<PAGE>
July 21, 1995
Dear Shareholder:
IAA TRUST GROWTH FUND, INC.
The net asset value of the Fund closed the fiscal year on June 30, 1995 at
$17.23 per share.
(WITHOUT SALES CHARGES)
<TABLE>
<S> <C> <C>
1 YEAR 5 YEARS 10 YEARS
- --------- ----------- -----------
26.68% 8.68% 11.30%
</TABLE>
(CURRENT MAXIMUM SALES CHARGES DEDUCTED)
<TABLE>
<S> <C> <C>
22.87% 8.01% 10.96%
</TABLE>
These returns assume all dividends and capital gains distributions were
reinvested and the maximum sales charge was applied on initial investments.
Twelve months ago the stock market was in the doldrums and down about 7% for the
first six months of 1994. Stocks rallied off the low and by December 31, 1994
the market, as measured by the S&P 500, was almost unchanged. During the year,
the economy showed strong growth and the Federal Reserve raised interest rates
six times in an effort to slow the economy and to reduce inflationary pressures.
After a lackluster 1994, stocks rose during the first six months of 1995. The
S&P 500 was up 26.07%, for the twelve months ended June 30, 1995. The IAA Trust
Growth Fund was up 26.68% over the same period. Most of this surge has been
fueled by declining interest rates and rising corporate profits. The market
seemed to be torn between those participants who think we are headed into a
recession and those who think we will have a 'soft landing'. The surprise could
come in the form of an economy that merely pauses, then resumes its upward
growth. This might force the Federal Reserve to raise interest rates which would
have a negative impact on stock prices.
The year began with most investors convinced the Federal Reserve would continue
to raise interest rates in its effort to slow inflation and the economy. The
fact that the economy slowed down so much, especially during February, March,
and April, caught most investors by surprise. We began the year with a cash
position of about 15% and carried it throughout the first half of the year. In
spite of our large cash position, we have been able to match the returns of the
market because our sector weightings turned out to be well placed.
Over-weighting in Technology turned out very well as stocks like INTEL have more
than doubled.
The outlook for common stocks is murky. This bull market is already very old and
the economy has been robust for quite a while. Many investors seem to believe
that stock prices will go up indefinitely, regardless of what happens to
interest rates and corporate earnings. There is little fear of owning stocks,
only the fear of missing the next move up.
We will continue to hold on to our cash reserves until a market correction
provides an investment opportunity. We have reduced the weighting in Technology,
the Fund's best performing sector, by reducing positions in stocks that had
reached their target price. The Energy, Health, Consumer Staples, and Consumer
Services sectors are where we will look to make new investments.
<PAGE>
IAA TRUST ASSET ALLOCATION FUND, INC.
The net asset value of the Fund closed the fiscal year on June 30, 1995 at
$12.29 per share. The figures below show historical compound annual returns of
Fund shares with dividends reinvested.
(WITHOUT SALES CHARGES)
<TABLE>
<S> <C> <C>
1 YEAR 5 YEARS 10 YEARS
- --------- ----------- -----------
16.29% 9.46% 9.39%
</TABLE>
(CURRENT MAXIMUM SALES CHARGES DEDUCTED)
<TABLE>
<S> <C> <C>
12.83% 8.79% 9.06%
</TABLE>
Until the business cycle is repealed, there will always be economic slowdowns.
The financial press refers to these slowdowns as landings and likes to debate
their severity. A slowdown which leads to a recession is called a hard landing.
If a recession is avoided (and it rarely is) the slowdown is considered to be
soft.
Unofficially, the economy has landed. Economic indicators such as unemployment
and industrial production point in that direction. What remains a mystery is the
severity of the landing: soft or hard? The investment community has placed its
bets on a soft landing and has celebrated this rarity by raising values of both
stocks and bonds. Meanwhile, the Federal Reserve reduced interest rates on July
6 in an attempt to restart economic growth.
As the slowdown in the economy became apparent, inflation forecasts were revised
down. The bond market reacted with a strong rally, pushing up the Merrill Lynch
Domestic Bond Index 11.46% in the first half of 1995. This was the strongest
six-month price performance by bonds in nearly 10 years.
The stock market also rejoiced in the economic slowdown. Expectations of lower
inflation, combined with a rise in corporate profits and the anticipation of
future cuts in interest rates, helped propel stock prices to record levels. The
S&P 500, led by the technology sector, gained 20.21% in the first half of 1995.
The Asset Allocation Fund had a successful half, gaining 14.67%. Fixed income
performance was helped by an increase in the duration and average maturity of
our bond portfolio as we correctly anticipated falling yields. Equity
performance benefited from overweightings in Technology and banking stocks. A
more aggressive asset allocation between stocks, bonds and cash would have
enhanced the Fund's return; however, we perceived an above average level of risk
in the stock market and kept the cash position larger than normal.
We believe that the economy is at a critical juncture. Whether the economic
landing is hard or soft has not yet been determined. The course of stock and
bond prices will be largely a result of this determination. Our strategy for
bonds is to gradually shorten the average maturity of the portfolio since we
believe that interest rates are near a low for this cycle. In equities, we will
search for stocks that have not fully participated in the recent rally. For
example, we have recently increased our weighting in the Health Care Services
sector where we see good value in companies who are leaders in medical cost
containment.
<PAGE>
IAA TRUST TAX EXEMPT BOND FUND, INC.
The net asset value of the Fund closed the fiscal year on June 30, 1995 at $8.36
per share. The figures below show historical compound annual returns of Fund
shares with dividends reinvested.
(WITHOUT SALES CHARGES)
<TABLE>
<S> <C> <C>
1 YEAR 5 YEARS 10 YEARS
- --------- ----------- -----------
7.51% 6.50% 7.66%
</TABLE>
(CURRENT MAXIMUM SALES CHARGES DEDUCTED)
<TABLE>
<S> <C> <C>
4.32% 5.84% 7.34%
</TABLE>
Although the Fund's income is exempt from Federal income tax, it may be subject
to state income taxation.
Over the past year, the investment environment was difficult for municipal
bonds. Increases in short-term borrowing rates by the Federal Reserve, combined
with talk of tax law changes and financial distress of Orange County,
California, united to create interest rate volatility.
During 1994, the Federal Reserve raised short-term rates six times to slow the
economy and reduce inflationary expectations. The Federal Reserve's strategy
seemed to work as interest rates fell during the first six months of 1995. The
outlook for business activity is mixed, with certain Manufacturing sectors
reporting a sharp slowdown, while other key sectors of the economy, like
Housing, are demonstrating surprising strength.
Uncertainty in the economy is mirrored in the political arena. Republican
leadership in the House and Senate has vowed to overhaul tax laws, while
simultaneously attempting to balance the budget. Various proposals have included
significantly lowering income tax rates, changes in capital gains tax rates, and
different approaches to taxing investments. One approach is the flat tax. All
income would be taxed at the same rate, thus eliminating the tax advantage of
municipal bonds. Since bond prices reflect investor expectations, the municipal
market is reflecting the possibility that municipal bond interest could lose its
tax preference.
Orange County, California, a major borrower in the municipal market, reported
investment losses totaling over $1.5 billion. These losses created a crisis that
led to Orange County's Chapter 9 bankruptcy and may lead to a default in its
financial obligations. Ramifications from this default, should it occur, remain
to be seen.
In this uncertain environment, we are investing to achieve a high degree of
safety, while seeking the best possible return. We employed various strategies,
picking up yield while extending duration, and maintaining the Fund's overall
'AA' credit quality. To date, these strategies have enhanced the return of the
Fund.
The past year total return for the Fund as of June 30, 1995, was 7.51%. In
comparison, the Lehman Brothers Municipal Bond Index had a total return of
8.82%. The Lehman Index is an unmanaged list of long-term, investment-grade,
tax-exempt bonds. The Index does not take into account brokerage commissions or
other costs, it may include bonds different from those in the Fund, and it may
pose different risks than the Fund.
At this point, no tax reform legislation has been introduced to Congress.
Nevertheless, tax issues will probably stay in the news through the next
presidential election. Also, the questionable interest rate direction from the
Federal Reserve has investors treading lightly. As a result, municipal bonds may
have increased price volatility. We will maintain present duration and maturity
levels until we are more confident in the direction of the Federal Reserve
policy and Congress on tax reform.
<PAGE>
IAA TRUST MONEY MARKET FUND, INC.
Money market investments, being short-term in nature, react quickly to Federal
Reserve interest rate changes. For most of the year, the Federal Reserve
continued the fight against inflation. At their February meeting, the Federal
Reserve increased short-term rates by 50 basis points. This was the 7th rate
increase in a series that began in the 1st quarter of 1994, and raised
short-term rates by a total of 3%. The goal of this Federal Reserve policy was
to reduce economic growth to a more manageable level, without causing a
recession. As the fiscal year came to a close, indications were that the elusive
soft landing in economic activity would be unattainable without a reversal in
Federal Reserve monetary policy. On July 6, the Federal Reserve lowered the
interbank borrowing rate by 25 basis points, making borrowing less expensive.
For the upcoming year, the Federal Reserve must wade through the conflicting
economic indicators to determine whether the data points to growth, or if a
slowdown in economic activity is more likely. Although the Federal Reserve
claims that it does not yield to political influences, it will be interesting to
see if the fact that Federal Reserve Chairman Alan Greenspan's term ends in
March -- during an election year -- causes the Federal Reserve to overcompensate
for recessionary pressures. Political pressures aside, the Federal Reserve will
want to make sure that the recent business slowdown is not sustained, thus
altering the direction of the economic growth.
As money market instruments began 'pricing-in' the July 6 Federal Reserve rate
reduction, the seven-day yield dropped from 5.40% on December 31, 1994 to 5.19%
on June 30, 1995. At the end of the fiscal year, the weighted average maturity
for the IAA Trust Money Market Fund was 39 days. This was slightly extended from
the previous quarter, as we believed rates would decline.
ANNUAL SHAREHOLDER MEETINGS
There will be no annual shareholder meetings in 1995. However, due to expected
changes in the Board of Directors in fiscal 1996, shareholder meetings will be
held in September, 1996.
Sincerely,
[ PHOTO ]
[ SIG CUT]
Ronald R. Warfield
President
<PAGE>
IAA TRUST MUTUAL FUNDS -- PORTFOLIO HIGHLIGHTS
<TABLE>
<S> <C> <C>
IAA TRUST GROWTH FUNDS, INC.
</TABLE>
<TABLE>
<S> <C> <C>
PORTFOLIO CHANGES For the Year Ended June 30, 1995
MAJOR PURCHASES MAJOR SALES
American Stores Co. (1) Adaptec, Inc. (2)
Engelhard Corp. (1) Burlington Resources, Inc. (2)
Green Tree Financial Corp. (1) Intel Corp.
Mylan Labs Fleetwood Enterprises (2)
NICOR, Inc. (1) TNT Freightways, Inc. (2)
Royal Dutch Petroleum Co. ADR (1) VLSI Technology (2)
VeriFone, Inc. (1) YPF-Sociedad Anonima (2)
(1) New Holdings (2) Deletions
</TABLE>
<TABLE>
<S> <C> <C> <C>
TEN LARGEST HOLDINGS June 30, 1995
PERCENT
VALUE OF FUND
---------- -----------
Motorola, Inc........................................................... $2,685,000 3.80%
Intel Corp.............................................................. 2,532,500 3.59
General Electric Co..................................................... 2,255,000 3.20
Green Tree Financial Corp............................................... 1,775,000 2.52
Hewlett-Packard Co...................................................... 1,758,200 2.49
MBNA Corp............................................................... 1,687,500 2.39
DPL, Inc................................................................ 1,659,375 2.35
Cisco Systems........................................................... 1,618,000 2.29
Sun Microsystems........................................................ 1,600,500 2.27
Exxon Corp.............................................................. 1,589,062 2.25
---------- -----
$19,160,137 27.15%
---------- -----
---------- -----
</TABLE>
<TABLE>
<S> <C> <C>
IAA TRUST ASSET ALLOCATION FUND, INC.
</TABLE>
<TABLE>
<S> <C> <C>
PORTFOLIO CHANGES For the Year Ended June 30, 1995
MAJOR PURCHASES MAJOR SALES
Federal Home Loan Bank, 8.000%, 9/20/04 (1) New England Telephone Co. (2)
United States Treasury Notes, 6.875%, 7.875%, 11/15/29
7/31/99 (1)
United States Treasury Notes, 7.250%, United States Treasury Bonds.(2)
8/15/04 (1) 8.875%, 8/15/17
Federal Farm Credit Bank (1)
5.800%, 12/18/00 Medtronic, Inc. (2)
Invacare, Corp. (1) Pitney Bowes (2)
Xerox Corporation (1) General Motors Corp.(2)
Harley-Davidson, Inc. (1) Cott Corp. (2)
(1) New Holdings (2) Deletions
</TABLE>
<TABLE>
<S> <C> <C> <C>
TEN LARGEST HOLDINGS June 30, 1995
PERCENT
VALUE OF FUND
--------- -----------
International American Devel. Bank, 8.875%, 06/01/09..................... $ 242,000 2.54%
Bell of Pennsylvania, 8.350%, 12/15/30................................... 238,000 2.50
Chesapeake & Potomac Telephone Co., 8.375%, 10/01/29..................... 226,250 2.37
United States Treasury Notes, 7.250%, 05/15/04........................... 213,716 2.24
Discover Credit Card Trust, 6.750%, 02/16/02............................. 200,625 2.10
United States Treasury Notes, 5.875%, 03/31/99........................... 199,546 2.09
United States Treasury Notes, 4.750%, 02/15/97........................... 196,700 2.06
Government National Mortgage Association, 9.000%, 07/15/16............... 176,406 1.85
Citicorp................................................................. 170,731 1.79
New Jersey Bell Telephone Co., 7.850%, 11/15/29.......................... 163,125 1.71
--------- -----
$2,027,099 21.25%
--------- -----
--------- -----
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
IAA TRUST MUTUAL FUNDS -- PORTFOLIO HIGHLIGHTS
</TABLE>
<TABLE>
<S> <C> <C>
IAA TRUST TAX EXEMPT BOND FUND, INC.
</TABLE>
<TABLE>
<S> <C> <C>
PORTFOLIO CHANGES For the Year Ended June 30, 1995
</TABLE>
<TABLE>
<S> <C> <C>
MAJOR PURCHASES MAJOR SALES
Penna. State Higher Education (1) State of Washington Unlimited (2)
5.600%, 09/01/10 6.375%, 02/01/14
Louisville & Jefferson Co. Met. Sewer (1) Plano Texas Water and Sewer (2)
5.250%, 05/15/10 6.950%, 05/01/01
Connecticut State Unlimited Tax (1) Brazos River Authority (2)
5.400%, 03/15/08 5.500%, 05/01/22
Massachusetts Bay Transit Authority (1) Weber County Utah Mun. Bldg. (2)
5.875%, 03/01/15 7.150%, 06/01/03
Joliet Illinois Refunding (2)
7.125%, 01/01/02
(1) New Holdings (2) Deletions
</TABLE>
<TABLE>
<S> <C> <C> <C>
TEN LARGEST HOLDINGS June 30, 1995
PERCENT
VALUE OF FUND
--------- -----------
Peru Indiana Community School, 6.750%, 01/01/09.......................... $ 578,875 3.07%
Cape Girardeau Missouri Waterworks, 7.450%, 03/01/05..................... 569,375 3.02
State of Rhode Island Ref. General Obligation, 7.000%, 06/15/05.......... 569,375 3.02
Pennsylvania State Higher Education, 5.600%, 09/01/10.................... 563,500 2.99
Washington Public Power Supply, 7.625%, 07/01/01......................... 559,375 2.97
Kaukauna Wisconsin Electric System, 7.250%, 12/15/08..................... 548,750 2.91
Connecticut State Unlimited Tax General Obligation, 5.400%, 03/15/08..... 543,125 2.89
Maricopa County School Dist. Arizona Unlimited, 6.400%, 07/01/06......... 543,125 2.89
Louisville & Jefferson County, Met. Sewer Dist. Rev., 5.250% 05/15/10.... 542,656 2.89
Chicago, Illinois Water Revenue, 6.500%, 11/01/15........................ 533,125 2.83
--------- -----
$5,551,281 29.48%
--------- -----
--------- -----
</TABLE>
IAA TRUST MONEY MARKET FUND, INC.
<TABLE>
<CAPTION>
TEN LARGEST HOLDINGS June 30, 1995
PERCENT
VALUE OF FUND
---------- -----------
<S> <C> <C>
Commercial Credit Co., 5.96%, 08/07/95.................................. $1,500,000 4.12%
Waste Management, Inc., 6.30%, 08/09/95................................. 1,489,763 4.09
Household Finance Corp., 6.11%, 07/06/95................................ 1,079,000 2.96
Norwest Corp., 5.85%, 08/29/95.......................................... 1,015,000 2.79
Chevron Oil Finance Co., 5.97%, 07/05/95................................ 950,000 2.61
American Express Credit Corp., 5.99%, 07/20/95.......................... 950,000 2.61
Transamerica Financial Corp., 6.02%, 07/18/95........................... 942,314 2.59
Texaco, Inc., 5.89%, 07/27/95........................................... 909,000 2.50
American General Finance Corp., 6.21%, 07/31/95......................... 900,000 2.47
AVCO Financial Services, Inc., 6.07%, 08/21/95.......................... 900,000 2.47
---------- -----
$10,635,077 29.21%
---------- -----
---------- -----
</TABLE>
PORTFOLIO CHARACTERISTICS June 30, 1995
30 DAY AVERAGE YIELD: 5.20%
7 DAY AVERAGE YIELD: 5.19%
AVERAGE DAYS TO MATURITY: 39.27
<PAGE>
IAA TRUST MUTUAL FUNDS -- SCHEDULE OF INVESTMENTS June 30, 1995
- --------------------------------------------------------------------------------
IAA TRUST GROWTH FUND, INC.
<TABLE>
<CAPTION>
SHARES VALUE
------ ---------
<S> <C> <C>
COMMON STOCKS -- 82.41%
BEVERAGES -- 1.62%
PepsiCo, Inc.......................... 25,000 $1,140,625
---------
CHEMICALS/BASIC -- 3.24%
Engelhard Corp........................ 32,000 1,372,000
Minnesota Mining & Manufacturing...... 16,000 916,000
---------
2,288,000
---------
CLIMATE CONTROL SYSTEMS -- 1.91%
York International, Inc............... 30,000 1,350,000
---------
COMPUTER PERIPHERAL EQUIPMENT -- 6.17%
Cisco Systems*........................ 32,000 1,618,000
Hewlett-Packard Co.................... 23,600 1,758,200
VeriFone, Inc.*....................... 40,000 980,000
---------
4,356,200
---------
COMPUTER SERVICES -- 4.36%
First Data Corp....................... 26,000 1,478,750
Sun Microsystems*..................... 33,000 1,600,500
---------
3,079,250
---------
CONSUMER PRODUCTS -- 1.26%
Rubbermaid, Inc....................... 32,000 888,000
---------
ELECTRICAL EQUIPMENT -- 3.19%
General Electric Co................... 40,000 2,255,000
---------
ELECTRONICS/INSTRUMENTATION -- 3.80%
Motorola, Inc......................... 40,000 2,685,000
---------
ELECTRIC UTILITY -- 2.35%
DPL, Inc.............................. 75,000 1,659,375
---------
ENTERTAINMENT -- 1.31%
Acclaim Entertainment, Inc.*.......... 50,000 921,875
---------
FOOD PRODUCTS -- 1.58%
Archer-Daniels-Midland Corp........... 60,000 1,117,500
---------
FINANCIAL SERVICES -- 5.98%
Federal National Mortgage Assoc....... 8,000 755,000
Green Tree Financial Corp............. 40,000 1,775,000
MBNA Corp............................. 50,000 1,687,500
---------
4,217,500
---------
HOSPITAL & MEDICAL SERVICE PLANS --
0.65%
US Healthcare, Inc.................... 15,000 459,375
---------
HOUSEHOLD PRODUCTS -- 1.29%
Unilever N.V.......................... 7,000 910,875
---------
INSURANCE -- 3.47%
American International Group.......... 10,000 1,140,000
Travelers Group, Inc.................. 30,000 1,312,500
---------
2,452,500
---------
MACHINERY & EQUIPMENT -- 0.60%
Hardinge, Inc......................... 22,000 420,750
---------
SHARES VALUE
----- ---------
MEDICAL SUPPLIES -- 1.92%
Johnson & Johnson..................... 20,000 $1,352,500
---------
METALS & MINING -- 1.19%
Newmont Mining Corp................... 20,000 837,500
---------
MISCELLANEOUS CHEMICAL PRODUCTS --
1.25%
Lubrizol Corp......................... 25,000 884,375
---------
MOTOR VEHICLE MFR. & PARTS -- 1.26%
Ford Motor Co......................... 30,000 892,500
---------
NATURAL GAS PRODUCTION TRANSMISSION --
2.12%
NICOR, Inc............................ 35,000 940,625
Unocal Corp........................... 20,000 552,500
---------
1,493,125
---------
PAPER & ALLIED PRODUCTS -- 1.67%
Weyerhaeuser Co....................... 25,000 1,178,125
---------
PETROLEUM/INTEGRATED -- 7.87%
Chevron Corp.......................... 25,000 1,165,625
Exxon Corp............................ 22,500 1,589,062
Phillips Petroleum.................... 40,000 1,335,000
Royal Dutch Petroleum Co. ADR......... 12,000 1,462,500
---------
5,552,187
---------
PHARMACEUTICALS -- 5.56%
Elan Corp., PLC*...................... 30,000 1,222,500
Merck & Co............................ 25,000 1,225,000
Mylan Labs............................ 48,000 1,476,000
---------
3,923,500
---------
RAILROAD -- 1.35%
Burlington Northern Corp.............. 15,000 950,625
---------
RETAIL -- 6.85%
American Stores Co.................... 30,000 843,750
Best Buy Co., Inc.*................... 15,500 412,688
Pep Boys.............................. 40,000 1,070,000
Toys-R-Us, Inc.*...................... 40,000 1,170,000
Wal-Mart Stores....................... 50,000 1,337,500
---------
4,833,938
---------
SEMICONDUCTORS & RELATED DEVICES --
3.59%
Intel Corp............................ 40,000 2,532,500
---------
STEEL PRODUCTION -- 0.76%
Nucor Corp............................ 10,000 535,000
---------
TELEPHONE UTILITY -- 4.24%
American Telephone and Telegraph...... 28,000 1,487,500
GTE Corp.............................. 44,000 1,501,500
---------
2,989,000
---------
TOTAL COMMON STOCKS
(cost $38,641,469)................... 58,156,700
---------
</TABLE>
<PAGE>
IAA TRUST MUTUAL FUNDS -- SCHEDULE OF INVESTMENTS June 30, 1995
- --------------------------------------------------------------------------------
IAA TRUST GROWTH FUND, INC. (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------- ---------
<S> <C> <C>
COMMERCIAL PAPER -- 15.12%
John Deere Capital Corp
6.11%, 07/06/95.................. $ 747,000 $ 747,000
Prudential Funding Corp.
5.99%, 07/10/95.................. 752,000 752,000
IBM Credit Corp.
5.98%, 07/11/95.................. 1,181,000 1,181,000
PHH Corp.
5.95%, 07/12/95.................. 1,021,680 1,019,822
Associates Corp. of N. America
5.99%, 07/13/95.................. 974,000 974,000
Heller Financial, Inc.
6.01%, 07/24/95.................. 782,000 782,000
Province of Quebec
6.18%, 07/24/95.................. 500,000 498,026
Heller Financial, Inc.
6.01%, 07/31/95.................. 638,760 638,760
Commercial Credit Corp.
5.97%, 08/02/95.................. 235,000 235,000
AVCO Financial Services, Inc.
6.01%, 08/07/95.................. 359,798 357,576
Prudential Funding Corp.
5.99%, 08/08/95.................. 1,413,000 1,413,000
PRINCIPAL
AMOUNT VALUE
--------- ---------
AVCO Financial Services, Inc.
5.93%, 08/15/95.................. $ 375,000 $ 375,000
Ford Motor Credit Co.
5.98%, 08/24/95.................. 909,000 909,000
Associates Corp. of N. America
5.93%, 08/30/95.................. 790,000 790,000
---------
TOTAL COMMERCIAL PAPER
(cost $10,672,184)............... 10,672,184
---------
OTHER SHORT-TERM INVESTMENTS -- 2.18%
MONEY MARKET FUNDS
(cost $1,538,242)
Federated Prime Obligation Fund,
5.93%............................ 1,538,242 1,538,242
---------
TOTAL INVESTMENTS -- 99.71%
(cost $50,851,895)............... 70,367,126
---------
CASH AND OTHER ASSETS
NET OF LIABILITIES -- 0.29%...... 209,978
---------
NET ASSETS -- 100.00%............. $70,577,104
---------
---------
* Non-income producing
</TABLE>
See notes to financial statements
<PAGE>
IAA TRUST MUTUAL FUNDS -- SCHEDULE OF INVESTMENTS June 30, 1995
- --------------------------------------------------------------------------------
IAA TRUST ASSET ALLOCATION FUND, INC.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------- ---------
<S> <C> <C>
BONDS AND NOTES -- 34.62%
AUTO -- 1.21%
General Motors Acceptance Corp.
8.875%, 06/01/10.................... $ 100,000 $ 115,875
---------
BANKING -- 3.66%
International American Development
Bank
9.500%, 10/15/97.................... 100,000 106,750
International American Development
Bank
8.875%, 06/01/09.................... 200,000 242,000
---------
348,750
---------
BEVERAGES -- 1.07%
Coca-Cola Company
6.625%, 10/01/02.................... 100,000 101,875
---------
CHEMICALS -- 1.06%
E.I. DuPont DeNemours & Company
6.750%, 10/15/02.................... 100,000 101,250
---------
FINANCE COMPANIES -- 2.92%
Discover Card Credit Trust
6.750%, 02/16/02.................... 200,000 200,625
Thrift Financial Corp.
8.550%, 05/20/18.................... 74,906 77,628
---------
278,253
---------
TELEPHONE UTILITY -- 6.58%
Bell of Pennsylvania
Putable Debentures
8.350%, 12/15/30.................... 200,000 238,000
New Jersey Bell Telephone Company
7.850%, 11/15/29.................... 150,000 163,125
Chesapeake & Potomac Telephone
Company of Virginia Debentures
8.375%, 10/01/29.................... 200,000 226,250
---------
627,375
---------
U.S. GOVERNMENT AGENCIES -- 5.96%
Federal Farm Credit Bank
5.800%, 12/18/00.................... 100,000 96,511
Federal Home Loan Bank
8.000%, 09/20/04.................... 100,000 101,421
Federal Home Loan Mortgage Corp.
10.750%, 07/01/00................... 7,835 7,835
Federal Home Loan Mortgage Corp.
8.750%, 04/01/01.................... 66,610 68,858
Federal Home Loan Mortgage Corp.
10.150%, 04/15/06................... 44,013 45,444
Government National Mortgage
Association Pool #60721
9.750%, 04/15/98.................... 6,019 6,403
Government National Mortgage
Association Pool #30111
9.000%, 05/15/09.................... 27,848 29,284
Government National Mortgage
Association Pool #23653
9.500%, 06/15/09.................... 17,207 18,266
Government National Mortgage
Association Pool #32147
9.500%, 08/15/09.................... 17,099 18,151
Government National Mortgage
Association Pool #161621
9.000%, 07/15/16.................... 167,756 176,406
---------
568,579
---------
PRINCIPAL
AMOUNT VALUE
--------- ---------
U.S. GOVERNMENT OBLIGATIONS -- 12.16%
United States Treasury Notes
4.750%, 02/15/97.................... $ 200,000 $ 196,700
United States Treasury Notes
6.000%, 12/31/97.................... 100,000 100,320
United States Treasury Notes
5.875%, 03/31/99.................... 200,000 199,546
United States Treasury Notes
6.750%, 06/30/99.................... 100,000 102,733
United States Treasury Notes
6.875%, 07/31/99.................... 100,000 103,117
United States Treasury Notes
7.250%, 05/15/04................... 200,000 213,716
United States Treasury Notes
7.250%, 08/15/04.................... 100,000 106,932
United States Treasury Bonds
11.625%, 11/15/04................... 100,000 137,487
---------
1,160,551
---------
TOTAL BONDS AND NOTES
(cost $3,082,642)................... 3,302,508
---------
SHARES VALUE
--------- ---------
COMMON STOCKS -- 51.78%
AEROSPACE/DEFENSE -- 0.89%
Raytheon............................. 1,100 85,388
---------
AUTO/AUTO PARTS -- 1.28%
Chrysler Corp........................ 1,000 47,875
Ford Motor Co........................ 1,000 29,750
Magna International, Inc., Cl. A..... 1,000 44,125
---------
121,750
---------
AIR COURIER SERVICES -- 0.89%
Federal Express Corp.*............... 1,400 85,050
---------
BANKS -- 4.00%
BankAmerica Corp..................... 1,000 52,625
Bank of New York..................... 1,500 60,562
Citicorp............................. 2,950 170,731
Norwest Corp......................... 3,400 97,750
---------
381,668
---------
BEVERAGES -- 1.34%
Coca-Cola Company.................... 2,000 127,500
---------
CONSTRUCTION AND ENGINEERING -- 0.82%
Fluor Corp........................... 1,500 78,000
---------
CONSTRUCTION MACHINERY -- 1.08%
Caterpillar, Inc..................... 1,600 102,800
---------
CONSUMER PRODUCTS -- 4.02%
Department 56, Inc................... 1,900 72,675
Gillette Co.......................... 2,000 89,250
Procter & Gamble..................... 2,000 143,750
Wolverine World Wide................. 3,750 77,812
---------
383,487
---------
ELECTRIC UTILITY -- 1.92%
Cilcorp, Inc......................... 1,200 43,650
Florida Progress Corp................ 1,200 37,500
Texas Utilities, Inc................. 1,000 34,375
Wisconsin Energy Corp................ 2,400 67,200
---------
182,725
---------
</TABLE>
<PAGE>
IAA TRUST MUTUAL FUNDS -- SCHEDULE OF INVESTMENTS June 30, 1995
- --------------------------------------------------------------------------------
IAA TRUST ASSET ALLOCATION FUND, INC. (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
--------- ---------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
ELECTRONICS -- 3.06%
General Electric Co.................. 1,200 $ 67,650
Phillips N.V......................... 2,950 126,113
Tektronix, Inc....................... 2,000 98,500
---------
292,263
---------
ENERGY -- 5.45%
Atlantic Richfield Co................ 700 76,825
Exxon Corp........................... 2,000 141,250
Repsol S.A., ADR..................... 2,100 66,412
Schlumberger, Ltd.................... 1,300 80,763
Williams Companies................... 2,800 97,650
YPF Sociedad Anonima, ADS............ 3,000 56,625
---------
519,525
---------
FINANCIAL SERVICES -- 0.79%
Travelers Group, Inc................. 1,733 75,819
---------
HEALTHCARE -- 6.67%
Bristol-Myers Squibb Co.............. 1,000 68,125
Columbia/HCA Healthcare.............. 2,700 116,775
Elan Corp., PLC*..................... 2,000 81,500
Invacare Corp........................ 2,000 83,000
Johnson & Johnson.................... 2,200 148,775
Mylan Labs........................... 2,000 61,500
US Healthcare, Inc................... 2,500 76,562
---------
636,237
---------
HOUSEHOLD APPLIANCES -- 0.29%
Whirlpool Corp....................... 500 27,500
---------
MANUFACTURING -- 0.90%
Minnesota Mining & Manufacturing..... 1,500 85,875
---------
MOTOR HOMES -- 0.70%
Fleetwood Enterprises................ 3,400 67,150
---------
MOTORCYCLES -- 0.79%
Harley-Davidson, Inc................. 3,100 75,562
---------
NEWSPAPERS -- PUBLISHING -- 0.64%
Tribune Co........................... 1,000 61,375
---------
OFFICE EQUIPMENT -- 0.86%
Xerox Corporation.................... 700 82,075
---------
PAPER & ALLIED PRODUCTS -- 1.24%
Mead Corp............................ 1,200 71,250
Weyerhaeuser Co...................... 1,000 47,125
---------
118,375
---------
REAL ESTATE -- 1.16%
Meditrust............................ 1,700 58,013
National Golf Properties............. 2,500 52,500
---------
110,513
---------
RETAIL -- 3.94%
Albertson's, Inc..................... 2,900 86,275
Best Buy Co., Inc.*.................. 1,400 37,275
SHARES VALUE
--------- ---------
Penney (J.C.) Co..................... 1,500 $ 72,000
Walgreen's........................... 2,000 100,250
Wal-Mart Stores, Inc................. 3,000 80,250
---------
376,050
---------
TECHNOLOGY -- 6.15%
Intel Corp........................... 2,000 126,625
Microsoft Corp.*..................... 1,000 90,375
Motorola, Inc........................ 1,900 127,537
Oracle Corp.......................... 3,750 144,844
Sun Microsystems, Inc................ 2,000 97,000
---------
586,381
---------
TELECOMMUNICATION SERVICES -- 0.45%
AirTouch Communications*............. 1,500 42,750
---------
TELEPHONE UTILITY -- 1.59%
American Telephone & Telegraph....... 1,200 63,750
Bell South Corp...................... 750 47,625
Pacific Telesis Group, Inc........... 1,500 40,125
---------
151,500
---------
TOOL PRODUCTS -- 0.86%
Illinois Tool Works.................. 1,500 82,500
---------
TOTAL COMMON STOCKS
(cost $3,844,658)................... 4,939,818
---------
PRINCIPAL
AMOUNT VALUE
--------- ---------
COMMERCIAL PAPER -- 9.74%
Heller Financial, Inc.
6.013%, 07/24/95.................... $ 250,000 250,000
Province of Quebec
6.180%, 07/24/95.................... 100,000 99,605
AVCO Financial Services, Inc.
6.048%, 08/14/95.................... 381,000 381,000
International Leasing Financial Corp.
5.900%, 08/22/95.................... 200,000 198,296
---------
TOTAL COMMERCIAL PAPER
(cost $928,901)..................... 928,901
---------
OTHER SHORT-TERM INVESTMENTS -- 3.21%
MONEY MARKET FUND
(cost $306,360)
Federated Prime Obligation Fund,
5.93%............................... 306,360 306,360
---------
TOTAL INVESTMENTS -- 99.35%
(cost $8,162,561)................... 9,477,587
---------
CASH AND OTHER ASSETS
NET OF LIABILITIES -- 0.65%......... 62,242
---------
NET ASSETS -- 100%................... $9,539,829
---------
---------
* Non-income producing security
</TABLE>
See notes to financial statements
<PAGE>
IAA TRUST MUTUAL FUNDS -- SCHEDULE OF INVESTMENTS June 30, 1995
- --------------------------------------------------------------------------------
IAA TRUST TAX EXEMPT BOND FUND, INC.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------- ---------
<S> <C> <C>
MUNICIPAL BONDS
(TAX EXEMPT) -- 96.97%
ARIZONA -- 7.18%
Bullhead City Arizona Parkway
Revenue
6.100%, 01/01/07.................. $ 250,000 $ 249,063
Gilbert School District #41
Maricopa County
General Obligation
12.000%, 07/01/98.................. 250,000 303,125
Maricopa County School District #93
Arizona Unlimited Tax General
Obligation
6.400%, 07/01/06................... 500,000 543,125
Salt River Project Arizona
Agriculture
Improvement & Power District
Electric
System Revenue
5.625%, 01/01/06................... 250,000 257,187
---------
1,352,500
---------
CALIFORNIA -- 6.37%
California State Public Works Board
Lease Revenue
5.200%, 12/01/09................... 500,000 452,500
City of Fresno California
Sewer System Revenue
6.250%, 09/01/14................... 250,000 255,938
Los Angeles California Wastewater
System Revenue
6.000%, 11/01/14................... 500,000 491,875
---------
1,200,313
---------
CONNECTICUT -- 2.88%
Connecticut State Unlimited Tax
General Obligation
5.400%, 03/15/08................... 550,000 543,125
---------
FLORIDA -- 2.68%
Port St. Lucie, Florida
Utility System Revenue
5.900%, 09/01/09................... 500,000 505,000
---------
ILLINOIS -- 17.79%
Chicago, Illinois Water Revenue
6.500%, 11/01/15................... 500,000 533,125
Chicago, Illinois O'Hare
International Airport Revenue
5.000%, 01/01/16................... 500,000 427,500
Dupage Water Commission Illinois
General Obligation
5.750%, 03/01/11................... 500,000 493,750
Illinois State Sales Tax Revenue
5.400%, 06/15/13................... 550,000 513,562
Illinois State Toll Highway
Authority Revenue, Series A
6.300%, 01/01/12................... 275,000 287,031
Northwest Suburban Municipal
Joint Action Water Agency
Illinois Contract Revenue
6.450%, 05/01/07................... 400,000 430,000
Northwest Water Commission
Illinois, Cook & Lake Revenue
5.000%, 05/01/13................... 500,000 449,375
Sangamon County Illinois Tax
General Obligation
6.500%, 03/01/08................... 200,000 216,000
---------
3,350,343
---------
PRINCIPAL
AMOUNT VALUE
--------- ---------
INDIANA -- 4.28%
Peru Indiana Community School Corp.
Revenue
6.750%, 01/01/09................... $ 550,000 $ 578,875
South Vermillion Middle School
Building Corp. Revenue
5.125%, 07/15/13................... 250,000 226,563
---------
805,438
---------
KENTUCKY -- 2.88%
Louisville & Jefferson County
Met. Sewer Dist. Rev. Series A
5.250%, 05/15/10................... 575,000 542,656
---------
MASSACHUSETTS -- 5.37%
Massachusetts Bay Transit
Authority, Revenue Bonds, Series A
5.875%, 03/01/15................... 500,000 498,125
Massachusetts State Water
Resource Authority Revenue
6.000%, 11/01/08................... 500,000 512,500
---------
1,010,625
---------
MISSISSIPPI -- 1.35%
Mississippi State Unlimited
General Obligation , Series B
5.900%, 11/15/11................... 250,000 254,062
---------
MISSOURI -- 3.02%
Cape Girardeau Missouri Waterworks
System Revenue
7.450%, 03/01/05................... 500,000 569,375
---------
NEBRASKA -- 1.58%
Grand Island Nebraska Sewer Project
Revenue
5.850%, 04/01/08................... 200,000 201,500
Nebraska Public Power Dist. Revenue
5.400%, 01/01/10................... 100,000 95,750
---------
297,250
---------
NEVADA -- 4.69%
Clark County Nevada School District
General Obligation
5.250%, 06/01/07................... 500,000 487,500
Henderson Nevada Water and Sewer
Unlimited Tax General Obligation
5.375%, 06/01/07................... 400,000 395,500
---------
883,000
---------
NEW YORK -- 2.42%
New York State Dormitory Authority
Revenue
5.500%, 07/01/12................... 500,000 456,250
---------
NORTH CAROLINA -- 1.43%
North Carolina East Municipal
Power Agency Power System
Revenue
7.000%, 01/01/08................... 250,000 268,438
---------
OHIO -- 2.59%
Montgomery County, Ohio
Sewer System Revenue
5.600%, 09/01/11................... 500,000 486,875
---------
PENNSYLVANIA -- 5.61%
Pennsylvania Intergovernmental Corp.
Authority, Special Tax Revenue
5.450%, 06/15/08................... 500,000 493,125
</TABLE>
<PAGE>
IAA TRUST MUTUAL FUNDS -- SCHEDULE OF INVESTMENTS June 30, 1995
- --------------------------------------------------------------------------------
IAA TRUST TAX EXEMPT BOND FUND, INC. (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------- ---------
<S> <C> <C>
MUNICIPAL BONDS (CONTINUED)
Pennsylvania State Higher Education
Revenue Bonds, Series A
5.600%, 09/01/10................... $ 575,000 $ 563,500
---------
1,056,625
---------
RHODE ISLAND -- 3.02%
State of Rhode Island Refunding
General Obligation
7.000%, 06/15/05................... 500,000 569,375
---------
TEXAS -- 6.59%
Austin Texas Limited Tax
General Obligation
7.250%, 09/01/03................... 350,000 394,187
Bexar County, Texas,
Detention Facilities Limited Tax
General Obligation
5.750%, 06/15/10................... 500,000 500,000
Garland Texas Limited Tax
General Obligation
5.800%, 08/15/12................... 350,000 346,063
---------
1,240,250
---------
WASHINGTON -- 6.74%
Public Utility District #1 of
Chelan County Washington Revenue
5.250%, 06/01/13................... 500,000 442,500
Washington Public Power Supply
System, Nuclear Project #1,
Refunding Revenue, 1990-C
7.625%, 07/01/01................... 500,000 559,375
Washington Public Power Supply
System Ref. Revenue Bonds, Series
1991-A, Project #3
6.500%, 07/01/02................... 250,000 266,875
---------
1,268,750
---------
PRINCIPAL
AMOUNT VALUE
--------- ---------
WEST VIRGINIA -- 2.12%
Pleasant County West Virginia
Pollution Control Revenue (West
Penn Power) Pleasants Station
7.000%, 08/01/08................... $ 400,000 $ 400,000
---------
WISCONSIN -- 6.38%
Brookfield Wisconsin Unlimited Tax
Corp. General Obligation
6.900%, 03/15/03................... 250,000 279,063
Kaukauna Wisconsin Electric System
Revenue
7.250% 12/15/08.................... 500,000 648,750
Wisconsin Clean Water
Revenue Bond
5.300%, 06/01/12................... 400,000 374,000
---------
1,201,813
---------
TOTAL MUNICIPAL BONDS
(cost $18,489,481)................. 18,262,063
---------
SHARES VALUE
--------- ---------
TAX EXEMPT
MONEY MARKET FUNDS -- 1.51%
(cost $285,036)
Nuveen Tax Exempt................... 285,036 285,036
---------
TOTAL INVESTMENTS -- 98.48%
(cost $18,774,517)................. 18,547,099
---------
CASH AND OTHER ASSETS
NET OF LIABILITIES -- 1.52%........ 285,447
---------
NET ASSETS -- 100%.................. $18,832,546
---------
---------
</TABLE>
See notes to financial statements
<PAGE>
IAA TRUST MUTUAL FUNDS -- SCHEDULE OF INVESTMENTS June 30, 1995
- --------------------------------------------------------------------------------
IAA TRUST MONEY MARKET FUND, INC.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------- ---------
<S> <C> <C>
COMMERCIAL PAPER -- 95.16%
AUTO & TRUCK -- 4.31%
Ford Motor Credit Co.
6.16%, 07/26/95................... $ 826,000 $ 826,000
Ford Motor Credit Co.
5.92%, 08/02/95................... 244,000 244,000
Ford Motor Credit Co.
6.03%, 08/02/95................... 500,000 500,000
---------
1,570,000
---------
COMMERCIAL BANKING -- 5.76%
US Central Credit Union
5.95%, 07/17/95................... 590,000 588,440
Norwest Corp.
5.90%, 08/23/95................... 500,000 495,657
Norwest Corp.
5.85%, 08/29/95................... 1,015,000 1,015,000
---------
2,099,097
---------
COMMERCIAL FINANCE -- 8.80%
CIT Group, Inc.
5.92%, 09/05/95................... 500,000 500,000
CIT Group, Inc.
5.93%, 09/06/95................... 500,000 500,000
CIT Group, Inc.
5.83%, 09/11/95................... 600,000 600,000
Heller Financial, Inc.
6.06%, 07/12/95................... 592,000 592,000
Heller Financial, Inc.
6.15%, 07/17/95................... 325,000 325,000
Heller Financial, Inc.
6.27%, 08/01/95................... 690,000 690,000
---------
3,207,000
---------
COMMERCIAL SERVICES -- 1.31%
PHH Corp.
5.95%, 07/12/95................... 478,320 477,451
---------
CONSUMER FINANCE -- 37.70%
American Express Credit Corp.
5.99%, 07/20/95................... 950,000 950,000
American Express Credit Corp.
5.83%, 07/25/95................... 296,000 296,000
American Express Credit Corp.
5.98%, 08/17/95................... 500,000 500,000
American General Finance Corp.
6.21%, 07/31/95................... 900,000 900,000
American General Finance Corp.
5.95%, 08/28/95................... 750,000 750,000
Associates Corp. of N. America
5.99%, 07/13/95................... 700,000 700,000
Associates Corp. of N. America
5.93%, 08/30/95................... 820,000 820,000
AVCO Financial Services, Inc.
6.01%, 08/07/95................... 440,202 437,483
AVCO Financial Services, Inc.
6.05%, 08/14/95................... 319,000 319,000
AVCO Financial Services, Inc.
6.07%, 08/21/95................... 900,000 900,000
Beneficial Corp.
6.07%, 07/19/95................... 600,000 600,000
PRINCIPAL
AMOUNT VALUE
--------- ---------
Beneficial Corp.
6.12%, 08/22/95................... $ 800,000 $ 800,000
Commercial Credit Co.
5.97%, 08/02/95................... 113,000 113,000
Commercial Credit Co.
5.96%, 08/07/95................... 1,500,000 1,500,000
Household Finance Corp.
6.11%, 07/06/95................... 1,079,000 1,079,000
Household Finance Corp.
5.93%, 08/15/95................... 600,000 600,000
International Lease Finance Corp.
5.90%, 08/14/95................... 307,000 304,786
International Lease Finance Corp.
5.90%, 08/22/95................... 700,000 694,034
Prudential Funding Corp.
6.01%, 08/03/95................... 750,340 750,340
Prudential Funding Corp.
5.99%, 08/08/95................... 383,000 383,000
Prudential Funding Corp.
5.92%, 08/10/95................... 330,000 330,000
---------
13,726,643
---------
ELECTRONICS -- 4.19%
General Electric Capital Corp.
6.07%, 07/27/95................... 400,000 400,000
General Electric Capital Corp.
5.93%, 08/15/95................... 522,000 522,000
General Electric Capital Corp.
5.84%, 08/31/95................... 602,000 602,000
---------
1,524,000
---------
ENVIRONMENTAL SERVICES -- 4.09%
Waste Management, Inc.
6.30%, 08/09/95................... 1,500,000 1,489,763
---------
FARM MACHINERY & EQUIPMENT -- 3.94%
John Deere Capital Corp.
6.01%, 07/25/95................... 500,000 500,000
John Deere Capital Corp.
5.94%, 08/31/95................... 435,000 435,000
John Deere Capital Corp.
5.83%, 09/13/95................... 500,000 500,000
---------
1,435,000
---------
FOOD PRODUCTS -- 2.18%
Philip Morris Companies, Inc.
5.75%, 08/17/95................... 800,000 793,994
---------
FOREIGN GOVERNMENTS -- 1.37%
Province of Quebec
6.18%, 07/24/95................... 500,000 498,026
---------
INSURANCE/MULTI-LINE -- 4.61%
Transamerica Financial Corp.
6.02%, 07/18/95................... 945,000 942,314
Transamerica Financial Corp.
6.02%, 10/16/95................... 750,000 736,580
---------
1,678,894
---------
OFFICE EQUIPMENT -- 4.55%
IBM Credit Corp.
5.98%, 07/11/95................... 856,000 856,000
</TABLE>
<PAGE>
IAA TRUST MUTUAL FUNDS -- SCHEDULE OF INVESTMENTS June 30, 1995
- --------------------------------------------------------------------------------
IAA TRUST MONEY MARKET FUND, INC. (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------- ---------
<S> <C> <C>
COMMERCIAL PAPER (CONTINUED)
IBM Credit Corp.
5.79%, 08/24/95................... $ 500,000 $ 500,000
IBM Credit Corp.
5.91%, 09/07/95................... 300,000 300,000
---------
1,656,000
---------
PHARMACEUTICALS -- 0.57%
Schering-Plough Corp.
6.02%, 09/12/95................... 210,000 207,436
---------
PETROLEUM REFINING -- 8.83%
Chevron Oil Finance Co.
5.97%, 07/05/95................... 950,000 950,000
Chevron Oil Finance Co.
5.93%, 08/16/95................... 615,000 615,000
Texaco, Inc.
5.98%, 07/11/95................... 435,000 435,000
Texaco, Inc.
5.89%, 07/27/95................... 909,000 909,000
Texaco, Inc.
5.94%, 08/08/95................... 305,000 305,000
---------
3,214,000
---------
PRINCIPAL
AMOUNT VALUE
--------- ---------
TELEPHONE/UTILITY -- 2.95%
AT&T Corp.
6.13%, 07/10/95................... $ 600,000 $ 599,080
AT&T Corp.
5.75%, 08/14/95................... 480,000 476,627
---------
1,075,707
---------
TOTAL COMMERCIAL PAPER
(cost $34,653,012)................ 34,653,011
---------
CORPORATE BONDS -- 2.20%
U.S. GOVERNMENT AGENCIES
(cost $800,000)
Federal Home Loan Bank- Variable
rate
(reset quarterly)
5.85%, 06/03/96................... 800,000 800,000
---------
OTHER SHORT-TERM INVESTMENTS -- 2.11%
MONEY MARKET FUNDS
(cost $768,703)
Federated Prime Obligation Fund,
5.93%............................. 768,703 768,703
---------
TOTAL INVESTMENTS -- 99.47%
(cost $36,221,714)................ 36,221,714
---------
CASH AND OTHER ASSETS
NET OF LIABILITIES -- 0.53%....... 193,749
---------
NET ASSETS -- 100%................. $36,415,463
---------
---------
</TABLE>
See notes to financial statements
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES June 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
IAA TRUST IAA TRUST IAA TRUST
IAA TRUST ASSET TAX EXEMPT MONEY
GROWTH FUND, ALLOCATION FUND, BOND FUND, MARKET
INC. INC. INC. FUND, INC.
-------------- ---------------- ------------ -----------
<S> <C> <C> <C> <C>
ASSETS:
Investments in securities at value (cost $50,851,895,
$8,162,561, $18,774,517 and $36,221,714,
respectively).......................................... $70,367,126 $9,477,587 $18,547,099 $36,221,714
Cash..................................................... 71,548 14,577 150 50,530
Receivable for capital stock sold........................ 3,003 19 -- 6,758
Dividends and interest receivable........................ 162,522 55,656 298,665 178,044
Other assets............................................. 25,196 2,401 5,113 7,025
-------------- -------- ------------ -----------
Total assets........................................... 70,629,395 9,550,240 18,851,027 36,464,071
-------------- -------- ------------ -----------
LIABILITIES:
Payable for capital stock redeemed....................... 100 -- -- 19,045
Distributions payable.................................... -- -- -- 11,290
Accrued expenses and other liabilities................... 52,191 10,411 18,481 18,273
-------------- -------- ------------ -----------
Total liabilities...................................... 52,291 10,411 18,481 48,608
-------------- -------- ------------ -----------
NET ASSETS:
Applicable to 4,096,719, 776,202, 2,253,392 and
36,415,615 shares outstanding, respectively............ $70,577,104 $9,539,829 $18,832,546 $36,415,463
-------------- -------- ------------ -----------
-------------- -------- ------------ -----------
NET ASSETS CONSIST OF:
Capital paid-in.......................................... $47,497,509 $8,258,032 $19,023,437 $36,415,463
Undistributed net investment income...................... 503,361 0 1,584 --
Accumulated net realized gain (loss) on investments...... 3,061,003 (33,229) 34,943 --
Net unrealized appreciation (depreciation) of
investments............................................ 19,515,231 1,315,026 (227,418) --
-------------- -------- ------------ -----------
$70,577,104 $9,539,829 $18,832,546 $36,415,463
-------------- -------- ------------ -----------
-------------- -------- ------------ -----------
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE............ $ 17.23 $ 12.29 $ 8.36 $ 1.00
----- ----- --- ---
----- ----- --- ---
OFFERING PRICE PER SHARE
(NET ASSET VALUE DIVIDED BY .97,
EXCEPT MONEY MARKET FUND)................................ $ 17.76 $ 12.67 $ 8.62 $ 1.00
----- ----- --- ---
----- ----- --- ---
</TABLE>
See notes to financial statements.
<PAGE>
STATEMENTS OF OPERATIONS for the Year Ended June 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
IAA TRUST IAA TRUST IAA TRUST
IAA TRUST ASSET TAX EXEMPT MONEY
GROWTH FUND, ALLOCATION FUND, BOND FUND, MARKET
INC. INC. INC. FUND, INC.
-------------- ---------------- ------------ -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends................................................ $1,081,733 $ 94,042 $ -- $ --
Interest................................................. 535,750 321,972 1,093,946 1,974,531
-------------- -------- ------------ -----------
Total investment income................................ 1,617,483 416,014 1,093,946 1,974,531
-------------- -------- ------------ -----------
EXPENSES:
Investment advisory fees (Note E)........................ 476,164 67,275 93,589 91,618
Distribution expenses (Note E)........................... 2,597 1,940 7,979 --
Legal fees............................................... 4,828 2,948 2,967 6,245
Transfer agent fees (Note E)............................. 68,022 11,101 21,475 41,216
Auditing fees............................................ 25,537 4,811 10,423 26,079
Printing................................................. 7,061 723 1,622 3,529
Directors' fees.......................................... 5,006 1,167 1,297 1,520
Administration fees (Note E)............................. 61,289 10,009 18,089 34,763
Accounting fees (Note E)................................. 44,673 25,883 30,271 35,458
Insurance................................................ 19,529 2,665 6,165 12,008
Registration fees........................................ 1,266 2,008 1,366 2,795
Miscellaneous............................................ 8,260 513 2,781 4,894
-------------- --------- ------------ -----------
Total expenses......................................... 724,232 131,043 198,024 260,125
-------------- --------- ------------ -----------
NET INVESTMENT INCOME..................................... 893,251 284,971 895,922 1,714,406
-------------- --------- ------------ -----------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS -- Note (D):
Net realized gain (loss) on investments.................. 4,148,412 (37,078) 35,903 --
Net change in unrealized appreciation on investments..... 10,210,477 1,113,816 411,011 --
-------------- --------- ------------ -----------
Net realized and unrealized gain on investments.......... 14,358,889 1,076,738 446,914 --
-------------- --------- ------------ -----------
INCREASE IN NET ASSETS FROM OPERATIONS.................... $15,252,140 $1,361,709 $1,342,836 $1,714,406
-------------- --------- ------------ -----------
-------------- --------- ------------ -----------
</TABLE>
See notes to financial statements.
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
IAA TRUST ASSET
IAA TRUST ALLOCATION FUND,
GROWTH FUND, INC. INC.
---------------------- --------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
6/30/95 6/30/94 6/30/95 6/30/94
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income................................................... $ 893,251 $ 686,215 $ 284,971 $ 234,195
Net realized gain (loss) on investments................................. 4,148,412 6,503,030 (37,078) 195,297
Net change in unrealized appreciation (depreciation) of investments..... 10,210,477 (8,484,217) 1,113,816 (421,301)
---------- ---------- --------- ---------
Increase (decrease) in net assets from operations....................... 15,252,140 (1,294,972) 1,361,709 8,191
---------- ---------- --------- ---------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment income....................................................... (671,272) (881,964) (269,547) (233,617)
Realized gains on investments........................................... (5,659,861) (7,182,675) (145,553) (161,313)
Return of capital....................................................... -- -- (6,398) --
---------- ----------- --------- ----------
(6,331,133) (8,064,639) (421,498) (394,930)
---------- ----------- --------- ---------
CAPITAL STOCK TRANSACTIONS -- (NET) Note (C)............................. 2,208,346 (1,975,906) (52,911) 2,376,426
----------- ----------- --------- ---------
Total increase (decrease) in net assets................................. 11,129,353 (11,335,517) 887,300 1,989,687
NET ASSETS:
Beginning of year....................................................... 59,447,751 70,783,268 8,652,529 6,662,842
----------- ----------- ---------- ---------
End of year............................................................. $70,577,104 $59,447,751 $9,539,829 $8,652,529
----------- ----------- ---------- ---------
</TABLE>
<TABLE>
<CAPTION>
IAA TRUST
IAA TRUST MONEY MARKET FUND,
TAX EXEMPT BOND FUND, INC.
INC. ---------------------
------------------------ YEAR YEAR
YEAR ENDED YEAR ENDED ENDED ENDED
6/30/95 6/30/94 6/30/95 6/30/94
----------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income................................................ $ 895,922 $ 900,397 $1,714,406 $1,036,030
Net realized gain on investments..................................... 35,903 500,759 -- --
Net change in unrealized appreciation (depreciation) of
investments........................................................ 411,011 (1,773,997) -- --
----------- ----------- ---------- ---------
Increase (decrease) in net assets from operations.................... 1,342,836 (372,841) 1,714,406 1,036,030
----------- ----------- ---------- ----------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment income.................................................... (894,338) (902,067) (1,714,510) (1,035,982)
Realized gains on investments........................................ (69,768) (864,483) -- --
----------- ----------- ---------- ----------
(964,106) (1,766,550) (1,714,510) (1,035,982)
----------- ----------- ---------- ----------
CAPITAL STOCK TRANSACTIONS -- (NET) Note (C).......................... (640,781) 1,207,940 (2,283,706) 5,396,848
----------- ----------- ---------- ----------
Total increase (decrease) in net assets.............................. (262,051) (931,451) (2,283,810) 5,396,896
NET ASSETS:
Beginning of year.................................................... 19,094,597 20,026,048 38,699,273 33,302,377
----------- ----------- ---------- ----------
End of year.......................................................... $18,832,546 $19,094,597 $36,415,463 $38,699,273
----------- ----------- ---------- ----------
----------- ----------- ---------- ----------
</TABLE>
See notes to financial statements.
<PAGE>
IAA TRUST MUTUAL FUNDS -- NOTES TO FINANCIAL STATEMENTS June 30, 1995
- --------------------------------------------------------------------------------
NOTE (A) SIGNIFICANT ACCOUNTING POLICIES: IAA Trust Growth Fund, Inc. ('Growth
Fund'), IAA Trust Asset Allocation Fund, Inc. ('Asset Allocation Fund'), IAA
Trust Tax Exempt Bond Fund, Inc. ('Tax Exempt Bond Fund') and IAA Trust Money
Market Fund, Inc. ('Money Market Fund') (collectively, 'the Funds') are
separately incorporated and registered companies under the Investment Company
Act of 1940 (the 'Act'), as amended, as diversified, open-ended management
companies. The following is a summary of the significant accounting policies
consistently followed by each Fund in the preparation of its financial
statements. These policies are in conformity with generally accepted accounting
principles.
(1) SECURITY VALUATION: For the Growth Fund, the Asset Allocation Fund and
the Tax Exempt Bond Fund, securities traded on national exchanges and
over-the-counter securities listed in the NASDAQ National Market System are
valued at the last reported sales price at the close of the New York Stock
Exchange. Securities for which there have been no sales on such day are
valued at the last reported bid price on such exchange. Over-the-counter
securities not listed on the National Market System are valued at the mean
of the current bid and asked prices. Fixed-income securities except
short-term securities may be valued on the basis of prices provided by a
pricing service when such prices are believed by the Advisor to reflect the
fair market value of such securities. Short-term investments, those with a
remaining maturity of 60 days or less, are valued at amortized cost, which
approximates market value. For the Money Market Fund, all securities are
valued at amortized cost, which approximates market value. Under the
amortized cost method, discounts and premiums are accreted and amortized
ratably to maturity and are included in interest income.
(2) INVESTMENT INCOME AND SECURITIES TRANSACTIONS: Dividend income is
recorded on the ex-dividend date. Interest income is accrued daily.
Securities transactions are accounted for on the date securities are
purchased or sold. Securities gains and losses are determined on the
identified cost basis.
(3) FEDERAL INCOME TAXES: The Funds have elected to be treated as 'regulated
investment companies' under Sub-chapter M of the Internal Revenue Code and
to distribute substantially all of their net taxable income annually.
Accordingly, no provisions for Federal income taxes have been made in the
accompanying financial statements.
(4) DIVIDENDS AND DISTRIBUTIONS: Dividends and distributions to shareholders
are recorded on the ex-dividend date. Income distributions and capital gain
distributions are determined in accordance with income tax regulations which
may differ from generally accepted accounting principles.
NOTE (B) DIVIDENDS FROM NET INVESTMENT INCOME AND DISTRIBUTIONS OF CAPITAL
GAINS: In the Growth Fund, net investment income from investment transactions
are distributed to shareholders twice a year. The Asset Allocation Fund
distributes net investment income to shareholders monthly. Net investment income
of the Tax Exempt Bond Fund is distributed to shareholders monthly. The Money
Market Fund declares dividends daily from its net investment income, which are
payable monthly. Dividends are automatically reinvested in additional Fund
shares, at the then current net asset value, for those shareholders that have
elected the reinvestment option. Net realized gains from investment
transactions, if any, of all Funds are generally distributed once a year.
NOTE (C) CAPITAL STOCK: At June 30, 1995, 10,000,000 shares of capital stock
were authorized for each of the Growth Fund, Asset Allocation Fund, and Tax
Exempt Bond Fund. The shares of capital stock authorized for the Money Market
Fund were 250,000,000. The par value for each share of the Growth Fund, Asset
Allocation Fund, and Tax Exempt Bond Fund is $1.00 per share. The par value for
each share of the Money Market Fund is $0.10 per share.
Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
GROWTH FUND ASSET ALLOCATION FUND
---------------------------------------------- ----------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
JUNE 30, 1995 JUNE 30, 1994 JUNE 30, 1995 JUNE 30, 1994
-------------------- ----------------------- ------------------- --------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
--------- --------- --------- --------- ------- --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold..................... 82,369 $1,266,232 214,566 $3,470,762 70,254 $ 788,460 237,408 $2,731,183
Shares issued through
reinvestment of dividends...... 424,176 6,030,680 483,039 7,779,673 23,407 261,811 19,634 224,250
--------- ---------- --------- --------- ------- --------- -------- ---------
506,545 7,296,912 697,605 11,250,435 93,661 1,050,271 257,042 2,955,433
--------- ---------- --------- ---------- ------- --------- -------- ---------
Shares redeemed................. (331,902) (5,088,566) (808,870) (13,226,341) (98,290) (1,103,182) (50,719) (579,007)
--------- ---------- --------- ---------- ------- --------- -------- ---------
Net increase (decrease)......... 174,643 $2,208,346 (111,265) $(1,975,906) (4,629) $ (52,911) 206,323 $2,376,426
--------- ---------- --------- ---------- ------ --------- -------- ---------
--------- ---------- --------- ---------- ------ --------- -------- ---------
</TABLE>
<PAGE>
IAA TRUST MUTUAL FUNDS -- NOTES TO FINANCIAL STATEMENTS June 30, 1995
(continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TAX EXEMPT BOND FUND MONEY MARKET FUND
------------------------------------------ ------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
JUNE 30, 1995 JUNE 30, 1994 JUNE 30, 1995 JUNE 30, 1994
-------------------- -------------------- -------------------- --------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
--------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold..................... 66,402 $ 546,984 183,322 $1,615,818 54,472,453 $54,472,453 75,655,484 $75,655,484
Shares issued through
reinvestment of dividends...... 76,197 620,434 126,457 1,111,563 1,587,538 1,587,538 960,883 960,883
--------- --------- --------- --------- ---------- ---------- ---------- ----------
142,599 1,167,418 309,779 2,727,381 56,059,991 56,059,991 76,616,367 76,616,367
--------- --------- --------- --------- ---------- ---------- ---------- ----------
Shares redeemed................. (221,928) (1,808,199) (176,084) (1,519,441) (58,343,697) (58,343,697) (71,219,519) (71,219,519)
--------- --------- --------- --------- ---------- ---------- ---------- ----------
Net increase (decrease)......... (79,329) $(640,781) 133,695 $1,207,940 (2,283,706) $(2,283,706) 5,396,848 $5,396,848
--------- --------- --------- --------- ---------- ---------- ---------- ----------
--------- --------- --------- --------- ---------- ---------- ---------- ----------
</TABLE>
NOTE (D) INVESTMENT TRANSACTIONS: Purchases and sales of investment securities,
other than U.S. Government obligations and short term notes for the year ended
June 30, 1995 were:
<TABLE>
<CAPTION>
PURCHASES SALES
------------ ------------
<S> <C> <C>
Growth Fund.............................................................................. $ 17,138,312 $ 23,837,818
Asset Allocation Fund.................................................................... $ 2,104,651 $ 1,471,038
Tax Exempt Bond Fund..................................................................... $ 4,504,040 $ 5,214,557
</TABLE>
For the year ended June 30, 1995, the aggregate cost of purchases and proceeds
from sales of U.S. Government Securities for IAA Asset Allocation Fund were
$199,003 and $124,750, respectively.
For both Federal income tax and financial statement purposes, the identified
cost of investments at June 30, 1995 was $50,851,895 for the Growth Fund,
$8,162,561 for the Asset Allocation Fund, $18,774,517 for the Tax Exempt Bond
Fund and $36,221,714 for the Money Market Fund.
The gross unrealized appreciation/depreciation for book and tax purposes at June
30, 1995 consisted of the following:
<TABLE>
<CAPTION>
APPRECIATION DEPRECIATION
------------ -----------
<S> <C> <C>
Growth Fund............................................................................... $ 19,560,881 $ 45,650
Asset Allocation Fund..................................................................... $ 1,359,565 $ 44,539
Tax Exempt Bond Fund...................................................................... $ 210,523 $ 437,941
</TABLE>
NOTE (E) ADVISORY, ADMINISTRATION AND DISTRIBUTION SERVICES AGREEMENTS: Under
its Advisory Agreements with the Funds, IAA Trust Company (the 'Advisor')
provides investment advisory services for the Funds. The Funds pay the Advisor
at the following annual percentage rates of the average daily net assets of each
Fund: Growth Fund 0.75%; Asset Allocation Fund 0.75%; Tax Exempt Bond Fund
0.50%; and Money Market Fund 0.50%. These fees are accrued daily and paid the
Advisor monthly. For the year ended June 30, 1995, the Advisor voluntarily
agreed to waive fees totalling $86,900 from the Money Market Fund. IAA Trust
Company also serves as the Funds' Custodian, without compensation.
Under its agreements with the Funds, Fund/Plan Services, Inc., the Funds'
Administrator, provides certain administrative services for which the Funds pay
an annual fee at the following annual percentage rates of the combined average
net assets of the Funds: 0.15% of the first $50,000,000; 0.07% on the next
$50,000,000; and 0.05% of the balance. Fund/Plan Services Inc., also serves as
the Funds' Accounting and Transfer Agent.
Fund/Plan Broker Services, Inc. serves as the Funds' Distributor. Pursuant to
Rule 12b-1 adopted by the Securities and Exchange Commission under the Act, the
Growth Fund, the Asset Allocation Fund, and the Tax Exempt Bond Fund have each
adopted a Plan of Distribution (the 'Plans'), effective April 1, 1993. The Plans
permit the participating Funds to pay certain expenses associated with the
distribution of their shares. The maximum amount payable under the Plans, on an
annual basis, is 0.25% of each Fund's average daily net assets.
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The tables below set forth financial data for a share of capital stock
outstanding throughout each period presented.
<TABLE>
<CAPTION>
IAA TRUST
GROWTH FUND, INC.
YEARS ENDED JUNE 30,
-----------------------------------------------------
1995 1994 1993 1992 1991
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year........................................... $ 15.16 $ 17.55 $ 17.23 $ 17.35 $ 17.42
--------- --------- --------- --------- ---------
INCOME FROM INVESTMENT OPERATIONS
Net investment income....................................................... 0.22 0.27 0.25 0.35 0.41
Net gains or losses on securities (both realized and unrealized)............ 3.45 (0.63) 1.67 0.40 0.44
--------- --------- --------- --------- ---------
Total from investment operations.......................................... 3.67 (0.36) 1.92 0.75 0.85
--------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
Dividends from net investment income........................................ (0.17) (0.22) (0.29) (0.38) (0.51)
Distributions from capital gains............................................ (1.43) (1.81) (1.31) (0.49) (0.41)
--------- --------- --------- --------- ---------
Total distributions....................................................... (1.60) (2.03) (1.60) (0.87) (0.92)
--------- --------- --------- --------- ---------
Net asset value, end of year................................................. $ 17.23 $ 15.16 $ 17.55 $ 17.23 $ 17.35
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
TOTAL RETURN +............................................................... 26.68% (2.42%) 11.71% 4.23% 5.37%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's)........................................ $ 70,577 $ 59,448 $ 70,785 $ 76,147 $ 81,974
Ratio of expenses to average net assets*.................................... 1.14% 1.24% 1.18% 0.85% 0.82%
Ratio of net investment income to average net assets*....................... 1.41% 1.03% 1.36% 1.91% 2.58%
Portfolio turnover.......................................................... 31.84% 49.12% 55.36% 45.50% 26.00%
</TABLE>
* Average net assets have been computed based on the aggregate value of the
fund's daily net assets.
+ Total return calculation does not reflect sales load.
<TABLE>
<CAPTION>
IAA TRUST
ASSET ALLOCATION FUND, INC.
YEARS ENDED JUNE 30,
-----------------------------------------------------
1995 1994 1993 1992 1991
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year........................................... $ 11.08 $ 11.60 $ 11.20 $ 10.74 $ 10.56
--------- --------- --------- --------- ---------
INCOME FROM INVESTMENT OPERATIONS
Net investment income....................................................... 0.36 0.34 0.57 0.68 0.73
Net gains or losses on securities (both realized and unrealized)............ 1.38 (0.25) 0.47 0.55 0.24
--------- --------- --------- --------- ---------
Total from investment operations.......................................... 1.74 0.09 1.04 1.23 0.97
--------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
Dividends from net investment income........................................ (0.34) (0.34) (0.57) (0.68) (0.76)
Distributions from capital gains............................................ (0.18) (0.27) (0.07) (0.09) (0.03)
Distributions from return of capital........................................ (0.01) (0.00) (0.00) (0.00) (0.00)
--------- --------- --------- --------- ---------
Total distributions....................................................... (0.53) (0.61) (0.64) (0.77) (0.79)
--------- --------- --------- --------- ---------
Net asset value, end of year................................................. $ 12.29 $ 11.08 $ 11.60 $ 11.20 $ 10.74
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
TOTAL RETURN +............................................................... 16.29% 0.71% 9.58% 11.84% 9.47%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's)........................................ $ 9,540 $ 8,653 $ 6,663 $ 6,233 $ 5,768
Ratio of expenses to average net assets*.................................... 1.46% 1.78% 1.71% 1.51% 1.33%
Ratio of net investment income to average net assets*....................... 3.18% 2.98% 4.97% 6.20% 6.83%
Portfolio turnover.......................................................... 21.03% 17.39% 36.70% 14.10% 20.60%
</TABLE>
* Average net assets have been computed based on the aggregate value of the
fund's daily net assets.
+ Total return calculation does not reflect sales load.
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The tables below set forth financial data for a share of capital stock
outstanding throughout each period presented.
<TABLE>
<CAPTION>
IAA TRUST
TAX EXEMPT BOND FUND, INC.
YEARS ENDED JUNE 30,
-----------------------------------------------------
1995 1994 1993 1992 1991
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year........................................... $ 8.19 $ 9.11 $ 8.78 $ 8.44 $ 8.32
--------- --------- --------- --------- ---------
INCOME FROM INVESTMENT OPERATIONS
Net investment income....................................................... 0.39 0.39 0.46 0.49 0.52
Net gains or losses on securities (both realized and unrealized)............ 0.20 (0.54) 0.33 0.34 0.13
--------- --------- --------- --------- ---------
Total from investment operations.......................................... 0.59 (0.15) 0.79 0.83 0.65
--------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
Dividends from net investment income........................................ (0.39) (0.39) (0.46) (0.49) (0.53)
Distributions from capital gains............................................ (0.03) (0.38) 0.00 0.00 0.00
--------- --------- --------- --------- ---------
Total distributions....................................................... (0.42) (0.77) (0.46) (0.49) (0.53)
--------- --------- --------- --------- ---------
Net asset value, end of year................................................ $ 8.36 $ 8.19 $ 9.11 $ 8.78 $ 8.44
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
TOTAL RETURN +............................................................... 7.51% (1.86%) 9.19% 10.05% 8.05%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's)........................................ $ 18,833 $ 19,095 $ 20,026 $ 17,872 $ 16,035
Ratio of expenses to average net assets*.................................... 1.06% 1.15% 1.03% 0.95% 0.83%
Ratio of net investment income to average net assets*....................... 4.79% 4.47% 5.11% 5.65% 6.17%
Portfolio turnover.......................................................... 24.89% 41.94% 39.60% 20.30% 6.30%
</TABLE>
* Average net assets have been computed based on the aggregate value of the
fund's daily net assets.
+ Total return calculation does not reflect sales load.
<TABLE>
<CAPTION>
IAA TRUST
MONEY MARKET FUND, INC.
YEARS ENDED JUNE 30,
-----------------------------------------------------
1995 1994 1993 1992 1991
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year........................................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- ---------
INCOME FROM INVESTMENT OPERATIONS
Net investment income....................................................... 0.05 0.03 0.02 0.03 0.06
--------- --------- --------- --------- ---------
Total from investment operations.......................................... 0.05 0.03 0.02 0.03 0.06
--------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
Dividends from net investment income........................................ (0.05) (0.03) (0.02) (0.03) (0.06)
--------- --------- --------- --------- ---------
Total distributions....................................................... (0.05) (0.03) (0.02) (0.03) (0.06)
--------- --------- --------- --------- ---------
Net asset value, end of year................................................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
TOTAL RETURN................................................................. 4.85% 2.86% 2.41% 3.49% 6.40%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's)........................................ $ 36,415 $ 38,699 $ 33,302 $ 10,191 $ 19,839
Ratio of expenses to average net assets* +.................................. 0.73% 0.56% 0.58% 1.32% 1.03%
Ratio of net investment income to average net assets*....................... 4.80% 2.83% 2.67% 3.60% 6.26%
</TABLE>
* Average net assets have been computed based on the aggregate value of the
fund's daily net assets.
+ After voluntary waiver of advisory fees. Before voluntary waiver of advisory
fees, the ratio of expenses to average net assets was .97%, 1.06% and 1.02%
for the years ended June 30, 1995, June 30, 1994 and June 30, 1993
respectively.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Boards of Directors
IAA Trust Mutual Funds
We have audited the accompanying statements of assets and liabilities,
including the schedule of investments of the IAA Trust Mutual Funds (the
'Funds') (comprising, respectively, the IAA Trust Growth Fund, Inc., the IAA
Trust Asset Allocation Fund, Inc., the IAA Trust Tax Exempt Bond Fund, Inc. and
the IAA Trust Money Market Fund, Inc.) as of June 30, 1995, and the related
statements of operations for the year then ended, the statements of changes in
net assets for each of the two years in the period then ended, and the financial
highlights for each of the periods presented. These financial statements and
financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation and physical inspection of
securities held by the custodian as of June 30, 1995. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
each of the respective Funds comprising the IAA Trust Mutual Funds as of June
30, 1995, the results of their operations for the year then ended, the changes
in their net assets for each of the two years in the period then ended, and the
financial highlights for each of the periods presented, in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, PA
July 28, 1995
<PAGE>
Board of Directors
Ronald R. Warfield
Herbert G. Allen
Vernal C. Brown
Paul S. Ives
William E. Klein, Sr.
Ailene Miller
Joseph W. Sommer
Officers
Ronald R. Warfield, President
Richard M. Miller, Vice-President
Wayne A. Brown, Vice-President
Gary E. Mede, Vice-President
Rollie D. Moore, Vice-President
Jerome P. Weiss, Secretary
Robert W. Weldon, Treasurer
Richard F. Day, Controller
Investment Advisor
IAA Trust Company
Bloomington, Illinois
Distributor
Fund/Plan Broker Services, Inc.
Conshohocken, Pennsylvania
Transfer Agent
Fund/Plan Services, Inc.
Conshohocken, Pennsylvania
IAA Trust Mutual Funds
IAA Trust Growth Fund, Inc.
IAA Trust Asset Allocation Fund, Inc.
IAA Trust Tax Exempt Bond Fund, Inc.
IAA Trust Money Market Fund, Inc.
Custodian
IAA Trust Company
Bloomington, Illinois
Independent Accountants
Coopers & Lybrand L.L.P.
Philadelphia, Pennsylvania
General Counsel
Jerome P. Weiss
Sonnenschein, Nath & Rosenthal
Washington, D.C.
This Report has been prepared for the general information of shareholders of
the Funds and is not authorized for distribution to prospective investors
unless preceded or accompanied by an effective Prospectus which contains
details concerning the sales charge and other pertinent information.
F30-113-04 (8/95)
Annual Report
June 30, 1995
IAA
Trust
Company Mutual Funds
IAA Trust Growth Fund, Inc.
IAA Trust Asset Allocation Fund, Inc.
IAA Trust Tax Exempt Bond Fund, Inc.
IAA Trust Money Market Fund, Inc.
