<PAGE>
January 29, 1996
Dear Shareholder:
IAA TRUST GROWTH FUND, INC.
The net asset value of the Fund on December 31, 1995, was $17.08.
(WITHOUT SALES CHARGES)
1 YEAR 5 YEARS 10 YEARS
--------- --------- -----------
31.07% 12.79% 11.11%
(CURRENT MAXIMUM SALES CHARGES DEDUCTED)
27.11% 12.09% 10.78%
These returns assume all dividends and capital gains distributions were
reinvested and the maximum sales charge was applied on initial investments.
The year 1995 turned out to be one of the best investment environments of
the last ten years as stocks and bonds turned in outstanding performances. The
S&P 500 returned 37.6% for the calendar year versus 31.1% for the IAA Growth
Fund. The average growth fund posted a return of 30.8% during the same period.
Interest rates declined during most of the year, and the Federal Reserve cut
rates in July and again in December. With every cut in rates investors became
more convinced that Price/Earnings (P/E) ratios of stocks would continue to rise
even if earnings were not as high as expectations. However, earnings in some
sectors, particularly Technology, were so much lower than expectations that even
the prospect of higher P/E's could not keep the stocks at their lofty levels.
The IAA Trust Growth Fund had kept pace with the S&P 500 through the end of
November but slipped during the first two weeks of December. Our decisions to
reduce our Technology and Finance sector weightings turned out to be good ones
because the groups posted large declines during the final quarter of the year.
Underweighting in the Consumer Staples and Health sectors, however, hurt
performance. Those sectors far outperformed the Index because investors looked
for a safe haven to weather what turned out to be poor earnings numbers in the
Technology sector and fear of profit margin squeezes in the Finance sector.
We think the stock market is overvalued and due for a correction, although
we have been repeating this for some time. The reason now touted for continued
stock market gains is that the new breed of investors has learned from past
mistakes. They are in for the long haul and will ride out the bad times, no
longer buying high and selling low. Also, the amount of 401-K money pouring into
the markets is huge, and there will be no stopping stocks from rising. In other
words, it's different this time.
Investing in the stock market is not for the faint hearted. Often, when many
people invest in an asset class, the chance to make money in that asset class
diminishes. When unnerved investors experience less than expected returns, they
often jump to a new investment. If this happens in the stock market, it will
create the opportunity for which we have been waiting.
Stock sectors that we continue to favor include Energy, Capital Goods, and
Basic Industry. Our strategy is to wait for an overall market correction as well
as to take advantage of individual stock declines. Although we have reduced our
cash position since September, it is still high relative to other mutual funds,
and that will allow us to take advantage of declines.
IAA TRUST ASSET ALLOCATION FUND, INC.
The annualized total returns for the Fund for the period ending December 31,
1995, were as follows:
(WITHOUT SALES CHARGES)
1 YEAR 5 YEARS 10 YEARS
--------- --------- -----------
25.34% 10.16% 9.42%
(CURRENT MAXIMUM SALES CHARGES DEDUCTED)
21.55% 9.49% 9.09%
Calendar year 1995 proved very rewarding for investors in financial assets. The
S&P 500 returned 37.6% and the Merrill Lynch Domestic Bond Index, 18.5%. During
this period the Fund's return was 25.3% versus the Lipper Balanced Fund Index of
24.6%.
We entered the year with Treasury bond yields near 8% because market
sentiment was excessively pessimistic. Value in the market was excellent. During
the year yields fell to levels lower than even the most optimistic forecasts had
projected. The Federal Reserve did an excellent job of engineering a soft
landing, which helped contain inflation.
The combination of a strong bond rally and good earnings growth ignited the
stock market to a close of over 5000 in the Dow Jones Industrials -- the fourth
best annual gain in the post World War II era.
As we enter 1996 the Fund's asset allocation is 49% stocks, 37% bonds, and
14% short-term reserves. The markets are full of optimism, which leads us to be
somewhat cautious. While most signals point to stable to lower rates, predicting
interest rates is always more of an art than a science.
At this time our objective in the bond portfolio is to increase income. We
will accomplish this by selling Treasury notes and purchasing bonds in yield
sectors such as mortgage securities. We will maintain our present durations and
continue our strategy of investing in high-quality bonds. After a very strong
1995, the stock market enters the new year with mixed signals. Valuations in
most sectors are still reasonable, inflation is under control, and interest
rates continue to fall. This is an excellent environment for stocks. However,
there is significant downside risk if earnings are below expectations. Other
negatives are record margin debt and excessive speculation. We expect 1996 to be
a turbulent year but one which should be moderately rewarding.
<PAGE>
The stock portfolio is being positioned away from sectors involved with
discretionary consumer purchases. It is being redeployed in sectors involving
non-discretionary purchases such as consumer non-cyclicals and healthcare. The
record level of consumer indebtedness should continue to dampen consumer
spending in 1996.
IAA TRUST TAX EXEMPT BOND FUND, INC.
The annualized total returns for the Fund for the period ending December 31,
1995, were as follows:
(WITHOUT SALES CHARGES)
1 YEAR 5 YEARS 10 YEARS
--------- --------- -----------
15.87% 7.03% 7.66%
(CURRENT MAXIMUM SALES CHARGES DEDUCTED)
12.45% 6.38% 7.33%
These returns assume all dividends and capital gains distributions were
reinvested and the maximum sales charge was applied on initial investments.
Although the Fund's income is exempt from federal income tax, it may be subject
to state income taxation.
In spite of concern over tax reform and the Orange County Bankruptcy, 1995
was a rewarding year for municipal investors. The general interest rate decline
pushed the Bond Buyer 20 down 127 basis points, ending the year at a 5.44%. Our
decision at the beginning of the year to increase the Fund's duration earned the
Fund planholders a 1995 total return of 15.87%. In comparison, the Lehman
Brothers Municipal Bond Index had a total return of 17.45%. The Lehman Index has
a higher return because it contains an unmanaged list of long-term
investment-grade tax-exempt bonds. The index does not take into account
brokerage commissions or other costs, may include bonds different from those in
the Fund, and may pose different risks than the Fund.
The threat of tax reform was foremost on the minds of the municipal investor
in 1995 and this threat will continue into 1996. It is reasonable to expect that
the tax reform debate will become more focused as the November elections
approach. This debate and eventual outcome should determine the strength of the
municipal bond market. Our feeling is that some type of reform will occur.
Nevertheless, neither the course of political discussions nor the future mood of
the municipal market can be predicted with any certainty. Debates on various
tax-reform proposals indicate that those that do not incorporate a single flat
tax rate but do include some long-standing deductions are gaining headway.
Consequently, we are expecting a less radical tax-reform proposal to emerge.
Municipal credit quality in general continued to improve in 1995. For
example, Orange County's finances have improved, and the county is expected to
emerge from bankruptcy by June, 1996. However, many challenges must yet be faced
by municipalities. As a result of federal efforts to reduce the budget deficit,
state and local governments could find themselves with increased financial
responsibilities. Those responsibilities could put an enormous strain on
municipal finances. With this in mind, we will continue our strategy of
investing in high-quality bonds, while seeking the best possible return.
IAA TRUST MONEY MARKET FUND, INC.
After passing on three separate occasions, the Federal Reserve further
reduced the key interest rate 25 basis points on December 19th, just when some
were expecting that they might wait until the budget debate was settled before
taking such action. This move seems to emphasize that the Fed is more concerned
with the sluggish economy than the continuing budget squabble.
The budget impasse has endured longer than anyone expected. This has caused
a delay in the release of government statistics which may affirm that further
rate reductions are necessary. There does appear to be a fundamental agreement
that federal spending will make up much less of the aggregate economy in years
to come. Weak economic growth and low inflation, coupled with the reduced
reliance on federal spending to stimulate the economy, indicate that there is
room for further rate reductions.
As of December 29th, the weighted average maturity of the IAA Trust Money
Market Fund was 35 days. Due to the expectation of year-end distributions, the
weighted average maturity dropped from its high of 44 days, which was reached
shortly before the Fed lowered rates. The 7-day average yield dropped from 5.19%
on June 30th to 4.93% on December 29th. This reduction in yield takes into
account the Fed move during the period and the expectation that the Fed will
continue to make borrowing less expensive.
Sincerely,
[ PHOTO AND SIGNATURE ]
Ronald R. Warfield
President
<PAGE>
IAA TRUST MUTUAL FUNDS -- PORTFOLIO HIGHLIGHTS (UNAUDITED)
IAA TRUST GROWTH FUND, INC.
PORTFOLIO CHANGES For the Six Months Ended December 31, 1995
MAJOR PURCHASES MAJOR SALES
EMC Corp. (1) Cisco Systems (2)
Phillips Electronics, N.V. (1) Sun Microsystems, Inc.
Department 56, Inc. (1) Acclaim Entertainment, Inc. (2)
Wellman, Inc. (1) VeriFone, Inc. (2)
Gymboree Corp. (1) Minnesota Mining & Mfg. (2)
Vishay Intertechnology, Inc. (1) Lubrizol Corp. (2)
Nucor Corp. (1) First Data Corp.
(1) New Holdings (2) Deletions
TEN LARGEST HOLDINGS December 31, 1995
<TABLE>
<CAPTION>
PERCENT
VALUE OF FUND
---------- -----------
<S> <C> <C>
General Electric Co..................................................... $ 2,880,000 3.82%
Motorola, Inc........................................................... 2,280,000 3.03
Intel Corp.............................................................. 2,270,000 3.01
Hewlett-Packard Co...................................................... 1,976,500 2.62
GTE Corp................................................................ 1,936,000 2.57
Green Tree Financial Corp............................................... 1,899,000 2.52
Travelers, Inc.......................................................... 1,886,250 2.50
DPL, Inc................................................................ 1,856,250 2.46
MBNA Corp............................................................... 1,843,750 2.45
AT&T Corp............................................................... 1,813,000 2.41
---------- -----
$20,640,750 27.39%
========== =====
</TABLE>
IAA TRUST ASSET ALLOCATION FUND, INC.
PORTFOLIO CHANGES For the Six Months Ended December 31, 1995
MAJOR PURCHASES MAJOR SALES
Federal National Mortgage Assn. Notes,
7.060%, 11/02/05 (1) Sun Microsystems, Inc.
United States Treasury Notes, 5.625%, 11/30/00 (1) Invacare Corp. (2)
EMC Corp. (1) Minnesota Mining & Mfg. (2)
Tektronix, Inc. Johnson & Johnson
Learonal, Inc. (1) Intel Corp.
Wellman, Inc. (1) Coca-Cola Co.
Healthdyne, Inc. (1) Fluor Corp.
(1) New Holdings (2) Deletions
<TABLE>
<CAPTION>
TEN LARGEST HOLDINGS December 31, 1995
PERCENT
VALUE OF FUND
--------- -----------
<S> <C> <C>
United States Treasury Notes, 5.625%, 11/30/00........................... $ 302,796 2.86%
Bell of Pennsylvania, 8.350%, 12/15/30................................... 255,250 2.41
International American Devel. Bank, 8.875%, 06/01/09..................... 252,250 2.38
Chesapeake & Potomac Telephone Co., 8.375%, 10/01/29..................... 244,750 2.31
United States Treasury Notes, 7.250%, 05/15/04........................... 222,214 2.10
Discover Credit Card Trust, 6.750%, 02/16/02............................. 203,750 1.92
United States Treasury Notes, 5.875%, 03/31/99........................... 203,668 1.92
Federal National Mortgage Association, 7.060%, 11/02/05.................. 199,830 1.89
United States Treasury Notes, 4.750%, 02/15/97........................... 199,020 1.88
Citicorp................................................................. 198,388 1.87
---------- -----
$2,281,916 21.54%
========== =====
</TABLE>
<PAGE>
IAA TRUST MUTUAL FUNDS -- PORTFOLIO HIGHLIGHTS (UNAUDITED)
IAA TRUST TAX EXEMPT BOND FUND, INC.
PORTFOLIO CHANGES For the Six Months Ended December 31, 1995
<TABLE>
<CAPTION>
MAJOR PURCHASES MAJOR SALES
<S> <C>
Cobb Co. Georgia School Dist. (1) Gilbert School Dist. #4 Maricopa Co. (2)
6.000%, 02/01/01 12.000%, 07/01/98
Florida State Board of Education (1) Massachusetts Bay Transit Authority (2)
5.000%, 06/01/02 5.875%, 03/01/15
Pleasant Co. W.V.Pollution Control (2)
7.000%, 08/01/08
South Vermillion Middle School (2)
Building Corp. Revenue
5.125%, 07/15/13
(1) New Holdings (2) Deletions
</TABLE>
<TABLE>
<CAPTION>
TEN LARGEST HOLDINGS December 31, 1995
PERCENT
VALUE OF FUND
--------- -----------
<S> <C> <C>
Pennsylvania State Higher Education, 5.600%, 09/01/10.................... $ 599,438 3.11%
Peru Indiana Community School, 6.750%, 01/01/09.......................... 598,125 3.10
Cape Girardeau Missouri Waterworks, 7.450%, 03/01/05..................... 584,375 3.03
State of Rhode Island Ref. General Obligation, 7.000%, 06/15/05.......... 583,750 3.03
Louisville & Jefferson County, Met. Sewer Dist. Rev., 5.250%, 05/15/10... 575,719 2.98
Chicago, Illinois Water Revenue, 6.500%, 11/01/15........................ 571,250 2.96
Kaukauna Wisconsin Electric System, 7.250%, 12/15/08..................... 570,000 2.96
Washington Public Power Supply, 7.625%, 07/01/01......................... 569,375 2.95
Connecticut State Unlimited Tax General Obligation, 5.400%, 03/15/08..... 567,187 2.94
Maricopa County School Dist., Arizona Unlimited, 6.400%, 07/01/06........ 557,500 2.89
---------- -----
$5,776,719 29.95%
========== =====
</TABLE>
IAA TRUST MONEY MARKET FUND, INC.
<TABLE>
<CAPTION>
TEN LARGEST HOLDINGS December 31, 1995
PERCENT
VALUE OF FUND
---------- -----------
<S> <C> <C>
Toyota Motor Credit Co., 5.68%, 01/17/96................................ $ 1,945,077 4.01%
US Central Credit Union, 5.77%, 01/19/96................................ 1,794,807 3.70
Assoc. Corp. of North America, 5.53%, 03/11/96.......................... 1,450,000 2.99
PHH Corp., 5.68%, 01/24/96.............................................. 1,438,760 2.97
Household Finance Corp., 5.74%, 01/09/96................................ 1,380,000 2.85
Beneficial Corp., 5.78%, 01/22/96....................................... 1,300,000 2.68
General Electric Capital Corp., 5.71%, 02/05/96......................... 1,300,000 2.68
Hewlett-Packard Corp., 5.55%, 03/05/96.................................. 1,287,173 2.66
Chevron Oil Finance Corp., 5.67%, 01/10/96.............................. 1,200,000 2.48
Prudential Funding Corp., 5.71%, 02/01/96............................... 1,200,000 2.48
---------- -----
$14,295,817 29.50%
========== =====
</TABLE>
PORTFOLIO CHARACTERISTICS December 31, 1995
30 DAY AVERAGE YIELD: 4.92%
7 DAY AVERAGE YIELD: 4.93%
AVERAGE DAYS TO MATURITY: 35
<PAGE>
IAA TRUST MUTUAL FUNDS -- SCHEDULE OF INVESTMENTS December 31, 1995 (unaudited)
- --------------------------------------------------------------------------------
IAA TRUST GROWTH FUND, INC.
<TABLE>
<CAPTION>
SHARES VALUE SHARES VALUE
--------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
COMMON STOCKS -- 85.00%
BEVERAGES -- 1.85% MEDICAL SUPPLIES -- 2.27%
PepsiCo, Inc. .................. 25,000 $1,396,875 Johnson & Johnson .............. 20,000 $1,712,500
--------- ---------
CHEMICALS/BASIC -- 2.47%
Engelhard Corp. ................ 50,000 1,087,500
Wellman, Inc. .................. 34,000 773,500 METALS & MINING -- 1.20%
--------- Newmont Mining Corp. ........... 20,000 905,000
1,861,000 ---------
--------- MOTOR VEHICLES/MOTORCYCLES -- 1.54%
CLIMATE CONTROL SYSTEMS -- 1.87%
York International, Inc. ....... 30,000 1,410,000 Ford Motor Co. ................. 30,000 870,000
--------- Harley-Davidson, Inc. .......... 10,000 287,500
COMPUTERS & PERIPHERAL EQUIPMENT -- 4.33% ---------
EMC Corp.* ..................... 60,000 922,500 1,157,500
Hewlett-Packard Co. ............ 23,600 1,976,500 ---------
International Business Machines NATURAL GAS PRODUCTION TRANSMISSION -- 2.98%
Corp. ......................... 4,000 367,000 NICOR, Inc. .................... 50,000 1,375,000
--------- Unocal Corp. ................... 30,000 873,750
3,266,000 ---------
--------- 2,248,750
COMPUTER SERVICES -- 3.24% ---------
First Data Corp. ............... 16,000 1,070,000 PAPER & ALLIED PRODUCTS -- 1.72%
Silicon Graphics, Inc. ......... 10,000 275,000 Weyerhaeuser Co. ............... 30,000 1,297,500
Sun Microsystems, Inc.* ........ 24,000 1,095,000 ---------
--------- PETROLEUM/INTEGRATED -- 8.19%
2,440,000 Chevron Corp. .................. 25,000 1,312,500
--------- Exxon Corp. .................... 22,500 1,802,813
CONSUMER PRODUCTS -- 1.08% Phillips Petroleum Co. ......... 40,000 1,365,000
Rubbermaid, Inc. ............... 32,000 816,000 Royal Dutch Petroleum Co.,
--------- ADR ........................... 12,000 1,693,500
ELECTRIC UTILITY -- 2.46% ---------
DPL, Inc. ...................... 75,000 1,856,250 6,173,813
--------- ---------
ELECTRONICS -- 9.11% PHARMACEUTICALS -- 6.36%
General Electric Co. ........... 40,000 2,880,000 Elan Corp., PLC* ............... 30,000 1,458,750
Motorola, Inc. ................. 40,000 2,280,000 Merck & Co. .................... 25,000 1,643,750
Philips Electronics N.V. ....... 30,000 1,076,250 Mylan Laboratories, Inc. ....... 72,000 1,692,000
Vishay Intertechnology, Inc. ... 20,000 630,000 ---------
--------- 4,794,500
6,866,250 ---------
--------- RAILROAD -- 1.55%
FOOD PRODUCTS -- 1.76% Burlington Northern Corp. ...... 15,000 1,170,000
Archer-Daniels-Midland Co. ..... 73,500 1,323,000 ---------
--------- RETAIL -- 7.02%
FINANCIAL SERVICES -- 6.28% American Stores Co. ............ 30,000 802,500
Federal National Mortgage Department 56, Inc.* ........... 25,000 959,375
Assoc. ........................ 8,000 993,000 Gymboree Corp. ................. 25,000 515,625
Green Tree Financial Corp. ..... 72,000 1,899,000 Pep Boys Manny Moe & Jack ...... 40,000 1,025,000
MBNA Corp. ..................... 50,000 1,843,750 Toys R Us, Inc.* ............... 40,000 870,000
--------- Wal-Mart Stores, Inc. .......... 50,000 1,118,750
4,735,750 ---------
--------- 5,291,250
HOSPITAL & MEDICAL SERVICE PLANS -- 0.93% ---------
U.S. Healthcare, Inc. .......... 15,000 697,500 SEMICONDUCTORS & RELATED DEVICES -- 3.01%
--------- Intel Corp. .................... 40,000 2,270,000
HOUSEHOLD PRODUCTS -- 1.31% ---------
Unilever N.V. .................. 7,000 985,250 STEEL PRODUCTION -- 1.52%
--------- Nucor Corp. .................... 20,000 1,142,500
INSURANCE -- 4.34% ---------
American International Group, TELEPHONE UTILITY -- 4.98%
Inc. .......................... 15,000 1,387,500 AT & T Corp. ................... 28,000 1,813,000
Travelers, Inc. ............... 30,000 1,886,250 GTE Corp. ..................... 44,000 1,936,000
--------- ---------
3,273,750 3,749,000
--------- ---------
MACHINERY & EQUIPMENT -- 1.04% TRANSPORTATION -- 0.59%
Hardinge, Inc. ................. 30,000 780,000 Federal Express Corp. .......... 6,000 443,250
--------- ---------
TOTAL COMMON STOCKS
(cost $43,147,576) ............ 64,063,188
----------
</TABLE>
<PAGE>
IAA TRUST MUTUAL FUNDS -- SCHEDULE OF INVESTMENTS December 31, 1995 (unaudited)
- --------------------------------------------------------------------------------
IAA TRUST GROWTH FUND, INC. (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
--------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
COMMERCIAL PAPER -- 14.09%
John Deere Capital Corp. International Lease Finance
5.76%, 01/04/96 ............... $1,348,000 $1,348,000 Corp.
Household Finance Corp. 5.63%, 02/20/96 ............... $1,001,000 $ 992,860
5.74%, 01/09/96 ............... 1,429,000 1,429,000 PHH Corp.
American Express Credit Corp. 5.55%, 02/21/96 ............... 140,000 138,856
5.75%, 01/10/96 ............... 1,500,000 1,500,000 ----------
Ford Motor Credit Co. TOTAL COMMERCIAL PAPER
5.73%, 01/22/96 ............... 558,000 558,000 (cost $10,621,665) ............ 10,621,665
International Lease Finance ----------
Corp. OTHER SHORT-TERM INVESTMENTS -- 0.63%
5.68%, 01/25/96 ............... 500,000 497,949 Money Market Fund
IBM Credit Corp. (cost $470,728)
5.72%, 01/31/96 ............... 1,122,000 1,122,000 Federated Prime Obligation Fund,
Ford Motor Credit Co. 5.57% ......................... 470,728 470,728
5.76%, 02/06/96 ............... 1,000,000 1,000,000 ----------
John Deere Capital Corp. TOTAL INVESTMENTS -- 99.72%
5.76%, 02/08/96 ............... 1,435,000 1,435,000 (cost $54,239,969) ............ 75,155,581
Chevron Oil Finance Co. ----------
5.55%, 02/16/96 ............... 600,000 600,000 CASH AND OTHER ASSETS
NET OF LIABILITIES -- 0.28% ... 211,131
----------
* Non-income producing NET ASSETS -- 100.00% .......... $75,366,712
====== ===========
</TABLE>
See notes to financial statements.
<PAGE>
IAA TRUST MUTUAL FUNDS -- SCHEDULE OF INVESTMENTS December 31, 1995 (unaudited)
- --------------------------------------------------------------------------------
IAA TRUST ASSET ALLOCATION FUND, INC.
<TABLE>
<S> <C> <C>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
--------- --------- --------- ---------
BONDS AND NOTES -- 36.36% U.S. GOVERNMENT OBLIGATIONS -- 14.08%
AUTO -- 1.16% United States Treasury Notes
General Motors Acceptance Corp. 4.750%, 02/15/97 .............. $ 200,000 $ 199,022
8.875%, 06/01/10 .............. $ 100,000 $ 122,625 United States Treasury Notes
--------- 6.000%, 12/31/97 .............. 100,000 101,555
BANKING -- 3.39% United States Treasury Notes
International American 5.875%, 03/31/99 .............. 200,000 203,668
Development Bank United States Treasury Notes
9.500%, 10/15/97 .............. 100,000 106,875 6.750%, 06/30/99 .............. 100,000 104,602
International American United States Treasury Notes
Development Bank 6.875%, 07/31/99 .............. 100,000 105,069
8.875%, 06/01/09 .............. 200,000 252,250 United States Treasury Notes
--------- 5.625%, 11/30/00 .............. 300,000 302,796
359,125 United States Treasury Notes
--------- 7.250%,05/15/04 ............... 200,000 222,214
BEVERAGES -- 0.98% United States Treasury Notes
Coca-Cola Co. 7.250%, 08/15/04 .............. 100,000 111,295
6.625%, 10/01/02 .............. 100,000 104,125 United States Treasury Bonds
--------- 11.625%, 11/15/04 ............. 100,000 141,652
CHEMICALS -- 0.99% ---------
DuPont E.I. DeNemours & Co. 1,491,873
6.750%, 10/15/02 .............. 100,000 105,000 ---------
--------- TOTAL BONDS AND NOTES
FINANCE COMPANIES -- 2.59% (cost $3,519,929) ............. 3,852,633
Discover Card Credit Trust ---------
6.750%, 02/16/02 .............. 200,000 203,750
Thrift Financial Corp.
8.550%, 05/20/18 .............. 67,564 70,658 SHARES VALUE
--------- --------- ---------
274,408 COMMON STOCKS -- 48.79%
--------- AEROSPACE/DEFENSE -- 0.98%
Raytheon Co. ................... 2,200 103,950
TELEPHONE UTILITY -- 6.41% ---------
Bell of Pennsylvania AUTO/AUTO PARTS -- 0.73%
Putable Debentures Chrysler Corp. ................ 1,000 55,375
8.350%, 12/15/30 .............. 200,000 255,250 Magna International,
New Jersey Bell Telephone Co. Inc., Cl. A ................... 500 21,625
7.850%, 11/15/29 .............. 150,000 178,688 ---------
Chesapeake & Potomac Telephone 77,000
Co. of Virginia Debentures ---------
8.375%, 10/01/29 .............. 200,000 244,750 AIR COURIER SERVICES -- 1.32%
--------- Federal Express Corp.* ......... 1,900 140,363
678,688 ---------
--------- BANKS -- 4.23%
U.S. GOVERNMENT AGENCIES -- 6.76% BankAmerica Corp. .............. 1,000 64,750
Federal Farm Credit Bank Bank of New York ............... 1,500 73,125
5.800%, 12/18/00 .............. 100,000 99,741 Citicorp ....................... 2,950 198,388
Federal Home Loan Bank Norwest Corp. .................. 3,400 112,200
8.000%, 09/20/04 .............. 100,000 101,796 ---------
Federal Home Loan Mortgage Corp. 448,463
10.750%, 07/01/00 ............. 5,425 5,446 ---------
Federal Home Loan Mortgage Corp. BEVERAGES -- 0.84%
8.750%, 04/01/01 .............. 61,320 63,650 Coca-Cola Co. .................. 1,200 89,100
Federal Home Loan Mortgage Corp. ---------
10.150%, 04/15/06 ............. 35,870 37,170 CONSTRUCTION AND ENGINEERING -- 0.44%
Federal National Mortgage Fluor Corp. .................... 700 46,200
Association ---------
7.060%, 11/02/05 .............. 200,000 199,830 CONSTRUCTION MACHINERY -- 0.89%
Government National Mortgage Caterpillar, Inc. .............. 1,600 94,000
Association Pool #60721 ---------
9.750%, 04/15/98 .............. 5,079 5,436 CONSUMER PRODUCTS -- 4.75%
Government National Mortgage Department 56, Inc. ............ 3,000 115,125
Association Pool #30111 Gillette Co. ................... 2,000 104,250
9.000%, 05/15/09 .............. 18,948 20,091 Procter & Gamble Co. ........... 2,000 166,000
Government National Mortgage Wolverine World Wide, Inc. ..... 3,750 118,125
Association Pool #23653 ---------
9.500%, 06/15/09 .............. 16,038 17,226 503,500
Government National Mortgage ---------
Association Pool #32147 ELECTRIC UTILITY -- 1.96%
9.500%, 08/15/09 .............. 15,220 16,347 CILCORP, Inc. .................. 1,200 50,850
Government National Mortgage Florida Progress Corp. ......... 1,200 42,450
Association Pool #161621 Texas Utilities, Inc. .......... 1,000 41,125
9.000%, 07/15/16 .............. 141,521 150,056 Wisconsin Energy Corp. ......... 2,400 73,500
--------- ---------
716,789 207,925
--------- ---------
</TABLE>
<PAGE>
IAA TRUST MUTUAL FUNDS -- SCHEDULE OF INVESTMENTS December 31, 1995 (unaudited)
- --------------------------------------------------------------------------------
IAA TRUST ASSET ALLOCATION FUND, INC. (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE SHARES VALUE
--------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
ELECTRONICS -- 2.51% Walgreen Co. ................... 4,000 $ 119,500
General Electric Co. ........... 1,200 $ 86,400 Wal-Mart Stores, Inc. .......... 3,000 67,125
Phillips Electronics N.V ....... 2,950 105,831 ---------
Tektronix, Inc. ................ 1,500 73,688 353,399
--------- ---------
265,919 TECHNOLOGY -- 4.27%
--------- EMC Corp.* ..................... 3,500 53,812
ENERGY -- 5.06% Intel Corp. .................... 800 45,400
Atlantic Richfield Co. ......... 700 77,525 Microsoft Corp.* ............... 500 43,875
Exxon Corp. .................... 2,000 160,250 Motorola, Inc. ................. 2,000 114,000
Repsol S.A., ADR ............... 2,100 69,038 Oracle Corp. ................... 3,750 158,906
Schlumberger, Ltd. ............. 600 41,550 Sun Microsystems, Inc. ......... 800 36,500
Williams Companies, Inc. ....... 2,800 122,850 ---------
YPF Sociedad Anonima, ADS ...... 3,000 64,875 452,493
--------- ---------
536,088 TELECOMMUNICATION SERVICES -- 0.40%
---------
FINANCIAL SERVICES -- 1.03% AirTouch Communication,
Travelers, Inc. ................ 1,733 108,962 Inc.* ......................... 1,500 42,375
--------- ---------
HEALTHCARE -- 6.63% TELEPHONE UTILITY -- 1.83%
Bristol-Myers Squibb Co. ....... 1,000 85,875 AT & T Corp. ................... 1,200 77,700
Columbia/HCA Healthcare BellSouth Corp. ................ 1,500 65,250
Corp. ......................... 2,700 137,025 Pacific Telesis Group, Inc. .... 1,500 50,438
Elan Corp., PLC* ............... 2,000 97,250 ---------
Healthdyne, Inc.* .............. 5,000 43,125 193,388
Integrated Health Services, ---------
Inc. .......................... 2,000 50,000 TOOL PRODUCTS -- 0.84%
Johnson & Johnson .............. 1,200 102,750 Illinois Tool Works, Inc ....... 1,500 88,500
Mylan Laboratories, Inc. ....... 3,000 70,500 ---------
US Healthcare, Inc. ............ 2,500 116,250 TOTAL COMMON STOCKS
--------- (cost $3,787,056) ............. 5,169,000
702,775 ---------
---------
INDUSTRIAL CHEMICALS -- 1.17% PRINCIPAL
Learonal, Inc. ................. 3,000 69,000 AMOUNT VALUE
Wellman, Inc. .................. 2,400 54,600 --------- ---------
---------
123,600 COMMERCIAL PAPER -- 14.04%
--------- Prudential Funding Corp.
MOTOR HOMES -- 0.82% 5.803%, 01/11/96 .............. $ 250,000 250,000
Fleetwood Enterprises, Inc. .... 3,400 87,550 AVCO Financial Services, Inc.
--------- 5.798%, 01/16/96 .............. 122,000 122,000
MOTORCYCLES -- 0.84% Ford Motor Credit Co.
Harley-Davidson, Inc. .......... 3,100 89,125 5.734%, 01/22/96 .............. 68,000 68,000
--------- PHH Corp.
NEWSPAPERS -- PUBLISHING -- 0.58% 5.680%, 01/24/96 .............. 388,000 386,470
Tribune Co. .................... 1,000 61,125 John Deere Capital Corp.
--------- 5.756%, 02/08/96 .............. 256,000 256,000
OFFICE EQUIPMENT -- 0.90% International Lease Finance
Xerox Corp. .................... 700 95,900 Corp.
--------- 5.630%, 02/20/96 .............. 149,000 147,788
PAPER & ALLIED PRODUCTS -- 1.00% American General Finance Corp.
Mead Corp. ..................... 1,200 62,700 5.625%, 02/27/96 .............. 257,000 257,000
Weyerhaeuser Co. ............... 1,000 43,250 ----------
--------- TOTAL COMMERCIAL PAPER
105,950 (cost $1,487,258) ............. 1,487,258
--------- ----------
REAL ESTATE -- 1.43% OTHER SHORT-TERM INVESTMENTS -- 0.27%
Meditrust, Inc. ................ 2,700 94,163 Money Market Funds
National Golf Properties, (cost $28,625)
Inc. .......................... 2,500 57,187 Federated Prime Obligation Fund,
--------- 5.57% ......................... 28,625 28,625
151,350 ----------
--------- TOTAL INVESTMENTS -- 99.46%
RETAIL -- 3.34% (cost $8,822,868) ............. 10,537,516
Albertson's, Inc. .............. 2,900 95,337 ----------
Penney (J.C.) Co. .............. 1,500 71,437 CASH AND OTHER ASSETS
NET OF LIABILITIES -- .54% ... 57,734
----------
NET ASSETS -- 100% ............. $10,595,250
==========
* Non-income producing security
</TABLE>
See notes to financial statements.
<PAGE>
IAA TRUST MUTUAL FUNDS -- SCHEDULE OF INVESTMENTS December 31, 1995 (unaudited)
- --------------------------------------------------------------------------------
IAA TRUST TAX EXEMPT BOND FUND, INC.
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
--------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
MUNICIPAL BONDS Northwest Water Commission
(TAX EXEMPT) -- 97.06% Illinois, Cook & Lake Revenue
ARIZONA -- 5.62% 5.000%, 05/01/13 ............. $ 500,000 $ 481,250
Bullhead City Arizona Parkway Sangamon County Illinois Tax
Revenue General Obligation
6.100%, 01/01/07 ............. $ 250,000 $ 259,375 6.500%, 03/01/08 ............. 200,000 225,750
Maricopa County School District #93 ---------
Arizona Unlimited Tax General 3,563,375
Obligation ---------
6.400%, 07/01/06 ............. 500,000 557,500 INDIANA -- 3.10%
Salt River Project Arizona Peru Indiana Community School
Agriculture Improvement & Corp. Revenue
Power District Electric 6.750%, 01/01/09 ............. 550,000 598,125
System Revenue ---------
5.625%, 01/01/06 ............. 250,000 266,250 KENTUCKY -- 2.98%
--------- Louisville & Jefferson County
1,083,125 Met. Sewer Dist. Rev. Series A
--------- 5.250%, 05/15/10 ............. 575,000 575,719
CALIFORNIA -- 6.72% ---------
California State Public Works MASSACHUSETTS -- 2.75%
Board Lease Revenue Massachusetts State Water
5.200%, 12/01/09 ............. 500,000 488,125 Resource Authority Revenue
City of Fresno California 6.000%, 11/01/08 ............. 500,000 531,250
Sewer System Revenue ---------
6.250%, 09/01/14 ............. 250,000 280,313 MISSISSIPPI -- 1.40%
Los Angeles California Mississippi State Unlimited
Wastewater System Revenue General Obligation, Series B
6.000%, 11/01/14 ............. 500,000 527,500 5.900%, 11/15/11 ............. 250,000 269,375
--------- ---------
1,295,938 MISSOURI -- 3.03%
--------- Cape Girardeau Missouri Waterworks
CONNECTICUT -- 2.94% System Revenue
Connecticut State Unlimited Tax 7.450%, 03/01/05 ............. 500,000 584,375
General Obligation ---------
5.400%, 03/15/08 ............. 550,000 567,187 NEBRASKA -- 1.63%
--------- Grand Island Nebraska Sewer
FLORIDA -- 5.42% Project Revenue
Florida State Board of Education 5.850%, 04/01/08 ............. 200,000 212,250
General Obligation Nebraska Public Power Dist.
5.000%, 06/01/02 ............. 500,000 516,875 Revenue
Port St. Lucie, Florida 5.400%, 01/01/10 ............. 100,000 101,750
Utility System Revenue ---------
5.900%, 09/01/09 ............. 500,000 529,375 314,000
--------- ---------
1,046,250 NEVADA -- 4.80%
--------- Clark County Nevada School
GEORGIA -- 2.79% District General Obligation
Cobb County, Georgia School 5.250%, 06/01/07 ............. 500,000 513,125
District General Obligation Henderson Nevada Water and Sewer
6.000%, 02/01/01 ............. 500,000 538,125 Unlimited Tax General Obligation
--------- Obligation 5.375%,
ILLINOIS -- 18.47% 06/01/07 ............. 400,000 412,000
Chicago, Illinois Water Revenue ---------
6.500%, 11/01/15 ............. 500,000 571,250 925,125
Chicago, Illinois O'Hare ---------
International Airport Revenue NEW YORK -- 2.54%
5.000%, 01/01/16 ............. 500,000 467,500 New York State Dormitory
Dupage Water Commission Illinois Authority Revenue
General Obligation 5.500%, 07/01/12 ............. 500,000 490,000
5.750%, 03/01/11 ............. 500,000 511,250 ---------
Illinois State Sales Tax Revenue NORTH CAROLINA -- 1.45%
5.400%, 06/15/13 ............. 550,000 553,437 North Carolina East Municipal
Illinois State Toll Highway Power Agency Power System
Authority Revenue, Series A Revenue 7.000%, 01/01/08 ..... 250,000 278,750
6.300%, 01/01/12 ............. 275,000 305,938 ---------
Northwest Suburban Municipal
Joint Action Water Agency
Illinois Contract Revenue
6.450%, 05/01/07 ............. 400,000 447,000
</TABLE>
<PAGE>
IAA TRUST MUTUAL FUNDS -- SCHEDULE OF INVESTMENTS December 31, 1995 (unaudited)
- --------------------------------------------------------------------------------
IAA TRUST TAX EXEMPT BOND FUND, INC. (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
--------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED) WISCONSIN -- 6.53%
OHIO -- 2.64% Brookfield Wisconsin Unlimited
Montgomery County, Ohio Tax Corp. General Obligation
Sewer System Revenue 6.900%, 03/15/03 ............. $ 250,000 $ 286,875
5.600%, 09/01/11 ............. $ 500,000 $ 510,000 Kaukauna Wisconsin Electric
--------- System Revenue
PENNSYLVANIA -- 5.74% 7.250%, 12/15/08 ............. 500,000 570,000
Pennsylvania Intergovernmental Wisconsin Clean Water
Corp. Authority, Revenue Bond
Special Tax Revenue 5.300%, 06/01/12 ............. 400,000 402,000
5.450%, 06/15/08 ............. 500,000 507,500 ----------
Pennsylvania State Higher 1,258,875
Education Revenue Bonds, ----------
Series A TOTAL MUNICIPAL BONDS
5.600%, 09/01/10 ............. 575,000 599,438 (cost $18,076,026) ........... 18,720,469
--------- ----------
1,106,938
--------- SHARES VALUE
RHODE ISLAND -- 3.03% --------- ---------
State of Rhode Island Refunding
General Obligation TAX EXEMPT
7.000%, 06/15/05 ............. 500,000 583,750 MONEY MARKET FUNDS -- 1.36%
--------- (cost $262,566)
TEXAS -- 6.67% Nuveen Tax Exempt, 4.62% ....... 262,566 262,566
Austin Texas Limited Tax ----------
General Obligation TOTAL INVESTMENTS -- 98.42%
7.250%, 09/01/03 ............. 350,000 405,562 (cost $18,338,692) ............ 18,983,035
Bexar County, Texas ----------
Detention Facilities Limited CASH AND OTHER ASSETS
Tax General Obligation NET OF LIABILITIES -- 1.58% ... 304,964
5.750%, 06/15/10 ............. 500,000 516,250 ----------
Garland Texas Limited Tax NET ASSETS -- 100% ............. $19,287,999
General Obligation ==========
5.800%, 08/15/12 ............. 350,000 364,000
---------
1,285,812
---------
WASHINGTON -- 6.81%
Public Utility District #1 of
Chelan County Washington
Revenue 5.250%, 06/01/13 ..... 500,000 471,875
Washington Public Power Supply
System, Nuclear Project #1,
Refunding Revenue, 1990-C
7.625%, 07/01/01 ............. 500,000 569,375
Washington Public Power Supply
System Ref. Revenue Bonds,
Series 1991-A, Project #3
6.500%, 07/01/02 ............. 250,000 273,125
---------
1,314,375
---------
</TABLE>
See notes to financial statements.
<PAGE>
IAA TRUST MUTUAL FUNDS -- SCHEDULE OF INVESTMENTS December 31, 1995 (unaudited)
- --------------------------------------------------------------------------------
IAA TRUST MONEY MARKET FUND, INC.
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
--------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
COMMERCIAL PAPER -- 95.56% Beneficial Corp.
AUTO & TRUCK -- 8.52% 5.78%, 01/22/96 ............... $1,300,000 $ 1,300,000
Ford Motor Credit Co. Beneficial Corp.
5.78%, 01/12/96 ............... $ 958,000 $ 958,000 5.63%, 02/13/96 ............... 1,000,000 1,000,000
Ford Motor Credit Co. Commercial Credit Co.
5.73%, 01/22/96 ............... 200,000 200,000 5.74%, 01/05/96 ............... 1,088,000 1,088,000
Ford Motor Credit Co. Commercial Credit Co.
5.78%, 01/23/96 ............... 628,000 628,000 5.75%, 01/23/96 ............... 800,000 800,000
Ford Motor Credit Co. Household Finance Corp.
5.77%, 01/25/96 ............... 400,000 400,000 5.76%, 01/08/96 ............... 600,000 600,000
Toyota Motor Credit Co. Household Finance Corp.
5.68%, 01/17/96 ............... 1,950,000 1,945,077 5.74%, 01/09/96 ............... 1,380,000 1,380,000
--------- International Lease Finance
4,131,077 Corp.
--------- 5.68%, 01/25/96 ............... 1,000,000 996,213
COMMERCIAL BANKING -- 6.99% International Lease Finance
US Central Credit Union Corp.
5.65%, 01/19/96 ............... 500,000 498,588 5.63%, 02/20/96 ............... 1,000,000 992,180
US Central Credit Union Prudential Funding Corp.
5.77%, 01/19/96 ............... 1,800,000 1,794,807 5.80%, 01/11/96 ............... 950,000 950,000
Norwest Corp. Prudential Funding Corp.
5.67%, 02/08/96 ............... 1,100,000 1,093,417 5.71%, 02/01/96 ............... 1,200,000 1,200,000
--------- ---------
3,386,812 18,100,393
--------- ---------
COMMERCIAL FINANCE -- 3.82% ELECTRONICS -- 4.25%
CIT Group Holdings, Inc. General Electric Capital Corp.
5.73%, 02/06/96 ............... 750,000 750,000 5.71%, 02/05/96 ............... 1,300,000 1,300,000
CIT Group Holdings, Inc. General Electric Capital Corp.
5.70%, 02/14/96 ............... 1,100,000 1,100,000 5.66%, 02/26/96 ............... 764,000 764,000
--------- ---------
1,850,000 2,064,000
--------- ---------
COMMERCIAL SERVICES -- 4.73% FARM MACHINERY & EQUIPMENT -- 4.02%
PHH Corp. John Deere Capital Corp.
5.68%, 01/24/96 ............... 1,444,000 1,438,760 5.76%, 01/04/96 ............... 1,150,000 1,150,000
PHH Corp. John Deere Capital Corp.
5.55%, 02/21/96 ............... 860,000 853,238 5.79%, 02/13/96 ............... 800,000 800,000
--------- ---------
2,291,998 1,950,000
--------- ---------
CONSUMER FINANCE -- 37.35% FOREIGN GOVERNMENTS -- 2.33%
American Express Credit Corp. Providence of Quebec
5.73%, 01/18/96 ............... 521,000 521,000 5.63%, 01/09/96 ............... 1,130,000 1,128,586
American Express Credit Corp. ---------
5.75%, 02/07/96 ............... 800,000 800,000 INSURANCE/MULTI-LINE -- 6.07%
American Express Credit Corp. Transamerica Financial Corp.
5.63%, 04/09/96 ............... 779,000 779,000 5.70%, 01/11/96 ............... 950,000 948,496
American General Finance Corp. Transamerica Financial Corp.
5.70%, 02/15/96 ............... 600,000 600,000 5.65%, 01/30/96 ............... 1,000,000 995,449
American General Finance Corp. USAA Capital Corp.
5.71%, 02/22/96 ............... 760,000 760,000 5.70%, 01/10/96 ............... 1,000,000 998,575
American General Finance Corp. ---------
5.63%, 02/27/96 ............... 778,000 778,000 2,942,520
Associates Corp. of N. America ---------
5.79%, 01/18/96 ............... 500,000 500,000 OFFICE EQUIPMENT -- 7.36%
Associates Corp. of N. America Hewlett Packard Corp.
5.64%, 02/05/96 ............... 400,000 400,000 5.55%, 03/05/96 ............... 1,300,000 1,287,173
Associates Corp. of N. America IBM Credit Corp.
5.53%, 03/11/96 ............... 1,450,000 1,450,000 5.80%, 01/16/96 ............... 670,000 670,000
AVCO Financial Services, Inc. IBM Credit Corp.
5.80%, 01/16/96 ............... 500,000 500,000 5.83%, 01/29/96 ............... 1,150,000 1,150,000
AVCO Financial Services, Inc. IBM Credit Corp.
5.74%, 02/12/96 ............... 706,000 706,000 5.72%, 01/31/96 ............... 459,000 459,000
---------
3,566,173
---------
</TABLE>
<PAGE>
IAA TRUST MUTUAL FUNDS -- SCHEDULE OF INVESTMENTS December 31, 1995 (unaudited)
- --------------------------------------------------------------------------------
IAA TRUST MONEY MARKET FUND, INC. (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
--------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
COMMERCIAL PAPER (CONTINUED) CORPORATE BONDS -- 1.65%
PETROLEUM REFINING -- 6.40% U.S. GOVERNMENT AGENCIES
Chevron Oil Finance Co. (cost $800,000)
5.67%, 01/10/96 ............... $1,200,000 $1,200,000 Federal Home Loan Bank --
Chevron Oil Finance Co. Variable rate (reset quarterly)
5.55%, 02/16/96 ............... 1,100,000 1,100,000 5.68%, 06/03/96 ............... $ 800,000 $ 800,000
Texaco, Inc. ---------
5.59%, 02/23/96 ............... 800,000 800,000
----------
3,100,000 OTHER SHORT-TERM
---------- INVESTMENTS -- 2.84% SHARES VALUE
TELEPHONE/UTILITY -- 3.72% --------- ---------
AT&T Corp. MONEY MARKET FUNDS
5.55%, 03/18/96 ............... 1,020,000 1,007,892 (cost $1,377,064)
AT&T Corp. Federated Prime Obligation Fund,
5.62%, 02/14/96 ............... 800,000 794,505 5.57% ......................... 1,377,064 1,377,064
---------- ----------
1,802,397 TOTAL INVESTMENTS -- 100.05%
---------- (cost $48,491,020) ............ 48,491,020
TOTAL COMMERCIAL PAPER ----------
(cost $46,313,956)............. 46,313,956 CASH AND OTHER ASSETS
---------- NET OF LIABILITIES -- (0.05)%
.............................. (24,954)
----------
NET ASSETS -- 100% ............ $48,466,066
==========
</TABLE>
See notes to financial statements.
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES December 31, 1995 (unaudited)
- --------------------------------------------------------------------------------
<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 $54,239,969,
$8,822,868, $18,338,692, and $48,491,020,
respectively).......................................... $75,155,581 $10,537,516 $18,983,035 4$8,491,020
Cash..................................................... -- -- -- 9,627
Receivable for securities sold........................... 100,000 110,156 45,310 --
Receivable for capital stock sold........................ 202,563 15,977 26,275 --
Dividends and interest receivable........................ 184,162 62,472 285,607 173,110
Other assets............................................. 16,509 2,244 4,390 8,481
-------------- ---------------- ------------ -----------
Total assets........................................... 75,658,815 10,728,365 19,344,617 48,682,238
-------------- ---------------- ------------ -----------
LIABILITIES:
Payable for capital stock redeemed....................... 6,000 15,023 8,987 --
Distributions payable.................................... 197,078 100,823 37,448 197,280
Accrued expenses and other liabilities................... 89,025 17,269 10,183 18,892
-------------- ---------------- ------------ -----------
Total liabilities...................................... 292,103 133,115 56,618 216,172
-------------- ---------------- ------------ -----------
NET ASSETS:
Applicable to 4,413,783, 819,153, 2,212,672 and
48,466,114 shares outstanding, respectively............ $75,366,712 $10,595,250 $19,287,999 $48,466,066
============= ================ ============ ===========
NET ASSETS CONSIST OF:
Capital paid-in.......................................... $52,888,363 $8,812,969 $18,676,569 4$8,466,066
Distributions in excess of net investment income......... (2,855) (105) (865) --
Accumulated net realized gain (loss) on investments...... 1,565,592 67,738 (32,048) --
Net unrealized appreciation of investments............... 20,915,612 1,714,648 644,343 --
-------------- ---------------- ------------ -----------
$75,366,712 $10,595,250 $19,287,999 $48,466,066
============= ================ ============ ===========
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE............ $17.08 $12.93 $8.72 $1.00
====== ====== ===== =====
OFFERING PRICE PER SHARE (NET ASSET VALUE DIVIDED BY .97,
EXCEPT MONEY MARKET FUND)................................ $17.61 $13.33 $8.99 $1.00
====== ====== ===== =====
</TABLE>
See notes to financial statements.
<PAGE>
STATEMENTS OF OPERATIONS for the Six Months Ended December 31, 1995 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
IAA TRUST IAA TRUST IAA TRUST
IAA TRUST ASSET TAX EXEMPT MONEY
GROWTH ALLOCATION BOND FUND, MARKET
FUND, INC. FUND, INC. INC. FUND, INC.
-------------- ----------------- ------------ -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends................................................ $ 541,867 $ 50,878 $ -- $ --
Interest................................................. 407,301 166,833 508,001 1,208,426
-------------- ------- ------------ -----------
Total investment income................................ 949,168 217,711 508,001 1,208,426
-------------- ------- ------------ -----------
EXPENSES:
Investment advisory fees (Note E)........................ 275,141 37,668 47,373 103,596
Distribution expenses (Note E)........................... 3,240 2,202 5,576 --
Legal fees............................................... 2,590 2,039 1,710 2,521
Transfer agent fees (Note E)............................. 31,602 4,426 7,161 21,841
Auditing fees............................................ 15,013 1,900 3,955 8,028
Printing................................................. 3,482 389 877 1,785
Directors' fees.......................................... 2,692 734 734 809
Administration fees (Note E)............................. 39,517 5,112 9,529 20,324
Accounting fees (Note E)................................. 23,730 13,786 16,474 18,313
Insurance................................................ 6,733 945 1,808 3,877
Registration fees........................................ 738 1,159 734 1,518
Miscellaneous............................................ 3,473 767 1,169 1,868
-------------- ------- ------------ -----------
Total expenses......................................... 407,951 71,127 97,100 184,480
-------------- ------- ------------ -----------
NET INVESTMENT INCOME..................................... 541,217 146,584 410,901 1,023,946
-------------- ------- ------------ -----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS -- Note (D):
Net realized gain (loss) on investments.................. 4,972,257 351,286 (20,741) --
Net change in unrealized appreciation on investments..... 1,400,381 399,622 871,761 --
-------------- ------- ------------ -----------
Net realized and unrealized gain on investments.......... 6,372,638 750,908 851,020 --
-------------- ------- ------------ -----------
INCREASE IN NET ASSETS FROM OPERATIONS.................... $6,913,855 $ 897,492 $1,261,921 $1,023,946
============== ========= ============ ===========
</TABLE>
See notes to financial statements.
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
IAA TRUST IAA TRUST ASSET
GROWTH FUND, INC. ALLOCATION FUND, INC.
-------------------------- ------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED YEAR
12/31/95 ENDED 12/31/95 ENDED
(UNAUDITED) 6/30/95 (UNAUDITED) 6/30/95
-------------- --------- -------------- ---------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income ................................. $ 541,217 $ 893,251 $ 146,584 $ 284,971
Net realized gain (loss) on investments ............... 4,972,257 4,148,412 351,286 (37,078)
Net change in unrealized appreciation (depreciation) of
investments ......................................... 1,400,381 10,210,477 399,622 (1,113,816)
------------ ------------ ------------ ------------
Increase in net assets from operations ................ 6,913,855 15,252,140 897,492 1,361,709
------------ ------------ ------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment income ..................................... (1,047,434) (671,272) (146,689) (219,893)
Realized gains on investments ......................... (6,467,667) (5,659,861) (250,319) (145,553)
Distribution in excess of realized gains on investments -- -- -- (49,654)
Return of capital ..................................... -- -- -- (6,398)
------------ ------------ ------------ ------------
(7,515,101) (6,331,133) (397,008) (421,498)
------------ ------------ ------------ ------------
CAPITAL STOCK TRANSACTIONS -- (NET) Note (C) ........... 5,390,854 2,208,346 554,937 (52,911)
------------ ------------ ------------ ------------
Total increase in net assets .......................... 4,789,608 11,129,353 1,055,421 887,300
NET ASSETS:
Beginning of period ................................... 70,577,104 59,447,751 9,539,829 8,652,529
------------ ------------ ------------ ------------
End of period ......................................... $ 75,366,712 $ 70,577,104 $ 10,595,250 $ 9,539,829
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
IAA TRUST TAX IAA TRUST
EXEMPT BOND FUND, INC. MONEY MARKET FUND, INC.
------------------------- -------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED YEAR
12/31/95 ENDED 12/31/95 ENDED
(UNAUDITED) 6/30/95 (UNAUDITED) 6/30/95
-------------- --------- -------------- ---------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income .............................. $ 410,901 $ 895,922 $ 1,023,946 $ 1,714,406
Net realized gain (loss) on investments ............ (20,741) 35,903 -- --
Net change in unrealized appreciation of investments 871,761 411,011 -- --
------------ ------------ ------------ ------------
Increase in net assets from operations ............. 1,261,921 1,342,836 1,023,946 1,714,406
------------ ------------ ------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment income .................................. (413,350) (894,338) (1,023,842) (1,714,510)
Realized gains on investments ...................... (46,251) (69,768) -- --
------------ ------------ ------------ ------------
(459,601) (964,106) (1,023,842) (1,714,510)
------------ ------------ ------------ ------------
CAPITAL STOCK TRANSACTIONS -- (NET) Note (C) ........ (346,867) (640,781) 12,050,499 (2,283,706)
------------ ------------ ------------ ------------
Total increase (decrease) in net assets ............ 455,453 (262,051) 12,050,603 (2,283,810)
NET ASSETS:
Beginning of period ................................ 18,832,546 19,094,597 36,415,463 38,699,273
------------ ------------ ------------ ------------
End of period ...................................... $ 19,287,999 $ 18,832,546 $ 48,466,066 $ 36,415,463
============ ============ ============ ============
</TABLE>
See notes to financial statements.
<PAGE>
IAA TRUST MUTUAL FUNDS -- NOTES TO FINANCIAL STATEMENTS December 31, 1995
(unaudited)
- --------------------------------------------------------------------------------
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 GNOSTIC 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 is
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 December 31, 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
------------------------------------------ ------------------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, 1995 JUNE 30, 1995 DECEMBER 31, 1995 JUNE 30, 1995
-------------------- -------------------- -------------------- --------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
--------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold.......................... 64,854 $1,130,418 82,369 $1,266,232 45,993 $ 594,142 70,254 $ 788,460
Shares issued through reinvestment
of dividends........................ 416,999 7,134,405 424,176 6,030,680 19,326 248,503 23,407 261,811
--------- ---------- --------- --------- --------- --------- --------- ---------
481,853 8,264,823 506,545 7,296,912 65,319 842,645 93,661 1,050,271
--------- ---------- --------- --------- --------- --------- --------- ---------
Shares redeemed...................... (164,789) (2,873,969) (331,902) (5,088,566) (22,368) (287,708) (98,290) (1,103,182)
--------- ---------- --------- --------- --------- --------- --------- ---------
Net increase (decrease).............. 317,064 $5,390,854 174,643 $2,208,346 42,951 $ 554,937 (4,629) $ (52,911)
========= ========== ======== ========= ======== ======== ======== =========
</TABLE>
<PAGE>
IAA TRUST MUTUAL FUNDS -- NOTES TO FINANCIAL STATEMENTS December 31, 1995
(unaudited) (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TAX EXEMPT BOND FUND MONEY MARKET FUND
-------------------------------------------- -----------------------------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, 1995 JUNE 30, 1995 DECEMBER 31, 1995 JUNE 30, 1995
---------------------- -------------------- ------------------------ -----------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
--------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold................ 39,289 $ 338,810 66,402 $ 546,984 34,363,689 $34,363,689 54,472,453 $54,472,453
Shares issued through
reinvestment of
dividends................. 34,407 293,555 76,197 620,434 771,133 771,133 1,587,538 1,587,538
73,696 632,365 142,599 1,167,418 35,134,822 35,134,822 56,059,991 56,059,991
Shares redeemed............ (114,416) (979,233) (221,928) (1,808,199) (23,084,323) (23,084,323) (58,343,697) (58,343,697)
Net increase (decrease).... (40,720) $(346,868) (79,329) $(640,781) 12,050,499 $12,050,499 (2,283,706) $(2,283,706)
</TABLE>
NOTE (D) INVESTMENT TRANSACTIONS: Purchases and sales of investment securities,
other than U.S. Government obligations and short term notes for the six months
ended December 31, 1995 were:
PURCHASES SALES
------------ ------------
Growth Fund..................................... $ 10,210,844 $ 10,676,994
Asset Allocation Fund........................... $ 558,409 $ 967,674
Tax Exempt Bond Fund............................ $ 1,047,525 $ 1,009,505
For the six months ended December 31, 1995, the aggregate cost of purchases of
U.S. Government Securities for IAA Asset Allocation Fund was $499,877.
For both Federal income tax and financial statement purposes, the identified
cost of investments at December 31, 1995 was $54,239,969 for the Growth Fund,
$8,822,868 for the Asset Allocation Fund, $18,338,692 for the Tax Exempt Bond
Fund and $48,491,020 for the Money Market Fund.
The gross unrealized appreciation/depreciation for book and tax purposes at
December 31, 1995 consisted of the following:
APPRECIATION DEPRECIATION
------------ -----------
Growth Fund.................................... $ 21,915,365 $ 999,753
Asset Allocation Fund.......................... $ 1,772,759 $ 58,111
Tax Exempt Bond Fund........................... $ 686,158 $ 41,815
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. IAA Trust Company 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; 0.10% 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.
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
12/31/95 ------------------------------------------
(UNAUDITED) 1995 1994 1993 1992
--------------- --------- --------- --------- ---------
Net asset value, beginning of period......................... $ 17.23 $ 15.16 $ 17.55 $ 17.23 $ 17.35
------ ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS
Net investment income....................................... 0.13 0.22 0.27 0.25 0.35
Net gains or losses on securities (both realized and
unrealized)............................................... 1.53 3.45 (0.63) 1.67 0.40
------ ------- ------- ------- -------
Total from investment operations.......................... 1.66 3.67 (0.36) 1.92 0.75
------ ------- ------- ------- -------
LESS DISTRIBUTIONS
Dividends from net investment income........................ (0.25) (0.17) (0.22) (0.29) (0.38)
Distributions from capital gains............................ (1.56) (1.43) (1.81) (1.31) (0.49)
------ ------- ------- ------- -------
Total distributions....................................... (1.81) (1.60) (2.03) (1.60) (0.87)
------ ------- ------- ------- -------
Net asset value, end of period............................... $ 17.08 $ 17.23 $ 15.16 $ 17.55 $ 17.23
------ ------- ------- ------- -------
------ ------- ------- ------- -------
TOTAL RETURN +............................................... 19.85%** 26.68% (2.42%) 11.71% 4.23%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's)........................ $75,367 $70,577 $59,448 $70,785 $76,147
Ratio of expenses to average net assets*.................... 1.11%** 1.14% 1.24% 1.18% 0.85%
Ratio of net investment income to average net assets*....... 1.47%** 1.41% 1.03% 1.36% 1.91%
Portfolio turnover.......................................... 31.56%** 31.84% 49.12% 55.36% 45.50%
<CAPTION>
1991
---------
<S> <C>
Net asset value, beginning of period......................... $ 17.42
---------
INCOME FROM INVESTMENT OPERATIONS
Net investment income....................................... 0.41
Net gains or losses on securities (both realized and
unrealized)............................................... 0.44
---------
Total from investment operations.......................... 0.85
---------
LESS DISTRIBUTIONS
Dividends from net investment income........................ (0.51)
Distributions from capital gains............................ (0.41)
---------
Total distributions....................................... (0.92)
---------
Net asset value, end of period............................... $ 17.35
---------
---------
TOTAL RETURN +............................................... 5.37%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's)........................ $ 81,974
Ratio of expenses to average net assets*.................... 0.82%
Ratio of net investment income to average net assets*....... 2.58%
Portfolio turnover.......................................... 26.00%
</TABLE>
- ----------
* Average net assets have been computed based on the aggregate value of the
fund's daily net assets.
** Annualized.
+ Total return calculation does not reflect sales load.
<TABLE>
<S> <C> <C> <C> <C> <C>
IAA TRUST
ASSET ALLOCATION FUND, INC.
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
12/31/95 ------------------------------------------
(UNAUDITED) 1995 1994 1993 1992
--------------- --------- --------- --------- ---------
Net asset value, beginning of period......................... $ 12.29 $11.08 $11.60 $11.20 $10.74
------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income....................................... 0.19 0.36 0.34 0.57 0.68
Net gains or losses on securities (both realized and
unrealized)............................................... 0.95 1.38 (0.25) 0.47 0.55
------ ------ ------ ------ ------
Total from investment operations.......................... 1.14 1.74 0.09 1.04 1.23
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income........................ (0.19) (0.34) (0.34) (0.57) (0.68)
Distributions from capital gains............................ (0.31) (0.18) (0.27) (0.07) (0.09)
Distributions from return of capital........................ (0.00) (0.01) (0.00) (0.00) (0.00)
------ ------ ------ ------ ------
Total distributions....................................... (0.50) (0.53) (0.61) (0.64) (0.77)
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Net asset value, end of period............................... $ 12.93 $12.29 $11.08 $11.60 $11.20
------ ------ ------ ------ ------
------ ------ ------ ------ ------
TOTAL RETURN +............................................... 18.62%** 16.29% 0.71% 9.58% 11.84%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's)........................ $10,595 $9,540 $8,653 $6,663 $6,233
Ratio of expenses to average net assets*.................... 1.41%** 1.46% 1.78% 1.71% 1.51%
Ratio of net investment income to average net assets*....... 2.91%** 3.18% 2.98% 4.97% 6.20%
Portfolio turnover.......................................... 21.43%** 21.03% 17.39% 36.70% 14.10%
<CAPTION>
1991
---------
<S> <C>
Net asset value, beginning of period......................... $10.56
------
INCOME FROM INVESTMENT OPERATIONS
Net investment income....................................... 0.73
Net gains or losses on securities (both realized and
unrealized)............................................... 0.24
------
Total from investment operations.......................... 0.97
------
LESS DISTRIBUTIONS
Dividends from net investment income........................ (0.76)
Distributions from capital gains............................ (0.03)
Distributions from return of capital........................ (0.00)
------
Total distributions....................................... (0.79)
------
------
Net asset value, end of period............................... $10.74
------
------
TOTAL RETURN +............................................... 9.47%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's)........................ $5,768
Ratio of expenses to average net assets*.................... 1.33%
Ratio of net investment income to average net assets*....... 6.83%
Portfolio turnover.......................................... 20.60%
</TABLE>
- ----------
* Average net assets have been computed based on the aggregate value of the
fund's daily net assets.
** Annualized.
+ 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>
<S> <C> <C> <C> <C> <C>
IAA TRUST
TAX EXEMPT BOND FUND, INC.
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
12/31/95 ------------------------------------------
(UNAUDITED) 1995 1994 1993 1992
--------------- --------- --------- --------- ---------
Net asset value, beginning of period......................... $ 8.36 $ 8.19 $ 9.11 $ 8.78 $ 8.44
------ ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS
Net investment income....................................... 0.19 0.39 0.39 0.46 0.49
Net gains or losses on securities (both realized and
unrealized)............................................... 0.38 0.20 (0.54) 0.33 0.34
------ ------- ------- ------- -------
Total from investment operations.......................... 0.57 0.59 (0.15) 0.79 0.83
------ ------- ------- ------- -------
LESS DISTRIBUTIONS
Dividends from net investment income........................ (0.19) (0.39) (0.39) (0.46) (0.49)
Distributions from capital gains............................ (0.02) (0.03) (0.38) 0.00 0.00
------ ------- ------- ------- -------
Total distributions....................................... (0.21) (0.42) (0.77) (0.46) (0.49)
------ ------- ------- ------- -------
Net asset value, end of period.............................. $ 8.72 $ 8.36 $ 8.19 $ 9.11 $ 8.78
======= ======= ======= ======= =======
TOTAL RETURN +............................................... 13.72%** 7.51% (1.86%) 9.19% 10.05%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's)........................ $19,288 $18,833 $19,095 $20,026 $17,872
Ratio of expenses to average net assets*.................... 1.02%** 1.06% 1.15% 1.03% 0.95%
Ratio of net investment income to average net assets*....... 4.32%** 4.79% 4.47% 5.11% 5.65%
Portfolio turnover.......................................... 10.18%** 24.89% 41.94% 39.60% 20.30%
<CAPTION>
1991
---------
<S> <C>
Net asset value, beginning of period......................... $ 8.32
-------
INCOME FROM INVESTMENT OPERATIONS
Net investment income....................................... 0.52
Net gains or losses on securities (both realized and
unrealized)............................................... 0.13
-------
Total from investment operations.......................... 0.65
-------
LESS DISTRIBUTIONS
Dividends from net investment income........................ (0.53)
Distributions from capital gains............................ 0.00
-------
Total distributions....................................... (0.53)
-------
Net asset value, end of period.............................. $ 8.44
=======
TOTAL RETURN +............................................... 8.05%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's)........................ $16,035
Ratio of expenses to average net assets*.................... 0.83%
Ratio of net investment income to average net assets*....... 6.17%
Portfolio turnover.......................................... 6.30%
</TABLE>
- ----------
* Average net assets have been computed based on the aggregate value of the
fund's daily net assets.
** Annualized.
+ Total return calculation does not reflect sales load.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
IAA TRUST
MONEY MARKET FUND, INC.
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
12/31/95 ------------------------------------------
(UNAUDITED) 1995 1994 1993 1992
--------------- --------- --------- --------- ---------
Net asset value, beginning of period......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS
Net investment income....................................... 0.03 0.05 0.03 0.02 0.03
------ ------- ------- ------- -------
Total from investment operations.......................... 0.03 0.05 0.03 0.02 0.03
------ ------- ------- ------- -------
LESS DISTRIBUTIONS
Dividends from net investment income........................ (0.03) (0.05) (0.03) (0.02) (0.03)
------ ------- ------- ------- -------
Total distributions....................................... (0.03) (0.05) (0.03) (0.02) (0.03)
------ ------- ------- ------- -------
Net asset value, end of period............................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------- ------- ------- -------
------ ------- ------- ------- -------
TOTAL RETURN................................................. 5.04%** 4.85% 2.86% 2.41% 3.49%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's)........................ $48,466 $36,415 $38,699 $33,302 $10,191
Ratio of expenses to average net assets* +.................. 0.90%** 0.73% 0.56% 0.58% 1.32%
Ratio of net investment income to average net assets*....... 4.99%** 4.80% 2.83% 2.67% 3.60%
<CAPTION>
1991
---------
<S> <C>
Net asset value, beginning of period......................... $ 1.00
-------
INCOME FROM INVESTMENT OPERATIONS
Net investment income....................................... 0.06
-------
Total from investment operations.......................... 0.06
-------
LESS DISTRIBUTIONS
Dividends from net investment income........................ (0.06)
-------
Total distributions....................................... (0.06)
-------
Net asset value, end of period............................... $ 1.00
-------
-------
TOTAL RETURN................................................. 6.40%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's)........................ $19,839
Ratio of expenses to average net assets* +.................. 1.03%
Ratio of net investment income to average net assets*....... 6.26%
</TABLE>
- ----------
* Average net assets have been computed based on the aggregate value of the
fund's daily net assets.
** Annualized.
+ After voluntary waiver of advisory fees. Before voluntary waiver of
advisory fees, the ratio of expenses to average net assets was 0.97%, 1.06%
and 1.02% for the years ended June 30, 1995, June 30, 1994 and June 30,
1993 respectively.
[ BACK COVER ]
IAA Trust Mutual Funds Semi-Annual Report
IAA Trust Growth Fund, Inc. December 31, 1995
IAA Trust Asset Allocation Fund, Inc.
IAA Trust Tax Exempt Bond Fund, Inc.
IAA Trust Money Market Fund, Inc.
Board of Directors
Ronald R. Warfield
Herbert G. Allen [ IAA TRUST LOGO ]
Nancy J. Erickson Company Mutual Funds
Paul S. Ives
William E. Klein, Sr.
Ailene Miller
Joseph W. Sommer IAA Trust Growth Fund, Inc.
IAA Trust Asset Allocation Fund, Inc.
Officers IAA Trust Tax Exempt Bond Fund, Inc.
Ronald R. Warfield, President IAA Trust Money Market Fund, Inc.
Wayne A. Brown, Vice-President
Gary E. Mede, Vice-President
Richard M. Miller, Vice-President
Rollie D. Moore, Vice-President
Paul M. Harmon, 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
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.
F30-113-05 (2/96)
