
GE Investment Management Incorporated
3003 Summer Street
Stamford, CT 06905

DISTRIBUTOR
GE Investment Distributors, Inc.
Member NASD and SIPC
777 Long Ridge Road
Stamford, CT 06927

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